Armstrong World Industries considers special cash dividend

Home News Armstrong World Industries considers special cash dividend

Lancaster, Pa.—Armstrong World Industries announced that its Board of Directors is considering the payment to shareholders of a special cash dividend of approximately $500 million in the aggregate. “This approach is a proactive way to efficiently allocate the Company’s capital and return value to shareholders at time when conditions in the capital markets are favorable,” said Matt Espe, President and CEO.

The special cash dividend of approximately $8.55 per share to Armstrong’s common shareholders would be funded in part by surplus cash on the Company’s balance sheet, and in part by an additional $250 million of debt that the Company is looking to raise in the term loan B market via an expansion of its existing senior credit facility, market conditions permitting.  This would increase the amount of the senior credit facility from $1.05 billion to $1.3 billion.

The declaration of a special cash dividend is conditioned on the Company’s ability to receive consent from current lenders permitting the payment, and obtaining the requisite debt financing on satisfactory terms and conditions.  The Company currently expects that any special cash dividend would be declared and paid before May 1, 2012.

In considering the proposed special dividend, the Board of Directors is evaluating a number of factors, including the current state of the capital markets, the Company’s current leverage and the likely effects of increased leverage on the Company’s ability to pursue its strategic initiatives, and the Company’s ability to generate cash flows to service the Company’s increased debt and to fund operations.

“Given the Company’s cash generation and earnings progress achieved in 2011, we are below our target leverage of 2 to 3 times net debt/EBITDA, and this contemplated action would help to return us to a more efficient capital structure,” said Tom Mangas, Senior Vice President and CFO.

Uncertainties Affecting Forward-Looking Statements

Our 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,” 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. 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 the “Risk Factors” and “Management’s Discussion and Analysis” sections of our recent reports on Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission. As a result, our actual results may differ materially from our expected results and from those expressed in our forward-looking statements. 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.

Must Read

Shaw Contract launches carbon neutral carpet tile

Cartersville, Ga.—Shaw Contract launched New Path, its first carbon neutral carpet tile collection constructed on the company's StrataWorx backing. Utilizing EcoSolution Q100 fiber technology...

How to combat credit card fees

It’s no secret that in recent years credit card fees have been nipping at floor covering retailers’ profit margins. According to the Merchants Payments...

Shaw Industries, Encina announce carpet recycling partnership

The Woodlands, Texas—Encina Development Group, a producer of ISCC+ circular chemicals from end-of-life plastics, has announced a new recycling partnership with Shaw Industries Group....

What’s new with moldings, accessories, sundries

As flooring professionals know all too well, a job isn’t complete until the proper finishing touches—moldings, accessories, sundries—have been installed. With so much importance...

Pergo Extreme expands product offering

Calhoun, Ga.—Pergo Extreme is continuing to expand its portfolio with 16 new introductions and advancing its existing waterproof warranty by adding WetProtect technology to...

How some flooring dealers make ecommerce work

The idea of ecommerce is still in its infancy within the world of flooring. While the concept has found success within some home improvement-related...
Some text some message..