Armstrong Gains by Acquiring Capella

Vicksburg, MS, March 20, 2006--Armstrong Wood Industries announced the acquisition of Capella Wood Floors for an undisclosed sum last week, and looks for strategic gains from the deal.. The Mississippi Business Journal reported that according to Capella, it is the first company to perfect the 3/4-inch engineered hardwood floor. Its line of hardwood flooring is sold through distributors and dealers located throughout the U.S. and Mexico. Capella is the successor to Anderson-Tully Engineered Wood. In July 2004, Capella's current ownership group purchased Anderson-Tully. "The acquisition of Capella is consistent with Armstrong's strategy to expand capacity in the high-growth engineered segment," said Frank Ready, president and CEO, North American Flooring Products, Armstrong. "Through the Capella acquisition, we are adding a terrific manufacturing capability, upside in terms of capacity and an additional brand already established in the marketplace. The fine work done by the Capella organization has positioned the company to take this next step." As part of the purchase agreement, Capella employees will retain their seniority and be a part of future expansion. Armstrong said it expects to increase the Vicksburg workforce as it moves to fully utilize the plant's capacity. According to Armstrong, Capella's production is approximately a third of the overall plant capacity. Richard M. Lingle, chairman of Capella, said, "It is a huge compliment to the employees of Capella that a company of the size and quality of Armstrong would seek us out for acquisition." According to Capella, which was established in 2000, its sales growth has exceeded 24% each of the past two years, and it anticipates exceeding that number in 2006.