Canadian appliance maker Camco recorded a net loss of $53.4 million or $2.67 per share on sales of $163 million for the fourth quarter ended Dec. 31, 2003. This compares to net income of $6.1 million or $0.31 per share on sales of $182 million for the same period in 2002.
As announced previously on Oct. 17, 2003, the company has decided to close its Hamilton manufacturing and distribution facility effective Dec. 31, 2004. As a result, Camco recorded plant closure costs of $77.6 million (52.0 million net of taxes) in the fourth quarter of 2003. The balance of the plant closure costs of $18.4 million ($12.3 million net of tax) will be recorded in 2004, the company said.
Excluding plant closure costs and write down of retail advances, the company attributed the lower net income for 2003 to lower export sales; higher operating costs, which were primarily the result of investment in Montreal capacity expansion; and higher employee pension and benefit costs.
Primarily as a result of lower export sales, revenues for 2003 of $595 million were down, compared to $665 million in 2002. The company said three factors contributed to lower export sales -- its primary export customer GE Consumer & Industrial began purchasing 12-cu-ft refrigeration models in the second quarter from a lower cost supplier, sales of dishwashers to GE Consumer & Industrial were reduced, and the effect of strengthening Canadian dollar exchange rate on U.S. dollar sales resulted in lower Canadian dollar reported revenue.
James Fleck, Camco's president and CEO, commented: "2003 was a critical transition year for Camco. We achieved significant progress toward our goal of becoming GE's principal supplier of dryers in North America, and our Canadian distribution business continued to develop as an innovative marketer of major appliances in Canada.
"In addition, we made the difficult decision to close the Hamilton manufacturing and distribution operations. Once we complete the transition challenges of 2004, Camco will be positioned to profitably grow both in Canada and the U.S."
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