Armstrong Earnings Edge Up, Wood Sales Plunge

Lancaster, PA, July 30, 2008--Armstrong World Industries reported second quarter net earnings of $52.4 million, compared to $51.6 a year ago.

Net sales were $926.8 million, up one percent, from $920.6 million in the same period for 2007.

Excluding a $34 million, or four percent, benefit from foreign exchange rates, sales decreased three percent.

Reported operating income from continuing operations increased to $96.7 million from $94.2 million in the second quarter of 2007.

Reported earnings from continuing operations were $52.4 million, or $0.91 per diluted share, compared to $52.7 million, or $0.93 per diluted share in the second quarter of 2007.

Mid single digit volume declines related to the U.S. residential housing markets and a moderate slowdown in U.S. commercial construction markets were offset by reduced expenses and by a strong performance from a joint venture, the company said

Resilient flooring net sales were $343.9 million compared to $322.9 million in the same period of 2007. Excluding the favorable impact of foreign exchange rates, net sales grew about two percent.

Armstrong said that global improvements in price and product mix and international volume growth offset high-single digit domestic volume declines.

Wood flooring net sales of $168.8 million declined 20 percent from $211.7 million in the prior year quarter as volume declined with weak residential housing activity.

Building Products net sales of $365.2 million increased from $322.1 million last year. Excluding the effects of favorable foreign exchange rates of $17 million, sales increased by eight percent.

Cabinets net sales of $48.9 million decreased 24 percent from $63.9 million in 2007.