Mercerville, NJ, May 14--Congoleum Corporation reported its financial results for the first quarter ended March 31, 2003.
Sales for the three months ended March 31, 2003 were $53.6 million, compared with sales of $57.9 million reported in the first quarter of 2002, a decrease of 7.4%. The net loss for the quarter was $2.6 million versus a net loss of $0.6 million (before a required accounting change) in the first quarter of 2002. The net loss per share was $.31 in the first quarter of 2003 compared with $.08 per share (before accounting change) in the first quarter of 2002. The Company recorded a non-cash transition charge of $10.5 million or $1.27 per share in the first quarter of 2002 for impairment of goodwill as required for adoption of Statement of Financial Accounting Standards No. 142.
Roger S. Marcus, Chairman of the Board, commented "Congoleum's first quarter sales were negatively affected by further declines in the manufactured housing industry as well as soft remodel demand due to economic weakness and low consumer confidence. These declines were partly offset by higher sales of builder products, as the new housing market has remained healthy, as well as increased sales of DuraStone. The lower sales, combined with increases in insurance and benefit costs and a less profitable product mix all hurt profitability despite continued improvements in manufacturing efficiency. Although improvement in demand for manufactured housing products does not appear imminent, there are several other reasons why we are optimistic about the balance of 2003. First, we are firmly committed to managing our expenses and continuing to improve efficiencies. Second, we have two exciting new products that will be introduced early in the second half of the year. Finally, the economic outlook and consumer confidence should improve with the war in Iraq effectively over. These factors should contribute to improving results as we move forward."
Marcus continued, "Our plans to resolve our asbestos related litigation continue to progress, as evidenced by the signing of an agreement on April 10th, 2003 with attorneys representing a majority of known pending claimants. We are encouraged by this latest development and remain cautiously optimistic that we can achieve our goal of completing the confirmation of our reorganization plan by the end of the year."
