Armstrong World Industries Splits in Two
Armstrong World Industries, Inc. announced today that they will be splitting the company into two separate businesses: one for flooring and one for ceilings. The separation will be completed early in 2016, and the new companies will be independent and publicly traded.
Armstrong Chief Executive Officer Matthew J. Espe told BusinessWire.com,“This separation is a continuation of the Company’s actions since emergence from bankruptcy to create long-term shareholder value … The time is right for this separation as these two businesses are well-positioned to deliver value as independent companies.”
Between 2009 and 2014, the flooring industry grew by 1.1% annually, and Armstrong Flooring generated $1.2 billion of revenue in 2014. Following the separation, they will continue to lead innovation in hardwood, vinyl, and laminate flooring. Armstrong flooring will continue to provide trusted brands in a variety of flooring types both in the United States and overseas. Armstrong Flooring will operate 17 manufacturing facilities with 3,600 employees worldwide.
The other company being formed from the separation will retain the title Armstrong World Industries, though it will be made up of the Armstrong Building Products unit. Generating $1.3 billion in revenue in 2014, Armstrong Building products is an industry leader in the production of suspended ceilings for residential and commercial use. It has 200 fewer employees than Armstrong Flooring, but will operate 22 manufacturing operations in eight countries.
With the announcement of the separation, Armstrong World Industries also announced their fourth quarter and full year financial results for 2014. Adjusted operating and net income both increased, by 7% and 8% respectively, and net sales of resilient flooring also increased.
“We anticipate improving market conditions in the U.S. will support modest sales growth despite some anticipated pressure from foreign exchange in our international operations,” Chief Financial Officer Dave Schulz explained to MarketWatch.com. “While earnings are expected to be lower than 2014, the investments we are making will position our businesses to succeed as two independent industry-leading public companies and benefit 2016 and beyond.”
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