Armstrong World Industries(US:AWI)2022-10-24 16:00Financial Performance - Total consolidated net sales for Q3 2022 were $325.0 million, an increase of 11.2% from $292.2 million in Q3 2021[134]. - For the first nine months of 2022, total consolidated net sales reached $928.6 million, up 12.7% from $824.1 million in the same period of 2021[134]. - Increased sales volumes contributed $17 million to Q3 2022 revenue and $40 million for the first nine months compared to the same periods in 2021[125]. - Average unit value (AUV) improvements added approximately $16 million to Q3 2022 net sales and $64 million for the first nine months compared to 2021[126]. - Mineral Fiber segment net sales increased by $60 million year-over-year, while Architectural Specialties segment net sales rose by $44 million[136]. - Total segment net sales for the Mineral Fiber segment increased by 9.0% to $233.7 million in Q3 2022, and by 9.8% to $671.4 million for the first nine months of 2022[146]. Cost and Expenses - Cost of goods sold as a percentage of net sales was 63.8% in Q3 2022, compared to 62.1% in Q3 2021, driven by higher input cost inflation[137]. - SG&A expenses in Q3 2022 were $59.3 million, or 18.2% of net sales, down from $62.3 million, or 21.3% of net sales, in Q3 2021[138]. - SG&A expenses for the first nine months of 2022 were $177.9 million, or 19.2% of net sales, compared to $176.5 million, or 21.4% of net sales in the prior year[139]. Income and Earnings - Equity earnings from the WAVE joint venture were $22.2 million in Q3 2022, down from $23.4 million in Q3 2021, and $61.7 million for the first nine months of 2022, compared to $68.1 million in the same period in 2021[141]. - Interest expense increased to $7.0 million in Q3 2022 from $6.1 million in Q3 2021, and to $17.9 million for the first nine months of 2022 from $17.4 million in the same period in 2021[142]. - Income tax expense for the first nine months of 2022 was $43.2 million, down from $48.0 million in the same period in 2021, with an effective tax rate of 22.2% compared to 25.1%[144]. - Operating income for the Mineral Fiber segment was $70.8 million in Q3 2022, a 3.4% increase from $68.5 million in Q3 2021, while for the first nine months, it decreased by 0.7% to $199.8 million[146]. Cash Flow and Financing - Net cash provided by operating activities was $119.2 million for the first nine months of 2022, down from $137.9 million in the same period in 2021[152]. - Net cash used for financing activities was $137.6 million in the first nine months of 2022, compared to $175.1 million in the same period in 2021[153]. - As of September 30, 2022, total borrowings under the senior credit facility were $450.0 million under Term Loan A and $235.0 million under the revolving credit facility[155]. - The company had $86.8 million in cash and cash equivalents, with $73.0 million in the U.S. and $13.8 million in foreign jurisdictions[159]. - The company has $265.0 million available under its revolving credit facility, which, along with cash on hand, is expected to meet near-term liquidity needs[159]. Share Repurchase - During the three months ended September 30, 2022, the company repurchased 0.7 million shares at an average price of $86.11 per share, totaling $60.0 million[168]. - For the nine months ended September 30, 2022, the company repurchased 1.6 million shares for a total cost of $145.0 million, averaging $88.58 per share[168]. - Since the inception of the share repurchase program, the company has repurchased 12.1 million shares for a total cost of $831.2 million, averaging $68.45 per share[168]. - The company has a share repurchase program authorized for up to $1,200.0 million through December 31, 2023[167]. Operational Overview - The company operated 16 manufacturing plants as of September 30, 2022, with 14 in the U.S. and 2 in Canada[119]. - The impact of COVID-19 on future operations remains uncertain, with ongoing challenges related to construction delays and inflation[117]. - The company continues to monitor macroeconomic trends affecting the commercial construction market, including GDP and office vacancy rates[124]. Compliance and Controls - There have been no material changes to critical accounting estimates since the 2021 Annual Report[160]. - The company’s disclosure controls and procedures were evaluated as effective as of September 30, 2022[162]. - There have been no material changes in internal control over financial reporting during the fiscal quarter ended September 30, 2022[162]. - The company continues to monitor market risks as disclosed in its Annual Report for the year ended December 31, 2021[161].