- Net sales up 12% on solid Mineral Fiber AUV growth and
Architectural Specialties' acquisitions
- Operating income increased 9% and diluted net earnings per
share increased 12%
- Adjusted EBITDA up 13% and adjusted diluted net earnings per
share up 17%
- Raising full-year 2024 guidance
(All comparisons 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 record second-quarter 2024 financial
results highlighted by strong sales and earnings growth.
“With double digit net sales growth and record earnings, our
second-quarter results further demonstrate the resilience of our
business model and the strength of our growth initiatives,” said
Vic Grizzle, President and CEO of Armstrong World Industries. “As
market demand stabilizes, we also are continuing to see the
benefits from our balanced set of end-markets and the consistent
operational execution of our teams. With our team’s relentless
focus on Mineral Fiber Average Unit Value improvement,
market-driven innovation, operational excellence and Architectural
Specialties expansion, we expect to continue delivering consistent
top-line growth with robust EBITDA margins.”
Second-Quarter Results
(Dollar amounts in millions except
per-share data)
For the Three Months Ended June
30,
2024
2023
Change
Net sales
$
365.1
$
325.4
12.2%
Operating income
$
95.0
$
87.0
9.2%
Operating income margin (Operating income
as a % of net sales)
26.0
%
26.7
%
(70)bps
Net earnings
$
65.9
$
60.2
9.5%
Diluted net earnings per share
$
1.50
$
1.34
11.9%
Additional Non-GAAP* Measures
Adjusted EBITDA
$
125
$
111
12.5%
Adjusted EBITDA margin (Adjusted EBITDA as
a % of net sales)
34.3
%
34.2
%
10bps
Adjusted net earnings
$
71
$
62
14.7%
Adjusted diluted net earnings per
share
$
1.62
$
1.38
17.4%
* 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.
Second-quarter 2024 consolidated net sales increased 12.2% from
prior-year results, driven by higher volumes of $27 million and
favorable Average Unit Value (dollars per unit sold, or "AUV") of
$13 million. Architectural Specialties net sales increased $24
million and Mineral Fiber net sales increased $16 million.
Architectural Specialties segment net sales improved primarily from
a $20 million contribution from our April 2024 acquisition of
3form, LLC ("3form") and our October 2023 acquisition of BOK
Modern, LLC ("BOK"). The increase in Mineral Fiber net sales was
primarily driven by favorable AUV and, to a lesser extent, higher
sales volumes.
Consolidated operating income increased 9.2% in the second
quarter of 2024 primarily due a $17 million margin benefit from
higher sales volumes and a $9 million benefit from favorable AUV.
These benefits were partially offset by an $18 million increase in
selling, general and administrative (“SG&A”) expenses due to
the impact of acquisitions and an increase in Mineral Fiber
SG&A expenses.
Second-Quarter Segment Results Mineral Fiber
(Dollar amounts in millions)
For the Three Months Ended June
30,
2024
2023
Change
Net sales
$
250.2
$
234.0
6.9%
Operating income
$
81.7
$
75.5
8.2%
Adjusted EBITDA*
$
104
$
95
10.4%
Operating income margin
32.7
%
32.3
%
40bps
Adjusted EBITDA margin*
41.7
%
40.4
%
130bps
Mineral Fiber net sales increased 6.9% in the second quarter of
2024 due to $13 million of favorable AUV and $3 million of higher
sales volumes. The improvement in AUV was driven primarily by
favorable like-for-like price, with a modest contribution from
favorable mix. The second quarter increase in volumes was primarily
driven by stabilizing demand and the benefit from growth
initiatives compared to the prior-year period.
Mineral Fiber operating income increased in the second quarter
of 2024 primarily due to a $9 million benefit from favorable AUV, a
$3 million decrease in manufacturing and input costs, a $2 million
increase from higher sales volumes and a $2 million increase in
WAVE equity earnings. These benefits were partially offset by a $9
million increase in SG&A expenses, driven primarily by $3
million of higher incentive compensation, an increase in employee
costs due to inflationary pressures, accruals for environmental
remediation matters and higher depreciation and amortization.
Architectural Specialties
(Dollar amounts in millions)
For the Three Months Ended June
30,
2024
2023
Change
Net sales
$
114.9
$
91.4
25.7%
Operating income
$
14.2
$
12.2
16.4%
Adjusted EBITDA*
$
21
$
17
25.1%
Operating income margin
12.4
%
13.3
%
(90)bps
Adjusted EBITDA margin*
18.4
%
18.5
%
(10)bps
Second-quarter 2024 Architectural Specialties net sales
increased 25.7% from prior-year results, driven primarily by a $20
million contribution 3form and BOK, and to a lesser extent,
increased custom project net sales.
Architectural Specialties operating income increased in the
second quarter of 2024 primarily due to a $14 million margin
benefit from increased sales, driven primarily by the acquisitions
of 3form and BOK, and partially due to improved project margins.
This increase was partially offset by an $9 million increase in
SG&A expenses, primarily due to the acquisitions of 3form and
BOK as well as a $3 million increase in manufacturing costs. The
decline in segment operating income margin was solely driven by the
acquisitions of 3form and BOK.
Unallocated Corporate
Unallocated Corporate operating loss was $1 million in the
second quarter of 2024 and 2023.
Cash Flow
Year to date cash flows from operating activities in 2024
decreased $10 million in comparison to the prior-year period, while
cash flows from investing activities decreased $75 million versus
the prior-year period. The change in operating cash flows was
driven by higher cash earnings offset by unfavorable working
capital changes, most notably timing-related changes in
receivables, and an increase in cash paid for income taxes. The
decrease in investing cash flows was primarily due to the
acquisition of 3form, partially offset by lower purchases of
property, plant and equipment.
Share Repurchase Program
During the second quarter of 2024, we repurchased 0.1 million
shares of common stock for a total cost of $10 million, excluding
the cost of commissions and taxes. As of June 30, 2024, there was
$692 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 June 30, 2024, we have repurchased 14.4 million shares
under the Program for a total cost of $1,008 million, excluding
commissions and taxes.
Updating 2024 Outlook
“Given our solid second quarter performance and improved line of
sight for the full year, we are increasing our guidance for all key
metrics,” said Chris Calzaretta, AWI Senior Vice President and CFO.
“We now expect operating conditions in the second half of the year
to be similar to the first half. With this backdrop, we expect to
expand Adjusted EBITDA margin at the total company level and we
will continue our disciplined deployment of capital to 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
$
1,415
to
$
1,440
9%
to
11%
Adjusted EBITDA*
$
430
$
474
to
$
486
10%
to
13%
Adjusted diluted net earnings per
share*
$
5.32
$
6.00
to
$
6.15
13%
to
16%
Adjusted free cash flow*
$
263
$
288
to
$
300
10%
to
14%
Earnings Webcast
Management will host a live webcast conference call at 10:00
a.m. ET today, to discuss second-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, 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 quarterly report for the quarter
ended June 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 system
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 June 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 June
30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Net sales
$
365.1
$
325.4
$
691.4
$
635.6
Cost of goods sold
215.8
201.4
417.8
399.5
Gross profit
149.3
124.0
273.6
236.1
Selling, general and administrative
expenses
79.9
61.9
145.6
124.6
Loss related to change in fair value of
contingent consideration
0.7
-
0.4
-
Equity (earnings) from unconsolidated
affiliates, net
(26.3
)
(24.9
)
(53.5
)
(45.7
)
Operating income
95.0
87.0
181.1
157.2
Interest expense
11.1
9.2
20.1
17.9
Other non-operating (income), net
(3.2
)
(2.2
)
(6.3
)
(4.6
)
Earnings before income taxes
87.1
80.0
167.3
143.9
Income tax expense
21.2
19.8
41.5
36.4
Net earnings
$
65.9
60.2
$
125.8
$
107.5
Diluted net earnings per share of common
stock
$
1.50
$
1.34
$
2.86
$
2.38
Average number of diluted common shares
outstanding
44.0
45.0
44.0
45.2
SEGMENT RESULTS Armstrong World Industries,
Inc. and Subsidiaries (Unaudited)
For the Three Months Ended June
30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Net Sales
Mineral Fiber
$
250.2
$
234.0
$
489.8
$
462.4
Architectural Specialties
114.9
91.4
201.6
173.2
Total net sales
$
365.1
$
325.4
$
691.4
$
635.6
For the Three Months Ended June
30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Segment operating
income (loss)
Mineral Fiber
$
81.7
$
75.5
$
160.9
$
139.3
Architectural Specialties
14.2
12.2
21.9
19.4
Unallocated Corporate
(0.9
)
(0.7
)
(1.7
)
(1.5
)
Total consolidated operating income
$
95.0
$
87.0
$
181.1
$
157.2
SELECTED BALANCE SHEET INFORMATION Armstrong
World Industries, Inc. and Subsidiaries
Unaudited
June 30, 2024
December 31, 2023
Assets
Current assets
$
351.2
$
313.0
Property, plant and equipment, net
599.3
566.4
Other non-current assets
869.7
793.0
Total assets
$
1,820.2
$
1,672.4
Liabilities and
shareholders’ equity
Current liabilities
$
200.0
$
194.5
Non-current liabilities
951.2
886.1
Shareholders' equity
669.0
591.8
Total liabilities and shareholders’
equity
$
1,820.2
$
1,672.4
SELECTED CASH FLOW INFORMATION Armstrong World
Industries, Inc. and Subsidiaries (Unaudited)
For the Six Months Ended June
30,
2024
2023
Net earnings
$
125.8
$
107.5
Other adjustments to reconcile net
earnings to net cash provided by operating activities
3.6
(0.8
)
Changes in operating assets and
liabilities, net
(45.7
)
(12.8
)
Net cash provided by operating
activities
83.7
93.9
Net cash (used for) investing
activities
(81.4
)
(6.0
)
Net cash provided by (used for) financing
activities
1.1
(92.6
)
Effect of exchange rate changes on cash
and cash equivalents
(0.6
)
0.3
Net increase (decrease) in cash and cash
equivalents
2.8
(4.4
)
Cash and cash equivalents at beginning of
year
70.8
106.0
Cash and cash equivalents at end of
period
$
73.6
$
101.6
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). The deferred compensation accruals were
for cash and stock awards that are 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, 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 June
30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Net sales
$
365
$
325
$
691
$
636
Net earnings
$
66
$
60
$
126
$
108
Add: Income tax expense
21
20
42
36
Earnings before income taxes
$
87
$
80
$
167
$
144
Add: Interest/other income and expense,
net
8
7
14
13
Operating income
$
95
$
87
$
181
$
157
Add: RIP expense (1)
1
1
1
1
Add: Acquisition-related impacts (2)
2
1
2
3
Add: Cost reduction initiatives
-
-
-
3
Add: WAVE pension settlement (3)
1
-
1
-
Add: Environmental expense
1
-
1
-
Adjusted operating income
$
100
$
89
$
186
$
164
Add: Depreciation and amortization
25
22
50
43
Adjusted EBITDA
$
125
$
111
$
236
$
207
Operating income margin
26.0
%
26.7
%
26.2
%
24.7
%
Adjusted EBITDA margin
34.3
%
34.2
%
34.1
%
32.6
%
(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 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 non-cash accounting loss upon settlement of their defined
benefit pension plan.
Mineral Fiber
For the Three Months Ended June
30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Net sales
$
250
$
234
$
490
$
462
Operating income
$
82
$
76
$
161
$
139
Add: Acquisition-related impacts (1)
1
-
-
-
Add: Cost reduction initiatives
-
-
-
3
Add: WAVE pension settlement (2)
1
-
1
-
Add: Environmental expense
1
-
1
-
Adjusted operating income
$
85
$
76
$
164
$
142
Add: Depreciation and amortization
20
19
40
37
Adjusted EBITDA
$
104
$
95
$
203
$
179
Operating income margin
32.7
%
32.3
%
32.9
%
30.1
%
Adjusted EBITDA margin
41.7
%
40.4
%
41.5
%
38.6
%
(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 non-cash accounting loss upon settlement of their defined
benefit pension plan.
Architectural
Specialties
For the Three Months Ended June
30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Net sales
$
115
$
91
$
202
$
173
Operating income
$
14
$
12
$
22
$
19
Add: Acquisition-related impacts (1)
1
1
1
3
Adjusted operating income
$
15
$
14
$
23
$
22
Add: Depreciation and amortization
6
3
10
6
Adjusted EBITDA
$
21
$
17
$
33
$
29
Operating income margin
12.4
%
13.3
%
10.9
%
11.2
%
Adjusted EBITDA margin
18.4
%
18.5
%
16.5
%
16.5
%
(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 June
30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Operating (loss)
$
(1
)
$
(1
)
$
(2
)
$
(2
)
Add: RIP expense (1)
1
1
1
1
Adjusted operating (loss)
$
-
$
-
$
(1
)
$
-
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.
Consolidated Results – Adjusted Free
Cash Flow
For the Three Months Ended June
30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Net cash provided by operating
activities
$
57
$
68
$
84
$
94
Net cash (used for) investing
activities
(87
)
(5
)
(81
)
(6
)
Net cash (used for) provided by
operating and investing activities
$
(30
)
$
63
$
2
$
88
Add: Cash paid for acquisitions, net of
cash acquired and investment in unconsolidated affiliate
94
10
99
10
Add: Arktura deferred compensation (1)
-
-
6
-
Add: Contingent consideration in excess of
acquisition-date fair value (1)
-
-
-
5
(Less): Proceeds from sale of facility
(2)
(2
)
-
(2
)
-
Adjusted Free Cash Flow
$
62
$
73
$
105
$
103
(1)
Deferred compensation and contingent
consideration payments related to 2020 acquisitions and were
recorded as components of net cash provided by operating
activities.
(2)
Proceeds related to the sale of
Architectural Specialties design center.
Consolidated Results – Adjusted Diluted
Earnings Per Share (EPS)
For the Three Months Ended June
30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Total
Per Diluted Share
Total
Per Diluted Share
Total
Per Diluted Share
Total
Per Diluted Share
Net earnings
$
66
$
1.50
$
60
$
1.34
$
126
$
2.86
$
108
$
2.38
Add: Income tax expense
21
20
42
36
Earnings before income taxes
$
87
$
80
$
167
$
144
(Less): RIP (credit) (1)
-
-
-
(1
)
Add: Acquisition-related impacts (2)
2
1
2
3
Add: Acquisition-related amortization
(3)
3
1
5
3
Add: Cost reduction initiatives
-
-
-
3
Add: WAVE pension settlement (4)
1
-
1
-
Add: Environmental expense
1
-
1
-
Adjusted net earnings before income
taxes
$
94
$
83
$
176
$
151
(Less): Adjusted income tax expense
(5)
(23
)
(20
)
(44
)
(38
)
Adjusted net earnings
$
71
$
1.62
$
62
$
1.38
$
132
$
3.00
$
113
$
2.50
Adjusted diluted EPS change
versus prior year
17.4%
20.0%
Diluted shares outstanding
44.0
45.0
44.0
45.2
Effective tax rate
24%
25%
25%
25%
(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 non-cash accounting loss upon settlement of their defined
benefit pension plan.
(5)
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
$
254
to
$
257
Add: Income tax expense
85
87
Earnings before income taxes
$
339
to
$
344
Add: Interest expense
40
42
Add: Other non-operating (income), net
(12
)
(11
)
Operating income
$
367
to
$
375
Add: RIP expense (1)
2
2
Add: Acquisition-related impacts (2)
2
2
Add: Environmental expense
1
1
Add: WAVE pension settlement (3)
1
1
Adjusted operating income
$
374
to
$
380
Add: Depreciation and amortization
100
106
Adjusted EBITDA
$
474
to
$
486
(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)
Represents the Company's 50% share of
WAVE's non-cash accounting 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
$
254
$
5.76
to
$
257
$
5.87
Add: Income tax expense
85
87
Earnings before income taxes
$
339
to
$
344
Add: RIP (credit) (2)
(2
)
(1
)
Add: Acquisition-related amortization
(3)
11
12
Add: Acquisition-related impacts (4)
2
2
Add: Environmental expense
1
1
Add: WAVE pension settlement (5)
1
1
Adjusted earnings before income
taxes
$
352
to
$
358
(Less): Adjusted income tax expense
(6)
(88
)
(89
)
Adjusted net earnings
$
264
$
6.00
to
$
269
$
6.15
(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)
Represents the Company's 50% share of
WAVE's non-cash accounting loss upon settlement of their defined
benefit pension plan.
(6)
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
$
171
to
$
183
Add: Return of investment from joint
venture
94
104
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 sale of facility
(2)
(2
)
(2
)
Adjusted net cash provided by operating
activities
$
368
to
$
390
Less: Capital expenditures
(80
)
(90
)
Adjusted Free Cash Flow
$
288
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240730120396/en/
Investors & Media: Theresa Womble,
tlwomble@armstrongceilings.com or (717) 396-6354
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