Armstrong Building Products is all overhead - that is, its products are. It is the world leader in ceiling systems, with a broad portfolio that includes mineral fiber, fiberglass, metal, wood, specialty ceilings and suspension systems. This segment accounts for 28 percent of total company sales and 42 percent of operating profit.
In 2000, Building Products reported a sales gain of 5.4 percent, primarily from the second quarter acquisition of Gema Holding AG, the Switzerland-based manufacturer and installer of metal ceilings. Results also reflect the continued success of higher-end commercial products and price increases, which helped offset soaring energy costs for natural gas.
The purchase of Gema makes Armstrong a leader in one of the fastest growing segments of suspended ceilings. Metal ceilings, long popular in European commercial design, have a global annual growth rate of 4 percent to 6 percent, more than double that of traditional suspended mineral-fiber ceilings.
In 2000, we continued roll out of our global commercial branding initiative, building credibility with added products and services to deliver on our brand promise, "Between us, ideas become reality.™"
Building Products continues to enjoy solid sales and earnings, but its sights are set even higher. The goal of the division's management team, which was realigned toward the end of the year, is to bring more value to the ceiling plane. This will be achieved by innovation, technology and customer collaboration to integrate elements within the plenum, ease and simplify installation and add value to the end user of the space.
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Products and programs The most exciting new commercial product is i-ceilings™, which integrates technology into ceiling panels. Looking up, the casual observer sees an ordinary ceiling panel. Invisible to the eye are our Sound Systems' flat panel speakers that deliver sound masking, paging and music through one set of speakers. Antennas imbedded within Wireless Systems' ceiling panels are configured for wireless communications, allowing computers to connect to company networks without cabling, and making paging and cell phone signals clearer, even deep within buildings.
Optima Vector, introduced in March 2000, extends Armstrong's line of high performance open-plan ceilings. Optima Vector is a revolutionary new acoustical ceiling with a proprietary edge detail that offers a unique grid-hiding visual with downward accessibility for both new construction and renovation. Vector™ offers the same superior sound absorption and light reflection that customers have come to expect in the Optima product line. Architects and designers are increasingly using ceilings as focal points in upscale commercial buildings. Armstrong has formed the Architectural Specialties group to provide collaborative design support. With extensive expertise in architecture and engineering, these specialists become partners in the planning and installation of signature ceiling designs. The introduction of MetalWorks and WoodWorks™ products to the core portfolio enable a greater commitment to the Specialty Ceilings category with custom metal and wood aesthetics and performance. Just as important as value-adding ceilings is marketing that gets the word out. Armstrong's School Zone™ program was created to educate decision makers about ceilings that can improve the learning environment. Armstrong ceiling systems inhibit the spread of mold and mildew and help eliminate sag to reduce maintenance and operating costs. But what makes them especially value-adding in classrooms is the ability to reduce noise and distractions that hinder learning. In the residential market, homeowners can also add a distinctive touch to their ceilings with several new products. WoodHaven™ laminate ceiling planks bring a natural woodgrain look to any room in the house. Four Seasons™ vinyl ceiling planks can be used indoors or out. They are designed for areas exposed to moisture or the elements, including kitchens, baths, sunrooms, porches, breezeways and garages.
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Herman Miller, Inc. is widely recognized for innovative furnishings and business practices. Herman Miller recognizes Armstrong for environmental commitment - both the ecological and office kind. For its 30,000 square-foot corporate renovation, Herman Miller trusted Armstrong to exercise environmental responsibility and reduce solid waste.
Armstrong reclaimed the old ceiling, which will be recycled into new tiles. Then it installed Armstrong Ultima ceiling tile, which has 79 percent recycle content. Those two steps alone would have made Herman Miller and its employees very happy.
What they didn't expect was the positive contribution to creating a healthy work environment. The improved acoustics and light reflection make for a brighter, more comfortable place to work. When you change the environment people work in, you can improve how they work and reduce time lost to absenteeism. That's a cost saving that's not always measured, but always gets noticed.
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Recycling is good business
Armstrong's U.S. recycling program for old ceiling tiles has saved millions of square feet of tile from ending up in landfills. Building owners who participate in the program - and neither old nor replacement tiles need be Armstrong products to qualify - eliminate landfill fees and dumpster costs. Armstrong even pays the cost of shipping the old ceilings to its plants, which use them as raw materials in manufacturing new acoustical ceilings. This first-of-its-kind program is an earth-friendly alternative to landfill disposal that has received a 2000 Governor's Award for Environmental Excellence from Pennsylvania Governor Tom Ridge.
Building Products is bringing value to ceilings in a way that brings value to Armstrong...and to the continued durability of the business.
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