Armstrong Reports Lower Income in Quarter

Lancaster, PA, Oct. 27, 2014 -- Armstrong World Industries reported third quarter net income of $31.8 million, or $0.57 per share, compared to $55.9 million, or $0.94 per share a year ago.

Net sales fell to $728.3 million, down slightly from $729.7 last year, driven by lower volumes in Europe and in resilient and wood flooring in the Americas, which "more than offset the impact from favorable price and mix."

Operating income and net income both declined compared to last year, driven primarily by approximately $12 million of fixed asset impairment charges in the European flooring business and $7 million for severance and other charges associated with the closures of a resilient flooring plant in Thomastown, Australia and an engineered wood flooring plant in Kunshan, China, Armstrong said.

"While earnings met our expectations, sales came in below our previous guidance range, driven by a number of factors that negatively impacted volumes in the third quarter," said Matt Espe, CEO.

"Although the macroeconomic environment weakened slightly versus our previous outlook, primarily in U.S. residential and Europe, softer market conditions only partially contributed to the volume declines, as we saw industry wide capacity utilization challenges resulting in increased competitive price pressure in our European flooring business, for which we continue to evaluate strategic alternatives. We also experienced a faster than anticipated category shift by consumers away from traditional vinyl products that negatively impacted our North American residential resilient business, as well as intensifying competitive price pressure in our wood business."

Resilient sales were $239.6 million, down from $246.2 million last year. Wood sales were $137.0 million, down from $148.0 million in 2013.

The company said it expects full year sales to be in the range of $2.680 billion to $2.72 billion.