Camco Posts Q1 Loss; Cites Plant Closure Costs
Apr 30, 2004
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Closure costs at its Hamilton, Canada appliance-making complex knocked Camco Inc. down to a CAD $3.7-million first-quarter net loss.

Camco, the largest appliance maker in Canada with its majority owned by General Electric Co. (GE), has reported that sales in the quarter ended March 20, 2004 were $123 million, down from $125.2 million a year earlier.

The $3.7-million loss, worth $0.18 per share, included after-tax closure costs of $4 million, and compared with a net loss of $1 million, $0.05 per share, in the year-ago period.

"Domestic sales were stronger as the Canadian market continued to be buoyant and the company commenced the distribution of complementary Samsung-branded appliance products," Camco stated.

However, export sales declined because GE stopped buying 12-cu-ft refrigerators from Camco last year, and U.S.-dollar sales were hit by last year's rise in the Canadian dollar.

"Net income for the balance of the year will continue to be impacted by quarterly charges for Hamilton closure costs," stated James Fleck, president and CEO of Camco. "However, the projects to reposition Camco for future success are going according to plan."

This includes a ramp-up of clothes-dryer production and a $14.9-million plant expansion in Montreal, where a 3-year labour contract was ratified in March 2004, Mr. Fleck says.

Total plant-closure costs in Hamilton are estimated at $98.8 million, or $66.1 million after taxes, excluding any gains on the sale of the facility's assets.

Of that total, $77.6 million, or $52 million net of taxes, was recorded in 2003. The latest quarter's pre-tax charge of $5.9 million leaves $15.3 million, or $10.2 million after taxes, to be booked throughout the rest of 2004. (Canadian Press)

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