March 14/21, 2016; Volume 30, Number 19
Lancaster, Pa.—The official separation of Armstrong World Industries’ flooring and ceiling businesses takes effect April 1, and the flooring sector will now be known as Armstrong Flooring Inc. (AFI).
Don Maier, the current president and CEO of Armstrong Flooring, will continue in that capacity. During a March 10 conference call, Maier announced a “new, energized, motivated” management team consisting of Jay Thompson, senior vice president and CFO; Dave Schulz, senior vice president and COO; Dominic Rice, senior vice president, North American Commercial; and Joe Bondi, senior vice president, North American Residential.
As part of the separation, Matt Espe, who had served as CEO of Armstrong World Industries, will leave the company.
Maier told investors during the call that the company ran into trouble during the recession years from 2007 to 2009. The downturn, he said, left the flooring business “very inwardly focused” and “strategically misaligned with the market.”
Maier said when he took over in 2014, he found multiple conflicting business strategies that were hurting sales. With that, the business had cut its spending on marketing to boost profits. But that weakened sales further, undercutting profits. Overseas, the European flooring division was draining management time and company resources.
“Frankly, recently we kind of lost our way,” he said. “Our financial results have been flat to declining. Volume, sales and EBITDA [earnings before interest, taxes, depreciation and amortization] have underperformed the market.”
Maier said he and his team immediately got out of the European flooring business, put a renewed emphasis on new products and innovation, and made other selective investments.
The spending includes the $45 million addition of luxury vinyl tile production to its Lancaster flooring plant, which began last fall. “The investments are really beginning to take effect,” Maier said. “The results, particularly in the fourth quarter, would indicate that we are really making great progress.”
Armstrong Flooring’s stock will trade on the New York Stock Exchange under the ticker symbol AFI.