Roger S. Marcus, Congoleum's chairman of the board, said the slight dip in sales was partly due to "our largest distributor reducing its inventories of our products by $3.2 million in the first quarter of this year as part of an overall inventory reduction program."
"Had they held inventories level, or increased them as they did in the first quarter last year, our sales and profits would have been significantly better," he added.
He also blamed higher raw material and energy costs for the slightly weakened sales.
"On the positive side, our operating expenses in the quarter were well below year ago levels, reflecting the success of cost reduction programs we instituted after the first quarter last year," he said. "We remain focused on controlling costs and improving efficiencies. If raw material pricing can at least remain steady and our distributors do not further reduce their inventories, I am cautiously optimistic that results for the balance of 2006 will be better than 2005."