Armstrong 3Q Earnings Up

Lancaster, PA, October 28, 2005--Armstrong Holdings, reported third quarter 2005 net sales of $937.0 million that were 4.9% higher than third quarter net sales of $893.5 million in 2004. Excluding the effects of favorable foreign exchange rates of $2.8 million, consolidated net sales increased by 4.5%. Operating income of $66.5 million was recorded for the third quarter of 2005 compared to $48.2 million in the third quarter of 2004. The increase in operating income was primarily due to increased sales volume and selling prices and improved manufacturing productivity, which offset inflationary cost pressures and higher SG&A expenses. Resilient Flooring net sales were $311.5 million in the third quarter of 2005 and $308.1 million in the third quarter of 2004. Excluding the favorable impact of foreign exchange rates, net sales increased 0.5%. Operating income of $7.7 million was recorded for the quarter compared to operating income in the third quarter of 2004 of $10.8 million. Operating income for the third quarter declined due to inflationary cost pressures, especially on raw materials, higher charges for cost reduction initiatives and increased expenses for environmental matters at a formerly owned site. These items more than offset the benefits of selling price increases, production efficiencies, a gain from the settlement of a breach of contract dispute and $2.4 million of proceeds received from a business interruption insurance claim. Wood Flooring net sales of $220.2 million in the third quarter of 2005 increased 5.2% from $209.4 million in the prior year. Units sold of pre- finished solid wood floors increased by approximately 10% in the third quarter primarily due to strong sales to home center retailers. Units sold of engineered hardwood floors increased 14% in the third quarter primarily due to continued strong overall demand. Net sales in the third quarter were negatively impacted by price declines which were made in response to declining lumber prices and competitive pressures. Operating income was $25.7 million in the third quarter of 2005 compared to $7.1 million in the third quarter of 2004. The increase was due to higher sales volume, declines in lumber prices, improved manufacturing productivity and a gain from the settlement of a breach of contract dispute, that more than offset lower selling prices and non-lumber inflationary cost pressures. Textiles and Sports Flooring net sales in the third quarter of 2005 increased to $79.7 million from $70.0 million in 2004. Excluding the effects of favorable foreign exchange rates, sales were up 13.7% due to higher volume of carpet tiles and outdoor sports flooring. Operating income of $3.2 million was recorded in 2005 compared to operating income in 2004 of $2.8 million. The 2005 operating income increased from 2004 as the impact of higher sales volume offset raw material inflation. For the nine-month period ending September 30, 2005, net sales were $2,696.7 million, an increase of 2.1% from the $2,642.0 million reported for the first nine months of 2004. Increases were reported in the Wood Flooring, Textiles and Sports Flooring, and Building Products segments, while the Resilient Flooring and Cabinets segments reported decreases. Excluding the favorable impact of foreign exchange rates, consolidated net sales increased 0.8%. Operating income in the first nine months of 2005 was $110.8 million. This compares to operating income of $91.0 million for the first nine months of 2004. 2004 results include a non-cash charge of $60.0 million to reflect a goodwill impairment loss related to the European resilient flooring reporting unit. Excluding this non-cash charge results in an adjusted operating income of $151.0 million in 2004. The decline in adjusted operating income was primarily due to higher raw material, energy and transportation costs, significantly increased charges for cost reduction initiatives, higher SG&A expenses and manufacturing inefficien