Armstrong World Industries Reports Third-Quarter 2024 Results
-
Record setting quarterly net sales of
$387 million , an increase of 11% - Operating income increased 11% and diluted net earnings per share increased 12%
- Adjusted EBITDA up 11% and adjusted diluted net earnings per share up 13%
- Raising full-year 2024 guidance for adjusted EBITDA, adjusted diluted net earnings per share and adjusted free cash flow
(Comparisons above are versus the prior-year period unless otherwise stated)
“With another quarter of record setting sales and strong earnings growth, we continue to demonstrate our ability to deliver growth despite muted market conditions through operational execution and our investments in strategic acquisitions, innovation and digital initiatives,” said
Third-Quarter Results |
||||||||||
(Dollar amounts in millions except per-share data) |
|
For the Three Months Ended |
|
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
Change |
||
Net sales |
|
$ |
386.6 |
|
|
$ |
347.3 |
|
|
11.3% |
Operating income |
|
$ |
111.3 |
|
|
$ |
100.2 |
|
|
11.1% |
Operating income margin (Operating income as a % of net sales) |
|
|
28.8 |
% |
|
|
28.9 |
% |
|
(10)bps |
Net earnings |
|
$ |
76.9 |
|
|
$ |
69.5 |
|
|
10.6% |
Diluted net earnings per share |
|
$ |
1.75 |
|
|
$ |
1.56 |
|
|
12.2% |
|
|
|
|
|
|
|
|
|
||
Additional Non-GAAP* Measures |
|
|
|
|
|
|
|
|
||
Adjusted EBITDA |
|
$ |
139 |
|
|
$ |
125 |
|
|
11.2% |
Adjusted EBITDA margin (Adjusted EBITDA as a % of net sales) |
|
|
35.9 |
% |
|
|
36.0 |
% |
|
(10)bps |
Adjusted net earnings |
|
$ |
79 |
|
|
$ |
71 |
|
|
11.1% |
Adjusted diluted net earnings per share |
|
$ |
1.81 |
|
|
$ |
1.60 |
|
|
13.1% |
* The Company uses non-GAAP adjusted measures in managing the business and believes the adjustments provide meaningful comparisons of operating performance between periods and are useful alternative measures of performance. Reconciliations of the most comparable generally accepted accounting principles in |
Third-quarter 2024 consolidated net sales increased 11.3% from prior-year results, driven by higher volumes of
Consolidated operating income increased 11.1% in the third quarter of 2024 primarily due to a
Third-Quarter Segment Results |
||||||||||
Mineral Fiber |
||||||||||
(Dollar amounts in millions) |
|
For the Three Months Ended |
|
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
Change |
||
Net sales |
|
$ |
258.0 |
|
|
$ |
249.7 |
|
|
3.3% |
Operating income |
|
$ |
93.0 |
|
|
$ |
85.5 |
|
|
8.8% |
Adjusted EBITDA* |
|
$ |
113 |
|
|
$ |
105 |
|
|
8.2% |
Operating income margin |
|
|
36.0 |
% |
|
|
34.2 |
% |
|
180bps |
Adjusted EBITDA margin* |
|
|
43.9 |
% |
|
|
41.9 |
% |
|
200bps |
Mineral Fiber net sales increased 3.3% in the third quarter of 2024 due to
Mineral Fiber operating income increased in the third quarter of 2024 primarily due to a
Architectural Specialties |
||||||||||
(Dollar amounts in millions) |
|
For the Three Months Ended |
|
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
Change |
||
Net sales |
|
$ |
128.6 |
|
|
$ |
97.6 |
|
|
31.8% |
Operating income |
|
$ |
19.2 |
|
|
$ |
15.5 |
|
|
23.9% |
Adjusted EBITDA* |
|
$ |
26 |
|
|
$ |
20 |
|
|
27.1% |
Operating income margin |
|
|
14.9 |
% |
|
|
15.9 |
% |
|
(100)bps |
Adjusted EBITDA margin* |
|
|
20.1 |
% |
|
|
20.8 |
% |
|
(70)bps |
Architectural Specialties net sales increased 31.8% in the third quarter of 2024 driven primarily by a
Architectural Specialties operating income increased in the third quarter of 2024 primarily due to an
Unallocated Corporate
Unallocated Corporate operating loss was
Cash Flow
Year-to-date cash flows from operating activities in 2024 increased
Share Repurchase Program
During the third quarter of 2024, we repurchased 0.1 million shares of common stock for a total cost of
** In |
Updating 2024 Outlook
“We delivered strong profitability in the third quarter, highlighted by forty-four percent Mineral Fiber and twenty percent Architectural Specialties adjusted EBITDA margins. With our strong third quarter results and an improved profitability outlook for the remainder of the year, we are increasing our full-year 2024 guidance for adjusted EBITDA and adjusted diluted net earnings per share, as well as modestly increasing guidance for adjusted free cash flow, while tightening the range on our full-year sales outlook,” said
|
|
|
For the Year Ended |
|||||||||||
(Dollar amounts in millions except per-share data) |
2023 Actual |
|
Current Guidance |
|
VPY Growth % |
|||||||||
Net sales |
$ |
1,295 |
|
$ |
1,420 |
|
to |
$ |
1,435 |
|
10% |
to |
11% |
|
Adjusted EBITDA* |
$ |
430 |
|
$ |
482 |
|
to |
$ |
490 |
|
12% |
to |
14% |
|
Adjusted diluted net earnings per share* |
$ |
5.32 |
|
$ |
6.15 |
|
to |
$ |
6.25 |
|
16% |
to |
17% |
|
Adjusted free cash flow* |
$ |
263 |
|
$ |
290 |
|
to |
$ |
300 |
|
10% |
to |
14% |
Earnings Webcast
Management will host a live webcast conference call at
Uncertainties Affecting Forward-Looking Statements
Disclosures in this release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, those relating to future financial and operational results, market and broader economic conditions and guidance. Those statements provide our future expectations or forecasts and can be identified by our use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “outlook,” “target,” “predict,” “may,” “will,” “would,” “could,” “should,” “seek,” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. This includes annual guidance. Forward-looking statements, by their nature, address matters that are uncertain and involve risks because they relate to events and depend on circumstances that may or may not occur in the future. As a result, our actual results may differ materially from our expected results and from those expressed in our forward-looking statements. A more detailed discussion of the risks and uncertainties that could cause our actual results to differ materially from those projected, anticipated or implied is included in the “Risk Factors” and “Management’s Discussion and Analysis” sections of our reports on Form 10-K and Form 10-Q filed with the
About Armstrong and Additional Information
More details on the Company’s performance can be found in its report on Form 10-Q for the quarter ended
Reported Financial Results |
||||||||||||||||
(Amounts in millions, except per share data) |
||||||||||||||||
SELECTED FINANCIAL RESULTS |
||||||||||||||||
|
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net sales |
|
$ |
386.6 |
|
|
$ |
347.3 |
|
|
$ |
1,078.0 |
|
|
$ |
982.9 |
|
Cost of goods sold |
|
|
222.5 |
|
|
|
205.9 |
|
|
|
640.3 |
|
|
|
605.4 |
|
Gross profit |
|
|
164.1 |
|
|
|
141.4 |
|
|
|
437.7 |
|
|
|
377.5 |
|
Selling, general and administrative expenses |
|
|
77.6 |
|
|
|
64.6 |
|
|
|
223.1 |
|
|
|
189.2 |
|
Loss related to change in fair value of contingent consideration |
|
|
0.2 |
|
|
|
- |
|
|
|
0.6 |
|
|
|
- |
|
Impairment and gain on sales of fixed assets, net |
|
|
0.2 |
|
|
|
- |
|
|
|
0.3 |
|
|
|
- |
|
Equity (earnings) from unconsolidated affiliates, net |
|
|
(25.2 |
) |
|
|
(23.4 |
) |
|
|
(78.7 |
) |
|
|
(69.1 |
) |
Operating income |
|
|
111.3 |
|
|
|
100.2 |
|
|
|
292.4 |
|
|
|
257.4 |
|
Interest expense |
|
|
10.5 |
|
|
|
8.8 |
|
|
|
30.6 |
|
|
|
26.7 |
|
Other non-operating (income), net |
|
|
(3.0 |
) |
|
|
(2.3 |
) |
|
|
(9.3 |
) |
|
|
(6.9 |
) |
Earnings before income taxes |
|
|
103.8 |
|
|
|
93.7 |
|
|
|
271.1 |
|
|
|
237.6 |
|
Income tax expense |
|
|
26.9 |
|
|
|
24.2 |
|
|
|
68.4 |
|
|
|
60.6 |
|
Net earnings |
|
$ |
76.9 |
|
|
$ |
69.5 |
|
|
$ |
202.7 |
|
|
$ |
177.0 |
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net earnings per share of common stock |
|
$ |
1.75 |
|
|
$ |
1.56 |
|
|
$ |
4.61 |
|
|
$ |
3.93 |
|
Average number of diluted common shares outstanding |
|
|
43.9 |
|
|
|
44.6 |
|
|
|
44.0 |
|
|
|
45.0 |
|
SEGMENT RESULTS |
||||||||||||||||
|
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mineral Fiber |
|
$ |
258.0 |
|
|
$ |
249.7 |
|
|
$ |
747.8 |
|
|
$ |
712.1 |
|
Architectural Specialties |
|
|
128.6 |
|
|
|
97.6 |
|
|
|
330.2 |
|
|
|
270.8 |
|
Total net sales |
|
$ |
386.6 |
|
|
$ |
347.3 |
|
|
$ |
1,078.0 |
|
|
$ |
982.9 |
|
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Segment operating income (loss) |
|
|
|
|
|
|
|
|
||||||||
Mineral Fiber |
|
$ |
93.0 |
|
|
$ |
85.5 |
|
|
$ |
253.9 |
|
|
$ |
224.8 |
|
Architectural Specialties |
|
|
19.2 |
|
|
|
15.5 |
|
|
|
41.1 |
|
|
|
34.9 |
|
Unallocated Corporate |
|
|
(0.9 |
) |
|
|
(0.8 |
) |
|
|
(2.6 |
) |
|
|
(2.3 |
) |
Total consolidated operating income |
|
$ |
111.3 |
|
|
$ |
100.2 |
|
|
$ |
292.4 |
|
|
$ |
257.4 |
|
SELECTED BALANCE SHEET INFORMATION |
||||||||
|
||||||||
|
|
Unaudited |
|
|
|
|
||
|
|
|
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets |
|
$ |
357.7 |
|
|
$ |
313.0 |
|
Property, plant and equipment, net |
|
|
577.4 |
|
|
|
566.4 |
|
Other non-current assets |
|
|
868.9 |
|
|
|
793.0 |
|
Total assets |
|
$ |
1,804.0 |
|
|
$ |
1,672.4 |
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
||
Current liabilities |
|
$ |
218.4 |
|
|
$ |
194.5 |
|
Non-current liabilities |
|
|
868.6 |
|
|
|
886.1 |
|
Shareholders' equity |
|
|
717.0 |
|
|
|
591.8 |
|
Total liabilities and shareholders’ equity |
|
$ |
1,804.0 |
|
|
$ |
1,672.4 |
|
SELECTED CASH FLOW INFORMATION |
||||||||
|
||||||||
(Unaudited) |
||||||||
|
|
|
||||||
|
|
For the Nine Months Ended |
||||||
|
|
2024 |
|
2023 |
||||
Net earnings |
|
$ |
202.7 |
|
|
$ |
177.0 |
|
Other adjustments to reconcile net earnings to net cash provided by operating activities |
|
|
12.8 |
|
|
|
5.4 |
|
Changes in operating assets and liabilities, net |
|
|
(35.3 |
) |
|
|
(6.0 |
) |
Net cash provided by operating activities |
|
|
180.2 |
|
|
|
176.4 |
|
Net cash (used for) investing activities |
|
|
(61.2 |
) |
|
|
(10.6 |
) |
Net cash (used for) financing activities |
|
|
(115.7 |
) |
|
|
(175.1 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(0.4 |
) |
|
|
(0.1 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
2.9 |
|
|
|
(9.4 |
) |
Cash and cash equivalents at beginning of year |
|
|
70.8 |
|
|
|
106.0 |
|
Cash and cash equivalents at end of period |
|
$ |
73.7 |
|
|
$ |
96.6 |
|
Supplemental Reconciliations of GAAP to non-GAAP Results (unaudited)
(Amounts in millions, except per share data)
To supplement its consolidated financial statements presented in accordance with accounting principles generally accepted in
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
|
|
|
For the Nine Months Ended
|
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net sales |
|
$ |
387 |
|
|
$ |
347 |
|
|
$ |
1,078 |
|
|
$ |
983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings |
|
$ |
77 |
|
|
$ |
70 |
|
|
$ |
203 |
|
|
$ |
177 |
|
Add: Income tax expense |
|
|
27 |
|
|
|
24 |
|
|
|
68 |
|
|
|
61 |
|
Earnings before income taxes |
|
$ |
104 |
|
|
$ |
94 |
|
|
$ |
271 |
|
|
$ |
238 |
|
Add: Interest/other income and expense, net |
|
|
8 |
|
|
|
7 |
|
|
|
21 |
|
|
|
20 |
|
Operating income |
|
$ |
111 |
|
|
$ |
100 |
|
|
$ |
292 |
|
|
$ |
257 |
|
Add: RIP expense (1) |
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
Add: Acquisition-related impacts (2) |
|
|
- |
|
|
|
1 |
|
|
|
2 |
|
|
|
4 |
|
Add: Cost reduction initiatives |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3 |
|
Add: WAVE pension settlement (3) |
|
|
- |
|
|
|
- |
|
|
|
1 |
|
|
|
- |
|
(Less): Gain on sales of fixed assets, net (4) |
|
|
(5 |
) |
|
|
- |
|
|
|
(5 |
) |
|
|
- |
|
Add: Impairment of fixed asset (5) |
|
|
5 |
|
|
|
- |
|
|
|
5 |
|
|
|
- |
|
Add: Environmental expense |
|
|
- |
|
|
|
- |
|
|
|
2 |
|
|
|
- |
|
Adjusted operating income |
|
$ |
113 |
|
|
$ |
102 |
|
|
$ |
299 |
|
|
$ |
266 |
|
Add: Depreciation and amortization |
|
|
26 |
|
|
|
23 |
|
|
|
76 |
|
|
|
66 |
|
Adjusted EBITDA |
|
$ |
139 |
|
|
$ |
125 |
|
|
$ |
375 |
|
|
$ |
332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income margin |
|
|
28.8 |
% |
|
|
28.9 |
% |
|
|
27.1 |
% |
|
|
26.2 |
% |
Adjusted EBITDA margin |
|
|
35.9 |
% |
|
|
36.0 |
% |
|
|
34.8 |
% |
|
|
33.8 |
% |
1. |
RIP expense represents only the plan service cost that is recorded within Operating income. For all periods presented, we were not required to and did not make cash contributions to our RIP. |
|
2. |
Represents the impact of acquisition-related adjustments for the fair value of inventory, contingent third-party professional fees, changes in fair value of contingent consideration, deferred compensation and restricted stock expenses. |
|
3. |
Represents the Company's 50% share of WAVE's loss upon settlement of their defined benefit pension plan. |
|
4. |
During the third quarter of 2024 we sold our idled Mineral Fiber plant in |
|
5. |
During the third quarter of 2024 we recorded an impairment charge for an undeveloped parcel of land upon reclassification to assets held for sale. |
Mineral Fiber |
||||||||||||||||
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net sales |
|
$ |
258 |
|
|
$ |
250 |
|
|
$ |
748 |
|
|
$ |
712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income |
|
$ |
93 |
|
|
$ |
86 |
|
|
$ |
254 |
|
|
$ |
225 |
|
Add: Acquisition-related impacts (1) |
|
|
- |
|
|
|
- |
|
|
|
1 |
|
|
|
- |
|
Add: Cost reduction initiatives |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3 |
|
Add: WAVE pension settlement (2) |
|
|
- |
|
|
|
- |
|
|
|
1 |
|
|
|
- |
|
(Less): Gain on sales of fixed assets, net (3) |
|
|
(5 |
) |
|
|
- |
|
|
|
(5 |
) |
|
|
- |
|
Add: Impairment of fixed asset (4) |
|
|
5 |
|
|
|
- |
|
|
|
5 |
|
|
|
- |
|
Add: Environmental expense |
|
|
- |
|
|
|
- |
|
|
|
2 |
|
|
|
- |
|
Adjusted operating income |
|
$ |
93 |
|
|
$ |
86 |
|
|
$ |
257 |
|
|
$ |
227 |
|
Add: Depreciation and amortization |
|
|
20 |
|
|
|
19 |
|
|
|
59 |
|
|
|
56 |
|
Adjusted EBITDA |
|
$ |
113 |
|
|
$ |
105 |
|
|
$ |
316 |
|
|
$ |
283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income margin |
|
|
36.0 |
% |
|
|
34.2 |
% |
|
|
34.0 |
% |
|
|
31.6 |
% |
Adjusted EBITDA margin |
|
|
43.9 |
% |
|
|
41.9 |
% |
|
|
42.3 |
% |
|
|
39.8 |
% |
1. |
Represents the impact of acquisition-related adjustments for changes in fair value of contingent consideration. |
|
2. |
Represents the Company's 50% share of WAVE's loss upon settlement of their defined benefit pension plan. |
|
3. |
During the third quarter of 2024 we sold our idled Mineral Fiber plant in |
|
4. |
During the third quarter of 2024 we recorded an impairment charge for an undeveloped parcel of land upon reclassification to assets held for sale. |
Architectural Specialties |
||||||||||||||||
|
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net sales |
|
$ |
129 |
|
|
$ |
98 |
|
|
$ |
330 |
|
|
$ |
271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income |
|
$ |
19 |
|
|
$ |
16 |
|
|
$ |
41 |
|
|
$ |
35 |
|
Add: Acquisition-related impacts (1) |
|
|
- |
|
|
|
1 |
|
|
|
1 |
|
|
|
4 |
|
Adjusted operating income |
|
$ |
19 |
|
|
$ |
17 |
|
|
$ |
43 |
|
|
$ |
39 |
|
Add: Depreciation and amortization |
|
|
6 |
|
|
|
3 |
|
|
|
17 |
|
|
|
10 |
|
Adjusted EBITDA |
|
$ |
26 |
|
|
$ |
20 |
|
|
$ |
59 |
|
|
$ |
49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income margin |
|
|
14.9 |
% |
|
|
15.9 |
% |
|
|
12.4 |
% |
|
|
12.9 |
% |
Adjusted EBITDA margin |
|
|
20.1 |
% |
|
|
20.8 |
% |
|
|
17.9 |
% |
|
|
18.0 |
% |
1. |
Represents the impact of acquisition-related adjustments for the fair value of inventory, contingent third-party professional fees, changes in fair value of contingent consideration, deferred compensation and restricted stock expenses. |
Unallocated Corporate |
||||||||||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Operating (loss) |
|
$ |
(1 |
) |
|
$ |
(1 |
) |
|
$ |
(3 |
) |
|
$ |
(2 |
) |
Add: RIP expense (1) |
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
Adjusted operating (loss) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(1 |
) |
|
$ |
- |
|
Add: Depreciation and amortization |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjusted EBITDA |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(1 |
) |
|
$ |
- |
|
1. |
RIP expense represents only the plan service cost that is recorded within Operating loss. For all periods presented, we were not required to and did not make cash contributions to our RIP. |
Consolidated Results – Adjusted Free Cash Flow |
||||||||||||||||
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net cash provided by operating activities |
|
$ |
97 |
|
$ |
83 |
|
|
$ |
180 |
|
|
$ |
176 |
|
|
Net cash provided by (used for) investing activities |
|
|
20 |
|
|
(5 |
) |
|
|
(61 |
) |
|
|
(11 |
) |
|
Net cash provided by operating and investing activities |
|
$ |
117 |
|
$ |
78 |
|
|
$ |
119 |
|
|
$ |
166 |
|
|
Add: Cash paid for acquisitions, net of cash acquired and investment in unconsolidated affiliate |
|
|
- |
|
|
14 |
|
|
|
99 |
|
|
|
24 |
|
|
Add: Arktura deferred compensation (1) |
|
|
- |
|
|
- |
|
|
|
6 |
|
|
|
- |
|
|
Add: Contingent consideration in excess of acquisition-date fair value (1) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
5 |
|
|
(Less): Proceeds from sales of facilities (2) |
|
|
(9 |
) |
|
- |
|
|
|
(12 |
) |
|
|
- |
|
|
Adjusted Free Cash Flow |
|
$ |
107 |
|
$ |
92 |
|
|
$ |
212 |
|
|
$ |
195 |
|
1. |
Deferred compensation and contingent consideration payments related to 2020 acquisitions were recorded as components of net cash provided by operating activities. |
|
2. |
Proceeds related to the sale of Architectural Specialties design center and the sale of our idled Mineral Fiber plant in |
Consolidated Results – Adjusted Diluted Earnings Per Share (EPS) |
|||||||||||||||||||||||||
|
For the Three Months Ended
|
|
|
For the Nine Months Ended
|
|
||||||||||||||||||||
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
||||||||||||||||
|
Total |
|
Per
|
|
Total |
|
Per
|
|
|
Total |
|
Per
|
|
Total |
|
Per
|
|
||||||||
Net earnings |
$ |
77 |
|
$ |
1.75 |
|
$ |
70 |
|
$ |
1.56 |
|
|
$ |
203 |
|
$ |
4.61 |
|
$ |
177 |
|
$ |
3.93 |
|
Add: Income tax expense |
|
27 |
|
|
|
|
24 |
|
|
|
|
|
68 |
|
|
|
|
61 |
|
|
|
||||
Earnings before income taxes |
$ |
104 |
|
|
|
$ |
94 |
|
|
|
|
$ |
271 |
|
|
|
$ |
238 |
|
|
|
||||
(Less): RIP (credit) (1) |
|
- |
|
|
|
|
- |
|
|
|
|
|
(1 |
) |
|
|
|
(1 |
) |
|
|
||||
Add: Acquisition-related impacts (2) |
|
- |
|
|
|
|
1 |
|
|
|
|
|
2 |
|
|
|
|
4 |
|
|
|
||||
Add: Acquisition-related amortization (3) |
|
3 |
|
|
|
|
2 |
|
|
|
|
|
8 |
|
|
|
|
4 |
|
|
|
||||
Add: Cost reduction initiatives |
|
- |
|
|
|
|
- |
|
|
|
|
|
- |
|
|
|
|
3 |
|
|
|
||||
Add: WAVE pension settlement (4) |
|
- |
|
|
|
|
- |
|
|
|
|
|
1 |
|
|
|
|
- |
|
|
|
||||
(Less): Gain on sales of fixed assets, net (5) |
|
(5 |
) |
|
|
|
- |
|
|
|
|
|
(5 |
) |
|
|
|
- |
|
|
|
||||
Add: Impairment of fixed asset (6) |
|
5 |
|
|
|
|
- |
|
|
|
|
|
5 |
|
|
|
|
- |
|
|
|
||||
Add: Environmental expense |
|
- |
|
|
|
|
- |
|
|
|
|
|
2 |
|
|
|
|
- |
|
|
|
||||
Adjusted net earnings before income taxes |
$ |
107 |
|
|
|
$ |
96 |
|
|
|
|
$ |
283 |
|
|
|
$ |
248 |
|
|
|
||||
(Less): Adjusted income tax expense (7) |
|
(28 |
) |
|
|
|
(25 |
) |
|
|
|
|
(71 |
) |
|
|
|
(63 |
) |
|
|
||||
Adjusted net earnings |
$ |
79 |
|
$ |
1.81 |
|
$ |
71 |
|
$ |
1.60 |
|
|
$ |
211 |
|
$ |
4.81 |
|
$ |
184 |
|
$ |
4.10 |
|
Adjusted diluted EPS change versus prior year |
|
|
13.1% |
|
|
|
|
|
|
|
|
17.3% |
|
|
|
|
|
||||||||
Diluted shares outstanding |
|
|
|
43.9 |
|
|
|
|
44.6 |
|
|
|
|
|
44.0 |
|
|
|
|
45.0 |
|
||||
Effective tax rate |
|
|
26% |
|
|
|
26% |
|
|
|
|
25% |
|
|
|
26% |
|
1. |
RIP (credit) represents the entire actuarial net periodic pension (credit) recorded as a component of net earnings. For all periods presented, we were not required to and did not make cash contributions to our RIP. |
|
2. |
Represents the impact of acquisition-related adjustments for the fair value of inventory, contingent third-party professional fees, changes in fair value of contingent consideration, deferred compensation and restricted stock expenses. |
|
3. |
Represents acquisition-related intangible amortization, including customer relationships, developed technology, software, trademarks and brand names, non-compete agreements and other intangibles. |
|
4. |
Represents the Company's 50% share of WAVE's loss upon settlement of their defined benefit pension plan. |
|
5. |
During the third quarter of 2024 we sold our idled Mineral Fiber plant in |
|
6. |
During the third quarter of 2024 we recorded an impairment charge for an undeveloped parcel of land upon reclassification to assets held for sale. |
|
7. |
Adjusted income tax expense is calculated using the effective tax rate multiplied by the adjusted net earnings before income taxes. |
Adjusted EBITDA Guidance |
||||||||
|
|
For the Year Ending |
|
|||||
|
|
Low |
|
|
High |
|
||
Net earnings |
|
$ |
260 |
|
to |
$ |
262 |
|
Add: Income tax expense |
|
|
83 |
|
|
|
84 |
|
Earnings before income taxes |
|
$ |
343 |
|
to |
$ |
346 |
|
Add: Interest expense |
|
|
40 |
|
|
|
41 |
|
Add: Other non-operating (income), net |
|
|
(11 |
) |
|
|
(10 |
) |
Operating income |
|
$ |
372 |
|
to |
$ |
377 |
|
Add: RIP expense (1) |
|
|
2 |
|
|
|
2 |
|
Add: Acquisition-related impacts (2) |
|
|
2 |
|
|
|
2 |
|
(Less): Gain on sales of fixed assets, net (3) |
|
|
(5 |
) |
|
|
(5 |
) |
Add: Impairment of fixed asset (4) |
|
|
5 |
|
|
|
5 |
|
Add: Environmental expense |
|
|
2 |
|
|
|
2 |
|
Add: WAVE pension settlement (5) |
|
|
1 |
|
|
|
1 |
|
Adjusted operating income |
|
$ |
380 |
|
to |
$ |
385 |
|
Add: Depreciation and amortization |
|
|
102 |
|
|
|
105 |
|
Adjusted EBITDA |
|
$ |
482 |
|
to |
$ |
490 |
|
1. |
RIP expense represents only the plan service cost that is recorded within Operating income. We do not expect to make cash contributions to our RIP. |
|
2. |
Represents the impact of acquisition-related adjustments for the fair value of inventory, contingent third-party professional fees and changes in fair value of contingent consideration. |
|
3. |
During the third quarter of 2024 we sold our idled Mineral Fiber plant in |
|
4. |
During the third quarter of 2024 we recorded an impairment charge for an undeveloped parcel of land upon reclassification to assets held for sale. |
|
5. |
Represents the Company's 50% share of WAVE's loss upon settlement of their defined benefit pension plan. |
Adjusted Diluted Net Earnings Per Share Guidance |
||||||||||||||||
|
|
For the Year Ending |
|
|||||||||||||
|
|
Low |
|
|
Per Diluted
|
|
|
High |
|
|
Per Diluted
|
|
||||
Net earnings |
|
$ |
260 |
|
|
$ |
5.91 |
|
to |
$ |
262 |
|
|
$ |
5.95 |
|
Add: Income tax expense |
|
|
83 |
|
|
|
|
|
|
84 |
|
|
|
|
||
Earnings before income taxes |
|
$ |
343 |
|
|
|
|
to |
$ |
346 |
|
|
|
|
||
Add: RIP (credit) (2) |
|
|
(2 |
) |
|
|
|
|
|
(1 |
) |
|
|
|
||
Add: Acquisition-related amortization (3) |
|
|
10 |
|
|
|
|
|
|
11 |
|
|
|
|
||
Add: Acquisition-related impacts (4) |
|
|
2 |
|
|
|
|
|
|
2 |
|
|
|
|
||
(Less): Gain on sales of fixed assets, net (5) |
|
|
(5 |
) |
|
|
|
|
|
(5 |
) |
|
|
|
||
Add: Impairment of fixed asset (6) |
|
|
5 |
|
|
|
|
|
|
5 |
|
|
|
|
||
Add: Environmental expense |
|
|
2 |
|
|
|
|
|
|
2 |
|
|
|
|
||
Add: WAVE pension settlement (7) |
|
|
1 |
|
|
|
|
|
|
1 |
|
|
|
|
||
Adjusted earnings before income taxes |
|
$ |
356 |
|
|
|
|
to |
$ |
361 |
|
|
|
|
||
(Less): Adjusted income tax expense (8) |
|
|
(86 |
) |
|
|
|
|
|
(87 |
) |
|
|
|
||
Adjusted net earnings |
|
$ |
271 |
|
|
$ |
6.15 |
|
to |
$ |
275 |
|
|
$ |
6.25 |
|
1. |
Adjusted diluted EPS guidance for 2024 is calculated based on approximately 44 million of diluted shares outstanding. |
|
2. |
RIP (credit) represents the entire actuarial net periodic pension (credit) recorded as a component of net earnings. We do not expect to make any cash contributions to our RIP. |
|
3. |
Represents acquisition-related intangible amortization, including customer relationships, developed technology, software, trademarks and brand names, non-compete agreements and other intangibles. |
|
4. |
Represents the impact of acquisition-related adjustments for the fair value of inventory, contingent third-party professional fees and changes in fair value of contingent consideration. |
|
5. |
During the third quarter of 2024 we sold our idled Mineral Fiber plant in |
|
6. |
During the third quarter of 2024 we recorded an impairment charge for an undeveloped parcel of land upon reclassification to assets held for sale. |
|
7. |
Represents the Company's 50% share of WAVE's loss upon settlement of their defined benefit pension plan. |
|
8. |
Income tax expense is based on an adjusted effective tax rate of approximately 24%, multiplied by adjusted earnings before income taxes. |
Adjusted Free Cash Flow Guidance |
||||||||
|
|
For the Year Ending |
|
|||||
|
|
Low |
|
|
High |
|
||
Net cash provided by operating activities |
|
$ |
181 |
|
to |
$ |
195 |
|
Add: Return of investment from joint venture |
|
|
98 |
|
|
|
100 |
|
Adjusted net cash provided by operating activities |
|
$ |
279 |
|
to |
$ |
295 |
|
Less: Capital expenditures |
|
|
(82 |
) |
|
|
(88 |
) |
Net cash provided by operating and investing activities |
|
$ |
197 |
|
to |
$ |
207 |
|
Add: Cash paid for acquisitions, net of cash acquired and investment in unconsolidated affiliate |
|
|
99 |
|
|
|
99 |
|
Add: Arktura deferred compensation (1) |
|
|
6 |
|
|
|
6 |
|
(Less): Proceeds from sales of facilities (2) |
|
|
(12 |
) |
|
|
(12 |
) |
Adjusted Free Cash Flow |
|
$ |
290 |
|
to |
$ |
300 |
|
1. |
Deferred compensation payments related to 2020 acquisition recorded as a component of net cash provided by operating activities. |
|
2. |
Proceeds related to the sale of Architectural Specialties design center and the sale of our idled Mineral Fiber plant in |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029415018/en/
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