Canadian appliance maker Camco announced net income of U.S. $5.3 million, or $0.27 per share, for the first quarter ending March 26, 2005. This compares to a net loss of $3.7 million, or $0.18 per share, for the same period last year, due to significant provisions for costs associated with the company's closing of a plant in Hamilton. Total sales for the first quarter amounted to $132 million, up 7.6 percent from sales of $123 million for the first quarter of 2004.
Excluding a one-time gain on the sale of the Hamilton facility and plant closure costs, Camco reported a loss from operations of $2.1 million in the first quarter of 2005 compared to income of $0.6 million for the same period last year. The appliance company said lower income from operations in the first quarter of 2005 was the result of lower margins on final sales of Hamilton manufactured product in the first quarter and increased raw material commodity prices. As a result of recent increases in material costs, especially steel and plastic, the company announced price increases in 2004 to the domestic market effective Jan. 2, 2005, which have only partially offset the full impact of the material cost inflation.
"Higher material costs, primarily steel and plastic as well as increased transportation costs continue to negatively impact profits despite higher sales," James Fleck, Camco president and CEO, commented. "Although the material cost environment remains difficult, we are addressing this challenge proactively through our continued focus on productivity as well as potential further price increases."
Closure-related income of $7.8 million, primarily from the sale of the Hamilton facility, was recorded in the first quarter of 2005 compared to closure costs of $5.9 million for the same period last year. The net closure income in the first quarter was the result of a one-time gain of $10.5 million from the sale of the Hamilton facility, partially offset by the losses incurred on the sale of equipment and other operating costs of the facility in the first quarter.
"Camco was pleased to close the sale of the Hamilton site to McMaster University in the first quarter of 2005," Mr. Fleck said. "McMaster plans to transform the site into a leading Canadian research facility. This transaction provided fair value to Camco shareholders."
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