Pergo Reports Results for First Nine Months

Stockholm, Sweden, October 21, 2005—Pergo reported its financial results for the first nine months of 2005. The profit after tax for the period of SEK 33 million (US$4.2 million) compared wit a loss of SEK 208 (US$26.4 million) in the same period of the prior year. Earnings per share (EPS) for the period was SEK 0.60 (US$0.08) compared with a loss of -SEK 3.90 (US$ 0.50) in the third quarter of last year. Net sales for the period were SEK 2,199 million (US$279.5 million), verses SEK 2,098 million (US$266.6 million) in the same period last year. Net sales for the third quarter were SEK 769 million (US$97.7 million) compared with SEK 681 (US$86.5 million) in the same period of 2004. Sales in North America in the third quarter were SEK 475 million (US$60.2 million) verses SEK 402 million (US$52 million) in the same period of last year. North American sales for the first nine months of 2005 were SEK 1,354 million (US$171.6 million) verses SEK 1,263) (US$106.1 million) in the same period of last year. Sales in Europe in thethird quarter were SEK 265 million (US$33.6 million) verses SEK 253 million (US$32.1 million) in the year ago period. European sales for the nine month period were SEK 772 million (US$97.8 million) compared with SEK 767 million) (US$91.2million) in the first nine months of 2005. The operating profit for the period was SEK 42 million (US$5.3 million) verses a loss of SEK -207 million (US$26.2 million). After considering items affecting comparability last years profit was SEK 46 million (US$5.8 million). The operating profit for the third quarter was SEK 22 million (US$2.8 million) compared with SEK 15 million (US$1.9 million). Cash flow from ongoing operations over the period was -SEK 53 million (-US$6.7 million) versus -SEK 83 million (-US$ 10.5 million). Cash flow for the third quarter was SEK 33 million (US$4.1 million) verses SEK -94 million (-US $11.9 million). The outlook reflects continued improvement in sales growth and profitability. CEO Tony Sturrus comments, "Today Pergo reports accelerating growth in sales for North America. In Q3, sales in local currency grew 15% and are up 10% on a year-over-year comparison basis. The growth in the quarter was achieved despite disruption in our logistical chain caused by the major hurricanes in September. Sales in our home centre channel were particularly strong during the period. Our sales levels in Europe also increased in the third quarter. "Our people have significantly improved our year-over-year profit performance in Q3. We are also on track with our European improvement program to save annualized cost of SEK 100 million. We will begin to realize some of the benefits of our lower cost model in Q4 with the full SEK 100 million improvement to be realized in 2006. "We are increasing our customer relationship activities both in Europe and in North America. We have introduced a more customer-focused and efficient selling structure throughout Europe." Our main objectives for the Pergo group remain growth and improved profitability.``