Camco Reports Q2 Loss Due to Hamilton Plant Closure
Jul 27, 2004
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Canadian appliance maker Camco Ltd. reported $6.5 million in closure costs at its Hamilton appliance factory during the second quarter, dropping the Canadian subsidiary of General Electric Co. to a $1.9-million net loss for the period, compared with a $1.2-million profit a year earlier.
Camco said that 3-month income from operations, before closure costs and investment writedowns, rose to $4.2 million, compared with $2.8 million a year earlier, thanks to rising domestic sales, lower costs, and increased production at the company's clothes-dryer plant in Montreal, Canada.
Sales rose 5 per cent, to $167 million from $158.2 million.
The quarter's closure costs in Hamilton, amounting to $4.4 million net of taxes, consisted primarily of employee severance. The shutdown of the stove and refrigerator factory, announced late last year and planned to be completed in November, affects 800 jobs.
"Although net income for the balance of the year will continue to be impacted by quarterly charges for Hamilton closure costs…on an operations basis, the company continues to outperform 2003," stated James Fleck, president and CEO of Camco, which is 51 percent owned by GE.
"We are now down to the last 5 months of production in Hamilton and the plant continues to perform extremely well, primarily as a result of the continued efforts of our employees," Mr. Fleck continued. "In Montreal, the dryer capacity program to expand plant production will be fully operational by September and work has started on the design of a new dryer platform. We are continuing to evaluate offers for the sale of the Hamilton site as well as redundant equipment."
On a per-share basis, the latest quarter's loss was $0.10, compared with a year-earlier profit of $0.06. (The Canadian Press)
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