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ARMSTRONG WORLD INDUSTRIES REPORTS RESULTS

 ARMSTRONG WORLD INDUSTRIES REPORTS RESULTS
 LANCASTER, Pa., Jan. 27 /PRNewswire/ -- Fourth-quarter financial


results released today by Armstrong World Industries, Inc. (NYSE: ACK) show declines from comparable 1990 levels in sales and in both earnings from continuing businesses and net earnings.
 This confirms a Jan. 10 announcement, in which the company said its fourth-quarter results would reflect a downturn in earnings resulting from decreased sales revenue, provisions for losses from the planned exit of three non-core businesses, and restructuring charges such as severance payments and retirement incentives.
 All 1990 results have been restated to remove the results of the three non-core businesses from the continuing businesses category and include them as discontinued businesses.
 Armstrong's fourth-quarter sales were at $583.0 million, down 2.6 percent from the 1990 fourth-quarter level of $598.6 million.
 The net loss for the fourth quarter 1991 was $12.0 million (45 cents per share). Included in these figures were charges of $9.4 million after tax (25 cents per share) resulting from the discontinuation of three non-core businesses, and $5.0 million after tax (13 cents per share) of losses related to restructuring charges.
 The company's net earnings in the fourth quarter of 1990 were $4.7 million after tax, but there were no earnings per share after providing for preferred dividends. These earnings also included charges associated with discontinued businesses of $2.3 million after tax (6 cents per share); restructuring charges of $2.2 million after tax (6 cents per share) related to the closing of a Toronto manufacturing facility and severance pay associated with personnel reductions; and an accrual of $2.7 million after tax (7 cents per share) for costs associated with litigation involving residual claims in connection with a plant formerly owned by Armstrong.
 In the fourth quarter of 1991, the company reported a loss from continuing businesses of $2.6 million after tax (20 cents per share) compared with earnings from continuing businesses of $7.0 million after tax (6 cents per share) in the fourth quarter of 1990.
 For the full year 1991, the company reported these results:
 -- 1991 net sales were $2.44 billion, down 3 percent from 1990's $2.52 billion.
 -- Earnings from continuing businesses were $60.6 million, compared with $146.4 million the previous year -- a decline of 59 percent.
 -- Earnings per share of common stock from continuing businesses were $1.11 on both a primary and fully diluted basis, compared with 1990 levels of $3.26 on a primary basis and $2.99 fully diluted.
 -- Total net earnings were $48.2 million, down 66 percent from 1990's $141.0 million.
 -- Net earnings per share of common stock were $.77 on both a primary and fully diluted basis, compared with 1990 levels of $3.12 on a primary basis and $2.86 fully diluted.
 Return on common shareholders' equity for 1991 was 3.3 percent, compared with 13.0 percent in 1990.
 The cost of goods sold for 1991, when expressed as a percent of sales, was 74.0 percent as compared to 1990's 72.1 percent. This higher cost relationship, which was more pronounced in the first quarter of 1991 than in the remainder of the year, is the result of spreading fixed costs over lower sales volume; severe competitive pricing pressures in some businesses; higher raw material costs in most businesses; a lower- margin product mix; and manufacturing inefficiencies related to reduced production schedules to meet lower demand and to reduce inventories.
 For 1991, interest expense increased $8.3 million from 1990 because of the settlement of prior-year tax returns in the first quarter 1991 and higher debt levels caused by the repurchase of Armstrong common stock in 1990.
 The full-year 1991 earnings from continuing businesses included after-tax restructuring charges of $8.6 million. Income taxes were affected by a $3.7 million deferred income tax charge reflecting increases in state income tax rates, primarily Pennsylvania's, as required by Financial Accounting Standard No. 96, "Accounting for Income Taxes." These items amounted to a loss per share of 33 cents on both a primary and fully diluted basis.
 The comparable full-year 1990 earnings from continuing businesses included a gain from the sale of woodlands of $36.9 million after tax; costs and expenses associated with a proxy contest and Armstrong's response to a takeover threat, $9.4 million after tax; restructuring costs including severance pay and provisions for writedown of assets and plant closings, $4.0 million after tax; and accrual for costs associated with litigation involving residual claims for a previously owned facility, $3.1 million after tax. These 1990 items represented earnings per share of 52 cents on a primary basis and 46 cents on a fully diluted basis.
 The 1991 net earnings include a charge of $12.4 million after tax (34 cents per share on a primary and fully diluted basis) to provide for the expected losses associated with the disposition of the three non- core businesses as well as their 1991 operating losses.
 The net earnings for 1990 include charges related to discontinued businesses amounting to $13.4 million after tax (34 cents on a primary basis and 31 cents on a fully diluted basis). Also included is a gain of $8.0 million (20 cents on a primary basis and 18 cents on a fully diluted basis) resulting from the company's implementation of the Financial Accounting Standard No. 96, "Accounting for Income Taxes."
 Two of Armstrong's four industry segments -- furniture and industry products -- showed fourth-quarter increases in sales. The other two segments -- floor coverings (which includes ceramic tile) and building products -- declined year-to-year. Only the furniture segment improved its operating profit when compared with fourth quarter 1990.
 "We were extremely disappointed to have concluded the year with losses in the final quarter," said William W. Adams, chairman and president. "Up until December, we had hoped that our better-performing businesses would offset the poor earnings -- and in some cases, losses -- from those businesses most dependent upon non-residential construction and remodeling.
 "We find encouragement in current reports of sales of new and existing homes and in the anticipated effect of lower interest rates on the general economy. Yet, we are prepared for an uninspiring market demand in the first half, especially in most segments of non-residential building. We are tightening cost disciplines, even as we continue our intense pursuit of new customers and new levels of customer satisfaction."
 ARMSTRONG WORLD INDUSTRIES, INC., AND SUBSIDIARIES
 Financial Highlights
 (estimated and unaudited)
 (Millions except for per-share data)
 Three months Twelve months
 ended Dec. 31 ended Dec. 31
 1991 1990(1) 1991 1990(1)
 NET SALES $583.0 $598.6 $2,439.3 $2,518.8
 EARNINGS (LOSSES) FROM CONTINUING
 BUSINESSES (2) (3) ($2.6) $7.0 $60.6 $146.4
 Losses from discontinued businesses,
 net of income taxes (4) (1.2) (1.0) (3.8) (4.3)
 Provision for losses on disposition of
 discontinued businesses,
 net of income taxes (5) (8.2) (1.3) (8.6) (9.1)
 Gain from cumulative effect of
 change in accounting for
 income taxes -- -- -- 8.0
 NET EARNINGS (LOSSES) ($12.0) $4.7 $48.2 $141.0
 Per share of common stock:
 Primary:
 Earnings (losses) from continuing
 businesses (2) ($.20) $.06 $1.11 $3.26
 Losses from discontinued
 businesses (4) (.03) (.03) (.11) (.11)
 Provision for losses on disposition of
 discontinued businesses (5) (.22) (.03) (.23) (.23)
 Gain from cumulative effect of change in
 accounting for income taxes -- -- -- .20
 Net earnings (losses) ($.45) -- $.77 $3.12
 Fully diluted
 Earnings (losses) from continuing
 businesses (2) $(.20) $.06 $1.11 $2.99
 Losses from discontinued
 businesses (4) (.03) (.03) (.11) (.11)
 Provision for losses on
 disposition of discontinued
 businesses (5) (.22) (.03) (.23) (.20)
 Gain from cumulative effect of
 change in accounting for
 income taxes -- -- -- .18
 Net earnings (losses) ($.45) -- $.77 $2.86
 Average number of common
 shares outstanding:
 Primary 37.2 37.2 37.2 38.9
 Fully diluted 43.1 42.9 43.1 44.7
 (1) Operating statement categories for 1990 have been restated to exclude the effects of discontinued businesses.
 (2) Earnings (losses) before taxes from continuing businesses include the following significant items:
 Three months Twelve months
 ended Dec. 31 ended Dec. 31
 ($ millions before taxes) 1991 1990 1991 1990
 a. Restructuring costs ($7.5) ($3.5) ($13.1) ($6.5)
 b. Gain on sale of woodlands -- -- -- 60.4
 c. Proxy contest and litigation
 expense, and First City
 settlement -- -- -- (15.4)
 d. Accrual for costs associated
 with litigation involving
 residual claims for a
 previously owned facility -- (4.5) -- (5.0)
 Total significant
 items before tax ($7.5) ($8.0) ($13.1) $33.5
 (3) For the year 1991, income taxes include a deferred income tax charge of $3.7 million reflecting increases in state income tax rates as required by Financial Accounting Standard No. 96, "Accounting for Income Taxes" (adopted by the company in 1990).
 (4) Income tax benefits applicable to losses from operation of discontinued businesses amounted to $.6 million and $1.9 million, respectively, in the three months and twelve months ended December 31, 1991. Income tax benefits applicable to 1990 losses from discontinued businesses amounted to $.5 million and $2.2 million, respectively, in the three months and twelve months ended December 31, 1990.
 (5) For the three months and twelve months ended December 31, 1991, the provision for losses on disposition of discontinued businesses represents charges related to three non-core businesses and additional charges for losses related to the 1989 disposition of the carpet business. Income tax benefits applicable to these provisions for losses amounted to $4.2 million and $4.6 million in the three months and twelve months ended December 31, 1991, respectively. For the three months and twelve months ended Dec. 31, 1990, income taxes applicable to the disposition of discontinued businesses amounted to $.4 million and $3.8 million, respectively.
 ARMSTRONG WORLD INDUSTRIES, INC., AND SUBSIDIARIES
 Industry Segments
 (estimated and unaudited)
 (millions)
 Three months Twelve months
 ended Dec. 31 ended Dec. 31
 1991 1990 (1) 1991 1990 (1)
 Net trade sales:
 Floor coverings $248.3 $256.6 $1,058.0 $1,095.9
 Building products 156.9 169.4 676.3 711.1
 Furniture 106.0 103.5 417.9 436.4
 Industry products 71.8 69.1 287.1 275.4
 Total net sales $583.0 $598.6 $2,439.3 $2,518.8
 Operating profit: (2)
 Floor coverings $6.1 $21.7 $84.6 $131.2
 Building products (3) 4.5 11.2 46.7 142.9
 Furniture 5.1 1.1 18.2 19.6
 Industry products 9.3 10.2 43.1 48.0
 Total operating profit $25.0 $44.2 $192.6 $341.7
 (1) 1990 industry segment net trade sales and operating profit have been restated to exclude the effects of discontinued businesses.
 (2) Operating profit includes restructuring costs for the following industry segments:
 Three months Twelve months
 ended Dec. 31 ended Dec. 31
 1991 1990 1991 1990
 Floor coverings ($2.8) ($.9) ($3.0) ($3.0)
 Building products (1.2) (1.6) (4.5) (1.6)
 Furniture -- -- (.3) --
 Industry products (2.1) -- (2.2) --
 Total ($6.1) ($2.5) ($10.0) ($4.6)
 (3) For the twelve months ended December 31, 1990, operating profits include gains from the sale of woodlands of $60.4 million.
 -0- 1/27/92
 /CONTACT: Armstrong Public Relations, 717-396-3313/
 (ACK) CO: Armstrong World Industries, Inc. ST: Pennsylvania IN: SU: ERN


CC-MK -- PH026 -- 3882 01/27/92 15:53 EST
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