FOAMEX INTERNATIONAL ANNOUNCES THIRD QUARTER 2003 RESULTS

LINWOOD, PA, November 11, 2003 – Foamex International Inc. (NASDAQ: FMXI), the leading manufacturer of flexible polyurethane and advanced polymer foam products in North America, today announced results for the third quarter and year-to-date period ended September 28, 2003.  

Third Quarter 2003 Results

Sales

Net sales for the third quarter were $321.5 million, down 5.7% from $340.8 million in the third quarter of a year ago.  Gross profit was $37.5 million, or 11.7% of sales, in 2003, compared to $30.8 million, or 9.0% of sales, in 2002, primarily reflecting improved operating efficiencies and selling price increases to customers, which has allowed the Company to recover a substantial portion of the increases in the cost of its major chemical raw materials. 

Earnings

Foamex reported a net loss for the quarter of $11.1 million, or $0.45 per diluted share.  This compares with a net loss of $7.2 million, or $0.30 per diluted share in the third quarter of 2002.  The 2003 quarter includes a write-off of debt issuance costs of $12.9 million associated with the previously announced refinancing of Foamex's bank credit. 

Income from operations was $18.6 million for the third quarter of 2003, which represents an increase from the $4.7 million reported in the third quarter of 2002.  Results for the 2002 period included a net restructuring, impairment and other credit of $3.7 million.  Selling, general, and administrative expenses in the quarter were $19.3 million, down $10.4 million, or 35.1 % from the 2002 quarter, due primarily to lower employee related costs and fees associated with terminated deal costs in the 2002 period.   Interest and debt issuance expense for the third quarter was $31.6 million including the aforementioned write-off of debt issuance costs, an increase of 106.8% from the 2002 quarter.  

Commenting on the results, Tom Chorman, President and Chief Executive Officer of Foamex, said: "We have stabilized and strengthened our business operations while operating in a difficult environment.  Our gross margin improvement reflects the results of our turnaround plan.  In particular, I am pleased to note that this is Foamex's fourth consecutive quarter of reduced SG&A expense." 

Chorman continued, "We continue to take aggressive steps to improve our financial performance, and are now focusing on new business opportunities and strengthening our existing customer relationships.  While we still have a lot of work ahead of us, I am optimistic that Foamex has turned the corner and that our continued efforts will lead to improved profitability and sales growth in the future." 

Year to Date Results

Sales

Net sales for the first three quarters ended September 28, 2003 were $983.6 million, down 1.7% from $1,000.8 million in the three quarters ended September 29, 2002.  Gross profit was $109.0 million, compared to $115.4 million in the 2002 period.  Gross profit as a percentage of sales decreased to 11.1% in 2003 from 11.5% in 2002.  

Earnings

Foamex had a net loss for the three quarters ended September 28, 2003 of $16.5 million, or $0.67 per diluted share, compared to net income of $6.7 million, or $0.25 per diluted share in 2002. 

Income from operations was $50.6 million for the three quarters ended September 28, 2003, a slight decline from $51.4 million in the 2002 period.  

Interest and debt issuance expense for the three quarters ended September 28, 2003 was $70.0 million, a 36.7% increase from 2002 primarily due to the write-off of debt issuance costs, higher average debt levels, higher effective interest rates and higher amortization of debt issuance costs.  The 2003 and 2002 periods included charges of $12.9 million and $4.9 million, respectively, relating to the write-off of debt issuance costs as a result of early extinguishments of debt. 

Business Segment Performance

Foam Products

Foam Products net sales for the third quarter were $137.1 million, up 12.6% from the third quarter of 2002.  Income from operations for the third quarter was $10.6 million, as compared to $1.1 million in the third quarter of 2002.  The increase primarily reflects selling price increases and operating efficiencies, partially offset by the higher cost of raw materials. 

For the three quarters ended September 28, 2003, Foam Products net sales were $378.4 million, up 5.6% from $358.4 million in 2002.  Increased selling prices and increased volumes of consumer products were partially offset by lower volumes in other markets.  Income from operations declined 12.6% to $20.1 million, primarily as a result of increased raw material costs. 

Automotive Products

Automotive Products net sales for the third quarter were $99.2 million, down 17.4% from the third quarter of 2002, due to lower volumes, including an expected reduction in lamination business.  Income from operations for the third quarter was $5.3 million, up 12.8% from the same period one year ago, due to lower overhead costs and improved operating efficiencies. 

Carpet Cushion Products

Carpet Cushion Products net sales for the third quarter were $54.1 million, down 11.4% from the third quarter of 2002 due to lower volume related to facility closures and a strategic refocusing of this business for improved profitability, partially offset by an increase in selling prices.  Loss from operations in the third quarter was $0.2 million, compared to a $4.7 million loss in the same period of 2002. 

Technical Products

Net sales for Technical Products in the third quarter were $25.8 million, down 15.4% from the third quarter of 2002 primarily due to lower volumes which were partially offset by higher prices of specialty products. Income from operations for the third quarter was $5.0 million, up from $2.4 million in the third quarter of 2002, due primarily to lower operating expenses and to costs related to Symphonex included in the 2002 period. 

Refinancing

As previously announced, during the quarter Foamex completed a comprehensive refinancing of its bank debt with a new group of lenders. The refinancing included a new $240 million secured credit facility and an $80 million secured term loan. The new facilities replaced the previous $262 million bank facility, and resulted in increased financial flexibility and liquidity. The new loans will mature on April 30, 2007. Proceeds borrowed under the new facilities were used to repay all outstanding balances under the former Foamex L.P. bank facility on August 18, 2003. 

Conference Call and Replay

Foamex management will host a conference call Tuesday, November 11, 2003, at 10:00 a.m. EST to discuss the Company’s third quarter 2003 results.  Investors can access the conference call in the U.S. by dialing (888) 390-2576 (international callers, dial (484) 630-8116) and ask to be connected to the Foamex investor call led by Tom Chorman.  Participants will be asked to provide the following passcode for this conference call: Foamex.

In addition, interested parties may listen to the conference call over the Internet at www.foamex.com.  To listen, go to the website 15 minutes early to register and download and install any necessary audio software.  For those unable to participate, a rebroadcast will be made available at the Company’s web site that will be available shortly after the call.

About Foamex International Inc.

Foamex, headquartered in Linwood, PA, is the world's leading producer of comfort cushioning for bedding, furniture, carpet cushion and automotive markets in the industrial, consumer, electronics and transportation industries.   For more information visit the Foamex web site at http://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, the Company's ability to realize anticipated cost savings, introduce new products, enhance sales growth and margins and the outlook for the Company's financial performance. These forward-looking statements are affected by risks, uncertainties and assumptions that the Company makes about, among other things, its ability to implement customer selling price increases in response to higher raw material costs, raw material price increases, general economic conditions, conditions in the capital markets, the interest rate environment, the level of automotive production, carpet production, furniture and bedding production and housing starts, the completion of various restructuring/consolidation plans, the achievement of management’s business plans, its capital and debt structure (including various financial covenants), litigation and changes in environmental legislation and environmental conditions and other factors mentioned in the documents filed by the Company with the Securities and Exchange Commission.  While the Company believes that its assumptions regarding the foregoing matters are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that the Company's forward-looking statements will prove to be accurate. 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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Foamex International Inc. and Subsidiaries

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Foamex International Inc. and Subsidiaries

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