Armstrong Narrows Operating Loss in 4Q
Lancaster, PA, February 24, 2006--Armstrong Holdings, Inc., today reported an operating loss of $10.1 million for the fourth quarter of 2005 compared to an operating loss of $134.8 million in the fourth quarter of 2004.
Net sales for the fourth quarter rose .7% to $861.7 million compared to fourth quarter 2004 net sales of $855.3 million.
Excluding the unfavorable effects of foreign exchange rates of $10.3 million, net sales increased 2.0%.
Net sales for the year ending December 31, 2005 of $3.56 billion, an increase of 1.7% from the $3,497.3 million reported for 2004.
Excluding the favorable effects of foreign exchange rates of $22.2 million, consolidated net sales increased 1.1%.
Operating earnings were recorded for 2005 of $100.7 million compared to an operating loss of $43.8 million for 2004.
During 2004, Armstrong implemented several manufacturing and organizational changes to improve its cost structure and enhance its competitive position.
Resilient Flooring net sales of $1.19 million in 2005 decreased from net sales of $1.22 million in 2004. Excluding the favorable impact of foreign exchange rates of $9.0 million, 2005 net sales declined approximately 3% versus 2004.
The decline was related to lower laminate sales volume related to a decision by a major customer to increase purchases of non- Armstrong laminate flooring products, and by a decline in residential vinyl sales as consumer preference in the market continued to shift away from vinyl products.
An operating loss of $25.8 million was recorded in 2005 compared to an operating loss in 2004 of $150.2 million. 2005 operating results reflect the negative impact of sales volume declines and increased cost to acquire petroleum-based raw materials. Contributing to the 2004 loss were a non-cash goodwill impairment charge of $108.4 million, a non-cash fixed asset impairment charge related to our European resilient business of $44.8 million and cost reduction initiative charges of $32.7 million.
Wood Flooring net sales of $833.9 million in 2005 were level with sales of $832.1 million in the prior year. Unit volume increased 2% while prices were lowered in response to declining lumber prices. Operating income grew to $60.9 million in 2005 compared to operating income of $51.4 million in 2004. Operating results benefited from increased volume, manufacturing efficiencies related to cost reduction initiatives and improvements in productivity at some plant locations. The improvement was made despite fixed asset impairment charges of $15.4 million in 2005.
Textiles and Sports Flooring net sales of $279.0 million increased in 2005 compared to $265.4 million in 2004. Excluding the translation effect of changes in foreign exchange rates of $4.2 million, net sales increased by 3.5%, primarily due to strong volume and favorable mix in carpet tile and sports flooring. An operating loss of $4.4 million was recorded in 2005 compared to an operating loss of $7.1 million recorded for 2004. The reduced 2005 operating loss was primarily due to increased sales volume, improved product mix, manufacturing efficiencies and reduced overhead expenses.
Building Products net sales of $1,047.6 million in 2005 increased from $971.7 million in the prior year. Excluding the translation effect of the changes in foreign exchange rates of $8.8 million, sales increased by 6.8%, primarily due to higher sales volume in commercial markets and improved pricing. Operating income increased to $148.5 million from operating income of $127.0 million in 2004. Volume growth and increased equity earnings in WAVE drove operating income improvement. Price realization essentially offset inflationary pressure from raw materials, energy and freight.
Cabinets 2005 net sales of $212.5 million were level with 2004 sales of $213.0 million. Operating loss of $9.7 million was recorded in 2005 compared to an operating income of $1.4 million in the prior year.
Related Topics:Armstrong Flooring