Armstrong Flooring Completes Sale of Wood Flooring Segment

Armstrong Flooring Inc. 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.

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 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.

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