Exhibit 10.11.4
[Execution]
AMENDMENT NO. 1 TO RATIFICATION AND AMENDMENT AGREEMENT AND
AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 1 TO RATIFICATION AND AMENDMENT AGREEMENT AND AMENDMENT NO.
3 TO LOAN AND SECURITY AGREEMENT, dated as of December 14, 2004 (this "First
Ratification Amendment"), by and among CONGOLEUM CORPORATION, a Delaware
corporation, as debtor and debtor-in-possession ("Borrower"), CONGOLEUM FISCAL,
INC., a New York corporation, as debtor and debtor-in-possession ("CFI"),
CONGOLEUM SALES, INC., a New York corporation, as debtor and
debtor-in-possession ("CSI" and together with CFI, collectively, "Guarantors"
and each individually, a "Guarantor"), and CONGRESS FINANCIAL CORPORATION, a
Delaware corporation ("Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Lender, Borrower and Guarantors have entered into financing
arrangements pursuant to which Lender may make loans and advances and provide
other financial accommodations to Borrower as set forth in the Loan and Security
Agreement, dated December 10, 2001, between Lender and Borrower, as amended by
Amendment No. 1 to Loan and Security Agreement, dated September 29, 2002,
between Lender and Borrower, Amendment No. 2 to Loan and Security Agreement,
dated as of February 27, 2003, among Lender, Borrower and Guarantors, and as
further amended and ratified by the Ratification and Amendment Agreement, dated
as of January 7, 2004 (the "Ratification Agreement"), between Lender and
Borrower, as acknowledged by Guarantors, permitting debtor and
debtor-in-possession financing for Borrower and Guarantors, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced (all of the foregoing, as amended hereby and as the same
may hereafter be further amended, modified, supplemented, extended, renewed,
restated or replaced, collectively, the "Loan Agreement", and together with all
agreements, documents and instruments at any time executed and/or delivered in
connection therewith or related thereto, including the Reaffirmation and
Amendment of Guarantor Documents, dated as of January 7, 2004, between Lender
and Guarantors, as from time to time amended, modified, supplemented, extended,
renewed, restated or replaced, collectively, the "Financing Agreements");
WHEREAS, Borrower and each Guarantor has commenced a case under Chapter 11
of Title 11 of the United States Code in the United States Bankruptcy Court for
the District of New Jersey and has retained possession of its assets and is
authorized under the Bankruptcy Code to continue the operation of its businesses
as a debtor-in-possession;
WHEREAS, Borrower and Guarantors have requested that Lender make certain
amendments to the Loan Agreement, and Lender is willing to agree to such
request, subject to the terms and conditions contained herein;
WHEREAS, by this First Ratification Amendment, Lender, Borrower and
Guarantors desire and intend to evidence such amendments; and
WHEREAS, this First Ratification Amendment has been authorized by the
Bankruptcy Court pursuant to an Order entered by the Bankruptcy Court
authorizing Borrower and Guarantors to execute and deliver this First
Ratification Amendment;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lender, Borrower and
Guarantors hereby covenant, warrant and agree as follows:
1. DEFINITIONS.
1.1 Additional Definition. "First Ratification Amendment" shall mean this
First Ratification Amendment, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
1.2 Amendments to Definitions in Financing Agreements.
(a) All references to the term "Budget" in the Ratification
Agreement and any of the other Financing Agreements shall be deemed and each
such reference is hereby amended to mean the Budget attached to the Ratification
Agreement as Exhibit A, as supplemented by the Budget attached hereto as Exhibit
A, in each case delivered to Lender pursuant to Section 5.3 of the Ratification
Agreement and setting forth the cash expenditures of Borrower and Guarantors on
a monthly or quarterly basis, as applicable, for the estimated and projected
periods covered thereby, together with any further amendments, modifications and
supplements thereto or any subsequent budget, satisfactory in form and substance
to Lender, setting forth such information for any subsequent period or periods.
(b) All references to the term "Financing Agreements" in this First
Ratification Amendment and in any of the Financing Agreements shall be deemed
and each such reference is hereby amended to include, in addition and not in
limitation, this First Ratification Amendment, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
(c) All references to the term "Ratification Agreement" in this
First Ratification Amendment and in any of the Financing Agreements shall be
deemed and each such reference is hereby amended to mean the Ratification
Agreement, as amended hereby, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
1.3 Interpretation. For purposes of this First Ratification Amendment,
unless otherwise defined herein, all capitalized terms used herein, including,
2
but not limited to, those terms used and/or defined in the recitals above, shall
have the respective meanings assigned to such terms in the Loan Agreement.
2. AMENDMENTS TO LOAN AGREEMENT
2.1 Capital Expenditures. Section 9.19 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"9.19 Capital Expenditures. Borrower and its Subsidiaries shall not,
directly or indirectly, make any Capital Expenditures in excess of: (i)
$8,500,000 in fiscal year 2003 and (ii) $7,000,000 in any other fiscal
year, provided, that, if the aggregate amount of Capital Expenditures made
by Borrower and its Subsidiaries during fiscal year 2004 is less than
$5,000,000, then the amount of Capital Expenditures permitted to be made
by Borrower and its Subsidiaries hereunder during fiscal year 2005 shall
be increased by $2,000,000."
2.2 EBITDA. Section 9.23 of the Loan Agreement is hereby amended by adding
the following subsection (c) to the end of such Section:
"(c) Borrower and its Subsidiaries shall not, as to any fiscal
quarter during the fiscal year 2005 of Borrower and its Subsidiaries,
permit EBITDA of Borrower and its Subsidiaries commencing on the first day
of such fiscal year and ending on the last day of the applicable fiscal
quarter set forth below on a cumulative year-to-date basis to be less than
the respective amount set forth below opposite such fiscal quarter end
year-to-date period:
Period Minimum EBITDA
------ --------------
January 1, 2005 through $3,500,000
March 31, 2005
January 1, 2005 through $9,500,000"
June 30, 2005
2.3 Term.
(a) The first sentence of Section 12.1(a) of the Loan Agreement is
hereby deleted in its entirety and replaced with the following:
"This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and shall
continue in full force and effect for a term ending on June 30, 2005 (the
"Termination Date")."
3
(b) Section 12.1(c)(iii) of the Loan Agreement is hereby amended by
deleting the reference to "December 31, 2004" and replacing it with "June 30,
2005".
3. AMENDMENT FEE. In addition to and not in limitation of all other fees,
costs and expenses payable to Lender under the Financing Agreements, in
consideration of this First Ratification Amendment, Borrower shall pay Lender an
amendment fee in the amount of $150,000, which fee shall be fully earned as of
and payable on the date hereof and may be charged directly to the loan account
of Borrower.
4. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS. In addition to
the continuing representations, warranties and covenants heretofore made in the
Loan Agreement or otherwise and hereafter made by Borrower and Guarantors to
Lender, whether pursuant to the Financing Agreements or otherwise, and not in
limitation thereof, Borrower and Guarantors hereby represent, warrant and
covenant with, to and in favor of Lender the following (which shall survive the
execution and delivery of this Agreement), the truth and accuracy of which, or
compliance with, to the extent such compliance does not violate the terms and
provisions of the Bankruptcy Code, being a continuing condition of the making of
loans by Lender:
4.1 The Budget attached hereto as Exhibit A has been thoroughly reviewed
by Borrower and Guarantors and their respective appropriate management and sets
forth, among other things, the actual through September 30, 2004 and the
projected through June 30, 2005 quarterly statements of cash flow, including
cash receipts and cash disbursements, quarterly statements of loan availability
of Borrower on a quarterly "roll-forward" basis and monthly statements of
asbestos/bankruptcy costs. Borrower and Guarantors hereby acknowledge, confirm
and agree that Lender has relied upon the Budget and on the information set
forth therein in determining to enter into this First Ratification Amendment.
Borrower shall furnish to Lender all other financial information, projections,
budgets, business plans, cash flows and such other information as Lender shall
reasonably request from time to time.
4.2 This First Ratification Amendment has been duly authorized, executed
and delivered by Borrower and Guarantors and the agreements and obligations of
Borrower and Guarantors contained herein constitute legal, valid and binding
obligations of Borrower and Guarantors enforceable against Borrower and
Guarantors in accordance with their respective terms.
4.3 No Event of Default or act, condition or event which with notice or
passage of time or both would constitute an Event of Default exists or has
occurred as of the date of this First Ratification Amendment.
5. CONDITIONS PRECEDENT. In addition to any other conditions contained
herein or in the Loan Agreement, as in effect immediately prior to the date
hereof, with respect to the Loans, Letter of Credit Accommodations and other
financial accommodations available to Borrower (all of which conditions, except
as modified or made pursuant to this First Ratification Amendment shall remain
applicable to the Loans and be applicable to Letter of Credit Accommodations and
other financial accommodations available to Borrower), the following are
4
conditions to Lender's obligation to extend further loans, advances or other
financial accommodations to Borrower pursuant to the Loan Agreement:
5.1 No trustee, examiner or receiver or the like shall have been appointed
or designated with respect to Borrower or any Guarantor, as debtor and
debtor-in-possession, or its business, properties and assets;
5.2 Borrower and Guarantors shall execute and/or deliver to Lender this
First Ratification Amendment, and all other Financing Agreements that Lender may
request to be delivered in connection herewith, in form and substance
satisfactory to Lender;
5.3 Borrower and Guarantors shall execute and/or deliver to Lender all
other Financing Agreements, and other agreements, documents and instruments, in
form and substance satisfactory to Lender, which, in the good faith judgment of
Lender are necessary or appropriate and implement the terms of this First
Ratification Amendment and the other Financing Agreements, as modified pursuant
to this First Ratification Amendment, all of which contains provisions,
representations, warranties, covenants and Events of Default, as are reasonably
satisfactory to Lender and its counsel;
5.4 Each of Borrower and Guarantors shall comply in full with the notice
and other requirements of the Bankruptcy Code and the applicable Federal Rules
of Bankruptcy Procedure with respect to any relevant Order approving this First
Ratification Amendment in a manner acceptable to Lender and its counsel, and an
Order shall have been entered by the Bankruptcy Court authorizing Borrower and
Guarantors to execute and deliver this First Ratification Amendment; and
5.5 No Event of Default shall be continuing under any of the Financing
Agreements, as of the date hereof.
6. MISCELLANEOUS.
6.1 Amendments and Waivers. Neither this First Ratification Amendment nor
any other instrument or document referred to herein or therein may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought.
6.2 Further Assurances. Each of Borrower and Guarantors shall, at its
expense, at any time or times duly execute and deliver, or shall cause to be
duly executed and delivered, such further agreements, instruments and documents,
including, without limitation, additional security agreements, collateral
assignments, Uniform Commercial Code financing statements or amendments or
continuations thereof, landlord's or mortgagee's waivers of liens and consents
to the exercise by Lender of all the rights and remedies hereunder, under any of
the other Financing Agreements, any Financing Order or applicable law with
respect to the Collateral, and do or cause to be done such further acts as may
be necessary or proper in Lender's opinion to evidence, perfect, maintain and
enforce the security interests of Lender, and the priority thereof, in the
Collateral and to otherwise effectuate the provisions or purposes of this First
Ratification Amendment, any of the other Financing Agreements or the Financing
Order. Upon the request of Lender, at any time and from time to time, Borrower
and Guarantors shall, at its cost and expense, do, make, execute, deliver and
5
record, register or file, financing statements, mortgages, deeds of trust, deeds
to secure debt, and other instruments, acts, pledges, assignments and transfers
(or cause the same to be done) and will deliver to Lender such instruments
evidencing items of Collateral as may be requested by Lender.
6.3 Headings. The headings used herein are for convenience only and do not
constitute matters to be considered in interpreting this First Ratification
Amendment.
6.4 Counterparts. This First Ratification Amendment may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which shall together constitute one and the same agreement.
6.5 Additional Events of Default. The parties hereto acknowledge, confirm
and agree that the failure of Borrower or any Guarantor to comply with any of
the covenants, conditions and agreements contained herein or in any other
agreement, document or instrument at any time executed by Borrower or any
Guarantor in connection herewith shall constitute an Event of Default under the
Financing Agreements.
6.6 Effectiveness. This First Ratification Amendment shall become
effective upon the execution hereof by Lender.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
6
IN WITNESS WHEREOF, the parties hereto have caused this First Ratification
Amendment to be duly executed as of the day and year first above written.
CONGRESS FINANCIAL CORPORATION
By: /s/ Xxxxxx X. Xxxx
---------------------------------------
Title: Vice President
------------------------------------
CONGOLEUM CORPORATION, as Debtor and
Debtor-in-Possession
By:
---------------------------------------
Title:
------------------------------------
CONGOLEUM SALES, INC.,
as Debtor and Debtor-in-Possession
By:
---------------------------------------
Title:
------------------------------------
CONGOLEUM FISCAL, INC.,
as Debtor and Debtor-in-Possession
By:
---------------------------------------
Title:
------------------------------------
7
IN WITNESS WHEREOF, the parties hereto have caused this First Ratification
Amendment to be duly executed as of the day and year first above written.
CONGRESS FINANCIAL CORPORATION
By:
---------------------------------------
Title:
------------------------------------
CONGOLEUM CORPORATION, as Debtor and
Debtor-in-Possession
By: /s/ Xxxxxx X. Xxxxx III
---------------------------------------
Title: Chief Financial Officer
------------------------------------
CONGOLEUM SALES, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Xxxxxx X. Xxxxx III
---------------------------------------
Title: Vice President
------------------------------------
CONGOLEUM FISCAL, INC.,
as Debtor and Debtor-in-Possession
By: /s/ Xxxxxx X. Xxxxx III
---------------------------------------
Title: Vice President
------------------------------------
8
EXHIBIT A
TO
AMENDMENT NO. 1 TO RATIFICATION AND AMENDMENT AGREEMENT AND
AMENDMENT NO. 3 TO LOAN AND SECURITY AGREEMENT
Budget
See attached
9
Page 1
CONGOLEUM CORPORATION
Quarterly Operating Results
($ in 000's)
Actual Est Actual Est Actual Proj. Total
March 31, March 31, June 30, June 30, Sept 30, Dec 31, Total 1st Half
2004 2005 2004 2005 2004 2004* 2004 2005
---------------------------------------------------------------------------------------------
Net sales $ 52,000 $ 54,411 $ 62,951 $ 64,000 $ 58,871 $ 52,410 $226,232 $118,411
Cost of sales 38,450 39,971 46,064 46,940 41,812 38,792 165,118 86,911
Selling, general and
administrative expenses 11,985 12,274 13,017 13,050 12,959 10,814 48,775 25,324
---------------------------------------------------------------------------------------------
Income (loss) from operations 1,565 2,166 3,870 4,010 4,100 2,804 12,339 6,176
Other income (expense):
Interest income -- 15 -- 15 26 -- 26 30
Interest expense (2,244) (2,400) (2,315) (2,400) (2,417) (2,443) (9,419) (4,800)
Other income /(expense): 244 250 421 460 212 125 1,002 710
Other expense -- -- -- -- -- -- -- --
---------------------------------------------------------------------------------------------
Income (loss) before
income taxes (435) 31 1,976 2,085 1,921 486 3,948 2,116
Provision (benefit) for
income taxes -- 12 616 834 768 194 1,578 846
---------------------------------------------------------------------------------------------
Net income(loss) * $ (435) $ 19 $ 1,360 $ 1,251 $ 1,153 $ 292 2,370 1,270
=============================================================================================
Net Income (Loss) $ (435) $ 19 $ 1,360 $ 1,251 $ 1,153 $ 292 $ 2,370 $ 1,270
Interest Expense 2,244 2,400 2,315 2,400 2,417 2,443 9,419 4,800
Depreciation 2,752 2,700 2,659 2,700 2,684 2,646 10,741 5,400
Amortization 138 138 138 138 138 138 552 276
Taxes -- 12 616 834 768 194 1,578 846
---------------------------------------------------------------------------------------------
EBITDA $ 4,699 $ 5,269 $ 7,088 $ 7,323 $ 7,160 $ 5,713 $ 24,660 $ 12,592
=============================================================================================
* excludes any asbestos related charges
Page 2
CONGOLEUM CORPORATION
Balance Sheet
Dollars in thousands
Actual Actual Actual Proj Proj Proj
March 31, June 30, Sept 30, Dec 31, March 31, June 30,
2004 2004 2004 2004 2005 2005
---------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents, including
restricted cash $ 11,835 $ 27,523 $ 45,663 $ 34,851 $ 26,459 $ 26,815
Accounts and notes receivable, net 19,092 24,204 18,569 14,177 20,048 21,487
Receivable-coverage costs & claims fee 3,587 3,587 5,513 10,715 8,840 9,153
Inventories 44,670 43,191 43,096 42,075 44,255 46,135
Prepaid expenses and other current assets 3,831 3,393 2,576 2,719 3,717 5,137
Deferred income taxes 8,752 8,457 8,456 8,456 8,457 8,457
---------------------------------------------------------------------------
Total current assets 91,767 110,355 123,873 112,993 111,776 117,184
Property, plant and equipment, net 85,101 82,949 81,125 80,783 79,536 77,991
Other noncurrent assets 7,832 7,680 7,552 7,426 7,300 7,174
---------------------------------------------------------------------------
Total assets $ 184,700 $ 200,984 $ 212,550 $ 201,202 $ 198,612 $ 202,348
===========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,962 $ 12,361 $ 13,534 $ 10,327 $ 12,827 $ 12,927
Accrued expenses 31,215 42,183 46,205 42,025 44,148 51,558
Asbestos-related liabilities 8,678 8,435 7,246 3,529 723 (1,310)
Insurance recoveries payable to Trust -- -- 14,466 13,939 9,699 7,334
Revolver Borrowings 11,157 15,262 8,638 8,638 8,638 8,638
---------------------------------------------------------------------------
Total current liabilities 63,012 78,241 90,089 78,458 76,035 79,148
Long-term debt 99,786 99,798 99,810 99,822 99,834 99,846
Note to asbestos Trust -- -- -- -- -- --
Other liabilities 11,465 11,782 11,603 11,585 11,567 11,549
Deferred taxes 4,376 3,900 3,900 3,900 3,900 3,900
Noncurrent pension liability 23,865 23,259 22,105 22,072 21,906 21,300
Accrued postretirement benefit obligation 8,413 8,309 8,195 8,225 8,210 8,195
---------------------------------------------------------------------------
Total liabilities 210,917 225,289 235,702 224,062 221,452 223,938
STOCKHOLDERS' EQUITY
Class A common stock, par value $0.01 per 47 47 47 47 47 47
Class B common stock, par value $0.01 per
share; 4,608,945 shares authorized, issued 46 46 46 46 46 46
Additional paid-in capital 49,105 49,105 49,105 49,105 49,105 49,105
Retained deficit (47,218) (45,857) (44,704) (44,412) (44,393) (43,142)
Minimum pension liability adjustment (20,384) (19,833) (19,833) (19,833) (19,833) (19,833)
---------------------------------------------------------------------------
Less common stock held in Treasury, at cost 7,813 7,813 7,813 7,813 7,813 7,813
---------------------------------------------------------------------------
Total stockholders' equity (26,217) (24,305) (23,152) (22,860) (22,841) (21,590)
Total liabilities and stockholders' equity $ 184,700 $ 200,984 $ 212,550 $ 201,202 $ 198,612 $ 202,348
===========================================================================
-----------------------------------------------------------------------------------------------------------------------------
Gross availability (net of $6mm holdback) $ 16,449 $ 17,915 $ 12,651 $ 8,945 $ 15,731 $ 16,499
Revolver Borrowing 11,157 15,262 8,638 8,638 8,638 8,638
---------------------------------------------------------------------------
Additional Credit Line Available 5,292 2,653 4,013 307 7,093 7,861
Cash on Hand, excluding restricted amounts 11,835 27,523 31,197 20,912 16,760 19,481
---------------------------------------------------------------------------
Cash plus available borrowing $ 17,127 $ 30,176 $ 35,210 $ 21,219 $ 23,852 $ 27,342
===========================================================================
Page 3
CONGOLEUM CORPORATION
Statement of Cash Flows
($ In thousands)
March June September December Total March June
2004 2004 2004 2004 2004 2005 2005
---------------------------------------------------------------------------------
Cash flows from operating activities:
Net income (loss) $ (440) $ 1,361 $ 1,153 $ 292 $ 2,366 $ 19 $ 1,251
Adjustments to reconcile net income to net
cash used by operating activities:
Deferred taxes -- 1,167 2,561 195 3,923 12 804
Depreciation 2,753 2,660 2,684 2,646 10,743 2,646 2,646
Amortization 139 139 139 138 555 138 138
Changes in certain assets and liabilities:
Accounts and notes receivable (5,533) (5,111) 5,635 4,392 (617) (5,871) (1,439)
Inventories 326 1,479 95 1,021 2,921 (2,180) (1,880)
Accounts payable 7,418 400 1,173 (3,207) 5,784 2,500 100
Other Working Capital 4,280 10,243 829 (4,539) 10,813 914 4,547
---------------------------------------------------------------------------------
Net cash provided (used) by
operating activities 8,943 12,338 14,269 938 36,488 (1,822) 6,167
Cash flows from investing activities:
Capital expenditures (819) (509) (858) (2,304) (4,490) (1,400) (1,100)
---------------------------------------------------------------------------------
Net cash provided (used) by
investing activities (819) (509) (858) (2,304) (4,490) (1,400) (1,100)
-----------------------------------------------------------------------------------------------------------------------------------
Free cash flow from operations 8,124 11,829 13,411 (1,366) 31,998 (3,222) 5,067
-----------------------------------------------------------------------------------------------------------------------------------
Asbestos Reorganization Expenditures (1,141) (243) (1,189) (3,717) (6,290) (2,806) (2,033)
Insurance recoveries, net of coverage
litigation payments -- -- 12,540 (5,729) 6,811 (2,365) (2,678)
Borrowings - Revolver 925 4,105 (6,624) -- (1,594) -- --
---------------------------------------------------------------------------------
Net increase (decrease) in cash and
cash equivalents 7,908 15,691 18,138 (10,812) 30,925 (8,393) 356
Cash and cash equivalents:
Beginning of period 3,926 11,834 27,525 45,663 3,926 34,852 26,459
---------------------------------------------------------------------------------
End of period $ 11,834 $ 27,525 $ 45,663 $ 34,851 $ 34,852 $ 26,459 $ 26,815
=================================================================================
Cash balance $ 11,834 $ 27,525 $ 45,663 $ 34,851 $ 34,852 $ 26,459 $ 26,815
Less restricted amounts -- -- (14,466) (13,939) (13,939) (9,699) (7,334)
Additional revolver borrowing available 5,292 2,653 4,013 307 307 7,093 7,861
---------------------------------------------------------------------------------
Net Cash plus revolver available $ 17,126 $ 30,178 $ 35,210 $ 21,219 $ 21,220 $ 23,853 $ 27,342
=================================================================================
Page 4
Monthly Statement of Asbestos/Bankruptcy Costs
($ in Thousands)
Reorganization Expenses
Cash basis activity Oct-04 Nov-04 Dec-04 Jan-05 Feb-05 Mar-05 Apr-05 May-05 Jun-05
Accrual-opening balance $(7,246) $ (5,811) $ (4,375) $ (3,529) $(1,864) $(1,336) $ (723) $ (58) $ 625
Charges
Spending 1,435 1,435 846 1,665 528 613 665 684 684
--------------------------------------------------------------------------------------------------
Ending balance $(5,811) $ (4,375) $ (3,529) $ (1,864) $(1,336) $ (723) $ (58) $ 625 $1,309
==================================================================================================
Insurance Coverage Litigation Costs and Claims Handling Fee (Reimbursable from Insurance Recoveries)
Receivable-opening balance $ 5,513 $ 7,903 $ 10,293 $ 10,716 $ 9,226 $ 8,874 $ 8,841 $ 9,089 $9,138
Spending 2,390 2,390 1,004 900 652 867 900 916 916
Receipts 581 2,390 1,004 900 652 867 900
--------------------------------------------------------------------------------------------------
Ending balance $ 7,903 $ 10,293 $ 10,716 $ 9,226 $ 8,874 $ 8,841 $ 9,089 $ 9,138 $9,154
==================================================================================================
Congoleum Corporation Page 5
Collateral and Borrowing Availability calculation
Description Limits 3/31/2004 6/30/2004 09/30/04 12/31/04 03/31/05 06/30/05
-----------------------------------------------------------------------------------------------------------------------------------
Accounts Receivable: $ 20,560 $ 25,766 $ 19,924 $ 15,378 $ 21,500 $ 23,000
Less Ineligibles: 10,493 13,545 12,985 12,733 10,533 12,262
Net Eligible Accounts Receivable: 10,067 12,221 6,939 2,645 10,967 10,738
Advance Rate: 85% 85% 85% 85% 85% 85%
Accounts Receivable Availability: $30,000 $ 8,557 $ 10,388 $ 5,898 $ 2,249 $ 9,322 $ 9,128
Inventory:
Raw Materials $ 4,527 $ 3,957 $ 4,381 $ 4,700 $ 4,700 $ 4,700
Resin 593 434 716 600 600 600
WIP 2,429 2,493 2,420 1,500 2,300 2,300
Finished Goods 35,025 33,249 32,863 32,680 34,180 36,180
---------------------------------------------------------------------
Total Inventory $ 42,574 $ 40,133 $ 40,380 $ 39,480 $ 41,780 $ 43,780
Less Ineligibles-
Raw Material $ 554 $ 471 $ 553 $ 500 $ 500 $ 500
Resin -- -- -- -- -- --
WIP 2,429 2,493 2,420 1,500 2,300 2,300
Finished Goods(incl Laminates) 2,527 2,242 2,107 2,182 2,257 2,332
---------------------------------------------------------------------
Total Ineligibles: $ 5,510 $ 5,206 $ 5,080 $ 4,182 $ 5,057 $ 5,132
Net Eligible:
Raw Material $ 3,973 $ 3,486 $ 3,828 $ 4,200 $ 4,200 $ 4,200
Advance Rate: 35% 35% 35% 35% 35% 35%
---------------------------------------------------------------------
Raw Material Avail: $3,000 A $ 1,391 $ 1,220 $ 1,340 $ 1,470 $ 1,470 $ 1,470
---------------------------------------------------------------------
Resin $ 593 $ 434 $ 716 $ 600 $ 600 $ 600
Advance Rate: 50% 50% 50% 50% 50% 50%
---------------------------------------------------------------------
Resin Availability $3,000 A $ 297 $ 217 $ 358 $ 300 $ 300 $ 300
---------------------------------------------------------------------
WIP Availability $ -- $ -- $ -- $ -- $ --
Finished Goods $ 32,498 $ 31,007 $ 30,756 $ 30,498 $ 31,923 $ 33,848
Advance Rate: 50% 50% 50% 50% 50% 50%
---------------------------------------------------------------------
Finished Goods Availability $20,000 $ 16,249 $ 15,503 $ 15,378 $ 15,249 $ 15,961 $ 16,924
---------------------------------------------------------------------
Inventory Availability: $23,000 $ 17,936 $ 16,941 $ 17,076 $ 17,019 $ 17,731 $ 18,694
TOTAL AVAILABILITY $ 26,493 $ 27,328 $ 22,974 $ 19,268 $ 27,054 $ 27,822
---------------------------------------------------------------------
Primary Uses:
Letters of Credit from First Union $ 4,044 $ 3,413 $ 4,323 $ 4,323 $ 5,323 $ 5,323
TOTAL USES: $ 4,044 $ 3,413 $ 4,323 $ 4,323 $ 5,323 $ 5,323
---------------------------------------------------------------------
---------------------------------------------------------------------
Gross Availability: $ 22,449 $ 23,915 $ 18,651 $ 14,945 $ 21,731 $ 22,499
less $3,000 limit (6,000) (6,000) (6,000) (6,000) (6,000) (6,000)
---------------------------------------------------------------------
NET AVAILABILITY: 16,449 17,915 12,651 8,945 15,731 16,499
Borrowings Outstanding 11,157 15,262 8,638 8,638 8,638 8,638
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Unused Availability 5,292 2,653 4,013 307 7,093 7,861
Cash, excluding restricted cash 11,835 27,523 31,197 20,912 16,760 19,481
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Cash plus unused availability $ 17,127 $ 30,176 $ 35,210 $ 21,219 $ 23,852 $ 27,342
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