-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MZL4pgWprwTL4up5CweG8eKOpBLHWBowDQRWqS8EcvvWxs+Y7kjmfNycEKAAKfLb tTqBCpX8EsoOx85WWGHLbA== 0001171520-06-000445.txt : 20061113 0001171520-06-000445.hdr.sgml : 20061110 20061113104822 ACCESSION NUMBER: 0001171520-06-000445 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20061109 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061113 DATE AS OF CHANGE: 20061113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONGOLEUM CORP CENTRAL INDEX KEY: 0000023341 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS PRODUCTS, NEC [3089] IRS NUMBER: 020398678 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13612 FILM NUMBER: 061206262 BUSINESS ADDRESS: STREET 1: 3500 QUAKERBRIDGE RD STREET 2: PO BOX 3127 CITY: MERCERVILLE STATE: NJ ZIP: 08619-0127 BUSINESS PHONE: 6095843000 MAIL ADDRESS: STREET 1: 3500 QUAKERBRIDGE RD STREET 2: PO BOX 3127 CITY: MERCERVILLE STATE: NJ ZIP: 08619-0127 FORMER COMPANY: FORMER CONFORMED NAME: BATH INDUSTRIES INC DATE OF NAME CHANGE: 19750528 FORMER COMPANY: FORMER CONFORMED NAME: BATH IRON WORKS CORP DATE OF NAME CHANGE: 19670907 8-K 1 eps2296.txt CONGOLEUM CORPORATION UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 November 9, 2006 ------------------------------------------------ Date of Report (Date of earliest event reported) Congoleum Corporation ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 01-13612 02-0398678 - ---------------------------- ----------- ---------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 3500 Quakerbridge Road P.O. Box 3127 Mercerville, NJ 08619-0127 ----------------------------------------------------- (Address of principal executive offices and Zip Code) 609-584-3000 ---------------------------------------------------- (Registrant's telephone number, including area code) N/A ------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a- 12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02 Results of Operations and Financial Condition On November 9, 2006, Congoleum Corporation, a Delaware corporation, issued a press release announcing its financial results for the three and nine months ended September 30, 2006. The text of the press release is filed herewith as Exhibit 99, and incorporated herein by reference. ITEM 9.01 Financial Statements and Exhibits - -------------------------------------------------------------------------------- EXHIBIT NO. DESCRIPTION - -------------------------------------------------------------------------------- 99 Press release, dated November 9, 2006. - -------------------------------------------------------------------------------- SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: November 10, 2006 Congoleum Corporation By: /s/ Howard N. Feist III -------------------------- Name: Howard N. Feist III Title: Chief Financial Officer EX-99 2 ex99.txt Exhibit 99.1 For Further Information: Howard N. Feist Chief Financial Officer (609) 584-3586 CONGOLEUM CORPORATION REPORTS THIRD QUARTER RESULTS MERCERVILLE, NJ, November 9, 2006 - Congoleum Corporation (AMEX: CGM) reported today its financial results for the third quarter ended September 30, 2006. Sales for the three months ended September 30, 2006 were $57.5 million, compared with sales of $60.5 million reported in the third quarter of 2005, a decrease of $3.0 million or 5.0%. The net loss for the third quarter of 2006 was $0.4 million, compared with net income of $0.3 million in the third quarter of 2005. The net loss per share was $.05 for the third quarter of 2006, compared with net income per share of $.04 in the third quarter of 2005. Sales for the nine months ended September 30, 2006 were $173.4 million compared with sales of $176.2 million in the first nine months of 2005. Net income for the nine months ended September 30, 2006 was $0.4 million, or $.05 per share, versus a net loss of $14.6 million, or $1.77 per share, in the first nine months of 2005 (which included an asbestos related charge of $15.5 million). Roger S. Marcus, Chairman of the Board, commented, "As previously reported, there was an explosion in late August on one of our two main resilient sheet production lines at the Marcus Hook facility. Fortunately, no one was hurt and the damage was limited to the oven section of the line. We were able to immediately replace about a third of the lost production capacity using our other line on a seven-day operation. We also made an arrangement with a competitor to provide the balance of our requirements. By the end of September we were nearly back to normal service levels as a result of these arrangements. While we estimate the incident cost us approximately $0.8 million in the third quarter due to excess costs, lost production and the impact of lost sales, I do not anticipate any further negative impact on fourth quarter performance. The equipment manufacturer, our insurance carrier, and our own employees should all be complimented for their timely response and support in expediting the line rebuilding process. At this time we expect the replacement line will be installed and running by the end of this year." Mr. Marcus continued, "In addition to the impact of the production disruption, our third quarter sales suffered from an extremely slow retail environment, particularly in upper end remodel products, which is affecting the entire flooring category. On a positive note, our Duraproduct sales continue to show healthy growth despite this environment, and we are benefiting from the 2006 introduction of our K-Tech product line which we did not have at this time last year." "The impact of the production line incident, the weak retail environment, and continuing cost increases on certain specialty raw materials all hurt our results for the quarter. However, the good news is that the line problems are behind us, costs for our core raw materials appear to have stabilized, and a September price increase of nearly 5% will help our margins going forward. While we will not have the hurricane-related business that took place in the fourth quarter of 2005, we expect increased Duraproduct sales and the addition of K-Tech will help replace some of that business." 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 Corporation is a leading manufacturer of resilient flooring, serving both residential and commercial markets. Its sheet, tile and plank products are available in a wide variety of designs and colors, and are used in remodeling, manufactured housing, new construction and commercial applications. The Congoleum brand name is recognized and trusted by consumers as representing a company that has been supplying attractive and durable flooring products for over a century. Congoleum is a 55% owned subsidiary of American Biltrite Inc. (AMEX: ABL). The above news release contains certain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks, uncertainties and assumptions. These statements can be identified by the use of the words such as "anticipate," "believe," "estimate," "expect," "intend," "plan," "project" and other words of similar meaning. In particular, these include statements relating to intentions, beliefs or current expectations concerning, among other things, future performance, results of operations, the outcome of contingencies such as bankruptcy and other legal proceedings, and financial conditions. These statements do not relate strictly to historical or current facts. These forward-looking statements are based on Congoleum's expectations, as of the date of this release, of future events, and Congoleum undertakes no obligation to update any of these forward-looking statements. Although Congoleum believes that these expectations are based on reasonable assumptions, within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from its expectations. Readers are cautioned not to place undue reliance on any forward-looking statements. Any or all of these statements may turn out to be incorrect. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statements made in this press release speak only as of the date of such statement. It is not possible to predict or identify all factors that could potentially cause actual results to differ materially from expected and historical results. Factors that could cause actual results to differ from expectations include: (i) the future cost and timing of estimated asbestos liabilities and payments, (ii) the availability of insurance coverage and reimbursement from insurance companies that underwrote the applicable insurance policies for the Company for asbestos-related claims, (iii) the costs relating to the execution and implementation of any plan of reorganization pursued by Congoleum, (iv) timely reaching agreement with other creditors, or classes of creditors, that exist or may emerge, (v) satisfaction of the conditions and obligations under Congoleum's outstanding debt instruments, (vi) the response from time to time of Congoleum's and its controlling shareholder's, American Biltrite Inc.'s, lenders, customers, suppliers and other constituencies to the ongoing process arising from Congoleum's strategy to settle its asbestos liability, (vii) Congoleum's ability to maintain debtor-in-possession financing sufficient to provide it with funding that may be needed during the pendency of its Chapter 11 case and to obtain exit financing sufficient to provide it with funding that may be needed for its operations after emerging from the bankruptcy process, in each case, on reasonable terms, (viii) timely obtaining sufficient creditor and court approval (including the results of any relevant appeals) of any reorganization plan pursued by Congoleum and the court overruling any objections to the plan that may be filed, (ix) compliance with the United States Bankruptcy Code, including Section 524(g), (x) costs of, developments in, and the outcome of insurance coverage litigation pending in New Jersey state court involving Congoleum and certain insurers, (xi) the possible adoption of another party's plan of reorganization which may prove to be unfeasible, (xii) the possible elimination of the interests of all existing shareholders through the implementation of the "cram down" provisions of the Bankruptcy Code if the holders of Congoleum's Senior Notes do not vote as a class to accept Congoleum's plan of reorganization in the requisite number and amount required by the Bankruptcy Code, (xiii) developments in, and the outcome of, proposed federal legislation that, if adopted, would establish a national trust to provide compensation to victims of asbestos-related injuries that would be funded by assessments against companies with asbestos-related liabilities such as Congoleum, (xiv) increases in raw material prices or disruption in supply, (xv) increased competitive activity from companies in the flooring industry, some of which have greater resources and broader distribution channels than Congoleum, (xvi) increases in the costs of environmental compliance and remediation or the exhaustion of insurance coverage for such expenses, (xvii) unfavorable developments in the national economy or in the housing industry in general, including developments arising from the war in Iraq, (xiii) shipment delays, depletion of inventory and increased production costs resulting from unforeseen disruptions of operations at any of Congoleum's facilities or distributors, (xix) product warranty costs, (xx) changes in distributors of Congoleum's products, (xxi) Congoleum's interests may not be the same as its controlling shareholder American Biltrite, Inc., (xxii) possible future sales by ABI could adversely affect the market for Congoleum's stock, (xxiii) the potential impact if the Company is unable to maintain its listing on the American Stock Exchange, and (xxiv) Congoleum's ability to replace the production capacity damaged by a production line fire in August 2006 and to obtain payments from its insurance carriers for the costs resulting from that incident. In any event, if Congoleum is not successful in obtaining sufficient creditor and court approval of its plan of reorganization, such failure would have a material adverse effect upon its business, results of operations and financial condition. Actual results could differ significantly as a result of these and other factors discussed in Congoleum's annual report on Form 10-K for the year ended December 31, 2005 and subsequent filings made by Congoleum with the Securities and Exchange Commission. CONGOLEUM CORPORATION RESULTS OF OPERATIONS (In thousands, except per share amounts.)
(Unaudited) For the Three For the Nine Months Ended Months Ended September 30, September 30, --------------------------- ---------------------------- 2006 2005 2006 2005 ---- ---- ---- ---- Net Sales .......................................... $ 57,460 $ 60,507 $ 173,440 $ 176,245 Cost of Sales ...................................... 44,562 47,270 133,661 135,577 Selling, General & Administrative Expenses ......... 10,681 10,556 31,338 32,962 Asbestos Related Reorganization Charges ............ -- -- -- 15,454 ---------- ---------- ---------- ---------- Income (Loss) from Operations ...................... 2,217 2,681 8,441 (7,748) Interest Income .................................... 104 91 387 273 Interest Expense ................................... (2,916) (2,670) (8,517) (7,788) Other Income ....................................... 77 223 124 638 ---------- ---------- ---------- ---------- Income (Loss) before Income Taxes .................. (518) 325 435 (14,625) Income Tax Expense ................................. (94) -- 22 -- ---------- ---------- ---------- ---------- Net Income (Loss) .................................. $ (424) $ 325 $ 413 $ (14,625) ========== ========== ========== ========== Net Income/(Loss) Per Share, Basic ................. $ (0.05) $ 0.04 $ 0.05 $ (1.77) ========== ========== ========== ========== Net Income/(Loss) Per Share, Diluted ............... $ (0.05) $ 0.04 $ 0.05 $ (1.77) ========== ========== ========== ========== Weighted Average Number of Common Shares Outstanding - Basic ................................ 8,280 8,261 8,317 8,261 ========== ========== ========== ========== Weighted Average Number of Common Shares Outstanding - Diluted .............................. 8,280 8,642 8,329 8,261 ========== ========== ========== ========== ADDITIONAL FINANCIAL INFORMATION: Capital Expenditures ............................... $ 1,541 $ 1,485 $ 2,537 $ 3,640 Depreciation and Amortization ...................... $ 2,685 $ 2,745 $ 8,030 $ 8,371
CONDENSED BALANCE SHEET (In thousands) (Unaudited) September 30, December 31, 2006 2005 ---- ---- ASSETS: Cash ......................................... $ 19,722 $ 24,511 Restricted Cash .............................. 10,220 11,644 Accounts & notes receivable, net ............. 26,731 17,092 Inventory .................................... 062 34,607 Other current assets ......................... 40,290 36,874 ---------- ---------- Total current assets ......................... 131,025 124,728 Property, plant & equipment (net) .............. 68,002 73,207 Other assets (net) ............................. 10,515 9,412 ---------- ---------- Total assets ................................... $ 209,542 $ 207,347 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY: Accounts payable, accrued expenses & deferred income taxes ........................ $ 54,778 $ 63,317 Revolving credit loan - secured debt ........... 14,286 9,404 Liabilities subject to compromise - current .... 31,965 23,990 ---------- ---------- Total current liabilities ...................... 101,029 96,711 Liabilities subject to compromise .............. 136,156 138,861 Long term debt ................................. -- -- Other liabilities .............................. 16,735 16,735 ---------- ---------- Total liabilities .............................. 253,920 252,307 Stockholders' equity (deficit) ................. (44,378) (44,960) ---------- ---------- Total liabilities & stockholders' equity ....... $ 209,542 $ 207,347 ========== ========== -----END PRIVACY-ENHANCED MESSAGE-----