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Armstrong to shutter two plants, lay off 300-plus

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Citing weak demand, Armstrong Flooring Inc. is closing two plants in the southeastern U.S. that make products for its wood flooring segment.

The two plants — in Jackson, Tenn., and Vicksburg, Miss. — are expected to close in the fourth quarter of 2017, according to a filing Monday with the U.S. Securities and Exchange Commission.

Armstrong, which is based in Manor Township, Lancaster County, said the move is expected to cost between $3 million and $5 million in pre-tax spending, and yield pre-tax savings of between $8 million and $10 million per year.

The two plants employ more than 300 people, whose jobs are being eliminated: 215 in Jackson and 93 in Mississippi, according to Stephen Trapnell, an Armstrong spokesperson.

The work of the two plants is being consolidated at six other Armstrong wood-flooring factories in Beverly, W.Va.; Oneida, Tenn.; Somerset, Ky.; Titusville, Pa., Warren, Ark.; and West Plains, Mo. 

In its filing, the company cited a mix of "challenging demand" and "productivity benefits" realized over the last several years.

Overall, the company's sales fell to $297.3 million in the second quarter of 2017, down 8.1 percent from $323.7 million in the same period last year, according to its quarterly earnings report with the SEC.

Profits also fell, sliding to $5.4 million for the second quarter, down 22.1 percent from $7 million in the year-ago period.

The wood flooring segment, meanwhile, reported an operating loss of $2.6 million for the second quarter, down from a gain of $400,000 in the same period in 2016. Sales for the quarter dropped to $109.5 million, down from $129 million a year ago.

Other products, however, did better, the company said, citing luxury vinyl tile, in particular. The company recently paid $36 million for the vinyl tile business of Mannington Mills, and invested in a new Lancaster County plant to make luxury vinyl tiles, or LVT.

"Second quarter 2017 results were disappointing to us and fell short of our expectations, with the main driver soft demand in our legacy categories, primarily residential sheet and wood flooring," said Don Maier, Armstrong Flooring's CEO. "Our LVT sales continued to grow at a double-digit rate, although they did not fully offset the declines in other areas. In response to the challenging results, which we expect to continue through year end, we are taking active steps to transition our company to deliver our medium term financial goals."

In addition to closing two plants, the company said it has competed an organizational realignment designed to save between $6 million and $7 million per year.

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