Steven Feldman

By Steven Feldman
Roger Marcus, president and CEO of Congoleum, was updating distributors and his sales force on the company’s progress at its annual sales meeting in Princeton, N.J., a couple of weeks ago. When the dust cleared, everyone had to come away feeling positive about the future. There was good news on the bankruptcy front, some disaster-averting at the Marcus Hook plant, and some new products and programs that should generate excitement.

Regarding the bankruptcy, Marcus noted that he truly expected to emerge three years ago, but satisfying 10 different factions that each had its own agenda proved to be a difficult undertaking. Eventually nine factions agreed to the final plan, but nine is as good as two. However, once the bondholders came to the table, the wheels were finally in motion.

A recent court hearing began the process of finalizing the deal. According to Marcus, more than likely Congoleum can be confirmed out of bankruptcy between March and April 2007. They are starting to see the light at the end of a tunnel that was a lot darker and longer than initially thought.

The next piece of good news stems from what could have been anything but. On Aug. 2 an explosion knocked out one of Congoleum’s two production lines at its Marcus Hook, N.J., facility. The mishap couldn’t have occurred at a worse time as inventory is at its lowest level during the first two weeks in August when the plant comes back from a two-week shutdown.

However, despite having 50% of its capacity knocked out, Congoleum today is in no worse an inventory position than it was prior to the explosion. It was able to pick up 40% of the capacity of the downed line by operating seven days a week. But it also worked a deal with a competitor to supplement productivity. Just goes to show what can happen when competitors work together for the good of the industry.

The third positive piece involves product. It’s no secret the climate for residential sales has not been strong over the past several months. Marcus believes the storm will last through at least the first half of 2007. “Our challenge is to develop every tool we can think of to keep your volume the same, if not grow, through this storm.”

To that end, Congoleum will have new products ready earlier than ever. In fact, most of what was shown at the sales meeting will be available by January at the latest. We cover some of these new products in the cover story.

All in all, things are looking up for the only major resilient manufacturer totally focused on resilient.