Armstrong's Q3 Net Income & EPS Both Increase From Q2

Lancaster, PA, November 11, 2016—Armstrong Flooring today reported net sales of $313.4 million for Q3 2016 compared to $322.6 million for Q3 2015, mainly reflecting lower hardwood segment net sales.

Net income was $8.3 million, or $0.29 per diluted share, as compared to $8.9 million, or $0.32 per diluted share, in the prior year quarter.

In Q2 2016, net income was $5.7 million, or $0.20 per diluted share.

“Our operational enhancements were evident during the quarter with adjusted EBITDA growth of 25% to $30.4 million and adjusted EBITDA margin of 9.7%,” said Don Maier, Chief Executive Officer. “We are steadily strengthening our balance sheet position and generating meaningful cash flow to deliver positive free cash flow for 2016. Our Luxury Vinyl Tile (“LVT”) business continued to outpace the broader market with double digit growth, particularly in residential end markets. That said, overall end markets were soft, creating heightened competitive dynamics and pricing pressure. Amid that backdrop, we are encouraged by our ability to deliver another quarter of adjusted EBITDA gains which reflects dedicated efforts to build value through our strategic priorities to achieve our medium term goals.”

For the resilient segment, net sales of $190.2 million were down 1.0% compared to $192.1 million in the prior year period. Net sales declined primarily due to lower pricing in response to competitor actions as well as lower volume from commercial market weakness in North America, which particularly affected traditional vinyl tile products, and increased competition in vinyl sheet. Favorable mix provided a partial offset, mainly attributable to LVT, which experienced double digit growth.

For the hardwood segment, net sales of $123.2 million were down 5.5% compared to $130.5 million in the prior year quarter primarily attributable to lower volume and unfavorable mix. Lower volume reflected a reduction in inventory levels at two major retail customers. Unfavorable mix reflected a higher proportion of sales from base grade engineered wood products versus premium wood products. Price was relatively stable reflecting efforts to hold price amid raw material inflation despite continued industry price pressure.