Armstrong's wood flooring segment net sales decreased 6.6% in the second quarter of 2012, from $133.6 million last year to $124.8 million this year, but its wood flooring operating income increased 3.0% from $13.4 million to $13.8 this year. The company said "volume, price and mix were all unfavorable when compared to the prior year, driven primarily by inventory reductions at one of our 'Big Box' customers." Reduced manufacturing costs, however, more than offset the decreased sales.
Armstrong's wood flooring segment net sales decreased 6.6% in the second quarter of 2012, from $133.6 million last year to $124.8 million this year, but its wood flooring operating income increased 3.0% from $13.4 million to $13.8 this year. The company said "volume, price and mix were all unfavorable when compared to the prior year, driven primarily by inventory reductions at one of our 'Big Box' customers." Reduced manufacturing costs, however, more than offset the decreased sales.
Overall at Armstrong, consolidated net sales decreased 5% to approximately $709.9 million from $748.6 million during the same quarter in 2011. Excluding an unfavorable foreign exchange impact, sales decreased approximately 3% compared with the same quarter last year. Operating income and net income both increased, however, primarily due to cost reduction actions that resulted in lower manufacturing costs and core SG&A expenses when compared with the same period of 2011. Operating income increased 5.8% to $76.9 million, and net income increased 10.3% to $41.8 million.
"In spite of a soft sales environment in the second quarter, we were able to deliver adjusted EBITDA of $110 million, an improvement of 1% over the prior year and within our guidance range," said Matt Espe, CEO. "We continue to see volumes down across our businesses as global markets continue to struggle, with Europe in particular, experiencing sharp volume declines in the second quarter."
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