Mercerville, NJ, May 09, 2006--Congoleum Corp., today reported its financial results for the first quarter ended March 31, 2006. Sales for the three months ended March 31, 2006 were $57.2 million, compared with sales of $57.6 million reported in the first quarter of 2005, a decrease of 0.7%.
Net income for the quarter was $211,000, versus a net loss of $352,000 in the first quarter of 2005. Net income per share was $.03 in the first quarter of 2006 compared with a net loss of $.04 per share in the first quarter of 2005.
Roger S. Marcus, chairman of the board, commented, "Our net results for the first quarter of 2006 were profitable compared to a loss for the same period last year, despite slightly lower sales. This was achieved in spite of our largest distributor reducing its inventories of our products by $3.2 million in the first quarter of this year as part of an overall inventory reduction program. Had they held inventories level, or increased them as they did in the first quarter last year, our sales and profits would have been significantly better. Our results also continue to suffer from the cumulative impact of higher raw material and energy costs, which have yet to be fully recovered in our selling prices. On the positive side, our operating expenses in the quarter were well below year ago levels, reflecting the success of cost reduction programs we instituted after the first quarter last year."
"We remain focused on controlling costs and improving efficiencies. If raw material pricing can at least remain steady and our distributors do not further reduce their inventories, I am cautiously optimistic that results for the balance of 2006 will be better than 2005."
Marcus continued, "We continue to press ahead with our reorganization. A hearing is scheduled for June 8 to consider the disclosure statement for our new reorganization plan; assuming it is approved we will proceed to solicit acceptances shortly thereafter. In the meantime, we continue to make progress with insurance settlements. During the month of April, we reached two new settlements which will provide another $26 million to the trust for asbestos claimants, bringing our total settlement pool to over $190 million. Additional settlement discussions are underway, and I am hopeful we are building momentum to obtain confirmation of our plan later this year."
