Armstrong World Industries, Inc. (NYSE:AWI), a leader in the
design, innovation and manufacture of ceiling and wall solutions in
the Americas, today reported first-quarter 2023 financial results,
including year-over-year net sales growth of 10% driven by a 12%
increase in Mineral Fiber segment sales and a 3% increase in
Architectural Specialties segment sales.
“The results we delivered in the first quarter
of 2023, highlighted by robust Mineral Fiber segment volume growth
of 9% and Mineral Fiber adjusted EBITDA margin expansion, are an
important first step on the path to delivering sales and earnings
growth for the full year. We remain laser-focused on our strategic
initiatives to drive sustainable growth while managing our costs in
the current uncertain macroeconomic environment,” said Vic Grizzle,
President and CEO of Armstrong World Industries. “Our strong market
position, our commitment to operational excellence and innovation,
and our best-in-class service model continue to enable us to create
value in all parts of the economic cycle.”
First-Quarter Results
(Dollar amounts in millions
except per-share data) |
For the Three Months Ended March 31, |
|
|
|
2023 |
|
2022 |
|
Change |
Net sales |
$ |
310.2 |
|
$ |
282.6 |
|
9.8% |
Operating income |
$ |
70.2 |
|
$ |
63.2 |
|
11.1% |
Net earnings |
$ |
47.3 |
|
$ |
44.4 |
|
6.5% |
Diluted net earnings per
share |
$ |
1.04 |
|
$ |
0.94 |
|
10.6% |
|
|
|
|
|
|
Additional Non-GAAP*
Measures |
|
|
|
|
|
Adjusted EBITDA |
$ |
96 |
|
$ |
87 |
|
9.5% |
Adjusted net earnings |
$ |
51 |
|
$ |
48 |
|
6.2% |
Adjusted diluted net earnings per
share |
$ |
1.12 |
|
$ |
1.02 |
|
9.8% |
* 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 2023 consolidated net sales
increased 9.8% from prior-year results, driven primarily by higher
volumes of $21 million and favorable Average Unit Value ("AUV") of
$6 million. Mineral Fiber net sales increased $25 million and
Architectural Specialties net sales increased $2 million over the
prior-year period.
First-quarter 2023 operating income increased 11.1% versus the
prior-year period driven primarily by the benefit of higher
volumes, favorable AUV performance and an increase in Worthington
Armstrong Joint Venture ('WAVE") equity earnings. These benefits
were partially offset by increases in manufacturing costs and
selling expenses, as well as severance expenses related to cost
savings initiatives in the current-year quarter.
First-Quarter Segment ResultsMineral Fiber
(Dollar amounts in
millions) |
For the Three Months Ended March 31, |
|
|
|
2023 |
|
2022 |
|
Change |
Net sales |
$ |
228.4 |
|
$ |
203.2 |
|
12.4% |
Operating income |
$ |
63.8 |
|
$ |
57.6 |
|
10.8% |
Adjusted EBITDA* |
$ |
84 |
|
$ |
74 |
|
12.9% |
First-quarter 2023 Mineral Fiber net sales
increased 12.4% from prior-year results due to $19 million of
higher sales volumes and $6 million of favorable AUV. The increase
in volumes was primarily driven by a recovery of sales volumes
compared to a weaker prior-year period due to inventory level
reductions at certain customers, and partially due to current-year
inventory level increases at home center customers. The improvement
in AUV was driven by favorable like-for-like price, partially
offset by unfavorable geographic mix.
First-quarter operating income increased 10.8% from prior-year
results driven primarily by a $12 million benefit from higher sales
volumes, a $5 million benefit from favorable AUV and a $3 million
increase in WAVE equity earnings. These benefits were partially
offset by an $8 million increase in manufacturing costs, primarily
driven by raw material and energy inflation and inventory valuation
impacts, partially offset by improved manufacturing productivity.
Also partially offsetting the favorability was $3 million in
severance costs related to cost savings initiatives in the
current-year quarter and a $3 million increase in selling expenses,
partially in support of digital growth initiatives.
Architectural Specialties
(Dollar amounts in
millions) |
For the Three Months Ended March 31, |
|
|
|
2023 |
|
2022 |
|
Change |
Net sales |
$ |
81.8 |
|
$ |
79.4 |
|
3.0% |
Operating income |
$ |
7.2 |
|
$ |
6.5 |
|
10.8% |
Adjusted EBITDA* |
$ |
12 |
|
$ |
13 |
|
(10.0)% |
First-quarter 2023 net sales in Architectural Specialties
increased 3.0% from prior-year results, driven by growth across
most product categories, partially offset by lower metal product
sales. Net sales growth was also negatively impacted by the timing
of custom project sales.
The 10.8% increase in first-quarter Architectural Specialties
operating income was driven primarily by a $2 million margin
benefit from increased sales and favorable project mix and a $1
million reduction in acquisition-related expenses, partially offset
by a $2 million increase in selling expenses.
Cash Flow and Share Repurchase
ProgramCash flows from operating activities for the first
three months of 2023 increased $10 million versus the prior-year
quarter, while cash flows from investing activities decreased $2
million versus the prior-year quarter. The net $8 million, or 46%,
increase in operating and investing cash flows was primarily due to
favorable working capital changes, most notably in inventory, and
an increase in dividends from WAVE, partially offset by an increase
in purchases of property, plant and equipment.
During the first quarter of 2023, we repurchased
0.4 million shares of common stock for a total cost of $27 million,
excluding the cost of commissions and taxes. As of March 31, 2023,
there was $322 million remaining under the Board of Directors'
current authorized share repurchase program.
**On July 29, 2016, our Board of Directors
approved our share repurchase program pursuant to which we are
authorized to repurchase up to $1,200 million of our outstanding
common stock through December 31, 2023 (the “Program”). Repurchases
under the Program may be made through open market, block and
privately negotiated transactions, including Rule 10b5-1 plans, at
such times and in such amounts as management deems appropriate,
subject to market and business conditions, regulatory requirements
and other factors. The Program does not obligate AWI to repurchase
any particular amount of common stock and may be suspended or
discontinued at any time without notice.
Maintaining 2023 Outlook
“While we are encouraged by our first-quarter
results, including adjusted free cash flow growth versus prior
year, we acknowledge the challenging macroeconomic environment and
expect weaker market conditions ahead for the rest of the year,”
said Chris Calzaretta, AWI CFO. “We are confident in the financial
strength of our business and are maintaining our full-year 2023
outlook. We continue to be focused on executing our strategy,
delivering manufacturing productivity, managing costs across the
business and growing adjusted free cash flow. Our capital
allocation strategy is unchanged, as we expect to continue to
create long-term value for shareholders through reinvestment in our
business, strategic partnerships and acquisitions, and returning
excess cash to shareholders.”
|
|
|
For the Year Ended December 31, 2023 |
(Dollar amounts in millions
except per-share data) |
2022 Actual |
|
Current Guidance |
|
VPY Growth % |
Net sales |
$ |
1,233 |
|
$ |
1,260 |
|
to |
$ |
1,310 |
|
2% |
to |
6% |
Adjusted EBITDA* |
$ |
385 |
|
$ |
395 |
|
to |
$ |
420 |
|
3% |
to |
9% |
Adjusted diluted net earnings per
share* |
$ |
4.74 |
|
$ |
4.80 |
|
to |
$ |
5.05 |
|
1% |
to |
7% |
Adjusted free cash flow* |
$ |
221 |
|
$ |
230 |
|
to |
$ |
250 |
|
4% |
to |
13% |
Earnings Webcast
Management will host a live webcast conference
call at 10:00 a.m. ET today, to discuss first-quarter 2023 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 10-Q filed with the U.S.
Securities and Exchange Commission (“SEC”), including the Form 10-Q
for the three months ended March 31, 2023, 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 $1.2 billion in revenue
in 2022, AWI has approximately 3,000 employees and a manufacturing
network of 16 facilities, plus seven facilities dedicated to its
WAVE joint venture.
More details on the Company’s performance can be
found in its report on Form 10-Q for the quarter ended
March 31, 2023, that the Company expects to file with the SEC
today.
ContactsInvestors & Media:
Theresa Womble, tlwomble@armstrongceilings.com or (717)
396-6354
Reported Financial Results(amounts in millions,
except per share data)
SELECT FINANCIAL RESULTSArmstrong World
Industries, Inc. and Subsidiaries(Unaudited)
|
For the Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
Net sales |
$ |
310.2 |
|
|
$ |
282.6 |
|
Cost of goods sold |
|
198.1 |
|
|
|
180.4 |
|
Gross profit |
|
112.1 |
|
|
|
102.2 |
|
Selling, general and
administrative expenses |
|
62.7 |
|
|
|
57.1 |
|
Loss related to change in fair
value of contingent consideration |
|
- |
|
|
|
0.1 |
|
Equity (earnings) from joint
venture |
|
(20.8 |
) |
|
|
(18.2 |
) |
Operating income |
|
70.2 |
|
|
|
63.2 |
|
Interest expense |
|
8.7 |
|
|
|
5.1 |
|
Other non-operating (income),
net |
|
(2.4 |
) |
|
|
(1.3 |
) |
Earnings before income taxes |
|
63.9 |
|
|
|
59.4 |
|
Income tax expense |
|
16.6 |
|
|
|
15.0 |
|
Net earnings |
$ |
47.3 |
|
|
$ |
44.4 |
|
|
|
|
|
|
|
Diluted net earnings per share of
common stock |
$ |
1.04 |
|
|
$ |
0.94 |
|
Average number of diluted common
shares outstanding |
|
45.5 |
|
|
|
47.2 |
|
SEGMENT RESULTSArmstrong World Industries, Inc.
and Subsidiaries(Unaudited)
|
For the Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
Net Sales |
|
|
|
|
|
Mineral Fiber |
$ |
228.4 |
|
|
$ |
203.2 |
|
Architectural Specialties |
|
81.8 |
|
|
|
79.4 |
|
Total net sales |
$ |
310.2 |
|
|
$ |
282.6 |
|
|
For the Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
Segment operating income
(loss) |
|
|
|
|
|
Mineral Fiber |
$ |
63.8 |
|
|
$ |
57.6 |
|
Architectural Specialties |
|
7.2 |
|
|
|
6.5 |
|
Unallocated Corporate |
|
(0.8 |
) |
|
|
(0.9 |
) |
Total consolidated operating
income |
$ |
70.2 |
|
|
$ |
63.2 |
|
SELECTED BALANCE SHEET INFORMATIONArmstrong World
Industries, Inc. and Subsidiaries
|
Unaudited |
|
|
|
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
Assets |
|
|
|
|
|
Current assets |
$ |
362.0 |
|
|
$ |
356.5 |
|
Property, plant and equipment,
net |
|
560.4 |
|
|
|
554.4 |
|
Other noncurrent assets |
|
765.5 |
|
|
|
776.3 |
|
Total assets |
$ |
1,687.9 |
|
|
$ |
1,687.2 |
|
Liabilities and shareholders’
equity |
|
|
|
|
|
Current liabilities |
$ |
166.3 |
|
|
$ |
182.7 |
|
Noncurrent liabilities |
|
976.8 |
|
|
|
969.5 |
|
Equity |
|
544.8 |
|
|
|
535.0 |
|
Total liabilities and shareholders’ equity |
$ |
1,687.9 |
|
|
$ |
1,687.2 |
|
SELECTED CASH FLOW INFORMATIONArmstrong World
Industries, Inc. and Subsidiaries(Unaudited)
|
For the Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
Net earnings |
$ |
47.3 |
|
|
$ |
44.4 |
|
Other adjustments to reconcile
net earnings to net cash provided by operating activities |
|
(1.4 |
) |
|
|
5.2 |
|
Changes in operating assets and
liabilities, net |
|
(19.7 |
) |
|
|
(32.9 |
) |
Net cash provided by operating
activities |
|
26.2 |
|
|
|
16.7 |
|
Net cash (used for) provided by
investing activities |
|
(1.5 |
) |
|
|
0.2 |
|
Net cash (used for) financing
activities |
|
(34.7 |
) |
|
|
(39.2 |
) |
Effect of exchange rate changes
on cash and cash equivalents |
|
— |
|
|
|
0.3 |
|
Net (decrease) in cash and cash
equivalents |
|
(10.0 |
) |
|
|
(22.0 |
) |
Cash and cash equivalents at
beginning of year |
|
106.0 |
|
|
|
98.1 |
|
Cash and cash equivalents at end
of period |
$ |
96.0 |
|
|
$ |
76.1 |
|
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 net 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, deferred compensation accruals,
impact of adjustments related to the fair value of inventory) for
recent acquisitions. The deferred compensation accruals are for
cash and stock awards that are recorded over each award's
respective vesting period, as such payments are 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 2023. 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 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, |
|
|
2023 |
|
|
2022 |
|
Net earnings |
$ |
47 |
|
|
$ |
44 |
|
Add: Income tax expense |
|
17 |
|
|
|
15 |
|
Earnings before income
taxes |
$ |
64 |
|
|
$ |
59 |
|
Add: Interest/other income and expense, net |
|
6 |
|
|
|
4 |
|
Operating
income |
$ |
70 |
|
|
$ |
63 |
|
Add: RIP expense (1) |
|
1 |
|
|
|
1 |
|
Add: Acquisition-related impacts (2) |
|
1 |
|
|
|
2 |
|
Add: Cost reduction initiatives |
|
3 |
|
|
|
- |
|
Adjusted operating
income |
$ |
75 |
|
|
$ |
67 |
|
Add: Depreciation and amortization |
|
21 |
|
|
|
21 |
|
Adjusted
EBITDA |
$ |
96 |
|
|
$ |
87 |
|
(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, |
|
|
2023 |
|
|
2022 |
|
Operating income |
$ |
64 |
|
|
$ |
58 |
|
Add: Cost reduction initiatives |
|
3 |
|
|
|
- |
|
Adjusted operating
income |
$ |
66 |
|
|
$ |
58 |
|
Add: Depreciation and amortization |
|
18 |
|
|
|
17 |
|
Adjusted
EBITDA |
$ |
84 |
|
|
$ |
74 |
|
Architectural Specialties
|
For the Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
Operating income |
$ |
7 |
|
|
$ |
7 |
|
Add: Acquisition-related impacts (1) |
|
1 |
|
|
|
2 |
|
Adjusted operating
income |
$ |
8 |
|
|
$ |
9 |
|
Add: Depreciation and amortization |
|
3 |
|
|
|
4 |
|
Adjusted
EBITDA |
$ |
12 |
|
|
$ |
13 |
|
(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, |
|
|
2023 |
|
|
2022 |
|
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.
Adjusted Free Cash Flow
|
For the Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
Net cash provided by operating activities |
$ |
26 |
|
|
$ |
17 |
|
Net cash (used for)
provided by investing activities |
|
(2 |
) |
|
|
- |
|
Net cash provided by
operating and investing activities |
$ |
25 |
|
|
$ |
17 |
|
Add: Net environmental expenses |
|
- |
|
|
|
1 |
|
Add: Contingent consideration in excess of acquisition-date fair
value (1) |
|
5 |
|
|
|
2 |
|
Adjusted Free Cash
Flow |
$ |
30 |
|
|
$ |
20 |
|
(1) Contingent compensation payments related to
2020 acquisitions recorded as a component of net cash provided by
operating activities.
Adjusted Diluted Net Earnings Per Share
(EPS)
|
For the Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
|
|
Total |
|
Per Diluted Share |
|
Total |
|
Per Diluted Share |
|
Net earnings |
$ |
47 |
|
$ |
1.04 |
|
|
$ |
44 |
|
$ |
0.94 |
|
|
Add: Income tax expense |
|
17 |
|
|
|
|
15 |
|
|
|
Earnings before income
taxes |
$ |
64 |
|
|
|
$ |
59 |
|
|
|
Add: Acquisition-related impacts
(1) |
|
1 |
|
|
|
|
2 |
|
|
|
Add: Acquisition-related
amortization (2) |
|
1 |
|
|
|
|
3 |
|
|
|
Add: Cost reduction
initiatives |
|
3 |
|
|
|
|
- |
|
|
|
Adjusted earnings before
income taxes |
$ |
69 |
|
|
|
$ |
64 |
|
|
|
(Less): Adjusted income tax
expense (3) |
|
(18 |
) |
|
|
|
(16 |
) |
|
|
Adjusted net
earnings |
$ |
51 |
|
$ |
1.12 |
|
|
$ |
48 |
|
$ |
1.02 |
|
|
Adjusted diluted EPS change
versus prior year |
|
|
|
9.8% |
|
|
|
|
|
|
Diluted shares outstanding |
|
|
|
45.5 |
|
|
|
|
|
47.2 |
|
|
Effective tax rate |
|
|
|
26% |
|
|
|
|
|
25% |
|
|
|
|
|
|
|
|
|
|
|
(1) Represents the impact of acquisition-related
adjustments for changes in fair value of contingent consideration,
deferred compensation and restricted stock expenses.(2) Represents
the intangible amortization related to acquired entities, 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 before income taxes.
Adjusted EBITDA Guidance
|
For the Year Ending December 31, 2023 |
|
|
Low |
|
|
High |
|
Net earnings |
$ |
206 |
|
to |
$ |
217 |
|
Add: Income tax expense |
|
68 |
|
|
|
73 |
|
Earnings before income
taxes |
$ |
274 |
|
to |
$ |
289 |
|
Add: Interest expense |
|
35 |
|
|
|
37 |
|
Add: Other non-operating (income) |
|
(7 |
) |
|
|
(6 |
) |
Operating
income |
$ |
302 |
|
to |
$ |
321 |
|
Add: RIP expense (1) |
|
3 |
|
|
|
4 |
|
Add: Acquisition-related impacts (2) |
|
4 |
|
|
|
5 |
|
Add: Cost reduction initiatives |
|
3 |
|
|
|
3 |
|
Adjusted operating
income |
$ |
312 |
|
to |
$ |
332 |
|
Add: Depreciation & Amortization |
|
83 |
|
|
|
88 |
|
Adjusted
EBITDA |
$ |
395 |
|
to |
$ |
420 |
|
(1) RIP expense represents only the plan service
cost that is recorded within Operating Income. For all periods
presented, we were not required and did not make cash contributions
to our RIP.(2) Represents the impact of acquisition-related
adjustments for deferred compensation and restricted stock
expenses.
Adjusted Diluted Net Earnings Per Share
Guidance
|
For the Year Ending December 31, 2023 |
|
|
Low |
|
|
Per Diluted Share(1) |
|
|
High |
|
|
Per Diluted Share(1) |
|
Net earnings |
$ |
206 |
|
|
$ |
4.57 |
|
to |
$ |
217 |
|
|
$ |
4.81 |
|
Add: Income tax expense |
$ |
68 |
|
|
|
|
|
$ |
73 |
|
|
|
|
Earnings before income
taxes |
$ |
274 |
|
|
|
|
to |
$ |
289 |
|
|
|
|
Add: RIP (credit) (2) |
$ |
(1 |
) |
|
|
|
|
$ |
(2 |
) |
|
|
|
Add: Acquisition-related amortization (3) |
$ |
5 |
|
|
|
|
|
$ |
6 |
|
|
|
|
Add: Acquisition-related impacts (4) |
$ |
4 |
|
|
|
|
|
$ |
5 |
|
|
|
|
Add: Cost reduction initiatives |
$ |
3 |
|
|
|
|
|
$ |
3 |
|
|
|
|
Adjusted earnings before
income taxes |
$ |
285 |
|
|
|
|
to |
$ |
301 |
|
|
|
|
(Less): Adjusted income tax expense (5) |
|
(70 |
) |
|
|
|
|
|
(74 |
) |
|
|
|
Adjusted net
earnings |
$ |
215 |
|
|
$ |
4.80 |
|
to |
$ |
227 |
|
|
$ |
5.05 |
|
(1) Adjusted EPS guidance for 2023 is calculated based on ~45
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 the intangible amortization
related to acquired entities, 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 deferred compensation
and restricted stock expenses.(5) Income tax expense is based on an
adjusted effective tax rate of ~25%, multiplied by adjusted
earnings before income taxes.
Adjusted Free Cash Flow
Guidance
|
For the Year Ending December 31, 2023 |
|
|
Low |
|
|
High |
|
Net cash provided by operating activities |
$ |
220 |
|
to |
$ |
240 |
|
Add: Return of investment from joint venture |
|
85 |
|
|
|
95 |
|
Adjusted net cash
provided by operating activities |
$ |
305 |
|
to |
$ |
335 |
|
Less: Capital expenditures |
|
(75 |
) |
|
|
(85 |
) |
Adjusted Free Cash
Flow |
$ |
230 |
|
to |
$ |
250 |
|
Armstrong World Industries (NYSE:AWI)
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Armstrong World Industries (NYSE:AWI)
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Von Apr 2023 bis Apr 2024