LANCASTER, PA - Citing "disappointing results," Armstrong World Industries said it will cease funding its DLW subsidiary as part of the exit strategy for its European flooring business.

Local DLW management in Germany have filed for insolvency following the December announcement. Affected are two DLW manufacturing plants in Germany and DLW administrative offices across Europe. Armstrong said the European businesses will be classified as discontinued operations in its fourth quarter results.

A major player in the industry, Armstrong World Industries manufactures hardwood, laminate, vinyl and linoleum flooring products. Armstrong (NYSE: AWI) posted net sales of $729.7 million for the third quarter of 2014, ended Sept. 30, and $2.073 billion for the first nine months. Sales for the resilient business dropped 2.7% to $239.6 million for the third quarter ($694.8 million for the nine months). The European flooring business posted net sales of $144.7 million for the first nine months and an operating loss of $23.2 million.

"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 J. Espe.

Armstrong said it acquired DLW in 1998 to establish a stronghold and serve as a catalyst for the development of its European flooring business. Declining market conditions, price competition and overcapacities attributed to the downfall. "Despite investing approximately $150 million in the business since 2007, DLW has been unable to generate profit or achieve its strategic plans. These results, and our ultimate decision, however, in no way reflect the dedication, effort and commitment of DLW employees over the years, for which we remain grateful," Espe said in the statement.

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