Mercerville, NJ, August 10, 2006--Congoleum Corporation in its second quarter financial report today noted positive second quarter net income, compared with $14.6 net loss in the second quarter of 2005.
Sales for the three months ended June 30, 2006 were $58.7 million, compared with sales of $58.1 million reported in the second quarter of 2005, an increase of $600,000 or 1%.
Net income for the second quarter of 2006 was $600,000, compared with a net loss of $14.6 million in the second quarter of 2005, which included a $15.5 million charge for asbestos liabilities. Net income per share was $.08 for the second quarter of 2006, compared with a net loss per share of $1.77 in the second quarter of 2005.
Sales for the six months ended June 30, 2006 were $116.0 million, essentially level with sales of $115.7 million in the first six months of 2005. Net income for the six months ended June 30, 2006 was $0.8 million, or $ .10 per share, versus a net loss of $15.0 million, or $1.81 per share, in the first six months of 2005 (after the asbestos related charge of $15.5 million).
Roger S. Marcus, chairman of the board, commented, "Sales during the second quarter benefited from several factors. These included volume growth in our popular DuraCeramic products, our new K-Tech for Kitchens line introduced earlier this year, and the effect of selling price increases. Sales also benefited from our largest distributor replenishing a portion of the inventory that it had reduced in the first quarter."
Marcus continued, "Unfortunately, the positive sales effects from these factors was largely offset by a marked slowdown in both the builder business and more upscale remodel markets, as well as the continuing loss of do-it-yourself tile business to foreign competition. High energy prices have not only hurt our consumers, but also added significant additional costs to our business, at a time when raw material costs are at a cyclical high point."
Marcus concluded, "Considering the demand weakness and cost pressures we faced, I am very pleased with our performance in the quarter. Our continued focus on plant efficiency and cost reduction, coupled with the growth in DuraCeramic sales and the new K-Tech line, enabled us to be profitable despite the very difficult environment."
On December 31, 2003, Congoleum Corporation filed a voluntary petition with the United States Bankruptcy Court for the District of New Jersey 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.
