This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at email@example.com or call 800-767-3771 ext. 9339.
Armstrong World Industries, Inc. (AWI - Analyst Report), reported first-quarter 2013 adjusted earnings of 22 cents per share, declining 55% from the prior year quarter’s earnings of 49 cents per share. The decline was attributable to increased foreign losses and the disbursement of previously capitalized financing costs resulting in higher tax rate. The results also missed the Zacks Consensus Estimate of 39 cents.
On a reported basis, earnings decreased nearly six-fold to 5 cents per share from the prior-year quarter’s earnings of 32 cents. Earnings include charges relating to a pre-tax adjustment, ordinary tax, unbenefited foreign losses and reversal of tax expense.
Net sales dipped 2% year over year to $622.3 million in the reported quarter and fell short of the Zacks Consensus Estimate of $634 million. Results were affected by the sale of the Patriot wood flooring distribution business in the third-quarter 2012. The year- over-year decline was also driven by lower commercial volumes, partly offset by gains in new residential construction which led to volume growth in the Wood Flooring business and positive impact of price and mix.
Cost of sales went down 3.7% to $478 million in the reported quarter. Gross profit improved 3.2% to $144.5 million from the year-ago quarter. Gross margin expanded 120 basis points (bps) year over year to 23.2% in the quarter.
Selling, general and administrative expenses declined 2% to $112.7 million in the quarter. Adjusted operating income decreased 8% to $54 million in the quarter from $59 million in the prior-year quarter. Operating margin contracted 60 bps year over year to 8.6%.
Building Products: Net sales at the Building Products segment dropped 3.4% to $292.8 million, due to lower volumes in the Americas and Europe, partly offset by a strong mix performance and higher pricing. Adjusted operating profit for the segment increased 3.4% to $60 million from $58 million in the year-ago quarter.
Resilient Flooring: The Resilient Flooring segment reported sales of $215 million, down 5.5% from the year-ago quarter. The decline was driven by softness in commercial sectors resulting in lower volumes in North America, Europe and Australia. The segment’s adjusted operating profit was $12 million, flat compared with the year-ago quarter.
Wood Flooring: Net sales in the reported quarter went up 8.6% year over year to $114.7 million, driven by a strong volume growth owing to promotional activity and share gains in the home center channel as well as strong demand from independent distributors. Adjusted operating profit, however, declined 50% to $1 million in the reported quarter from $2 million in the prior-year quarter.
Cash and cash equivalents were $278 million as of Mar 31, 2013 compared with $683 million as of Mar 31, 2012. Cash flow used in operating activities was $14 million in the reported quarter compared with $33 million in the prior-year quarter.
Armstrong maintains its full year 2013 sales guidance in the range of $2.7 to $2.8 billion. It also retains the forecast for adjusted EBITDA in the band of $390 to $420 million. The company, however, lowered its full year adjusted EPS from the previous range of $2.30 to $2.60 to the new range of $2.15 to $2.45.
For the second quarter of 2013, Armstrong expects sales to be in the range of $680 and $730 million and adjusted EBITDA in the range of $85 to $105 million.
Pa.-based Armstrong is a leading global producer of flooring products and ceiling systems for use in the construction and renovation of residential, commercial and institutional buildings. Armstrong also designs, manufactures and sells kitchen and bathroom cabinets in the U.S.
Armstrong currently retains a short-term Zacks Rank #4 (Sell). Other companies in the building and construction industry with favorable Zacks Ranks are Headwaters Incorporated (HW - Snapshot Report), James Hardie Industries plc (JHX - Snapshot Report) and Masco Corporation (MAS - Analyst Report); each carrying a Zacks Rank #2 (Buy).