WARREN, N.J. -- Due to the continued effect of the economic slowdown in its U.S. and international markets, Formica Corp. has entered into discussions with its bank syndicate concerning an amendment for non-compliance with certain financial covenants for the quarter ended June 30, 2001 under its $345 million bank credit facility.

The slowdown, which began in North America in the fourth quarter of 2000, has since spread to the Formica’s international markets in Europe and Asia, the copoany said.

In addition to lower sales volumes, earnings have been negatively impacted by higher energy and transportation costs, along with a stronger U.S. dollar. This has been partially offset by a cost-control program the company instituted, along with savings realized as a result of the reorganization following last year’s acquisition of Perstorp Surface Materials AB.

Formica noted that it has adequate liquidity, based on cash on hand, to finance operations and to fully complete its rationalization program and grow its revenue base.