Armstrong Records Higher Sales, Lower Net Profit

Lancaster, PA, Aug. 6, 2010--Armstrong World Industries reported second quarter net income was $26.8 million, or $0.46 per share on net sales of $724.8 million, up 3%, from $705.7 million a year ago.

Excluding a $6 million benefit from foreign exchange rates, sales increased 2%.

Reported operating income was $52.9 million compared to $47.1 million in the second quarter of 2009. Adjusted operating income of $59.4 million increased compared to $48.7 million on the same basis.

A year ago, Armstrong reported net income of $28.3 million, or $0.50 per share. Adjusted net income was $32.4 million, or $0.56 per share, compared to $25.9 million, or $0.46 per share, on the same basis in 2009.

The company said that reductions in operating costs more than offset higher hardwood lumber and other raw materials costs. In addition, higher sales internationally offset U.S. declines.

Resilient Flooring net sales were $276.0 million, compared to $270.3 million last year. Excluding a $2 million impact of foreign exchange, net sales increased about 1%.

Wood Flooring net sales were $127.2 million, flat compared to $127.8 million last year.

Building Products net sales were $284.4 million, up from $268.7 million a year ago.

Cabinets net sales were $37.2 million, 4% below last year's sales.

For the six months ended June 30, net sales were $1.38 billion compared to $1.37 billion in 2009.

Armstrong expects that most key markets will decline this year. For the year, North American and European commercial markets are expected to decline approximately 5%. North American residential markets are expected to be flat to down modestly, with U.S. housing starts anticipated to be between 575,000 and 625,000 units and renovation activity approximately level with prior year.

Management expects 2010 sales of $2.7 billion to $2.85 billion.