8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 29, 2013

ARMSTRONG WORLD INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	1-2116	23-0366390
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)
2500 Columbia Avenue P.O. Box 3001 Lancaster, Pennsylvania		17603
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (717) 397-0611

NA

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition.

On April 29, 2013, Armstrong World Industries, Inc. (the “Company”) issued a press release announcing its first quarter 2013 consolidated financial results. The full text of the press release is attached hereto as Exhibit 99.1.

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished herewith and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.

Section 7 – Regulation FD

Item 7.01 Regulation FD Disclosure.

On April 29, 2013, the Company issued a press release announcing that it will report its first quarter 2013 consolidated financial results via a webcast and conference call on Monday, April 29, 2013 at 1:00 p.m. Eastern Time which can be accessed through the “For Investors” section of the Company’s website, www.armstrong.com. During this report, the Company will reference a slide presentation, a copy of which is attached hereto as Exhibit 99.2 and incorporated herein by reference.

The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2, is being furnished herewith and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Act, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

No. 99.1	Press Release of Armstrong World Industries, Inc. dated April 29, 2013
No. 99.2	Earnings Call Presentation First Quarter 2013 dated April 29, 2013

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ARMSTRONG WORLD INDUSTRIES, INC.
By:	/s/ Mark A. Hershey
	Mark A. Hershey
	Senior Vice President, General Counsel and Secretary

Date: April 29, 2013

3

EX-99.1

Exhibit 99.1

Armstrong World Industries Reports First Quarter 2013 Results

Key Highlights

• Operating income from continuing operations of $47 million, up 10% over the 2012 period

• Adjusted EBITDA from continuing operations of $79 million, down 6% over the 2012 period

• Commencement of operations at homogeneous flooring and ceilings plants in China

LANCASTER, Pa., April 29, 2013 —Armstrong World Industries, Inc. (NYSE: AWI), a global leader in the design and manufacture of floors and ceilings, today reported first quarter 2013 results.

First Quarter Results from continuing operations

(Amounts in millions except per share data)	Three Months Ended March  31,
	2013		2012		Change
Net sales	$	622.3	$	636.0		(2.2	)%
Operating income		47.0		42.7		10.1	%
Net income		3.2		19.0		(83.2	)%
Diluted earnings per share	$	0.05	$	0.32		(84.4	)%

Consolidated net sales for the first quarter decreased by approximately $14 million, or 2%, compared to the prior year period. Sales were negatively impacted by approximately $9 million due to the sale of the Patriot wood flooring distribution business, which occurred in the third quarter of 2012. The sales decline was also driven by lower commercial volumes which more than offset gains in new residential construction that resulted in strong volume growth in the Wood Flooring business. Price and mix were both positive, but only partially offset the impact of lower volumes.

Operating income increased in spite of lower sales volumes, primarily due to lower restructuring and cost reduction charges. Net income and diluted earnings per share were impacted by a higher effective tax rate in the first quarter of 2013, due to increased unbenefitted foreign losses and the expensing of previously capitalized financing costs associated with the prior credit facility as a result of the refinancing transaction completed in the first quarter of 2013.

“We delivered first quarter results in line with the expectations we outlined earlier this year, despite a continued choppy commercial market environment,” said Matt Espe, President and CEO. “We also achieved a significant milestone toward our growth initiatives in China as we commenced operations at our homogenous flooring and ceilings plants. Collectively, I’m proud that construction of these plants was completed with a perfect employee safety record and the plants were brought online as scheduled and on budget.”

Additional (non-GAAP*) Financial Metrics from continuing operations

(Amounts in millions except per share data)	Three Months Ended March  31,
	2013			2012			Change
Adjusted operating income	$	54		$	59			(9	)%
Adjusted net income		13			29			(55	)%
Adjusted diluted earnings per share	$	0.22		$	0.49			(55	)%
Free cash flow	($	51	)	($	50	)		(3	)%
(Amounts in millions)	Three Months Ended March  31,
	2013			2012			Change
Adjusted EBITDA
Building Products	$	74		$	71			4	%
Resilient Flooring		19			19			1	%
Wood Flooring		3			5			(34	)%
Unallocated Corporate		(17	)		(11	)		(49	)%
Consolidated Adjusted EBITDA	$	79		$	84			(6	)%

* The Company uses the above non-GAAP adjusted measures, as well as other non-GAAP measures mentioned below, in managing the business and believes the adjustments provide meaningful comparisons of operating performance between periods. Adjusted operating income, adjusted EBITDA, adjusted net income, and adjusted EPS exclude the impact of foreign exchange, restructuring charges and related costs, impairments, and certain other nonrecurring gains and losses. Free cash flow is defined as cash from operations and dividends received from the WAVE joint venture, less expenditures for property and equipment, less restricted cash, and is adjusted to remove the impact of cash used or proceeds received for acquisitions and divestitures. The company believes free cash flow is useful because it provides insight into the amount of cash that the Company has available for discretionary uses, after expenditures for capital commitments and adjustments for acquisitions/divestitures. Adjusted figures are reported in comparable dollars using the budgeted exchange rate for 2013, and are reconciled to the most comparable GAAP measures in tables at the end of this release.

Adjusted operating income and adjusted EBITDA declined by 9% and 6%, respectively, in the first quarter of 2013 when compared to the prior year period, primarily due to the margin impact of lower volumes. Adjusted net income and earnings per share benefited from a reduction in the adjusted effective tax rate from 40% to 39%. Free cash flow declined slightly over the prior year driven primarily by lower sales volumes and increased capital expenditures associated with emerging market investments, which were only partially offset by working capital improvements.

First Quarter Segment Highlights

Building Products

	Three Months Ended March  31,
	2013		2012		Change
Total segment net sales	$	292.8	$	303.1		(3.4	)%
Operating income	$	59.3	$	43.3		37.0	%

Net sales declined by approximately 3% when compared to the prior year period as strong mix performance and higher pricing were more than offset by lower volumes in the Americas and Europe. The increase in operating income was driven by $15 million of accelerated depreciation and impairment charges associated with the closure of the Mobile, AL facility and approximately $4 million of net costs related to the collective bargaining contract settlement with employees at the Marietta, PA plant, both of which occurred during the first quarter of 2012. During the first quarter of 2013, we experienced favorable price and mix and higher earnings from WAVE, which were more than offset by the margin impact of lower volumes.

Resilient Flooring

	Three Months Ended March  31,
	2013		2012		Change
Total segment net sales	$	214.8	$	227.3		(5.5	)%
Operating income	$	6.4	$	10.7		(40.2	)%

Net sales declined driven by lower volumes in North America, Europe and Australia, where continued softness in commercial sectors tied to public spending negatively impacted volumes. The decline in operating income was driven by $5 million of severance charges associated with cost reduction actions in Australia and in the European Flooring business in 2013. Operating income was negatively affected by the margin impact of lower volumes, but this was offset with reductions in manufacturing expenses due to increases in productivity despite additional start up costs associated with our China plants and lower SG&A expenses.

Wood Flooring

	Three Months Ended March  31,
	2013		2012		Change
Total segment net sales	$	114.7	$	105.6		8.6	%
Operating income	$	0.5	$	2.5		(80.0	)%

Net sales improved driven by strong volume growth, which was only partially offset by unfavorable mix and price. Higher volumes were driven by promotional activity and share gains in the home center channel, as well as strong demand from independent distributors as gains in new residential construction drove increased demand from builders which negatively impacted mix. Sales were also negatively impacted by approximately $9 million due to the sale of the Patriot wood flooring distribution business which occurred in the third quarter of 2012.

Operating income declined driven by unfavorable price and mix and higher manufacturing and input costs, which were only partially offset by higher volumes and reductions in SG&A expenses. Increases in manufacturing costs were driven by higher labor costs as we increased our workforce to respond to the increase in demand. Shipments for solid wood products were negatively impacted as orders outpaced production in the quarter. To address the increased demand, we are adding additional crews at several solid wood plants.

Corporate

Unallocated corporate expense of $19.2 million increased from $13.8 million in the prior year, primarily due to a $2.6 million reduction in the pension credit, and increased expense associated with employee benefits and insurance programs.

Discontinued Operations

In October 2012, the Company sold its Cabinets business to American Industrial Partners. The transaction was subject to customary working capital adjustments, which are expected to be completed in the second quarter of 2013. The financial results of the cabinets business, which have previously been shown as a separate reporting segment, have been reclassified as discontinued operations for all periods presented.

Market Outlook and 2013 Guidance ⁽¹⁾

“We are reaffirming the full year guidance metrics, with the exception of EPS, that we outlined when we released fourth quarter 2012 results, which anticipate sales in the $2.7 to $2.8 billion range and adjusted EBITDA in the $390 to $420 million range, as the market conditions we experienced in the first quarter were generally in line with our expectations,” said Tom Mangas, Senior Vice President and CFO. “Additionally, I’m pleased to announce that we successfully completed the refinancing of our senior credit facility, which did not materially change our debt levels or liquidity, but resulted in an extension of maturities and lower future cash interest expense.”

The Company now expects full year adjusted EPS to be in the range of $2.15 to $2.45 as the refinancing transaction required previously capitalized financing costs associated with the prior credit facility to be expensed.

For the second quarter of 2013, sales are expected to be in the range of $680 and $730 million and adjusted EBITDA in the range of $85 to $105 million.

⁽¹⁾  Sales guidance includes the impact of foreign exchange. Guidance metrics, other than sales, are presented using 2013 budgeted foreign exchange rates. Adjusted EPS guidance for 2013 is calculated based on an adjusted effective tax rate of 39%.

Earnings Webcast

Management will host a live Internet broadcast beginning at 1:00 p.m. Eastern time today, during which first quarter results will be discussed. This event will be broadcast live on the Company’s Web site. To access the call and accompanying slide presentation, go to www.armstrong.com and click “For Investors.” The replay of this event will also be available on the Company’s Web site for up to one year after the date of the call.

Uncertainties Affecting Forward-Looking Statements

Disclosures in this release, including without limitation, those relating to future financial results guidance, and in our other public documents and comments contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements provide our future expectations or forecasts and can be identified by our use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “outlook,” “target,” “predict,” “may,” “will,” “would,” “could,” “should,” “seek,” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. Forward-looking statements, by their nature, address matters that are uncertain and involve risks because they relate to events and depend on circumstances that may or may not occur in the future. As a result, our actual results may differ materially from our expected results and from those expressed in our forward-looking statements. A more detailed discussion of the risks and uncertainties that could cause our actual results to differ materially from those projected, anticipated or implied is included in the “Risk Factors” and “Management’s Discussion and Analysis” sections of our reports on Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”). Forward- looking statements speak only as of the date they are made. We undertake no obligation to update any forward-looking statements beyond what is required under applicable securities law.

About Armstrong and Additional Information

More details on the Company’s performance can be found in its quarterly report on Form 10-Q for the quarter ended March 31, 2013 that will be filed with the SEC today.

Armstrong World Industries, Inc. is a global leader in the design and manufacture of floors and ceilings. In 2012, Armstrong’s consolidated net sales from continuing operations totaled approximately $2.6 billion. As of March 31, 2013, Armstrong operated 34 plants in eight countries and had approximately 8,700 employees worldwide.

Additional forward looking non-GAAP metrics are available on the Company’s web site at http://www.armstrong.com/ under the Investor Relations tab. The website is not part of this release and references to our website address in this release are intended to be inactive textual references only.

As Reported Financial Highlights

FINANCIAL HIGHLIGHTS

Armstrong World Industries, Inc., and Subsidiaries

(amounts in millions, except for per-share amounts)

(Unaudited)

	Three Months Ended March 31,			Three Months Ended March 31,
	2013			2012
Net sales	$	622.3		$	636.0
Cost of goods sold		477.8			496.0
Selling, general and administrative expenses		112.7			110.7
Restructuring charges, net		—			0.2
Equity (earnings) from joint venture		(15.2	)		(13.6	)
Operating income		47.0			42.7
Interest expense		33.2			11.2
Other non-operating (income)		(1.3	)		(0.8	)
Earnings from continuing operations before income taxes		15.1			32.3
Income tax expense		11.9			13.3
Earnings from continuing operations	$	3.2		$	19.0
Net loss from discontinued operations, net of tax benefit of $- and ($0.3)		—			(0.8	)
Loss on sale of discontinued business, net of tax benefit of ($0.1) and $-		(0.2	)		—
Net loss from discontinued operations		(0.2	)		(0.8	)
Net earnings	$	3.0		$	18.2
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		(6.2	)		5.3
Derivative gain (loss)		4.3			(2.3	)
Pension and postretirement adjustments		8.9			2.4
Total other comprehensive income		7.0			5.4
Total comprehensive income	$	10.0		$	23.6
Earnings per share of common stock, continuing operations:
Basic	$	0.05		$	0.32
Diluted	$	0.05		$	0.32
Loss per share of common stock, discontinued operations:
Basic	$	—		($	0.01	)
Diluted	$	—		($	0.01	)
Net earnings per share of common stock:
Basic	$	0.05		$	0.31
Diluted	$	0.05		$	0.31
Average number of common shares outstanding:
Basic		59.2			58.6
Diluted		59.8			59.1
Dividends declared per common share	$	—		$	8.55

SEGMENT RESULTS

Armstrong World Industries, Inc., and Subsidiaries

(amounts in millions)

(Unaudited)

	Three Months Ended March 31,
Net sales	2013			2012
Building Products	$	292.8		$	303.1
Resilient Flooring		214.8			227.3
Wood Flooring		114.7			105.6
Total net sales	$	622.3		$	636.0
	Three Months Ended March 31,
Operating income (loss)	2013			2012
Building Products	$	59.3		$	43.3
Resilient Flooring		6.4			10.7
Wood Flooring		0.5			2.5
Unallocated Corporate (expense)		(19.2	)		(13.8	)
Total Operating income	$	47.0		$	42.7

Selected Balance Sheet Information

(amounts in millions)

	(Unaudited) March 31, 2013		December 31, 2012
Assets
Current assets	$	1,025.2	$	1,019.9
Property, plant and equipment, net		1,013.7		1,005.0
Other noncurrent assets		830.8		829.4
Total assets	$	2,869.7	$	2,854.3
Liabilities and shareholders’ equity
Current liabilities	$	354.9	$	384.7
Noncurrent liabilities		1,780.0		1,750.5
Equity		734.8		719.1
Total liabilities and shareholders’ equity	$	2,869.7	$	2,854.3

Selected Cash Flow Information ⁽¹⁾

(amounts in millions)

(Unaudited)

	Three Months Ended March 31,
	2013			2012
Net income	$	3.0		$	18.2
Other adjustments to reconcile net income to net cash used for operating activities		36.0			30.9
Changes in operating assets and liabilities, net		(53.0	)		(82.0	)
Net cash (used for) operating activities		(14.0	)		(32.9	)
Net cash (used for) investing activities		(37.3	)		(15.7	)
Net cash (used for) provided by financing activities		(6.2	)		249.6
Effect of exchange rate changes on cash and cash equivalents		(0.9	)		1.7
Net (decrease) increase in cash and cash equivalents		(58.4	)		202.7
Cash and cash equivalents, beginning of period		336.4			480.6
Cash and cash equivalents, end of period	$	278.0		$	683.3

(1) Cash flow information includes cash flow attributable to Cabinets

Supplemental Reconciliations of GAAP to non-GAAP Results (unaudited)

(Amounts in millions, except per share data)

To supplement its consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (GAAP), the Company provides additional measures of performance adjusted to exclude the impact of foreign exchange, restructuring charges and related costs, impairments, and certain other gains and losses. Adjusted figures are reported in comparable dollars using the budgeted exchange rate for 2013. The Company uses these adjusted performance measures in managing the business, including communications with its Board of Directors and employees, and believes that they provide users of this financial information with meaningful comparisons of operating performance between current results and results in prior periods. The Company believes that these non-GAAP financial measures are appropriate to enhance understanding of its past performance, as well as prospects for its future performance. A reconciliation of these adjustments to the most directly comparable GAAP measures is included in this release and on the Company’s website. These non-GAAP measures should not be considered in isolation or as a substitute for the most comparable GAAP measures. Non-GAAP financial measures utilized by the Company may not be comparable to non-GAAP financial measures used by other companies.

CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS	Three Months Ended March 31,
	2013			2012
Adjusted EBITDA	$	79		$	84
D&A/Fx*		(25	)		(25	)
Operating Income, Adjusted	$	54		$	59
Cost reduction initiatives expense		5			11
Restructuring		1			—
Impairment		—			5
Foreign exchange impact		1			—
Operating Income, Reported	$	47		$	43

* Excludes accelerated depreciation associated with cost reduction initiatives reflected below. Actual D&A as reported is $25 million for the three months ended March 31, 2013 and $34 million for the three months ended March 31, 2012.

BUILDING PRODUCTS	Three Months Ended March 31,
	2013			2012
Adjusted EBITDA	$	74		$	71
D&A/Fx		(14	)		(13	)
Operating Income, Adjusted	$	60		$	58
Cost reduction initiatives expense		1			10
Impairment		—			5
Foreign exchange impact		—			—
Operating Income, Reported	$	59		$	43
RESILIENT FLOORING	Three Months Ended March 31,
	2013			2012
Adjusted EBITDA	$	19		$	19
D&A/Fx		(7	)		(7	)
Operating Income, Adjusted	$	12		$	12
Cost reduction initiatives expense		4			1
Restructuring		1			—
Foreign exchange impact		1			—
Operating Income, Reported	$	6		$	11
WOOD FLOORING	Three Months Ended March 31,
	2013			2012
Adjusted EBITDA	$	3		$	5
D&A/Fx		(2	)		(3	)
Operating Income, Adjusted	$	1		$	2
Foreign exchange impact		—			—
Operating Income, Reported	$	1		$	2

UNALLOCATED CORPORATE	Three Months Ended March 31,
	2013			2012
Adjusted EBITDA	$	(17	)	$	(11	)
D&A/Fx		(2	)		(2	)
Operating (Loss), Adjusted	$	(19	)	$	(13	)
Foreign exchange impact		—			—
Operating (Loss), Reported	$	(19	)	$	(13	)

	Three Months Ended
CONSOLIDATED	March 31, 2013					March 31, 2012
	Total			Per Share		Total			Per Share
Adjusted EBITDA	$	79				$	84
D&A as reported		(25	)				(34	)
Accelerated Deprecation		—					9
Operating Income, Adjusted	$	54				$	59
Other non-operating (expense)		(32	)				(11	)
Earnings Before Taxes, Adjusted		22					48
Adjusted tax (expense) @ 39% for 2013 and 40% for 2012		(9	)				(19	)
Net Earnings, Adjusted	$	13		$	0.22	$	29		$	0.49
Pre-tax adjustment items		(7	)				(16	)
Reversal of adjusted tax expense @ 39% for 2013 and 40% for 2012		9					19
Ordinary tax		(5	)				(10	)
Unbenefitted foreign losses		(7	)				(3	)
Net Earnings, Reported	$	3		$	0.05	$	19		$	0.32

CASH FLOW (1)	Three Months Ended March 31,
	2013			2012
Free Cash Flow
Net Cash From Operations	$	(14	)	$	(33	)
Less: net cash provided by (used for) investing		(37	)		(16	)
Add back (subtract) adjustments to reconcile to free cash flow
Restricted Cash		—			(1	)
Free Cash Flow	$	(51	)	$	(50	)

(1) Cash flow includes cash flows attributable to Cabinets

EX-99.2

Earnings Call Presentation

1

st

Quarter 2013

April 29, 2013

Exhibit 99.2

Safe Harbor Statement

Our disclosures in this presentation, including without limitation, those relating to future financial

results

guidance,

and

in

our

other

public

documents

and

comments

contain

forward-looking

statements within the meaning of the Private Securities Litigation Reform Act.  Those statements

provide our future expectations or forecasts and can be identified by our use of words such as

"anticipate," "estimate," "expect," "project," "intend," "plan,"

"believe," "outlook," and other words or

phrases of similar meaning in connection with any discussion of future operating or financial

performance.  Forward-looking statements, by their nature, address matters that are uncertain and

involve risks because they relate to events and depend on circumstances that may or may not

occur

in

the

future.

As

a

result,

our

actual

results

may

differ

materially

from

our

expected

results

and from those expressed in our forward-looking statements.  A more detailed discussion of the

risks and uncertainties that may affect our ability to achieve the projected performance is included

in

the

“Risk

Factors”

and

“Management’s

Discussion

and

Analysis”

sections

of

our

reports

on

Forms 10-K and 10-Q filed with the SEC. Forward-looking statements speak only as of the date

they are made.  We undertake no obligation to update any forward-looking statements beyond

what is required under applicable securities law.

In addition, we will be referring to non-GAAP financial measures within the meaning of SEC

Regulation G.   A reconciliation of the differences between these measures with the most directly

comparable

financial

measures

calculated

in

accordance

with

GAAP

are

included

within

this

presentation

and

available

on

the

Investor

Relations

page

of

our

website

at

www.armstrong.com.

The guidance in this presentation is only effective as of the date given, April 29, 2013, and will not

be updated or affirmed unless and until we publicly announce updated or affirmed guidance. 

2

All

figures

throughout

the

presentation

are

in

$

millions

unless

otherwise

noted.

Figures

may

not

add

due

to

rounding.

Basis of Presentation Explanation

When reporting our financial results within this presentation, we make several adjustments.

Management uses the non-GAAP measures below in managing the business and believes the

adjustments provide meaningful comparisons of operating performance between periods.  As reported

results will be footnoted throughout the presentation. 

3

•

We report in comparable dollars to remove the effects of

currency translation on the P&L.  The budgeted exchange

rate for 2013 is used for all currency translations in 2013

and prior years. Guidance is presented using the 2013

budgeted exchange rate for the year.  

•

We remove the impact of discrete expenses and income. 

Examples include plant closures, restructuring actions, and

other large unusual items. 

•

Taxes for normalized Net Income and EPS are calculated

using a constant 39% for 2013 results and guidance and

40% for 2012, which are based on the full year historical

tax rates.

•

In the fourth quarter of 2012, we completed the sale of

Cabinets business. The financial results of the Cabinets

business, which were previously shown as a separate

reporting segment, have been reclassified and presented

as discontinued operations.  The financial results included

within this presentation, including historical results, are

presented on a continuing operations basis unless

specifically noted otherwise.

Comparable

Dollars

Other

Adjustments

Net Sales

Yes

No

Gross Profit

Yes

Yes

SG&A Expense

Yes

Yes

Equity Earnings

Yes

Yes

Operating Income

Yes

Yes

Net Income

Yes

Yes

Cash Flow

No

No

Return on Capital

Yes

Yes

EBITDA

Yes

Yes

What Items Are Adjusted

(1)

As reported Net Sales: $622 million in 2013 and $636 million in 2012

(2)

As reported Operating Income: $47 million in 2013 and $43 million in 2012

(3)

As reported EPS: $0.05 in 2013 and $0.32 in 2012

(4)

Cash flow information includes cash flows attributable to Cabinets

(5)

Unadjusted

Key Metrics –

First Quarter 2013

2013

2012

Variance

Net Sales

(1)

$620

$634

(2.3)%

Operating Income

(2)

54

59

(8.9)%

% of Sales

8.7%

9.3%

(60 bps)

EBITDA

79

84

(5.6)%

% of Sales

12.7%

13.1%

(40 bps)

Earnings Per Share

(3)

$0.22

$0.49

(55.0)%

Free Cash Flow

(4)

(51)

(50)

(2.8)%

Net Debt

792

409

383

ROIC

(5)

10.3%

8.2%

210 bps

4

2013

2012

V

EBITDA–

Adjusted

$79

$84

($5)

Depreciation and Amortization

(25)

(25)

-

Operating Income –

Adjusted

$54

$59

($5)

Foreign Exchange Movements

(1)

-

(1)

Cost Reduction Initiatives

(5)

(2)

(3)

Accelerated Depreciation (not included above)

-

(9)

9

Impairments

-

(5)

5

Restructuring

(1)

-

(1)

Operating Income –

As Reported

$47

$43

$4

Interest (Expense)

(32)

(11)

(21)

EBT

$15

$32

($17)

Tax (Expense)

(12)

(13)

1

Net Income

$3

$19

($16)

First Quarter 2013 vs. PY–

Adjusted EBITDA to Reported Net Income

5

First Quarter Sales and EBITDA by Segment –

2013 vs. PY

6

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

2012

Price /

Mix

Volume

Input

Costs

Mfg Cost

SG&A

WAVE

Pension

Credit

Change

in D&A

2013

$7

($3)

$0

($13)

EBITDA Bridge –

First Quarter 2013 vs. Prior Year

7

$3

$0

($1)

$2

$84

$79

($50)

($51)

($8)

$20

($18)

($3)

($3)

$11

($80)

($70)

($60)

($50)

($40)

($30)

($20)

($10)

$0

$10

$20

2012

Cash Earnings

Working Capital

Capex

Interest Exp

WAVE

Dividends

Other

2013

Free Cash Flow –

First Quarter 2013 vs. Prior Year

8

Cash flow information includes cash flows attributable to Cabinets

2013 Estimate Range

(1)

2012

(1)

Variance

Net Sales

(2)

2,700

to

2,800

2,623

3%

to

7%

Operating Income

(3)

280

to

310

302

(7)%

to

3%

EBITDA

390

to

420

402

(3)%

to

4%

Earnings Per Share

(4)

$2.15

to

$2.45

$2.53

(15)%

to

(3)%

Free Cash Flow

75

to

125

89

(16)%

to

40%

(1)

Guidance and 2012 results are presented using 2013 budgeted foreign exchange rates

(2)

2012 and 2013 net sales include the impact of foreign exchange

(3)

As reported Operating Income: $270-

$300 million in 2013 and $271 million 2012

(4)

As reported earnings per share: $1.90 -

$2.20 in 2013 and $2.41 in 2012

Key Metrics –

Guidance 2013

9

2013 Financial Outlook

$50 -

$60 million vs. 2012

2.5% Annual Gross Productivity target; Adjusted Gross

Margin (50) to (100) bps vs. 2012

Down $10 million; 60% manufacturing, 40% SG&A

$0 -

$5 million vs. 2012

$10 -

$30 million; Adjusted long-term ETR of ~39%

(2)

Sales

(1)

$680 –

$730 million; EBITDA $85 –

$105 million

$170 -

$190 million

$5 to $10 million

Raw Material & Energy Inflation*

Manufacturing Productivity*

U.S. Pension Credit

Earnings from WAVE

Cash Taxes/ETR*

Q2

Capital Spending

Exclusions from  EBITDA*

10

(1)

Net sales include foreign exchange impact

(2)

As reported ETR of 43% for 2013

* Changed from February Outlook

Appendix

11

•

Cabinets

•

Announced sale in Q3 2012 and finalized sale in Q4 2012

•

Treated as discontinued operation starting with Q3 2012

•

Patriot

•

Completed sale in Q3 2012

•

Results included in the Wood Flooring segment

12

Divested Businesses

Patriot impact on Y-o-Y

Comparisons

Q3 2012

Q4 2012

2012

1H 2013

Q3 2013

2013

Net Sales

$3-$4M

$7 -

$8M

$10 -

$12M

$18 -

$20M

$6 -$7M

$24-$27M

EBITDA

--

Minimal   --

2013 Estimate Range

Adjusted Operating Income

280

to

310

D&A

110

Adjusted EBITDA

390

to

420

Changes in Working Capital

(10)

to

(30)

Capex

(170)

to

(190)

Interest Expense

(65)

to

(70)

Cash Taxes

(10)

to

(30)

Other, including cash payments for restructuring and

one-time items

(5)

to

(10)

Free Cash Flow

75

to

125

Adjusted Operating Income to Free Cash Flow

13

First Quarter

2013

Reported

Comparability

(1)

Adjustments

FX

(2)

Adj

2013

Adjusted

2012

Reported

Comparability

(1)

Adjustments

FX

(2)

Adj

2012

Adjusted

Net Sales

622

-

(2)

620

636

-

(2)

634

Operating

Income

47

6

1

54

43

16

-

59

EPS

$0.05

$0.16

$0.01

$0.22

$0.32

$0.17

-

$0.49

(1)

See earnings press release and 10-Q for additional detail on comparability adjustments

(2)

Eliminates impact of foreign exchange movements

Consolidated Results

14

First Quarter

2013

Reported

Comparability

(1)

Adjustments

2013

Adjusted

2012

Reported

Comparability

(1)

Adjustments

2012

Adjusted

Building Products

59

1

60

43

15

58

Resilient Flooring

6

6

12

11

1

12

Wood Flooring

1

-

1

2

-

2

Unallocated Corporate

(Expense) Income

(19)

-

(19)

(13)

-

(13)

Segment Operating Income (Loss)

15

(1)

Eliminates impact of foreign exchange movements and non-recurring items; see earnings press release and 10-Q for additional detail

First Quarter

($ millions)

2013

2012

Net cash from operations

($14)

($33)

Net cash provided by (used for) investing

(37)

(16)

Add back (subtract) adjustments to reconcile to free cash flow

Restricted cash

-

(1)

Free Cash Flow

($51)

($50)

Cash Flow

16

Cash flow information includes cash flows attributable to Cabinets