Armstrong World Industries(AWI)2022-04-25 16:00Financial Performance - Net sales for the three months ended March 31, 2022, were $282.6 million, an increase of 12.8% compared to $251.9 million for the same period in 2021[19] - Gross profit for the three months ended March 31, 2022, was $102.2 million, representing a gross margin of 36.2%, up from $87.5 million and a margin of 34.7% in the prior year[19] - Operating income increased to $63.2 million for the three months ended March 31, 2022, compared to $54.1 million in the same period of 2021, reflecting a growth of 16.8%[19] - Net earnings for the three months ended March 31, 2022, were $44.4 million, compared to $35.4 million in the same period of 2021, marking a 25.4% increase[19] - Earnings per share (EPS) for continuing operations was $0.94 for the three months ended March 31, 2022, compared to $0.78 for the same period in 2021, an increase of 20.5%[19] Assets and Liabilities - Total assets as of March 31, 2022, were $1,708.1 million, slightly down from $1,710.0 million as of December 31, 2021[22] - Total liabilities decreased to $1,170.5 million as of March 31, 2022, from $1,179.3 million as of December 31, 2021[22] - Shareholders' equity increased to $537.6 million as of March 31, 2022, compared to $519.7 million as of December 31, 2021[22] - The company reported a decrease in cash and cash equivalents to $76.1 million as of March 31, 2022, from $98.1 million as of December 31, 2021[22] Segment Performance - The Mineral Fiber segment reported operating income of $57.6 million for the first quarter of 2022, compared to $60.6 million in the same period of 2021, indicating a decrease of 4.9%[37] - The Architectural Specialties segment achieved an operating income of $6.5 million in Q1 2022, a significant improvement from an operating loss of $4.9 million in Q1 2021[37] - Total net sales for the Mineral Fiber segment reached $203.2 million in Q1 2022, up from $188.7 million in Q1 2021, indicating a 7.9% increase[43] - Architectural Specialties segment net sales increased to $79.4 million in Q1 2022 from $63.2 million in Q1 2021, marking a 25.6% rise[43] Cash Flow and Dividends - Cash and cash equivalents at the end of the first quarter of 2022 were $76.1 million, down from $121.6 million at the end of Q1 2021, marking a decrease of 37.4%[27] - The company paid cash dividends of $10.9 million during the first quarter of 2022, compared to $10.1 million in the same period of 2021[27] - Net cash provided by operating activities for Q1 2022 was $16.7 million, a decrease from $19.6 million in Q1 2021[27] Share Repurchase and Stock - The company acquired treasury stock amounting to $30.0 million in the first quarter of 2022, compared to $10.0 million in the same period of 2021[27] - The company repurchased 0.3 million shares for a total cost of $30.0 million during the three months ended March 31, 2022, with an average price of $99.67 per share[81] - As of March 31, 2022, the company had $483.8 million remaining under its share repurchase authorization of up to $1,200.0 million[80] - Since the inception of the share repurchase program, the company has repurchased 10.8 million shares for a total cost of $716.2 million[81] Debt and Financing - The company's long-term debt includes a $1,000.0 million variable rate senior credit facility, with a Term Loan A principal balance of $462.5 million as of March 31, 2022[56] - Borrowings under the revolving credit facility were $180.0 million as of March 31, 2022, compared to $165.0 million as of December 31, 2021[56] - As of March 31, 2022, total borrowings under the senior credit facility were $642.5 million, with $462.5 million under Term Loan A and $180.0 million under the revolving credit facility[143] Tax and Regulatory - The effective tax rate for Q1 2022 was 25.3%, up from 24.6% in Q1 2021, primarily due to a reduced benefit from share-based compensation[54] - The company did not record any asset impairments or material bad debt reserves related to COVID-19 during the first quarter of 2022[110] Environmental and Joint Ventures - The company has a 50% equity interest in the Worthington Armstrong Venture (WAVE), which produces suspension system products[108] - The joint venture WAVE reported net sales of $110.4 million for the three months ended March 31, 2022, compared to $98.6 million in the same period of 2021, a 12.1% increase[51] - The estimated future liability for environmental remediation remains uncertain, with costs potentially material to future quarterly or annual results[99] Operational Insights - The company operates 16 manufacturing plants across two countries, with 14 located in the U.S. and two in Canada[111] - The Architectural Specialties segment's revenues are primarily project-driven, leading to potentially volatile sales patterns due to project scheduling uncertainty[115] - The company continues to monitor macroeconomic trends affecting construction market activity, including GDP and office vacancy rates[117]