Congoleum Corporation Reports Fourth Quarter Results.Business Editors MERCERVILLE, N.J.--(BUSINESS WIRE)--March 13, 2001 Congoleum Corporation (AMEX AMEX See: American Stock Exchange : CGM (1) (Computer Graphics Metafile) An ISO/IEC standard format for 2D graphics images introduced in 1987. Primarily a vector graphics format for technical illustrations and geophysical visualizations, CGM also supports raster graphics and text. ) today reported its financial results for the fourth quarter and full year ended December December: see month. 31, 2000. These results include non-recurring costs associated with the previously announced termination of a major distributor, LDBrinkman, and the related startup (STARTing UP) "At startup" means when the computer is first turned on or when a program is first loaded. See Startup folder. of a new distributor, Mohawk Industries Mohawk Industries is an American company that supplies residential and commercial flooring and other home products. It is one of the two largest carpet manufacturers in the world. It is exchanged on the New York Stock Exchange under the listed security MHK. . The Company recorded a charge of $7.7 million before taxes in the fourth quarter of 2000 for expenses arising from these changes. A provision for a future return of inventory reduced fourth quarter sales by $4.0 million and reduced earnings before taxes by an additional $1.3 million. Fourth Quarter Results Excluding the charges and reduction in sales for the distributor transition, sales for the quarter ended December 31, 2000 were $55.5 million, up $1.8 million or 3.3% from the fourth quarter of 1999. Net earnings excluding these charges were $0.3 million, down from $1.5 million in the fourth quarter of 1999. After the effect of the transition charges, sales for the three months ended December 31, 2000 were $51.5 million, down $2.3 million or 4.2% from the fourth quarter of 1999. The net loss for the fourth quarter of 2000 after these charges was $5.7 million. The loss per share after the charges was $.69 in the fourth quarter of 2000 compared with earnings per share of $.18 in the fourth quarter of 1999. Full Year Results Excluding the charges and reduction in sales for the distributor transition, sales for the year ended December 31, 2000 were $228.7 million, a decrease of 7.0% from the $246.0 million reported in 1999, and the net loss was $2.1 million compared with net earnings of $4.9 million in 1999. After the transition related charges, sales for the year ended December 31, 2000 were $224.6 million, a decrease of 8.7% from the prior year. The net loss after these charges was $8.1 million in 2000, and the loss per share was $.98 in 2000 compared with earnings per share of $.57 in 1999. Roger S. Marcus, Chairman of the Board, commented, "Two major factors lead to our loss for the year. The first was the depressed condition of the manufactured housing Manufactured housing (also known as prefab housing) is a type of housing unit that is largely assembled in factories and then transported to sites of use. In the United States, the term "manufactured home" specifically refers to a house built entirely in a protected industry. Shipments to this industry constitute a major portion of our volume and our large share of the market left us bearing the full burden of the decline. The second factor was the replacement of a major distributor, which entailed significant expense and temporarily disrupted dis·rupt tr.v. dis·rupt·ed, dis·rupt·ing, dis·rupts 1. To throw into confusion or disorder: Protesters disrupted the candidate's speech. 2. sales. Unfortunately, the impact of these factors overshadowed the spectacular success of our new Ultima product line, which has lead to a resurgence re·sur·gence n. 1. A continuing after interruption; a renewal. 2. A restoration to use, acceptance, activity, or vigor; a revival. of enthusiasm for Congoleum at the retail level." Mr. Marcus continued, "The addition of Mohawk as a distributor is expected to increase market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" and expand our retail presence. The popularity of Ultima gives us an opportunity to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the momentum with additional designs as well as new products with similar selling features. Finally, the completion of our capital program provides highly efficient capacity to produce increased volume. The eventual recovery of the manufactured housing industry will further fuel this growth. With all these strengths, I believe Congoleum is poised for much greater success in the future." Congoleum Corporation is a leading manufacturer of resilient See resiliency. flooring, serving both residential and commercial markets. Its sheet, tile tile, one of the ceramic products used in building, to which group brick and terra-cotta also belong. The term designates the finished baked clay—the material of a wide variety of units used in architecture and engineering, such as wall slabs or blocks, floor , plank and laminate laminate, n a thin slice of porcelain or plastic fabricated in a dental lab, which is cemented to the front of the teeth to cover gaps, whiten stained teeth, or reshape chipped or broken teeth. products are available in a wide variety of designs and colors, and are used in remodeling remodeling /re·mod·el·ing/ (re-mod´el-ing) reorganization or renovation of an old structure. bone 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). The above news release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , which involve a number of risks and uncertainties, including product demand, the effect of a change in distributors, consumer preferences, changes in customer inventories, pricing, competitive factors, raw material prices, market conditions, costs and insurance coverage for resolving asbestos-related claims and other factors. Actual results could differ significantly as a result of these and other factors discussed in the Company's most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the Securities and Exchange Commission. (See attached table)
CONGOLEUM CORPORATION
UNAUDITED RESULTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
2000 1999 2000 1999
---- ---- ---- ----
Net sales $51,535 $53,818 $224,644 $246,006
Cost of sales 37,764 40,412 170,373 176,559
Selling, general
& administrative
expenses 13,524 10,205 54,395 57,428
Distributor
transition
expenses 7,717 -- 7,717 --
--------- --------- --------- ---------
Income (loss)
from operations (7,470) 3,201 (7,841) 12,019
Interest expense,
net (1,619) (1,380) (5,714) (6,101)
Other income,
net 295 310 1,450 1,729
--------- --------- --------- ---------
Income (loss)
before income
taxes (8,794) 2,131 (12,105) 7,647
Provision (credit)
for income taxes (3,078) 637 (3,976) 2,719
--------- --------- --------- ---------
Net income (loss) $(5,716) $1,494 $(8,129) $4,928
========= ========= ========= =========
Net income (loss)
per common
share, basic and
diluted $(.69) $.18 $(.98) $.57
========= ========= ========= =========
Weighted average
number of common
and equivalent
shares
outstanding 8,260 8,399 8,267 8,699
========= ========= ========= =========
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