Foamex 4Q Earnings Off

Linwood, PA, April 2, 2007--Foamex International in the fourth quarter posted net income of $1.1 million, or $0.03 per diluted share, compared to net income of $18.9 million, or $0.49 per diluted share, in the fourth quarter of 2005.

Net sales for the fourth quarter were $310.7 million, down from $335.1 million in the fourth quarter of 2005.

The company said that fourth quarter 2005 results were unusually strong and benefited significantly from one-time supply and demand imbalances caused by Hurricanes Katrina and Rita. It said results in 2006 reflect lower volumes in Foam Products and Carpet Cushion Products, contraction of demand in the flexible polyurethane foam industry as a whole, the full impact of raw material cost increases initiated in the 2005 period, and the scrap foam charge described above.

For the year 2006 the company reported net income of $12.3 million, or $0.32 per diluted share, compared to a net loss of $56.2 million, or $(1.53) per diluted share, in 2005. Sales for the year were $1.36 billion, up from $1.28 billion in 2005, due primarily to higher selling prices in all operating segments partially offset by lower volumes in Foam Products and Carpet Cushion Products.

Commenting on the results, Ray Mabus, Chairman and Chief Executive Officer, said, "2006 was a historic year for Foamex with record sales and income from operations. In addition, on February 12, 2007, Foamex emerged from Chapter 11, repaying all of its creditors in full and maintaining substantial value for its stockholders. Today Foamex is a stronger company, investing in state-of-the-art technology, with a much-improved capital structure."

Mabus said, "While the fourth quarter was down somewhat due to soft demand in the end markets of our Foam Products and Carpet Cushion segments, we believe our change in strategic direction is correct and the effects of this change are just beginning to be seen. We are experiencing the benefits of adjusting our business towards innovation and customer-focused foam solutions and away from that of a traditional foam manufacturer. Along with our focus on product innovation, we continue to examine ways to extract substantial efficiencies from our operations. Going forward, Foamex is well positioned to provide significant value for our customers, employees, and stockholders."

Although demand in the first quarter of 2007 remains soft in the furniture, bedding and carpet cushion markets, the company believes operating income for the full year will exceed $110 million. During 2007, the company expects depreciation and amortization of approximately $18 million.

The company anticipates capital expenditures will be approximately $20 to $22 million, of which approximately $8 to $10 million is related to maintenance activity and the remainder represents investments in initiatives designed to drive operational efficiencies and growth. Based on its post-emergence capital structure, Foamex expects to pay interest of between $50 and $55 million annually.

The company does not expect to be a significant federal income taxpayer in 2007 due to the company's net operating loss carryforwards. Foamex said it remains committed to returning value to its stockholders through debt reduction and expects that the company will pay off approximately $50 million of debt during 2007.