Armstrong Flooring faces deadlines to sell and pay out back financial loans | Community Business enterprise

Armstrong Flooring faces deadlines to sell and pay out back financial loans | Community Business enterprise

Armstrong Flooring Inc. faces raising tension to promote or make an additional “strategic transaction” as monetary deadlines loom, leaving the long term of 500 community work opportunities and the 160-yr-aged company in problem.

The East Lampeter Township-headquartered company’s capability to carry on is dependent on finishing a sale or refinance no later on than June 30, it said in a current report submitted with the Securities and Exchange Commission.

“The failure to entire a sale of the Organization or to get enough funding could adversely influence our potential to obtain our business aims and continue on as a going worry,” the enterprise advised buyers in its once-a-year report.

For the 12 months finished Dec. 31, Armstrong Flooring described a web decline of $53 million, inspite of a 11% enhance in gross sales income. As of Dec. 31, the company experienced an accrued deficit of $356.2 million and a overall credit card debt of $111.3 million, with $110 million because of June.

The announcement follows 4 straight a long time of losses for the manufacturer, which drop its hardwood flooring division in December 2018.

In January, the company introduced it experienced amended its term financial loan with non-public credit rating investment decision administration company Pathlight Cash LP to give an supplemental $35 million to give it “financial overall flexibility to go after its operational and strategic objectives.”

Armstrong also mentioned it experienced hired investment decision bank Houlihan Lokey Cash Inc. to assist with a system for the sale of the corporation and with the thing to consider of other strategic options. 

Armstrong reported it is expected to refinance credit rating agreements no afterwards than June 30, even if a sale of the company or other strategic transaction has not been consummated prior to it. 

It said it would not be creating any further more disclosures or holding phone calls with buyers right until the sale or other “strategic alternative” is finished. It did not issue an earnings launch. The firm also claimed it would not remedy any inquiries with regards to Armstrong Flooring’s monetary or operational performance, the method of the sale or other strategic alternatives.

The company faces a $250,000 increase in product sales procedure costs to its creditors if it does not comprehensive a sale right before March 31, it said in its SEC report.

Situation appears bleak 

Auditors and the corporation expressed “substantial doubt” that Armstrong is monetarily stable more than enough to satisfy its obligations and continue on its company for the foreseeable upcoming due to the fact of the prospective sale and doubt that its credit rating agreements can be extended past June 30. 

“Additionally, primarily based on recent projections, as a outcome of continuing supply chain disruptions and ongoing inflationary pressures related to transportation, labor and uncooked components which are expected to continue as a result of 2022, the forecasts do not deliver the Business with fair certainty it will have the vital liquidity to fund functions further than June 30, 2022,” the business reported in the SEC filing.

Armstrong described it experienced 1,568 employees globally as of Dec. 31, with 1,172 in the United States. In December 2020, it experienced about 1,500 workers, together with 500 in Lancaster. The remainder are in Canada, Australia, China, the Philippines, Singapore and Vietnam.

Armstrong Flooring debuted with close to 3,700 staff members, like 750 involving its Dillerville Street flooring plant and its previous Columbia Avenue headquarters.

The firm operates 7 producing vegetation in three international locations. Two plants are in  Pennsylvania, just one in Lancaster metropolis and one in Beech Creek Township, Clinton County. There are vegetation in Illinois, Mississippi, Oklahoma and just one plant just about every in China and Australia.

Past calendar year, it offered its Los Angeles-location plant for virtually $77 million and moved its headquarters and technological center, another charge-conserving shift. It relocated its headquarters and complex middle from a leased business on Columbia Avenue to Greenfield in East Lampeter Township, a shift projected to reduce hire by additional than 60%. It was shelling out $5.62 million a year to lease its Columbia Avenue spot, according to general public filings from 2016, when it signed the five-calendar year lease.

Armstrong Flooring was spun off from Armstrong Entire world Industries in 2016, a transfer that remaining Armstrong Industries with the much additional profitable ceilings small business.