ICS Magazine

Armstrong Holdings' 3Q Net Slid, Hurt by Textiles, Sports Flooring

November 8, 2002
LANCASTER, Pa. -- Third quarter net income fell 29% at Armstrong Holdings Inc. as weakness in its textiles and sports flooring businesses offset stronger sales in wood flooring, building products and cabinets.

Armstrong World Industries, the company's main operating unit, continues to operate under Chapter 11 of the U.S. Bankruptcy Code. Earlier this week the unit said it would create a billion-dollar trust to resolve thousands of asbestos- related lawsuits as part of a plan to emerge from bankruptcy.

The Lancaster, Pa., manufacturer of floor coverings, ceiling tiles and cabinets Friday reported net income of $29.4 million, or 72 cents a share, down from $41.2 million, or $1.01 a share a year earlier.

Armstrong said the weak European economy and higher costs for medical benefits and pensions pressured results in the latest period.

Sales increased 5.1% to $846 million from $804.9 million.

The company posted operating income of $52.4 million, including a restructuring reversal of $600,000 in its textiles and sports flooring business.

Operating earnings a year earlier came to $32.9 million, which included charges for potential asbestos-related claims and $5.7 million of goodwill amortization. Under accounting rules adopted earlier this year, goodwill isn't routinely written down as it was in the past, but stays on a balance sheet untouched unless it is deemed impaired.

Armstrong said corporate expense rose to $12.8 million from $2.5 million a year ago, primarily because of a reduced pension credit of $4.6 million, as well as higher advertising costs and management changes.