March 3, 2020
Bernstein Liebhard LLP announced today that the court appointed the Firm as lead counsel in a securities class action lawsuit pending in the United States District Court for the Central District of California on behalf of those who purchased the securities of Armstrong Flooring, Inc. (“Armstrong Flooring” or the “Company”) (NYSE: AFI) between March 6, 2018 and November 4, 2019, inclusive (the “Class Period”).
The initial complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company had engaged in channel stuffing to artificially boost sales; (2) that the Company’s internal control over inventory levels was not effective; and (3) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
On May 3, 2019, Armstrong Flooring’s Chief Executive Officer abruptly resigned.
On this news, the Company’s stock price fell $1.75, nearly 12%, to close at $13.14 per share on May 3, 2019 on unusually heavy trading volume.
Then, on November 5, 2019, before the market opened, Armstrong Flooring reported $165.6 million net sales for third quarter 2019, a nearly 21% decline year-over-year, and a net loss of $31.4 million. The Company also cut its full year 2019 guidance for adjusted EBITDA to a range of $20 million to $25 million, from prior guidance range of $46 million to $54 million, citing “larger distributor movements on inventory” than anticipated.
On this news, the Company’s stock price fell $2.90 per share, or nearly 44%, to close at $3.70 per share on November 5, 2019, thereby injuring investors further.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for twelve consecutive years.
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Laurence J. Hasson
Bernstein Liebhard LLP