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Armstrong World Industries Reports Second-Quarter 2024 Results

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Armstrong World Industries (NYSE:AWI) reported strong Q2 2024 results, with net sales up 12.2% to $365.1 million and operating income up 9.2% to $95 million. The growth was driven by solid Mineral Fiber average unit value (AUV) improvements and acquisitions in the Architectural Specialties segment. Adjusted EBITDA increased 12.5% to $125 million, while adjusted diluted EPS grew 17.4% to $1.62.

The Mineral Fiber segment saw 6.9% sales growth to $250.2 million, while Architectural Specialties sales jumped 25.7% to $114.9 million. Based on the strong performance, AWI raised its full-year 2024 guidance, now expecting 9-11% net sales growth and 10-13% adjusted EBITDA growth.

Armstrong World Industries (NYSE:AWI) ha riportato risultati solidi per il secondo trimestre del 2024, con vendite nette in aumento del 12,2% a 365,1 milioni di dollari e reddito operativo in crescita del 9,2% a 95 milioni di dollari. Questa crescita è stata sostenuta dai miglioramenti del valore medio unitario (AUV) delle Fibre Minerali e da acquisizioni nel segmento delle Specialità Architettoniche. L'EBITDA rettificato è aumentato del 12,5% a 125 milioni di dollari, mentre l'utile per azione diluito rettificato è cresciuto del 17,4% a 1,62 dollari.

Il segmento delle Fibre Minerali ha registrato una crescita delle vendite del 6,9% a 250,2 milioni di dollari, mentre le vendite delle Specialità Architettoniche sono aumentate del 25,7% a 114,9 milioni di dollari. Sulla base delle forti performance, AWI ha alzato le previsioni per l'intero anno 2024, ora aspettandosi una crescita delle vendite nette tra il 9 e l'11% e una crescita dell'EBITDA rettificato tra il 10 e il 13%.

Armstrong World Industries (NYSE:AWI) reportó resultados sólidos para el segundo trimestre de 2024, con ventas netas que aumentaron un 12,2% a 365,1 millones de dólares y ingresos operativos que crecieron un 9,2% a 95 millones de dólares. Este crecimiento fue impulsado por importantes mejoras en el valor unitario medio (AUV) de las Fibras Minerales y adquisiciones en el segmento de Especialidades Arquitectónicas. El EBITDA ajustado aumentó un 12,5% a 125 millones de dólares, mientras que el EPS diluido ajustado creció un 17,4% a 1,62 dólares.

El segmento de Fibras Minerales experimentó un crecimiento de ventas del 6,9% a 250,2 millones de dólares, mientras que las ventas de Especialidades Arquitectónicas saltaron un 25,7% a 114,9 millones de dólares. Basándose en el sólido rendimiento, AWI elevó su guía para el año completo 2024, ahora esperando un crecimiento de ventas netas del 9 al 11% y un crecimiento del EBITDA ajustado del 10 al 13%.

암스트롱 월드 인더스트리(뉴욕증권거래소:AWI)는 2024년도 2분기 실적을 발표했으며, 순매출이 12.2% 증가하여 3억 6,510만 달러에 달하고 영업이익이 9.2% 증가하여 9,500만 달러에 이르렀습니다. 이러한 성장은 안정적인 미네랄 섬유의 평균 단위 가치(AUV) 향상과 건축 전문 분야에서의 인수합병에 의해 촉진되었습니다. 조정된 EBITDA는 12.5% 증가하여 1억 2,500만 달러에 도달했으며, 조정된 희석 EPS는 17.4% 증가하여 1.62달러로 성장했습니다.

미네랄 섬유 부문은 6.9%의 매출 성장률을 기록하여 2억 5,020만 달러에 이르렀으며, 건축 전문 분야의 매출은 25.7% 증가하여 1억 1,490만 달러에 도달했습니다. 이러한 강력한 성과를 바탕으로 AWI는 2024년 전체 연도 예상치를 상향 조정하였으며, 이제는 9-11%의 순매출 성장과 10-13%의 조정 EBITDA 성장을 예상하고 있습니다.

Armstrong World Industries (NYSE:AWI) a annoncé des résultats solides pour le deuxième trimestre 2024, avec des ventes nettes en hausse de 12,2% à 365,1 millions de dollars et un revenu opérationnel en hausse de 9,2% à 95 millions de dollars. Cette croissance a été soutenue par de solides améliorations de la valeur moyenne unitaire (AUV) des fibres minérales et par des acquisitions dans le secteur des spécialités architecturales. Le résultat d'exploitation ajusté a augmenté de 12,5% à 125 millions de dollars, tandis que le bénéfice par action dilué ajusté a augmenté de 17,4% à 1,62 dollar.

Le segment des fibres minérales a connu une croissance des ventes de 6,9% à 250,2 millions de dollars, tandis que les ventes des spécialités architecturales ont bondi de 25,7% à 114,9 millions de dollars. Sur la base de cette solide performance, AWI a relevé ses prévisions pour l'année entière 2024, s'attendant désormais à une croissance des ventes nettes de 9 à 11% et à une croissance de l'EBITDA ajusté de 10 à 13%.

Armstrong World Industries (NYSE:AWI) hat starke Ergebnisse für das zweite Quartal 2024 veröffentlicht, mit einem Anstieg des Nettoumsatzes um 12,2% auf 365,1 Millionen US-Dollar und einem Anstieg des Betriebsgewinns um 9,2% auf 95 Millionen US-Dollar. Dieses Wachstum wurde durch solide Verbesserungen des durchschnittlichen Stückwerts (AUV) der Mineralfasern und durch Akquisitionen im Bereich Architekturspezialitäten vorangetrieben. Das bereinigte EBITDA stieg um 12,5% auf 125 Millionen US-Dollar, während der bereinigte verwässerte Gewinn pro Aktie um 17,4% auf 1,62 US-Dollar wuchs.

Der Mineralfaserbereich verzeichnete ein Umsatzwachstum von 6,9% auf 250,2 Millionen US-Dollar, während die Umsätze im Bereich Architekturspezialitäten um 25,7% auf 114,9 Millionen US-Dollar sprangen. Basierend auf der starken Leistung hat AWI die Prognose für das Gesamtjahr 2024 angehoben und erwartet nun ein Umsatzwachstum von 9-11% und ein bereinigtes EBITDA-Wachstum von 10-13%.

Positive
  • Net sales increased 12.2% year-over-year to $365.1 million
  • Operating income grew 9.2% to $95 million
  • Adjusted EBITDA rose 12.5% to $125 million
  • Adjusted diluted EPS increased 17.4% to $1.62
  • Mineral Fiber segment sales grew 6.9% to $250.2 million
  • Architectural Specialties segment sales jumped 25.7% to $114.9 million
  • Company raised full-year 2024 guidance
Negative
  • Operating income margin decreased 70 basis points to 26.0%
  • Architectural Specialties operating income margin declined 90 basis points to 12.4%

Insights

Armstrong World Industries' Q2 2024 results demonstrate strong financial performance and positive momentum. The company reported 12.2% year-over-year net sales growth to $365.1 million, driven by higher volumes and favorable Average Unit Value (AUV). Operating income increased 9.2% to $95 million, while adjusted EBITDA grew 12.5% to $125 million.

Key highlights include:

  • Mineral Fiber segment net sales up 6.9% with operating income increasing 8.2%
  • Architectural Specialties segment net sales up 25.7% with operating income rising 16.4%
  • Diluted EPS increased 11.9% to $1.50
  • Adjusted diluted EPS up 17.4% to $1.62

The company's performance was bolstered by strategic acquisitions, including 3form and BOK Modern, which contributed significantly to the Architectural Specialties segment growth. The Mineral Fiber segment benefited from favorable AUV and higher sales volumes.

Armstrong has raised its full-year 2024 guidance, projecting net sales growth of 9% to 11% and adjusted EBITDA growth of 10% to 13%. This upward revision reflects management's confidence in the company's business model and growth initiatives.

From an investor's perspective, Armstrong's ability to deliver consistent top-line growth with robust EBITDA margins is encouraging. The company's focus on operational excellence and market-driven innovation positions it well for continued success in the ceiling and wall solutions market.

Armstrong World Industries' Q2 results offer valuable insights into current market trends and the company's competitive positioning. The 12.2% net sales growth indicates a robust demand for ceiling and wall solutions, particularly in the commercial construction sector.

Several factors contribute to Armstrong's strong performance:

  • Market stabilization: The company notes that market demand is stabilizing, suggesting a potentially favorable environment for sustained growth.
  • Balanced end-markets: Armstrong's exposure to diverse end-markets provides resilience against sector-specific fluctuations.
  • Pricing power: The ability to implement favorable pricing, as evidenced by the AUV improvement, demonstrates the company's strong market position and brand value.
  • Strategic acquisitions: The integration of 3form and BOK Modern has significantly boosted the Architectural Specialties segment, expanding Armstrong's product portfolio and market reach.

The raised full-year guidance implies management's confidence in the company's ability to navigate potential market challenges. However, investors should monitor factors such as raw material costs, labor market dynamics and overall economic conditions that could impact the construction industry.

Armstrong's focus on innovation and operational excellence positions it well to capitalize on emerging trends in sustainable building materials and customized architectural solutions. The company's ability to maintain strong EBITDA margins while pursuing growth initiatives is particularly noteworthy in the current economic environment.

  • Net sales up 12% on solid Mineral Fiber AUV growth and Architectural Specialties' acquisitions
  • Operating income increased 9% and diluted net earnings per share increased 12%
  • Adjusted EBITDA up 13% and adjusted diluted net earnings per share up 17%
  • Raising full-year 2024 guidance

(All comparisons versus the prior year period unless otherwise stated)

LANCASTER, Pa.--(BUSINESS WIRE)-- Armstrong World Industries, Inc. (NYSE:AWI), a leader in the design, innovation and manufacture of ceiling and wall solutions in the Americas, today reported record second-quarter 2024 financial results highlighted by strong sales and earnings growth.

“With double digit net sales growth and record earnings, our second-quarter results further demonstrate the resilience of our business model and the strength of our growth initiatives,” said Vic Grizzle, President and CEO of Armstrong World Industries. “As market demand stabilizes, we also are continuing to see the benefits from our balanced set of end-markets and the consistent operational execution of our teams. With our team’s relentless focus on Mineral Fiber Average Unit Value improvement, market-driven innovation, operational excellence and Architectural Specialties expansion, we expect to continue delivering consistent top-line growth with robust EBITDA margins.”

Second-Quarter Results

(Dollar amounts in millions except per-share data)

 

For the Three Months Ended June 30,

 

 

 

 

 

2024

 

 

2023

 

 

Change

Net sales

 

$

365.1

 

 

$

325.4

 

 

12.2%

Operating income

 

$

95.0

 

 

$

87.0

 

 

9.2%

Operating income margin (Operating income as a % of net sales)

 

 

26.0

%

 

 

26.7

%

 

(70)bps

Net earnings

 

$

65.9

 

 

$

60.2

 

 

9.5%

Diluted net earnings per share

 

$

1.50

 

 

$

1.34

 

 

11.9%

 

 

 

 

 

 

 

 

 

Additional Non-GAAP* Measures

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

125

 

 

$

111

 

 

12.5%

Adjusted EBITDA margin (Adjusted EBITDA as a % of net sales)

 

 

34.3

%

 

 

34.2

%

 

10bps

Adjusted net earnings

 

$

71

 

 

$

62

 

 

14.7%

Adjusted diluted net earnings per share

 

$

1.62

 

 

$

1.38

 

 

17.4%

* The Company uses non-GAAP adjusted measures in managing the business and believes the adjustments provide meaningful comparisons of operating performance between periods and are useful alternative measures of performance. Reconciliations of the most comparable generally accepted accounting principles in the United States ("GAAP") measure are found in the tables at the end of this press release. Excluding per share data, non-GAAP figures are rounded to the nearest million and corresponding percentages are rounded to the nearest decimal.

Second-quarter 2024 consolidated net sales increased 12.2% from prior-year results, driven by higher volumes of $27 million and favorable Average Unit Value (dollars per unit sold, or "AUV") of $13 million. Architectural Specialties net sales increased $24 million and Mineral Fiber net sales increased $16 million. Architectural Specialties segment net sales improved primarily from a $20 million contribution from our April 2024 acquisition of 3form, LLC ("3form") and our October 2023 acquisition of BOK Modern, LLC ("BOK"). The increase in Mineral Fiber net sales was primarily driven by favorable AUV and, to a lesser extent, higher sales volumes.

Consolidated operating income increased 9.2% in the second quarter of 2024 primarily due a $17 million margin benefit from higher sales volumes and a $9 million benefit from favorable AUV. These benefits were partially offset by an $18 million increase in selling, general and administrative (“SG&A”) expenses due to the impact of acquisitions and an increase in Mineral Fiber SG&A expenses.

Second-Quarter Segment Results
Mineral Fiber

(Dollar amounts in millions)

 

For the Three Months Ended June 30,

 

 

 

 

 

2024

 

 

2023

 

 

Change

Net sales

 

$

250.2

 

 

$

234.0

 

 

6.9%

Operating income

 

$

81.7

 

 

$

75.5

 

 

8.2%

Adjusted EBITDA*

 

$

104

 

 

$

95

 

 

10.4%

Operating income margin

 

 

32.7

%

 

 

32.3

%

 

40bps

Adjusted EBITDA margin*

 

 

41.7

%

 

 

40.4

%

 

130bps

Mineral Fiber net sales increased 6.9% in the second quarter of 2024 due to $13 million of favorable AUV and $3 million of higher sales volumes. The improvement in AUV was driven primarily by favorable like-for-like price, with a modest contribution from favorable mix. The second quarter increase in volumes was primarily driven by stabilizing demand and the benefit from growth initiatives compared to the prior-year period.

Mineral Fiber operating income increased in the second quarter of 2024 primarily due to a $9 million benefit from favorable AUV, a $3 million decrease in manufacturing and input costs, a $2 million increase from higher sales volumes and a $2 million increase in WAVE equity earnings. These benefits were partially offset by a $9 million increase in SG&A expenses, driven primarily by $3 million of higher incentive compensation, an increase in employee costs due to inflationary pressures, accruals for environmental remediation matters and higher depreciation and amortization.

Architectural Specialties

(Dollar amounts in millions)

 

For the Three Months Ended June 30,

 

 

 

 

 

2024

 

 

2023

 

 

Change

Net sales

 

$

114.9

 

 

$

91.4

 

 

25.7%

Operating income

 

$

14.2

 

 

$

12.2

 

 

16.4%

Adjusted EBITDA*

 

$

21

 

 

$

17

 

 

25.1%

Operating income margin

 

 

12.4

%

 

 

13.3

%

 

(90)bps

Adjusted EBITDA margin*

 

 

18.4

%

 

 

18.5

%

 

(10)bps

Second-quarter 2024 Architectural Specialties net sales increased 25.7% from prior-year results, driven primarily by a $20 million contribution 3form and BOK, and to a lesser extent, increased custom project net sales.

Architectural Specialties operating income increased in the second quarter of 2024 primarily due to a $14 million margin benefit from increased sales, driven primarily by the acquisitions of 3form and BOK, and partially due to improved project margins. This increase was partially offset by an $9 million increase in SG&A expenses, primarily due to the acquisitions of 3form and BOK as well as a $3 million increase in manufacturing costs. The decline in segment operating income margin was solely driven by the acquisitions of 3form and BOK.

Unallocated Corporate

Unallocated Corporate operating loss was $1 million in the second quarter of 2024 and 2023.

Cash Flow

Year to date cash flows from operating activities in 2024 decreased $10 million in comparison to the prior-year period, while cash flows from investing activities decreased $75 million versus the prior-year period. The change in operating cash flows was driven by higher cash earnings offset by unfavorable working capital changes, most notably timing-related changes in receivables, and an increase in cash paid for income taxes. The decrease in investing cash flows was primarily due to the acquisition of 3form, partially offset by lower purchases of property, plant and equipment.

Share Repurchase Program

During the second quarter of 2024, we repurchased 0.1 million shares of common stock for a total cost of $10 million, excluding the cost of commissions and taxes. As of June 30, 2024, there was $692 million remaining under the Board of Directors' current authorized share repurchase program**.

** In July 2016, our Board of Directors approved a share repurchase program authorizing us to repurchase up to $150 million of our outstanding common stock through July 2018 (the “Program”). Pursuant to additional authorization and extensions of the Program approved by our Board of Directors, including $500 million authorized on July 18, 2023, we are authorized to purchase up to $1,700 million of our outstanding shares of common stock through December 2026. Since inception and through June 30, 2024, we have repurchased 14.4 million shares under the Program for a total cost of $1,008 million, excluding commissions and taxes.

Updating 2024 Outlook

“Given our solid second quarter performance and improved line of sight for the full year, we are increasing our guidance for all key metrics,” said Chris Calzaretta, AWI Senior Vice President and CFO. “We now expect operating conditions in the second half of the year to be similar to the first half. With this backdrop, we expect to expand Adjusted EBITDA margin at the total company level and we will continue our disciplined deployment of capital to create value for shareholders.”

 

 

 

For the Year Ended December 31, 2024

(Dollar amounts in millions except per-share data)

2023 Actual

 

Current Guidance

 

VPY Growth %

Net sales

$

1,295

 

$

1,415

 

to

$

1,440

 

9%

to

11%

Adjusted EBITDA*

$

430

 

$

474

 

to

$

486

 

10%

to

13%

Adjusted diluted net earnings per share*

$

5.32

 

$

6.00

 

to

$

6.15

 

13%

to

16%

Adjusted free cash flow*

$

263

 

$

288

 

to

$

300

 

10%

to

14%

Earnings Webcast

Management will host a live webcast conference call at 10:00 a.m. ET today, to discuss second-quarter 2024 results. This event will be available on the Company's website. The call and accompanying slide presentation can be found on the investor relations section of the Company's website at www.armstrongworldindustries.com. The replay of this event will be available on the website for up to one year after the date of the call.

Uncertainties Affecting Forward-Looking Statements

Disclosures in this release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, those relating to future financial and operational results, expected savings from cost management initiatives, the performance of our WAVE joint venture, market and broader economic conditions and guidance. Those statements provide our future expectations or forecasts and can be identified by our use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “outlook,” “target,” “predict,” “may,” “will,” “would,” “could,” “should,” “seek,” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. This includes annual guidance. Forward-looking statements, by their nature, address matters that are uncertain and involve risks because they relate to events and depend on circumstances that may or may not occur in the future. As a result, our actual results may differ materially from our expected results and from those expressed in our forward-looking statements. A more detailed discussion of the risks and uncertainties that could cause our actual results to differ materially from those projected, anticipated or implied is included in the “Risk Factors” and “Management’s Discussion and Analysis” sections of our reports on Form 10-K and Form 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”), including our quarterly report for the quarter ended June 30, 2024, that the Company expects to file today. Forward-looking statements speak only as of the date they are made. We undertake no obligation to update any forward-looking statements beyond what is required under applicable securities law.

About Armstrong and Additional Information

Armstrong World Industries, Inc. is a leader in the design, innovation and manufacture of innovative ceiling and wall system solutions in the Americas. With $1.3 billion in revenue in 2023, AWI has approximately 3,500 employees and a manufacturing network of 19 facilities, plus seven facilities dedicated to its WAVE joint venture. For over 160 years, Armstrong has delivered products and services to our customers that can transform how people design, build and experience spaces with aesthetics, acoustics, wellbeing and sustainability in mind.

More details on the Company’s performance can be found in its report on Form 10-Q for the quarter ended June 30, 2024, that the Company expects to file with the SEC today.

Reported Financial Results
(Amounts in millions, except per share data)

SELECTED FINANCIAL RESULTS
Armstrong World Industries, Inc. and Subsidiaries
(Unaudited)

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net sales

 

$

365.1

 

 

$

325.4

 

 

$

691.4

 

 

$

635.6

 

Cost of goods sold

 

 

215.8

 

 

 

201.4

 

 

 

417.8

 

 

 

399.5

 

Gross profit

 

 

149.3

 

 

 

124.0

 

 

 

273.6

 

 

 

236.1

 

Selling, general and administrative expenses

 

 

79.9

 

 

 

61.9

 

 

 

145.6

 

 

 

124.6

 

Loss related to change in fair value of contingent consideration

 

 

0.7

 

 

 

-

 

 

 

0.4

 

 

 

-

 

Equity (earnings) from unconsolidated affiliates, net

 

 

(26.3

)

 

 

(24.9

)

 

 

(53.5

)

 

 

(45.7

)

Operating income

 

 

95.0

 

 

 

87.0

 

 

 

181.1

 

 

 

157.2

 

Interest expense

 

 

11.1

 

 

 

9.2

 

 

 

20.1

 

 

 

17.9

 

Other non-operating (income), net

 

 

(3.2

)

 

 

(2.2

)

 

 

(6.3

)

 

 

(4.6

)

Earnings before income taxes

 

 

87.1

 

 

 

80.0

 

 

 

167.3

 

 

 

143.9

 

Income tax expense

 

 

21.2

 

 

 

19.8

 

 

 

41.5

 

 

 

36.4

 

Net earnings

 

$

65.9

 

 

 

60.2

 

 

$

125.8

 

 

$

107.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net earnings per share of common stock

 

$

1.50

 

 

$

1.34

 

 

$

2.86

 

 

$

2.38

 

Average number of diluted common shares outstanding

 

 

44.0

 

 

 

45.0

 

 

 

44.0

 

 

 

45.2

 

SEGMENT RESULTS
Armstrong World Industries, Inc. and Subsidiaries
(Unaudited)

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net Sales

 

 

 

 

 

 

 

 

 

 

 

 

Mineral Fiber

 

$

250.2

 

 

$

234.0

 

 

$

489.8

 

 

$

462.4

 

Architectural Specialties

 

 

114.9

 

 

 

91.4

 

 

 

201.6

 

 

 

173.2

 

Total net sales

 

$

365.1

 

 

$

325.4

 

 

$

691.4

 

 

$

635.6

 

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Segment operating income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

Mineral Fiber

 

$

81.7

 

 

$

75.5

 

 

$

160.9

 

 

$

139.3

 

Architectural Specialties

 

 

14.2

 

 

 

12.2

 

 

 

21.9

 

 

 

19.4

 

Unallocated Corporate

 

 

(0.9

)

 

 

(0.7

)

 

 

(1.7

)

 

 

(1.5

)

Total consolidated operating income

 

$

95.0

 

 

$

87.0

 

 

$

181.1

 

 

$

157.2

 

SELECTED BALANCE SHEET INFORMATION
Armstrong World Industries, Inc. and Subsidiaries

 

 

Unaudited

 

 

 

 

 

June 30, 2024

 

 

December 31, 2023

Assets

 

 

 

 

 

Current assets

 

$

351.2

 

 

$

313.0

Property, plant and equipment, net

 

 

599.3

 

 

 

566.4

Other non-current assets

 

 

869.7

 

 

 

793.0

Total assets

 

$

1,820.2

 

 

$

1,672.4

Liabilities and shareholders’ equity

 

 

 

 

 

Current liabilities

 

$

200.0

 

 

$

194.5

Non-current liabilities

 

 

951.2

 

 

 

886.1

Shareholders' equity

 

 

669.0

 

 

 

591.8

Total liabilities and shareholders’ equity

 

$

1,820.2

 

 

$

1,672.4

SELECTED CASH FLOW INFORMATION
Armstrong World Industries, Inc. and Subsidiaries
(Unaudited)

 

 

For the Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

Net earnings

 

$

125.8

 

 

$

107.5

 

Other adjustments to reconcile net earnings to net cash provided by operating activities

 

 

3.6

 

 

 

(0.8

)

Changes in operating assets and liabilities, net

 

 

(45.7

)

 

 

(12.8

)

Net cash provided by operating activities

 

 

83.7

 

 

 

93.9

 

Net cash (used for) investing activities

 

 

(81.4

)

 

 

(6.0

)

Net cash provided by (used for) financing activities

 

 

1.1

 

 

 

(92.6

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(0.6

)

 

 

0.3

 

Net increase (decrease) in cash and cash equivalents

 

 

2.8

 

 

 

(4.4

)

Cash and cash equivalents at beginning of year

 

 

70.8

 

 

 

106.0

 

Cash and cash equivalents at end of period

 

$

73.6

 

 

$

101.6

 

Supplemental Reconciliations of GAAP to non-GAAP Results (unaudited)
(Amounts in millions, except per share data)

To supplement its consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company provides additional measures of performance adjusted to exclude the impact of certain discrete expenses and income including adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), adjusted diluted earnings per share ("EPS") and adjusted free cash flow. Investors should not consider non-GAAP measures as a substitute for GAAP measures. The Company excludes certain acquisition related expenses (i.e. – impact of adjustments related to the fair value of inventory, contingent third-party professional fees, changes in the fair value of contingent consideration and deferred compensation accruals for acquisitions). The deferred compensation accruals were for cash and stock awards that are recorded over each award's respective vesting period, as such payments were subject to the sellers’ and employees’ continued employment with the Company. The Company also excludes all acquisition-related intangible amortization from adjusted net earnings and in calculations of adjusted diluted EPS. Examples of other excluded items have included plant closures, restructuring charges and related costs, impairments, separation costs and other cost reduction initiatives, environmental site expenses and environmental insurance recoveries, endowment level charitable contributions, the impact of defined benefit plan settlements, and certain other gains and losses. The Company also excludes income/expense from its U.S. Retirement Income Plan (“RIP”) in the non-GAAP results as it represents the actuarial net periodic benefit credit/cost recorded. For all periods presented, the Company was not required and did not make cash contributions to the RIP based on guidelines established by the Pension Benefit Guaranty Corporation, nor does the Company expect to make cash contributions to the plan in 2024. Adjusted free cash flow is defined as cash from operating and investing activities, adjusted to remove the impact of cash used or proceeds received for acquisitions and divestitures, environmental site expenses and environmental insurance recoveries. Management's adjusted free cash flow measure includes returns of investment from WAVE and cash proceeds received from the settlement of company-owned life insurance policies, which are presented within investing activities on our condensed consolidated statement of cash flows. The Company uses these adjusted performance measures in managing the business, including communications with its Board of Directors and employees, and believes that they provide users of this financial information with meaningful comparisons of operating performance between current results and results in prior periods. The Company believes that these non-GAAP financial measures are appropriate to enhance understanding of its past performance, as well as prospects for its future performance. The Company also uses adjusted EBITDA and adjusted free cash flow (with further adjustments, when necessary) as factors in determining at-risk compensation for senior management. These non-GAAP measures may not be defined and calculated the same as similar measures used by other companies. Non-GAAP financial measures utilized by the Company may not be comparable to non-GAAP financial measures used by other companies. A reconciliation of these adjustments to the most directly comparable GAAP measures is included in this release and on the Company’s website. These non-GAAP measures should not be considered in isolation or as a substitute for the most comparable GAAP measures.

In the following charts, numbers may not sum due to rounding. Excluding adjusted diluted EPS, non-GAAP figures are rounded to the nearest million and corresponding percentages are rounded to the nearest percent based on unrounded figures.

Consolidated Results – Adjusted EBITDA

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net sales

 

$

365

 

 

$

325

 

 

$

691

 

 

$

636

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

66

 

 

$

60

 

 

$

126

 

 

$

108

 

Add: Income tax expense

 

 

21

 

 

 

20

 

 

 

42

 

 

 

36

 

Earnings before income taxes

 

$

87

 

 

$

80

 

 

$

167

 

 

$

144

 

Add: Interest/other income and expense, net

 

 

8

 

 

 

7

 

 

 

14

 

 

 

13

 

Operating income

 

$

95

 

 

$

87

 

 

$

181

 

 

$

157

 

Add: RIP expense (1)

 

 

1

 

 

 

1

 

 

 

1

 

 

 

1

 

Add: Acquisition-related impacts (2)

 

 

2

 

 

 

1

 

 

 

2

 

 

 

3

 

Add: Cost reduction initiatives

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3

 

Add: WAVE pension settlement (3)

 

 

1

 

 

 

-

 

 

 

1

 

 

 

-

 

Add: Environmental expense

 

 

1

 

 

 

-

 

 

 

1

 

 

 

-

 

Adjusted operating income

 

$

100

 

 

$

89

 

 

$

186

 

 

$

164

 

Add: Depreciation and amortization

 

 

25

 

 

 

22

 

 

 

50

 

 

 

43

 

Adjusted EBITDA

 

$

125

 

 

$

111

 

 

$

236

 

 

$

207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income margin

 

 

26.0

%

 

 

26.7

%

 

 

26.2

%

 

 

24.7

%

Adjusted EBITDA margin

 

 

34.3

%

 

 

34.2

%

 

 

34.1

%

 

 

32.6

%

(1)

RIP expense represents only the plan service cost that is recorded within Operating income. For all periods presented, we were not required to and did not make cash contributions to our RIP.

(2)

Represents the impact of acquisition-related adjustments for the fair value of inventory, contingent third-party professional fees, changes in fair value of contingent consideration, deferred compensation and restricted stock expenses.

(3)

Represents the Company's 50% share of WAVE's non-cash accounting loss upon settlement of their defined benefit pension plan.

Mineral Fiber

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net sales

 

$

250

 

 

$

234

 

 

$

490

 

 

$

462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

82

 

 

$

76

 

 

$

161

 

 

$

139

 

Add: Acquisition-related impacts (1)

 

 

1

 

 

 

-

 

 

 

-

 

 

 

-

 

Add: Cost reduction initiatives

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3

 

Add: WAVE pension settlement (2)

 

 

1

 

 

 

-

 

 

 

1

 

 

 

-

 

Add: Environmental expense

 

 

1

 

 

 

-

 

 

 

1

 

 

 

-

 

Adjusted operating income

 

$

85

 

 

$

76

 

 

$

164

 

 

$

142

 

Add: Depreciation and amortization

 

 

20

 

 

 

19

 

 

 

40

 

 

 

37

 

Adjusted EBITDA

 

$

104

 

 

$

95

 

 

$

203

 

 

$

179

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income margin

 

 

32.7

%

 

 

32.3

%

 

 

32.9

%

 

 

30.1

%

Adjusted EBITDA margin

 

 

41.7

%

 

 

40.4

%

 

 

41.5

%

 

 

38.6

%

(1)

Represents the impact of acquisition-related adjustments for changes in fair value of contingent consideration.

(2)

Represents the Company's 50% share of WAVE's non-cash accounting loss upon settlement of their defined benefit pension plan.

Architectural Specialties

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net sales

 

$

115

 

 

$

91

 

 

$

202

 

 

$

173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

14

 

 

$

12

 

 

$

22

 

 

$

19

 

Add: Acquisition-related impacts (1)

 

 

1

 

 

 

1

 

 

 

1

 

 

 

3

 

Adjusted operating income

 

$

15

 

 

$

14

 

 

$

23

 

 

$

22

 

Add: Depreciation and amortization

 

 

6

 

 

 

3

 

 

 

10

 

 

 

6

 

Adjusted EBITDA

 

$

21

 

 

$

17

 

 

$

33

 

 

$

29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income margin

 

 

12.4

%

 

 

13.3

%

 

 

10.9

%

 

 

11.2

%

Adjusted EBITDA margin

 

 

18.4

%

 

 

18.5

%

 

 

16.5

%

 

 

16.5

%

(1)

Represents the impact of acquisition-related adjustments for the fair value of inventory, contingent third-party professional fees, changes in fair value of contingent consideration, deferred compensation and restricted stock expenses.

Unallocated Corporate

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Operating (loss)

 

$

(1

)

 

$

(1

)

 

$

(2

)

 

$

(2

)

Add: RIP expense (1)

 

 

1

 

 

 

1

 

 

 

1

 

 

 

1

 

Adjusted operating (loss)

 

$

-

 

 

$

-

 

 

$

(1

)

 

$

-

 

Add: Depreciation and amortization

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Adjusted EBITDA

 

$

-

 

 

$

-

 

 

$

-

 

 

$

-

 

(1)

RIP expense represents only the plan service cost that is recorded within Operating income. For all periods presented, we were not required to and did not make cash contributions to our RIP.

Consolidated Results – Adjusted Free Cash Flow

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Net cash provided by operating activities

 

$

57

 

 

$

68

 

 

$

84

 

 

$

94

 

Net cash (used for) investing activities

 

 

(87

)

 

 

(5

)

 

 

(81

)

 

 

(6

)

Net cash (used for) provided by operating and investing activities

 

$

(30

)

 

$

63

 

 

$

2

 

 

$

88

 

Add: Cash paid for acquisitions, net of cash acquired and investment in unconsolidated affiliate

 

 

94

 

 

 

10

 

 

 

99

 

 

 

10

 

Add: Arktura deferred compensation (1)

 

 

-

 

 

 

-

 

 

 

6

 

 

 

-

 

Add: Contingent consideration in excess of acquisition-date fair value (1)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5

 

(Less): Proceeds from sale of facility (2)

 

 

(2

)

 

 

-

 

 

 

(2

)

 

 

-

 

Adjusted Free Cash Flow

 

$

62

 

 

$

73

 

 

$

105

 

 

$

103

 

(1)

Deferred compensation and contingent consideration payments related to 2020 acquisitions and were recorded as components of net cash provided by operating activities.

(2)

Proceeds related to the sale of Architectural Specialties design center.

Consolidated Results – Adjusted Diluted Earnings Per Share (EPS)

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

2024

 

2023

 

 

2024

 

2023

 

 

Total

 

Per
Diluted
Share

 

Total

 

Per
Diluted
Share

 

 

Total

 

Per
Diluted
Share

 

Total

 

Per
Diluted
Share

 

Net earnings

$

66

 

$

1.50

 

$

60

 

$

1.34

 

 

$

126

 

$

2.86

 

$

108

 

$

2.38

 

Add: Income tax expense

 

21

 

 

 

 

20

 

 

 

 

 

42

 

 

 

 

36

 

 

 

Earnings before income taxes

$

87

 

 

 

$

80

 

 

 

 

$

167

 

 

 

$

144

 

 

 

(Less): RIP (credit) (1)

 

-

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

(1

)

 

 

Add: Acquisition-related impacts (2)

 

2

 

 

 

 

1

 

 

 

 

 

2

 

 

 

 

3

 

 

 

Add: Acquisition-related amortization (3)

 

3

 

 

 

 

1

 

 

 

 

 

5

 

 

 

 

3

 

 

 

Add: Cost reduction initiatives

 

-

 

 

 

 

-

 

 

 

 

 

-

 

 

 

 

3

 

 

 

Add: WAVE pension settlement (4)

 

1

 

 

 

 

-

 

 

 

 

 

1

 

 

 

 

-

 

 

 

Add: Environmental expense

 

1

 

 

 

 

-

 

 

 

 

 

1

 

 

 

 

-

 

 

 

Adjusted net earnings before income taxes

$

94

 

 

 

$

83

 

 

 

 

$

176

 

 

 

$

151

 

 

 

(Less): Adjusted income tax expense (5)

 

(23

)

 

 

 

(20

)

 

 

 

 

(44

)

 

 

 

(38

)

 

 

Adjusted net earnings

$

71

 

$

1.62

 

$

62

 

$

1.38

 

 

$

132

 

$

3.00

 

$

113

 

$

2.50

 

Adjusted diluted EPS change versus prior year

 

 

17.4%

 

 

 

 

 

 

 

 

20.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted shares outstanding

 

 

 

44.0

 

 

 

 

45.0

 

 

 

 

 

44.0

 

 

 

 

45.2

 

Effective tax rate

 

 

24%

 

 

 

25%

 

 

 

 

25%

 

 

 

25%

 

(1)

RIP (credit) represents the entire actuarial net periodic pension (credit) recorded as a component of net earnings. For all periods presented, we were not required to and did not make cash contributions to our RIP.

(2)

Represents the impact of acquisition-related adjustments for the fair value of inventory, contingent third-party professional fees, changes in fair value of contingent consideration, deferred compensation and restricted stock expenses.

(3)

Represents acquisition-related intangible amortization, including customer relationships, developed technology, software, trademarks and brand names, non-compete agreements and other intangibles.

(4)

Represents the Company's 50% share of WAVE's non-cash accounting loss upon settlement of their defined benefit pension plan.

(5)

Adjusted income tax expense is calculated using the effective tax rate multiplied by the adjusted net earnings before income taxes.

Adjusted EBITDA Guidance

 

 

For the Year Ending December 31, 2024

 

 

 

Low

 

 

High

 

Net earnings

 

$

254

 

to

$

257

 

Add: Income tax expense

 

 

85

 

 

 

87

 

Earnings before income taxes

 

$

339

 

to

$

344

 

Add: Interest expense

 

 

40

 

 

 

42

 

Add: Other non-operating (income), net

 

 

(12

)

 

 

(11

)

Operating income

 

$

367

 

to

$

375

 

Add: RIP expense (1)

 

 

2

 

 

 

2

 

Add: Acquisition-related impacts (2)

 

 

2

 

 

 

2

 

Add: Environmental expense

 

 

1

 

 

 

1

 

Add: WAVE pension settlement (3)

 

 

1

 

 

 

1

 

Adjusted operating income

 

$

374

 

to

$

380

 

Add: Depreciation and amortization

 

 

100

 

 

 

106

 

Adjusted EBITDA

 

$

474

 

to

$

486

 

(1)

RIP expense represents only the plan service cost that is recorded within Operating income. We do not expect to make cash contributions to our RIP.

(2)

Represents the impact of acquisition-related adjustments for the fair value of inventory, contingent third-party professional fees and changes in fair value of contingent consideration.

(3)

Represents the Company's 50% share of WAVE's non-cash accounting loss upon settlement of their defined benefit pension plan.

Adjusted Diluted Net Earnings Per Share Guidance

 

 

For the Year Ending December 31, 2024

 

 

 

Low

 

 

Per Diluted
Share(1)

 

 

High

 

 

Per Diluted
Share(1)

 

Net earnings

 

$

254

 

 

$

5.76

 

to

$

257

 

 

$

5.87

 

Add: Income tax expense

 

 

85

 

 

 

 

 

 

87

 

 

 

 

Earnings before income taxes

 

$

339

 

 

 

 

to

$

344

 

 

 

 

Add: RIP (credit) (2)

 

 

(2

)

 

 

 

 

 

(1

)

 

 

 

Add: Acquisition-related amortization (3)

 

 

11

 

 

 

 

 

 

12

 

 

 

 

Add: Acquisition-related impacts (4)

 

 

2

 

 

 

 

 

 

2

 

 

 

 

Add: Environmental expense

 

 

1

 

 

 

 

 

 

1

 

 

 

 

Add: WAVE pension settlement (5)

 

 

1

 

 

 

 

 

 

1

 

 

 

 

Adjusted earnings before income taxes

 

$

352

 

 

 

 

to

$

358

 

 

 

 

(Less): Adjusted income tax expense (6)

 

 

(88

)

 

 

 

 

 

(89

)

 

 

 

Adjusted net earnings

 

$

264

 

 

$

6.00

 

to

$

269

 

 

$

6.15

 

(1)

Adjusted diluted EPS guidance for 2024 is calculated based on approximately 44 million of diluted shares outstanding.

(2)

RIP (credit) represents the entire actuarial net periodic pension (credit) recorded as a component of net earnings. We do not expect to make any cash contributions to our RIP.

(3)

Represents acquisition-related intangible amortization, including customer relationships, developed technology, software, trademarks and brand names, non-compete agreements and other intangibles.

(4)

Represents the impact of acquisition-related adjustments for the fair value of inventory, contingent third party professional fees and changes in fair value of contingent consideration.

(5)

Represents the Company's 50% share of WAVE's non-cash accounting loss upon settlement of their defined benefit pension plan.

(6)

Income tax expense is based on an adjusted effective tax rate of approximately 25%, multiplied by adjusted earnings before income taxes.

Adjusted Free Cash Flow Guidance

 

 

For the Year Ending December 31, 2024

 

 

 

Low

 

 

High

 

Net cash provided by operating activities

 

$

171

 

to

$

183

 

Add: Return of investment from joint venture

 

 

94

 

 

 

104

 

Add: Cash paid for acquisitions, net of cash acquired and investment in unconsolidated affiliate

 

 

99

 

 

 

99

 

Add: Arktura deferred compensation (1)

 

 

6

 

 

 

6

 

(Less): Proceeds from sale of facility (2)

 

 

(2

)

 

 

(2

)

Adjusted net cash provided by operating activities

 

$

368

 

to

$

390

 

Less: Capital expenditures

 

 

(80

)

 

 

(90

)

Adjusted Free Cash Flow

 

$

288

 

to

$

300

 

(1)

Deferred compensation payments related to 2020 acquisition recorded as a component of net cash provided by operating activities.

(2)

Proceeds related to the sale of Architectural Specialties design center.

 

Investors & Media: Theresa Womble, tlwomble@armstrongceilings.com or (717) 396-6354

Source: Armstrong World Industries, Inc.

FAQ

What were Armstrong World Industries' (AWI) key financial results for Q2 2024?

AWI reported net sales of $365.1 million (up 12.2%), operating income of $95 million (up 9.2%), and adjusted diluted EPS of $1.62 (up 17.4%) for Q2 2024.

How did Armstrong World Industries' (AWI) Mineral Fiber segment perform in Q2 2024?

AWI's Mineral Fiber segment saw net sales increase 6.9% to $250.2 million, with operating income up 8.2% to $81.7 million in Q2 2024.

What drove the growth in Armstrong World Industries' (AWI) Architectural Specialties segment in Q2 2024?

AWI's Architectural Specialties segment growth was primarily driven by a $20 million contribution from the acquisitions of 3form and BOK Modern, resulting in a 25.7% increase in net sales to $114.9 million.

Has Armstrong World Industries (AWI) updated its guidance for 2024?

Yes, AWI raised its full-year 2024 guidance, now expecting net sales growth of 9-11% and adjusted EBITDA growth of 10-13%.

Armstrong World Industries, Inc.

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