Management’s Discussion and Analysis of Financial Condition and Results of Operations
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion should be read in conjunction with the financial statements, the accompanying notes, the cautionary note regarding forward-looking statements and risk factors included in this report and our Annual Report on Form 10-K for the year ended December 31, 2021.
OVERVIEW
AWI is a leader in the design, innovation and manufacture of ceiling and wall solutions in the Americas. Our products primarily include mineral fiber, fiberglass wool, metal, wood, wood fiber, glass-reinforced-gypsum and felt. We also manufacture ceiling suspension system (grid) products through a joint venture with Worthington Industries, Inc. ("Worthington") called Worthington Armstrong Venture ("WAVE").
COVID-19
The impact of the COVID-19 pandemic on our future consolidated results of operations remains uncertain. During 2020, we noted delays in construction driven by temporary closures of non-essential businesses, with the most significant impacts in certain major metropolitan areas impacted by COVID-19. Beginning in 2021, market conditions began to improve and continued to do so in the first half of 2022, although the improvement has been tempered by delays in construction starts and extended project timelines, in addition to the impact of higher inflation. We continue to monitor and manage the impact of COVID-19 and its potential impacts to our business.
As of June 30, 2022, all of our manufacturing facilities were operational, excluding our St. Helens, Oregon facility which was idled in the second quarter of 2018. In an effort to operate safely and responsibly, we continue to follow guidelines from governmental health authorities across all our facilities.
We did not record any asset impairments, inventory charges or material bad debt reserves related to COVID-19 during the first six months of 2022 or the full year of 2021, although future events may require such charges. We will continue to evaluate the nature and extent of the COVID-19 pandemic’s impact on our financial condition, results of operations and cash flows.
Manufacturing Plants
As of June 30, 2022, we operated 16 manufacturing plants in two countries, with 14 plants located within the U.S. and two plants in Canada. We closed our St. Helens, Oregon mineral fiber manufacturing plant in the second quarter of 2018, and the facility was classified as an asset held for sale as of June 30, 2022. During the second quarter of 2022, we entered into a sale agreement for our idled Mineral Fiber plant with closing expected in the next twelve months.
WAVE operates six additional plants in the U.S. to produce suspension system (grid) products, which we use and sell in our ceiling systems.
Reportable Segments
Our operating segments are as follows: Mineral Fiber, Architectural Specialties and Unallocated Corporate.
Mineral Fiber – produces suspended mineral fiber and soft fiber ceiling systems. Our mineral fiber products offer various performance attributes such as acoustical control, rated fire protection, aesthetic appeal, and health and sustainability features. Ceiling products are sold to resale distributors, ceiling systems contractors and wholesalers and retailers (including large home centers). The Mineral Fiber segment also includes the results of WAVE, which manufactures and sells suspension system (grid) products and ceiling component products that are invoiced by both AWI and WAVE. Segment results relating to WAVE consist primarily of equity earnings and reflect our 50% equity interest in the joint venture. Ceiling component products consist of ceiling perimeters and trim, in addition to grid products that support drywall ceiling systems. For some customers, WAVE sells its suspension systems products to AWI for resale to customers. Mineral Fiber segment results reflect those sales transactions. The Mineral Fiber segment also includes all assets and liabilities not specifically allocated to our Architectural Specialties or Unallocated Corporate segment, including all property and related depreciation associated with our Lancaster, PA headquarters. Operating results for the Mineral Fiber segment include a significant majority of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations.
Architectural Specialties – produces, designs and sources ceilings and walls for use in commercial settings. Products are available in numerous materials, such as metal, felt and wood, in addition to various colors, shapes and designs. Products offer various
23
Management’s Discussion and Analysis of Financial Condition and Results of Operations
performance attributes such as acoustical control, rated fire protection and aesthetic appeal. We sell standard, premium and customized products, a portion of which are derived from sourced products. Architectural Specialties products are sold primarily to resale distributors and direct customers, primarily ceiling systems contractors. The majority of this segment's revenues are project driven, which can lead to more volatile sales patterns due to project scheduling uncertainty. Operating results for the Architectural Specialties segment include a portion of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations.
Unallocated Corporate – includes certain assets, liabilities, income and expenses that have not been allocated to our other business segments and consists of: cash and cash equivalents, the net funded status of our U.S. Retirement Income Plan (“RIP”), the estimated fair value of interest rate swap contracts, outstanding borrowings under our senior credit facility and income tax balances. Our Unallocated Corporate segment also includes all expenses related to our German defined benefit pension plan that was formerly reported in our Europe, the Middle East and Africa (including Russia) (“EMEA”) and Pacific Rim segments and was not included in the sale of certain subsidiaries comprising our businesses and operations in EMEA and the Pacific Rim to Knauf International GmbH.
Factors Affecting Revenues
For information on our segments' 2022 net sales by segment, see Notes 2 and 3 to the Condensed Consolidated Financial Statements.
Markets. We compete in the building product construction markets of the Americas. We closely monitor publicly available macroeconomic trends that provide insight into commercial construction market activity, including GDP, office vacancy rates, the Architecture Billings Index, new commercial construction starts, state and local government spending, corporate profits and retail sales. The company continues to monitor the impacts of global events, including the conflict in Ukraine, which due to our Americas-only geography, had minimal direct impact on our results of operations during the first half of 2022.
We noted several factors and trends within our markets that directly affected our business performance during the second quarter of 2022 compared to the second quarter of 2021, most importantly the continuing recovery of commercial construction activity from the COVID-19 pandemic, partially offset by on-going challenges to global supply chains and labor availability. Our results also benefited from improved performance within our Architectural Specialties segment, primarily driven by our recent acquisitions. Demand continues to be tempered by delays in construction starts and extended project timelines, in addition to the impact of higher inflation. For the three months and six months ended June 30, 2022, increased sales volumes contributed $17 million and $24 million, respectively, to revenue compared to the same periods in 2021.
Average Unit Value. We periodically modify sales prices of our products due to changes in costs for raw materials and energy, market conditions and the competitive environment. Typically, realized price increases are less than announced price increases because of project pricing, competitive adjustments and changing market conditions. We also offer a wide assortment of products that are differentiated by style, design and performance attributes. Pricing and margins for products within the assortment vary. In addition, changes in the relative quantity of products purchased at different price points can impact year-to-year comparisons of net sales and operating income. Within our Mineral Fiber segment, we focus on improving sales dollars per unit sold, or average unit value (“AUV”), as a measure that accounts for the varying assortment of products and like-for-like pricing impacting our revenues. We estimate that favorable AUV increased our total consolidated net sales for the three and six months ended June 30, 2022 by approximately $24 million and $48 million, respectively, compared to the same periods in 2021. Our Architectural Specialties segment revenues are primarily earned based on individual contracts that include a mix of products, both manufactured by us and sourced from third parties, which varies by project. As such, we do not track AUV performance for this segment, but attribute most changes in sales to volume.
During the first and second quarters of 2022, we implemented or announced future price increases on Mineral Fiber ceiling, grid products and certain Architectural Specialties products. In July 2022, we implemented an additional price increase on Mineral Fiber ceiling tile products and certain Architectural Specialties products. We may implement future pricing actions based on numerous factors, namely the rate and pace of inflation impact on our business.
Seasonality. Historically, our sales tend to be stronger in the second and the third quarters of our fiscal year due to more favorable weather conditions, customer business cycles and the timing of renovation and new construction.
Factors Affecting Operating Costs
Operating Expenses. Our operating expenses are comprised of direct production costs (principally raw materials, labor and energy), manufacturing overhead costs, freight, costs to purchase sourced products and selling, general and administrative (“SG&A”) expenses.
Our largest raw material expenditures are primarily for fiberglass, perlite, recycled paper and starch. Other raw materials include
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
aluminum, clays, felt, pigment, steel, wood and wood fiber. We manufacture most of our mineral wool needs at one of our manufacturing facilities. Natural gas and packaging materials are also significant input costs. Fluctuations in the prices of these inputs are generally beyond our control and have a direct impact on our financial results. Global supply chain and labor disruptions have contributed to raw material and transportation cost inflation. For the three and six months ended June 30, 2022, higher costs for raw materials and energy negatively impacted operating income by $11 million and $18 million, respectively, compared to the same periods in 2021.
2020 Acquisition-Related Expenses and (Gains) Losses
In connection with our acquisitions of TURF Design, Inc. (“Turf”) in July 2020, Moz Designs, Inc. (“Moz”) in August 2020, and Arktura LLC (“Arktura”) in December 2020, we recorded certain acquisition-related expenses and (gains) losses to operating income in the three and six months ended June 30, 2022 and 2021, summarized as follows (dollar amounts in millions):
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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|
Affected Line Item in the Condensed Consolidated Statement of Earnings and Comprehensive Income |
Deferred revenue |
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$ |
- |
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|
$ |
- |
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$ |
- |
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|
$ |
0.7 |
|
|
Net sales |
Loss (gain) related to change in fair value of contingent consideration |
|
|
6.1 |
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|
|
(9.7 |
) |
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|
6.2 |
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|
|
(9.5 |
) |
|
Loss (gain) related to change in fair value of contingent consideration |
Deferred cash and restricted stock expenses |
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2.0 |
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3.7 |
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4.0 |
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6.5 |
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|
SG&A expenses |
Inventory |
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- |
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- |
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- |
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0.3 |
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Cost of goods sold |
Net negative (positive) impact to operating income |
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$ |
8.1 |
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$ |
(6.0 |
) |
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$ |
10.2 |
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$ |
(2.0 |
) |
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|
The deferred revenue and inventory amounts above reflect the post-acquisition expenses associated with recording these liabilities and assets at fair value as part of purchase accounting. The change in fair value of contingent consideration is related to our Moz and Turf acquisitions and is remeasured quarterly during each acquisition’s respective earn-out period. See Note 14 to the Condensed Consolidated Financial Statements for further information. Expenses related to the deferred cash and restricted stock awards for Arktura’s former owners and employees are recorded over their respective service periods, as such payments are subject to the awardees’ continued employment with AWI. Depreciation of fixed assets acquired and amortization of intangible assets acquired have been excluded from the table above.
Employees
As of June 30, 2022 and December 31, 2021, we had approximately 2,950 and 2,820 full-time and part-time employees, respectively.
RESULTS OF CONTINUING OPERATIONS
Please refer to Notes 2 and 4 to the Condensed Consolidated Financial Statements for a reconciliation of operating income to consolidated earnings from continuing operations before income taxes and additional financial information related to discontinued operations.
CONSOLIDATED RESULTS FROM CONTINUING OPERATIONS
(dollar amounts in millions)
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2022 |
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2021 |
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Change is Favorable/(Unfavorable) |
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Three Months Ended June 30, |
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Total consolidated net sales |
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$ |
321.0 |
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|
$ |
280.0 |
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|
|
14.6 |
% |
Operating income |
|
$ |
71.6 |
|
|
$ |
78.3 |
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|
|
(8.6 |
)% |
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|
Six Months Ended June 30, |
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Total consolidated net sales |
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$ |
603.6 |
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|
$ |
531.9 |
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|
|
13.5 |
% |
Operating income |
|
$ |
134.8 |
|
|
$ |
132.4 |
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|
|
1.8 |
% |
Consolidated net sales for the second quarter of 2022 increased 14.6% from prior-year results with favorable AUV contributing $24 million and higher volumes contributing $17 million. Mineral Fiber net sales increased $26 million and Architectural Specialties net
25
Management’s Discussion and Analysis of Financial Condition and Results of Operations
sales increased $15 million from second-quarter 2021 results. The increase in Mineral Fiber net sales was driven by improved AUV due primarily to favorable price, and higher volumes. Architectural Specialties net sales growth resulted from improved performance from our recent acquisitions compared to the same period in 2021 and positive impacts from price increases.
Consolidated net sales for the first six months of 2022 increased 13.5% as favorable AUV contributed $48 million and higher volumes contributed $24 million. Mineral Fiber net sales increased $41 million year-over-year and Architectural Specialties net sales increased $31 million. The increase in Mineral Fiber net sales was driven by improved AUV, due primarily to favorable price, partially offset by lower volumes resulting primarily from a reduction of inventory levels at certain distributor customers in early 2022. Architectural Specialties net sales improved due to an increase in custom project sales, improved performance from our recent acquisitions compared to the same period in 2021 and positive impacts from price increases.
Cost of goods sold in the second quarter of 2022 was 63.3% of net sales, compared to 62.5% for the same period in 2021, driven by higher inflation, partially offset by favorable AUV performance and improved manufacturing productivity. Cost of goods sold in the first six months of 2022 was 63.5% of net sales, compared to 63.8% for the same period in 2021. This decrease was driven by favorable AUV performance and improved manufacturing productivity, partially offset by higher inflation.
SG&A expenses in the second quarter of 2022 were $61.5 million, or 19.2% of net sales, compared to $60.0 million, or 21.4% of net sales, for the same period in 2021. The second-quarter 2022 increase in SG&A expenses was driven primarily by a $5 million increase in selling expenses and a $2 million increase in incentive compensation expense, which was partially offset by a $6 million decrease in intangible asset amortization and acquisition-related expenses related to the Architectural Specialties segment.
SG&A expenses in the first six months of 2022 were $118.6 million, or 19.6% of net sales, compared to $114.2 million, or 21.5% of net sales, for the 2021 period. The increase in SG&A expenses for the first six months of 2022 compared to the same period in 2021 was driven by a $13 million increase in selling expenses in support of increased sales and growth initiatives, and a $2 million increase in incentive compensation expense, which was partially offset by an $11 million decrease in intangible asset amortization and acquisition-related expenses related to the Architectural Specialties segment.
During the second quarter and first six months of 2022, we recorded $6.1 million and $6.2 million, respectively, of remeasurement losses for changes in the fair value of contingent consideration related to the acquisition of Turf. During the same periods in 2021, we recorded $9.7 million and $9.5 million, respectively, of remeasurement gains related to the acquisitions of Turf and Moz. See Note 14 to the Condensed Consolidated Financial Statements for further information.
Equity earnings from our WAVE joint venture were $21.3 million in the second quarter of 2022, compared to $23.7 million in the prior-year period, and were $39.5 million in the first six months of 2022 compared to $44.7 million in the first six months of 2021. The decrease in WAVE earnings during the second quarter of 2022 compared to the same period in 2021 resulted primarily from higher steel cost inflation, partially offset by favorable AUV that was driven by price. The decrease in WAVE earnings during the first six months of 2022 compared to the same period in 2021 resulted primarily from higher steel cost inflation and lower volumes, primarily due to a reduction of inventory levels at certain distributor customers in early 2022, and increased SG&A expenses, partially offset by favorable AUV that was driven by price. See Note 8 to the Condensed Consolidated Financial Statements for further information.
Interest expense was $5.8 million in the second quarter of 2022 compared to $5.6 million in the second quarter of 2021. Interest expense was $10.9 million in the first six months of 2022 compared to $11.3 million in the first six months of 2021. The decrease in interest expense for the first six months of 2022 was primarily due to lower average borrowings outstanding, partially offset by rising interest rates on floating rate debt.
Other non-operating income, net, was $1.4 million in the second quarter of 2022 compared to $1.6 million in the second quarter of 2021. Other non-operating income, net, was $2.7 million in the first six months of 2022, compared to $2.9 million in the first six months of 2021. Other non-operating income, net, is primarily comprised of the non-service cost components of pension and postretirement net period benefit costs.
Income tax expense was $15.0 million in the second quarter of 2022 compared to $19.2 million in the second quarter of 2021. The effective tax rate for the second quarter of 2022 was 22.3% compared to 25.8% for the same period of 2021. Income tax expense was $30.0 million in the first six months of 2022 compared to $31.4 million in the first six months of 2021. The effective tax rate was 23.7% in the first six months of 2022 compared to 25.3% in the same period of 2021. The effective tax rate for the second quarter and first six months of 2022 was lower compared to the same periods in 2021 primarily due to a reduction in our valuation allowance for capital loss carryforwards recorded in the second quarter of 2022.
26
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Total Other Comprehensive Income (“OCI”) was $2.2 million in the second quarter of 2022 compared to $1.8 million in the second quarter of 2021. OCI was $14.1 million in the first six months of 2022 compared to $6.4 million in the first six months of 2021. The increase in OCI in the second quarter and first six months of 2022 compared to the same periods in 2021 was primarily driven by derivative gains. Derivative gain represents the mark-to-market value adjustments of our derivative assets and liabilities and the recognition of gains and losses previously deferred in OCI. Also impacting the change in OCI were foreign currency translation adjustments and pension and postretirement adjustments. Foreign currency translation adjustments represent the change in the U.S. dollar value of assets and liabilities denominated in foreign currencies. Amounts in the second quarter and first six months of 2022 and 2021 were driven primarily by changes in the Canadian dollar. Pension and postretirement adjustments represent the amortization of actuarial gains and losses related to our defined benefit pension and postretirement plans.
REPORTABLE SEGMENT RESULTS
Mineral Fiber
(dollar amounts in millions)
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2022 |
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2021 |
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Change is Favorable/(Unfavorable) |
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Three Months Ended June 30, |
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Total segment net sales |
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$ |
234.5 |
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$ |
208.1 |
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12.7 |
% |
Operating income |
|
$ |
71.4 |
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|
$ |
72.1 |
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|
|
(1.0 |
)% |
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|
Six Months Ended June 30, |
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Total segment net sales |
|
$ |
437.7 |
|
|
$ |
396.8 |
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|
|
10.3 |
% |
Operating income |
|
$ |
129.1 |
|
|
$ |
132.7 |
|
|
|
(2.7 |
)% |
Second-quarter 2022 net sales increased $26 million due to favorable AUV of $24 million and higher sales volumes of $2 million. For the first six months of 2022, net sales improved $41 million from the prior-year period due to favorable AUV of $48 million, partially offset by a negative impact of $7 million from lower sales volumes. The improvement in AUV in both the second quarter and first six months of 2022 was driven primarily by favorable price. Volumes for the second quarter and first six months of 2022 were negatively impacted by a reduction of inventory levels at certain distributor customers in early 2022.
Second-quarter 2022 operating income compared to the same period in 2021 benefited from a $21 million favorable AUV margin impact, offset by a $14 million increase in manufacturing costs, driven by elevated raw material and energy costs, a $4 million increase in selling expenses, a $2 million decrease in equity earnings driven by higher steel cost inflation and a $2 million increase in incentive compensation expense.
Operating income for the first six months of 2022 compared to the same period in 2021 benefited from a $40 million favorable AUV margin impact, offset by a $21 million increase in manufacturing costs, driven by increased raw material and energy costs, a $9 million increase in selling expenses in support of increased sales and growth initiatives, a $5 million decrease resulting from lower sales volumes, a $5 million decrease in equity earnings and a $2 million increase in incentive compensation expense.
Architectural Specialties
(dollar amounts in millions)
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2022 |
|
|
2021 |
|
|
Change is Favorable/(Unfavorable) |
|
Three Months Ended June 30, |
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|
Total segment net sales |
|
$ |
86.5 |
|
|
$ |
71.9 |
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|
|
20.3 |
% |
Operating income |
|
$ |
1.1 |
|
|
$ |
7.4 |
|
|
|
(85.1 |
)% |
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|
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|
|
Six Months Ended June 30, |
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|
Total segment net sales |
|
$ |
165.9 |
|
|
$ |
135.1 |
|
|
|
22.8 |
% |
Operating income |
|
$ |
7.6 |
|
|
$ |
2.5 |
|
|
|
204.0 |
% |
Net sales increased $15 million and $31 million in the second quarter and first six months of 2022, respectively. These increases were primarily due to improved performance from our recent acquisitions compared to the same periods in 2021, benefits from price increases and an increase in custom project sales.
Operating income for the second quarter of 2022 compared to the same period in 2021 was positively impacted by a $5 million increase in sales volumes and a $5 million reduction in intangible asset amortization. These increases to operating income were offset
27
Management’s Discussion and Analysis of Financial Condition and Results of Operations
by a $14 million increase in acquisition-related expenses and losses, primarily due to the change in the fair value of contingent consideration related to the acquisitions of Turf and Moz, and higher selling expenses of $1 million.
Operating income for the first six months of 2022 compared to the same period in 2021 was positively impacted by a $14 million increase in sales volumes and a $9 million reduction in intangible asset amortization. These increases to operating income were offset by a $13 million increase in acquisition-related expenses and losses, primarily due to the change in the fair value of contingent consideration related to the acquisitions of Turf and Moz, and higher selling expenses of $5 million, primarily related to additional investments in selling capabilities and incentive compensation.
Unallocated Corporate
Unallocated Corporate operating loss was $1 million in the second quarter of 2022 and 2021. Unallocated Corporate operating loss was $2 million in the first six months of 2022, compared to $3 million in the first six months of 2021.
FINANCIAL CONDITION AND LIQUIDITY
Cash Flow
Operating activities for the first six months of 2022 provided $63.1 million of cash, compared to $81.9 million in the first six months of 2021. The decrease was primarily due to negative working capital changes in receivables and inventory, primarily due to timing, partially offset by higher cash earnings.
Net cash used by investing activities was $1.6 million in the first six months of 2022, compared to $6.8 million in the first six months of 2021. The favorable change in cash compared to the same period in 2021 was primarily due to the absence of the purchase price adjustments paid to Knauf and lower purchases of property, plant and equipment, partially offset by a decrease in dividends from WAVE.
Net cash used for financing activities was $80.2 million in the first six months of 2022, compared to $93.4 million in the first six months of 2021. The favorable change in cash was primarily due to lower debt repayments, partially offset by an increase in repurchases of outstanding common stock and payments of acquisition-related contingent consideration in 2022.
Liquidity
Our liquidity needs for operations vary throughout the year. We retain lines of credit to facilitate our seasonal cash flow needs, since cash flow is historically lower during the first and fourth quarters of our fiscal year. We have a $1,000.0 million variable rate senior credit facility, which is comprised of a $500.0 million revolving credit facility (with a $150.0 million sublimit for letters of credit) and a $500.0 million Term Loan A. The revolving credit facility and Term Loan A are currently priced at 1.25% over LIBOR. The senior credit facility also has a $25.0 million letter of credit facility, also known as our bi-lateral facility. The revolving credit facility and Term Loan A mature in September 2024. The $1,000.0 million senior credit facility is secured by the capital stock of material U.S. subsidiaries and a pledge of 65% of the stock of our material first-tier foreign subsidiary in Canada. The unpaid balances of the revolving credit facility and Term Loan A may be prepaid without penalty at the maturity of their respective interest reset periods. Any principal amounts paid on the Term Loan A may not be re-borrowed.
As of June 30, 2022, total borrowings outstanding under our senior credit facility were $456.2 million under Term Loan A and $215.0 million under the revolving credit facility.
The senior credit facility includes two financial covenants that require the ratio of consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) to consolidated cash interest expense minus cash consolidated interest income to be greater than or equal to 3.0 to 1.0 and requires the ratio of consolidated funded indebtedness, minus AWI and domestic subsidiary unrestricted cash and cash equivalents up to $100 million, to EBITDA to be less than or equal to 3.75 to 1.0. As of June 30, 2022, we were in compliance with all covenants of the senior credit facility.
28
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The Term Loan A is currently priced on a variable interest rate basis. The following table summarizes our interest rate swaps (dollar amounts in millions):
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|
|
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|
|
Trade Date |
|
Notional Amount |
|
Coverage Period |
|
Risk Coverage |
November 28, 2018 |
|
$ |
200.0 |
|
November 2018 to November 2023 |
|
USD-LIBOR |
November 28, 2018 |
|
$ |
100.0 |
|
March 2021 to March 2025 |
|
USD-LIBOR |
March 10, 2020 |
|
$ |
50.0 |
|
March 2021 to March 2024 |
|
USD-LIBOR |
March 11, 2020 |
|
$ |
50.0 |
|
March 2021 to March 2024 |
|
USD-LIBOR |
Under the terms of our interest rate swaps above, we pay a fixed rate monthly and receive 1-month LIBOR, inclusive of a 0% floor.
These swaps are designated as cash flow hedges against changes in LIBOR for a portion of our variable rate debt.
We utilize lines of credit and other commercial commitments to ensure that adequate funds are available to meet operating requirements. Letters of credit are currently arranged through our revolving credit facility and our bi-lateral facility. Letters of credit may be issued to third party suppliers, insurance and financial institutions and typically can only be drawn upon in the event of AWI’s failure to pay its obligations to the beneficiary. The following table presents details related to our letters of credit facilities (dollar amounts in millions):
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|
June 30, 2022 |
|
Financing Arrangements |
|
Limit |
|
|
Used |
|
|
Available |
|
Bi-lateral facility |
|
$ |
25.0 |
|
|
$ |
8.1 |
|
|
$ |
16.9 |
|
Revolving credit facility |
|
|
150.0 |
|
|
|
- |
|
|
|
150.0 |
|
Total |
|
$ |
175.0 |
|
|
$ |
8.1 |
|
|
$ |
166.9 |
|
As of June 30, 2022, we had $79.3 million of cash and cash equivalents, $65.3 million in the U.S. and $14.0 million in various foreign jurisdictions, primarily Canada. As of June 30, 2022, we also had $285.0 million available under our revolving credit facility. We believe cash on hand and cash generated from operations, together with borrowing capacity under our credit facility, will be adequate to address our near-term liquidity needs based on current expectations of our business operations, capital expenditures and scheduled payments of debt obligations.
CRITICAL ACCOUNTING ESTIMATES
There have been no material changes to our critical accounting estimates disclosed in our 2021 Annual Report on Form 10-K.
29