Congoleum Corp. announced that it has received a letter from the American Stock Exchange (the Amex) warning the company that it does not meet minimum income and stockholders' equity requirements to stay listed. Additionally, the Amex said that it expects Congoleum to file a plan by May 22 advising the stock exchange of what steps Congoleum will take to achieve compliance. Congoleum noted that the primary reason for the company's noncompliance with the Amex is the continuing reorganization effort spurred by asbestos liabilities.
"We intend to submit a plan to the Amex shortly that responds to this notification," said Roger S. Marcus, Congoleum chairman of the board, in a press statement. "Congoleum would have had positive net income in three of the last four years and would have been in compliance with the Amex's listing requirements were it not for the special charges in connection with our asbestos-related reorganization.
"I believe we are making progress toward confirmation of a reorganization plan this year and putting this very costly proceeding behind us," Marcus added. "I also am hopeful that we will demonstrate to the Amex that there are extenuating circumstances and that the financial performance of our operating business warrants a continued listing of our shares."
According to the Amex, Congoleum has stockholders' equity of less than $2,000,000 and losses from continuing operations and/or net losses in two of its three most recent fiscal years. In addition, the company has stockholders' equity of less than $4,000,000 and losses from continuing operations and/or net losses in three of its four most recent fiscal years, the Amex reported. Neither of these conditions are in compliance with the rules to maintain an Amex listing.