FOAMEX ANNOUNCES SALE OF JOINT VENTURE INTEREST IN FOAMEX ASIA
Company Expects Net Cash Proceeds of Approximately $22 Million;
Intends to Use Net Cash Proceeds to Pay Down Debt
Sale Expected to Increase Company’s Opportunities in Asian Markets
LINWOOD, PA, August 6, 2007 – Foamex International Inc. (OTC: FMXL), a leading manufacturer of flexible polyurethane and advanced polymer foam products, today announced that it has entered into a definitive agreement to sell its 70% equity interest in Foamex Asia Co., Ltd. (“Foamex Asia”) to Hua Kee Company Limited (“Hua Kee”). Hua Kee is Foamex’s joint venture partner in Foamex Asia.
After taxes, transaction costs and the satisfaction of various obligations associated with the transaction, Foamex expects to net approximately $22 million of cash from the transaction. Foamex intends to use the cash proceeds from the transaction to pay down debt. The Company expects to record a pre-tax gain of approximately $2 million in the third quarter of 2007, when the transaction is expected to close.
Commenting on the transaction, Jack Johnson, Chief Executive Officer of Foamex, said, “Upon an extensive review of our overall portfolio, we concluded that the ownership interest in this venture has not yielded satisfactory returns and is not positioned to facilitate our current global growth strategy. By selling our equity interest we unwind certain non-compete agreements and other restrictive agreements, thereby allowing us to concentrate on other business opportunities in the Asian markets where we see the most potential for growth. We are committed to leveraging strategic growth opportunities in Asia. Through this sale, we believe we will be better positioned to take advantage of the numerous opportunities previously unavailable to us in the Asian market.”
About Foamex International Inc.
Foamex, headquartered in Linwood, PA, is a leading producer of polyurethane foam-based solutions and specialty comfort products. The Company services the bedding, furniture, carpet cushion and automotive markets and also manufactures high-performance polymers
for diverse applications in the industrial, aerospace, defense, electronics and computer industries. For more information visit the Foamex web site at www.foamex.com.
Forward-looking statements
This press release contains, and oral statements made from time to time by representatives of the Company may contain, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, future operating results, operating efficiencies, future market prices and margins, future energy costs, future government and legislative action, future cost savings, future benefit costs, the Company's liquidity and ability to finance its operations, and other statements that are not historical facts that involve certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Additional information that could cause actual results to vary materially from the results anticipated may be found in the Company's most recent Form 10-K and other reports filed with the Securities and Exchange Commission. Readers should be aware that any forward-looking statement made in this press release or elsewhere by the Company speaks only as of the date on which it is made, and the Company disclaims any obligation or intent to update any of the factors listed above or forward-looking statements.
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