Fourth-Quarter 2023 Results†
- Net sales up 3% with better-than-expected Mineral Fiber
volumes
- Operating income declined 6% primarily due to
acquisition-related expenses, while adjusted operating income
increased 5%
- Diluted earnings per share from continuing operations down 1%
primarily due to acquisition-related expenses
- Adjusted EBITDA up 7% and adjusted diluted earnings per share
up 13%
Full-Year 2023 Results†
- Net sales up 5% on strong average unit value ("AUV")
performance
- Operating income up 16% and adjusted operating income increased
13%
- Diluted earnings per share from continuing operations up
16%
- Adjusted EBITDA up 12% and adjusted diluted earnings per share
up 12%
- Cash flow from operating and investing activities up 6% and
adjusted free cash flow up 19%
- Issuing 2024 Guidance: Net sales growth of 3% to 6% and
adjusted EBITDA growth of 5% to 9%
† All comparisons versus the prior year period.
Armstrong World Industries, Inc. (NYSE:AWI), a leader in the
design, innovation and manufacture of ceiling and wall solutions in
the Americas, today reported record-setting fourth-quarter and
full-year 2023 financial results with steady sales growth and
improved adjusted EBITDA margins across both the Mineral Fiber and
Architectural Specialties segments.
“We delivered record fourth quarter net sales and adjusted
EBITDA results, highlighted by adjusted EBITDA margin expansion in
both our segments while continuing to face soft market conditions.
These results contributed to record-setting sales and adjusted
EBITDA for the full year that exceeded our guidance expectations,”
said Vic Grizzle, President and CEO of Armstrong World Industries.
“Our strong position and the momentum we’ve generated is a clear
testament to the focused efforts of our teams to execute our
strategy and deliver on our key initiatives along with the overall
resilience of our business model.”
Fourth-Quarter Results
(Dollar amounts in millions except
per-share data)
For the Three Months Ended
December 31,
2023
2022
Change
Net sales
$
312.3
$
304.5
2.6%
Operating income
$
66.3
$
70.6
(6.1)%
Operating income margin (Operating income
as a % of net sales)
21.2
%
23.2
%
(200)bps
Earnings from continuing operations
$
46.8
$
48.8
(4.1)%
Diluted earnings per share from continuing
operations
$
1.06
$
1.07
(0.9)%
Additional Non-GAAP* Measures
Adjusted EBITDA
$
98
$
92
6.9%
Adjusted EBITDA margin (Adjusted EBITDA as
a % of net sales)
31.4
%
30.1
%
130bps
Adjusted earnings from continuing
operations
$
54
$
49
9.1%
Adjusted diluted earnings per share from
continuing operations
$
1.22
$
1.08
13.0%
*
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.
Fourth-quarter 2023 consolidated net sales increased 2.6% from
prior-year results, driven by favorable Average Unit Value (dollars
per unit sold, or "AUV") of $4 million and higher sales volumes of
$4 million. Mineral Fiber net sales increased $4 million and
Architectural Specialties net sales increased $4 million.
Fourth-quarter 2023 operating income was positively impacted by
improved Architectural Specialties project margins, a benefit from
favorable AUV and increased equity earnings from the Worthington
Armstrong Joint Venture ("WAVE"), partially offset by higher
incentive compensation, an increase in selling expenses and higher
manufacturing costs. Operating income was also negatively impacted
by a $7 million increase in acquisition-related charges, resulting
in a 6.1% decrease versus the prior-year period.
Fourth-Quarter Segment Results
Mineral
Fiber
(Dollar amounts in millions)
For the Three Months Ended
December 31,
2023
2022
Change
Net sales
$
220.3
$
216.0
2.0%
Operating income
$
60.9
$
61.1
(0.3)%
Adjusted EBITDA*
$
81
$
78
3.5%
Operating income margin
27.6
%
28.3
%
(70)bps
Adjusted EBITDA margin*
36.8
%
36.3
%
50bps
Mineral Fiber net sales increased 2.0% in the fourth quarter of
2023 primarily due to $4 million of favorable AUV and $1 million of
higher volumes. The increase in AUV was driven by favorable price,
partially offset by unfavorable mix. The change in sales volumes
resulted from the benefit from our growth initiatives partially
offset by softer market demand.
Fourth-quarter 2023 operating income was substantially unchanged
from the prior year. A $6 million increase in incentive
compensation and a $2 million increase in selling expense in the
fourth quarter of 2023 were partially offset by a $4 million
benefit from favorable AUV and a $4 million increase in WAVE equity
earnings.
Architectural
Specialties
(Dollar amounts in millions)
For the Three Months Ended
December 31,
2023
2022
Change
Net sales
$
92.0
$
88.5
4.0%
Operating income
$
6.0
$
10.7
(43.9)%
Adjusted EBITDA*
$
17
$
13
26.9%
Operating income margin
6.5
%
12.1
%
(560)bps
Adjusted EBITDA margin*
18.4
%
15.0
%
330bps
Fourth-quarter 2023 Architectural Specialties net sales
increased 4.0% from prior-year results, driven primarily by
contributions from recent acquisitions, partially offset by the
impact of unfavorable custom project timing.
Operating income was positively impacted by a $6 million margin
benefit from increased sales and improved custom project margins,
partially offset by a $2 million increase in selling expenses and
higher manufacturing costs. Operating income was also negatively
impacted by a $7 million increase in acquisition-related charges,
resulting in a 43.9% decrease versus the prior-year period.
Full Year Results
(Dollar amounts in millions)
For the Year Ended December
31,
2023
2022
Change
Net sales
$
1,295.2
$
1,233.1
5.0%
Operating income
$
323.7
$
278.7
16.1%
Operating income margin
25.0
%
22.6
%
240bps
Earnings from continuing operations
$
223.8
$
199.9
12.0%
Diluted net earnings per share from
continuing operations
$
4.99
$
4.30
16.0%
Net cash provided by operating and
investing activities
$
223.1
$
210.6
5.9%
Additional Non-GAAP* Measures
Adjusted EBITDA
$
430
$
385
11.6%
Adjusted EBITDA margin
33.2
%
31.2
%
200bps
Adjusted earnings from continuing
operations
$
238
$
220
8.3%
Adjusted diluted net earnings per share
from continuing operations
$
5.32
$
4.74
12.2%
Adjusted free cash flow
$
263
$
221
19.0%
Full-year net sales increased 5.0% from prior-year results,
primarily due to favorable AUV of $43 million and higher sales
volumes of $19 million. Mineral Fiber net sales increased $45
million, while Architectural Specialties net sales increased $17
million. The increase in Mineral Fiber net sales was primarily
driven by favorable AUV as a result of increased like-for-like
pricing, partially offset by unfavorable mix. Architectural
Specialties net sales improved primarily due to contributions from
recent acquisitions, as well as growth in metal and felt product
sales, partially offset by lower wood product sales.
Full-year operating income increased 16.1% from prior-year
results, driven by favorable AUV benefit of $33 million, a $23
million margin benefit from increased Architectural Specialties
sales, a $12 million increase in WAVE equity earnings, and an $8
million reduction in acquisition-related expenses. These benefits
were partially offset by a $15 million increase in selling expense,
primarily related to investments in selling capabilities within our
Architectural Specialties segment, investments in support of our
digital initiatives and higher marketing expenses, a $10 million
increase in manufacturing and input costs, net of productivity, and
an $8 million increase in incentive compensation.
Cash Flow
Cash flows from operating activities in 2023 increased $51
million versus the prior-year period, while cash flows from
investing activities decreased $39 million versus the prior-year
period. The net $13 million, or 5.9%, increase in operating and
investing cash flows was primarily due to favorable working capital
changes in inventories, accounts receivable and accounts payable
and accrued expenses. These benefits were partially offset by an
increase in cash paid for acquisitions, an increase in purchases of
property, plant and equipment, and lower dividends from WAVE.
Share Repurchase Program
During the fourth quarter of 2023, we repurchased 0.4 million
shares of common stock for a total cost of $35 million, excluding
the cost of commissions and taxes. For the full-year 2023, we
repurchased 1.8 million shares of common stock for a total cost of
$132 million, excluding the cost of commissions and taxes. As of
December 31, 2023, there was $717 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 December 31, 2023, we have repurchased 14.2
million shares under the Program for a total cost of $983 million,
excluding commissions and taxes.
2024 Outlook
“Solid contributions from Mineral Fiber AUV, operating leverage
in the Architectural Specialties segment, WAVE equity earnings and
manufacturing productivity were key to driving margin expansion for
the company in 2023. These strong financial results enabled full
year adjusted free cash flow growth of nearly 20% and fueled our
ability to execute on all of our capital allocation priorities in
2023,” said Chris Calzaretta, AWI Senior Vice President and CFO.
“Our 2024 outlook reflects a laser-focused approach to delivering
profitable growth, margin expansion and adjusted free cash flow
growth despite modestly softer economic conditions. Our capital
allocation priorities remain unchanged as we continue to execute
our strategy and create value for shareholders.”
For the Year Ended December 31,
2024
(Dollar amounts in millions except
per-share data)
2023 Actual
Current Guidance
VPY Growth %
Net sales
$
1,295
$
1,335
to
$
1,375
3%
to
6%
Adjusted EBITDA*
$
430
$
450
to
$
470
5%
to
9%
Adjusted diluted net earnings per
share*
$
5.32
$
5.60
to
$
5.90
5%
to
11%
Adjusted free cash flow*
$
263
$
275
to
$
290
5%
to
10%
Earnings Webcast
Management will host a live webcast conference call at 10:00
a.m. ET today, to discuss fourth-quarter and full-year 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 Form 10-Q filed with the U.S. Securities and Exchange
Commission (“SEC”), including our annual report on Form 10-K for
the year ended December 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 $1.3 billion in revenue in 2023,
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-K for the year ended December 31, 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 (Quarterly data
is unaudited)
For the Three Months Ended
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
Net sales
$
312.3
$
304.5
$
1,295.2
$
1,233.1
Cost of goods sold
192.8
193.0
798.2
784.0
Gross profit
119.5
111.5
497.0
449.1
Selling, general and administrative
expenses
73.3
59.1
262.5
237.0
Loss (gain) related to change in fair
value of contingent consideration
0.1
(2.3
)
0.1
11.0
Equity (earnings) from joint venture
(20.2
)
(15.9
)
(89.3
)
(77.6
)
Operating income
66.3
70.6
323.7
278.7
Interest expense
8.6
9.2
35.3
27.1
Other non-operating (income), net
(3.0
)
(1.9
)
(9.9
)
(6.0
)
Earnings from continuing operations before
income taxes
60.7
63.3
298.3
257.6
Income tax expense
13.9
14.5
74.5
57.7
Earnings from continuing operations
46.8
48.8
223.8
199.9
Net earnings from discontinued
operations
-
-
-
3.0
Net earnings
$
46.8
$
48.8
$
223.8
$
202.9
Diluted earnings per share of common
stock, continuing operations
$
1.06
$
1.07
$
4.99
$
4.30
Diluted earnings per share of common
stock, discontinued operations
$
-
$
-
$
-
$
0.07
Diluted net earnings per share of common
stock
$
1.06
$
1.07
$
4.99
$
4.37
Average number of diluted common shares
outstanding
44.2
45.6
44.8
46.4
SEGMENT RESULTS Armstrong World
Industries, Inc. and Subsidiaries (Quarterly data is unaudited)
For the Three Months Ended
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
Net Sales
Mineral Fiber
$
220.3
$
216.0
$
932.4
$
887.4
Architectural Specialties
92.0
88.5
362.8
345.7
Total net sales
$
312.3
$
304.5
$
1,295.2
$
1,233.1
For the Three Months Ended
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
Segment operating
income (loss)
Mineral Fiber
$
60.9
$
61.1
$
285.7
$
260.9
Architectural Specialties
6.0
10.7
40.9
21.7
Unallocated Corporate
(0.6
)
(1.2
)
(2.9
)
(3.9
)
Total consolidated operating income
$
66.3
$
70.6
$
323.7
$
278.7
SELECTED BALANCE SHEET
INFORMATION Armstrong World Industries, Inc. and Subsidiaries
December 31, 2023
December 31, 2022
Assets
Current assets
$
313.0
$
356.5
Property, plant and equipment, net
566.4
554.4
Other non-current assets
793.0
776.3
Total assets
$
1,672.4
$
1,687.2
Liabilities and
shareholders’ equity
Current liabilities
$
194.5
$
182.7
Non-current liabilities
886.1
969.5
Shareholders' equity
591.8
535.0
Total liabilities and shareholders’
equity
$
1,672.4
$
1,687.2
SELECTED CASH FLOW INFORMATION
Armstrong World Industries, Inc. and Subsidiaries
For the Year Ended December
31,
2023
2022
Net earnings
$
223.8
$
202.9
Other adjustments to reconcile net
earnings to net cash provided by operating activities
12.5
28.8
Changes in operating assets and
liabilities, net
(2.8
)
(49.3
)
Net cash provided by operating
activities
233.5
182.4
Net cash (used for) provided by investing
activities
(10.4
)
28.2
Net cash (used for) financing
activities
(258.6
)
(201.9
)
Effect of exchange rate changes on cash
and cash equivalents
0.3
(0.8
)
Net (decrease) increase in cash and cash
equivalents
(35.2
)
7.9
Cash and cash equivalents at beginning of
year
106.0
98.1
Cash and cash equivalents at end of
period
$
70.8
$
106.0
Supplemental Reconciliations of GAAP to
non-GAAP Results (unaudited) (Amounts in millions,
except per share data)
To supplement its consolidated financial statements presented in
accordance with accounting principles generally accepted in the
United States (“GAAP”), the Company provides additional measures of
performance adjusted to exclude the impact of certain discrete
expenses and income including adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization ("EBITDA"), adjusted diluted
earnings per share ("EPS") and adjusted free cash flow. Investors
should not consider non-GAAP measures as a substitute for GAAP
measures. The Company excludes certain acquisition related expenses
(i.e. – changes in the fair value of contingent consideration and
deferred compensation accruals for acquisitions). The deferred
compensation accruals 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 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 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 from Continuing
Operations – Adjusted EBITDA
For the Three Months Ended
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
Net sales
$
312
$
305
$
1,295
$
1,233
Net earnings
$
47
$
49
$
224
$
203
Less: Net earnings from discontinued
operations
-
-
-
3
Earnings from continuing
operations
$
47
$
49
$
224
$
200
Add: Income tax expense
14
15
75
58
Earnings from continuing operations
before income taxes
$
61
$
63
$
298
$
258
Add: Interest/other income and expense,
net
6
7
25
21
Operating income
$
66
$
71
$
324
$
279
Add: RIP expense (1)
1
1
3
4
Add: Acquisition-related impacts (2)
7
-
11
19
Add: Cost reduction initiatives and
other
1
-
3
-
Adjusted operating income
$
75
$
71
$
340
$
301
Add: Depreciation and amortization
23
20
89
84
Adjusted EBITDA
$
98
$
92
$
430
$
385
Operating income margin
21.2
%
23.2
%
25.0
%
22.6
%
Adjusted EBITDA margin
31.4
%
30.1
%
33.2
%
31.2
%
(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
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
Net sales
$
220
$
216
$
932
$
887
Operating income
$
61
$
61
$
286
$
261
Add: Cost reduction initiatives and
other
1
-
3
-
Adjusted operating income
$
62
$
61
$
289
$
261
Add: Depreciation and amortization
19
17
75
69
Adjusted EBITDA
$
81
$
78
$
364
$
330
Operating income margin
27.6
%
28.3
%
30.6
%
29.4
%
Adjusted EBITDA margin
36.8
%
36.3
%
39.1
%
37.2
%
Architectural
Specialties
For the Three Months Ended
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
Net sales
$
92
$
89
$
363
$
346
Operating income
$
6
$
11
$
41
$
22
Add: Acquisition-related impacts (1)
7
-
11
19
Adjusted operating income
$
13
$
10
$
52
$
41
Add: Depreciation and amortization
4
3
14
14
Adjusted EBITDA
$
17
$
13
$
66
$
55
Operating income margin
6.5
%
12.1
%
11.3
%
6.3
%
Adjusted EBITDA margin
18.4
%
15.0
%
18.1
%
15.8
%
(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
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
Operating (loss)
$
(1
)
$
(1
)
$
(3
)
$
(4
)
Add: RIP expense (1)
1
1
3
4
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
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
Net cash provided by operating
activities
$
57
$
63
$
234
$
182
Net cash provided by (used for)
investing activities
-
20
(10
)
28
Net cash provided by operating and
investing activities
$
57
$
83
$
223
$
211
Add: Acquisitions, net
3
3
27
3
Add: Net environmental expenses
1
-
1
1
Add: Contingent consideration in excess of
acquisition-date fair value (1)
-
-
5
2
Add: Arktura deferred compensation (2)
8
5
8
5
Adjusted Free Cash Flow
$
68
$
91
$
263
$
221
(1)
Contingent consideration payments
related to 2020 acquisitions recorded as a component of net cash
provided by operating activities.
(2)
Contingent compensation payments
related to the acquisition.
Consolidated Results from Continuing
Operations – Adjusted Diluted Earnings Per Share
(EPS)
For the Three Months Ended
December 31,
For the Year Ended December
31,
2023
2022
2023
2022
Total
Per Diluted Share
Total
Per Diluted Share
Total
Per Diluted Share
Total
Per Diluted Share
Net earnings
$
47
$
1.06
$
49
$
1.07
$
224
$
4.99
$
203
$
4.37
Less: Net earnings from discontinued
operations
-
-
-
-
-
-
3
0.07
Earnings from continuing
operations
$
47
$
1.06
$
49
$
1.07
$
224
$
4.99
$
200
$
4.30
Add: Income tax expense
14
15
75
58
Earnings from continuing operations
before income taxes
$
61
$
63
$
298
$
258
(Less): RIP (credit) (1)
-
-
(1
)
(1
)
Add: Acquisition-related impacts (2)
7
-
11
19
Add: Acquisition-related amortization
(3)
2
1
6
8
Add: Cost reduction initiatives and
other
1
-
3
-
Adjusted earnings from continuing
operations before income taxes
$
70
$
64
$
318
$
283
(Less): Adjusted income tax expense
(4)
(16
)
(15
)
(79
)
(63
)
Adjusted earnings from continuing
operations
$
54
$
1.22
$
49
$
1.08
$
238
$
5.32
$
220
$
4.74
Adjusted diluted EPS from continuing
operations change versus prior year
13.0%
12.2%
Diluted shares outstanding
44.2
45.6
44.8
46.4
Effective tax rate
23%
23%
25%
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,
2024
Low
High
Net earnings
$
243
to
$
248
Add: Income tax expense
79
84
Earnings before income taxes
$
323
to
$
332
Add: Interest expense
40
42
Add: Other non-operating (income), net
(7
)
(6
)
Operating income
$
356
to
$
368
Add: RIP expense (1)
2
4
Adjusted operating income
$
359
to
$
371
Add: Depreciation and amortization
90
100
Adjusted EBITDA
$
450
to
$
470
(1)
RIP expense represents only the
plan service cost that is recorded within Operating income. For all
periods presented, we do not expect to make cash contributions to
our RIP.
Adjusted Diluted Net Earnings Per Share
Guidance
For the Year Ending December 31,
2024
Low
Per Diluted Share(1)
High
Per Diluted Share(1)
Net earnings
$
243
$
5.55
to
$
248
$
5.77
Add: Income tax expense
79
84
Earnings before income taxes
$
323
to
$
332
Add: RIP (credit) (2)
(3
)
(1
)
Add: Acquisition-related amortization
(3)
7
8
Adjusted earnings before income
taxes
$
327
to
$
339
(Less): Adjusted income tax expense
(4)
(81
)
(84
)
Adjusted net earnings
$
246
$
5.60
to
$
255
$
5.90
(1)
Adjusted diluted EPS guidance for
2024 is calculated based on approximately 43 to 44 million of
diluted shares outstanding.
(2)
RIP (credit) represents the
entire actuarial net periodic pension (credit) recorded as a
component of net earnings. We do not expect to make any cash
contributions to our RIP.
(3)
Represents acquisition-related
intangible amortization, including customer relationships,
developed technology, software, trademarks and brand names,
non-compete agreements and other intangibles.
(4)
Income tax expense is based on an
adjusted effective tax rate of approximately 25%, multiplied by
adjusted earnings before income taxes.
Adjusted Free Cash Flow
Guidance
For the Year Ending December 31,
2024
Low
High
Net cash provided by operating
activities
$
270
to
$
285
Add: Return of investment from joint
venture
85
95
Adjusted net cash provided by operating
activities
$
355
to
$
380
Less: Capital expenditures
(80
)
(90
)
Adjusted Free Cash Flow
$
275
to
$
290
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240220877226/en/
Investors & Media: Theresa Womble,
tlwomble@armstrongceilings.com or (717) 396-6354
Armstrong World Industries (NYSE:AWI)
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