Armstrong World Industries : First Quarter 2026 Earnings Presentation
AWI
Published on 04/28/2026 at 06:44 am EDT
1st Quarter 2026 Earnings Presentation
April 28, 2026
Basis of Presentation Explanation
Results throughout this presentation are presented on a normalized basis.
We remove the impact of certain discrete expenses and income in certain measures including adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), adjusted diluted earnings per share ("EPS") and adjusted free cash flow. The Company excludes certain acquisition related expenses (i.e. - impact of adjustments related to the fair value of inventory, third-party professional fees and changes in the fair value of contingent consideration for acquisitions). 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, gains and losses on sales or impairment of fixed assets, 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 to 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 2026. 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 the Worthington Armstrong Venture ("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.
Investors should not consider non-GAAP measures as a substitute for GAAP measures.
Excluding adjusted diluted EPS, non-GAAP figures are rounded to the nearest million and corresponding percentages are based on unrounded figures. Operating Segments: "MF": Mineral Fiber, "AS": Architectural Specialties, "UC": Unallocated Corporate.
We define "organic" as total company and/or AS results excluding the impact of the February 2026 acquisition of Event Scape Inc. and Eventscape U.S. Holdings Inc. (collectively,
"Eventscape"), the December 2025 acquisition of FGM-Parallel LLC ("Parallel") and the September 2025 acquisition of Geometrik Manufacturing, Inc. ("Geometrik").
All dollar figures throughout the presentation are in $ millions, expect per share data, and all comparisons are versus prior year unless otherwise noted. Figures may not sum due to rounding.
3
GAAP and non-GAAP Financial Results
Q1 2026
AWI Consolidated Results
Net sales Net earnings
Operating income Adj. EBITDA*
Operating income margin (operating income % of net sales) Adj. EBITDA margin* (Adj. EBITDA % of net sales)
Diluted net earnings per share
Adj. diluted net earnings per share*
Net cash (used for) provided by operating & investing activities Adj. free cash flow*
Net cash provided by operating & investing activities % of net sales
Adj. free cash flow margin* (Adj. free cash flow % of net sales)
$409.9
$66.8
$94.2
$130 23.0%
31.7%
$1.55
$1.69 ($19.3)
$47 (4.7%)
11.5%
Q1 2025
$382.7
$69.1
$98.5
$129 25.7%
33.6%
$1.58
$1.66
$47.0
$48 12.3%
12.5%
Segment Results
Q1 2026
Q1 2025
MF
AS
UC
MF
AS
UC
Net sales
$257.2
$152.7
-
$245.1
$137.6
-
Operating income (loss)
$85.5
$9.3
($0.6)
$84.5
$14.8
($0.8)
Adj. EBITDA*
$109
$21
-
$105
$24
-
Operating income margin (Operating income % of net sales)
33.2%
6.1%
NM
34.5%
10.8%
NM
Adj. EBITDA margin* (Adj. EBITDA % of net sales)
42.4%
13.6%
NM
43.0%
17.1%
NM
4
*Non-GAAP measure. See appendix for reconciliation to nearest GAAP measure.
"NM": Not meaningful.
Solid Sales Growth with Muted Adj. EBITDA* Growth
1st Quarter 2026 Key Takeaways
Net Sales up 7% and Adj. EBITDA* up 1%
Total company Adj. EBITDA margin* of 31.7% impacted primarily by short-term headwinds in the Architectural Specialties segment
Mineral Fiber segment Adj. EBITDA* up 4%
Adj. EBITDA margin* of 42.4%, with strong AUV1 and positive volumes
Architectural Specialties segment Adj. EBITDA* down 12%
Double-digit AS sales driven by solid organic growth and recent acquisitions2; AS Organic Adj. EBITDA margin* of 14.5% impacted by a non-recurring tariff adjustment
2026 Guidance Update
Continue to expect 8% to 10% Net Sales growth, 8% to 12% Adj. EBITDA* growth and 9% to 14% Adj. Free Cash Flow* growth; Modestly raising Adj. Diluted EPS* range to 10% to 14% growth driven by higher share repurchases
$410M (+7% VPY)
Net Sales
$130M (+1% VPY)
Adj. EBITDA*
$1.69 (+2% VPY)
Adj. Diluted EPS*
$47M (-1% VPY)
Adj. Free Cash Flow*
*Non-GAAP measure. See appendix for reconciliation to nearest GAAP measure. 5
1. Average Unit Value ("AUV"). Includes both like-for-like price and mix impacts. | 2. Recent acquisitions include Eventscape, Parallel and Geometrik.
AUV Growth and Positive Volume Drive Strong Results
Mineral Fiber Q1 2026 Results
$245 $257
Net Sales Growth VPY
+5%
Q1 Mineral Fiber Key Highlights
●
Top-line AUV growth of 4% primarily driven
by favorable like-for-like price
●
Q1 '25
Q1 '26
Adj. EBITDA* VPY
Q1
2025 Adj. EBITDA* $105
AUV
9
Volume
1
Manufacturing1
(1)
Input Costs2
(3)
SG&A1
(2)
WAVE Equity Earnings
1
Slightly positive volume driven by solid commercial execution in a flattish market
Higher input costs primarily due to raw
material and energy inflation and
unfavorable inventory valuation impacts
●
Increase in SG&A primarily driven by lower deferred compensation gains
2026 Adj. EBITDA* $109
% Change 4%
Adj. EBITDA margin* of 42.4%
*Non-GAAP measure. See appendix for reconciliation to nearest GAAP measure.
Excludes the change in depreciation and amortization throughout the presentation.
Includes raw material, energy and freight impacts, in addition to inventory valuation impacts. 6
Sales Growth with Earnings Primarily Impacted by Short-Term Headwinds
Architectural Specialties Q1 2026 Results
Net Sales
Growth VPY
$153
$138
11%
Q1 Architectural Specialties Key Highlights
Sales growth driven by solid organic growth and
recent acquisitions
Manufacturing costs negatively impacted by a non-recurring tariff adjustment
Increase in SG&A expenses primarily due to
Q1 '25
Q1 '26
Adj. EBITDA* VPY
Q1
2025 Adj. EBITDA* $24
Sales
7
Manufacturing1
(7)
SG&A1
(3)
2026 Adj. EBITDA*
$21
% Change
(12%)
higher selling expenses in support of growth
Recent acquisitions add incremental costs, as
expected … $2M increase in manufacturing costs
and $1M increase in SG&A expenses
●
Adj. EBITDA margin* of 13.6% and AS Organic Adj.
EBITDA margin* of 14.5%
●
Strong order intake expected to support solid second-half organic growth
*Non-GAAP measure. See appendix for reconciliation to nearest GAAP measure.
1. Excludes the change in depreciation and amortization throughout the presentation. 7
Strong Sales Growth with Earnings Pressured by Discrete Headwinds
Q1 2026 Consolidated Company Key Metrics
Q1 2025
Q1 2026
Variance
Net Sales
$383
$410
7%
Adj. EBITDA*
$129
$130
1%
Adj. EBITDA Margin* (Adj. EBITDA % of Net Sales)
33.6%
31.7%
(190bps)
AWI Organic Adj. EBITDA Margin* (Adj. EBITDA % of Net Sales)
33.6%
32.2%
(140bps)
Adj. Diluted Net Earnings Per Share*
$1.66
$1.69
2%
Adj. EBITDA* Bridge VPY
$8
$129
$9
($8)
($3)
($5)
$1 $130
Q1 2025 Volume AUV Manufacturing 1
Input Costs2
SG&A1
Equity Earnings Q1 2026
*Non-GAAP measure. See appendix for reconciliation to nearest GAAP measure.
Excludes the change in depreciation and amortization throughout the presentation. 8
Includes raw material, energy and freight impacts, in addition to inventory valuation impacts.
Adjusted Free Cash Flow* Funds All Capital Allocation Priorities
Q1 2026 Adj. Free Cash Flow* Down 1% vs PY
Q1 2026
Capital Deployment
$48
$5
$47
$1
$2
($8)
$18
$19
$15
$65
$60
2026
$22
$13
2025
2025 Adj. Operating cash flow and
other1
CapEx Interest Paid
WAVE
Dividends
2026
*Non-GAAP measure. See appendix for reconciliation to nearest GAAP measure.
1. Includes cash earnings, working capital, and other current assets and liabilities and proceeds from company-owned officer life insurance. 9
Updated Full Year 2026 Guidance
Expecting strong growth across all key metrics
Adjusted EBITDA*
$600M to $620M
8% to 12% YoY
Net Sales
$1,745M to $1,785M
8% to 10% YoY
Commentary1
Expect Mineral Fiber volume flat to up 1% on slightly improving market conditions and growth initiatives
Expect Mineral Fiber AUV growth ~6% … delivering
Adj. EBITDA Margin* expansion
Adjusted Free Cash Flow*
$375M to $395M
9% to 14% YoY
Adjusted Diluted EPS*
$8.15 to $8.45
10% to 14% YoY
Prior: $8.05 to $8.35
9% to 13% YoY
WAVE equity earnings expected to grow mid-single digits
Organic AS high-single-digit top line growth … Adj.
EBITDA Margin* of 19-20%
Guidance includes recent acquisition of Eventscape
… adds incremental Sales and Adj. EBITDA* growth to Architectural Specialties
*Non-GAAP measure. See appendix for reconciliation to nearest GAAP measure.
1. Additional assumptions available in the appendix of this presentation. 10
Appendix
Full Year 2026 Assumptions
Segment
Net Sales
Adjusted EBITDA Margin
Mineral Fiber
6% to 7% growth
~44% (prior: > 43.5%)
Architectural Specialties
Mid-teens % growth
~19% (prior: > 19%)
Full Year 2026
Consolidated Metrics
Capital expenditures $100M to $110M
Depreciation and amortization $119M to $124M
Interest expense $27M to $29M (prior: $25M to $28M)
Book / cash tax rate ~25% / ~22%
Shares outstanding ~43M (prior ~43 to 43.5M)
Cash return of investment from joint venture $114M to $122M
Shipping Days
vs Prior Year
2025
2026
Q1 (1) -
Q2 - -
Q3 - -
Q4 - -
Full Year (1) -
*Non-GAAP measure.
12
Adjusted EBITDA Reconciliation
For the Three Months Ended March 31,
2026
2025
Net sales
$410
$383
Net earnings
$67
$69
Add: Income tax expense
22
22
Earnings before income taxes
$88
$91
Add: Interest/other income and expense, net
6
8
Operating income
$94
$99
Add: RIP expense1
1
1
Add: Acquisition-related impacts2
3
-
Add: Severance and cost reduction actions
3
-
Adjusted operating income
$100
$99
Add: Depreciation and amortization
30
29
Adjusted EBITDA
$130
$129
Operating income margin
23.0%
25.7%
Adjusted EBITDA margin
31.7%
33.6%
Adjusted Diluted EPS
Reconciliation
For the Three Months Ended March 31,
2026
2025
Net earnings
Add: Income tax expense
$67
22
$69
22
Earnings before income taxes
$88
$91
Add: Acquisition-related impacts2
3
-
Add: Acquisition-related amortization3
4
4
Add: Severance and cost reduction actions
3
-
Adjusted net earnings before income taxes
$97
$96
(Less): Adjusted income tax expense4
(24)
(23)
Adjusted net earnings
$73
$73
Diluted shares outstanding
43.2
43.8
Effective tax rate
24%
24%
Diluted net earnings per share
$1.55
$1.58
Adjusted diluted net earnings per share
$1.69
$1.66
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.
Represents the impact of third-party professional fees and changes in fair value of contingent consideration.
Represents acquisition-related intangible amortization, including customer relationships, developed technology, software, trademarks and brand names, non-compete agreements and other intangibles.
Adjusted income tax expense is calculated using the effective tax rate multiplied by the adjusted net earnings before income taxes.
13
Adjusted Free Cash Flow Reconciliation
For the Three Months Ended March 31,
2026
2025
Net cash provided by operating activities
$32
$41
Net cash (used for) provided by investing activities
($51)
$6
Net cash (used for) provided by operating and investing activities
($19)
$47
Add: Acquisitions, net of cash acquired
65
-
Add: Contingent consideration in excess of acquisition-date fair value1
2
1
Adjusted free cash flow
$47
$48
Segment Adj. EBITDA Reconciliation
For the Three Months Ended March 31,
MF
AS
UC
2026
2025
2026
2025
2026
2025
Net sales
$257
$245
$153
$138
-
-
Operating income (loss)
$86
$85
$9
$15
($1)
($1)
Add: RIP expense2
-
-
-
-
1
1
Add: Acquisition-related impacts3
-
-
3
-
-
-
Add: Severance and cost reduction actions
2
-
1
-
-
-
Adjusted operating income
$87
$85
$13
$15
-
-
Add: Depreciation and amortization
22
21
8
9
-
-
Adjusted EBITDA
$109
$105
$21
$24
-
-
Operating income margin (Operating income % of net sales)
33.2%
34.5%
6.1%
10.8%
NM
NM
Adjusted EBITDA margin (Adjusted EBITDA % of net sales)
42.4%
43.0%
13.6%
17.1%
NM
NM
Contingent consideration payments related to acquisitions that were recorded as components of net cash provided by operating activities.
RIP expense represents only the plan service cost that is recorded within Operating income (loss). For all periods presented, we were not required to and did not make cash contributions to our RIP.
Represents the impact of third-party professional fees and changes in fair value of contingent consideration. 14
"NM": Not meaningful.
AS Organic Adj. EBITDA Reconciliation
For the Three Months Ended March 31,
Total AS
Recent Acquisitions1
AS Organic
2026
2025
2026
2025
2026
2025
Net sales
$153
$138
$5
-
$147
$138
Operating income
$9
$15
($2)
-
$12
$15
Add: Acquisition-related impacts2
3
-
2
-
1
-
Add: Severance and cost reduction actions
1
-
-
-
1
-
Adjusted operating income
$13
$15
($1)
-
$14
$15
Add: Depreciation and amortization
8
9
-
-
8
9
Adjusted EBITDA
$21
$24
($1)
-
$21
$24
Operating income margin (Operating income % of net sales)
6.1%
10.8%
(45.6%)
-
8.0%
10.8%
Adjusted EBITDA margin (Adjusted EBITDA % of net sales)
13.6%
17.1%
(10.7%)
-
14.5%
17.1%
Recent acquisitions include the February 2026 acquisition of Eventscape, the December 2025 acquisition of Parallel and the September 2025
acquisition of Geometrik.
Represents the impact of third-party professional fees and changes in fair value of contingent consideration.
15
AWI Organic Adj. EBITDA Reconciliation
For the Three Months Ended March 31,
Total AWI
Recent Acquisitions1
AWI Organic
2026
2025
2026
2025
2026
2025
Net sales
$410
$383
$5
-
$405
$383
Operating income
$94
$99
($2)
-
$97
$99
Add: RIP expense2
1
1
-
-
1
1
Add: Acquisition-related impacts3
3
-
2
-
1
-
Add: Severance and cost reduction actions
3
-
-
-
3
-
Adjusted operating income
$100
$99
($1)
-
$101
$99
Add: Depreciation and amortization
30
29
-
-
30
29
Adjusted EBITDA
$130
$129
($1)
-
$130
$129
Operating income margin (Operating income % of net sales)
23.0%
25.7%
(45.6%)
-
23.9%
25.7%
Adjusted EBITDA margin (Adjusted EBITDA % of net sales)
31.7%
33.6%
(10.7%)
-
32.2%
33.6%
Recent acquisitions include the February 2026 acquisition of Eventscape, the December 2025 acquisition of Parallel and the September 2025 acquisition of Geometrik.
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.
Represents the impact of third-party professional fees and changes in fair value of contingent consideration.
16
2026 Adj. Free Cash Flow
Guidance Reconciliation
Full Year 2026
Low
High
Net cash provided by operating activities $295 $317
Add: Income tax expense
113
116
Earnings before income taxes
$452
$464
Add: Contingent consideration in excess of
acquisition-date fair value3
2
2
Adjusted Free Cash Flow $375 $395
2026 Adj. EBITDA
Guidance Reconciliation
Full Year 2026
Low
High
Net earnings $339 $348
Add: Interest expense 27 29
2026 Adj. Diluted EPS Guidance Reconciliation
Full Year 2026
Low
High
Net earnings $339 $348
Operating income
$474
$489
Add: RIP expense1
2
2
Add: Acquisition-related impacts2
3
3
Add: Severance and cost reduction actions
3
3
Adjusted operating income
$481
$496
Add: Depreciation and amortization
119
124
Add: Other non-operating (income), net (5) (4)
Add: Return of investment from joint venture 114 122
(Less): Capital expenditures
(100)
(110)
Add: Acquisitions, net of cash acquired
65
65
Adjusted EBITDA $600 $620
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.
Represents the impact of third-party professional fees and changes in fair value of contingent consideration.
Contingent consideration payments related to acquisitions that were recorded as components of net cash provided by operating activities.
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.
Represents acquisition-related intangible amortization, including customer relationships, developed technology, software, trademarks and brand names, non-compete agreements and other intangibles.
Adjusted income tax expense is based on an adjusted effective tax rate of approximately 25%, multiplied by adjusted earnings before income taxes.
Adjusted diluted EPS guidance for 2026 is calculated based on approximately 43 million of diluted shares
outstanding.
(Less): RIP (credit)4 (1) (1)
Add: Income tax expense
113
116
Earnings before income taxes
$452
$464
Add: Acquisition-related amortization5 14 16
Add: Severance and cost reduction actions
3
3
Adjusted earnings before income taxes $470 $484
Add: Acquisition-related impacts2 3 3
Adjusted net earnings
$352
$363
Diluted net earnings per share
$7.84
$8.11
Adjusted diluted net earnings per share7
$8.15
$8.45
(Less): Adjusted income tax expense6 (117) (121)
17
Disclaimer
Armstrong World Industries Inc. published this content on April 28, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 28, 2026 at 10:43 UTC.