Armstrong Flooring, Inc. Class Action Lawsuit
- Company Name
- Armstrong Flooring, Inc.
- Stock Symbol
- Class Period
- March 6, 2018 to November 4, 2019
- Central District of California
On November 15, 2019, the Armstrong Flooring, Inc. class action lawsuit was filed charging Armstrong Flooring and certain of its current and former officers with violations of the Securities Exchange Act of 1934. The Armstrong Flooring class action lawsuit was commenced in the Central District of California on behalf of purchasers of Armstrong Flooring securities between March 6, 2018 and November 4, 2019 (the “Class Period”) and is captioned Chupa v. Armstrong Flooring, Inc., No. 19-cv-09840.
Armstrong Flooring manufactures and sells flooring products primarily used in the construction and renovation of commercial, residential, and institutional buildings.
The Armstrong Flooring securities class action lawsuit alleges that throughout the Class Period, defendants failed to disclose that Armstrong Flooring’s internal control over inventory levels was not effective and that Armstrong Flooring had engaged in channel stuffing to artificially boost sales. As a result of this information being withheld from the market, Armstrong Flooring securities traded at artificially inflated prices during the Class Period, with Armstrong Flooring’s stock price reaching a high of more than $20 per share.
On May 3, 2019, Armstrong Flooring announced that, “pursuant to a mutual agreement between Armstrong Flooring and Donald R. Maier [Armstrong Flooring’s CEO], Maier’s employment with Armstrong Flooring [had] ceased and he [had] resigned as a member of the Board of Directors.” On this news, Armstrong Flooring’s stock price fell nearly 12%.
Then, on November 5, 2019, before the market opened, Armstrong Flooring reported $165.6 million in net sales for the third quarter of 2019, a nearly 21% decline year over year, and a net loss of $31.4 million. Armstrong Flooring also cut its full year 2019 guidance for adjusted EBITDA to a range of $20 million to $25 million from its prior guidance range of $46 million to $54 million, citing “larger distributor movements on inventory” than anticipated. On this news, Armstrong Flooring’s stock price fell nearly 44%.
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