Canadian appliance maker Camco announced net income of U.S. $3.7 million, or $0.18 per share, for the second quarter ending June 25, 2005. This compares to a net loss of $1.9 million, or $0.10 per share, for the same period last year, due to significant provisions for Hamilton plant closure costs.
Total sales for the second quarter totaled $170 million, up 2 percent from sales of $167 million for the second quarter of 2004.
Closure-related expenses of $0.2 million related to final dismantling associated with the Hamilton plant, were recorded in the second quarter of 2005 compared to closure costs of $6.5 million for the same period last year.
For the first half of 2005, the Camco recorded net income of $9.0 million on sales of $302 million compared to a net loss of $5.6 million on sales of $290 million in 2004. Income from operations, before closure costs and write-downs, were $3.9 million, compared to $4.8 million in 2004 as a result of recent increases in commodity prices, especially steel and plastic.
As announced on July 25, 2005, Controladora Mabe S.A. de C.V. (Mabe) of Mexico and Camco have entered into a support agreement pursuant to which 6295053 Canada Inc, a wholly owned subsidiary of Mabe, will make an offer to purchase all of the common shares of the Company at a price of $3.52 per share for an aggregate value of approximately $70.4 million.
"The market for home appliances was quite robust during the first half of the year, and this was a major contributor to Camco's strong performance," James Fleck, president and CEO said. "Material cost inflation continued to be a critical issue for the company, and as a result price increases were implemented in Canada and the US. Most significantly, Camco reached an agreement with GE that effectively increases dryer prices retroactively for the first half of 2005. In the event that the Mabe transaction does not close in the third quarter, the dryer supply agreement with GE will need to be renegotiated."
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