Armstrong Holdings Inc. recently reported 2002 third quarter net sales of $846.0 million, as compared to $804.9 million in the third quarter of 2001, an increase of 5.1 percent.

Increases in Wood Flooring, Building Products, Resilient Flooring and Cabinets were partially offset by a decline in Textiles and Sports Flooring.

Operating income of $52.4 million in the third quarter of 2002 increased from $32.9 million in the third quarter of 2001. Earnings from continuing operations for the third quarter of 2002 were $29.4 million, or $0.72 per diluted share, as compared to $14.3 million, or $0.35 per diluted share for the third quarter of 2001.

The third quarter of 2001 included a non-cash pre-tax charge of $16 million related to probable asbestos-related insurance recoveries, a net restructuring reversal of $1.1 million and $5.7 million of goodwill amortization, which as a result of adopting FAS 142, is no longer amortizable and has no corresponding cost in 2002. The company recorded a restructuring reversal of $0.6 million in the third quarter of 2002 in its Textiles and Sports Flooring business.

Resilient Flooring net sales were $314.6 million in the third quarter of 2002, increased 3.8 percent from $303.2 million in the third quarter of 2001. This primarily resulted from an increase in the Americas net sales of 3.7 percent, due to volume gains in laminate and improved product mix in commercial sheet and linoleum, partially offset by an unfavorable product mix in certain residential products. Excluding the effects of favorable foreign exchange rates, Europe decreased 6.3 percent, primarily due to lower sales of linoleum products.

Operating income of $21.5 million in the third quarter of 2002 compared to $28.3 million in the third quarter of 2001. This decrease was primarily due to higher selling expenses and unfavorable price and mix in the Americas, partially offset by higher sales and lower advertising expenses.

Wood Flooring net sales of $180.3 million in the third quarter of 2002 increased 13.5 percent from sales of $158.9 million in the third quarter of 2001, driven primarily by increased volume and pricing in the independent channel.

Operating income of $10 million in the third quarter of 2002 compared to break even performance in the third quarter of 2001. The increase in operating income was driven by higher net sales, improved production efficiencies, lower lumber costs and lower selling expense, partially offset by increased personnel and medical costs, and costs associated with exiting a product line and a provision for an accident.

Textiles and Sports Flooring net sales of $68.6 million decreased 4.9 percent in the third quarter of 2002 compared to $72.1 million in the third quarter of 2001. Excluding the effects of favorable foreign exchange rates, net sales decreased 13.8 percent due to the weak European market. An operating loss of $1.7 million in the third quarter of 2002 compared to an operating loss of $6.9 million in the third quarter of 2001. The change was primarily due to a fixed asset impairment charge of $8.4 million in 2001 and the unfavorable impact of lower net sales.