American Biltrite posts Q2 loss, suspends dividend
Net sales for the period were $105.8 million, down 13.3 percent from $122.0 million in the second quarter of 2002.This year’s second quarter net loss of $3.45 per share compared with net income of $1.6 million, or 48 cents per share, in the second quarter of 2002.
For the six months ended June 30, the company’s net loss was $15 million, or $4.36 per share, on sales of $209.8 million, compared with net earnings (before a required accounting change) of $900,000, or $.25 per share, on sales of $224.7 million for the comparable year-earlier period.
The $11.9 million second quarter loss includes $9.9 million related to the company’s decision to dispose of its Janus Flooring hardwood floor subsidiary and $2 million related to American Biltrite's 55 percent owned subsidiary Congoleum. Included in the $9.9 million Janus loss was $8.5 million in non-cash charges reducing the carrying values of Janus's fixed assets, inventories, deferred tax assets, and other current assets to amounts expected to be realized through the disposition. The company expects these charges will represent the substantial majority of the expenses to exit this business.
Future expenses in connection with the disposition, which will be reported as losses on discontinued operations, are currently anticipated to be approximately $2 million. The company anticipates the disposition of Janus, net of future expenses, will generate $3 million to $5 million in cash.
The company also indicated that, based upon second quarter results, its board of directors has decided not to declare the quarterly dividend it has historically paid in early October.
"American Biltrite's loss for the quarter was due to Janus and, to a much lesser extent, Congoleum,” noted Roger S. Marcus, chairman of the board. “Our decision to dispose of the Janus business will permit us to concentrate our capital and management resources on our other operations, where we believe we can earn acceptable returns.
“Congoleum continues to proceed with its plans to reorganize and resolve its asbestos liabilities,” Marcus added. “Congoleum's customers, suppliers, employees, bondholders, and stockholders would all benefit from the proposed plan of reorganization and resolution of the asbestos concern. Meanwhile Congoleum continues to pursue cost reduction initiatives to counter the poor current market conditions and to introduce innovative new products to position itself for future growth.
"Results for the balance of American Biltrite's operations in the quarter were essentially at break-even, reflecting the weak economy. Efforts across the company are focused on reducing costs, improving cash flow, and positioning ourselves to take advantage of an improving economy. Included in these initiatives was the decision not to declare a dividend."