Congoleum Narrows Loss, Sees Slack Demand

Mercerville, NJ, Nov. 12, 2009--Congoleum Corp. reported a $1.9 million net loss in the third quarter compared to a $10.1 million loss a year ago.

Sales for the three months ended Sept. 30 were $37.4 million, compared with $46.1 million last year, a decrease of 19%.

Congoleum recorded a charge of $11.5 million to increase its reserve for costs to complete its asbestos related reorganization. Net loss per share was $0.23 compared to a net loss of $1.22 per share in the third quarter of 2008.

Sales for the nine months were $106.8 million, compared with sales of $140.1 million in 2008.

"Demand for our products in the third quarter remained very weak, but did not deteriorate further," said Chairman Roger S. Marcus.

"Our third quarter sales were close to the level of the second quarter, and it continues to appear that market conditions have bottomed out but not begun any meaningful recovery."

Congoleum said it reduced inventories by $6 million during the third quarter.

"Despite the market outlook suggesting continuing soft demand, we are taking actions that we hope will improve our sales in 2010," Marcus said.

"We recently introduced a new sheet product line that has generated interest and orders exceeding our expectations, and we believe this line could have a more positive impact in 2010 than we had originally planned. We are also finalizing two additional major product introductions, one to take place in the first quarter of 2010 and the second in the following quarter. With the help of these three new products, we hope to achieve improved results in 2010 even if the economy remains flat."

Marcus also said the company agreed with its debtor-in-possession lender, subject to court approval, to amend its credit facility to extend it through June 30, 2010 and to provide an additional $5 million in liquidity.