UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 28, 2004
Commission file number 1-7807
Champion Parts, Inc.
(Exact name of registrant as specified in its charter)
Illinois | 1-7807 | 36-2088911 |
(State or other jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
2005 West Avenue B, Hope, Arkansas | 71801 | |
(address of principal executive offices) | (Zip Code) |
(870) 777-8821 | ||
Registrant's telephone number, including area code |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] | No [ ] |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. |
Class Common Shares - $0.10 Par Value | Outstanding as of March 28, 2004 3,655,266 |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] |
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Champion Parts, Inc.
Form 10-Q
Cross Reference Index
PART I | FINANCIAL INFORMATION | PAGE |
ITEM 1. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA | |
Balance Sheet - Assets Balance Sheet - Liabilities & Stockholders' Equity Statement of Income Statement of Stockholders' Equity Statement of Comprehensive Income Statement of Cash Flows Notes to Financial Statements | 3 4 5 6 7 8 9-11 | |
ITEM 2. | MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | |
Management Overview Results of Operations Three Months Ended March 28, 2004 Critical Accounting Policies and Estimates Recent Accounting Pronouncements Liquidty and Capital Resources Liquidity Overview Working Capital Debt Seasonality Future Outlook Factors Which May Affect Future Results | 12 12-13 13-14 14-15 15 16 17 17 17 18 | |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 18 |
ITEM 4. | CONTROLS AND PROCEDURES | 18 |
PART II | OTHER INFORMATION | |
ITEM 1. | LEGAL PROCEEDINGS | 19 |
ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K | 19 |
SIGNATURE PAGE | 20 | |
EXHIBITS | ||
31.1 31.2 32.1 32.2 | SECTION 302 OFFICER CERTIFICATION - CEO SECTION 302 OFFICER CERTIFICATION -CFO SECTION 906 CERTIFICATION - CEO SECTION 906 CERTIFICATION - CFO | 21 22 23 24 |
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CHAMPION PARTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS | March 28, 2004 (Unaudited) | Dec. 31, 2003 (Audited) |
CURRENT ASSETS: | ||
Cash | $ 537,000 | $ 135,000 |
Accounts receivable, less allowance for uncollectibles of $1,021,000 and $945,000 in 2004 and 2003, respectively | 9,236,000 | 9,956,000 |
Other receivables | 61,000 | 83,000 |
Inventories, net of reserves | 11,852,000 | 10,864,000 |
Prepaid expenses and other assets | 347,000 | 334,000 |
Deferred income tax asset | 36,000 | 36,000 |
TOTAL CURRENT ASSETS | 22,069,000 | 21,408,000 |
PROPERTY, PLANT AND EQUIPMENT: Land | 70,000 | 70,000 |
Buildings | 4,405,000 | 4,405,000 |
Machinery and equipment | 14,311,000 | 14,272,000 |
Gross property, plant & equipment | 18,786,000 | 18,747,000 |
Less: Accumulated depreciation | 16,543,000 | 16,423,000 |
NET PROPERTY, PLANT & EQUIPMENT | 2,243,000 | 2,324,000 |
ASSETS HELD FOR SALE | 1,475,000 | 1,475,000 |
OTHER ASSETS | 434,000 | 434,000 |
TOTAL ASSETS | $26,221,000 | $25,641,000 |
The accompanying notes are an integral part of these statements.
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CHAMPION PARTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS’ EQUITY | March 28, 2004 (Unaudited) | Dec. 31, 2003 (Audited) |
CURRENT LIABILITIES: Accounts payable | $9,121,000 | $7,681,000 |
Accrued expenses: Salaries, wages and employee benefits | 574,000 | 549,000 |
Other accrued expenses | 4,471,000 | 4,803,000 |
Taxes other than income | 231,000 | 101,000 |
Current maturities of long-term debt: Current maturities – revolver | 7,797,000 | 8,386,000 |
Current maturities – term notes | 1,486,000 | 1,602,000 |
Current maturities – subordinated debt | 19,000 | 67,000 |
Current maturities – asset purchase note | 65,000 | 65,000 |
Total current maturities of long-term debt | 9,367,000 | 10,120,000 |
TOTAL CURRENT LIABILITIES | 23,764,000 | 23,254,000 |
DEFERRED INCOME TAXES | 36,000 | 36,000 |
LONG-TERM DEBT: Long-term notes payable – subordinated debt | 1,799,000 | 1,799,000 |
Long-term notes payable – City of Hope, Arkansas note | -0- | 250,000 |
Long-term notes payable – asset purchase | 50,000 | 65,000 |
TOTAL LONG-TERM DEBT | 1,849,000 | 2,114,000 |
STOCKHOLDERS' EQUITY: Preferred stock - No par value; authorized 10,000,000 shares; issued and outstanding, none | -0- | -0- |
Common stock - $.10 par value; authorized 50,000,000 shares; issued and outstanding, 3,655,266 shares | 366,000 | 366,000 |
Additional paid-in capital | 15,578,000 | 15,578,000 |
Accumulated (deficit) | (13,352,000) | (13,687,000) |
Accumulated other comprehensive (loss) | (2,020,000) | (2,020,000) |
TOTAL STOCKHOLDERS’ EQUITY | 572,000 | 237,000 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $26,221,000 | $25,641,000 |
The accompanying notes are an integral part of these statements.
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CHAMPION PARTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (CONDENSED)
FOR THE PERIODS ENDED
(Unaudited)
Three Months March 28, 2004 | Three Months March 30, 2003 | |
Net Sales | $5,468,000 | $6,196,000 |
Costs and Expenses: Cost of products sold | 4,557,000 | 5,159,000 |
Selling, distribution & administrative | 680,000 | 647,000 |
Total costs and expenses
| 5,237,000 | 5,806,000 |
Operating income | 231,000 | 390,000 |
Non-operating income/(expense): Interest (expense) | (145,000) | (121,000) |
Other non-operating income | 254,000 | 15,000 |
Total non-operating income/(expense) | 109,000 | (106,000) |
Net income before income taxes | 340,000 | 284,000 |
Income taxes | 5,000 | -0- |
Net income | $ 335,000 | $ 284,000 |
Weighted Average Common Shares Outstanding at March 28, 2004: Basic | 3,655,266 | 3,655,266 |
Diluted | 3,756,252 | 3,655,266 |
Earnings Per Common Share - Basic: Net income per common share - basic | $ 0.09 | $ 0.08 |
Earnings Per Common Share - Diluted: Net income per common share - diluted | $ 0.09 | $ 0.08 |
The accompanying notes are an integral part of these statements
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CHAMPION PARTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
Common Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated (Deficit) | Accumulated Comprehensive (Loss) | |
BALANCE: Dec. 31, 2003 | 3,655,266 | $ 366,000 | $ 15,578,000 | $(13,687,000) | $ (2,020,000) |
Net Income | -0- | -0- | -0- | 335,000 | -0- |
BALANCE: March 28, 2004 | 3,655,266 | $ 366,000 | $ 15,578,000 | $(13,352,000) | $ (2,020,000) |
The accompanying notes are an integral part of these statements
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CHAMPION PARTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
Three Months March 28, 2004 | Three Months March 30, 2003 | |
Net income and other comprehensive income | $ 335,000 | $ 284,000 |
The accompanying notes are an integral part of these statements.
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CHAMPION PARTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months March 28, 2004 | Three Months March 30, 2003 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 335,000 | $ 284,000 |
Adjustments to reconcile net income to net cash provided by/(used in) operating activities: | ||
Depreciation and amortization | 120,000 | 109,000 |
Provision for inventory write-offs | (12,000) | 125,000 |
Provision for doubtful accounts | 76,000 | 37,000 |
Write-off - City of Hope, Arkansas note | (250,000) | -0- |
Changes in assets and liabilities: | ||
Accounts receivable - gross | 644,000 | (1,556,000) |
Other accounts receivable | 22,000 | 23,000 |
Inventories - gross | (976,000) | (305,000) |
Prepaid expenses | (13,000) | (86,000) |
Accounts payable | 1,440,000 | 747,000 |
Accrued liabilities and other | (177,000) | (136,000) |
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES | 1,209,000 | (758,000) |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (39,000) | (165,000) |
NET CASH USED IN INVESTING ACTIVITIES | (39,000) | (165,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
(Payments)/borrowings under revolving loan | (589,000) | 974,000 |
Payments on term note obligations | (116,000) | (116,000) |
Payments under subordinate debt obligations | (48,000) | (48,000) |
Payments under acquisition note obligations | -0- | (83,000) |
Payments under asset acquisition note obligations | (15,000) | -0- |
NET CASH (USED IN)/PROVIDED BY FINANCING ACTIVITIES | (768,000) | 727,000 |
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 402,000 | (196,000) |
CASH & CASH EQUIVALENTS - Beg. of period | 135,000 | 246,000 |
CASH & CASH EQUIVALENTS - End of period | $ 537,000 | $ 50,000 |
Supplemental disclosures of cash flow information Cash paid during the quarter: | ||
Income taxes | $ 36,000 | $ -0- |
Interest |