Congoleum Records Profit on Lower Sales

Mercerville, NJ, May 7, 2008 -- Congoleum Corporation swung to a profit in the first quarter compared to a year ago with net income of $1.7 million or $.20 per share. However, sales declined by 3.3 percent.

A year ago the company reported a loss of $351,000.

Sales for the three months ended March 31 were $47.7 million, compared with sales of $49.3 million reported in the first quarter of 2007.

Last year's loss included $2.8 million in interest on its senior notes.

"Given the sharp deterioration in economic conditions versus the first quarter of 2007, I am very pleased that we were able to hold our sales decline to under 4 percent," said Roger S. Marcus, chairman of the board, commented.

"All three of our markets -- manufactured housing, new construction, and remodeling -- are down to a much greater degree, in excess of 20 percent by my estimate. The relative strength of our own performance in this climate reflects the continued sales growth of our unique Dura products, as well as new marketing initiatives launched in the fourth quarter of 2007 and the benefit of selling price increases."

Marcus said that raw material costs have escalated significantly with the price of oil, which resulted in a gross margin decline of 1.5 percent compared to a year ago.