Acquisitions the Focus of Post-Bankruptcy Armstron

Lancaster, PA, August 18, 2006--When Armstrong World Industries comes out of bankruptcy, it expects to come out swinging, according to the Lancaster New Era. The newspaper quoted Armstrong’s top executive as saying that the company intends to pursue acquisitions that have been out of reach while the firm has been in bankruptcy. Chairman and CEO, Michael D. Lockhart, was quoted by the newspaper as saying, “We expect to use this new avenue of acquisitions to accelerate the growth of the company.” Armstrong anticipates emerging from its nearly six-year bankruptcy by year-end, following Tuesday’s confirmation of its reorganization plan by a federal judge. The Lancaster-based maker of floors, ceilings and cabinets filed for bankruptcy in December 2000 to resolve a deluge of 170,000 claims from people hurt by exposure to asbestos insulation it once made and installed. The newspaper said that the solution is a plan that calls for Armstrong’s corporate parent, Armstrong Holdings, to be dissolved, and its decimated stock, which closed Thursday at 33.5 cents, to be canceled. A new corporation and stock will be created, with about two-thirds owned by a trust formed to pay all current and future asbestos claims, and a third by unsecured creditors. Lockhart said, explained that big acquisitions typically involve cash and stock. But with Armstrong’s stock virtually worthless, Armstrong lacked the ammunition to do a big deal. In addition, all major moves need bankruptcy court approval. When it emerges from bankruptcy, the need for court approval leaves, and fresh ammo arrives. Armstrong’s new stock is to debut at $35 a share, its reorganization plan says. “We look forward to seeing what we can do,” said Lockhart.