Annual report pursuant to Section 13 and 15(d)

Nature of Operations

v3.8.0.1
Nature of Operations
12 Months Ended
Dec. 31, 2017
Segment Reporting [Abstract]  
Nature of Operations
NATURE OF OPERATIONS
Resilient Flooring — Our Resilient Flooring segment designs, manufactures, sources and sells a broad range of floor coverings primarily for homes and commercial buildings under various brands, including the Armstrong brand. Manufactured products in this segment include luxury vinyl tile ("LVT"), vinyl sheet, and vinyl tile flooring. In addition, our Resilient Flooring segment sources and sells LVT products, vinyl sheet products, and laminate products, as well as installation and maintenance materials and accessories. Resilient Flooring products are offered in a wide variety of designs, colors and installation options. We sell these products to independent wholesale flooring distributors, large home centers, retailers, flooring contractors and to the manufactured homes industry, and through secured specifications for these products through architects, designers and end-users. When market conditions and available capacity warrant, we also provide products on an original equipment manufacturer (“OEM”) basis to other flooring companies.
Wood Flooring — Our Wood Flooring segment designs, manufactures, sources and sells branded hardwood flooring products, including the Armstrong and Bruce brands, for use in residential construction and renovation, with some commercial applications in stores, restaurants and high-end offices. The product offering includes pre-finished solid and engineered wood floors in various wood species and dimensions, as well as related accessories. Our Wood Flooring products are generally sold to independent wholesale flooring distributors, large home centers, retailers and flooring contractors, and through secured specifications with regional and national builders. When market conditions and available capacity warrant, we may also provide products on an OEM basis to other flooring companies.
The table below presents segment information. Total assets for 2017 and 2016 will differ from the totals on our Consolidated Balance Sheets due to unallocated assets, which primarily consist of cash and deferred income taxes.
 
Resilient Flooring
 
Wood Flooring
 
Total
2017
 
 
 
 
 
Net sales to external customers
$
700.9

 
$
432.8

 
$
1,133.7

Segment operating income (loss)
9.0

 
(56.0
)
 
(47.0
)
Segment assets
547.6

 
286.3

 
833.9

Depreciation and amortization
38.7

 
40.0

 
78.7

Asset impairment

 
12.5

 
12.5

Cash used for purchases of property, plant and equipment
32.5

 
12.3

 
44.8

 
 
 
 
 
 
2016
 
 
 
 
 
Net sales to external customers
$
707.1

 
$
486.1

 
$
1,193.2

Segment operating income
15.1

 
3.8

 
18.9

Segment assets
514.3

 
354.7

 
869.0

Depreciation and amortization
32.5

 
14.1

 
46.6

Cash used for purchases of property, plant and equipment
25.7

 
11.9

 
37.6

 
 
 
 
 
 
2015
 
 
 
 
 
Net sales to external customers
$
713.3

 
$
475.4

 
$
1,188.7

Segment operating income (loss)
11.2

 
(25.2
)
 
(14.0
)
Segment assets
539.5

 
331.1

 
870.6

Depreciation and amortization
26.1

 
12.0

 
38.1

Cash used for purchases of property, plant and equipment
40.8

 
20.8

 
61.6


Segment operating income (loss) is the measure of segment profit reviewed by our Chief Executive Officer who is our Chief Operating Decision Maker. The sum of the segments’ operating (loss) income equals the total combined operating (loss) income as reported on our Consolidated Statements of Operations and Comprehensive Income (Loss). The following reconciles our total operating (loss) income to (loss) income from continuing operations before income taxes, which are only measured and managed on a combined basis:
 
Year Ended December 31,
 
2017
 
2016
 
2015
Operating (loss) income
$
(47.0
)
 
$
18.9

 
$
(14.0
)
Interest expense
2.8

 
1.5

 

Other expense, net
0.2

 
5.8

 
3.6

(Loss) income from continuing operations before income taxes
$
(50.0
)
 
$
11.6

 
$
(17.6
)


Geographic Areas

The sales in the table below are allocated to geographic areas based upon the location of the customer.
 
Year Ended December 31,
 
2017
 
2016
 
2015
Net trade sales
 
 
 
 
 
United States
$
956.4

 
$
1,015.9

 
$
1,017.9

Other
177.3

 
177.3

 
170.8

Total
$
1,133.7

 
$
1,193.2

 
$
1,188.7



The long-lived assets in the table below include property, plant and equipment, net. Long-lived assets by geographic area are reported by location of the operations to which the asset is attributed.
 
December 31, 2017
 
December 31, 2016
United States
$
318.2

 
$
347.4

China
86.9

 
85.6

Other
13.0

 
12.2

Total
$
418.1

 
$
445.2



Information about Major Customers

In 2017, net sales to two customers exceeded 10% of our total net sales. Total revenues from these customers were $128.4 million and $126.0 million in 2017. We monitor the creditworthiness of our customers and generally do not require collateral.