CFM Majestic Inc. Announces Second Quarter Results.

MISSISSAUGA, Ontario--(BUSINESS WIRE)--May 9, 1996--CFM MAJESTIC INC.(TSE: CFM ) CFM Majestic Inc. is releasing its results for the period ended March 31, 1996.

On February 14, 1996, the Company announced, as part of the ongoing program of integration of The Majestic Products Company, significant steps taken to rationalize production capacity. The rationalization included, amongst other things, the closure of the Austin, Texas manufacturing facility.

During the second quarter ended March 31, 1996, the Company recorded a plant shut down charge net of proceeds on the sale of fixed assets including land and building associated with the rationalization of production capacity described above, of $5.9 million before tax or $3.6 million or 24 cents per share after tax.

The acquisition of The Majestic Products Company has enabled the Company to report record sales for the period ended March 31, 1996. Sales for this period were $69.3 million, up 322 percent compared to $21.5 million in the prior period. This substantial increase includes sales of Majestic of $49.4 million.

Consolidated net income for the six month period ended March 31, 1996 was $2.3 million or 15 cents per share (net of the after tax plant shut down charge of $3.6 million or 24 cents per share) or $5.9 million or 39 cents per share after removing the after tax effect of the plant shut down charge. This represents a 30 percent increase in consolidated net income compared to prior year results for the same period of $4.5 million or 30 cents per share.

The pre-tax plant shut down charge of $5.9 million consists of both a cash and a non-cash component. Of this amount, $2.2 million is the pre-tax cash component consisting of employee severance and other costs associated with the transfer of production from Austin, Texas to the Huntington, Indiana and Mississauga, Ontario facilities. It is estimated that the annual pre-tax savings in duplicate administration, manufacturing overhead and freight costs will exceed US$2.5 million. The rationalization of production capacity reinforces CFM's position as a low cost producer in North American fireplace industry and ensures the Company is positioned for continued growth in sales, earnings and cash flow in 1996 and onward. CFM Majestic is North America's leading manufacturer of gas and wood burning fireplaces. Founded in 1987 as CFM International Inc., the company designs, engineers and manufactures a full line of innovative fireplace products.

CFM Majestic's market position is a product of ongoing research and development aimed at constantly improving the design and efficiency of its products, along with its strategic relationships with gas utilities, strong regional distributors and local dealers.

CONTACT: CFM Majestic Inc.

Colin M. Adamson, 905/670-7777

905/670-7915 (Fax)

or

CFM Majestic Inc.

Rick Blum, 905/670-7777

905/670-7915 (Fax)