Mercerville, NJ, March 11--Congoleum Corp. reported a profit for 2004 compared with a loss in 2003. The company reported basic net income for 2004 of $2.9 million, compared with a loss of $6.8 million in 2003.
Net income per share in 2004 was $0.36, compared to a net loss per share of $0.82 in 2003.
Sales for the year were $229.5 million, an increase of 4.0% compared to the $220.7 million reported in 2003.
Income from operations in 2004 was $8.7 million, compared to a loss from operations of $3.1 million for 2003.
The company’s results include charges of $5.0 million in 2004 and $3.7 million in 2003 for resolution of asbestos liabilities.
Roger S. Marcus, Chairman of the Board, commented "Sales improved in 2004 due to a combination of price increases, higher residential sales of our Xclusive and DuraCeramic product lines, and greater shipments to the manufactured housing industry.
"Our overall sales growth would have been higher were it not for lower sales in the do-it-yourself tile category, where we faced continued price pressure from China and other overseas sources, and by lower sales of specials and off-goods.
"The resulting sales mix was more profitable than 2003, and margins benefited further from increases in manufacturing efficiencies. Unfortunately, we also experienced significant inflation in raw material costs, particularly resins, which exceeded our price increases and offset much of the margin improvement."
Mr. Marcus continued "We lowered operating expenses by $4 million last year as a result of cost reduction steps taken in both 2003 and 2004, despite continued increases in medical and benefit costs. This reduction helped us achieve an $11.8 million improvement in income from operations, which swung from a loss of $3.1 million in 2003 to $8.7 million in income in 2004.
"We also increased our cash position considerably during the year, with unrestricted cash balances growing from $2.2 million at the end of 2003 to $29.7 million at the end of 2004.
"While the raw material situation will continue to be a challenge in 2005, we are committed to taking steps to protect our margins while continuing to build on the success of the new products we develop. We also hope to complete our reorganization process during the third quarter of 2005, putting the financial and management burden of our asbestos liabilities behind us."
On December 31, 2003, Congoleum Corporation filed a voluntary petition with the United States Bankruptcy Court for the District of New Jersey (Case No. 03-51524) seeking relief under Chapter 11 of the United States Bankruptcy Code as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Congoleum has filed an amended plan of reorganization and disclosure statement with the court and is seeking confirmation of the plan at a hearing scheduled to begin April 12, 2005.
