Armstrong 3Q Sales and Operating Earnings Up

Lancaster, PA, November 6, 2007—Operating income and sales increased but net income plummeted for Armstrong World Industries in the third quarter.

Armstrong reported third quarter net earnings of $48.1 million, or $0.85 a share, compared to a year-ago net income of $1.29 billion. However, operating income rose from $65 million to $85.9 million on sales of $913.3 million.

Sales increase includes an $18 million benefit from foreign exchange. Performance in the third quarter of 2007 reflects a moderation of the growth experienced in the first six months of the year, due to increasing weakness in the U.S. residential housing market.

Resilient Flooring net sales were $327.9 million in the third quarter, compared to $319.8 million in the same period of 2006. Excluding the favorable impact of foreign exchange rates, net sales were flat.

Wood Flooring net sales of $191.9 million in the third quarter of 2007 declined 12% from $217.2 million in the prior year quarter.

Building Products net sales of $334.8 million in the third quarter of 2007 increased from $304.5 million in the prior year quarter. Excluding the effects of favorable foreign exchange rates of $9 million, sales increased by 7%.

Cabinets net sales of $58.7 million decreased 4% from $60.8 million in 2006 primarily due to the implementation of an enterprise resource planning, system which pushed some sales into the fourth quarter, and to volume reductions related to declines in the U.S. housing market.

Free cash flow of $119 million in the third quarter of 2007 was above $19 million in 2006 on higher earnings, lower capital spending and reduced tax payments.

For the nine months ended June 30, net sales were $2.69 billion compared to $2.60 billion in 2006. Excluding a $50 million favorable impact from exchange rates, net sales increased by 2%.