Mercerville, NJ, November 12--Congoleum Corp. in the third quarter reported sales of $58.9 million, compared with sales of $61.1 million reported in the third quarter of 2003, a decrease of 3.6%.
Net income for the quarter ended September 30, 2004 was $1.2 million compared with net income of $1.3 million in the third quarter of 2003. Diluted net income per share for the quarter ended September 30, 2004 was $0.13, compared with $0.15 in the third quarter of 2003. Results in the third quarter of 2003 included $1.6 million or $.19 per share from the recognition of tax benefit realized as a result of net operating loss carry back claims received.
Sales for the nine months ended September 30, 2004 were $173.8 million, compared with sales of $169.7 million reported in the first nine months of 2003, an increase of 2.4%. Net income for the nine months ended September 30, 2004 was $2.1 million, or $0.25 per share, versus a net loss of $3.3 million, or $0.40 per share, in the first nine months of 2003.
Roger S. Marcus, Chairman of the Board, commented "Third quarter results showed solid margin improvement despite the most severe inflationary pressure on resins and other raw materials in three decades. The margin improvement was achieved through a more profitable sales mix and the cost reduction steps we have taken over the past year.
"While volume of some less profitable products declined, pipeline sales of our new high end sheet product Xclusive more than compensated for the decline. The margin improvement is all the more impressive given the raw material situation.
"Despite the increases in material costs, as well as greater expenses for energy and freight, operating income has improved significantly for the quarter and year to date over year ago levels. Had the raw material cost environment been more stable, we would have had an excellent quarter."
Mr. Marcus continued, "While we do not expect any improvement in the raw material situation near term, there are a number of positive factors as we look ahead. We have additional price increases in process that will offset some, but not all, of the increased raw material costs. We anticipate continued sales and margin benefits from products introduced this year, as well as new products and programs we plan for early 2005.
"Finally, we remain intensely focused on improving manufacturing efficiency and reducing costs. These steps should all help our future performance."
Mr. Marcus concluded, "We are also encouraged that our reorganization is moving forward. As we announced earlier this week, we have concluded negotiations with representatives of the Asbestos Creditors' Committee, the Future Claimants representative, and other asbestos claimant representatives and filed a modified plan of reorganization and related documents with the Bankruptcy Court. While the modified plan will require a re-solicitation process, we are confident that this modified plan will have widespread support. Our goal is to have our plan confirmed during the second quarter of 2005."
