- Record setting quarterly net sales of $387 million, an increase
of 11%
- Operating income increased 11% and diluted net earnings per
share increased 12%
- Adjusted EBITDA up 11% and adjusted diluted net earnings per
share up 13%
- Raising full-year 2024 guidance for adjusted EBITDA, adjusted
diluted net earnings per share and adjusted free cash flow
(Comparisons above are versus the prior-year period unless
otherwise stated)
Armstrong World Industries, Inc. (NYSE:AWI), a leader in the
design, innovation and manufacture of ceiling and wall solutions in
the Americas, today reported third-quarter 2024 financial results
highlighted by robust sales and earnings growth.
“With another quarter of record setting sales and strong
earnings growth, we continue to demonstrate our ability to deliver
growth despite muted market conditions through operational
execution and our investments in strategic acquisitions, innovation
and digital initiatives,” said Vic Grizzle, President and CEO of
Armstrong World Industries. “As market demand continues to
stabilize, we are well positioned to deliver full year double-digit
top and bottom-line growth with industry-leading margin performance
through strong Mineral Fiber Average Unit Value improvement,
market-driven innovation, operational excellence and Architectural
Specialties growth.”
Third-Quarter Results
(Dollar amounts in millions except
per-share data)
For the Three Months Ended
September 30,
2024
2023
Change
Net sales
$
386.6
$
347.3
11.3%
Operating income
$
111.3
$
100.2
11.1%
Operating income margin (Operating income
as a % of net sales)
28.8
%
28.9
%
(10)bps
Net earnings
$
76.9
$
69.5
10.6%
Diluted net earnings per share
$
1.75
$
1.56
12.2%
Additional Non-GAAP* Measures
Adjusted EBITDA
$
139
$
125
11.2%
Adjusted EBITDA margin (Adjusted EBITDA as
a % of net sales)
35.9
%
36.0
%
(10)bps
Adjusted net earnings
$
79
$
71
11.1%
Adjusted diluted net earnings per
share
$
1.81
$
1.60
13.1%
* 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.
Third-quarter 2024 consolidated net sales increased 11.3% from
prior-year results, driven by higher volumes of $30 million and
favorable Average Unit Value (dollars per unit sold, or "AUV") of
$9 million. Architectural Specialties net sales increased $31
million and Mineral Fiber net sales increased $8 million.
Architectural Specialties segment net sales improved primarily due
to a $25 million increase from our April 2024 acquisition of 3form,
LLC ("3form") and our July 2023 acquisition of BOK Modern, LLC
("BOK"). The increase in Mineral Fiber net sales was primarily
driven by favorable AUV.
Consolidated operating income increased 11.1% in the third
quarter of 2024 primarily due to a $17 million margin benefit from
higher sales volumes, a $6 million benefit from favorable AUV and a
$2 million increase in Worthington Armstrong Joint Venture ("WAVE")
equity earnings. These benefits were partially offset by a $13
million increase in selling, general and administrative
(“SG&A”) expenses, primarily due to the impact of acquisitions,
and to a lesser extent, an increase in Mineral Fiber SG&A
expenses.
Third-Quarter Segment Results
Mineral
Fiber
(Dollar amounts in millions)
For the Three Months Ended
September 30,
2024
2023
Change
Net sales
$
258.0
$
249.7
3.3%
Operating income
$
93.0
$
85.5
8.8%
Adjusted EBITDA*
$
113
$
105
8.2%
Operating income margin
36.0
%
34.2
%
180bps
Adjusted EBITDA margin*
43.9
%
41.9
%
200bps
Mineral Fiber net sales increased 3.3% in the third quarter of
2024 due to $10 million of favorable AUV, partially offset by $1
million of lower sales volumes. The improvement in AUV was driven
by favorable like-for-like pricing.
Mineral Fiber operating income increased in the third quarter of
2024 primarily due to a $6 million benefit from favorable AUV, a $3
million decrease in manufacturing and input costs and a $2 million
increase in WAVE equity earnings primarily driven by favorable AUV.
These benefits were partially offset by a $3 million increase in
SG&A expenses, primarily driven by higher incentive
compensation.
Architectural
Specialties
(Dollar amounts in millions)
For the Three Months Ended
September 30,
2024
2023
Change
Net sales
$
128.6
$
97.6
31.8%
Operating income
$
19.2
$
15.5
23.9%
Adjusted EBITDA*
$
26
$
20
27.1%
Operating income margin
14.9
%
15.9
%
(100)bps
Adjusted EBITDA margin*
20.1
%
20.8
%
(70)bps
Architectural Specialties net sales increased 31.8% in the third
quarter of 2024 driven primarily by a $25 million increase due to
the acquisitions of 3form and BOK, in addition to increased custom
metal project net sales.
Architectural Specialties operating income increased in the
third quarter of 2024 primarily due to an $18 million margin
benefit from increased sales, driven primarily by the acquisitions
of 3form and BOK, and partially due to improved custom project
margins. This increase largely offset a $10 million increase in
SG&A expenses and a $4 million increase in manufacturing costs,
both of which were primarily due to the acquisitions of 3form and
BOK.
Unallocated Corporate Unallocated
Corporate operating loss was $1 million in the third quarter of
2024 and 2023.
Cash Flow
Year-to-date cash flows from operating activities in 2024
increased $4 million in comparison to the prior-year period. The
favorable change in operating cash flows was primarily driven by
higher cash earnings partially offset by net unfavorable working
capital impacts. Year-to-date cash flows from investing activities
decreased $51 million versus the prior-year period primarily due to
$94 million of cash paid for the acquisition of 3form, partially
offset by proceeds received from sales of real estate.
Share Repurchase Program
During the third 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 September 30, 2024, there
was $677 million remaining under our 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 authorizations 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 September 30, 2024, we have repurchased 14.5 million shares
under the Program for a total cost of $1,023 million, excluding
commissions and taxes.
Updating 2024 Outlook
“We delivered strong profitability in the third quarter,
highlighted by forty-four percent Mineral Fiber and twenty percent
Architectural Specialties adjusted EBITDA margins. With our strong
third quarter results and an improved profitability outlook for the
remainder of the year, we are increasing our full-year 2024
guidance for adjusted EBITDA and adjusted diluted net earnings per
share, as well as modestly increasing guidance for adjusted free
cash flow, while tightening the range on our full-year sales
outlook,” said Chris Calzaretta, AWI Senior Vice President and CFO.
“We remain focused on expanding adjusted EBITDA margin at the total
company level and expect to deliver a fourth consecutive year of
net sales and earnings growth in 2024. With a strong balance sheet
and our demonstrated ability to generate cash, we expect to
continue to execute our capital allocation strategy to drive
shareholder value.”
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
$
1,420
to
$
1,435
10%
to
11%
Adjusted EBITDA*
$
430
$
482
to
$
490
12%
to
14%
Adjusted diluted net earnings per
share*
$
5.32
$
6.15
to
$
6.25
16%
to
17%
Adjusted free cash flow*
$
263
$
290
to
$
300
10%
to
14%
Earnings Webcast
Management will host a live webcast conference call at 10:00
a.m. ET today, to discuss third-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, 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 September 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 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 September 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
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Net sales
$
386.6
$
347.3
$
1,078.0
$
982.9
Cost of goods sold
222.5
205.9
640.3
605.4
Gross profit
164.1
141.4
437.7
377.5
Selling, general and administrative
expenses
77.6
64.6
223.1
189.2
Loss related to change in fair value of
contingent consideration
0.2
-
0.6
-
Impairment and gain on sales of fixed
assets, net
0.2
-
0.3
-
Equity (earnings) from unconsolidated
affiliates, net
(25.2
)
(23.4
)
(78.7
)
(69.1
)
Operating income
111.3
100.2
292.4
257.4
Interest expense
10.5
8.8
30.6
26.7
Other non-operating (income), net
(3.0
)
(2.3
)
(9.3
)
(6.9
)
Earnings before income taxes
103.8
93.7
271.1
237.6
Income tax expense
26.9
24.2
68.4
60.6
Net earnings
$
76.9
$
69.5
$
202.7
$
177.0
Diluted net earnings per share of common
stock
$
1.75
$
1.56
$
4.61
$
3.93
Average number of diluted common shares
outstanding
43.9
44.6
44.0
45.0
SEGMENT RESULTS
Armstrong World Industries, Inc.
and Subsidiaries
(Unaudited)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Net Sales
Mineral Fiber
$
258.0
$
249.7
$
747.8
$
712.1
Architectural Specialties
128.6
97.6
330.2
270.8
Total net sales
$
386.6
$
347.3
$
1,078.0
$
982.9
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Segment operating income (loss)
Mineral Fiber
$
93.0
$
85.5
$
253.9
$
224.8
Architectural Specialties
19.2
15.5
41.1
34.9
Unallocated Corporate
(0.9
)
(0.8
)
(2.6
)
(2.3
)
Total consolidated operating income
$
111.3
$
100.2
$
292.4
$
257.4
SELECTED BALANCE SHEET
INFORMATION
Armstrong World Industries, Inc.
and Subsidiaries
Unaudited
September 30, 2024
December 31, 2023
Assets
Current assets
$
357.7
$
313.0
Property, plant and equipment, net
577.4
566.4
Other non-current assets
868.9
793.0
Total assets
$
1,804.0
$
1,672.4
Liabilities and
shareholders’ equity
Current liabilities
$
218.4
$
194.5
Non-current liabilities
868.6
886.1
Shareholders' equity
717.0
591.8
Total liabilities and shareholders’
equity
$
1,804.0
$
1,672.4
SELECTED CASH FLOW
INFORMATION
Armstrong World Industries, Inc.
and Subsidiaries
(Unaudited)
For the Nine Months Ended
September 30,
2024
2023
Net earnings
$
202.7
$
177.0
Other adjustments to reconcile net
earnings to net cash provided by operating activities
12.8
5.4
Changes in operating assets and
liabilities, net
(35.3
)
(6.0
)
Net cash provided by operating
activities
180.2
176.4
Net cash (used for) investing
activities
(61.2
)
(10.6
)
Net cash (used for) financing
activities
(115.7
)
(175.1
)
Effect of exchange rate changes on cash
and cash equivalents
(0.4
)
(0.1
)
Net increase (decrease) in cash and cash
equivalents
2.9
(9.4
)
Cash and cash equivalents at beginning of
year
70.8
106.0
Cash and cash equivalents at end of
period
$
73.7
$
96.6
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). Acquisition related deferred
compensation accruals excluded from adjusted EBITDA represented
cash and stock awards that were 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, gains and losses on sales or impairment
of fixed assets, 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
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Net sales
$
387
$
347
$
1,078
$
983
Net earnings
$
77
$
70
$
203
$
177
Add: Income tax expense
27
24
68
61
Earnings before income taxes
$
104
$
94
$
271
$
238
Add: Interest/other income and expense,
net
8
7
21
20
Operating income
$
111
$
100
$
292
$
257
Add: RIP expense (1)
1
1
2
2
Add: Acquisition-related impacts (2)
-
1
2
4
Add: Cost reduction initiatives
-
-
-
3
Add: WAVE pension settlement (3)
-
-
1
-
(Less): Gain on sales of fixed assets, net
(4)
(5
)
-
(5
)
-
Add: Impairment of fixed asset (5)
5
-
5
-
Add: Environmental expense
-
-
2
-
Adjusted operating income
$
113
$
102
$
299
$
266
Add: Depreciation and amortization
26
23
76
66
Adjusted EBITDA
$
139
$
125
$
375
$
332
Operating income margin
28.8
%
28.9
%
27.1
%
26.2
%
Adjusted EBITDA margin
35.9
%
36.0
%
34.8
%
33.8
%
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 loss upon settlement of their defined benefit pension
plan.
4.
During the third quarter of 2024 we sold
our idled Mineral Fiber plant in St. Helens, Oregon.
5.
During the third quarter of 2024 we
recorded an impairment charge for an undeveloped parcel of land
upon reclassification to assets held for sale.
Mineral
Fiber
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Net sales
$
258
$
250
$
748
$
712
Operating income
$
93
$
86
$
254
$
225
Add: Acquisition-related impacts (1)
-
-
1
-
Add: Cost reduction initiatives
-
-
-
3
Add: WAVE pension settlement (2)
-
-
1
-
(Less): Gain on sales of fixed assets, net
(3)
(5
)
-
(5
)
-
Add: Impairment of fixed asset (4)
5
-
5
-
Add: Environmental expense
-
-
2
-
Adjusted operating income
$
93
$
86
$
257
$
227
Add: Depreciation and amortization
20
19
59
56
Adjusted EBITDA
$
113
$
105
$
316
$
283
Operating income margin
36.0
%
34.2
%
34.0
%
31.6
%
Adjusted EBITDA margin
43.9
%
41.9
%
42.3
%
39.8
%
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 loss upon settlement of their defined benefit pension
plan.
3.
During the third quarter of 2024 we sold
our idled Mineral Fiber plant in St. Helens, Oregon.
4.
During the third quarter of 2024 we
recorded an impairment charge for an undeveloped parcel of land
upon reclassification to assets held for sale.
Architectural
Specialties
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Net sales
$
129
$
98
$
330
$
271
Operating income
$
19
$
16
$
41
$
35
Add: Acquisition-related impacts (1)
-
1
1
4
Adjusted operating income
$
19
$
17
$
43
$
39
Add: Depreciation and amortization
6
3
17
10
Adjusted EBITDA
$
26
$
20
$
59
$
49
Operating income margin
14.9
%
15.9
%
12.4
%
12.9
%
Adjusted EBITDA margin
20.1
%
20.8
%
17.9
%
18.0
%
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
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Operating (loss)
$
(1
)
$
(1
)
$
(3
)
$
(2
)
Add: RIP expense (1)
1
1
2
2
Adjusted operating (loss)
$
-
$
-
$
(1
)
$
-
Add: Depreciation and amortization
-
-
-
-
Adjusted EBITDA
$
-
$
-
$
(1
)
$
-
1.
RIP expense represents only the plan
service cost that is recorded within Operating loss. 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
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Net cash provided by operating
activities
$
97
$
83
$
180
$
176
Net cash provided by (used for)
investing activities
20
(5
)
(61
)
(11
)
Net cash provided by operating and
investing activities
$
117
$
78
$
119
$
166
Add: Cash paid for acquisitions, net of
cash acquired and investment in unconsolidated affiliate
-
14
99
24
Add: Arktura deferred compensation (1)
-
-
6
-
Add: Contingent consideration in excess of
acquisition-date fair value (1)
-
-
-
5
(Less): Proceeds from sales of facilities
(2)
(9
)
-
(12
)
-
Adjusted Free Cash Flow
$
107
$
92
$
212
$
195
1.
Deferred compensation and contingent
consideration payments related to 2020 acquisitions were recorded
as components of net cash provided by operating activities.
2.
Proceeds related to the sale of
Architectural Specialties design center and the sale of our idled
Mineral Fiber plant in St. Helens, Oregon.
Consolidated
Results – Adjusted Diluted Earnings Per Share (EPS)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Total
Per Diluted Share
Total
Per Diluted Share
Total
Per Diluted Share
Total
Per Diluted Share
Net earnings
$
77
$
1.75
$
70
$
1.56
$
203
$
4.61
$
177
$
3.93
Add: Income tax expense
27
24
68
61
Earnings before income taxes
$
104
$
94
$
271
$
238
(Less): RIP (credit) (1)
-
-
(1
)
(1
)
Add: Acquisition-related impacts (2)
-
1
2
4
Add: Acquisition-related amortization
(3)
3
2
8
4
Add: Cost reduction initiatives
-
-
-
3
Add: WAVE pension settlement (4)
-
-
1
-
(Less): Gain on sales of fixed assets, net
(5)
(5
)
-
(5
)
-
Add: Impairment of fixed asset (6)
5
-
5
-
Add: Environmental expense
-
-
2
-
Adjusted net earnings before income
taxes
$
107
$
96
$
283
$
248
(Less): Adjusted income tax expense
(7)
(28
)
(25
)
(71
)
(63
)
Adjusted net earnings
$
79
$
1.81
$
71
$
1.60
$
211
$
4.81
$
184
$
4.10
Adjusted diluted EPS change versus prior
year
13.1%
17.3%
Diluted shares outstanding
43.9
44.6
44.0
45.0
Effective tax rate
26%
26%
25%
26%
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 loss upon settlement of their defined benefit pension
plan.
5.
During the third quarter of 2024 we sold
our idled Mineral Fiber plant in St. Helens, Oregon.
6.
During the third quarter of 2024 we
recorded an impairment charge for an undeveloped parcel of land
upon reclassification to assets held for sale.
7.
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
$
260
to
$
262
Add: Income tax expense
83
84
Earnings before income taxes
$
343
to
$
346
Add: Interest expense
40
41
Add: Other non-operating (income), net
(11
)
(10
)
Operating income
$
372
to
$
377
Add: RIP expense (1)
2
2
Add: Acquisition-related impacts (2)
2
2
(Less): Gain on sales of fixed assets, net
(3)
(5
)
(5
)
Add: Impairment of fixed asset (4)
5
5
Add: Environmental expense
2
2
Add: WAVE pension settlement (5)
1
1
Adjusted operating income
$
380
to
$
385
Add: Depreciation and amortization
102
105
Adjusted EBITDA
$
482
to
$
490
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.
During the third quarter of 2024 we sold
our idled Mineral Fiber plant in St. Helens, Oregon.
4.
During the third quarter of 2024 we
recorded an impairment charge for an undeveloped parcel of land
upon reclassification to assets held for sale.
5.
Represents the Company's 50% share of
WAVE's 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
$
260
$
5.91
to
$
262
$
5.95
Add: Income tax expense
83
84
Earnings before income taxes
$
343
to
$
346
Add: RIP (credit) (2)
(2
)
(1
)
Add: Acquisition-related amortization
(3)
10
11
Add: Acquisition-related impacts (4)
2
2
(Less): Gain on sales of fixed assets, net
(5)
(5
)
(5
)
Add: Impairment of fixed asset (6)
5
5
Add: Environmental expense
2
2
Add: WAVE pension settlement (7)
1
1
Adjusted earnings before income
taxes
$
356
to
$
361
(Less): Adjusted income tax expense
(8)
(86
)
(87
)
Adjusted net earnings
$
271
$
6.15
to
$
275
$
6.25
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.
During the third quarter of 2024 we sold
our idled Mineral Fiber plant in St. Helens, Oregon.
6.
During the third quarter of 2024 we
recorded an impairment charge for an undeveloped parcel of land
upon reclassification to assets held for sale.
7.
Represents the Company's 50% share of
WAVE's loss upon settlement of their defined benefit pension
plan.
8.
Income tax expense is based on an adjusted
effective tax rate of approximately 24%, 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
$
181
to
$
195
Add: Return of investment from joint
venture
98
100
Adjusted net cash provided by operating
activities
$
279
to
$
295
Less: Capital expenditures
(82
)
(88
)
Net cash provided by operating and
investing activities
$
197
to
$
207
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 sales of facilities
(2)
(12
)
(12
)
Adjusted Free Cash Flow
$
290
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 and the sale of our idled
Mineral Fiber plant in St. Helens, Oregon.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241029415018/en/
Investors & Media: Theresa Womble,
tlwomble@armstrongceilings.com or (717) 396-6354
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