EXHIBIT 99.1
November 18, 1998
ARMSTRONG WORLD INDUSTRIES ANNOUNCES
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COST REDUCTION PROGRAM
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The following news release was issued today:
LANCASTER, PA., November 18, 1998 -- Armstrong World Industries, Inc.
(ACK:NYSE) today announced that it expects to take a charge in the fourth
quarter of 1998 of approximately $78 million primarily to reflect a workforce
reduction.
The key elements include:
- The expected pre-tax charge of approximately $78 million is primarily
related to severance and enhanced retirement benefits for
approximately 750 salaried and hourly employees, or approximately 7%
of Armstrong's 10,400 worldwide work force (or 4% of its 20,220
worldwide employees including the recent Triangle Pacific Corp. and
DLW acquisitions), as well as expected losses on the disposal of
certain flooring machinery and equipment. About 74% of the total
charge relates to actions in Armstrong's Floor Products division.
- Approximately $29 million, or 37% of the charge, are cash
expenditures for severance payments which will occur over the next 12
months. The remainder of the charge reflects $40 million of expense
for enhanced retirement benefits and $9 million of expected losses on
the disposal of certain flooring machinery and equipment.
- The anticipated savings from the workforce reduction should permit
recovery of these charges in approximately two years.
- The charges reflect several initiatives designed to improve the
company's cost position in major product lines, lower overall break-
even operating levels and improve its ability to develop and market
new products rapidly.
George A. Lorch, Chairman and Chief Executive Officer of Armstrong,
said, "This announcement is the direct result of initiatives we have taken to
grow the company by providing better value to our customers and to be more
competitive. The improvements in our processes have permanently altered our cost
structure and have enabled us to respond more quickly to changing market
conditions.
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"Eliminating jobs is a difficult decision because it causes so much
disruption in the lives of employees and their families. Therefore, consistent
with our past practice we are providing significant severance, enhanced
retirement benefits and support services to reduce the hardships brought on by
job loss. Nonetheless," Lorch continued, "we must constantly strive to fairly
balance the interest of all our stakeholders -- employees, customers, suppliers
and shareholders -- to ensure the long-term success of our company. The actions
we are announcing today will enhance our ability to grow our company at rates of
return above our cost of capital, thereby optimizing the interests of all of our
stakeholders.
This news release contains forward-looking statements related to future
sales growth and earnings opportunities. Actual results could differ materially
as a result of known and unknown risks and uncertainties and other factors,
including the company's ability to complete and successfully integrate its
pending acquisitions, the strength of domestic and foreign economies, slower
than anticipated sales growth, price and product competition, increases in raw
material costs, interest and foreign exchange rates, changes from projected
effective tax rates and the ultimate outcome of the company's asbestos-related
litigation. Additional information which could affect the company's financial
results is included in the 1997 Annual Report, Forms 10-K, 10-Q, and 8-K on file
with the Securities and Exchange Commission.
Armstrong is a manufacturer and marketer of branded products and
services that are distinguished by design and/or function for use in finishing
the interiors of residential and commercial buildings worldwide. Its products
include resilient floor coverings, acoustical ceilings and grid systems,
adhesives and insulation. Armstrong also manufactures and markets gasketing
materials for the automotive market.
Armstrong World Industries, Inc.