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March 5, 2008 |
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ARMSTRONG WORLD: Completes Strategic Review Following Evaluation Armstrong World Industries Inc. completed its strategic review, disclosed in February 2007, after extensive evaluation of alternatives, including a possible sale of Armstrong World's individual businesses and the entire company. Based on market conditions, including continued deterioration in the U.S. residential housing market and dramatic tightening of the credit markets, the board of directors concluded that it is in the best interest of Armstrong and its shareholders to continue to execute the company's strategic operating plan under its current structure as a publicly traded company. The company's projected financial position would allow the return of US$500 million of capital to shareholders in 2008, and its credit agreements have been amended to permit this. Seasonal cash usage is such that the board of directors has declared a special cash dividend of US$4.50 per common share, payable on March 31, 2008, to shareholders of record on March 11, 2008. This special cash dividend represents an aggregate payment of approximately US$260 million, leaving US$240 million available to be returned to shareholders later in the year if the business performs as expected. The board of directors based its decision to declare a special dividend on the substantial amount of cash generated in 2007, and on expectations that future cash generation will more than meet the company's needs. "Armstrong's board of directors thoroughly explored a comprehensive range of alternatives, weighing the interests of our shareholders, customers and employees," Michael D. Lockhart, Armstrong chairman and chief executive officer, said. "We believe that Armstrong can continue to create shareholder value by outperforming our markets with innovative products and services that deliver value and performance." Armstrong also stated that the Armstrong World Industries Asbestos Personal Injury Trust has informed the company's board of directors that it "supports the board's decision to conclude the strategic review and pay a special dividend." The trust further notified Armstrong that it "currently expects to have sufficient liquidity to pay claims against the trust for the foreseeable future and has no present plans to dispose of company common stock." About Armstrong World Headquartered in Lancaster, Pennsylvania, Armstrong World Industries, Inc. (NYSE:AWI) -- http://www.armstrong.com/ -- , designs, manufactures and sells flooring products and ceiling systems around the world. It also designs, manufactures and sells kitchen and bathroom cabinets. Its business segments include resilient flooring, wood flooring, building products and cabinets. The company has Asia-Pacific locations in Australia, China, Hong Kong, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam. It also has locations in Colombia, Costa Rica, Greece and Iceland, among others. On Dec. 6, 2000, it filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court. On Aug. 18, 2006, it emerged from Chapter 11. On April 3, 2006, Armstrong World acquired HomerWood Inc. On May 1, 2006 it acquired Capella Engineered Wood LLC, and its parent company, Capella Inc. On March 27, 2007, it entered into an agreement to sell the principal operating companies in its European textile and sports flooring business segment to Tapijtfabriek H. Desseaux N.V. and its subsidiaries. These businesses were classified as discontinued at Oct. 2, 2006. |
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