Armstrong World Industries Reports 4% Net Sales Jump in 2013

Armstrong World Industries Inc. (Lancaster, Pa.) announced on Monday 2013 net sales from continuing operations of $2.72 billion, up 3.9 percent from 2012. Net operating income was $238.6 million, a decrease of 12 percent.

Consolidated net sales for the fourth quarter of 2013 were $661.3 million, approximately 8 percent higher than the same period the previous year. Net income for the period was $10.8 million, an increase of 17.4 percent.

Despite the increase in sales, operating income declined due to increases in manufacturing and input costs driven by rising lumber prices and plant start up costs in Russia, company officials said in a statement. Additionally, SG&A expenses increased to support emerging market and architectural specialties growth initiatives.

Net sales in Armstrong's wood flooring segment increased more than 23 percent during last year's fourth quarter, from $107.8 million to $133.1 million, thanks to strong volume growth aided by favorable price realization from pricing actions taken earlier in the year.  The higher volumes were driven by strong demand from the home center channel and independent distributors. Despite the increase in sales, operating income in the wood flooring segment mirrored that of the company as a whole, declining due to increases in manufacturing and lumber costs, which were only partially offset by improvements in price and the margin impact of higher volumes.

Increases in both volumes and price within the wood flooring were the primary drivers of the increase in sales. But sales were negatively impacted by approximately $26 million due to the sale of the Patriot wood flooring distribution business in the third quarter of 2012.

Armstrong officials expect residential repair and remodel activity to be up slightly and new residential construction to continue to improve, with new home starts expected to be approximately 1.1 million in 2014. 

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