The net loss for the quarter (before a required accounting change) was $600,000 vs. a net loss of $3.7 million in the first quarter of 2001. The net loss per share (before accounting change) was 8 cents in the first quarter of 2002 compared with 45 cents per share in the first quarter of 2001.
The company recorded a non-cash transition charge of $10.5 million or $1.27 per share in the first quarter of 2002 for impairment of goodwill as required for adoption of Statement of Financial Accounting Standards No. 142.
"Congoleum's results in the first quarter of 2002 showed a quantum improvement over the first quarter of 2001," said Roger S. Marcus, chairman of the board. "Shipments of the new DuraStone product continue to surpass even our most optimistic projections." Also bolstering Congoleum's performance was the company's initial shipments to a major home center chain, Marcus said. A third factor contributing to the improvement was sales of the newly introduced sheet product, Utopia. And the company's builder products are selling well as a result of the new designs and constructions we added last fall, he added.
"Finally, sales to the manufactured housing industry were up from the very low levels of the first quarter of 2001," Marcus explained. "However, the near-term outlook for this segment remains weak and we do not anticipate sales for the balance of 2002 will exceed prior year levels."
Marcus said Congoleum's initial investment for expansion in the mass merchandiser business, combined with costs associated with launching new products, has had a short-term negative effect on profitability. Both effects were offset by savings from lower raw materials costs and further improvements in manufacturing efficiency.
"If these trends continue and we maintain the pace of improvement over 2001 that we achieved in the first quarter, we should turn in a very solid performance for the full year of 2002," Marcus said.