Third-Quarter 2023 Results
- Net sales up 7% versus the prior-year quarter on strong average
unit value ("AUV") performance
- Operating income up 37% with 630 basis points of margin
expansion and diluted earnings per share from continuing operations
up 32% versus the prior-year quarter
- Adjusted EBITDA up 19% with 380 basis points of margin
expansion and adjusted diluted earnings per share up 18% versus the
prior-year quarter
- Year-to-date cash flow from operating and investing activities
up 30% and adjusted free cash flow up 50% versus the prior-year
period
- Raising full year guidance for all key metrics
Armstrong World Industries, Inc. (NYSE:AWI), a leader in the
design, innovation and manufacture of ceiling and wall solutions in
the Americas, today reported robust third-quarter 2023 financial
results demonstrating strong operating income and adjusted EBITDA
growth and margin expansion with positive contributions from both
the Mineral Fiber and Architectural Specialties segments.
“With record-setting total company net sales and adjusted EBITDA
this quarter, we continue to demonstrate the resilience of our
business in the face of challenging market conditions. With our
diverse set of end markets, consistent Mineral Fiber average unit
value growth and attractive growth initiatives, we are showing how
Armstrong can deliver strong financial performance in all parts of
the cycle,” said Vic Grizzle, President and CEO of Armstrong World
Industries. “We remain well on our way to generating solid sales,
earnings and cash flow growth for 2023, even as difficult market
conditions persist. I’m especially proud of our team’s ability to
execute in these challenging conditions and deliver results while
continuing to invest in and advance our growth initiatives.”
Third-Quarter Results
(Dollar amounts in millions
except per-share data)
For the Three Months Ended
September 30,
2023
2022
Change
Net sales
$
347.3
$
325.0
6.9%
Operating income
$
100.2
$
73.3
36.7%
Operating income margin
(Operating income as a % of net sales)
28.9
%
22.6
%
630bps
Earnings from continuing
operations
$
69.5
$
54.5
27.5%
Diluted earnings per share from
continuing operations
$
1.56
$
1.18
32.2%
Additional Non-GAAP*
Measures
Adjusted EBITDA
$
125
$
105
19.4%
Adjusted EBITDA margin (Adjusted
EBITDA as a % of net sales)
36.0
%
32.2
%
380bps
Adjusted earnings from continuing
operations
$
71
$
63
13.8%
Adjusted diluted earnings per
share from continuing operations
$
1.60
$
1.36
17.6%
*
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 2023 consolidated net sales increased 6.9% from
prior-year results, driven by favorable Average Unit Value (dollars
per unit sold, or "AUV") of $20 million and higher sales volumes of
$2 million. Mineral Fiber net sales increased $16 million while
Architectural Specialties net sales increased $6 million.
Third-quarter 2023 operating income increased 36.7% versus the
prior-year period driven primarily by favorable AUV performance, a
margin benefit from increased Architectural Specialties sales and
lower input costs. In the quarter, raw materials remained
inflationary while energy and freight costs declined compared to
the prior-year period. Input costs also benefited from favorable
inventory valuation impacts. Lower acquisition-related charges,
primarily due to the absence of the change in fair value of
contingent consideration related to the 2020 acquisition of TURF
Design, Inc. (“Turf”) that was recorded in the prior-year period,
provided an additional benefit to operating income. These benefits
were partially offset by an increase in selling expense.
Third-Quarter Segment Results
Mineral
Fiber
(Dollar amounts in millions)
For the Three Months Ended
September 30,
2023
2022
Change
Net sales
$
249.7
$
233.7
6.8%
Operating income
$
85.5
$
70.8
20.8%
Adjusted EBITDA*
$
105
$
89
17.5%
Operating income margin
34.2
%
30.3
%
390bps
Adjusted EBITDA margin*
41.9
%
38.1
%
380bps
Mineral Fiber net sales increased $16 million in the third
quarter of 2023 due to $18 million of favorable AUV, partially
offset by $2 million of lower sales volumes. The increase in AUV
was driven primarily by favorable price and to a lesser extent,
favorable mix, that resulted largely from positive customer channel
mix. The decrease in sales volumes was primarily due to softer
market demand and lower sales within our Latin America channel,
partially offset by the benefit from our growth initiatives.
Third-quarter 2023 operating income increased primarily due to
an $11 million benefit from favorable AUV and a $6 million benefit
from lower input costs, including favorable inventory valuation
impacts. These increases were partially offset by a $3 million
increase in selling expenses, primarily due to advertising expense,
and an increase in incentive compensation.
Architectural Specialties
(Dollar amounts in millions)
For the Three Months Ended
September 30,
2023
2022
Change
Net sales
$
97.6
$
91.3
6.9%
Operating income
$
15.5
$
3.4
355.9%
Adjusted EBITDA*
$
20
$
16
30.1%
Operating income margin
15.9
%
3.7
%
1,220bps
Adjusted EBITDA margin*
20.8
%
17.1
%
370bps
Third-quarter 2023 Architectural Specialties net sales increased
6.9% from prior-year results, driven primarily by growth in metal
product sales and contributions from the acquisitions of GC
Products, Inc. and BOK Modern, LLC.
Operating income increased in the third quarter of 2023 due to
an $8 million benefit from increased sales and improved custom
project margins and an $8 million reduction in acquisition-related
expenses, primarily due to the absence of the change in fair value
of contingent consideration related to the acquisition of Turf,
that was recorded in the prior-year period. These benefits were
partially offset by a $2 million increase in manufacturing costs
and a $2 million increase in selling expenses.
Cash Flow
Cash flows from operating activities for the first nine months
of 2023 increased $57 million versus the prior-year period, while
cash flows used for investing activities decreased $19 million
versus the prior-year period. The net $38 million, or 30%, increase
in operating and investing cash flows was primarily due to
favorable working capital changes, most notably in inventories and
accounts receivable, a favorable change in net income taxes payable
and an increase in dividends from WAVE. These benefits were
partially offset by an increase in purchases of property, plant and
equipment and cash paid for acquisitions.
Share Repurchase Program
During the third quarter of 2023, we repurchased 0.5 million
shares of common stock for a total cost of $40 million, excluding
the cost of commissions and taxes. In the first nine months of
2023, we repurchased 1.3 million shares of common stock for a total
cost of $97 million, excluding the cost of commissions and taxes.
As of September 30, 2023, there was $752 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 September 30, 2023, we have repurchased 13.7
million shares under the Program for a total cost of $948 million,
excluding commissions and taxes.
Updating 2023 Outlook
“Our strong third-quarter results with margin expansion in both
businesses give us confidence to raise full year 2023 guidance,”
said Chris Calzaretta, AWI Senior Vice President and CFO. “We
continue to expect full-year margin improvement in both the Mineral
Fiber and Architectural Specialties segments and we remain
confident in our growth strategy and the strong cash flow
generation of the business. This cash flow generation enables us to
invest back in our business while also providing direct returns to
shareholders. Year-to-date, we have returned over $130 million to
shareholders through share repurchases and dividends and, just last
week, we announced the fifth consecutive annual increase of our
quarterly dividend, further supporting our capital allocation
priorities.”
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
$
1,280
to
$
1,295
4%
to
5%
Adjusted EBITDA*
$
385
$
418
to
$
426
9%
to
11%
Adjusted diluted net earnings per
share*
$
4.74
$
5.05
to
$
5.15
7%
to
9%
Adjusted free cash flow*
$
221
$
245
to
$
255
11%
to
15%
Earnings Webcast
Management will host a live webcast conference call at 10:00
a.m. ET today, to discuss third-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 quarter ended
September 30, 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 3,100 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 September 30, 2023, 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,
2023
2022
2023
2022
Net sales
$
347.3
$
325.0
$
982.9
$
928.6
Cost of goods sold
205.9
207.5
605.4
591.0
Gross profit
141.4
117.5
377.5
337.6
Selling, general and administrative
expenses
64.6
59.3
189.2
177.9
Loss related to change in fair value of
contingent consideration
-
7.1
-
13.3
Equity (earnings) from joint venture
(23.4
)
(22.2
)
(69.1
)
(61.7
)
Operating income
100.2
73.3
257.4
208.1
Interest expense
8.8
7.0
26.7
17.9
Other non-operating (income), net
(2.3
)
(1.4
)
(6.9
)
(4.1
)
Earnings from continuing operations before
income taxes
93.7
67.7
237.6
194.3
Income tax expense
24.2
13.2
60.6
43.2
Earnings from continuing operations
69.5
54.5
177.0
151.1
Net earnings from discontinued
operations
-
3.0
-
3.0
Net earnings
$
69.5
$
57.5
$
177.0
$
154.1
Diluted earnings per share of common
stock, continuing operations
$
1.56
$
1.18
$
3.93
$
3.23
Diluted earnings per share of common
stock, discontinued operations
$
-
$
0.07
$
-
$
0.06
Diluted net earnings per share of common
stock
$
1.56
$
1.25
$
3.93
$
3.29
Average number of diluted common shares
outstanding
44.6
46.1
45.0
46.7
SEGMENT RESULTS
Armstrong World Industries, Inc.
and Subsidiaries
(Unaudited)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Net Sales
Mineral Fiber
$
249.7
$
233.7
$
712.1
$
671.4
Architectural Specialties
97.6
91.3
270.8
257.2
Total net sales
$
347.3
$
325.0
$
982.9
$
928.6
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Segment operating
income (loss)
Mineral Fiber
$
85.5
$
70.8
$
224.8
$
199.8
Architectural Specialties
15.5
3.4
34.9
11.0
Unallocated Corporate
(0.8
)
(0.9
)
(2.3
)
(2.7
)
Total consolidated operating income
$
100.2
$
73.3
$
257.4
$
208.1
SELECTED BALANCE SHEET
INFORMATION
Armstrong World Industries, Inc.
and Subsidiaries
Unaudited
September 30, 2023
December 31, 2022
Assets
Current assets
$
350.1
$
356.5
Property, plant and equipment, net
559.1
554.4
Other non-current assets
804.6
776.3
Total assets
$
1,713.8
$
1,687.2
Liabilities and
shareholders’ equity
Current liabilities
$
185.8
$
182.7
Non-current liabilities
942.5
969.5
Equity
585.5
535.0
Total liabilities and shareholders’
equity
$
1,713.8
$
1,687.2
SELECTED CASH FLOW
INFORMATION
Armstrong World Industries, Inc.
and Subsidiaries
(Unaudited)
For the Nine Months Ended
September 30,
2023
2022
Net earnings
$
177.0
$
154.1
Other adjustments to reconcile net
earnings to net cash provided by operating activities
5.4
25.7
Changes in operating assets and
liabilities, net
(6.0
)
(60.6
)
Net cash provided by operating
activities
176.4
119.2
Net cash (used for) provided by investing
activities
(10.6
)
8.1
Net cash (used for) financing
activities
(175.1
)
(137.6
)
Effect of exchange rate changes on cash
and cash equivalents
(0.1
)
(1.0
)
Net (decrease) in cash and cash
equivalents
(9.4
)
(11.3
)
Cash and cash equivalents at beginning of
year
106.0
98.1
Cash and cash equivalents at end of
period
$
96.6
$
86.8
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 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 earnings
from continuing operations 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 from Continuing
Operations – Adjusted EBITDA
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Net sales
$
347
$
325
$
983
$
929
Net earnings
$
70
$
58
$
177
$
154
Less: Net earnings from discontinued
operations
-
3
-
3
Earnings from continuing
operations
$
70
$
55
$
177
$
151
Add: Income tax expense
24
13
61
43
Earnings from continuing operations
before income taxes
$
94
$
68
$
238
$
194
Add: Interest/other income and expense,
net
7
6
20
14
Operating income
$
100
$
73
$
257
$
208
Add: RIP expense (1)
1
1
2
3
Add: Acquisition-related impacts (2)
1
9
4
19
Add: Cost reduction initiatives
-
-
3
-
Adjusted operating income
$
102
$
83
$
266
$
230
Add: Depreciation and amortization
23
22
66
64
Adjusted EBITDA
$
125
$
105
$
332
$
294
Operating income margin
28.9
%
22.6
%
26.2
%
22.4
%
Adjusted EBITDA margin
36.0
%
32.2
%
33.8
%
31.6
%
(1)
RIP expense represents only the
plan service cost that is recorded within Operating income. For all
periods presented, we were not required to and did not make cash
contributions to our RIP.
(2)
Represents the impact of
acquisition-related adjustments for changes in fair value of
contingent consideration, deferred compensation and restricted
stock expenses.
Mineral Fiber
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Net sales
$
250
$
234
$
712
$
671
Operating income
$
86
$
71
$
225
$
200
Add: Cost reduction initiatives
-
-
3
-
Adjusted operating income
$
86
$
71
$
227
$
200
Add: Depreciation and amortization
19
18
56
52
Adjusted EBITDA
$
105
$
89
$
283
$
252
Operating income margin
34.2
%
30.3
%
31.6
%
29.8
%
Adjusted EBITDA margin
41.9
%
38.1
%
39.8
%
37.5
%
Architectural
Specialties
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Net sales
$
98
$
91
$
271
$
257
Operating income
$
16
$
3
$
35
$
11
Add: Acquisition-related impacts (1)
1
9
4
19
Adjusted operating income
$
17
$
12
$
39
$
30
Add: Depreciation and amortization
3
3
10
11
Adjusted EBITDA
$
20
$
16
$
49
$
41
Operating income margin
15.9
%
3.7
%
12.9
%
4.3
%
Adjusted EBITDA margin
20.8
%
17.1
%
18.0
%
16.1
%
(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
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Operating (loss)
$
(1
)
$
(1
)
$
(2
)
$
(3
)
Add: RIP expense (1)
1
1
2
3
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
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Net cash provided by operating
activities
$
83
$
56
$
176
$
119
Net cash (used for) provided by
investing activities
(5
)
10
(11
)
8
Net cash provided by operating and
investing activities
$
78
$
66
$
166
$
127
Add: Acquisition of co-ownership interest
in software-related intellectual property
-
-
10
-
Add: Acquisition of BOK Modern
14
-
14
-
Add: Net environmental expenses
-
-
-
1
Add: Contingent consideration in excess of
acquisition-date fair value (1)
-
-
5
2
Adjusted Free Cash Flow
$
92
$
66
$
195
$
130
(1)
Contingent compensation payments
related to 2020 acquisitions recorded as a component of net cash
provided by operating activities.
Consolidated Results from Continuing
Operations – Adjusted Diluted Earnings Per Share
(EPS)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Total
Per Diluted Share
Total
Per Diluted Share
Total
Per Diluted Share
Total
Per Diluted Share
Net earnings
$
70
$
1.56
$
58
$
1.25
$
177
$
3.93
$
154
$
3.29
Less: Net earnings from discontinued
operations
-
-
3
0.07
-
-
3
0.06
Earnings from continuing
operations
$
70
$
1.56
$
55
$
1.18
$
177
$
3.93
$
151
$
3.23
Add: Income tax expense
24
13
61
43
Earnings from continuing operations
before income taxes
$
94
$
68
$
238
$
194
(Less): RIP (credit) (1)
-
-
(1
)
(1
)
Add: Acquisition-related impacts (2)
1
9
4
19
Add: Acquisition-related amortization
(3)
2
2
4
6
Add: Cost reduction initiatives
-
-
3
-
Adjusted earnings from continuing
operations before income taxes
$
96
$
78
$
248
$
219
(Less): Adjusted income tax expense
(4)
(25
)
(15
)
(63
)
(49
)
Adjusted net earnings
$
71
$
1.60
$
63
$
1.36
$
184
$
4.10
$
171
$
3.65
Adjusted diluted EPS change versus prior
year
17.6%
12.3%
Diluted shares outstanding
44.6
46.1
45.0
46.7
Effective tax rate
26%
20%
26%
22%
(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 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)
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,
2023
Low
High
Net earnings
$
218
to
$
220
Add: Income tax expense
73
75
Earnings before income taxes
$
291
to
$
295
Add: Interest expense
36
37
Add: Other non-operating (income), net
(8
)
(9
)
Operating income
$
319
to
$
323
Add: RIP expense (1)
3
3
Add: Acquisition-related impacts (2)
5
6
Add: Cost reduction initiatives
3
3
Adjusted operating income
$
330
to
$
335
Add: Depreciation and amortization
88
91
Adjusted EBITDA
$
418
to
$
426
(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 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
$
218
$
4.84
to
$
220
$
4.89
Add: Income tax expense
73
75
Earnings before income taxes
$
291
to
$
295
Add: RIP (credit) (2)
(1
)
(1
)
Add: Acquisition-related amortization
(3)
6
6
Add: Acquisition-related impacts (4)
5
6
Add: Cost reduction initiatives
3
3
Adjusted earnings before income
taxes
$
304
to
$
308
(Less): Adjusted income tax expense
(5)
(76
)
(77
)
Adjusted net earnings
$
228
$
5.05
to
$
231
$
5.15
(1)
Adjusted diluted 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 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 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
$
235
to
$
245
Add: Return of investment from joint
venture
90
95
Adjusted net cash provided by operating
activities
$
325
to
$
340
Less: Capital expenditures
(80
)
(85
)
Adjusted Free Cash Flow
$
245
to
$
255
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231024080404/en/
Investors & Media: Theresa Womble,
tlwomble@armstrongceilings.com or (717) 396-6354
Armstrong World Industries (NYSE:AWI)
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Armstrong World Industries (NYSE:AWI)
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