Congoleum Corporation Reports First Quarter Results.
MERCERVILLE, N.J.--(BUSINESS WIRE)--May 14, 2003
Congoleum Corporation (AMEX: CGM) reported today its financial results for the first quarter ended March 31, 2003.
Sales for the three months ended March 31, 2003 were $53.6 million, compared with sales of $57.9 million reported in the first quarter of 2002, a decrease of 7.4%. The net loss for the quarter was $2.6 million versus a net loss of $0.6 million (before a required accounting change) in the first quarter of 2002. The net loss per share was $.31 in the first quarter of 2003 compared with $.08 per share (before accounting change) in the first quarter of 2002. The Company recorded a non-cash transition charge of $10.5 million or $1.27 per share in the first quarter of 2002 for impairment of goodwill as required for adoption of Statement of Financial Accounting Standards No. 142.
Roger S. Marcus, Chairman of the Board, commented "Congoleum's first quarter sales were negatively affected by further declines in the manufactured housing industry as well as soft remodel demand due to economic weakness and low consumer confidence. These declines were partly offset by higher sales of builder products, as the new housing market has remained healthy, as well as increased sales of DuraStone. The lower sales, combined with increases in insurance and benefit costs and a less profitable product mix all hurt profitability despite continued improvements in manufacturing efficiency. Although improvement in demand for manufactured housing products does not appear imminent, there are several other reasons why we are optimistic about the balance of 2003. First, we are firmly committed to managing our expenses and continuing to improve efficiencies. Second, we have two exciting new products that will be introduced early in the second half of the year. Finally, the economic outlook and consumer confidence should improve with the war in Iraq effectively over. These factors should contribute to improving results as we move forward."
Mr. Marcus continued, "Our plans to resolve our asbestos related litigation continue to progress, as evidenced by the signing of an agreement on April 10th, 2003 with attorneys representing a majority of known pending claimants. We are encouraged by this latest development and remain cautiously optimistic that we can achieve our goal of completing the confirmation of our reorganization plan by the end of the year."
Congoleum Corporation is a leading manufacturer of resilient flooring, serving both residential and commercial markets. Its sheet, tile and plank products are available in a wide variety of designs and colors, and are used in remodeling, manufactured housing, new construction and commercial applications. The Congoleum brand name is recognized and trusted by consumers as representing a company that has been supplying attractive and durable flooring products for over a century.
Congoleum is a 55% owned subsidiary of American Biltrite Inc. (AMEX: ABL).
WARNING REGARDING FORWARD LOOKING STATEMENTS
THE ABOVE NEWS RELEASE CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS, WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, THAT INVOLVE RISKS, UNCERTAINTIES AND ASSUMPTIONS. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON CONGOLEUM'S EXPECTATIONS, AS OF THE DATE OF THIS RELEASE, OF FUTURE EVENTS, AND CONGOLEUM UNDERTAKES NO OBLIGATION TO UPDATE ANY OF THESE FORWARD LOOKING STATEMENTS. ALTHOUGH CONGOLEUM BELIEVES THAT THESE EXPECTATIONS ARE BASED ON REASONABLE ASSUMPTIONS, WITHIN THE BOUNDS OF ITS KNOWLEDGE OF ITS BUSINESS AND EXPERIENCE, THERE CAN BE NO ASSURANCE THAT ACTUAL RESULTS WILL NOT DIFFER MATERIALLY FROM ITS EXPECTATIONS. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER FROM EXPECTATIONS INCLUDE: (I) THE FUTURE COST AND TIMING OF ESTIMATED ASBESTOS LIABILITIES AND PAYMENTS AND AVAILABILITY OF INSURANCE COVERAGE AND REIMBURSEMENT FROM INSURANCE COMPANIES, WHICH UNDERWROTE THE APPLICABLE INSURANCE POLICIES FOR CONGOLEUM AND ITS CONTROLLING SHAREHOLDER, AMERICAN BILTRITE INC., FOR ASBESTOS-RELATED CLAIMS AND OTHER COSTS RELATING TO THE EXECUTION AND IMPLEMENTATION OF ANY PLAN OF REORGANIZATION PURSUED BY CONGOLEUM, (II) TIMELY NEGOTIATING AND ENTERING INTO SETTLEMENT AGREEMENTS ON TERMS IT CONSIDERS SATISFACTORY WITH A SUFFICIENT MAJORITY OF ASBESTOS CLAIMANTS, (III) TIMELY REACHING AGREEMENT WITH OTHER CREDITORS, OR CLASSES OF CREDITORS, THAT EXIST OR MAY EMERGE, (IV) CONGOLEUM'S AND ITS CONTROLLING SHAREHOLDER'S, AMERICAN BILTRITE INC.'S, SATISFACTION OF THE CONDITIONS AND OBLIGATIONS UNDER THEIR RESPECTIVE OUTSTANDING DEBT INSTRUMENTS, AND AMENDMENTS TO THOSE OUTSTANDING DEBT INSTRUMENTS, AS NECESSARY, TO PERMIT THE CONTEMPLATED NOTE CONTRIBUTION(S) IN CONNECTION WITH CONGOLEUM'S PLAN OF REORGANIZATION AND TO MAKE CERTAIN FINANCIAL COVENANTS IN THOSE DEBT INSTRUMENTS LESS RESTRICTIVE, (V) THE RESPONSE FROM TIME-TO-TIME OF CONGOLEUM'S AND ITS CONTROLLING SHAREHOLDER'S, AMERICAN BILTRITE INC.'S, LENDERS, CUSTOMERS, SUPPLIERS AND OTHER CONSTITUENCIES TO THE ONGOING PROCESS ARISING FROM CONGOLEUM'S STRATEGY TO SETTLE ITS ASBESTOS LIABILITY, (VI) TIMELY OBTAINING SUFFICIENT CREDITOR AND COURT APPROVAL OF ANY REORGANIZATION PLAN PURSUED BY IT, (VII) COMPLIANCE WITH THE UNITED STATES BANKRUPTCY CODE, INCLUDING SECTION 524(g), (VIII) THE FUTURE COST AND TIMING OF PAYMENTS ASSOCIATED WITH AND AVAILABILITY OF INSURANCE COVERAGE FOR ENVIRONMENTAL AND NON-ASBESTOS RELATED PRODUCT AND GENERAL LIABILITY CLAIMS, (IX) INCREASES IN RAW MATERIAL PRICES, (X) INCREASED COMPETITIVE ACTIVITY FROM COMPANIES IN THE FLOORING INDUSTRY, SOME OF WHICH HAVE GREATER RESOURCES AND BROADER DISTRIBUTION CHANNELS THAN CONGOLEUM, (XI) UNFAVORABLE DEVELOPMENTS IN THE NATIONAL ECONOMY OR IN THE HOUSING INDUSTRY IN GENERAL, (XII) SHIPMENT DELAYS, DEPLETION OF INVENTORY AND INCREASED PRODUCTION COSTS RESULTING FROM UNFORESEEN DISRUPTIONS OF OPERATIONS AT ANY OF CONGOLEUM'S FACILITIES OR DISTRIBUTORS, (XIII) PRODUCT WARRANTY COSTS, AND (XIV) CHANGES IN DISTRIBUTORS OF CONGOLEUM'S PRODUCTS. IN ANY EVENT, THE FAILURE OF CONGOLEUM TO TIMELY REACH AGREEMENT WITH PLAINTIFFS REPRESENTING A SUFFICIENT NUMBER OF ASBESTOS CLAIMANTS WITH ASBESTOS CLAIMS PENDING AGAINST CONGOLEUM, WHICH AGREEMENT WOULD RESULT IN A GLOBAL SETTLEMENT OF CONGOLEUM'S ASBESTOS LIABILITY, OR THE FAILURE TO REACH THE PRESENTLY ANTICIPATED SETTLEMENT, COULD HAVE A MATERIAL ADVERSE EFFECT UPON CONGOLEUM'S BUSINESS, RESULTS OF OPERATIONS OR FINANCIAL CONDITION. ACTUAL RESULTS COULD DIFFER SIGNIFICANTLY AS A RESULT OF THESE AND OTHER FACTORS DISCUSSED IN CONGOLEUM'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2002 AND ITS OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.
CONGOLEUM CORPORATION RESULTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (Unaudited) For the Three Months Ended March 31, 2003 2002 Net sales $53,581 $57,926 Cost of sales 40,914 44,065 Selling, general & administrative expenses 13,203 13,152 Income (loss) from operations (536) 709 Interest expense, net (2,196) (2,007) Other income, net 144 352 Loss before income taxes and cumulative effect of accounting change (2,588) (946) Benefit for income taxes -- (299) Net loss before accounting change (2,588) (647) Cumulative effect of accounting change -- (10,523) Net loss $(2,588) $(11,170) Net loss per common share before effect of accounting change, basic and diluted $(.31) $(.08) Cumulative effect of accounting change -- (1.27) Net loss per common share, basic and diluted $(.31) $(1.35) Weighted average number of common shares outstanding: 8,260 8,260
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|Date:||May 14, 2003|
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