Wesco Financial Corporation Issues Third Quarter 2010 Earnings
Unaudited consolidated net income of Wesco Financial Corporation (NYSE AMEX:WSC) and its subsidiaries for the third quarter of 2010 amounted to $17,748,000 compared with $9,882,000 for the third quarter of 2009. Unaudited consolidated net income for the first nine months of 2010 was $61,345,000 compared with $42,771,000 for the first nine months of 2009. The 2010 figures included realized after-tax net investment gains of $2,600,000 for the third quarter and $2,432,000 for the first nine months. No investment gains or losses were realized in the 2009 periods.
Consolidated earnings before realized net investment gains improved for each of the 2010 periods due mainly to a reduction in operating expenses of Wesco’s CORT furniture rental business as well as increased investment income of Wesco’s insurance businesses. The operations of CORT and Precision Steel, although improved, continue to reflect the effects of weak economic conditions.
Following is a breakdown of consolidated net income into useful business components. All figures are on an after-tax basis and are in thousands except for per-share amounts, which are based on 7,119,807 shares outstanding.
|Quarter Ended September 30,||Nine Months Ended September 30,|
|Wesco-Financial and Kansas Bankers|
|insurance businesses --|
|CORT furniture rental business||2,936||18||11,339||592|
|Precision Steel businesses||69||(186||)||306||(859||)|
|Realized net investment gains||2,600||---||2,432||---|
|Consolidated net income||$||17,748||$||9,882||$||61,345||$||42,771|
Wesco’s Form 10-Q for the quarter ended September 30, 2010 was filed electronically with the Securities and Exchange Commission today, and we invite shareholders, the financial media and others to access it through the SEC’s website ( www.sec.gov). The Form 10-Q contains unaudited condensed consolidated financial statements, management’s discussion and analysis of financial condition and results of operations, and other information.On September 1, 2010, Wesco’s Board of Directors received a formal written proposal from Berkshire Hathaway Inc. (“Berkshire”) to acquire the remaining 19.9% of the shares of Wesco’s common stock that it does not presently own in exchange for shares of Berkshire’s Class B common stock and/or cash at the election of the shareholder (the “Berkshire proposal”). In response, Wesco’s Board of Directors has formed a special committee of independent directors (the “Special Committee”), which is evaluating the Berkshire proposal with the assistance of financial and legal advisors. There can be no assurance that an agreement on terms satisfactory to the Special Committee or Wesco’s Board of Directors will result or that any transaction will be completed. Reference is made to a Current Report on Form 8-K filed by Wesco with the Securities and Exchange Commission on September 2, 2010, for a press release filed by Wesco in connection with the Berkshire proposal.
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