Armstrong World Industries (NYSE:AWI) Q3 2025 Earnings Call October 28, 2025 10:00 AM ET Company ParticipantsChris Calzaretta - CFOTheresa Womble - VP of Investor Relations and Corporate CommunicationsVic Grizzle - CEOConference Call ParticipantsAatish Shah - AnalystKeith Hughes - AnalystTomohiko Sano - AnalystZack Pacheco - AnalystPhilip Ng - AnalystBrian Biros - AnalystAdam Baumgarten - AnalystJohn Lovallo - AnalystRafe Jadrosich - AnalystSusan Maklari - AnalystOperatorLadies and gentlemen, thank you for ...

Financial Data and Key Metrics Changes - The company reported record-setting third quarter net sales and earnings results, achieving a year-over-year top-line growth of 10% [4][5] - Consolidated adjusted EBITDA increased by 6%, while adjusted net earnings per share rose by 13% [5][20] - Adjusted free cash flow grew by 22% year-to-date, driven by higher cash earnings and lower income tax payments [23] Business Line Data and Key Metrics Changes - In the Mineral Fiber segment, net sales increased by 6%, primarily due to strong average unit value (AUV) growth and positive sales volume contributions [8][17] - The Architectural Specialties segment saw a net sales increase of 18%, driven by acquisitions and solid organic growth [12][19] Market Data and Key Metrics Changes - The company expects full-year Mineral Fiber volume to be flat to down 1%, an improvement from previous expectations [26] - The Architectural Specialties segment is projected to grow approximately 29% for the full year, supported by robust contributions from recent acquisitions [26] Company Strategy and Development Direction - The company remains focused on operational efficiency, commercial execution, and growth initiatives to navigate a dynamic macroeconomic environment [6][29] - Investments in digital growth initiatives like ProjectWorks and Canopy are expected to drive volume and contribute to margin expansion [14][15] Management's Comments on Operating Environment and Future Outlook - Management noted that market conditions have stabilized, with no anticipated softening in discretionary renovation activity [29][77] - The office market is showing signs of recovery, with declining vacancy rates and increased demand for renovations [32][68] Other Important Information - The company announced a 10% increase in its quarterly dividend, marking the seventh consecutive annual increase since the inception of its dividend program [25] - The acquisition of Geometric, a Canadian wood ceiling manufacturer, is expected to enhance the company's product offerings and geographic diversification [13][87] Q&A Session Summary Question: Benefits from new products and their impact on AUV - Management highlighted strong performance in high-end product segments, confirming that innovation is driving growth in both Mineral Fiber and Architectural Specialties [38][39] Question: Outlook for Architectural Specialties margins - Management expects to maintain organic margins around 20% while continuing to focus on growth opportunities [41] Question: Explanation of EBITDA margin pressure - Management discussed timing-related cost headwinds, including higher incentive compensation and medical costs, and indicated these are not expected to persist [45][46] Question: Outlook for education, healthcare, and data centers - Management noted stable activity levels in education and healthcare, with robust opportunities in data centers [48] Question: Expectations for manufacturing costs and inflation - Management acknowledged inflationary pressures but emphasized ongoing productivity improvements to mitigate these costs [55] Question: Insights on the office market recovery - Management indicated early signs of recovery in the office market, with positive activity across multiple regions [68]