- Net sales up 5% with mid-single digit growth in both Mineral
Fiber and Architectural Specialties segments versus the prior-year
period
- Operating income increased 23% and diluted net earnings per
share increased 31% versus the prior-year period
- Adjusted EBITDA up 16% and adjusted diluted net earnings per
share up 23% versus the prior-year period
- Recently announced acquisition of 3form, LLC to expand
Architectural Specialties portfolio
- Raising full-year 2024 guidance
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 first-quarter 2024 financial
results highlighted by solid sales growth and strong operational
performance driving operating income and adjusted EBITDA margin
expansion.
“The record results we delivered this quarter reflect the
resilience of our business model and the momentum we carried into
the year. The ability to drive sales and earnings growth with
margin expansion while facing choppy, uncertain market conditions
is an ongoing testament to the strong commercial and operational
execution of our teams,” said Vic Grizzle, President and CEO of
Armstrong World Industries. “We are also excited about our recently
announced acquisition of 3form that further broadens our
Architectural Specialties portfolio and enhances our relationship
with architects and designers, positioning Armstrong to sell more
products in more spaces. With this acquisition, the solid start to
the year and our consistent operational excellence, we have raised
our 2024 guidance and expect to generate strong sales and earnings
growth for the fourth consecutive year while continuing to face an
uncertain economic backdrop.”
First-Quarter Results
(Dollar amounts in millions except
per-share data)
For the Three Months Ended March
31,
2024
2023
Change
Net sales
$
326.3
$
310.2
5.2%
Operating income
$
86.1
$
70.2
22.6%
Operating income margin (Operating income
as a % of net sales)
26.4
%
22.6
%
380bps
Net earnings
$
59.9
$
47.3
26.6%
Diluted net earnings per share
$
1.36
$
1.04
30.8%
Additional Non-GAAP* Measures
Adjusted EBITDA
$
111
$
96
16.0%
Adjusted EBITDA margin (Adjusted EBITDA as
a % of net sales)
33.9
%
30.9
%
300bps
Adjusted net earnings
$
61
$
51
19.8%
Adjusted diluted net earnings per
share
$
1.38
$
1.12
23.2%
*
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.
First-quarter 2024 consolidated net sales increased 5.2% from
prior-year results, driven by favorable Average Unit Value (dollars
per unit sold, or "AUV") of $20 million, partially offset by lower
sales volumes of $4 million. Mineral Fiber net sales increased $11
million and Architectural Specialties net sales increased $5
million.
Consolidated operating income increased 22.6% in the first
quarter of 2024 primarily due to a benefit from favorable AUV, an
increase in equity earnings from the Worthington Armstrong Joint
Venture ("WAVE"), and severance costs recorded in the prior-year
period. These benefits were partially offset by an increase in
selling, general and administrative expenses ("SG&A") and lower
sales volumes.
First-Quarter Segment Results Mineral Fiber
(Dollar amounts in millions)
For the Three Months Ended March
31,
2024
2023
Change
Net sales
$
239.6
$
228.4
4.9%
Operating income
$
79.2
$
63.8
24.1%
Adjusted EBITDA*
$
99
$
84
17.6%
Operating income margin
33.1
%
27.9
%
520bps
Adjusted EBITDA margin*
41.2
%
36.8
%
450bps
Mineral Fiber net sales increased 4.9% in the first quarter of
2024 due to $19 million of favorable AUV, partially offset by $8
million of lower sales volumes. The improvement in AUV was driven
by favorable like-for-like pricing and favorable mix. The decrease
in volumes was primarily driven by prior-year period inventory
level increases at our home center customers that did not occur in
the current-year period.
Mineral Fiber operating income increased in the first quarter of
2024 primarily due to a $13 million benefit from favorable AUV, a
$7 million increase in WAVE equity earnings and a $3 million
decrease in manufacturing and input costs, partially offset by a $5
million decrease from lower sales volumes. Operating income was
also negatively impacted by a $2 million increase in SG&A
expenses, which included increases in deferred compensation related
charges and higher depreciation, partially offset by the benefit
from severance expense recorded in the prior-year period.
Architectural Specialties
(Dollar amounts in millions)
For the Three Months Ended March
31,
2024
2023
Change
Net sales
$
86.7
$
81.8
6.0%
Operating income
$
7.7
$
7.2
6.9%
Adjusted EBITDA*
$
12
$
12
4.3%
Operating income margin
8.9
%
8.8
%
10bps
Adjusted EBITDA margin*
14.0
%
14.3
%
(20)bps
First-quarter 2024 Architectural Specialties net sales increased
6.0% from prior-year results, driven primarily by contributions
from our July 2023 acquisition of BOK Modern, LLC ("BOK") and
increased custom metal project sales.
Architectural Specialties operating income increased in the
first quarter of 2024 primarily due to a $4 million margin benefit
from increased sales, driven largely by improved custom project
margins, and a $1 million reduction in acquisition-related
expenses. These increases were partially offset by higher
manufacturing costs and selling expenses due in part to the
acquisition of BOK and additional investments in selling
capabilities.
Unallocated Corporate Unallocated
Corporate operating loss was $1 million in the first quarter of
2024 and 2023.
Cash Flow Cash flows from operating activities in 2024
increased slightly in comparison to the prior-year period, while
cash flows from investing activities increased $7 million versus
the prior-year period. The $8 million, or 30.8%, increase in
operating and investing cash flows was primarily due to higher cash
earnings and lower purchases of property, plant and equipment,
partially offset by unfavorable working capital impacts.
Share Repurchase Program During the first quarter of
2024, we repurchased 0.1 million shares of common stock for a total
cost of $15 million, excluding the cost of commissions and taxes.
As of March 31, 2024, there was $702 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 March 31, 2024, we have repurchased 14.3 million shares
under the Program for a total cost of $998 million, excluding
commissions and taxes.
Updating 2024 Outlook “With strong first-quarter results
and our recently announced acquisition of 3form, we are raising our
full-year 2024 guidance,” said Chris Calzaretta, AWI Senior Vice
President and CFO. “We remain focused on consistently delivering
profitable growth, adjusted EBITDA margin expansion and adjusted
free cash flow growth despite lingering macroeconomic uncertainty
in the back-half of this year. The acquisition of 3form further
demonstrates our ability to deliver on all of our capital
allocation priorities and to continue creating 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
$
1,395
to
$
1,435
8%
to
11%
Adjusted EBITDA*
$
430
$
465
to
$
485
8%
to
13%
Adjusted diluted net earnings per
share*
$
5.32
$
5.80
to
$
6.05
9%
to
14%
Adjusted free cash flow*
$
263
$
285
to
$
300
8%
to
14%
Earnings Webcast
Management will host a live webcast conference call at 11:00
a.m. ET today, to discuss first-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 March 31, 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 March 31, 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 March
31,
2024
2023
Net sales
$
326.3
$
310.2
Cost of goods sold
202.0
198.1
Gross profit
124.3
112.1
Selling, general and administrative
expenses
65.7
62.7
(Gain) related to change in fair value of
contingent consideration
(0.3
)
-
Equity (earnings) from unconsolidated
affiliates, net
(27.2
)
(20.8
)
Operating income
86.1
70.2
Interest expense
9.0
8.7
Other non-operating (income), net
(3.1
)
(2.4
)
Earnings before income taxes
80.2
63.9
Income tax expense
20.3
16.6
Net earnings
$
59.9
$
47.3
Diluted net earnings per share of common
stock
$
1.36
$
1.04
Average number of diluted common shares
outstanding
44.1
45.5
SEGMENT RESULTS
Armstrong World Industries, Inc.
and Subsidiaries
(Unaudited)
For the Three Months Ended March
31,
2024
2023
Net Sales
Mineral Fiber
$
239.6
$
228.4
Architectural Specialties
86.7
81.8
Total net sales
$
326.3
$
310.2
For the Three Months Ended March
31,
2024
2023
Segment operating
income (loss)
Mineral Fiber
$
79.2
$
63.8
Architectural Specialties
7.7
7.2
Unallocated Corporate
(0.8
)
(0.8
)
Total consolidated operating income
$
86.1
$
70.2
SELECTED BALANCE SHEET
INFORMATION
Armstrong World Industries, Inc.
and Subsidiaries
Unaudited
March 31, 2024
December 31, 2023
Assets
Current assets
$
330.7
$
313.0
Property, plant and equipment, net
559.9
566.4
Other non-current assets
800.9
793.0
Total assets
$
1,691.5
$
1,672.4
Liabilities and
shareholders’ equity
Current liabilities
$
184.4
$
194.5
Non-current liabilities
880.3
886.1
Shareholders' equity
626.8
591.8
Total liabilities and shareholders’
equity
$
1,691.5
$
1,672.4
SELECTED CASH FLOW
INFORMATION
Armstrong World Industries, Inc.
and Subsidiaries
(Unaudited)
For the Three Months Ended March
31,
2024
2023
Net earnings
$
59.9
$
47.3
Other adjustments to reconcile net
earnings to net cash provided by operating activities
(0.1
)
(1.4
)
Changes in operating assets and
liabilities, net
(33.4
)
(19.7
)
Net cash provided by operating
activities
26.4
26.2
Net cash provided by (used for) investing
activities
5.9
(1.5
)
Net cash (used for) financing
activities
(33.1
)
(34.7
)
Effect of exchange rate changes on cash
and cash equivalents
(0.4
)
—
Net (decrease) in cash and cash
equivalents
(1.2
)
(10.0
)
Cash and cash equivalents at beginning of
year
70.8
106.0
Cash and cash equivalents at end of
period
$
69.6
$
96.0
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. – 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 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, 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 March
31,
2024
2023
Net sales
$
326
$
310
Net earnings
$
60
$
47
Add: Income tax expense
20
17
Earnings before income taxes
$
80
$
64
Add: Interest/other income and expense,
net
6
6
Operating income
$
86
$
70
Add: RIP expense (1)
1
1
Add: Acquisition-related impacts (2)
-
1
Add: Cost reduction initiatives
-
3
Adjusted operating income
$
86
$
75
Add: Depreciation and amortization
24
21
Adjusted EBITDA
$
111
$
96
Operating income margin
26.4
%
22.6
%
Adjusted EBITDA margin
33.9
%
30.9
%
(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 changes in fair value of
contingent consideration, deferred compensation and restricted
stock expenses.
Mineral Fiber
For the Three Months Ended March
31,
2024
2023
Net sales
$
240
$
228
Operating income
$
79
$
64
Add: Cost reduction initiatives
-
3
Adjusted operating income
$
79
$
66
Add: Depreciation and amortization
20
18
Adjusted EBITDA
$
99
$
84
Operating income margin
33.1
%
27.9
%
Adjusted EBITDA margin
41.2
%
36.8
%
Architectural
Specialties
For the Three Months Ended March
31,
2024
2023
Net sales
$
87
$
82
Operating income
$
8
$
7
Add: Acquisition-related impacts (1)
-
1
Adjusted operating income
$
8
$
8
Add: Depreciation and amortization
4
3
Adjusted EBITDA
$
12
$
12
Operating income margin
8.9
%
8.8
%
Adjusted EBITDA margin
14.0
%
14.3
%
(1)
Represents the impact of
acquisition-related adjustments for changes in fair value of
contingent consideration, deferred compensation and restricted
stock expenses.
Unallocated Corporate
For the Three Months Ended March
31,
2024
2023
Operating (loss)
$
(1
)
$
(1
)
Add: RIP expense (1)
1
1
Adjusted operating (loss)
$
-
$
-
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 March
31,
2024
2023
Net cash provided by operating
activities
$
26
$
26
Net cash provided by (used for)
investing activities
$
6
(2
)
Net cash provided by operating and
investing activities
$
32
$
25
Add: Acquisitions, net
6
-
Add: Arktura deferred compensation (1)
6
-
Add: Contingent consideration in excess of
acquisition-date fair value (2)
-
5
Adjusted Free Cash Flow
$
43
$
30
(1)
Contingent consideration payments related
to 2020 acquisition recorded as a component of net cash provided by
operating activities.
(2)
Contingent compensation payments related
to the acquisition.
Consolidated Results – Adjusted Diluted
Earnings Per Share (EPS)
For the Three Months Ended March
31,
2024
2023
Total
Per Diluted Share
Total
Per Diluted Share
Net earnings
$
60
$
1.36
$
47
$
1.04
Add: Income tax expense
20
17
Earnings before income taxes
$
80
$
64
Add: Acquisition-related impacts (1)
-
1
Add: Acquisition-related amortization
(2)
2
1
Add: Cost reduction initiatives
-
3
Adjusted net earnings before income
taxes
$
82
$
69
(Less): Adjusted income tax expense
(3)
(21
)
(18
)
Adjusted net earnings
$
61
$
1.38
$
51
$
1.12
Adjusted diluted EPS change versus prior
year
23.2%
Diluted shares outstanding
44.1
45.5
Effective tax rate
25%
26%
(1)
Represents the impact of
acquisition-related adjustments for changes in fair value of
contingent consideration, deferred compensation and restricted
stock expenses.
(2)
Represents acquisition-related intangible
amortization, including customer relationships, developed
technology, software, trademarks and brand names, non-compete
agreements and other intangibles.
(3)
Adjusted income tax expense is calculated
using the effective tax rate multiplied by the adjusted earnings
from continuing operations before income taxes.
Adjusted EBITDA Guidance
For the Year Ending December 31,
2024
Low
High
Net earnings
$
253
to
$
259
Add: Income tax expense
84
86
Earnings before income taxes
$
337
to
$
345
Add: Interest expense
40
42
Add: Other non-operating (income), net
(10
)
(8
)
Operating income
$
367
to
$
379
Add: RIP expense (1)
2
2
Adjusted operating income
$
369
to
$
381
Add: Depreciation and amortization
96
104
Adjusted EBITDA
$
465
to
$
485
(1)
RIP expense represents only the plan
service cost that is recorded within Operating income. For all
periods presented, we do not expect to make cash contributions to
our RIP.
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
$
253
$
5.74
to
$
259
$
5.91
Add: Income tax expense
84
86
Earnings before income taxes
$
337
to
$
345
Add: RIP (credit) (2)
(2
)
(1
)
Add: Acquisition-related amortization
(3)
7
8
Adjusted earnings before income
taxes
$
342
to
$
352
(Less): Adjusted income tax expense
(4)
(86
)
(88
)
Adjusted net earnings
$
256
$
5.80
to
$
264
$
6.05
(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)
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
$
271
to
$
286
Add: Return of investment from joint
venture
94
104
Adjusted net cash provided by operating
activities
$
365
to
$
390
Less: Capital expenditures
(80
)
(90
)
Adjusted Free Cash Flow
$
285
to
$
300
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240430114520/en/
Investors & Media: Theresa Womble,
tlwomble@armstrongceilings.com or (717) 396-6354
Grafico Azioni Armstrong World Industries (NYSE:AWI)
Storico
Da Feb 2025 a Mar 2025
Grafico Azioni Armstrong World Industries (NYSE:AWI)
Storico
Da Mar 2024 a Mar 2025
