Pergo Posts 2Q Profit

Trelleborg, Sweden, July 26, 2006--Pergo in the second quarter of 2006 reported net income of SEK 37 million (US$5 million) compared with a loss of SEK 5 million (US$681,063) in the second quarter of 2005. Earnings per share for the period were SEK 0.69 (US$0.09) verses a loss of SEK -0.12 (US$0.02). Net sales for the quarter were up 16% year on year to SEK 831 million ($113.2 million) verses SEK 717 million in the same period of last year ($97.7 million). In the first half of 2006 the company reported net income of SEK 71 million (US$9.7 million) compare to SEK 15 million (US$2.0 million). Earnings per share up for the half were SEK 1.34 (US$0.18) verses SEK 0.26 (US $0.04) in the same quarter of last year. Net sales for the first half rose 12% year on year to SEK 1,599 million (US$ 217.8million) compared to (SEK 1,430 million) (US$194.820 million) in the first half of 2005 Following strong first half year operating results and despite increased competitive pressures, the company’s board of directors raised the guidance for full year 2006 sales growth to at least 15% (previously 10-15%) and maintained full year 2006 guidance for EBIT margin of 6-7%, with a bias towards the upper end of range, and return on capital employed of 16-18% Tony Sturrus, president and CEO of Pergo AB, commented: “Record second quarter and first half year operating results underline our dual objectives of continued growth and enhanced profitability. We also continue to benefit from the restructuring in 2005 and ongoing operating efficiency improvements. The North American operations continued to perform well across most business lines and the European operations yielded higher margins as a result of the changes that we have made. Our operating margin therefore increased to above 5% for both the quarter and year to date. “We remain focused on investing in the value of the Pergo brand and developing key account relationships across our operating regions. The introduction of new product ranges; new account initiatives; the extension of existing distribution channels; and activities to capitalize on Pergo’s significant worldwide intellectual property portfolio, provide the engine for further growth. We also continue to enhance our operating efficiency levels in order to improve our financial performance and maintain our competitiveness.”