Armstrong Flooring Stock Tumbles as Warns Bankruptcy Likely

Armstrong Flooring Inc. stock tumbled more than 50% in premarket trading Monday after the company warned it has yet to reach a deal to sell itself and the company will likely seek bankruptcy protection.

The Lancaster, Pa.-based company said it has amended some of its credit agreements while engaging with interested third parties to potentially sell itself. The company said it has received expressions of interest and has until May 8 to enter into a deal.

However, Armstrong said it appears unlikely that any interested party will be in a position to enter into a deal by then. As a result, it's likely the company will file for chapter 11 bankruptcy protections, it said.

The company warned in November that worsening supply chain disruptions, as well as inflationary pressures expected to continue into 2022 on transportation, labor and raw materials, would likely put it out of compliance with certain covenants in its credit agreements. At the time, the company warned about significant doubts about whether it could continue as a going concern longer-term.

On Dec. 31, it said it retained Houlihan Lokey Capital Inc. to help sell the company.

Shares of the company tumbled 54% in premarket trading Monday to 75 cents a share.