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Armstrong Flooring to close two wood floor facilities

Armstrong Logo 2016Lancaster, Pa.—Armstrong Flooring released its reported financial results for the second quarter, which ended June 30. The company also announced the planned closing of two wood floor facilities.

“Second quarter 2017 results were disappointing to us and fell short of our expectations, with the main driver soft demand in our legacy categories, primarily residential sheet and wood flooring,” said Don Maier, CEO. “Our LVT sales continued to grow at a double-digit rate, although they did not fully offset the declines in other areas. In response to the challenging results, which we expect to continue through year end, we are taking active steps to transition our company to deliver our medium term financial goals.”

Maier continued, “We are intensifying our efforts on innovation-based growth initiatives, taking a harder line on costs and rationalizing our manufacturing footprint. [For example] we have completed our previously announced organizational realignment, which we continue to expect to generate annualized SG&A savings of $6 million to $7 million. In June, we completed the acquisition of Mannington’s VCT assets, which improves our capacity utilization as we increase sales in this attractive category using our existing production facilities. Additionally, we have announced the planned closing of two wood flooring facilities, which we expect to improve our cost position in the future. These announced actions, along with other planned initiatives, reinforce our commitment to achieving a 10% EBITDA margin by 2020, under a range of growth scenarios.”

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Mannington Mills completes sale of VCT business to Armstrong Flooring

logo_manningtonSalem, N.J.—Mannington Mills has closed on the sale of its vinyl composition tile (VCT) business to Armstrong Flooring. The transaction was announced on May 8.

“Our long-term growth strategy is focused on investment in high-growth, high-profit markets and categories,” said Russell Grizzle, president and CEO, Mannington Mills. “The sale of the VCT business allows us to aggressively pursue those opportunities.”

Mannington Mills is a fourth generation, family-owned company with a strong U.S. manufacturing base. “Our successful history is based on growth through innovation and investment with a commitment to our valued distributor partners and customers,” Grizzle noted. “We plan to continue that into the future.”

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Armstrong Flooring completes acquisition of Mannington Mills’ VCT business

Armstrong Logo 2016Lancaster, Pa.—Armstrong Flooring has closed on the previously announced definitive asset purchase agreement to acquire the Vinyl Composition Tile (VCT) business of Mannington Mills.

“We are pleased to close on this strategic acquisition and strengthen our footprint in the well-structured VCT category,” said Don Maier, chief executive officer. “This acquisition remains on track to drive accretive benefits to earnings in 2018 and marks an exciting step in our multi-pronged approach to achieve our medium-term goals. We look forward to providing customers with an expanded inventory selection backed by our expertise in VCT, as well as exceptional service from our strong distribution network.”

Armstrong Flooring intends to use its existing plant and distribution networks to accommodate the additional VCT volume from the acquisition in order to drive top and bottom line benefits through increased scale and capacity utilization.

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Armstrong poised to grab VCT biz from Mannington

May 8/15, 2017: Volume 31, Issue 24

By Ken Ryan

 

Screen Shot 2017-05-15 at 2.01.05 PMArmstrong Flooring has agreed to acquire the vinyl composition tile (VCT) business of Mannington Mills for a reported $36 million. The transaction is expected to close in the second quarter.

Armstrong Flooring said it intends to use its existing plant and distribution networks to accommodate the increase in VCT volume to drive top- and bottom-line benefits through increased scale and capacity utilization.

VCT products are widely used in commercial markets, particularly in educational facilities and mass merchants. In 2015, VCT represented 42.4% of the commercial resilient business in volume and 26.3% in sales (FCNews, June 20/27, 2016). While VCT is still the largest resilient segment in commercial, it has been impacted by the growth of LVT and now rigid-core products.

While acknowledging the market shift wrought by LVT, Don Maier, CEO of Armstrong Flooring, told FCNews that both products have a place in the commercial portfolio. “VCT offers durability and design options at an attractive price, and has been a mainstay in educational and mass retail buildings as well as other industries. At the same time, we recognize the growth of LVT and have made investments in recent years, such as the addition of an LVT line at our Lancaster plant to increase our domestic production capacity. In the first quarter of 2017, we experienced double-digit volume growth in LVT. This VCT investment is consistent with our strategy to improve our performance in all categories while simultaneously investing in innovation and new growth initiatives.”

Maier added that the acquisition gives Armstrong a good opportunity to increase revenue within the well-structured VCT category, which he said has historically generated above-average profitability within its product portfolio.

Armstrong expects to expand its VCT volume and make better use of the production capacity at its U.S. plants that manufacture VCT. “We expect our strong track record with VCT to make this a smooth transition,” Maier said.

For Mannington, which entered the VCT market in 1990 with production facilitated through its Salem, N.J., plant, the decision to sell the VCT business is in line with the company’s long-term growth strategy. According to Russell Grizzle, president and CEO of Mannington Mills, the move “opens up opportunities for us to invest in high-growth, high-profit markets and categories.”

The sale of its VCT business will result in a company-wide layoff of about 80 employees, Mannington confirmed. Keith Campbell, chairman of Mannington, told NJ.com that he knows the sale will impact the local community. “It’s a sad day overall because it affects people,” he said. “We know it affects not only our associates in Salem, but our Salem community.”

Distributor reaction
Armstrong distributors responded favorably to the acquisition. “I think this is a great opportunity for Armstrong and its wholesalers, including FlorStar, to expand their hard surface options and those of our customers,” said Scott Rozmus, CEO of FlorStar. “With the acquisition, we gain access to an expanded color palette as well as an additional product line. Such tools in turn help us provide more solutions for clients, which is always a good thing.”

John Sher, president of Adleta, an Armstrong distributor, called the acquisition “awesome,” noting that VCT still represents a major business segment. “Our sales team is excited. We also will do all we can to help our contractors transition their Mannington jobs. We want them to feel we appreciate this new business, not that they have to buy from us. We applaud Don Maier and his team for making this acquisition.”

Jeff Striegel, president of Elias Wilf, a Mannington distributor, believes that while VCT has been declining and losing share to alternate products for the better part of the last decade—and has reached the life cycle stage of a mature, non-growth category—the move gives Armstrong a stronghold position in the segment. “In a shrinking usage environment, it makes sense for one of the players to simply take a dominant position by squeezing out overcapacity. This allows for equilibrium to increase profitability, and while sales growth is limited profitability isn’t. Look at the continued decline of carpet, and simultaneously you have Mohawk and Shaw’s carpet side of the business operating at some of the highest profitability levels ever experienced within the industry. In the end, this is probably a great strategic move for both Armstrong and Mannington.”

Striegel noted that the impact on Elias Wilf’s business would be relatively small, as sales in VCT had been nearly cut in half over the past six years while profitability had been squeezed to the point where VCT wasn’t much of a contributor to the bottom line any longer. “Additionally, with the product benefits of LVT vs. VCT as it relates to cost, maintenance and aesthetics we anticipated further erosion in the years ahead. Quite frankly, the exponential growth of LVT and rigid core products for Mannington and Elias Wilf has already made replacing the VCT sales a non-issue.”

 

 

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Armstrong agrees to purchase Mannington's VCT business

logo_manningtonSalem, N.J.—Mannington Mills has signed an agreement to sell its vinyl composition tile (VCT) business to Armstrong Flooring. The transaction is expected to close in the 2nd quarter of 2017.

This transaction is an adjustment to Mannington’s product portfolio, according to Russell Grizzle, president and CEO of Mannington Mills. “The decision to sell the VCT business is in line with our long-term growth strategy and opens up opportunities for us to invest in high-growth high-profit markets and categories.”

VCT is designed for the heavy traffic experienced in schools, grocery stores and other commercial applications. Mannington entered the market in 1990, with manufacturing located in Salem, N.J. The site is also home to Mannington’s headquarters as well as all commercial and residential sheet vinyl manufacturing operations, which will continue to operate as usual.

“Mannington’s successful history is based on growing our business through a combination of innovation, customer focus and investment in opportunities in mid- to upper-end flooring product categories,” Grizzle said. “We remain committed to a strong U.S. manufacturing base, to our surrounding communities and to our valued distributor partners and customers.”

Armstrong Logo 2016Armstrong Flooring president and CEO Don Maier shared the company’s enthusiasm toward the transaction. “It gives us a good opportunity to increase revenue within the well-structured VCT category which has historically generated above-average profitability within our product portfolio. We expect this transaction to be accretive to earnings in 2018 as we drive profitability through improved capacity utilization and scale using our existing facilities and distribution system. We have a strong history and deep expertise in VCT which makes this acquisition consistent with our strategy to support our legacy product lines while simultaneously investing in innovation and new growth initiatives to help us realize our medium-term goals.”

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Spartan Surfaces enters distribution agreement with Tarkett

spartan-surfaces-exteriorBel Air, Md.—Spartan Surfaces has entered into a distribution agreement with Tarkett in its Mid-Atlantic footprint. Starting Jan. 1, 2017, Spartan Surfaces will be a distributor of the Tarkett commercial focused brands including the Tarkett Collection (homogeneous, heterogeneous, LVT and linoleum flooring), Johnsonite (rubber flooring, stairwell systems, wall base and accessories) and the Azrock Collection (VCT, VET and SVT). Spartan Surfaces will distribute these Tarkett brands in southern New Jersey, central and eastern Pennsylvania, Delaware, Maryland, and Northern Virginia including Washington DC.

“We are excited to be associated with an innovative and design focused flooring manufacturer that provides impactful solutions for our architectural and design focused clients,” said Kevin Jablon, owner of Spartan Surfaces.

Spartan Surfaces will be carrying significant inventory of each of Tarkett’s brands at its headquarters and main warehouse in Bel Air, Md. “The Tarkett family of products provides the perfect complement to our Spartan product portfolio that includes design oriented product solutions and dependable flooring supply products, which will lead to a very successful business relationship for 2017 and beyond,” Jablon said.

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Armstrong’s sustainability practices recognized in California

ArmstrongAward515_CROPLancaster, Pa.–Armstrong Commercial Flooring has received the 2015 Los Angeles Green Leadership Award for its innovative floor recycling program and waste reduction initiatives.

“This award is a testament to the ongoing commitments Armstrong continues to drive in order to reduce impacts on natural resources, by reusing and recycling materials into the products we manufacturer,” said Amy Costello, sustainability manager, Armstrong Commercial Flooring. “Through our continued commitment to sustainable business practices, we demonstrate every day that Armstrong is a responsible community partner who makes beautiful quality flooring while decreasing our environmental footprint.”

The innovative Armstrong Floor Recycling Program is the first program to recycle installed Armstrong Vinyl Composition Tile (VCT) flooring products as well as Luxury Vinyl Tile (LVT) and other vinyl flooring products. Under the program, vinyl flooring is recycled in a closed-loop, post-consumer stream with reclaimed material incorporated into new flooring products. In 2014, the Armstrong South Gate, Calif., facility recycled over 450 tons of reclaimed materials, including 50 tons from the state of California. In addition to this accomplishment, the Armstrong South Gate facility was able to eliminate all process waste from going to the landfill, making it a zero process waste facility.

“The county is proud to honor Armstrong and our other Green Leadership Award recipients for their efforts and commitment to the environment,” said Sachi Hamai, interim CEO.

The County of Los Angeles Board of Supervisors created the Green Leadership Awards Program as a partnership with local residents, community groups, businesses and non-profit agencies to protect the environment and the county’s natural resources. Awards are presented in five categories, including transportation, energy/water, sustainability and outreach/education in both the private and public sectors.  Armstrong was honored with the business sector award, recognized as a private company moving its business practices toward a sustainable enterprise.

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Mannington to raise prices on VCT

Screen Shot 2014-10-14 at 8.48.34 AMSalem, N.J. — Mannington Mills Inc. announced it would be implementing a price increase of 4% on all of its Vinyl Composition Tile (VCT) products effective with shipments on Jan. 5, 2015.

The company cites substantial increases in raw material, energy and other costs as the reasons that necessitate this increase.

“Despite rising costs, the commercial market is performing well and we are optimistic that will continue,” said Jack Ganley, president, commercial business, at Mannington Mills. “We continue to look for ways to deliver innovative style, choices that work, and exceptional value to our customers.”

The increase will affect both the U.S. and Canada.

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Armstrong facilitates VCT recycling

Volume 26/number 28 June 10/17, 2013

by Ken Ryan

To Patricia Fanty and Amy Costello of Armstrong Commercial Flooring, it’s a slam dunk for customers: a VCT recycling program for building owners where Armstrong bears 100% of the cost of providing containers along with transporting the reclaimed material back to the recycling facilities.

“Why wouldn’t a building owner take advantage of this program?” said Fanty, marketing manager, commercial flooring. “It’s that simple.”

Armstrong is touting the many benefits of the program as the company markets to commercial customers in the U.S. and Canada. First piloted in 2009, Armstrong launched the commercial VCT recycling initiative in June 2012. It spent three years optimizing the entire program so it operates seamlessly and efficiently. “We do this on our customer programs,” Fanty said, “because there are a lot of aspects to this program.”  Continue reading Armstrong facilitates VCT recycling

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Armstrong Commercial wins 2013 ADEX awards

ADEX 2013.JPEGArmstrong Commercial Flooring continues to win Awards for Design Excellence (ADEX), with the latest being for its Striations BioBased Tile (BBT) and Raffia premium vinyl composition tile (VCT).

“We are honored to receive the ADEX awards for our Striations BBT and Raffia VCT products,” said Patricia Fanty, commercial marketing manager, Armstrong.  “These awards are voted on by the design community and it is confirmation that our products align with the current demands of the market. Receiving this distinction is a testament to Armstrong’s passion for developing industry-leading designs and innovations.” Continue reading Armstrong Commercial wins 2013 ADEX awards