Formica Corporation has entered into discussions with its bank syndicate concerning an amendment for non-compliance with certain financial covenants for the quarter ended June 30, 2001 under its $345 million bank credit facility. The slowdown, which began in North America in the fourth quarter of 2000, has since spread to the Company’s international markets in Europe and Asia.
In addition to lower sales volumes, earnings have been negatively impacted by higher energy and transportation costs, along with a stronger U.S. dollar. This has been partially offset by a stringent cost control program put in place, along with savings from the reorganization following last year’s acquisition of Perstorp Surface Materials AB. The Company has adequate liquidity based on cash on hand to finance operations and to fully complete its rationalization program and grow its revenue base. Formica Corporation, whose owners include Credit Suisse First Boston Private Equity, Citicorp Venture Capital, Ltd. and CVC Capital Partners Limited, was founded in 1913, and is a prominent worldwide manufacturer and marketer of decorative surfacing materials, including high pressure laminate, foils, printed papers, Surell(R) and Fountainhead(R) solid surfacing materials and laminate flooring.
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