Armstrong Flooring Inc. is considering offers from “several potential buyers” as it received an extension from lenders to complete a sale, according to documents filed with the Securities and Exchange Commission on Thursday.
The company headquartered in East Lampeter Township must enter into a binding definitive purchase agreement, merger agreement or other similar agreement by May 2. The agreement must be concluded no later than June 15, in accordance with the amended loan agreement. Previously, the closing deadline was May 15.
Armstrong employs approximately 500 people locally.
The 160-year-old company’s ability to continue depends on completing a sale or refinancing by June 30, it said in a March 9 report. filed with the Securities and Exchange Commission.
The company requested and received an extension from its lenders so it could review potential offers, according to an addendum to its loan agreement.
Armstrong has engaged investment bank Houlihan Lokey Capital Inc. to help with the process of selling the business and considering other strategic alternatives.
Armstrong did not disclose his potential suitors.
“The company has received confidential, non-binding expressions of interest from multiple parties as part of the sale process,” Armstrong wrote in its latest notice to the SEC this week. “After careful consideration and review, the Company’s Board of Directors has instructed Company management and advisors to continue to implement those expressions of interest that the Board believes are most likely to maximize the value to be realized by the company’s stakeholders, subject to further negotiations and documentation.
In its March 9 SEC filing, Armstrong said it would not make any further disclosures or hold calls with investors until the sale or other “strategic alternative” is completed. It did not issue an earnings statement. The company also said it would not respond to any inquiries regarding its financial or operational performance, the sale process or other strategic alternatives.
In January, the company announced that it had amended its term loan with private credit investment management firm Pathlight Capital LP to provide an additional $35 million to give it “the financial flexibility to pursue its operational objectives. and strategic”.
The company has expressed doubts about the possibility of continuing beyond June 30 due to continued supply chain disruptions and continued inflationary pressures related to transportation, labor and raw materials which are expected to continue through 2022, the company said in the March 9 SEC filing.
For the year ended Dec. 31, Armstrong Flooring reported a net loss of $53 million, despite an 11% increase in revenue. As of December 31, the company had an accumulated deficit of $356.2 million and total debt of $111.3 million, including $110 million due in June.
Armstrong has had four consecutive years of losses since exiting its hardwood flooring division in December 2018.
Last year, it sold its Los Angeles-area factory for nearly $77 million and moved its headquarters and technical center, another economical move. It moved its head office and technical center to Greenfield in East Lampeter Township. Armstrong Flooring was spun off from Armstrong World Industries in 2016, a move that left Armstrong Industries with the much more profitable ceilings business.
Armstrong said it had 1,568 employees worldwide as of Dec. 31, including 1,172 in the United States. As of December 2020, it had approximately 1,500 employees, including 500 in Lancaster. The others are in Canada, Australia, China, the Philippines, Singapore and Vietnam.
Armstrong Flooring started out with approximately 3,700 employees, including 750 between its Dillerville Road flooring plant and its former headquarters on Columbia Avenue.
Armstrong Flooring operates seven manufacturing plants in three countries. Two plants are in Pennsylvania, one in the city of Lancaster and one in Beech Creek Township, Clinton County. There are factories in Illinois, Mississippi, Oklahoma and a factory in China and Australia.