By David Reed, UT EditorLinwood, Pennsylvania-Foamex International Inc., the leading manufacturer of flexible polyurethane and advanced polymer foam products in North America, announced that volatility in raw materials prices and a difficult operating environment are contributing to weaker than expected performance in its businesses. As a result, the company said in an 11 July statement, it has significantly reduced its earnings expectations for the second quarter of 2005. The Company recently disclosed an amendment to the Foamex LP credit facility that provides additional flexibility in its second quarter bank covenants, and bolsters liquidity.Foamex also announced that it has retained the investment banking firm Miller Buckfire & Co., llc to help evaluate strategic alternatives for strengthening its balance sheet and enhancing long-term value.”For the past year, Foamex has encountered rising chemical raw material costs and unrelenting market pressures,” said Tom Chorman, Foamex’s president and chief executive officer. “While we have implemented several measures to offset these pressures, our legacy balance sheet and high debt-carrying cost have substantially limited our ability to reinvest in the business. Therefore, we are conducting a thorough assessment of our businesses in order to develop a solution that will result in a significantly stronger company able to generate substantial long-term value,” his statement added.”As we work through this process, nothing changes day-to-day,” Chorman continued. “We will continue to focus on improving operations and delivering the superior products and urethane-based solutions our customers expect from Foamex. We are pleased to have the continued support of our lenders, as well as that of our customers and vendors, as we move forward with our recovery,” he added in the prepared statement.”
Breaking news and in-depth coverage of essential topics delivered straight to your inbox.
Breaking news and in-depth coverage of essential topics delivered straight to your inbox.View All Newsletters