Armstrong World Industries, Inc.
) has announced the completion of a $1.275 billion new Senior
Secured Credit Facility. The credit facility includes a $575
million term loan A, a $450 million term loan B and a revolving
credit facility of $250 million. Under the credit facility, both
the $250 million revolving credit facility and term loan A will
mature in Mar 2018 while term loan B will mature in Mar 2020.
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The proceeds from this new credit facility are intended to be
used to repay the previous credit agreement of Armstrong.
The credit facility was led by Merrill Lynch, a division of
Bank of America
). Armstrong anticipates that the agreement will reduce the
annual interest cost by approximately $8 million. In addition,
most of the credit facility fees, which are estimated to be $8
million, will be amortized over the life of the facility.
Armstrong, in Feb 2013, posted fourth-quarter 2012 earnings of 15
cents per share, a 6.3% drop from the prior-year quarter's
earnings of 16 cents per share. The company's earnings were
impacted by a higher effective tax rate. Revenues in the reported
quarter decreased 1.6% year over year to $612.8 million due to a
decline in volume and unfavorable mix.
Armstrong's volumes are expected to remain affected as global
markets continue to struggle, particularly Europe. Furthermore,
the outlook for residential repair and remodel activity also
remains weak as customers remain cautious regarding their
Pa.-based Armstrong is a leading global producer of flooring
products and ceiling systems for use in the construction and
renovation of residential, commercial and institutional
buildings. Armstrong also designs, manufacturesand sells kitchen
and bathroom cabinets in the U.S.
Armstrong currently retains a short-term Zacks Rank #4 (Sell).