Armstrong Exits European Flooring Business
Armstrong World Industries (Lancaster, Pa.) will exit the European flooring business and stop funds to its German subsidiary, DLW. In turn, DLW filed for insolvency.
Armstrong acquired DLW in 1998 to develop its European flooring business. The economic crisis came with a decrease in public funding that affected the business' commercial segments, specifically hospitals and schools, according to a statement from Armstrong.
In the nine-month period that ended Sept. 30, net sales of resilient flooring were $144.7 million with an operating loss of $23.2 million.The carrying value of assets was $152 million, including property, plant and equipment of $73.4 million and inventory of $57.1 million.The carrying value of liabilities was $171.3 million, including an unfunded pension liability of $126.5 million.
Since 2007, Armstrong had invested approximately $150 million in DLW, but the company did not generate profit."Our difficult, but necessary, decision to exit the European flooring business and discontinue funding our DLW subsidiary in Germany was the culmination of a comprehensive evaluation of strategic alternatives following years of disappointing results, multiple restructuring initiatives and significant financial investments," said Armstrong CEO Matthew Espe in a statement.
Source: www.hardwoodfloorsmag.com (Released on 15th December 2014)