UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 3, 2019 (May 2, 2019)

 

 

ARMSTRONG FLOORING, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-37589   47-4303305

(State or other jurisdiction

of incorporation )

 

(Commission

File No.)

 

(IRS Employer

Identification No.)

 

2500 Columbia Avenue P.O. Box 3025

Lancaster, Pennsylvania

  17603
(Address of principal executive offices)   (Zip code)

Registrant’s telephone number, including area code: (717) 672-9611

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.0001 par value   AFI   New York Stock Exchange

 

 

 


Item 2.02

Results of Operations and Financial Condition

On May 3, 2019, Armstrong Flooring, Inc. (the “ Company ”) issued a press release announcing its first quarter 2019 financial results. The full text of the press release is attached hereto as Exhibit 99.1.

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished herewith and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “ Securities Act ”), or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 5.02

Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

(b) Effective May 2, 2019, pursuant to a mutual agreement between the Company and Donald R. Maier, Mr. Maier’s employment with the Company ceased and he resigned as a member of the Board of Directors of the Company (the “ Board ”). Mr. Maier will not stand for re-election to the Board at the Company’s upcoming annual meeting of stockholders. In connection with Mr. Maier’s separation, the Company entered into a separation agreement under which Mr. Maier agreed to a general release of claims in favor of the Company. In exchange for this release and in accordance with the terms of the Company’s Severance Pay Plan for Executive Employees (the “ Severance Plan ”), the Company will pay Mr. Maier a lump sum cash payment of $100,000 within 3 business days of his execution of the separation agreement, and a lump sum cash payment of $2,768,138 on or within 5 business days following his execution of a supplemental release. Mr. Maier will be eligible to receive a pro-rated bonus under the Company’s 2019 Annual Incentive Plan based on actual achievement of the corporate performance metrics for 2019. Pursuant to the separation agreement, in accordance with the terms of the Severance Plan and the Company’s 2016 Long-Term Incentive Plan, and subject to the effectiveness of the supplemental release, (i) Mr. Maier will be paid an amount equal to six months’ of the COBRA premium in effect under the Company’s health plans applicable to Mr. Maier and his dependents, less the monthly premium cost then in effect for such coverage for active employees and (ii) the vesting of 34,027 of Mr. Maier’s Restricted Stock Units will be accelerated and an aggregate of 122,416 of Mr. Maier’s Performance Stock Units and Performance Shares, relating to grants made in 2017 and 2018, will remain eligible to vest based on satisfaction of the applicable Company performance metrics, in each case representing a pro-rata portion of Mr. Maier’s total outstanding awards. All awards previously made to Mr. Maier in 2019 and all earlier awards not vesting in accordance with the terms described in the prior sentence have been forfeited. Mr. Maier will continue to be bound by non-competition restrictions and other restrictive covenants for two years following the separation pursuant to the separation agreement.


The foregoing description of the separation agreement does not purport to be complete and is qualified in its entirety by reference to the separation agreement, which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.

(c) Effective May 2, 2019, Larry S. McWilliams, the Company’s Chair of the Board, age 62, has been appointed to the position of Interim Chief Executive Officer of the Company. Mr. McWilliams will have oversight of global executive functions and will serve as the Company’s principal executive officer on an interim basis. Mr. McWilliams will focus on the Company’s near-term strategic priorities and facilitate the Company’s management transition while the Company seeks a permanent Chief Executive Officer.

Mr. McWilliams has served as a member of the Board since March 30, 2016. Previously, Mr. McWilliams had served as President and Chief Executive Officer of Keystone Foods, a supplier of proteins and distribution services (2011 to 2012), Senior Vice President at Campbell Soup Company (2001 to 2011), President of Campbell International (2005 to 2010), President of Campbell USA (2004 to 2005) and President of Campbell Soup North America (2003 to 2004). Mr. McWilliams has also held positions at Coca-Cola (1995 to 2001) and the Pillsbury Company (1993 to 1995). Since 2010, Mr. McWilliams has also served on the Board of Directors of Armstrong World Industries, Inc. and has served as its Chair since 2018. In addition, Mr. McWilliams previously served on the boards of Godiva Chocolatiers International and Bob Evans Farms, Inc. Mr. McWilliams formerly served on the Board of Governors of St. Joseph’s University Food Marketing Council and the Grocery Manufacturers’ Association’s Industry Affairs Council.

There are no familial relationships between Mr. McWilliams and any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer of the Company. Additionally, there have been no transactions since the beginning of the Company’s fiscal year in which Mr. McWilliams, or his immediate family members, had or will have a direct or indirect material interest.

In connection with his appointment as Interim Chief Executive Officer, and effective as of May 2, 2019, Mr. McWilliams will receive (i) an annual base salary of $700,000 to be paid in accordance with the Company’s regular payroll policies during his tenure and (ii) a grant of restricted stock units with a value of $160,000, with the number of shares to be subject to the grant determined by the NYSE closing price of the Company’s common shares on the grant date. The grant will be scheduled to vest on the date of the Company’s 2020 annual meeting of stockholders based on continued services to the Company, or sooner as may be provided for under the terms of the Company’s 2016 Long Term Incentive Plan, as amended and restated. Mr. McWilliams will not participate in the Company’s Annual Incentive Plan and, while in the role of Interim Chief Executive Officer, will not receive the cash and equity-based compensation paid to non-employee directors of the Company.

In addition, effective May 2, 2019, the Company appointed James C. Melville, age 67, as the Lead Independent Director of the Board. Mr. Melville has served as member of the Board since March 30, 2016. Mr. Melville will continue to serve as the Chair of the Nominating and Governance Committee and as a member of both the Finance and Management Development and Compensation Committees of the Board. Mr. Melville is a member of the Minneapolis, Minnesota-based law firm of Kaplan, Strangis and Kaplan, P.A., where he has practiced in the corporate, governance, mergers and acquisitions, securities and financial areas since 1994. Mr. Melville has been designated a Board Leadership Fellow by the National Association of Corporate Directors (NACD). Mr. Melville has served on the Board of Directors of Armstrong World Industries, Inc. since 2012.

There are no familial relationships between Mr. Melville and any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer of the Company. Additionally, there have been no transactions since the beginning of the Company’s fiscal year in which Mr. Melville, or his immediate family members, had or will have a direct or indirect material interest.


For his role as Lead Independent Director of the Board, Mr. Melville will receive an additional annual cash retainer of $25,000.

Section 7 – Regulation FD

Item 7.01 Regulation FD Disclosure.

On May 3, 2019, the Company issued a press release announcing that it will report its first quarter 2019 financial results via a live webcast and conference call on May 7, 2019 at 10:00 a.m. Eastern Time. The live webcast and accompanying slide presentation will be available in the Investors section of the Company’s website at www.armstrongflooring.com. To participate in the call, please dial 877-407-0789 (domestic) or 201-689-8562 (international). A replay of the conference call will be available for 90 days, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13689555. The full text of the press release is attached hereto as Exhibit 99.1.

In connection with the actions described in Item 5.02 above, the Company also issued a press release. The full text of the press release is attached hereto as Exhibit 99.2.

The information in Item 7.01 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, is being furnished herewith and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 8.01

Other Events

The Company’s Amended and Restated Certificate of Incorporation provides that the size of the Board shall be fixed from time to time by the Board. The size of the Board is currently fixed at nine (9) members. However, the Board has taken action to reduce the size of the Board to eight (8) members, effective immediately, and to further reduce the size of the Board to seven (7) members following the certification of the results of the vote at the upcoming annual meeting of stockholders. The immediate reduction in the size of the Board will eliminate the vacancy that will exist as a result of Mr. Maier’s resignation from the Board and withdrawal of his name from re-election, and the reduction to seven (7) members will eliminate the vacancy that will exist as of the upcoming annual meeting of stockholders that was previously disclosed in the Proxy Statement. The Board is permitted, however, under its Amended and Restated Certificate of Incorporation, to expand the size of the Board and appoint directors to fill such newly created vacancies. The Board continues to search for qualified director candidates.


Item 9.01

Financial Statements and Exhibits

(d) Exhibits

 

Exhibit No.

  

Description

10.1    Separation Agreement between Armstrong Flooring, Inc. and Donald R. Maier, dated May 2, 2019
99.1    Press Release of Armstrong Flooring, Inc., dated May 3, 2019
99.2    Press Release of Armstrong Flooring, Inc., dated May 3, 2019


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

ARMSTRONG FLOORING, INC.
By:  

/s/ Christopher S. Parisi

  Christopher S. Parisi
 

Senior Vice President,

General Counsel & Secretary

Date: May 3, 2019

Exhibit 10.1

EXECUTION VERSION

SEPARATION AGREEMENT AND RELEASE

THIS SEPARATION AGREEMENT AND RELEASE (this “ Agreement ”) is entered into on May 2, 2019, by and between Armstrong Flooring, Inc., a Delaware corporation (the “ Company ”) and Donald R. Maier (“ Executive ”). The Company and Executive may be referred to herein individually as a “Party” and collectively as the “Parties.”

WITNESSETH:

WHEREAS , the Parties have mutually agreed that Executive will depart from the Company and step down from his position as Chief Executive Officer, effective May 2, 2019 (the “ Separation Date ”); and

WHEREAS , the Parties wish to enter into the arrangement set forth exclusively in this Agreement.

NOW, THEREFORE , in consideration of the premises and the releases, representations, covenants and obligations herein contained, the Company and Executive, intending to be legally bound, hereby agree as follows:

1. Mutual Agreement . Executive acknowledges that he and the Company mutually agreed that as of the Separation Date, Executive will no longer serve in any positions he holds with the Company and its subsidiaries (including as Chief Executive Officer and as a member of the board of directors of the Company (the “ Company Board ”)), effective as of the Separation Date, and agrees to execute any additional documents reasonably required by the Company to effectuate such agreement. Executive agrees not to continue serving as a director on the Company Board following the Separation Date even in the event he is so elected.

2. Payments and Benefits .

(a) Whether or not Executive signs this Agreement, the Company shall pay Executive (i) his monthly base pay through the Separation Date in accordance with the Company’s usual payroll practices, (ii) accrued but unpaid vacation pay in one lump-sum included in Executive’s final paycheck and (iii) reimbursement of any business expenses incurred prior to the Separation Date in compliance with the policies and procedures of the Company. Provided that Executive timely and validly elects continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“ COBRA ”), Executive and his eligible dependents’ participation in the group health and dental insurance plans of the Company will continue after the date of this Agreement in accordance with the provisions of COBRA for such period as is required pursuant to applicable law. Executive will be responsible for all COBRA premium payments.

(b) Provided that this Agreement becomes effective pursuant to its terms and Executive remains in compliance with this Agreement at all times, the Company shall pay Executive severance benefits in the amount of $100,000 in one lump-sum within three (3) business days of Executive’s execution of this Agreement, less all applicable withholdings and deductions.

 


(c) Provided that Executive remains in compliance with this Agreement at all times and executes the Supplemental Release of Claims attached hereto as Appendix A (the “ Supplemental Release ”) on or within twenty-one (21) days following the Separation Date and does not timely revoke his consent to the Supplemental Release, (i) the Company shall pay Executive an additional lump-sum payment in the amount of $2,768,138 on or within five (5) business days following the Supplemental Release Effective Date (as defined in the Supplemental Release), less all applicable withholdings and deductions, in the first payroll period following the Supplemental Release Effective Date (as defined in the Supplemental Release), (ii) the Company shall pay Executive an amount equal to six (6) times the monthly COBRA premium in effect under the Company’s health, dental and vision plans applicable to Executive and his dependents as of the Separation Date on or within five (5) business days following the Supplemental Release Effective Date (as defined in the Supplemental Release), less the monthly premium cost then in effect for such coverage for active employees, less all applicable withholdings and deductions, in the first payroll period following the Supplemental Release Effective Date (as defined in the Supplemental Release), (iii) the Company shall pay Executive an amount equal to the product of (x) a bonus under the Company’s 2019 Annual Incentive Plan (“ AIP ”), based solely on actual achievement of the corporate performance metrics under the 2019 AIP and Executive’s target bonus of $751,179 without regard to any personal performance modifier, and (y) the quotient obtained by dividing 120 by 365, less all applicable withholdings and deductions, such amount to be paid at the same time and calculated in the same manner (including any provisions for the treatment of the 2019 annual bonuses applied in connection with any change in control of the Company) as 2019 annual bonuses are paid to the Company’s active executive officers under the 2019 AIP, but no later than March 15, 2020, (iv) the Company shall provide, or cause to be provided, certain executive outplacement services for up to twelve (12) months following the Separation Date up to a maximum cost of $20,000, (v) 34,027 of Executive’s Restricted Stock Units (“ RSUs ”) will be accelerated and vest on the Supplemental Release Effective Date, as shown on Appendix B, (vi) the service-based vesting requirement with respect to a target number of Executive’s Performance Stock Units (“ PSUs ”) equal to 54,929 shall lapse, and such PSUs shall remain eligible to vest based on satisfaction of the applicable company performance metrics, as shown on Appendix B (provided that, in connection with a change in control of the Company that occurs during the applicable performance period, the performance period shall be deemed to end on the date of such change in control of the Company and the performance metrics shall be measured as of such date), and (vii) the service-based vesting requirement with respect to a target number of Executive’s Performance Shares (“ PSAs ”) equal to 67,487 shall lapse, and such PSAs shall remain eligible to vest based on satisfaction of the applicable company performance metrics, as shown on Appendix B (provided that, in connection with a change in control of the Company that occurs during the applicable performance period, the performance period shall be deemed to end on the date of such change in control of the Company and the performance metrics shall be measured as of such date). The Parties acknowledge that all of Executive’s stock options are fully vested, and Executive shall be entitled to exercise such options under the “rule of 55 and 5” under the applicable plans and agreement (such that, for the avoidance of doubt, Executive may exercise such options during the period equal to the lesser of 5 years from Separation Date or until the expiration date of the options). Executive shall receive a payout of his vested deferred compensation under the terms of the applicable plans and his deferral elections in accordance with Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”). In addition, the Company shall reimburse Executive for up to an aggregate amount of $15,000 of reasonable and documented attorney’s fees incurred by Executive in connection with the drafting, negotiation and execution of this Agreement.

 

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3. No Other Payments or Benefits . Executive acknowledges and agrees that the payments and benefits set forth in this Agreement are all the payments and benefits to which he is entitled from the Company and that he is not entitled to any other compensation, benefits, or payments from the Company or any other Company Parties (as defined in Section 7(a) below), other than for payments of his vested benefits and pursuant to the Excluded Claims (as defined in Section 7(a) below).

4. Return of Property . Executive agrees that within five (5) business days of the Separation Date, he will deliver, without retaining any copies, all documents and other material in Executive’s possession relating, directly or indirectly, to any Confidential Information (as defined in Section 5 below) or other information of the Company, or confidential or other information regarding third parties, learned as an employee of the Company including, but not limited to, any and all documents, contracts, agreements, plans, books, notes, passwords, including electronically stored data and any copies of the foregoing, as well as all materials or equipment supplied by the Company, such as credit cards, laptop or other computer equipment. The Company agrees that, within five (5) business days of the Separation Date, it will deliver to Executive all personal effects which are located at the Company’s premises.

5. Confidentiality and Confidential Information .

(a) Executive represents that he has held, and Executive agrees that he will at all times hold, in the strictest confidence and has not and will not make any unauthorized disclosure, directly or indirectly, of any Confidential Information, or confidential information regarding third parties, or make any use thereof, directly or indirectly, except in working for the Company. Executive assigns to the Company any rights he may have or have acquired in such Confidential Information and recognizes that all such information shall be the sole property of the Company and its successors or assigns.

(b) “ Confidential Information ” means and includes any and all information regarding the Company and its subsidiaries and affiliates that is not generally known or available to the public, including but not limited to: information regarding past, current and prospective customers and investors and business affiliates, employees, contractors, and the industry not generally known to the public; strategies, methods, books, records, and documents; technical information concerning products, equipment, services and processes; procurement procedures, pricing, and pricing techniques; including contact names, services provided, pricing, type and amount of services used, financial and sales data; trading methodologies and terms; communications information; evaluations, opinions and interpretations of information and data; marketing and merchandising techniques; electronic databases; models; specifications; computer programs; contracts; bids or proposals; technologies and methods; training methods and processes; organizational structure; personnel information; payments or rates paid to consultants or other service providers; and other such confidential or proprietary information. Executive acknowledges that the Company’s business is highly competitive, that this Confidential Information constitutes a valuable, special and unique asset used by the Company in its business, and that protection of such Confidential Information against unauthorized disclosure and use is of critical importance to

 

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the Company. Confidential Information shall not include information that (i) was already in Executive’s possession prior to disclosure by the Company but not developed by Executive; (ii) was independently developed by Executive without reference to the Company’s Confidential Information; (iii) is obtained from a third party who is not prohibited from transmitting the information to Executive by a contractual, legal or fiduciary obligation to the Company; or (iv) is or becomes generally available to the public other than as a result of an impermissible disclosure by Executive.

6. Permitted Disclosures . Pursuant to 18 U.S.C. § 1833(b), Executive will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret of the Company that (i) is made (A) in confidence to a Federal, State, or local government official, either directly or indirectly, or to his attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to his attorney and use the trade secret information in the court proceeding, if Executive (i) files any document containing the trade secret under seal, and (ii) does not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section. Further, nothing in this Agreement or any other agreement that Executive has with the Company shall prohibit or restrict Executive from making any voluntary disclosure of information or documents concerning possible violations of law to, or seek a whistleblower award from, any governmental agency or legislative body, or any self-regulatory organization, in each case, without advance notice to the Company. Further, nothing in this Agreement or any other agreement that Executive has with the Company, including, without limitation, the Amended and Restated Change in Control Severance Agreement between the Company and Executive effective December 1, 2017 (“ CIC Agreement ”), shall prohibit or restrict the Company Parties (as defined below) from making truthful statements about Executive’s employment or departure from the Company or responding to inquiries about Executive.

7. Release .

(a) Executive hereby releases, discharges and forever acquits the Company, and its affiliates and subsidiaries and the past, present and future stockholders, members, partners, directors, managers, employees, agents, attorneys, heirs, legal representatives, successors and assigns of the foregoing, in their personal and representative capacities (individually, “ Company Party ,” and collectively, the “ Company Parties ”), from liability for, and hereby waives, any and all claims, charges, liabilities, causes of action, rights, complaints, sums of money, suits, debts, covenants, contracts, agreements, promises, benefits, obligations, damages, demands or liabilities of every nature, kind and description, in law, equity or otherwise, whether known or unknown, suspected or unsuspected (collectively, “ Claims ”) which Executive or Executive’s heirs, executors, administrators, spouse, relatives, successors or assigns ever had, now has or may hereafter claim to have by reason of any matter, cause or thing whatsoever: (i) arising from the beginning of time through the date upon which Executive signs this Agreement including, but not limited to (A) any such Claims relating in any way to Executive’s employment relationship with the Company or any other Company Parties, and (B) any such Claims arising under any

 

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federal, state, local or foreign statute or regulation, including, without limitation, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974 and any other federal, state, local or foreign law (statutory, regulatory or otherwise) that may be legally waived and released; (ii) relating to wrongful employment termination; or (iii) arising under or relating to any policy, agreement, understanding or promise, written or oral, formal or informal, between the Company or any of the other Company Parties and Executive, including, without limitation, the CIC Agreement, the Company’s Severance Pay Plan for Executive Employees and any incentive compensation plan or stock option plan with any Company Party; provided , however , that nothing in this Release shall release or impair any rights that cannot be waived under applicable law, rights under this Agreement, rights to vested benefits under the Company’s 401(k) plan, deferred compensation plans and group health plan, rights with respect to vested equity awards and the rights to indemnification and directors and officers insurance provided to Executive (the “ Excluded Claims ”).

(b) Executive further acknowledges and agrees that, except with respect to Excluded Claims, the Company Parties have fully satisfied any and all obligations whatsoever owed to him arising out of his employment with the Company or any other Company Party, and that no further payments or benefits are owed to him by the Company or any other Company Party.

8. Restrictive Covenants . The Company and Executive acknowledge and agree that the restrictive covenants and agreements set forth in Section 8 of the CIC Agreement are incorporated herein by reference and fully made a part hereof for all purposes and remain in full force and effect except as expressly set forth in this Agreement.

9. No Admission . Nothing herein shall be deemed to constitute an admission of wrongdoing by Executive or any of the Company Parties. Neither this Agreement nor any of its terms may be used as an admission or introduced as evidence as to any issue of law or fact in any proceeding, suit or action, other than an action to enforce this Agreement.

10. Counterparts . This Agreement may be executed in counterparts, and each counterpart, when so executed and delivered, shall be deemed to be an original and both counterparts, taken together, shall constitute one and the same Agreement. A faxed or .pdf-ed signature shall operate the same as an original signature.

11. Successors and Assigns . This Agreement shall inure to the benefit of and be binding upon the Company and any successor organization which shall succeed to the Company by acquisition, merger, consolidation or operation of law, or by acquisition of assets of the Company and any assigns. Executive may not assign this Agreement, except with respect to the rights provided under Section 2 of this Agreement, which shall inure to the benefit of Executive’ heirs, executors and administrators.

12. Severability; Blue-Penciling . The provisions of this Agreement are severable and the invalidity of any one or more provisions shall not affect the validity of any other provision. In the event that a court of competent jurisdiction shall determine that any provision of this Agreement or the application thereof is unenforceable in whole or in part because of the scope thereof, the Parties hereto agree that said court in making such determination shall have the power to reduce the scope of such provision to the extent necessary to make it enforceable, and that this Agreement in its reduced form shall be valid and enforceable to the full extent permitted by law.

 

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13. Indemnification . The Indemnification Agreement between Executive and the Company, dated as of March 30, 2016 (the “Indemnification Agreement”), will survive the termination of Executive’s employment on the Separation Date and will remain in effect in accordance with the terms of the Indemnification Agreement.

14. 409(A) . Although the Company does not guarantee any particular tax treatment relating to the payments and benefits to be provided to Executive under this Agreement, it is the intent of the Parties that all payments and benefits under this Agreement comply with or be exempt from Section 409A of the Code and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. The Parties agree to reasonably cooperate to take all further actions necessary to satisfy the requirements of Section 409A of the Code.

15. Governing Law . This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to any conflict of law principles thereof that would give rise to the application of the laws of any other jurisdiction.

16. Entire Agreement/No Oral Modifications . This Agreement constitutes the entire agreement between Executive and any of the Company Parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, arrangements or agreements relating thereto, whether written or oral, including but not limited to the CIC Agreement, provided , however , that Section 8 of the CIC Agreement shall remain in effect. Executive represents that in executing this Agreement, Executive has not relied on any representation or statement not set forth herein. No amendment or modification of this Agreement shall be valid or binding on the Parties unless in writing and signed by both Parties.

IN WITNESS WHEREOF, the Parties have signed this Agreement as of the date first above written.

 

Armstrong Flooring, Inc.     Donald R. Maier
By:  

/s/ James C. Melville

   

/s/ Donald R. Maier

  Name: James C. Melville
    Donald R. Maier
  Title: Director    

 

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APPENDIX A

SUPPLEMENTAL RELEASE OF CLAIMS

1. Release .

(a) For good and valuable consideration, including the Company’s provision of a certain payment to Executive in accordance with Section 2(c) of the Separation Agreement and Release, dated May 2, 2019 (the “ Separation Agreement ”), Executive releases, discharges and forever acquits the Company, and its affiliates and subsidiaries and the past, present and future stockholders, members, partners, directors, managers, employees, agents, attorneys, heirs, legal representatives, successors and assigns of the foregoing, in their personal and representative capacities (individually, “ Company Party ,” and collectively, the “ Company Parties ”), from liability for, and hereby waives, any and all claims, charges, liabilities, causes of action, rights, complaints, sums of money, suits, debts, covenants, contracts, agreements, promises, benefits, obligations, damages, demands or liabilities of every nature, kind and description, in law, equity or otherwise, whether known or unknown, suspected or unsuspected (collectively, “ Claims ”) which Executive or Executive’s heirs, executors, administrators, spouse, relatives, successors or assigns ever had, now has or may hereafter claim to have by reason of any matter, cause or thing whatsoever: (i) arising from the beginning of time through the date upon which Executive signs this Agreement including, but not limited to (A) any such Claims relating in any way to Executive’s employment relationship with the Company or any other Company Parties, and (B) any such Claims arising under any federal, state, local or foreign statute or regulation, including, without limitation, the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit Protection Act (the “ ADEA ”), Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974 and any other federal, state, local or foreign law (statutory, regulatory or otherwise) that may be legally waived and released; (ii) relating to wrongful employment termination; or (iii) arising under or relating to any policy, agreement, understanding or promise, written or oral, formal or informal, between the Company or any of the other Company Parties and Executive, including, without limitation, the Amended and Restated Change in Control Severance Agreement between Executive and the Company, effective December 1, 2017, the Company’s Severance Pay Plan for Executive Employees and any incentive compensation plan or stock option plan with any Company Party; provided , however , that nothing in this Supplemental Release shall release or impair any rights that cannot be waived under applicable law, rights under the Separation Agreement, rights to vested benefits under the Company’s 401(k) plan, deferred compensation plans and group health plan, rights with respect to vested equity awards and the rights to indemnification and directors and officers insurance provided to Executive (the “ Excluded Claims ”).

(b) Executive further acknowledges and agrees that, except with respect to Excluded Claims, the Company Parties have fully satisfied any and all obligations whatsoever owed to him arising out of his employment with the Company or any other Company Party, and that no further payments or benefits are owed to him by the Company or any other Company Party.

 

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2. Review and Revocation Period .

(a) Executive acknowledges that (i) the Company and/or its successor has advised Executive to consult with an attorney of Executive’s own choosing before signing this Supplemental Release, (ii) Executive has been given the opportunity to seek the advice of counsel, (iii) Executive has carefully read and fully understands all of the provisions of this Supplemental Release, (iv) the release provided herein specifically applies to any rights or claims Executive may have against the Company Parties pursuant to the ADEA, (v) Executive is entering into this Supplemental Release knowingly, freely and voluntarily in exchange for good and valuable consideration to which Executive is not otherwise entitled, including the payment set forth in Section 2(c) of the Separation Agreement, and (vi) Executive has the full power, capacity and authority to enter into this Supplemental Release.

(b) Executive understands and agrees that Executive has twenty-one (21) days following Executive’s receipt of this Supplemental Release to review this Supplemental Release and its terms and to reflect upon them and consider whether Executive wants to sign it, although Executive may sign it sooner. Executive understands and agrees that Executive may accept this Supplemental Release by signing and returning it within the applicable time frame to Christopher Parisi, Senior Vice President, General Counsel, Secretary and Chief Compliance Officer, Armstrong Flooring, Inc. at 2500 Columbia Avenue, P.O. Box 3025, Lancaster, Pennsylvania 17604 or by e-mail at csparisi@armstrongflooring.com , or Executive’s counsel may email Executive’s signature to the Company’s counsel.

(c) Notwithstanding the initial effectiveness of this Supplemental Release, Executive may revoke the execution and delivery (and therefore the effectiveness) of this Supplemental Release within the seven day period beginning on the date Executive delivers the re-execution to the Company (such seven day period being referred to herein as the “ Release Revocation Period ”). To be effective, such revocation must be in writing signed by Executive and must be delivered to Company before 11:59 p.m., Eastern Standard time, on the last day of the Release Revocation Period.

(d) In the event of such revocation by Executive, this Supplemental Release shall be of no force or effect, and Executive shall not have any rights and the Company shall not have any obligations under Section 2(c) of the Separation Agreement. Provided that Executive does not revoke his consent to this Supplemental Release within the Release Revocation Period, this Supplemental Release shall become effective on the eighth (8th) calendar day after the date upon which he executes this Supplemental Release (the “ Supplemental Release Effective Date ”).

 

 

Donald R. Maier
Date:  

 

 

8

Exhibit 99.1

 

LOGO

ARMSTRONG FLOORING REPORTS FIRST QUARTER 2019 RESULTS

AND ANNOUNCES NEW $50 MILLION SHARE REPURCHASE

AUTHORIZATION

First Quarter 2019 Highlights

 

   

Net Sales of $141.7 Million

 

   

Net Loss of $16.7 Million and Adjusted Net Loss of $13.1 Million

 

   

Adjusted EBITDA Break-even

 

   

Announces New $50 Million Share Repurchase Authorization

 

   

Updates Outlook for Full Year 2019

Lancaster, PA, May  3, 2019. Armstrong Flooring, Inc. (NYSE: AFI) (“Armstrong Flooring” or the “Company”), North America’s largest producer of resilient flooring products, today reported financial results for the first quarter ended March 31, 2019.

In addition, the Company announced in a separate release today that Larry McWilliams has been elected Chief Executive Officer on an interim basis. [A full release can be viewed here.]

Mr. McWilliams commented, “We acknowledge the headwinds affecting our first quarter results, but I am truly excited about the future of our business. We can capitalize on the opportunities before us by staying close and connected to our customer needs, focusing on execution and committing to innovation in all facets of our business. Our brand, products and most importantly the team we have assembled are well positioned to drive profitable growth in the business.”

First Quarter 2019 Results Compared with First Quarter of 2018 Results

Consolidated Results

 

(Dollars in millions except per share data)    Three Months Ended March 31,  
     2019     2018     Change  

Net sales

   $ 141.7     $ 164.3       (13.8 %) 

Operating (loss)

   ($ 15.6   ($ 8.9     NM  

Net (loss)

   ($ 16.7   ($ 10.4     NM  

Diluted (loss) per share

   ($ 0.63   ($ 0.40     NM  

Adjusted EBITDA

   $ 0.0     $ 10.6       NM  

Adjusted EBITDA margin

     0.0     6.5     (650 bps

Adjusted net (loss)

   ($ 13.1   $ (3.5     NM  

Adjusted diluted (loss) per share

   ($ 0.49   $ (0.13     NM  

In the first quarter of 2019, net sales decreased 13.8% to $141.7 million from $164.3 million in the first quarter of 2018, including an adverse currency impact of 120 basis points. The decrease in net sales was primarily due to lower volumes and unfavorable mix, partly offset by overall higher selling prices in response to inflationary pressure. Lower volumes in the first quarter of 2019 reflected overall soft end-market demand along with challenging weather condition in many regions of the U.S., particularly in our residential categories. In addition inventory levels decreased in the distributor channel, in part due to the timing of customer purchases in response to uncertainty in U.S. tariff policy since the second half of 2018.


Net loss in the first quarter of 2019 was $16.7 million, or diluted loss per share of $0.63, as compared to a net loss of $10.4 million, or diluted loss per share of $0.40, in the prior year quarter. Adjusted net loss was $13.1 million, or adjusted diluted loss per share of $0.49, as compared to an adjusted net loss of $3.5 million, or adjusted diluted loss per share of $0.13, in the prior year quarter.

First quarter 2019 adjusted EBITDA was break even, as compared to $10.6 million in the prior year quarter. The prior year quarter benefited from $4.3 million of customer reimbursements, which did not recur in the first quarter of 2019. The remainder of the decrease in adjusted EBITDA was driven by input cost inflation pressure and lower net sales, partially offset by improved productivity.

Cash Flow and Balance Sheet

During the first quarter of 2019, the Company used $63.2 million of cash from operations, primarily due to an increase in net working capital following a lower than normal balance at December 31, 2018, in addition to normal seasonal working capital cash outflows during the first quarter. During the first quarter of 2019, the Company paid down $25 million of its revolving credit facility. At March 31, 2019, the Company had cash, cash equivalents and restricted cash of $75.7 million and long-term debt of $74.0 million. As of March 31, 2019, the Company had $71.1 million of availability under its revolving credit facility.

Share Repurchase Authorization

The Company also announced today that its Board of Directors has increased its share repurchase program for an additional $50 million beyond the $41 million already repurchased under the prior share repurchase program, effective immediately. Repurchases under the new program may be made through open market, block, and privately negotiated transactions, including Rule 10b5-1 plans, at times and in such amounts as management deems appropriate, subject to market and business conditions, regulatory requirements and other factors. The authorization to repurchase additional shares under the increased repurchase program is aligned with the Company’s goal to return a portion of the net sale proceeds from its wood flooring business, which closed on December 31, 2018.

Doug Bingham, Chief Financial Officer, stated, “The Board’s decision to authorize a new $50 million share repurchase program reflects the strength of our balance sheet. We remain committed to driving value for our shareholders across multiple fronts, and an efficient use of cash and capital structure is an effective tool in achieving our goal.”

Full Year 2019 Outlook

For the full year 2019, the Company now expects adjusted EBITDA to be in the range of $50 million to $58 million, with growth heavily weighted to the second half as the overall market improves and elevated inventory levels in the channel are worked down. The Company also expects capital expenditures to be approximately $30 million for the full year 2019. The Company continues to expect to build cash from operations over the remaining quarters of 2019.

 

2


Conference Call and Webcast

The Company will hold a live webcast and conference call to review first quarter results hosted by Mr. McWilliams and Mr. Bingham on Tuesday, May 7, 2019 at 10:00 a.m. ET. The live webcast and accompanying slide presentation will be available in the Investors section of the Company’s website at www.armstrongflooring.com. To participate in the call, please dial 877-407-0789 (domestic) or 201-689-8562 (international). A replay of the conference call will be available for 90 days, by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13689555.

About Armstrong Flooring

Armstrong Flooring, Inc. (NYSE: AFI) is a global leader in the design and manufacture of innovative flooring solutions. Headquartered in Lancaster, Pennsylvania, Armstrong Flooring is North America’s largest producer of resilient flooring products. The Company safely and responsibly operates 8 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 at www.armstrongflooring.com.

Forward Looking Statements

Disclosures in this release and in our other public documents and comments contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements provide our future expectations or forecasts and can be identified by our use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “outlook,” “target,” “predict,” “may,” “will,” “would,” “could,” “should,” “seek,” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. Forward-looking statements, by their nature, address matters that are uncertain and involve risks because they relate to events and depend on circumstances that may or may not occur in the future. As a result, our actual results may differ materially from our expected results and from those expressed in our forward looking statements. A more detailed discussion of the risks and uncertainties that could cause our actual results to differ materially from those projected, anticipated or implied is included in our reports filed with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made. We undertake no obligation to update any forward-looking statements beyond what is required under applicable securities law.

Contact Information

Investors:

Douglas Bingham

SVP, Chief Financial Officer

717-672-9300

IR@armstrongflooring.com

Media:

Alison van Harskamp

Director, Corporate Communications

717-672-7545

aficorporatecommunications@armstrongflooring.com

 

3


Armstrong Flooring, Inc. and Subsidiaries

Consolidated Statements of Operations

(Dollars in millions except per share data)

(Unaudited)

 

    

Three months ended

March 31,

 
     2019     2018  

Net sales

   $ 141.7     $ 164.3  

Cost of goods sold

     119.6       135.0  
  

 

 

   

 

 

 

Gross profit

     22.1       29.3  

Selling, general, and administrative expense

     37.7       38.2  
  

 

 

   

 

 

 

Operating (loss)

     (15.6     (8.9

Interest expense

     1.0       1.0  

Other expense

     0.3       0.6  
  

 

 

   

 

 

 

(Loss) from continuing operations before income taxes

     (16.9     (10.5

Income tax (benefit)

     (0.3     (0.1
  

 

 

   

 

 

 

(Loss) from continuing operations

     (16.6     (10.4

Earnings (loss) from discontinued operations

     —         —    

Loss on disposal of discontinued operations

     (0.1     —    
  

 

 

   

 

 

 

Net (loss) from discontinued operations

     (0.1     —    
  

 

 

   

 

 

 

Net (loss)

   $ (16.7   $ (10.4
  

 

 

   

 

 

 

Weighted average number of common shares outstanding - Basic

     26.7       25.9  
  

 

 

   

 

 

 

Basic (loss) per share of common stock

   $ (0.63   $ (0.40
  

 

 

   

 

 

 

Weighted average number of common shares outstanding - Diluted

     26.7       25.9  
  

 

 

   

 

 

 

Diluted (loss) per share of common stock

   $ (0.63   $ (0.40
  

 

 

   

 

 

 

Consolidated Balance Sheet

(Dollars in millions)

 

    

March 31,

2019

    

December 31,

2018

 

Assets

     

Current Assets:

     

Cash, cash equivalents, and restricted cash

   $ 75.7      $ 173.8  

Accounts and notes receivable, net

     61.0        39.0  

Inventories, net

     144.7        139.5  

Other current assets

     16.7        18.6  
  

 

 

    

 

 

 

Total current assets

     298.1        370.9  

Property, plant, and equipment, net

     294.3        296.1  

Other non-current assets

     47.0        41.2  
  

 

 

    

 

 

 

Total assets

   $ 639.4      $ 708.2  
  

 

 

    

 

 

 

Liabilities and Stockholders’ Equity

     

Current liabilities:

     

Accounts payable and accrued expenses

   $ 108.9      $ 141.4  

Short-term debt and current portion of long-term debt

     3.7        28.7  

Other current liabilities

     0.2        0.5  
  

 

 

    

 

 

 

Total current liabilities

     112.8        170.6  

Long-term debt

     70.3        70.6  

Postretirement benefit liabilities

     54.7        55.7  

Pension benefit liabilities

     10.3        11.3  

Other long-term liabilities

     13.7        9.0  
  

 

 

    

 

 

 

Total liabilities

     261.8        317.2  

Total stockholders’ equity

     377.6        391.0  
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

   $ 639.4      $ 708.2  
  

 

 

    

 

 

 

 

4


Supplemental Reconciliations of GAAP to non-GAAP Results (unaudited)

To supplement its consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (GAAP), the Company provides additional measures of performance adjusted to exclude the impact of restructuring charges and related costs, impairments, the non-cash impact of the U.S. pension plan, and certain other gains and losses. Free cash flow is defined as net cash from operating activities less purchases of property, plant and equipment. The Company uses these adjusted performance measures in managing the business, including in communications with its Board of Directors and employees, and believes that they can provide users of this financial information with meaningful comparisons of operating performance between current and prior periods. In addition, the Company has applied pro forma adjustments to its non-GAAP results for periods prior to completion of the sale of the wood flooring business. These adjustments represent the elimination of certain shared costs that were formerly allocated to the divested wood flooring segment and are intended to reflect, on a pro forma basis, the retroactive elimination of these costs in accordance with the Company’s ongoing cost optimization program which, when combined with certain payments under the Transition Services Agreement entered into with the purchaser, are expected to offset the impact of substantially all of these costs. The Company believes that these non-GAAP financial measures are appropriate to enhance understanding of its past performance, as well as its prospects for future performance. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is included in this release and on the Company’s website. These non-GAAP measures should not be considered in isolation or as a substitute for the most comparable GAAP measures. Non-GAAP financial measures utilized by the Company may not be comparable to non-GAAP financial measures used by other companies. The Company does not provide financial guidance for forecasted net income since certain items that impact net income are outside of our control and cannot be reasonably predicted. Therefore, the Company is unable to provide a reconciliation of its Adjusted EBITDA guidance to net income, the most comparable financial measure calculated in accordance with GAAP.

 

(Dollars in millions except per share data)              
     Three Months Ended March 31,  
     2019      2018  

Net (loss)

   ($ 16.7    ($ 10.4

Net loss from discontinued operations

     0.1        —    

Interest expense

     1.0        1.0  

Other expense

     0.3        0.6  

Taxes

     (0.3      (0.1
  

 

 

    

 

 

 

Operating (loss)

     (15.6      (8.9

Depreciation and amortization

     11.3        10.8  

Expenses related to strategic projects and cost reduction initiatives

     3.7        3.0  

U.S. pension expense

     0.6        0.9  

Pro forma adjustment for corporate expense

     —          4.7  
  

 

 

    

 

 

 

Adjusted EBITDA

   $ 0.0      $ 10.6  
  

 

 

    

 

 

 

 

5


     Three Months Ended March 31,  
     2019      2018  
     $ million      Per diluted share      $ million      Per diluted share  

Net (loss)

   ($ 16.7    ($ 0.62    ($ 10.4    ($ 0.40

Expenses related to strategic projects and cost reduction initiatives

     3.7           3.0     

Pro forma adjustment for corporate expense

     —             4.7     

U.S. pension expense

     0.6           0.9     

Other expense

     0.3           0.6     

Tax impact of adjustments at statutory rate

     (1.2         (2.3   

Net loss (earnings) from discontinued operations

     0.1           —       
  

 

 

       

 

 

    

Adjusted Net Loss

   ($ 13.1    ($ 0.49    ($ 3.5    ($ 0.13
  

 

 

    

 

 

    

 

 

    

 

 

 

Rows and columns may not foot due to rounding.

 

6

Exhibit 99.2

Armstrong Flooring Appoints Board Chair Larry McWilliams Interim CEO

LANCASTER, Pa. – May 3, 2019 – Armstrong Flooring, Inc., (NYSE: AFI) North America’s largest producer of resilient flooring products, today announced that its board of directors and Donald R. Maier, President and Chief Executive Officer, have mutually agreed that Mr. Maier would step down as CEO, effective immediately. Armstrong Flooring Chair Larry S. McWilliams has been elected Chief Executive Officer on an interim basis. He will focus on the company’s near-term strategic priorities and facilitate Armstrong Flooring’s management transition while the company seeks a permanent CEO.

Armstrong Flooring also announced today its first quarter 2019 financial results, revised 2019 guidance and an increase in the size of the Company’s stock repurchase plan. A full release can be viewed here .

Mr. McWilliams, the former President and CEO of Keystone Foods and a former senior executive at Campbell Soup Company, joined the Armstrong World Industries (NYSE: AWI) Board in 2010 and became Chair of the Board of Armstrong Flooring in 2016 after it was spun off from AWI as an independent, publicly traded company. Mr. McWilliams is a longtime executive in the retail and consumer sectors and will remain the Chair of Board of Armstrong Flooring. He is also the Chair of Board of Armstrong World Industries.

“We are fortunate to have as our Chair a respected industry veteran and an experienced business executive who will provide a steady hand and ensure the Armstrong Flooring team remains focused on leading the company into future, long-term success,” said James C. Melville, an Armstrong Flooring Board director. “Larry has committed to be interim CEO for as long as needed to ensure an orderly and seamless transition.”

Mr. McWilliams stated, “Armstrong Flooring has built incredible brand equity and customer loyalty over its long history, and I am ready and eager to step in at this juncture and work closely with our talented employee base, distributors, and customers to deliver the best products, solutions and value for all of our stakeholders.”

“We thank Don for his years of dedication to the company. He joined Armstrong World Industries in 2010 and played many important roles along the way, including the CEO role of Armstrong Flooring before and after its transition into an independent company. We wish him the very best,” Mr. McWilliams said.

“It has been my privilege to lead Armstrong Flooring during such a critical phase in the company’s long history,” Mr. Maier said. “It has also been my privilege to work with such a dedicated group of colleagues who are committed to leading this great company into its next phase.”

Mr. Maier has resigned from the Board of Directors and will not stand for re-election at the upcoming 2019 annual meeting.

About Larry McWilliams

Larry S. McWilliams is the interim CEO of Armstrong Flooring and Chair of its Board of Directors. Mr. McWilliams was previously the President and Chief Executive Officer of Keystone Foods, a producer of proteins, from May 2011 to May 2012. From May 2005 to October 2010, he served as a Senior Vice President at Campbell Soup Company and subsequently became the President of Campbell International, responsible for all of Campbell Soup’s business in Europe, Latin America and Asia Pacific. Mr. McWilliams joined Campbell Soup in March 2001 as Senior Vice President Sales and Chief Customer Officer, overseeing the company’s relationships with its global


retail partners. In April 2003, he assumed the position of President North America Soup. Mr. McWilliams was named Senior Vice President and President Campbell USA in March 2004. Prior to Campbell Soup, Mr. McWilliams held positions at Coca-Cola from 1995 to 2001 and the Pillsbury Company from 1993 to 1995. Mr. McWilliams also serves as Chair of the Board at Armstrong World Industries, a manufacturer of commercial and residential ceiling, wall and suspension system solutions, and Armstrong Flooring’s predecessor company prior to its spin-off in April 2016. In addition, Mr. McWilliams previously served on the board of Godiva Chocolatiers International, a privately held company, and on the board of Bob Evans Farms, Inc., a full-service restaurant company. Mr. McWilliams formerly served on the Board of Governors of St. Joseph’s University Food Marketing Council and the Grocery Manufacturers’ Association’s Industry Affairs Council.

About Armstrong Flooring

Armstrong Flooring, Inc. (NYSE: AFI) is a global leader in the design and manufacture of innovative flooring solutions. Headquartered in Lancaster, Pennsylvania, Armstrong Flooring is North America’s largest producer of resilient flooring products. The company safely and responsibly operates 8 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 at www.armstrongflooring.com.

Forward-Looking Statements

Disclosures in this release, including without limitation, those relating to the Company’s management transition and plans with respect to share repurchases, and in our other public documents and comments contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements provide our future expectations or forecasts and can be identified by our use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “outlook,” “target,” “predict,” “may,” “will,” “would,” “could,” “should,” “seek,” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. Forward-looking statements, by their nature, address matters that are uncertain and involve risks because they relate to events and depend on circumstances that may or may not occur in the future. As a result, our actual results may differ materially from our expected results and from those expressed in our forward-looking statements. A more detailed discussion of the risks and uncertainties that could cause our actual results to differ materially from those projected, anticipated or implied is included in our reports filed with the U.S. Securities and Exchange Commission. Forward-looking statements speak only as of the date they are made. We undertake no obligation to update any forward-looking statements beyond what is required under applicable securities law.

Contact Information

Investors:

Douglas Bingham

SVP, Chief Financial Officer

717-672-9300

IR@armstrongflooring.com

Media:

Alison van Harskamp

Director, Corporate Communications

717-672-7545

aficorporatecommunications@armstrongflooring.com