Armstrong World Industries – AWI – Reported second quarter 2012 results

Armstrong World Industries, Inc. (NYSE: AWI), a global leader in the design and manufacture of floors, ceilings, and cabinets, reported second quarter 2012 results.

Highlights for the Second Quarter of 2012

• Operating Income of $76.9 million, up 5.8% over the 2011 period
• Adjusted EBITDA of $110 million, up 1% despite lower sales, over the 2011 period
• Management lowers full year 2012 guidance on weaker market outlook
• Ongoing cost savings program target increased to $200 million

AWI – Second Quarter Results

Consolidated net sales decreased approximately $39 million, or 5%, compared to the prior year period.  Excluding approximately $17 million of unfavorable foreign exchange impact for the quarter, sales declined approximately 3% compared to the prior year period.  On a consolidated level, improvements in price and mix were unable to offset broad volume declines in all businesses and geographies.

Operating income and net income both increased in spite of the margin impact of lower volumes, primarily due to cost reduction actions taken under our cost savings program, which resulted in lower manufacturing costs and core SG&A expenses when compared to the same period last year.  Input cost inflation increased $2 million versus the second quarter of 2011.

AWI  – Market Outlook and 2012 Guidance       

Management’s macroeconomic outlook for 2012 has declined from the end of the first quarter.  ”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 Tom Mangas, Senior Vice President and CFO.

Management is lowering full year sales and EBITDA guidance and now expects sales to be in the $2.75 to $2.85 billion range and adjusted EBITDA to be in the $400 to $430 million range.  2012 adjusted EPS is expected to be $2.40 to $2.70 per diluted share and free cash flow is anticipated to be between $30 and $70 million.  The Company identified savings opportunities in excess of the previously announced $185 million initiative.  ”We now expect to save approximately $200 million, with savings in 2012 now expected to be approximately $50 million, up from $35 million incorporated in our previous guidance,” said Mangas.

For the third quarter of 2012, sales are expected to be between $740 and $780 million and adjusted EBITDA to be in the range of $120 to $140 million.

About Armstrong – AWI

Armstrong World Industries, Inc. (AWI)  is a global leader in the design and manufacture of floors, ceilings and cabinets.  In 2011, Armstrong’s consolidated net sales totaled approximately $2.9 billion.  As of June 30, 2012, Armstrong operated 33 plants in eight countries and had approximately 9,300 employees worldwide.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.