NEW HAVEN, CT — Transpro has announced results for the third quarter and nine months, which ended on Sept. 30.

Transpro reported net earnings for the third quarter of $2.7 million or 36 cents per diluted share, on sales of $72 million. Net income is up 35.5 percent and sales increased 9.7 percent over the comparable period last year.

Charles Johnson, president and CEO, said that while this performance reflects overall improvement in market conditions compared to the year-ago period, Transpro’s business in the third quarter was negatively affected by a number of factors, including continued raw material and fuel cost increases, intensified competitive pricing pressure in the aftermarket radiator product line and softness in the markets for its temperature control products.

For the third quarter of 2004, net sales were $72 million, an increase of 9.7 percent over net sales of $65.6 million in the third quarter of 2003.

Consolidated gross margin for the third quarter of 2004 was $15.2 million, or 21 percent of sales, versus a consolidated gross margin of $13.2 million, or 20.1 percent of sales, in the year-ago period. The improvement in consolidated gross margin reflects the cost reduction benefits of the company’s three-year restructuring program, as well as higher sales levels in the quarter. These factors were somewhat offset by a combination of downward competitive pricing pressure within the Automotive and Light Truck Group and rising commodity costs for all business segments.

Selling, general and administrative expenses totaled $10.8 million, or 15.1 percent of net sales, in the 2004 third quarter, compared to $9.1 million, or 13.8 percent of net sales, in the year-ago period. This increase is attributable to the higher level of sales, increased freight costs and increased accruals for incentive-related expenses. Operating income for the third quarter of 2004 rose 12.2 percent to $4.3 million, or 6 percent of net sales, versus $3.8 million, or 5.9 percent of sales, in the third quarter of last year.

Consolidated net income for the 2004 third quarter totaled $2.7 million, or 36 cents per diluted share, a 35.5 percent increase over consolidated net income of $2 million, or 27 cents per diluted share, in the third quarter of 2003. The company’s 2003 third quarter results include $0.3 million in restructuring and special charges, as well as a tax benefit of $0.6 million representing additional refundable income taxes as a result of filing the company’s 2002 federal income tax return.

For the third quarter of 2004, the company generated operating cash flow of $8.1 million, versus operating cash flow of $2.5 million in the third quarter of last year, reflecting steps the company has taken to improve its working capital management and profitability.

For the first nine months of 2004, net sales were $204.1 million, an increase of 15.6 percent over net sales of $176.6 million in the first nine months of 2003. In the Automotive and Light Truck Group, net sales for the 2004 nine-month period were $142.2 million an 8.3 percent increase over net sales of $131.2 million in the same period last year. In the Heavy Duty Group, net sales for the 2004 nine-month period increased 36.5 percent to $62 million from $45.4 million in the first nine months of 2003.

Consolidated gross margin for the 2004 nine-month period was $38.1 million, or 18.7 percent of net sales, an increase of 29.6 percent over gross margins of $29.4 million, or 16.6 percent of net sales, a year ago. Selling, general and administrative expenses for the first nine months of 2004 were $31.9 million, or 15.6 percent of net sales, compared to $29.4 million, or 16.7 percent of net sales, in the first nine months of 2003.

For the first nine months, Transpro reported consolidated net income of $2.8 million, or 38 cents per diluted share, versus a consolidated net loss of $3 million, or 43 cents per diluted share, a year ago. Included in the company’s results for the 2003 nine-month period are restructuring and special charges of $1.3 million, as well as a tax benefit of $1.3 million reflecting additional refundable income taxes recorded during the second and third quarters as a result of filing the 2002 federal income tax return.

Operating cash flow for the first nine months of 2004 was $11.3 million, a significant improvement over operating cash flow of $4.4 million a year ago.

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