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Jun 30, 2023
Armstrong Q2 2023 Earnings Report
Armstrong's second quarter demonstrated resilience with double-digit adjusted EBITDA growth and margin expansion, driven by both Mineral Fiber and Architectural Specialties segments.
Key Takeaways
Armstrong World Industries reported a 1% increase in net sales, a 22% increase in operating income, and a 10% increase in adjusted EBITDA for the second quarter of 2023. The company saw margin expansion in both the Mineral Fiber and Architectural Specialties segments, with positive contributions from both.
Net sales increased by 1% compared to the prior-year quarter, driven by strong average unit value (AUV) performance.
Operating income rose by 22% with a 440 basis point margin expansion, and diluted net earnings per share increased by 21% compared to the prior-year quarter.
Adjusted EBITDA increased by 10% with a 260 basis point margin expansion, and adjusted diluted net earnings per share increased by 7% compared to the prior-year quarter.
The company acquired BOK Modern, a design leader in metal architectural solutions, complementing its existing metal portfolio.
Armstrong
Armstrong
Forward Guidance
Armstrong World Industries updated its full year 2023 outlook to reflect confidence in delivering solid sales, earnings and cash flow growth.
Positive Outlook
- Net sales are expected to be between $1,265 million and $1,305 million, representing a 3% to 6% growth.
- Adjusted EBITDA is projected to be between $400 million and $420 million, indicating a 4% to 9% increase.
- Adjusted diluted net earnings per share are anticipated to be between $4.85 and $5.05, reflecting a 2% to 7% growth.
- Adjusted free cash flow is forecasted to be between $240 million and $250 million, showing a 9% to 13% increase.
- Strong execution at plants drove manufacturing productivity and operational efficiencies.
Challenges Ahead
- Challenging market conditions persist.
- The company is navigating softer market conditions.
- Lower volumes in Mineral Fiber segment due to softer market demand.
- Increase in selling expenses.
- Increase in manufacturing costs