Congoleum Reports Loss on Special Charge

Mercerville, NJ, Nov. 6, 2008--Congoleum Corporation reported that third quarter sales fell 14% to $46.1 million, compared with sales of $53.6 million a year ago, due mostly to declining sales in the manufactured housing and recreational vehicle industries.

Congoleum also recorded a charge of $11.5 million to increase its reserve for asbestos related costs. The net loss for the quarter was $10.1 million or $1.22 per share, compared with net income of $1.2 million a year ago, or $.15 per share.

Sales for the nine months were $140.9 million, compared with sales of $160.4 million in the first nine months of 2007.

Sales for other parts of the business were down 6% from the third quarter of last year.

"While this is still a significant decline, I believe it is better than market conditions would dictate, and reflects the continued success of our Duraproduct line, which continued to post modest sales increases over comparable prior year levels despite the poor economy," said Chairman Roger Marcus.

"We reduced inventories during the quarter, as did our distributors, in response to market conditions. While we have also reduced overhead spending, these lowered production levels, coupled with the continued sharp inflation in raw materials experienced during the third quarter, more than negated the effect of our own selling price increases, and gross margins were well below year earlier levels." He said business conditions were the worst he's ever seen.

The company said it received approval from the Bankruptcy Court of a litigation settlement that it believes will remove what had been one of the major obstacles to the confirmation of its reorganization plans, and it is optimistic that it can complete the process in the first half of 2009.