Armstrong Flooring Completes Sale of Wood Flooring Segment
December 31 2018 - 4:15PM
Business Wire
- Enters 2019 with Resilient Focused Growth Platform and More
Profitable Portfolio
Armstrong Flooring, Inc. (NYSE: AFI) (“Armstrong Flooring” or
the “Company”) today announced that it has completed the previously
disclosed sale of its Wood Flooring segment to an affiliate of
American Industrial Partners (“AIP”). Proceeds from the sale were
approximately $90 million, net of closing costs, transaction fees
and taxes. The transaction is subject to a customary post-closing
working capital adjustment process, which is expected to be
completed in the first quarter of 2019. The Company currently
expects to return a portion of the net proceeds of the sale to
shareholders in an amount, manner, and timing to be determined by
its Board of Directors, after consideration of all relevant
factors.
Completion of the sale permits Armstrong Flooring to intensify
its focus on the fastest-growing parts of the flooring market,
including Luxury Vinyl Tile (“LVT”) and rigid core, as well as a
wide range of resilient categories such as Vinyl Composition Tile
(“VCT”), resilient sheet and its Diamond 10® line of products. This
exclusive focus on resilient flooring is expected to strengthen the
Company’s product and end market mix while improving its ability to
innovate and enhance the profitability of its portfolio.
Don Maier, Chief Executive Officer, commented, “We are excited
to enter 2019 with an exclusive focus on resilient flooring, which
improves the profitability of our award-winning product portfolio.
This transaction is immediately accretive to our EBITDA margin and
together with the right-sizing of our cost structure unlocks
additional value for Armstrong Flooring’s shareholders. This
divestiture positions us well for the future, as we are now able to
concentrate our efforts on attractive and growing resilient
categories. Additional financial information regarding the
transaction will be available to shareholders after the New
Year.”
In conjunction with the closing of the sale transaction, the
Company also replaced its existing asset backed debt facility with
a new secured credit agreement comprised of a $75 million Term Loan
A and a $75 million revolving credit facility. Borrowings under the
facility will bear interest at a rate of LIBOR plus a spread of
1.50% to 2.25%, depending on the Company’s net leverage ratio, with
an initial spread of 1.75%. The new credit arrangements have a
five-year term, maturing in 2023.
Updated Financial Statements
Starting in the fourth quarter 2018, the Wood Flooring segment
will be classified as a discontinued operation. Amounts for the
prior periods will be reclassified to conform to this
presentation.
Armstrong expects to disclose in the near future additional
financial information regarding the Company and the effects of the
sale transaction, including certain reclassified historical
financial information in connection with the sale and discontinued
operations treatment of the Wood Flooring Segment, some of which
will be made available in the investor relations section of the
Company’s website at www.armstrongflooring.com within several
business days. Additional details on this transaction will be
available in a Current Report on Form 8-K to be filed with the
Securities and Exchange Commission.
About Armstrong Flooring
Armstrong Flooring, Inc. (NYSE: AFI) is a global leader in the
design and manufacture of innovative flooring solutions that
inspire spaces where people live, work, learn, heal and play SM.
Headquartered in Lancaster, Pennsylvania, Armstrong Flooring is a
leading manufacturer of resilient products across North America.
The Company safely and responsibly operates 8 manufacturing
facilities globally, working to provide the highest levels of
service, quality and innovation to ensure it remains as strong and
vital as its 150-year heritage. Learn more at
www.armstrongflooring.com.
About American Industrial Partners
American Industrial Partners is an operationally-oriented
private equity firm that makes control investments in industrial
businesses serving domestic and global markets. The firm has deep
roots in the industrial economy and has been active in private
equity investing since 1989. To date, AIP has completed over 90
transactions and currently has $4 billion of assets under
management on behalf of leading pension, endowment and financial
institutions. For more information on AIP,
visit www.americanindustrial.com.
Forward Looking Statements
Disclosures in this release 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 our reports filed with the U.S. Securities and Exchange
Commission. 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20181231005134/en/
Investors:Douglas BinghamVP, Treasury and Investor
Relations717-672-9300IR@armstrongflooring.com
Media:Steve TrapnellCorporate Communications
Manager717-672-7218aficorporatecommunications@armstrongflooring.com
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