LANCASTER, Pa.--(BUSINESS WIRE)--Armstrong Flooring, Inc. (NYSE: AFI), a leader in the design and manufacture of innovative flooring solutions, today reported financial results for the second quarter ended June 30, 2020.
Michel Vermette, President and Chief Executive Officer, commented, “Our second quarter results reflect the focused execution of our strategic plan during these challenging times. Since April, our top line performance improved month-over-month throughout the quarter as demand for our critical products began to recover. We are encouraged by improving end market trends and an overall positive response from our customers as we continue to streamline new product introductions and strengthen our service capabilities. As we look to the balance of 2020, our focus remains on expanding our reach within our addressable flooring market, simplifying our processes, and strengthening our competitive position while being mindful that extended shelter-in-place orders may continue to have an evolving impact on near term flooring demand. However, I am confident in our ability to continue improving our operations and with our recently enhanced liquidity position we are now better situated to execute our business transformation.”
Second Quarter 2020 Results Compared with Second Quarter 2019 Results
Consolidated Results
| (Dollars in millions except per share data) | Three Months Ended June 30, | ||||
| 2020 | 2019 | Change | |||
| Net sales | $145.6 | $177.7 | (18.1%) | ||
| Operating (loss) income | ($5.6) | $3.7 | N/M | ||
| Net (loss) income | ($6.3) | $14.7 | N/M | ||
| Diluted (loss) earnings per share | ($0.29) | $0.56 | N/M | ||
| Adjusted EBITDA | $6.9 | $20.0 | (65.7%) | ||
| Adjusted EBITDA margin | 4.7% | 11.3% | (660 bps) | ||
| Adjusted net (loss) income | ($5.1) | $9.4 | N/M | ||
| Adjusted diluted (loss) earnings per share | ($0.23) | $0.36 | N/M | ||
In the second quarter of 2020, net sales decreased 18.1% to $145.6 million from $177.7 million in the second quarter of 2019, including an adverse currency impact of 80 basis points. The decrease in net sales was primarily attributable to lower volumes due to the COVID-19 pandemic and shelter-in-place related business disruptions, including the temporary closing of many independent customer retail locations and the postponement of certain commercial projects, partially offset by increased activity with home centers.
The net loss in the second quarter of 2020 was $6.3 million, or diluted loss per share of $0.29, as compared to net income of $14.7 million, or diluted earnings per share of $0.56, in the prior year quarter. Adjusted net loss was $5.1 million, or adjusted diluted loss per share of $0.23, as compared to adjusted net income of $9.4 million, or adjusted diluted earnings per share of $0.36, in the prior year quarter.
Second quarter 2020 adjusted EBITDA was $6.9 million, as compared to adjusted EBITDA of $20.0 million in the prior year quarter. The decrease in adjusted EBITDA was primarily attributable to lower net sales and higher SG&A expense, partially offset by reduced input costs.
Liquidity and Capital Resources Update
In June 2020, the Company amended its senior secured asset-based revolving credit facility, modifying the facility size to $90 million with a maturity date in 2023. Additionally, in June 2020 the Company entered into a $70 million term loan facility that matures in 2025 to further strengthen its capital resources for business transformation and growth initiatives.
At June 30, 2020, the Company had cash of $34.1 million and total liquidity of approximately $120.7 million including cash plus availability under its credit facilities. The Company expects the facilities to provide ample financial resources to effectively execute its near and long-term objectives.
About Armstrong Flooring
Armstrong Flooring, Inc. (NYSE: AFI) is a global leader in the design and manufacture of innovative flooring solutions that inspire beauty wherever your life happens. Headquartered in Lancaster, Pennsylvania, Armstrong Flooring is a leading manufacturer of resilient products across North America. The company safely and responsibly operates eight manufacturing facilities globally, working to provide the highest levels of service, quality and innovation to ensure it remains as strong and vital as its 150-year heritage. Learn more www.armstrongflooring.com.
