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CONTINENTAL MATERIALS SECOND-QUARTER SALES IMPROVES BUT LOSS INCREASES

CONTINENTAL MATERIALS SECOND-QUARTER SALES IMPROVES BUT LOSS INCREASES
 CHICAGO, Aug. 7 /PRNewswire/ -- Continental Materials Corp. (AMEX: CUO) today reported a net loss of $445,000, or 38 cents per share, for its second quarter ended July 3 compared with a loss of $129,000, or 11 cents per share, a year ago. Net sales improved approximately six percent to $21,415,000 from $20,182,000 a year ago.
 Net sales for the six months totalled $37,157,000 compared with $35,299,000 in last year's first half. The six-month's net loss was $1,276,000, or $1.09 per share, compared with $322,000, or 27 cents per share, a year ago.
 The increased operating loss reflects a sales mix change in favor of the construction materials segment which traditionally experiences lower profit margins. Lower sales volume, pricing pressures and a planned reduction in production in the company's heating, air conditioning and refrigeration segment led to the diminished operating results. The results for the prior year's first half included the reversal of $200,000 of tax contingencies reflecting the settlement, in favor of the company, of state tax audits for the yeas 1979 through 1981.
 The combined sales volume of the company's two construction materials subsidiaries, Transit Mix Concrete Co. and Castle Concrete Company of Colorado Springs, Colo., improved dramatically. This increase was the result of a higher level of construction activity in the Colorado Springs area, stable prices and mild weather earlier in the year.
 The combined volume and operating result of the company's heating, air conditioning and refrigeration segment declined from year-ago levels. This segment comprises the operations of Williams Furnace Co. of Colton, Calif., Phoenix Manufacturing, Inc., of Phoenix, Ariz., and Imeco, Inc., of Polo and Dixon, Ill. Sales declined at Williams and Phoenix due to mild weather and weak activity in the markets served, as well as price competition. Imeco's sales and order backlog continued to improve from depressed levels in the prior year.
 On May, 15, 1992, ConAgra, Inc., d/b/a Armour Food Company and its insurance carrier, Arkwright Mutual Insurance Company, each filed suit against Imeco, Inc. a subsidiary of the company, and Central Ice Machine Company in the District Court of Douglas County, Neb., seeking reimbursement for alleged aggregate damages of approximately $13,500,000. The plaintiffs allege that an ammonia-based refrigeration system designed by Central Ice Machine and utilizing ammonia units manufactured by Imeco leaked, resulting in damage to Armour's inventory and other losses. The subject equipment was manufactured and sold in 1984, prior to the company's acquisition of Imeco, Inc. The alleged incidents took place in May 1990 and March 1991. Imeco, Inc. is vigorously defending the claims and believes that it is not liable. No amounts have been accrued or reserved as of July 3, 1992, in regard to this matter.
 CONTINENTAL MATERIALS CORP.
 Summary of Sales and Earnings
 Period ended Three Months
 7/3/92 6/28/91
 Net sales $21,415,000 $20,182,000
 Operating (loss) income (94,000) 457,000
 Interest expense, net (471,000) (662,000)
 Other (loss) income (29,000) 10,000
 Loss before income taxes (594,000) (195,000)
 Credit for income taxes (149,000) (66,000)
 Net loss (445,000) (129,000)
 Net loss per share $ (0.38) $ (0.11)
 Average shares outstanding 1,174,000 1,174,000
 Period ended Six Months
 7/3/92 6/28/91
 Net sales $37,157,000 $35,299,000
 Operating (loss) income (1,079,000) 346,000
 Interest expense, net (914,000) (1,235,000)
 Other (loss) income 59,000 98,000
 Loss before income taxes (1,934,000) (791,000)
 Credit for income taxes (658,000) (469,000)
 Net loss (1,276,000) (322,000)
 Net loss per share $ (1.09) $ (0.27)
 Average share outstanding 1,174,000 1,174,000
 -0- 8/7/92
 /CONTACT: Keith Owens of Lesnik Public Relations, 708-291-1080, for Continental Materials/
 (CUO) CO: Continental Materials Corp. ST: Illinois IN: SU: ERN


SH -- NY032 -- 8053 08/07/92 13:47 EDT
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Publication:PR Newswire
Date:Aug 7, 1992
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