Sales for the quarter came in at $68 million, a 25 percent increase over second quarter 2001 sales of $54.4 million. Net income for the period was $800,000 vs. $200,000 in the second quarter of 2001. Earnings per share for the quarter were 10 cents per share compared with 2 cents in the year-earlier period.
Sales for the six months ended June 30, 2002 were $125.9 million, compared with sales of $106 million in the first six months of 2001, an increase of 18.8 percent.
Net income for the first six months of 2002 (before a required accounting change) was $200,000, or 2 cents per share, compared with a net loss of $3.5 million, or 43 cents per share, for the first six months of 2001.
During the first quarter of 2002, Congoleum recorded a non-cash transition charge of $10.5 million, or $1.27 per share, for impairment of goodwill as required for adoption of Statement of Financial Accounting Standards No. 142. Including this charge, Congoleum's net loss for the first six months of 2002 was $10.3 million, or $1.25 per share.
"Our sales performance for the second quarter and first half of 2002 has been excellent, thanks to the continued success of Ultima (introduced in the fall of 2000), overwhelming demand for the DuraStone line we brought out last August, and a very favorable response to improvements in our line of products for the builder market," said Roger S. Marcus, chairman of the board. "Our success in acquiring new business has also contributed to this positive performance, with the first quarter benefiting from opening shipments to Lowe's, a major home center chain, for an in-stock do-it-yourself tile program. Our sales success is all the more encouraging given that we have seen no improvement in the manufactured housing industry, a major market for our products.
"Our profit margins in the second quarter, while below the same period last year, improved versus the first quarter of 2002," Marcus added. "Achieving our sales growth has required significant investments in new products and new business that have limited margins. We have, however, maintained a focus on controlling operating expenses, which have declined as a percentage of sales. I believe the improved results achieved in the first half of 2002 position us for a solid full year performance despite our expectation of a flat economy and little to no improvement in the manufactured housing sector. We look forward to continued success with our new products. At the same time, I am hopeful we can improve margins through a combination of further cost reductions and a recently announced price increase of 3 to 5 percent which (took) effect Aug. 1."
