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Formica to Sell Flooring Assets to Unit of Shaw Industries Group

January 26, 2004
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WARREN, N.J., Jan. 26 /PRNewswire/ -- Formica Corporation today announced that it has reached an agreement to sell the equipment assets of its Formica Flooring business to the Shaw Diversified Services, Inc. unit of Shaw Industries Group, Inc. The equipment, which is located in a leased manufacturing facility in Algona, WA, is being sold to Shaw for cash and the assumption of certain liabilities. Formica is not transferring its brand name, products or designs to Shaw.

After closing of the transaction, which is expected during the current quarter, Formica will withdraw from laminated flooring manufacturing in North America following a transition period to permit Formica to meet its obligations to its customers.

The closing of the sale to Shaw is contingent upon the approval of the United States Bankruptcy Court for the Southern District of New York. Formica expects to file a motion for the Court's approval on January 26th.

"Formica's decision to exit the laminate flooring business in North America reflects the competitive nature of the laminate flooring business and the changing dynamics of the North American flooring industry," said Frank A. Riddick, III, President and Chief Executive Officer. "Not being a vertically integrated producer in this highly competitive business, we reluctantly concluded that it would not be economically viable for Formica to remain as a niche, stand-alone manufacturer. Our flooring business represents a very small segment of our sales. This, along with confirmation of our Plan of Reorganization under Chapter 11, convinced us that a profitable future for Formica lies in emphasizing our businesses which give us the greatest opportunity for growth, especially in the high pressure laminate business where we benefit from our standing as a global leader."

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