Armstrong World Industries(AWI) - 2023 Q3 - Quarterly Report

FORM 10-Q General Information Cautionary Note Regarding Forward-Looking Statements This section provides a standard disclaimer that forward-looking statements are subject to various risks and uncertainties, potentially causing actual results to differ materially from expectations - Forward-looking statements are subject to various risks and uncertainties, including expectations concerning markets, economic conditions, dividends, and the ability to increase revenues and earnings[12] - Key risk categories include changes in customer relationships, availability and costs of manufacturing inputs, labor, joint venture financial contribution, ESG objectives, digitalization, strategic transactions, tax consequences, indebtedness, liquidity, legal/regulatory matters, economic conditions, construction activity, market competition, and cybersecurity breaches[13][14][15][16][17] PART I - FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including earnings, balance sheets, equity, and cash flows, highlighting strong financial performance with increased net sales, operating income, and net earnings Condensed Consolidated Statements of Earnings and Comprehensive Income Consolidated Statements of Earnings and Comprehensive Income Highlights | Metric | 3 Months Ended Sep 30, 2023 (millions) | 3 Months Ended Sep 30, 2022 (millions) | 9 Months Ended Sep 30, 2023 (millions) | 9 Months Ended Sep 30, 2022 (millions) | | :--------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Net Sales | $347.3 | $325.0 | $982.9 | $928.6 | | Gross Profit | $141.4 | $117.5 | $377.5 | $337.6 | | Operating Income | $100.2 | $73.3 | $257.4 | $208.1 | | Net Earnings | $69.5 | $57.5 | $177.0 | $154.1 | | Diluted EPS (Continuing Ops) ($) | $1.56 | $1.18 | $3.93 | $3.23 | | Diluted EPS (Net Earnings) ($) | $1.56 | $1.25 | $3.93 | $3.29 | Condensed Consolidated Balance Sheets Consolidated Balance Sheet Highlights | Metric | Sep 30, 2023 (millions) | Dec 31, 2022 (millions) | | :--------------------------------- | :---------------------- | :---------------------- | | Total Assets | $1,713.8 | $1,687.2 | | Total Current Assets | $350.1 | $356.5 | | Total Current Liabilities | $185.8 | $182.7 | | Long-term Debt (less current) | $604.8 | $651.1 | | Total Shareholders' Equity | $585.5 | $535.0 | Condensed Consolidated Statements of Shareholders' Equity Shareholders' Equity Changes (9 Months Ended Sep 30, 2023) | Metric | Amount (millions) | | :--------------------------------- | :------------------ | | Total Shareholders' Equity (Dec 31, 2022) | $535.0 | | Net Earnings | $177.0 | | Acquisition of Treasury Stock | $(98.0) | | Cash Dividends | $(34.7) | | Total Shareholders' Equity (Sep 30, 2023) | $585.5 | Condensed Consolidated Statements of Cash Flows Cash Flow Highlights (9 Months Ended Sep 30) | Metric | 2023 (millions) | 2022 (millions) | | :--------------------------------- | :-------------- | :-------------- | | Net cash provided by operating activities | $176.4 | $119.2 | | Net cash (used for) provided by investing activities | $(10.6) | $8.1 | | Net cash (used for) financing activities | $(175.1) | $(137.6) | | Net (decrease) in cash and cash equivalents | $(9.4) | $(11.3) | | Cash and cash equivalents at end of period | $96.6 | $86.8 | Notes to Condensed Consolidated Financial Statements NOTE 1. BUSINESS AND BASIS OF PRESENTATION - Armstrong World Industries, Inc. (AWI) is a Pennsylvania corporation incorporated in 1891[36] - In July 2023, AWI acquired BOK Modern, LLC, a designer of metal facade architectural solutions, integrating its operations into the Architectural Specialties segment[39] - In November 2022, AWI acquired GC Products, Inc., a designer and manufacturer of glass-reinforced-gypsum, glass-reinforced-cement, molded ceiling, and specialty wall products, also integrated into the Architectural Specialties segment[39] NOTE 2. SEGMENT RESULTS Segment Net Sales (in millions) | Segment | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Mineral Fiber | $249.7 | $233.7 | $712.1 | $671.4 | | Architectural Specialties | $97.6 | $91.3 | $270.8 | $257.2 | | Total Net Sales | $347.3 | $325.0 | $982.9 | $928.6 | Segment Operating Income (in millions) | Segment | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Mineral Fiber | $85.5 | $70.8 | $224.8 | $199.8 | | Architectural Specialties | $15.5 | $3.4 | $34.9 | $11.0 | | Unallocated Corporate | $(0.8) | $(0.9) | $(2.3) | $(2.7) | | Total Consolidated Operating Income | $100.2 | $73.3 | $257.4 | $208.1 | NOTE 3. REVENUE - Revenue is disaggregated by product-based segments (Mineral Fiber and Architectural Specialties) and major customer channels (Distributors, Home centers, Direct customers, Other)[45][46] Mineral Fiber Net Sales by Customer Channel (in millions) | Customer Channel | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Distributors | $182.0 | $173.8 | $516.4 | $495.0 | | Home centers | $25.5 | $24.0 | $80.0 | $75.6 | | Direct customers | $15.7 | $16.1 | $45.6 | $46.6 | | Other | $26.5 | $19.8 | $70.1 | $54.2 | | Total | $249.7 | $233.7 | $712.1 | $671.4 | Architectural Specialties Net Sales by Customer Channel (in millions) | Customer Channel | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Distributors | $57.4 | $44.7 | $142.5 | $129.4 | | Direct customers | $36.4 | $45.3 | $122.8 | $125.0 | | Other | $3.8 | $1.3 | $5.5 | $2.8 | | Total | $97.6 | $91.3 | $270.8 | $257.2 | NOTE 4. ACQUISITIONS - On July 17, 2023, AWI acquired BOK Modern, LLC for a purchase price of $13.8 million cash and additional contingent consideration not to exceed $3.3 million, with an estimated fair value of $0.8 million[52] - In May 2023, AWI acquired a co-ownership interest in certain software-related intellectual property for a total purchase price of $11.0 million[53] - On November 4, 2022, AWI acquired the business and assets of GC Products, Inc. for $2.8 million cash[54] NOTE 5. DISCONTINUED OPERATIONS - During the three and nine months ended September 30, 2022, AWI recorded a $1.0 million tax benefit related to federal tax statute of limitation closures for the separation of Armstrong Flooring, Inc[55] - During the three and nine months ended September 30, 2022, AWI recorded a $2.0 million tax benefit related to federal tax statute of limitation closures for the sale of EMEA and Pacific Rim businesses[57] Net Earnings from Discontinued Operations (in millions) | Metric | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2022 | | :--------------------------------- | :-------------------------- | :-------------------------- | | Net earnings from discontinued operations | $3.0 | $3.0 | NOTE 6. ACCOUNTS AND NOTES RECEIVABLE Accounts and Notes Receivable, Net (in millions) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------- | :----------- | :----------- | | Customer receivables | $112.8 | $107.4 | | Miscellaneous receivables | $7.0 | $8.2 | | Less allowance for warranties, discounts and losses | $(3.1) | $(3.2) | | Accounts and notes receivable, net | $116.7 | $112.4 | - All outstanding Employee Retention Credit (ERC) receivables of $4.8 million as of December 31, 2022, were collected during the first quarter of 2023[59] NOTE 7. INVENTORIES Inventories, Net (in millions) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------- | :----------- | :----------- | | Finished goods | $58.8 | $60.9 | | Goods in process | $4.5 | $6.5 | | Raw materials and supplies | $68.1 | $63.0 | | Less LIFO reserves | $(24.2) | $(20.4) | | Total inventories, net | $107.2 | $110.0 | NOTE 8. OTHER CURRENT ASSETS Other Current Assets (in millions) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------- | :----------- | :----------- | | Prepaid expenses | $15.1 | $16.6 | | Assets held for sale | $6.6 | $4.6 | | Fair value of derivative assets | $3.2 | $3.7 | | Other | $2.7 | $1.4 | | Total other current assets | $27.6 | $26.3 | - Assets held for sale as of September 30, 2023, included the idled Mineral Fiber plant in St. Helens, Oregon, and an Architectural Specialties design center in Chicago, Illinois[60] NOTE 9. EQUITY INVESTMENT - The investment in WAVE joint venture is a 50% equity interest reflected within the Mineral Fiber segment[62] WAVE Joint Venture Financial Data (in millions) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net sales | $117.8 | $116.9 | $343.4 | $356.3 | | Gross profit | $68.5 | $64.0 | $200.9 | $180.1 | | Net earnings | $49.1 | $46.7 | $144.5 | $130.0 | NOTE 10. LEASES - During Q1 2023, AWI entered a new operating lease for a manufacturing facility, recognizing an initial ROU asset and lease liability of $13.0 million[64] - During Q3 2023, AWI modified a lease for an existing manufacturing facility, recognizing an additional ROU asset and lease liability of $8.6 million[64] Weighted-Average Discount Rate for Leases | Metric | Sep 30, 2023 (%) | Dec 31, 2022 (%) | | :--------------------------------- | :--------------- | :--------------- | | Operating leases | 4.9% | 3.8% | | Finance leases | 4.6% | 3.7% | NOTE 11. GOODWILL AND INTANGIBLE ASSETS Goodwill and Intangible Assets (in millions) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------- | :----------- | :----------- | | Goodwill | $174.8 | $167.3 | | Total intangible assets | $658.2 | $640.9 | | Amortization expense (9 months) | $11.0 | $12.8 | - The increase in goodwill as of September 30, 2023, resulted from the acquisition of BOK[70] NOTE 12. OTHER NON-CURRENT ASSETS Other Non-Current Assets (in millions) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------- | :----------- | :----------- | | Cash surrender value of company-owned life insurance policies | $40.7 | $42.8 | | Investment in employee deferred compensation plans | $7.8 | $7.7 | | Fair value of derivative assets | $3.0 | $7.7 | | Other | $1.0 | $1.2 | | Total other non-current assets | $52.5 | $59.4 | NOTE 13. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts Payable and Accrued Expenses (in millions) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------- | :----------- | :----------- | | Payables, trade and other | $95.3 | $105.0 | | Employment costs | $20.8 | $20.0 | | Current portion of pension and postretirement liabilities | $9.9 | $9.9 | | Acquisition-related contingent consideration | $0 | $15.2 | | Other | $24.3 | $22.4 | | Total accounts payable and accrued expenses | $150.3 | $172.5 | NOTE 14. INCOME TAX EXPENSE Income Tax Expense and Effective Tax Rate | Metric | 3 Months Ended Sep 30, 2023 (millions) | 3 Months Ended Sep 30, 2022 (millions) | 9 Months Ended Sep 30, 2023 (millions) | 9 Months Ended Sep 30, 2022 (millions) | | :--------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Earnings from continuing operations before income taxes | $93.7 | $67.7 | $237.6 | $194.3 | | Income tax expense | $24.2 | $13.2 | $60.6 | $43.2 | | Effective tax rate (%) | 25.8% | 19.5% | 25.5% | 22.2% | - The effective tax rate for both the three and nine months ended September 30, 2023, was higher primarily due to the benefits recognized from federal and state statute closures and the reduction in valuation allowance for capital loss carryforwards in the prior year[74] NOTE 15. DEBT - AWI's long-term debt includes a $950.0 million variable rate senior credit facility, comprising a $500.0 million revolving credit facility and a $450.0 million Term Loan A[76] Debt Balances (in millions) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------- | :----------- | :----------- | | Principal balance of Term Loan A | $450.0 | $450.0 | | Borrowings outstanding under revolving credit facility | $175.0 | $205.0 | | Long-term debt, less current installments | $604.8 | $651.1 | Letters of Credit Facilities (in millions) | Financing Arrangement | Limit | Sep 30, 2023 Used | Available | | :---------------------- | :---- | :---------------- | :-------- | | Bi-lateral facility | $25.0 | $7.7 | $17.3 | | Revolving credit facility | $150.0 | $0 | $150.0 | | Total | $175.0 | $7.7 | $167.3 | NOTE 16. PENSIONS AND OTHER BENEFIT PROGRAMS Net Periodic Benefit Costs (Credits) (in millions) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net periodic pension credit | $0 | $0 | $0 | $0 | | Net periodic postretirement credit | $(0.8) | $(0.4) | $(2.4) | $(1.2) | NOTE 17. FINANCIAL INSTRUMENTS AND CONTINGENT CONSIDERATION Fair Values of Financial Instruments and Contingent Consideration (in millions) | Metric | Sep 30, 2023 Carrying Amount | Sep 30, 2023 Estimated Fair Value | Dec 31, 2022 Carrying Amount | Dec 31, 2022 Estimated Fair Value | | :--------------------------------- | :----------------------------- | :-------------------------------- | :----------------------------- | :-------------------------------- | | Total long-term debt, including current portion | $(621.7) | $(616.2) | $(651.1) | $(645.3) | | Interest rate swap contracts | $6.2 | $6.2 | $11.4 | $11.4 | | Acquisition-related contingent consideration | $(0.8) | $(0.8) | $(15.2) | $(15.2) | - Acquisition-related contingent consideration of $15.2 million related to the Turf acquisition was paid in Q1 2023[91] - The remaining acquisition-related contingent consideration of $0.8 million as of September 30, 2023, relates to the BOK acquisition, measured at fair value using a Monte Carlo simulation[87][88] NOTE 18. DERIVATIVE FINANCIAL INSTRUMENTS - AWI uses interest rate swaps as cash flow hedges to manage exposure to interest rate volatility on variable rate debt[94] - In March 2023, interest rate swaps were amended to change the hedged interest rate from LIBOR to the Secured Overnight Financing Rate (SOFR)[94][176] - As of September 30, 2023, $6.3 million of existing gains in Accumulated Other Comprehensive Income (AOCI) are expected to be recognized in net earnings over the next twelve months[103] NOTE 19. SHAREHOLDERS' EQUITY - During the three months ended September 30, 2023, AWI repurchased 0.5 million shares for $40.0 million (average price $74.80 per share)[106] - During the nine months ended September 30, 2023, AWI repurchased 1.3 million shares for $97.0 million (average price $72.09 per share)[106] - As of September 30, 2023, $751.8 million remained under the Board's share repurchase authorization[104] - On October 18, 2023, the Board declared a $0.28 per share quarterly dividend, an increase from the previous $0.254 per share[108] NOTE 20. OTHER LONG-TERM LIABILITIES Other Long-Term Liabilities (in millions) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------- | :----------- | :----------- | | Long-term deferred compensation arrangements | $17.0 | $15.4 | | Environmental insurance recoveries received in excess of cumulative expenses incurred | $2.7 | $3.5 | | Acquisition-related contingent consideration | $0.8 | $0 | | Other | $7.9 | $6.9 | | Total other long-term liabilities | $28.4 | $25.8 | NOTE 21. LITIGATION AND RELATED MATTERS - AWI is actively involved in the investigation and remediation of existing or potential environmental contamination at two domestically owned Superfund sites: Macon, GA, and Elizabeth City, NC[116] - Total environmental liabilities recorded were $0.8 million as of September 30, 2023, and $0.5 million as of December 31, 2022, reflected within other long-term liabilities[127] - Insurance recoveries in excess of cumulative expenses were $2.7 million as of September 30, 2023, and $3.5 million as of December 31, 2022[119] NOTE 22. NET EARNINGS PER SHARE Net Earnings Per Share (Continuing Operations) | Metric | 3 Months Ended Sep 30, 2023 ($) | 3 Months Ended Sep 30, 2022 ($) | 9 Months Ended Sep 30, 2023 ($) | 9 Months Ended Sep 30, 2022 ($) | | :--------------------------------- | :------------------------------ | :------------------------------ | :------------------------------ | :------------------------------ | | Basic EPS | $1.56 | $1.18 | $3.93 | $3.24 | | Diluted EPS | $1.56 | $1.18 | $3.93 | $3.23 | | Basic Shares Outstanding (millions) | 44.5 | 46.1 | 45.0 | 46.6 | | Diluted Shares Outstanding (millions) | 44.6 | 46.1 | 45.0 | 46.7 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial performance, highlighting strong consolidated net sales and operating income growth driven by favorable average unit value and increased sales volumes across key segments, alongside cash flow and liquidity Overview - AWI is a leader in the design, innovation, and manufacture of ceiling and wall solutions in the Americas[137] - The company operates 16 manufacturing plants (14 in the U.S., 2 in Canada) and manufactures ceiling suspension systems through the WAVE joint venture[138][139] - Reportable segments include Mineral Fiber, Architectural Specialties, and Unallocated Corporate. Recent acquisitions of BOK Modern (July 2023) and GC Products (November 2022) are included in the Architectural Specialties segment[138][140] Factors Affecting Revenues - Consolidated net sales for the three and nine months ended September 30, 2023, increased by approximately $20 million and $43 million, respectively, due to favorable Average Unit Value (AUV)[146] - Sales volumes increased by $2 million (three months) and $11 million (nine months), partly driven by contributions from the acquisitions of GC Products and BOK[145] - Price increases were implemented on Mineral Fiber ceiling products and grid products during the first half and third quarter of 2023[147] - Sales are historically stronger in the second and third quarters due to favorable weather, customer business cycles, and timing of renovation/new construction projects[147] Factors Affecting Operating Costs - In the three months ended September 30, 2023, operating income benefited by $2 million from lower energy costs, which more than offset higher raw material costs[149] - For the nine months ended September 30, 2023, operating income was negatively impacted by $4 million from higher raw material costs, partially offset by lower energy costs[149] Acquisition-Related Expenses and Losses (in millions) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :--------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Loss related to change in fair value of contingent consideration | $0 | $7.1 | $0 | $13.3 | | Deferred cash and restricted stock expenses | $1.4 | $1.9 | $4.1 | $5.9 | | Net negative impact to operating income | $1.4 | $9.0 | $4.1 | $19.2 | - The decrease in acquisition-related expenses is primarily due to the completion of the contingent consideration earn-out period for the Turf acquisition on December 31, 2022[152] Results of Operations Consolidated Results (in millions) | Metric | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | Change (%) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | Change (%) | | :--------------------------------- | :-------------------------- | :-------------------------- | :--------- | :-------------------------- | :-------------------------- | :--------- | | Total consolidated net sales | $347.3 | $325.0 | 6.9% | $982.9 | $928.6 | 5.8% | | Operating income | $100.2 | $73.3 | 36.7% | $257.4 | $208.1 | 23.7% | - Cost of goods sold as a percentage of net sales decreased to 59.3% in Q3 2023 (from 63.8% in Q3 2022) and to 61.6% for the nine months (from 63.6% in 9 months 2022), driven by favorable AUV margin, lower input costs, and improved manufacturing productivity[157][158] - Equity earnings from the WAVE joint venture increased to $23.4 million in Q3 2023 (from $22.2 million) and to $69.1 million for the nine months (from $61.7 million), primarily due to lower steel costs and higher volumes[160] - Interest expense increased due to higher interest rates on floating rate debt, partially offset by lower average debt balances[161] - The effective tax rate increased to 25.8% in Q3 2023 (from 19.5%) and to 25.5% for the nine months (from 22.2%), primarily due to the absence of prior-year tax benefits from federal and state statute closures and valuation allowance reductions[162] Financial Condition and Liquidity - Net cash provided by operating activities significantly increased to $176.4 million for the first nine months of 2023, up from $119.2 million in the prior-year period, driven by favorable working capital changes[172] - Net cash used in investing activities was $10.6 million for the first nine months of 2023, a shift from $8.1 million provided in the prior year, primarily due to cash paid for acquisitions and increased capital expenditures[172] - Net cash used for financing activities increased to $175.1 million for the first nine months of 2023, compared to $137.6 million in the prior year, mainly due to lower proceeds from revolving credit facility borrowings[173] - AWI has a $950.0 million variable rate senior credit facility, including a $500.0 million revolving credit facility and a $450.0 million Term Loan A[174] - As of September 30, 2023, AWI had $96.6 million in cash and cash equivalents and $325.0 million available under its revolving credit facility, and was in compliance with all debt covenants[175][181] Critical Accounting Estimates - There have been no material changes to the critical accounting estimates disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[182] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers readers to the company's Annual Report on Form 10-K for a comprehensive discussion of its exposure to various market risks - For information regarding exposure to certain market risks, refer to Item 7A, 'Quantitative and Qualitative Disclosures About Market Risk,' in the Annual Report on Form 10-K for the year ended December 31, 2022[183] Item 4. Controls and Procedures Management, including the principal executive officer and chief financial officer, concluded that the company's disclosure controls and procedures were effective as of September 30, 2023. No material changes in internal control over financial reporting occurred during the fiscal quarter - Disclosure controls and procedures were effective as of September 30, 2023, based on management's evaluation with the participation of the principal executive officer and chief financial officer[184] - There have been no material changes in internal control over financial reporting during the fiscal quarter ended September 30, 2023[184] PART II - OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 21 of the Condensed Consolidated Financial Statements for detailed information regarding legal proceedings, primarily focusing on environmental matters - Information regarding legal proceedings is incorporated by reference from Note 21 to the Condensed Consolidated Financial Statements[186] Item 1A. Risk Factors The company states that there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2022 - There have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[186] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company continued its share repurchase program, acquiring 0.5 million shares for $40.0 million during the third quarter of 2023. A significant authorization amount remains for future repurchases - During the three months ended September 30, 2023, AWI repurchased 534,736 shares under its program for a total cost of $40.0 million, at an average price of $74.80 per share[187][189] - As of September 30, 2023, $751.8 million remained under the Board's share repurchase authorization, which extends through December 31, 2026[187][188] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities[190] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[190] Item 5. Other Information This section discloses that the President and CEO, Victor D. Grizzle, entered into a new 10b5-1 plan for the exercise and sale of stock options in December 2023 - On August 31, 2023, CEO Victor D. Grizzle entered into a new 10b5-1 plan for the exercise and sale of 22,914 stock options at market price on December 28, 2023[191] Item 6. Exhibits This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, primarily consisting of Inline XBRL documents and certifications - The exhibits include Inline XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, and Presentation Linkbase[192] Signatures Signatures The report was duly signed on behalf of Armstrong World Industries, Inc. by its Senior Vice President and Chief Financial Officer, and its Vice President and Controller - The report was signed by Christopher P. Calzaretta, Senior Vice President and Chief Financial Officer, and James T. Burge, Vice President and Controller, on October 24, 2023[195]