Armstrong Flooring realigns wood inventory accounting
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LANCASTER, Pa.- With its wood and resilient floor sales up for the year, Armstrong Flooring says it will change accounting in its wood products from 'last in, first out' to 'first in, first out', and unify flooring sales operations.
 
Following its April 2016 spinoff from Armstrong Industries (its sibling spinoff is cabinet manufacturer ACPI) Armstrong Flooring, Inc. (NYSE:AFI) says it is North America’s largest producer of resilient and wood flooring products. It reported $1.19 billion in sales for 2016 - less than half of it wood floors.
 
"We continue to encounter a declining trend in our legacy portfolio, and we believe that the sales trends experienced in 2016 will continue in 2017," said Don Maier, Chief Executive Officer. Maier says the firm made significant progress in increasing in annual sales for the first time in three years, though it was less than 1 percent for the year and the quarter.
  
 Effective with fourth quarter and full year 2016 results, Armstrong changed its accounting for inventories in the wood segment from the last in, first out (LIFO) method to the first in, first out (FIFO) method. Adjusted financial results now also include the impacts of foreign currency translation. 
 
In the fourth quarter of 2016, net sales were $271.7 million compared to $280.1 million in the fourth quarter of 2015, as a result of declines in both Resilient and Wood segment net sales. Excluding the impact of foreign exchange, net sales were down 2.8 percent, compared to the prior year quarter.
 
The fourth quarter net loss was $6.3 million, an improvement on a $16.6 million loss in the year ago period. Adjusted net income under Wood FIFO, actual Fx, which excluded one-time items including severance expenses and gains on disposal of discontinued operations, was $2.5 million - a smaller loss that explains the advantage of changing the accounting practice. , or ($0.09) per diluted share, as compared to ($11.8) million, or ($0.43) per diluted share in the prior-year quarter.  
 
Armstrong's Wood Flooring Segment saw sales of $113.4 million in the fourth quarter, representing less than half of revenues. 
 
Armstrong is combining its commercial and residential go-to-market structures and related organization. The new structure is designed to provide enhanced support and responsiveness to retailers and contractors and to foster greater alignment with distributors, which cover both commercial and residential markets.  
 
 Armstrong Flooring, headquartered in Lancaster, Pennsylvanina, says it is the #1 manufacturer of resilient and wood flooring products across North America, and operates 17 manufacturing facilities in three countries and employs approximately 4,000 individuals www.armstrongflooring.com.
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Bill Esler | ConfSenior Editor

Bill wrote for WoodworkingNetwork.com, FDMC and Closets & Organized Storage magazines. 

Bill's background includes more than 10 years in print manufacturing management, followed by more than 30 years in business reporting on industrial manufacturing in the forest products industries, including printing and packaging at American Printer (Features Editor) and Graphic Arts Monthly (Editor in Chief) magazines; and in secondary wood manufacturing for WoodworkingNetwork.com.

Bill was deeply involved with the launches of the Woodworking Network Leadership Forum, and the 40 Under 40 Awards programs. He currently reports on technology and business trends and develops conference programs.

In addition to his work as a journalist, Bill supports efforts to expand and improve educational opportunities in the manufacturing sectors, including 10 years on the Print & Graphics Scholarship Foundation; six years with the U.S. WoodLinks; and currently on the Woodwork Career Alliance Education Committee. He is also supports the Greater West Town Training Partnership Woodworking Program, which has trained more than 950 adults for industrial wood manufacturing careers. 

Bill volunteers for Foinse Research Station, a biological field station staddling the border of Ireland and Northern Ireland, one of more than 200 members of the Organization of Biological Field Stations.