LANCASTER, Pa., Feb. 26 /PRNewswire-FirstCall/ -- Armstrong World
Industries, Inc. (NYSE: AWI) today reported fourth quarter 2008 net sales of
$708.4 million, down 17 percent, from $852.4 million in the same period for
2007. Excluding a $27.5 million, or 3 percent, impact of foreign exchange
rates, sales decreased 14 percent. Reported operating loss from continuing
operations of $6.5 million compared to operating income of $51.1 million in
the fourth quarter of 2007. Adjusted operating income from continuing
operations of $24.3 million decreased 54 percent compared to $52.8 million on
the same basis.
The Company uses adjusted income from operations in managing the business
and believes the adjustments provide meaningful comparisons of operating
performance between periods. Adjusted income excludes the impact of
restructuring charges and related costs, and certain other gains and losses.
As detailed in the attached reconciliation to GAAP, these adjustments
increased operating income by $30.8 million in the fourth quarter of 2008 and
by $1.7 million in the fourth quarter of 2007.
Reported loss from continuing operations of $26.2 million, or $0.46 per
diluted share, compared to income of $21.0 million, or $0.37 per diluted
share, in the fourth quarter of 2007. 2008 included a $14 million non-cash
charge related to an increase in the valuation allowance against state
deferred tax assets. The charge will have no impact on the company's ability
to utilize the net operating losses in the future. Adjusted earnings from
continuing operations of $11.1 million, or $0.20 per diluted share, compared
to $28.3 million, or $0.50 per diluted share, on the same basis on 2007.
Fourth quarter adjusted operating income decreased significantly
year-over-year due to double-digit volume declines across most businesses and
geographies. Volume in global commercial markets dropped at an accelerated
pace over the quarter, and U.S. residential market continued to fall. The
impact of 18 percent lower volume was only partially offset by SG&A expense
reductions of nearly 17 percent. Improved price realization offset cost
inflation.
4th Quarter Segment Highlights
Resilient Flooring net sales were $246.6 million in the fourth quarter of
2008 compared to $289.4 million in the same period of 2007. Excluding the
impact of foreign exchange rates, net sales declined about 11 percent.
Mid-double-digit global volume declines offset improvements in product mix.
Reported operating loss was $25.4 million compared to a loss of $6.9 million
in the fourth quarter of 2007. Adjusted operating loss of $15.9 million
worsened from a $5.4 million loss calculated on the same basis in the prior
year. Lower volume and raw material inflation across geographies more than
offset improved product mix and reduced SG&A costs.
Wood Flooring net sales of $124.5 million in the fourth quarter of 2008
declined 34 percent from $188.8 million in the prior year's quarter as lower
residential housing activity continued to reduce sales. Reported operating
loss was $25.8 million in the fourth quarter compared to income of $17.3
million reported in 2007. 2008 included a $25.4 million intangible asset
impairment charge. Adjusted operating loss of $0.2 million compared to income
of $17.5 million on the same basis in the prior year. Lower sales more than
offset reduced SG&A expenses and modest raw material deflation.
Building Products net sales of $298.7 million in the fourth quarter of
2008 decreased from $321.3 million in the prior year's quarter. Excluding the
effects of foreign exchange rates of $15 million, sales decreased by 3
percent. Global volume declines in excess of 10 percent more than offset
price realization and improved product mix. Reported operating income
decreased to $38.8 million from $46.6 million in the fourth quarter of 2007.
Adjusted operating income of $39.8 million fell from $46.9 million on the same
basis in the prior year. Lower sales volume, raw material inflation and lower
income from WAVE more than offset price realization and reduced SG&A expenses.
Cabinets 2008 fourth quarter net sales of $38.6 million were 27 percent
below sales of $52.9 million in 2007 due to lower volume. Volume declines
resulted from lower U.S. housing market demand. Reported operating loss for
the fourth quarter of $2.8 million was below income of $3.7 million in the
prior year. Reported operating loss of $2.8 million was below an adjusted
loss of $1.3 million in the prior year, primarily due to lower sales. There
were no adjustments to operating income in 2008.
Unallocated corporate income of $8.7 million in the fourth quarter of 2008
compared to expense of $9.6 million in the fourth quarter of 2007. Adjusted
income of $3.3 million compared to expense of $4.9 million on the same basis
in the prior year primarily due to significantly lower incentive compensation
expenses.
Free cash flow of $65 million in the fourth quarter of 2008 compared to
$247 million in 2007 on lower earnings. 2007 benefited from approximately
$180 million in refunds of federal income taxes paid over the preceding 10
years. The refunds resulted from the carry back of a portion of tax net
operating losses created by funding of the Asbestos Trust under AWI's Plan of
Reorganization in October 2006.
Year-to-Date Results
For the year ended December 31, 2008, net sales were $3,393.0 million
compared to $3,549.7 million in 2007. Excluding a $57 million favorable
impact from exchange rates, net sales decreased by 6 percent. Volume declines
offset modest price improvements and a small benefit from a better product
mix.
Reported operating income for 2008 was $210.9 million compared to
operating income of $296.7 million in 2007. Adjusted operating income of
$262.4 million decreased 14 percent compared to adjusted operating income of
$305.7 million in the prior year. Operating income declined due to lower
volumes and input cost inflation that were only partially offset by price
realization, reduced manufacturing and SG&A expenses and higher earnings from
the WAVE joint venture.
Reported earnings from continuing operations were $80.4 million, or $1.42
per diluted share, compared to $152.8 million, or $2.69 per diluted share in
2007. Adjusted earnings from continuing operations of $139.7 million, or
$2.47 per diluted share, compared to $155.6 million, or $2.74 per diluted
share, on the same basis on 2007.
Free cash flow for 2008 was $142 million compared to $511 million for
2007, on lower earnings. 2007 benefited from increased dividends from WAVE
and a federal tax refund that was not repeated in 2008.
Outlook
Global macroeconomic forecasts indicate a very difficult outlook for all
key markets in 2009. Declines in Building Products' North American commercial
markets are expected to approach an unprecedented 15 percent; declines in
European markets are anticipated to be approximately 10 percent. North
American commercial floor markets are expected to decline 12 percent to 15
percent. Declines in North American residential floor markets are estimated to
be 15 percent to 20 percent, with an anticipated 30 percent incremental
decline in U.S. housing starts and low-double-digit declines in renovation.
In response to pervasive and significant market declines, management has
initiated cost reduction actions to partially offset volume declines and
inflation. In 2009, discrete manufacturing actions are expected to deliver
savings of approximately $20 million. An additional $35 million in benefits
from ongoing manufacturing and SG&A productivity initiatives is also
anticipated. Further reductions are planned, which will reduce SG&A costs by
an incremental $10 million to $15 million. We reduced our global workforce 10
percent from year-end 2006 and anticipate additional reductions of 5 percent
to 10 percent in 2009.
Our markets remain highly volatile and hard to predict. Based on the above
assumptions, management's current 2009 estimate is for sales to decline at
least 15 percent. Adjusted operating income is estimated to be less than half
of the $253 million earned in 2008. 2009 cash taxes are estimated to be less
than $5 million. A 42 percent tax rate will be utilized for adjusted earnings
to facilitate comparability from period to period. Free cash flow for the year
is also anticipated to be at least 50 percent below 2008.
Earnings are lowest in the first and fourth quarters because of seasonal
impacts. As a result, the reduction in annual earnings is expected to result
in a modest operating loss in the first quarter of 2009.
For 2009 guidance and comparison purposes, 2008 adjusted operating income
will not be adjusted for fresh-start reporting impacts that are fully
incorporated in both years. On this basis, 2008 adjusted operating income was
$253.0 million. Details are in the GAAP reconciliation tables at the end of
this release.
Floor Europe Restructuring Plan
Management also today announced a plan to make the European Resilient
Flooring business profitable. The plan includes investment in
state-of-the-art manufacturing capacity and reduction of SG&A costs required
to make the business cost competitive. The plan is expected to require costs
net of asset sales of approximately $15 million over the next 12 to 24 months,
yielding cost savings of $15 million to $20 million by 2011.
Leadership Succession
After 36 years of service with the company, Stephen J. Senkowski,
executive vice president and chief executive officer of Armstrong Building
Products, has elected to retire, effective April 1, 2009. He will be
succeeded by F. Nicholas Grasberger III, who joined Armstrong as senior vice
president and chief financial officer in 2005.
Senkowski's leadership was central to the development of Building Products
into a highly profitable global market leader. He led the expansion of
product and service offerings; improved innovation, safety and manufacturing;
and developed new business opportunities. He has also served as president of
WAVE, Armstrong's joint venture with Worthington Industries that manufactures
grid suspension products. Under his tenure, the Company became the market
leader in grid suspension systems.
Grasberger joined Armstrong in 2005 from Kennametal Inc. (NYSE: KMT), a $2
billion global manufacturer of cutting tools and wear parts, where he served
as vice president and chief financial officer since 2000. He also played a
leadership role in improving Kennametal's portfolio and accelerating growth
through a series of acquisitions and divestitures in North America and Europe.
Prior to Kennametal, Grasberger was employed at H.J. Heinz for 11 years,
where his last assignment was treasurer. He began his career in the Treasury
Department at USX Corporation.
Grasberger earned a BBA from the University of Notre Dame, and a MBA from
the Joseph Katz Graduate School of Business at the University of Pittsburgh.
An interim chief financial officer will be named shortly.
Annual Meeting
Management also announced the Board of Directors established Monday, June
22, 2009 as the date for the Company's annual meeting of shareholders.
Shareholders of record at the close of trading on Friday, March 27, 2009 will
be entitled to vote at that meeting. Pursuant to Article II, Section 5 of the
Company's Bylaws, if a shareholder other than the Asbestos Personal Injury
Settlement Trust should wish to propose business to come before that meeting,
written notice of such business must be received by the Corporate Secretary of
the Company no later than Wednesday, March 25, 2009. Any such notice should be
addressed to the attention of: Jeffrey D. Nickel, Corporate Secretary,
Armstrong World Industries, Inc., 2500 Columbia Avenue, Lancaster, PA 17603.
It is recommended that any notice be sent via means that will provide
confirmation of the delivery date.
Earnings Conference Call
Management will conduct a discussion for shareholders during a live
Internet broadcast at 10:00 a.m. Eastern time today. This event will be
broadcast live on the Company's Web site, www.armstrong.com. From the
homepage, click "Investor Relations" to access the call and the accompanying
slide presentation. The replay of this event will be available on the
Company's Web site through March 12, 2009.
Forward Looking Statement
These materials contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act. Such statements provide
expectations or forecasts of future events. Our outcomes could differ
materially due to known and unknown risks and uncertainties, including: lower
construction activity reducing our market opportunities; availability and
costs for raw materials and energy; risks related to our international trade
and business; business combinations among competitors, suppliers and
customers; risks related to capital investments and restructurings; reduced
business with key customers; and other factors disclosed in our recent reports
on Forms 10-K, 10-Q and 8-K filed with the SEC. We undertake no obligation to
update any forward-looking statement.
About Armstrong and Additional Information
More details on the Company's performance can be found in its Form 10-K,
filed with the SEC today. To supplement its consolidated financial statements
presented in accordance with accounting principles generally accepted in the
United States (GAAP), Armstrong provides additional measures of performance
adjusted to exclude foreign exchange and certain costs, expenses, and gains
and losses. The Company uses these adjusted performance measures in managing
the business, including communications with its Board of Directors and
employees, and believes that they provide users of this financial information
with meaningful comparisons of operating performance between current results
and results in prior periods. The Company believes that these non-GAAP
financial measures are appropriate to enhance understanding of its past
performance as well as prospects for its future performance. A reconciliation
of these adjustments to the most directly comparable GAAP measures is included
in this release and on our website. These non-GAAP measures should not be
considered in isolation or as a substitute for the most comparable GAAP
measures. Non-GAAP financial measures utilized by the Company may not be
comparable to non-GAAP financial measures used by other companies.
Armstrong World Industries, Inc. is a global leader in the design and
manufacture of floors, ceilings and cabinets. In 2008, Armstrong's
consolidated net sales totaled approximately $3.4 billion. Based in Lancaster,
Pa., Armstrong operates 40 plants in 10 countries and has approximately 12,200
employees worldwide. For more information, visit www.armstrong.com.
FINANCIAL HIGHLIGHTS
Armstrong World Industries, Inc., and Subsidiaries
(amounts in millions, except for per-share amounts)
Successor Successor Successor Successor
Company Company Company Company
------- ------- ------- -------
Three Months Three Months
Ended Ended
December 31, December 31, Year Year
2008 2007 2008 2007
---- ---- ---- ----
Net sales $708.4 $852.4 $3,393.0 $3,549.7
Cost of goods sold 570.2 654.4 2,632.0 2,687.5
Selling, general
and administrative
expenses 127.2 157.8 579.9 611.3
Intangible asset
impairment 25.4 - 25.4 -
Restructuring charges, net - - 0.8 0.2
Equity (earnings) from
joint ventures (7.9) (10.9) (56.0) (46.0)
---- ----- ----- -----
Operating income, (loss) (6.5) 51.1 210.9 296.7
Interest expense 7.1 10.4 30.8 55.0
Other non-operating
expense 0.1 0.4 1.3 1.4
Other non-operating (income) (2.1) (5.8) (10.6) (18.2)
Chapter 11 reorganization
(income), net - (1.0) - (0.7)
--- ---- --- ----
Earnings (loss) from
continuing operations
before income taxes (11.6) 47.1 189.4 259.2
Income tax expense 14.6 26.1 109.0 106.4
---- ---- ----- -----
Earnings (loss) from
continuing operations (26.2) 21.0 80.4 152.8
Gain (loss) from
discontinued
operations, net of
tax of $0.0, $0.0
$0.4 and $0.3,
respectively 0.7 (1.4) 0.6 (7.5)
--- ---- --- ----
Net earnings (loss) $(25.5) $19.6 $81.0 $145.3
====== ===== ===== ======
Earnings (loss) per share
of common stock,
continuing operations:
Basic $(0.46) $0.37 $1.43 $2.73
Diluted $(0.46) $0.37 $1.42 $2.69
Gain (loss) per share
of common stock,
discontinued operations:
Basic $0.01 $(0.02) $0.01 $(0.13)
Diluted $0.01 $(0.02) $0.01 $(0.13)
Net earnings (loss) per
share of common stock:
Basic $(0.45) $0.35 $1.44 $2.59
Diluted $(0.45) $0.34 $1.43 $2.56
Average number of common
shares outstanding:
Basic 56.5 56.3 56.4 56.0
Diluted 56.5 56.9 56.6 56.7
SEGMENT RESULTS
Armstrong World Industries, Inc., and Subsidiaries
(amounts in millions)
Successor Successor Successor Successor
Company Company Company Company
------- ------- ------- -------
Three Months Three Months
Ended Ended
December 31, December 31, Year Year
2008 2007 2008 2007
---- ---- ---- ----
Net sales:
----------
Resilient Flooring $246.6 $289.4 $1,220.1 $1,230.8
Wood Flooring 124.5 188.8 624.6 791.6
Building Products 298.7 321.3 1,369.1 1,292.1
Cabinets 38.6 52.9 179.2 235.2
---- ---- ----- -----
Total Net Sales $708.4 $852.4 $3,393.0 $3,549.7
====== ====== ======== ========
Operating income (loss):
Resilient Flooring $(25.4) $(6.9) $(16.8) $40.4
Wood Flooring (25.8) 17.3 (2.4) 64.3
Building Products 38.8 46.6 239.7 221.4
Cabinets (2.8) 3.7 (6.7) 10.5
Unallocated Corporate 8.7 (9.6) (2.9) (39.9)
--- ---- ---- -----
Total Operating
Income (Loss) $(6.5) $51.1 $210.9 $296.7
===== ===== ====== ======
Selected Balance Sheet Information
(amounts in millions)
Successor Successor
Company Company
------- -------
December 31, December 31,
2008 2007
---- ----
Assets:
-------
Current assets $1,261.5 $1,490.5
Property, plant and equipment, net 954.2 1,012.8
Other noncurrent assets 1,136.1 2,136.1
------- -------
Total assets $3,351.8 $4,639.4
======== ========
Liabilities and shareholders' equity:
-------------------------------------
Current liabilities $385.4 $486.8
Other noncurrent liabilities 1,222.1 1,715.4
Shareholders' equity 1,744.3 2,437.2
------- -------
Total liabilities and shareholders' equity $3,351.8 $4,639.4
======== ========
Selected Cash Flow Information
(amounts in millions)
Successor Successor
Company Company
------- -------
Year Year
2008 2007
---- ----
Net earnings $81.0 $145.3
Other adjustments to reconcile net
earnings to net cash provided by
operating activities 214.1 235.3
Changes in operating assets and
liabilities, net (80.9) 194.6
----- -----
Net cash provided by operating
activities 214.2 575.2
Net cash used for investing activities (75.7) (36.7)
Net cash used for financing activities (277.0) (305.4)
Effect of exchange rate changes
on cash and cash equivalents (20.8) 17.4
----- ----
Net increase (decrease) in cash and
cash equivalents (159.3) 250.5
Cash and cash equivalents,
beginning of period 514.3 263.8
----- -----
Cash and cash equivalents,
end of period $355.0 $514.3
====== ======
Reconciliation to GAAP (unaudited)
Results on the 2008 adjustment basis
Three Three Twelve Twelve
CONSOLIDATED Months Months Months Months
Ended Ended Ended Ended
December December December December
(amounts in millions) 31, 31, 31, 31,
2008 2007 2008 2007
------------------------ ---- ---- ---- ----
Operating Income (Loss),
Adjusted $24.3 $52.8 $262.4 $305.7
Fresh-Start:
Change in depreciation
and amortization 2.3 2.7 9.4 2.7
Impact on hedging-
related activity - (1.2) - (5.8)
Other Significant Items:
Cost reduction initiatives
expenses 7.1 - 20.8 0.2
Insurance Settlement (6.9) (5.0) (6.9) (5.0)
Impairment Charges 28.3 - 28.3 -
Environmental accrual - 1.1 - 1.1
Chapter 11 related post-
emergence expenses - 0.3 (1.3) 7.1
Review of strategic
alternatives - 3.8 1.2 8.7
------------------------ ----- ----- ------ ------
Operating Income (Loss),
Reported $(6.5) $51.1 $210.9 $296.7
================ ===== ===== ====== ======
Three Three Twelve Twelve
RESILIENT FLOORING Months Months Months Months
Ended Ended Ended Ended
December December December December
(amounts in millions) 31, 31, 31, 31,
2008 2007 2008 2007
------------------------ ---- ---- ---- ----
Operating Income (Loss),
Adjusted $(15.9) $(5.4) $3.5 $40.8
Fresh-Start:
Change in depreciation
and amortization 0.8 0.8 3.3 0.8
Impact on hedging-
related activity - (0.4) - (1.5)
Other Significant Items:
Cost reduction initiatives
expenses 5.8 - 14.1 -
Impairment Charge 2.9 - 2.9 -
Environmental accrual - 1.1 - 1.1
------------------------ ------ ----- ------ -----
Operating Income (Loss),
Reported $(25.4) $(6.9) $(16.8) $40.4
================ ====== ===== ====== =====
Three Three Twelve Twelve
WOOD FLOORING Months Months Months Months
Ended Ended Ended Ended
December December December December
(amounts in millions) 31, 31, 31, 31,
2008 2007 2008 2007
------------------------ ---- ---- ---- ----
Operating Income (Loss),
Adjusted $(0.2) $17.5 $24.0 $64.5
Fresh-Start:
Change in depreciation
and amortization 0.2 0.2 1.0 0.2
Other Significant Items:
Impairment Charge 25.4 - 25.4 -
------------------------ ------ ----- ----- -----
Operating Income (Loss),
Reported $(25.8) $17.3 $(2.4) $64.3
================ ====== ===== ===== =====
Three Three Twelve Twelve
BUILDING PRODUCTS Months Months Months Months
Ended Ended Ended Ended
December December December December
(amounts in millions) 31, 31, 31, 31,
2008 2007 2008 2007
------------------------ ---- ---- ---- ----
Operating Income (Loss),
Adjusted $39.8 $46.9 $243.9 $218.4
Fresh-Start:
Change in depreciation
and amortization 1.0 1.1 4.2 1.1
Impact on hedging-
related activity - (0.8) - (4.3)
Other Significant Items:
Cost reduction initiatives
expenses - - - 0.2
------------------------ ----- ----- ------ ------
Operating Income (Loss),
Reported $38.8 $46.6 $239.7 $221.4
================ ===== ===== ====== ======
Three Three Twelve Twelve
CABINETS Months Months Months Months
Ended Ended Ended Ended
December December December December
(amounts in millions) 31, 31, 31, 31,
2008 2007 2008 2007
------------------------ ---- ---- ---- ----
Operating Income (Loss),
Adjusted $(2.8) $(1.3) $(6.7) $5.5
Other Significant Items:
Insurance Settlement - (5.0) - (5.0)
------------------------ ----- ---- ----- -----
Operating Income (Loss),
Reported $(2.8) $3.7 $(6.7) $10.5
================ ===== ==== ===== =====
UNALLOCATED Three Three Twelve Twelve
CORPORATE EXPENSE Months Months Months Months
Ended Ended Ended Ended
December December December December
(amounts in millions) 31, 31, 31, 31,
2008 2007 2008 2007
------------------------ ---- ---- ---- ----
Operating Income (Loss),
Adjusted $3.3 $(4.9) $(2.4) $(23.5)
Fresh-Start:
Change in depreciation
and amortization 0.2 0.6 0.8 0.6
Other Significant Items:
Cost Reduction
Initiatives 1.3 - 6.7 -
Chapter 11 related post-
emergence expenses - 0.3 (1.3) 7.1
Review of strategic
alternatives - 3.8 1.2 8.7
Insurance Settlement (6.9) - (6.9) -
------------------------ ---- ----- ----- ------
Operating Income (Loss),
Reported $8.7 $(9.6) $(2.9) $(39.9)
================ ==== ===== ===== ======
CONSOLIDATED
Three Months Ended Three Months Ended
(amounts in millions) December 31, 2008 December 31, 2007
Total Per Share Total Per Share
------------------ ----- --------- ----- ---------
Earnings, Adjusted $11.1 $0.20 $28.3 $0.50
Fresh-Start (net of tax):
Change in depreciation
and amortization 1.3 0.02 1.6 0.03
Impact on hedging-
related activity - - (0.7) (0.01)
Other Significant Items
(net of tax):
Cost reduction initiatives
expenses 4.1 0.07 - -
Insurance Settlements (4.0) (0.07) (2.9) (0.05)
Impairment Charges 16.4 0.29 - -
Environmental accrual - - 0.6 0.01
Chapter 11 related post-
emergence expenses - - 0.2 0.00
Review of strategic
alternatives - - 2.2 0.04
Tax NOL Valuation
Allowance* 13.9 0.25 - -
Tax rate - reported
to adjusted** 5.6 0.10 6.3 0.11
------------------ ------ ------ ----- -----
Earnings, Reported $(26.2) ($0.46) $21.0 $0.37
================== ====== ====== ===== =====
Note: May not add due to rounding
* The NOL valuation allowance is caused by a reduction in the amount
of future reversals of existing taxable temporary differences.
** The tax rate adjustment is the difference between the adjusted tax
rate and the effective tax rate.
CONSOLIDATED
Twelve Months Ended Twelve Months Ended
(per share) December 31, 2008 December 31, 2007
Total Per Share Total Per Share
------------------ ----- --------- ----- ---------
Earnings, Adjusted $139.7 $2.47 $155.6 $2.74
Fresh-Start (net of tax):
Change in depreciation
and amortization 5.5 0.10 1.6 0.03
Impact on hedging-
related activity - - (3.4) (0.06)
Other Significant Items
(net of tax):
Cost reduction initiatives
expenses 12.1 0.21 0.1 0.00
Insurance Settlement (4.0) (0.07) (2.9) (0.05)
Impairment Charges 16.4 0.29 - -
Environmental accrual - - 0.6 0.01
Chapter 11 related post-
emergence expenses (0.8) (0.01) 4.1 0.07
Review of strategic
alternatives 0.7 0.01 5.0 0.09
Tax NOL Valuation
Allowance* 13.9 0.25 - -
Tax rate - reported
to adjusted** 15.6 0.27 (2.5) (0.04)
------------------ ----- ----- ------ -----
Earnings, Reported $80.4 $1.42 $152.8 $2.69
================== ===== ===== ====== =====
Note: May not add due to rounding
* The NOL valuation allowance is caused by a reduction in the amount of
future reversals of existing taxable temporary differences.
** The tax rate adjustment is the difference between the adjusted tax
rate and the effective tax rate.
Three Three Twelve Twelve
Cash Flow Months Months Months Months
Ended Ended Ended Ended
December December December December
(millions) 31, 31, 31, 31,
2008 2007 2008 2007
-------------- ---- ---- ---- ----
Free Cash Flow
Net Cash From Operations $86 $278 $214 $575
Plus / (minus): Net
Cash from Investing (20) (27) (76) (37)
Add back / (subtract):
Emergence related payments (1) 1 3 26
Divestiture - (5) - (58)
Acquisitions - - 1 5
------------ -- -- -- --
Free Cash Flow $65 $247 $142 $511
============== == === === ===
Reconciliation to GAAP (unaudited)
2008 Results on the 2009 adjustment basis
CONSOLIDATED Three Three Three
Months Months Months
Ended Ended Ended
(amounts in millions) March 31, June 30, September 30,
2008 2008 2008
------------------------------ ---- ---- ----
Operating Income (Loss), Adjusted $43.8 $96.7 $90.5
Cost reduction initiatives
expenses 5.4 - 8.3
Insurance Settlement - - -
Impairment Charges - - -
Chapter 11 related post-
emergence income (1.3) - -
Review of strategic
alternatives 1.2 - -
------------------------------ ----- ---- -----
Operating Income (Loss),
Reported $38.5 $96.7 $82.2
======================== ===== ==== =====
Three Three Three
RESILIENT FLOORING Months Months Months
Ended Ended Ended
(amounts in millions) March 31, June 30, September 30,
2008 2008 2008
------------------------------ ---- ---- ----
Operating Income (Loss),
Adjusted $(7.2) $14.6 $9.5
Cost reduction initiatives
expenses - - 8.3
Impairment Charge - - -
------------------------------ ----- ----- ----
Operating Income (Loss),
Reported $(7.2) $14.6 $1.2
======================== ===== ===== ====
Three Three Three
WOOD FLOORING Months Months Months
Ended Ended Ended
(amounts in millions) March 31, June 30, September 30,
2008 2008 2008
------------------------------ ---- ---- ----
Operating Income (Loss),
Adjusted $2.5 $12.4 $8.5
Impairment Charge - - -
------------------------------ ---- ----- ----
Operating Income (Loss),
Reported $2.5 $12.4 $8.5
======================== ==== ===== ====
UNALLOCATED CORPORATE Three Three Three
EXPENSE Months Months Months
Ended Ended Ended
(amounts in millions) March 31, June 30, September 30,
2008 2008 2008
------------------------------ ---- ---- ----
Operating Income (Loss),
Adjusted $(2.8) $(2.1) $(1.4)
Cost reduction initiatives expenses 5.4 - -
Chapter 11 related post-
emergence income (1.3) - -
Review of strategic
alternatives 1.2 - -
Insurance Settlement - - -
------------------------------ ----- ----- -----
Operating Income (Loss),
Reported $(8.1) $(2.1) $(1.4)
======================== ===== ===== =====
CONSOLIDATED Three Months Twelve Months
Ended Ended
(amounts in millions) December 31, December 31,
2008 2008
------------------------------ ---- ----
Operating Income (Loss), Adjusted $22.0 $253.0
Cost reduction initiatives
expenses 7.1 20.8
Insurance Settlement (6.9) (6.9)
Impairment Charges 28.3 28.3
Chapter 11 related post-
emergence income - (1.3)
Review of strategic alternatives - 1.2
------------------------------ ----- ------
Operating Income (Loss), Reported $(6.5) $210.9
======================== ===== ======
RESILIENT FLOORING Three Months Twelve Months
Ended Ended
(amounts in millions) December 31, December 31,
2008 2008
------------------------------ ---- ----
Operating Income (Loss), Adjusted $(16.7) $0.2
Cost reduction initiatives
expenses 5.8 14.1
Impairment Charge 2.9 2.9
------------------------------ ------ ------
Operating Income (Loss), Reported $(25.4) $(16.8)
======================== ====== ======
WOOD FLOORING Three Months Twelve Months
Ended Ended
(amounts in millions) December 31, December 31,
2008 2008
------------------------------ ---- ----
Operating Income (Loss), Adjusted $(0.4) $23.0
Impairment Charge 25.4 25.4
------------------------------ ------ -----
Operating Income (Loss), Reported $(25.8) $(2.4)
======================== ====== =====
UNALLOCATED CORPORATE EXPENSE Three Months Twelve Months
Ended Ended
(amounts in millions) December 31, December 31,
2008 2008
------------------------------ ---- ----
Operating Income (Loss), Adjusted $3.1 $(3.2)
Cost reduction initiatives expenses 1.3 6.7
Chapter 11 related post-
emergence income - (1.3)
Review of strategic alternatives - 1.2
Insurance Settlement (6.9) (6.9)
------------------------------ ---- -----
Operating Income (Loss), Reported $8.7 $(2.9)
======================== ==== =====
Note: No adjustments necessary for Building Products and Cabinets
SOURCE Armstrong World Industries,Inc. - 02/26/2009
CONTACT: Beth Riley of Armstrong World Industries, Inc.,
bariley@armstrong.com, Investors, +1-717-396-6354,
News media,
+1-866-321-6677
Web Site: www.armstrong.com
( AWI)
