AWI - Earnings call transcript Q3 2018 | Armstrong World Industries, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to Third Quarter Armstrong World Industries Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] I would now like to turn the conference over to your host, Tom Waters, Vice President Corporate Finance; you may begin.

Thomas Waters

Nicole. you, Thank welcome. and Good morning Please note to is have invited armstrongceilings.com. the broadcast members to this of at listen website call on media call, live been our that and being the Vic me Grizzle, With are our and our Brian CEO; CFO. MacNeal, today seen posted have this release in section. Investor on and our press the reference during morning, MacNeal Relations presentation website Brian our will both this release you Hopefully, and the call, are the that involve advise be statements I that making call, during and will we risks you this uncertainties. forward-looking Actual from outcomes expected those differ may materially or implied.

of more detailed our risks a XX-Q may For that including affect filings, World discussion filed review the please and morning. this Industries, uncertainties earlier the Armstrong SEC

any speak date is of the what only law. We required they by statements applicable undertake as statements, to forward-looking securities beyond made. Forward-looking update are no obligation

In measures on operating addition, non-GAAP reconciliation the appendix With presentation; in the within the available will G. over both the of of measures that, the release website. financial and included with of to GAAP most measures the include A our call SEC comparable turn is Regulation Vic. are of meaning I'll our these press performance discussion in directly

Victor Grizzle

today results remainder good morning, review good Tom, with XXXX. Thanks, and quarterly and to be our our you of outlook everyone. the It's to for

double-digits, operations. the sale specialties, team in from was was flow $XXX we our Third entire cash quarter in quarter inflation, best closed the topline EBITDA free international the received million with a in performance grew busy our we another years. acquisition pricing expanding like-for-like and quarter strong results; grew XX% our in seven architectural earned enough XX%, cover to Adjusted cash of the

second trend single-digit results pattern sales and company of began have high both multi-year strong growth out the delivered the that were double-digits. positive in in of XX% of and a The growth year low row. Total EBITDA, continues we XXXX; broken for both the quarter have third sales growth up in single-digit

the and together or values inflationary an quarter strong periods the second in was the the Ceilings of can X% is AUV. quarter, average pricing stronger mix together and realization both, business our with year-to-date first acquisition like-for-like acquisition Sales improving our of sales price drove we of Fiber In higher than Steel gains the have which unit the by Mineral confidence we increases ahead our up quarter With Price the were growth. strong that earned two driven quarters sequentially in pipeline continue this year. and year; growing headwinds. in

Fiber was overall a the the the was education distribution Our category. teams than pricing in in and retail Mineral grew have our our sales down high-end center modest higher supporting the and both these and times. improvements a AUV quarter, done partner in Total significantly stronger fractionally sector Fiber home by was offset independent softness sales Sustain in driven fantastic channel. faster inflationary overall products, the volume families mix job in the Mineral Acoustics on improvement in Also by

quarter-to-quarter retail patterns. the swings quite Lowe's, resulting levels Depot, is channels reminder, a etcetera that be order can due and as Now lumpy Home their inventory Menards, in to

Mineral sales month-to-date up we channel quarter even in this example adjusted though up that, October were XX%. segment were in gross was improvements The had Fiber double-digits. it's margins. The up the continued Specialties in quarter. an $XX Organic XX% softer million, quarter. channel segment revenue As performance with a Price of drove and our this third up a expanded shipments Architectural EBITDA X% manufacturing strong up

great as EBITDA is points team I'm year, they are XX% operational doing result, margins projects quarter. to also the our reflects levels. and industry-leading our efficiencies, expanding building. a proud and business market, grow from underlying execution up This increasing team's and team adjusted is growth large in is win is last service specification the basis This over organic to and and job for XX% Our XXX the and performance very ability significantly share outpacing improving a of this it's

of metal During Columbus, adding the quarter Steel systems. additional portfolio. we including a security ceiling Specialties radiant our is walls both, Ceilings capacity completed standard and of to the and Based Steel and acquisition Ceilings Architectural near and architectural, capability Ohio manufacturer custom ceilings

Plasterform I and distribution and mix. XX% new Year-to-date, platform, Tectum. and drive over to expect to combination growth. low powerful long XX% a up operational know a EBITDA modest to security history industry-leading expertise and we of Tectum our proven as to in margins them add thrive amount of be The single-digit expanded a has to points our XXX were years. our Ceilings And excited than after of radiant the Now have is basis two are to additions ownership Steel team portfolio further portfolio, sales solutions to product our Under growth. Armstrong's sales capital less

received pleased program into important from Now sale return with from of $XXX shareholders of those million a our yet we're and was gross results. our and returned isn't shareholders Knauf. Rim while for accelerated majority on EMEA We've we regard turn this commitment the to And and Pacific total closed an dive purchase it commitment. have October on the realized businesses, which of the to financial have do on transaction with to transaction of X. price our the very concluded the deeper to this to proceeds share to I'll over through that, our executed Brian $XXX Delivering repurchase our back cash to million

Brian MacNeal

Fund costs as year-to-date these we reminder, and $X I'll available morning just the our of Slide [ph] on results. Good with reflective quarter our of and into principles basis in to Today results, presentation discrete, our addition but under Rock on customary we year-to-date matter are consistent reviewing adjusted before friendly slides everyone X adjustments million to and presentation website. basis go be not of our litigation and be XXXX the the details as our to call. third financials with operating a costs Vic. of the referring quarter the Thanks, our unusual true in associated I'll

free prior the of by year million Net businesses. Since in the share of $XXX of $XX by share was share. program repurchase receipt just at acquisitions per the Adjusted $XX did share Turning repurchased to XXXX, slightly a Year-to-date, due diluted quarter. international but driven contribute program. improved quarter the the which sales growth an just we and sale aided our accelerated up results; by were $XXX EBITDA. including X shares now the per to sales XX% under Gross quarter for X.X our margins like-for-like million average by closed XX% purchase October, margins debt cash third EBITDA impact the million shares our $XXX over Slide of million Adjusted recent contributor $XXX previously program of not million from in and meaningful over flow productivity, adjusted the to driven decreased we benefits XX%. increased XX% of the earnings price restructuring EBITDA contracts third announced. pricing, price that of of were for up quarter mix X inception have XXXX, repurchase our third gross have back for million or the under expanded repurchase bought by million. including the

impacted is adjusted plan gains Slide increase exceeded $X bottom-line. The down higher for to change We've to free like-for-like as of million, $X cost costs to by SG&A Vic expanded incentive $X again. input and increases our cash to realization freight in also strong WAVE comparison EBITDA flow material allocations capital by impacted by was adjusted Slide lower. fell increased where now in cost headwinds base the to million we which by In cash are and plan. were capital to the grew from period. shows $X as improved are true-up year-to-date X; to a Energy quarter performance the driven mentioned year JV. continued by they the million $XX steel due million, earnings our $XX SG&A you realize facing. had earlier flow is were X compared XXXX expenditures the Turning than when free inflation by compared true-up benefits being greater and raw in accruals flat WAVE the million year-on-year. above strong the AUV base million pricing quarters will period price cost Cash remember, prior costs. driven quarter. relatively working our higher

like-for-like and a segment decline improved due to quarter, begins X X%. for of Adjusted other WAVE Mineral volume the grew sales EBITDA customers. driver mix our gains realization retail all reporting. SG&A inflation. offset pricing In biggest home million. in Mineral The category company the more improve entire the centers to Slide driven by the and solid up and slight independent tax offset payments. explained I Price Fiber the Fiber The the in Strong segment. than EBITDA timing appear was was $X drivers

about segment Specialties are say share the Plasterform is segment. continue excitement internally sales on as quarterly and this creating growth customers X; and Steel Slide enough driving, with Architectural gains I our XX% can't to contributed. the Ceilings team really strong and and we Moving in increased our the Armstrong's acquisitions the

Specialties in drive opportunity, and Adjusted segment. XX%, up was to this sales the and margins XX% our over the basis but operational in are Architectural wall innings We just accelerating improvements early XXX of in points not specialty continue in we ceiling leadership as are to growth space. the expanded EBITDA we

continue we collected XXXX back expanded. discussed XX as cash year consolidate profitability. a first $XXX EBITDA XXXX recaps realized of by increased freight for to of XXXX and last total working the finally, million margin cost all early And in ramp late of three results. of even price X% benefited XXXX. Plasterform in and and XX%. from SG&A impacted mix, by the Sales diluted the will an year share base headwinds, bridge was up from year-to-date contributed cost per our running one-off environmental items is integrate gains were period and driven ahead Adjusted three the Adjusted X% of we million. Adjusted working we up million including capabilities margins our are materials quarters add improve but timing first and in production. Input is year; were Slide international $X raw company products, productivity EBITDA in the the and earnings in stranded Slide the new Ceilings As see over WAVE plants basis. quarter. last in acquisitions, confident capital free were I flow of million volume, expansion $X quarters to from settlement as use up XX% our XXXX. I'm we on capital $XX in has Steel increased X EBITDA annual

Our improvements more cash in shows offset G&A actions to manufacturing flow. $XX on-track restructuring of earnings million deliver year-to-date than in Slide by free are the I remain XX the contribute and to year. Lower more all investment, benefit timing capital Slide mentioned, as working the we to updates normalized return capital a expenditures million XXXX are of and guidance. level the our capital payments of tax XX lower drive $XX cash improvement.

AUV year to result Specialties, range in we from X% X% raising growth Architectural X% a revenue strong guidance the recent As are versus X%. acquisitions; our Fiber of of prior previous to range our Mineral organic in growth in our sales gains to

range unchanged. midpoint is Our adjusted been tightened has but EBITDA the

$X.XX EPS EBITDA range We've midpoint to adjusted tighten our expect the and continue range. double-digit We to increased growth. by $X.XX the of

after flow expected Our lower that midpoint of acquire us the and invest WAVE's year. WAVE's the additional increase is dividend earnings reduced was determined $XX flow to Armstrong, cash efficiency leverage X.Xx increased paid special our EBITDA. and margin expenditure Post and and cash To WAVE a our forecast adjusted prudent. that of Free a free leverage balance slightly the October to excluding $XX growth providing been XX% Worthington business we've close, board a of both, multiple a rate Even cash special periodically, In able outlook. this is cash cash is WAVE flow from dividend and we're and examines pleased million; free million. I'm shareholders. tax benefiting appropriate years sheet flow free yielding ample cash dividend, with this to for also return capital cash has

over that, deploying to of continue the remain cash business, in Vic. we as only we our back future about it flow sight maintain value into vehicles. continue America's line balance highest is in cash balanced to With future, creation turn fashion clear; to the the will a sheet. generate an I'll And will flexible we efficient a and prudent to As

Victor Grizzle

Thanks, Brian.

we be on record comments. summary questions, a Before open it up a to year. few remains for additional pace XXXX

underway; and ceilings and in Fiber bearing position. and America's our both, innovation, to fruit line an investments investing business growth. is selling bottom These we've company, of newest most Acoustics received delivering we Total rates market, revitalization been Sustain The focused extend outpace now into launched Architectural innovative has manufacturing leadership the now capabilities wall first product our have DESIGNFlex, Specialties and And specialty specifications. are line As already adoption top with Mineral market. well achieving unprecedented the are to our we Products. business and the continues our

the business organic deployment impressive go, focused remain we've first to And said; reinvigorate we enhance like we new Mineral the Sustain, value. are that. and approach we we now sales growth, Fiber capital done to invest DESIGNFlex. and capabilities We category to our and XXXX, to as Total and million via $XXX margins expanding in business, driving on shareholder separated with we would Acoustics, adding innovations when M&A. In flooring balance disciplined invested We've look

We three We a also endeavor we as execute completed this said as which now would And Knauf. in the we bolt-on cash acquisitions said in address through Architectural would acquisition Specialties and we to we we space, and well that's the return returns have have that shareholders. this successful been strategy, said done business we've would in now international poor category. attractive our to sale finally, we

years deliver we been margin $XXX too. on returned flow ongoing high share the have through two million high able cash our In nearly a past business, As repurchase program. commitment this free to we've

as Lancaster with you next next much forward been of Investor share lot looking that what's at still as thus there Day is here you has week For to AWI. so do; seeing accomplished far, to I'm our for more many in to

company. share to focused future you exciting an an have products as industry-leading America's We with building

for I'll your And it with attention. thank So up for that, you open questions.

Operator

Bank. question from Sood Nishu [Operator Deutsche from comes Instructions] And first our

Nishu Sood

I price take on realization, sales Architectural if your acquisition well step up ahead, sales that of play forward, very back a here. is imply Specialties, going we the question; step little from EBITDA and of view First the EBITDA And how a performance, gates always a and had that Obviously, just is realization; we're increasing driven so -- a as back less, in mainly kind taking you've by as for [indiscernible] tape AUV we're encouraging look how costs? wanted strong and as does to look as kind to terms strong coming we and what higher bit take well. you're the as guidance ahead of margins the up [ph]?

Victor Grizzle

good as Brian growth -- had needed AUV on covering drove again Vic; overlooked It's we're inflationary of we're is course very and with to we the times pleased of add this very be which you've this gains. noted. color and strong Fiber like the well, but some some much Nishu, segment then, product at as half it's the high-end top The our pricing. line incrementals AUV with the inflation portfolio in and the of can of mix here like-for-like shouldn't Mineral in

That when Specialties I I that, Specialty business, a then to and So Architectural think Fiber become in to noted, the call really in and that want Specialties I'll size and our serving to and is we that group to as the that's also double-digit material space over look country. the top doing in drive job; team is Architectural $X several the the the attention how in across present jobs were And at the helpful the broad-based this that; continue driving the great Mineral of activity team Architectural quarter. million nature segment. to you about add in every has And space line growth. space speaks in

So projects, not again, large very and broad-based just projects. sized multiple very

both well business that in has size, by overtime the business, lumpy as the nature I'm been but the As categories. encouraged across of very as broad-based

flow. to to to was down that our things; that came add the good expect in due increases on shortfall and growth have we purchases, things timing second So lumpiness in line that adds we incentives three EBITDA top quarter primarily really in the to the quarter of WAVE on that's going we had anticipated continue basically to due slower which of line. some business and from to was performance cash we ahead the from price true-ups late some business that grid volume in the second would and to The in continue The management to EBITDA we had WAVE on/around strong accrual

how very well well driving hit terms team flow in cash that think this improvements. of Brian I is

there off costs of and specifically of I we plant, the the quarter. the those about got higher in would closure we in the of we that things And are to in course, says finally, those. quarter up some it the Coast fell to West the of connection D.C. some startup some were had some some our say one-timers or It's a quarter. that issues behind true shortfall. that quarter, so into we some the linked of really, had over then who Helens talked wasn't And those the three quarter. of second were with And in third inflation third driving St. these really cost But those fell those finish we

Nishu Sood

and great very that's it, helpful. Got

network. Specialties, -- channeling it that distribution and Second the innovation product now and acquisitions question; we're your through Architectural on industry-leading power the

say help going? model market bracket has I of pace that business you that come the what share gains to gaining the us pace to are seems accelerated, market gains? you the through; just there of and share have help kind of us power can or can Clearly is that's way to it understand some the your think share, fair say, You're clear to

Victor Grizzle

Nishu; The difficult number tied new mean a I can really best to again, construction Architectural to business new bias on business Specialty as construction pinpoint me we've renovation. let frame the versus just that's that it's got so but I more the to more,

markets of we've demand today. there marketplace look new the construction, the as you terms construction the when the trends, at out is about in So of part in new talked strongest the

in believe new out growth that do available is somewhere there single-digit we construction there. So mid-to-high activity

that probably So somewhere could as as is to that's that say single-digit mid-to-high I growth. a Architectural the in Specialties growing you think segment benchmark is close

bench you versus go; we there give best growth So delta the I could you. proxy is rate probably our that the between

Operator

next our John Lovallo Merrill from Bank comes And question from America of Lynch.

John Lovallo

was you Mineral volume some quarter percentage 'XX called five like of seems were of negative in to the like one sounds order your like something right? low volume about of comp EBITDA retail math and kind third improvement it that the quarter outlook. the in one. I'm just missing the flattish Fiber to is potentially of I in XXX down looks off need channel slightly, something quarter comp that fourth basis offer of if points or positive this Recognizing there it if here curious, think it's in end a the of the margin year-over-year lumpiness we're

Brian MacNeal

couple day the we an year there; up do extra of the in shipping things quarter fourth at A calendar, versus look you as one, pick ago.

that, saw volume five piece four is, expecting to in we're the half, four think we growth and seeing for you of to about channel then and piece we cost we as as QX. in see restructuring the we're that drive Fiber all volume, so in back that Mineral the as the flow in we of some you more $X bottom-line had nice timing. QX; timing down October already double-digit as our that of mentioned, see Bigbox benefit of with mentioned million about inventory third Vic about specifically probably did So that through And we'll

should that drivers, you help of inflation, So the the elements benefits. as restructuring bridge and some look at AUV then

John Lovallo

us it not reverse spiked quarter? fourth this meaningfully you the already expect sure I'm you've and remind on if then, And this the what hit account third if accounts payable in you looks in that pretty to like but just drove could quarter.

Victor Grizzle

the It then AS, around days expect and end of cash like that because the the QX. spiked it's cycle reverse best, especially saw right our of one we some in Overall, quarter, is total. Yes. towards XX-XX in sales we conversion

Operator

from And our Evercore Kim from next comes question Stephen ISI.

Stephen Kim

wanted competitive Mineral in any anticipate just terms ownership to change at guess in in forward by -- of looking ask all the see do any USG with being I [ph]? I Fiber in of business; bought dynamic the changes you

Victor Grizzle

ahead are for wait meaningful under people landscape. the no We change on we get meaningful what the trying But and what is that needs this we'll has ownership to what in report continue any and as in And is drive that. and to you marketplace. our meeting solve to obviously, really can focus question we competitive and our it I results. what we're day, change whoever for, I really, there the a of those no But they're meaningful our new thinking trying as to change do. tell customer are been the end of we to see lot, long again about on of think go at customers you know, these have kinds watching stay and competition competitors

Stephen Kim

about the looks mentioned what recovering talked I also your that impact in don't the this here XQ; may there's XQ entirety looks and thing. the of that And be center overall wanted you headwind or of October, follow-up, an great. lumpiness just terms November, as fact the could a size of like I from question -- offset of the a December October, we answer you the lumpiness, maybe you're shipping about to of XQ sort result what I pool lumpiness day, trying just exactly of in -- seasonality to like to you the But in recovery do hoping John's what home being on as because if the a was you for know XQ that's then clarify think I guess just the think it's frame and the you extra sales

be us XQ? what you So sense effect benefit that in just you think may that of give -- can a

Victor Grizzle

Stephen, I'll corresponding we I channel, be with that not the get of and referring to a of comes that think retail orders specifically ton the that seasonality those swings honest inventory course management you're in in channel. inventory. from is there -- channel; seasonality large the chunks to in the lumpiness you, in then of

that year. and going third more quarter lumpiness. business, of the we had Mineral than kind it's we of evens what actually a feel we're second channel a to even Fiber to that again to in that pretty at experiencing last that pretty a So several year off strong channel October on as in zone. so dynamic By we zero we go buy half, full by we're in but going be particular, that of be out we drove start back you over compare were a seeing going one you seasonality make is if that actual we're the see to seeing buy what October, in and to look in We so looking when But of remember, the what tough given that in all based October; and that retail this this big quarters; our can sure in retail and with, range we've enable we're what the right landing channel. back confident comping two partners out been to base we're year

October, where to put out in it exactly think even see it's going again, we we expect what I us like and be. we -- and to we're itself So,

Brian MacNeal

Stephen, would that. I to add

that day point Obviously, order you to think in roughly volume, As and and to won't that close Vic pretty segment. AUV million real bring really in benefit got but dollar hang we've hit but QX you be the our QX, hit for growth right, showing benefit Mineral on the high the In there the to then a will up and about sales in strong Fiber year. around made, it. the XX plus lumpiness then that target, seasonality bridge as think Obviously, just we're million total should the to us to that's EBITDA pick $X as of Fiber so we midpoint. the value restructuring QX Mineral $XX right, an about from you see extra question as percent AS that of of QX given AUV

Operator

And our [ph] next question from Phil Jefferies. comes from

Unidentified Analyst

the what's was think how provide if on And about to and a Steel of in closed and think for Ceilings sometime you Plasterform wondering about XQ. good to now businesses? into I base middle going I could seasonality that Steel Ceilings of Thanks. margin how color some XQ? the

Victor Grizzle

the seasonality Plasterform, and very business, Specialty our quarters do as fourth I Architectural will like than more and activity Fiber a much follow the Steel we in The like have Mineral of Ceilings lot to think business second we and and well; first tend third the the quarters.

added progression of Ceilings to I line lot contribution those to of earnings were us, we to acquisitions businesses efficiencies very capabilities, we what first of Armstrong too we expect Tectum. dissimilar more EBITDA our two of the our contribution. we businesses make it when that's Tectum and And relatively bring So efficient that scalable And experienced the to brought the scale and a the almost do to growth. those new EBITDA what specific drive as companies; go-to-market of is again, those reported, and not companies On in so as bring can with the little didn't with earnings rest two bought business, Plasterform frankly. Steel quarter, two to overall points third should follow very it two the similar course top patterns those while and

to we those two think I performing we'll System. catch level up So those under the be Armstrong where businesses businesses driving a disproportionate should as growth in be

with a question was be overall referencing. may that seasonality the of again your So, little out that phase

So hopefully answers [ph]. that

Unidentified Analyst

Just what's margins upto kind bring overall on level? expected to the those timeline margin the the of company side;

Victor Grizzle

so started after already process. that now right it it We're we've away, but working we're at right

to also the think I capital how done those some of Tectum. but high we period for been XX the to margins have it's EBITDA good process ramp we'll we've that month a in proxy is get improvements some what XX of Tectum to an and at

is one proxy. it's I good -- think timeframe to a good two year So a

Unidentified Analyst

And repurchase beginning repurchases follow-up; into there the at close more sounds any then that baked program like share the just today? one share just is the of it XQ. EPS [indiscernible] or year guidance Is purchase full

Brian MacNeal

still Our it, other look ASR completed. in repurchases -- plenty to we'll the of continue at but share share program authorization open this vehicles of left November/December form and repurchase market itself in for is has

Operator

our from question And comes next [indiscernible].

Unidentified Analyst

quarter. incremental what $XX seeing of that behind results in your So XQ this the freight attempts your now? price cost Can up achieved how you're and during AUV you largely sense impact give of will given currently, and you million inflation a are the caught input you us

Brian MacNeal

August the in sold, so much freight itself XXXX, goods raw last in a a year is wrap see the our deceleration recall, higher of inflation, was July so ago smaller total materials We than freight that started inflation did of are you of September. we're quarter and obviously much Now year a really higher. cost piece to in And QX if that. starting

inflation look AUV we out think we as ample that. at strength offset to the got headwinds, So we've

Unidentified Analyst

changed greater previously; to gave And from XX% than the guidance increase from before? double-digit you then like just higher confidence your to what level; what Architectural

Brian MacNeal

business; year given, have a little ship idea projects. and those of Specialty because we rest already to have good In the visibility the more visibility the that the of we of again, of going project nature business, so of Architectural what's the a

us and performers raise of business of gave in the -- behind that that strong go confidence and think terms already three to ahead AS. quarters guidance on line the So top I us

Operator

comes [ph] And from Keith our from SunTrust. next question

Unidentified Analyst

activity of or bit minute year renovation include Specialties. construction all the the to and change I Question the either Is business? order at for maybe October Mineral pace in shifting during a your new to back or guess quarter little a of Architectural this Fiber

Victor Grizzle

think Mineral the early across pattern I pretty take activity was at the education order those months was quarter. you it you when where have third and summer consistent. of the a in pretty Specialties, both months part lot Fiber out look But of you consistent, Architectural months, in

Brian MacNeal

it outlier was softness, up segment the we where then October. in retail saw The one some and picked we

there. a So, of shifting little bit

Unidentified Analyst

insulation from be now? in saw to cost right the where we quarter the the will side, cost the similar fourth what On we stand third in will

Victor Grizzle

seems I in in we saw the in out last again And lap quarter, starting meaningful the quarter. quarter overall the the third bit be flattening as fourth later some year. referenced, to Yes, curve a Brian think increases cost where third to we're

not So, feel like expenses they're -- I those. we're with again, freight are -- particular, we're they finished not in

are cover to out costs that and seems But are those continue segment to in move into in issues price be those going think got materials drive leveling I next year that increases. are going higher. enough here -- those higher to I we've even structural to to as raw think

Unidentified Analyst

you now? And litigation you're finally, hold that right stands us cost can Rock with I know the where any litigations [ph]; of you talked give some the of adjustments, describing and of kind update

Victor Grizzle

process we in come give continue again, we're litigation continuing a confident is pause lot it's that to As the as lawsuit. much along. it's know, would at versus least; that there's and activity, phases case this. the can't would claims quarter us and about any you confidence think to cooking and nothing be, and that into we on not basis prevail going It through -- it out get kind that process. is will what continue it too we fourth comment But of it's the continue of that to here, it's be to own we're prevail but that I this And in in rate for we to that accelerated in there's an litigation of we going on that's litigation, expected of

Operator

next our question from KeyBanc. comes Ken And Zener from

Kenneth Zener

to the assume lower in be this some is cheer year, it But I volume looks here your for wall to end perhaps this your just the at do as Architectural Specialties, feel week; volume you much. shift saying it much how very all of term, Mineral perhaps was industry I mix -- you as things need this you down the or need changing, point price guys the industry thank that, same like [ph]. feel hair it, quarter you dressing these but given connect given Longer a you'll so will basis. range. And and pricing is like Last you actually report the is even at year a record it your think and mix forward saw guidance volume from of this necessarily -- Do your almost strong your we changing? so looking I'm pricing mix quarter. is [ph] growth that's just of kind in percentage

Victor Grizzle

higher demand DESIGNFlex driving talk we're solutions, We've Fiber several got are working to this going create we're demand whole that Mineral is specify Fiber to hard Mineral exciting that for focusing the so about solutions through platform, are ceiling for services working and detail to want solutions. prices are Mineral initiatives or in space; wants not creating Mineral products Listen, And on not if drive a customers more in category drives to is higher that we week come most all to the the Fiber time, that specify the ceilings. it to types around and group next earn long innovative innovation Fiber hard to value for of renewing ever. and that only incentivizing innovation the them AUVs also in them more to but these ceiling we interest to

hard that you those And of So price, some we're in all with fronts; you're we're week share mix. and going when of to next Lancaster. on volume working

Operator

from Thompson comes from question last our And Research. Katherine Thompson

Brian Biros

with in like to start XX% that. wanted was I Specialties acquisition growth Architectural segment; XX% the it quarter, looks the of

between construction broken the new guys you you. can the market called just penetration. categories think XX% remaining I up and out; Thank talk about two you So

Victor Grizzle

the again, on major activity. space, it's renovation construction to biased specialty architecture think more I new or

Architectural bucket kind all Specialties the just So that versus renovation. put of of in I would

larger more across in well. groups construction quarter And was in project [ph] business toward Specialties all the earlier large in Architectural as Architectural is comments, buys new there renovation I'd think certainly that it's I And I my work. but it Specialty mentioned material capture of third from the activity. quarter; I of double-digits highlighted balance the nice the as were a also the job; there very small size size shipments in up to so so broad-based

that So has this that again, broad-based really participation now the speaks think in I Armstrong to category.

Brian Biros

two about one in new general? a just was think renovation also or construction penetration, I it's between there is new versus those still construction not kind market difference any If of sorry. I talking

Victor Grizzle

single-digits. to it's construction; of I'll back comments in new my around go rate earlier mid-to-upper that the still

So mean the that of thing I you best that that's rest think assume proxy that can to I the is almost penetration, think it way. about

Brian Biros

I into any are could If but a small you. more, would other you projects the into were that new of or projects that well geographies dig where or types if mentioned others? dig there worse could of even construction appreciated. just large and kind doing think you it you about And little than Thank it be

Victor Grizzle

new growth. activity. construction, of the broad-based it we're construction areas side the to construction renewed pretty country a in in construction positive construction are major new the still, education new and been more well. so construction more vertical across activity robust and seeing out been in office healthcare one is call continues segment I'll category, new the I metropolitan the is really On as has office although think the the all on new the kind seeing which be The vertical has some site robust But

Operator

to remarks. at now further turn I for Thank back further Vic CEO; the you. would time. this showing questions like any Grizzle, to call no And I'm

Victor Grizzle

going your week. forward looking there be you to here thank hosting forward we our And to And Day next our to Investor everybody for for want look just we're on I those participation campus. all again, to today. that are

then, until much. very thank you So

Operator

gentlemen, and you have your conference. thank program, day. disconnect. a Everyone, today's today's concludes great you in all may This for participation Ladies

Armstrong World Industries (AWI) 30 Oct 182018 Q3 Earnings call transcript