Armstrong Net Income Rises as Sales Fall

Lancaster, PA, July 30, 2012 --Armstrong World Industries reported second quarter net income of $41.8 million compared to $37.9 million a year ago.

However, net sales fell to $709.9 million from $748.6 million in the second quarter last year.

Excluding approximately $17 million of unfavorable foreign exchange impact for the quarter, sales declined approximately 3% compared to the prior year period, Armstrong said.

Armstrong said that mprovements in price and mix were unable to offset broad volume declines in all businesses and geographies.

"We continue to see volumes down across our businesses as global markets continue to struggle, with Europe in particular, experiencing sharp volume declines in the second quarter," said CEO Matt Espe.

We will continue to responsibly manage our cost structure and adapt to the continued challenging market conditions. As a result we are increasing our cost savings target by another $15 million, bringing the total program goal to $200 million."

Wood flooring sales fell to $124.8 million from $133.6 million, while resilient sales declined to $253.5 million from $274.7 million.

"We now expect our residential and commercial remodel opportunity to be lower as the domestic economic recovery decelerates and Eurozone economic conditions continue to worsen," said CFO Tom Mangas.

Net sales decreased in the second quarter as volume, price and mix were all unfavorable compared to the last year, driven primarily by inventory reductions at one of its big box customers.

Operating income increased in the second quarter of 2012 as reduced manufacturing costs more than offset the margin impact of lower sales and unfavorable mix and price.