LINWOOD, Pa. (July 12)—Foamex International Inc., a maker of flexible polyurethane and advanced polymer foam products, said 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 a statement it has significantly reduced its earnings expectations for the second quarter of 2005. The company recently disclosed an amendment to the Foamex L.P. credit facility that provides additional flexibility in its second-quarter bank covenants, and bolsters liquidity.
Foamex also announced that it has retained investment banking firm Miller Buckfire & Co. L.L.C. 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 CEO.
"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."