Armstrong profits double to $52.5M in third quarter
  • Armstrong World Industries

By TIM MEKEEL
Lancaster
Updated Nov 01, 2011 09:50

Armstrong World Industries doubled its net profits in the third quarter, thanks largely to the absence of major restructuring charges.

The company announced Monday that net profits were $52.5 million (89 cents a share), up from $24.6 million (42 cents a share) in 2010's third quarter.

Sales grew 4.6 percent to $773.6 million from $739.8 million.

The biggest factor in the upturn was the reduction in net pretax restructuring charges to $700,000 from $15 million in 2010's third quarter.

Those year-ago charges were mostly the result of severance for workers at plants being closed in Beaver Falls; Teesside, England; and Holmsund, Sweden.

Also helping results were:

A $6.4 million drop in selling, general and administrative expenses.

A $2.2 million increase in profits from Armstrong's WAVE ceiling-grid joint venture.

Offsetting these favorable trends in part were:

A $14 million increase in raw materials costs caused by inflation.

A $7.4 million hike in interest expense, the result of last year's refinancing of corporate debt.

Factoring out the impact of the restructuring charges and certain other items, Armstrong's net profits still were up 6 percent.

Matt Espe, chairman and chief executive officer, said the positive profits illustrate "that the businesses continue to execute well in a tough operating environment."

Taking a look at how Lancaster-based Armstrong's businesses performed individually, all four fared better.

Its biggest business, building products (including ceilings), had a strong quarter.

Operating profits increased 22.3 percent to $72.4 million on an 8.4 percent jump in sales to $335.9 million.

Higher selling prices, a more profitable mix of products, greater WAVE profits and lower SG&A expenses lifted profits for this segment.

Resilient flooring had a better quarter too, with operating profits up 5 percent to $10.6 million despite a 1.6 percent dip in sales to $271.0 million.

Lifting profits were reduced manufacturing and SG&A costs, higher selling prices and the absence of 2010's costs to close plants.

Wood flooring saw $17.4 million in operating profits, versus a $13.3 million operating loss in 2010. Sales grew 6.2 percent to $127.2 million.

Lower manufacturing and SG&A expenses and the absence of 2010's plant-closing costs triggered the turnaround.

Cabinets likewise went from red to black, to $1.7 million in operating profits from a $1.2 million operating loss.

Fueling the rebound were a 13.2 percent boost in sales to $39.5 million and lower SG&A expenses.

With its headquarters on Columbia Avenue, Armstrong is one of the county's largest industrial employers, with about 1,500 employees here.

However, Armstrong locked out the 260 employees in its Marietta ceiling plant's unionized work force on July 17.

tmekeel@lnpnews.com

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