Armstrong Earnings and Exec Pay Bounce Back

Lancaster, PA, February 28, 2006--After losing money for three consecutive years, the owner of Armstrong World Industries said today it was profitable in 2005, according to the Lancaster New Era. Armstrong Holdings Inc., posted a net earnings of $112.1 million, or $2.75 a share, in large part because it had fewer special charges to be subtracted from profits. Sales in 2005 for company rose 1.7 percent to $3.56 billion from $3.50 billion the prior year. As the company's numbers improved for the year, so did the compensation for Armstrong's top executives, according to the Lancaster New Era. The newspaper reported that the company compensation of chief executive officer Michael D. Lockhart, for instance, grew more than 50 percent to more than $4.6 million, the firm disclosed today. Within Armstrong's five businesses, building products (ceilings) and wood flooring had the best years, the company's report showed. Building products' operating profits rose 16.9 percent to $148.5 million, while wood flooring's operating profits grew 18.5 percent to $60.9 million. But Armstrong's three other businesses were in the red. Resilient flooring, the company's largest business, trimmed its operating loss to $25.8 million from $150.2 million. Textile and sports flooring likewise reduced its operating loss, to $4.4 million from $7.1 million. Cabinets fell into the red with an operating loss of $9.7 million, compared with a 2004 operating profit of $1.4 million. The year 2005 was a good one for the company's top five executives as well, Armstrong disclosed in a filing with the Securities and Exchange Commission. Lockhart, Armstrong's top executive, received $4.68 million for the year. He got a $965,000 salary, a $1.19 million bonus and $2.34 million in long-term incentive plan payments. Mostly due to a substantial increase in his long-term payments, Lockhart's total compensation was 52.7 percent higher than the $3.06 million he received in 2004. Executive vice president Stephen J. Senkowski was paid $1.88 million, compared with $1.30 million in 2004, with the difference again being the long-term payments. Chief financial officer F. Nicholas Grasberger III earned $1.65 million in his first year with Armstrong. John N. Rigas, corporate secretary and general counsel, earned $1.20 million in 2005, compared with $813,000 the prior year. Long-term incentive payments were the biggest factor in the overall increase. Controller William C. Rodruan earned $677,500 for the year, compared with $493,900 in 2004.