AWI - Earnings call 3 2023 | Armstrong World Industries, Inc.

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Operator

Good morning. My name is Colby and I will be your conference operator today. At this time, I would like to welcome everyone to the Q3 2023 Armstrong World Industries Earnings Conference Call. [Operator Instructions] I will now turn the call over to Theresa Womble, Vice President of Investor Relations and Corporate Communications.

You may begin.

Theresa Womble

welcome, our and this Colby, you, everyone, call to morning. Thank results CEO; call, World Calzaretta, XXXX of Vic today's and outlook. Industries our year Grizzle, Quarter Armstrong On discuss our Chris rest will our Third and CFO, a accompany available that the World on To of is Industries section presentation website. have Investors remarks, we Armstrong these provided the

with comparable discussion operating available and A financial measures meaning the within Reg in of press financial G. non-GAAP the directly the Both website. Our release the of of issued reconciliation the is included measures and are these measures morning. our this GAAP appendix performance will most presentation SEC earnings on include of in

We have we forward-looking risks operational be making and materially call, including call and provide date, take these performance to implied. a statements as the detailed statement expected the of our update statements law. morning. that XX, required uncertainties will from applicable And any turn XX-Q beyond no involve our securities earlier view statements of the SEC I'll now We those obligation XXXX. These or today's by forward-looking Vic. financial risks this and in uncertainties is During differ filed what to we may October and represent discussion of the the filings,

Victor Grizzle

this our Thank you, Theresa, and good thank you morning. call morning, for joining everyone, all and

delivered strong Fiber market segments. demand while results. overall of seen growth Architectural conditions our release quarter As morning, in third have both Mineral dampened you we generated press in that most weak and Specialty strong our We facing still earnings and sales this

by fact to expected a not of experience activity further we to execution than Our our initially we results quarter did teams. in were expected, that due outstanding as largely market the deterioration due and stronger the the

year. the the products our Now successfully and the deliver to growth of efforts spent teams fact, levels the throughout I the across these get highest like quarter in into the company our industry in by with recognize initiatives. quality I'd best we execution appreciate also more entire the of implementing service results, details while strong to our before the in

the to Armstrong thanks entire team. So .

our total market the X expanding margin million increased end reported in all results XX% result sales Both the effective XXX Total truly our in highest points. and of position, expansion. under with a of when company even increase earnings to verticals of resilience diverse our sales. net X with quarterly or a These strong Mineral set a adjusted EBITDA Architectural on are stability X% quarter, adjusted Specialties strength basis and robust are For growth business adjusted marks of earnings, of providing pressure. our with of and Fiber, sales initiatives, the EBITDA margin EBITDA company the emblematic $XXX our segments, quarterly and business, and markets, record-setting history

has Now not XXXX The to we was of Mineral segment, taking the what sales similar anticipated more materialized. volumes the XXXX. to half a in of largely better-than-expected the strong seen second X% adjusted growth growth. we in weaker sales market as delivered backdrop first were results half economic experienced The closer XX% look had and our sales Fiber due EBITDA we at

the reversal given the pronounced volumes more home build channel, a center inventory our expected also year. or box We in big in sales in earlier

not volumes expected. it third this in the we was at channel, see did quarter sales While lower level

our the Canopy in mineral the this highlight driven quarter initiatives digital contributed Much continued renovation Our by volume by our points X initiative, was of with drive growth quarter. and being quarter the more initiatives designed fiber growth momentum gain in this to to Armstrong. of activity

was first platform important through Third time for positive a and to the initiative. year contributor milestone prior growth an This exciting launched for this doubled Canopy is from the levels growth. EBITDA platform than more sales since quarter the

is ceilings to and have Canopy access and what but for the products platform with creates need cost-effective solutions a whose customers of As it way an fiber on Canopy of that mineral know-how driving access limited a renovate, the our easy-to-use to to the we're done. solutions. decision-makers offers assortment awareness reminder, platform get installed XX% base and these of broad

customers portfolio, through particularly projects projects win both attracting is these continues Works, performance. high grow. automated Project Armstrong how set at higher our meaningfully products What's that project strong win base also to contributing our and specifications of end is Canopy traction overall encouraging customers incremental rate. to be our is continues of to our service AUV different this average to platform grow, continues rate on the our to of thus to strengthening Adding growth. design of our with than repeat and The average a new continues unit value number the volume and far gain and and to

our note, continues well to positive that driven on quarter X% pricing AUV a mix. Now growth be highlight. favorable as of was this as AUV by

to that EBITDA led strong continue in and to back fiber contribution underscores our joint AUV mix quarter, to the delivering these venture contribution our XXXX levels. inflation, earnings to better which product moderating to innovation, focus its mineral nearly new ongoing of initiatives ways from customers the improvement growth, product growth through we consistent to way improve our service a XX% factors, We innovate and realize. fuels adjusted on margin mix well a prices earn All WAVE in on AUV strong our

and this deliveries with level continued versus quarter prior adjusted EBITDA this claims Our quarter with plans and is proud and third revenue particular the business on-time of better in these results for operating sales rates. I'm their due get performance leverage. Architectural AES back of operational year the quarter to the this Adjusted We in margin low segment work terms delivered XX% strong exceeded XX%. doing and our the earnings. to to with EBITDA for along team XX% grew Specialties delivered segment also strong growth, a record-setting

results We're both the Armstrong for for also opportunities to new is Modern addition quarter. pleased new time acquisition in and to opening the this sales segment, adding included first spaces. Architectural capabilities with Specialties is in our which of more our This is

the quoting In activity terms to positive. in activity continued Specialty of overall segment, be Architectural market

However, than less positive first we the saw in half.

We also some some order new the activity being in with experienced choppiness delayed. orders

cancellations. increase experienced Although in some we're seeing not of we have awards, delays project project

municipal see strength complexity. can projects airports particularly continue be and are convention subject given We to larger like projects their large often transportation, These centers. to delays in in and

important carefully and schedules continually and shifting in overall we are So monitoring this project activity segment.

financial take a over call want Chris an brought to to internal highlight the some we more details, the in I for to online turning quarter. moment Before investment

Architectural Specialties with and category. a our to XXXX design production unique recently, for been over Just Metal -- MOS has us years, and within most capabilities active [indiscernible]. capacity expand metal including us in growth seen metal you've and our last the unique acquisitions in area and and capabilities, several and metal Atura

be These to expand this invested that us million equipment approximately earlier our efficient. broaden location. of in metal of Johnson, investments allow back in that our acquisitions our X the of works primarily capability include metal more last $XX the we've capacity produces to ceilings in today. and was in steel Because overall centralized our and new line the metal growth Johnstown, location One Ohio years product XXXX, over to of in capabilities

as investments, well the business our moment and done be be production the we've these for in And to of triple the With and also reducing over I'll for uniquely through to Armstrong work Chris, some value better the higher could this timing to expect projects significantly come able larger and The will financials. we increase the as frankly, metal more infrastructure details, there while acquisitions a positions overall the you advance in capability projects. category. times. transportation significantly capacity with win to site bill back finishing in lead but not our

Christopher Calzaretta

Thanks, Vic, the morning on to and good call. everyone

incremental of available benefit quarter Slide The favorable Mineral by X% of results. by our AUV Fiber performance our website, partially X, by market initiatives. the As within the was volumes. volumes channel a to driven sales Latin strong which was Fiber growth shipping volumes my of full solid result mix during by average mineral decrease This teams, segment driven Slide by quarter The we softer slides remarks, of by X%. we on discuss America Mineral partially referring quarter X, offset I'll reminder, on throughout and quarterly remain sales details our day marks and in mix. our the On offset driven track contribution presentation. basis above like-for-like year AUV to with along mix. execution was less fiber channel, the positive in one driven by from lower another pricing, demand, be the AUV our historical for strong and AUV growth overall was of lower our growth the our deliver impact

mineral While prior fiber our were expectations. ahead than of third quarter they year, were lower volumes well

to mentioned, and EBITDA expanded Vic $XX adjusted input Driving margin market grew Fiber or to were by channel. home was XXX better-than-expected the setting by drivers expansion points. costs. As record EBITDA this gain timing within million and basis Mineral segment margin and and a $XXX a X center customer fall-through million adjusted our AUV XX% lower EBITDA

an also a input flowing the part prior impact moderate. the materials year of million lapped saw cost as freight lapped versus an of year in that to is Input incentive increase costs in year, input tailwinds positive in we as that deflation the this compensation first due through prior we quarter headwind increase where Recall remain of P&L. unfavorable XXXX, and selling inventory increased of prior the quarter in raw inflationary, had inventory a the quarter. related impacts benefited the from in from that SG&A The valuation $X to the favorable benefit million energy provided benefit from primarily While we valuations. and a costs input quarter inflation. double-digit $X QX costs expense headwind reversal period timing in

year-over-year half our to was As modest as gain more QX of year. first the compared equity the outlooked in we WAVE earnings from call, the

was WAVE gain steel by higher earnings by driven offset and The lower AUV. equity volumes, third partially lower costs quarter

prior adjusted Slide year nearly which versus XXX our million target record-setting sales and million, the discuss Architectural Adjusted or expanded our EBITDA results. Specialties X, minimum $XXX points we On EBITDA basis of AS XX%. above highlighted and are and of segment respectively. margins $XX by

pleased see organic see While we our which overall recent acquisitions, growth. BOK quarter, to notably contribute to July, in were Modern, the acquired in we we sales continue growth solid also to incremental

Another operating leverage. bright for was spot AS improved

remain path as And margins. business SG&A always, which can quarter-to-quarter. leveraging our which as is to our project We important to XX% closely an focused we on grow cause back delays, choppiness EBITDA part of minimum continue we of the target monitor

company consolidated per AUV, expanded XX%. higher than [indiscernible]. XXX costs benefits where offset quarter third diluted Adjusted up margin more earnings metrics, year, with EBITDA EBITDA Consolidated and share adjusted Slide from SG&A our cash lower X basis $XX input shows XX% higher increased the points, versus prior increased flow free volumes expense. and million improved adjusted adjusted

or versus what year-to-date highlights down grow which our and would share the results free margins market. our continued by execution teams Slide year, earnings these in flow headwinds. doing expand we diluted well we points way flow increased year despite period XX% cash our prior market versus X year. per million $XX and on -- driven is a do adjusted XX% to cash by free to adjusted Adjusted increased are the this We're prior said the

flow CapEx Slide XX dividends driven partially earnings. improvement shows our priorities. and by This free allocation returns The interest. adjusted flow demonstrates was working offset to cash prior company and This increase through challenging the generation flow to was our year. higher consistently and deploy cash free increase performance despite for to capital higher WAVE the cash and conditions cash drive higher that cash year-to-date in versus cash ability by growth year-to-date generate our capital

highest allocation capital remains business back investing the see we Our returns. first where priority into our

attributes strategic that our target and leverage the unique strength specifiable acquisitions that businesses. we Next, offer capabilities of

In about shareholders. our of $XX for the share repurchased shares. seek the we inception quarter, a of million total XXXX, we we have to repurchased shares program And since return in third excess to million. $XXX Third, repurchase XX.X cash of million

existing to million our we a quarterly the and over term dividend, commitment increasing in increase XX% continued our And in $XXX cash share repurchase to announced shareholders. authorization. under third the demonstrating to with authorization week, After further last our returning the ability July, confidence our displaying cash we quarter to remaining ended long generate

shows full XX guidance. Slide updated our year

a on our We based metrics outlook all key have better-than-expected improved for market.

increased and midpoint narrowed net for slightly. the have the range sales We

We have also increased adjusted flow. EBITDA, EPS diluted free for adjusted the midpoint adjusted and cash

presentation. we The in take year-to-date now our profitability for before Vic the the outlook further in for now your company. this questions. assumptions quarter, the performance I'll fourth for improved expect are Given to year back it comments appendix And and full our changes of turn we

Victor Grizzle

Thanks, Chris. Yes.

Before a I'd segments. on market context take like both moment and some of we questions, backdrop additional to get to your the our impacting provide overall

back As of to economic lower year. underlying in market activity year, the namely to half I further the in level level lower demand of of at mentioned expected of this half deterioration appears earlier, the side. market on the the renovation back Instead, a drive have stabilized demand, we

weakness replacement primarily believe is renovation activity the the vertical. and that office to impacting and continue market in We on mainly spending discretionary

renovation activity, creates and low as markets of both reported, we in office quarter. uncertainty, were and to offset continued Overall the wide overall These But broader demand with serves uncertainty. government education range funding economic remains weakness. a vertical leading rate pressured office are to our support, events, project positive types, healthcare helping by leasing and churn interest which business the

In be starts late across the overall construction XXXX territory. in from starts and mandates more the healthcare with data, And new addition, positive consideration of appears and office, persist, employment less funding earlier more of the and contributed and quarter. verticals out this In activity headwinds remain in continuing, recent has of side growth financial bidding for throughout although in of subleasing year, and data Dodge positively office moved outlooked education, as office activity. the back-to-office mixed. in to demand transportation. remains Good many we conditions XXXX stabilizing

cash improved against conditions remain strong market said, the With a of the strength our the the of us business is for level. all allows and our are though weaker our model modestly resilience to even there of priorities, fund So XXXX, view business results level generating does in deployed. flow as uncertainty And concerns that parts the our healthy the again, and has on macroeconomic being market strong these and Chris, by on all strategy outlined allocation capital cycle. demonstrating that our

matter with the the industry-leading and that the scale, and is uniquely category by more by unique an market strength business, service our and and to of resilience of attributes business the us include others. and The attractive a innovate our well position specifications driven where core these of positions strength product our community innovation supported to win building position A&D than

best-in-class The these [indiscernible] category about stabilizing industry of and partners distribution consistently sites. markets all down having the our end revenue have the ability lead set serve blocks the parts job the in time. give as ability The that strength deliver moves of balanced all differentiate industry, same diverse And we of ceilings cycles. their up passionate can our are business our we confidence again, we the rarely manufacturing a business in and the productivity, of It's in even expand to we to unique that strengths, and down AUV of cycle. terms at the us because margins who and are us of with attributes of that the in grow distribution, and the consistent best-in-class growth profit factor have or and as these building of

core these to With value to profitable beyond. happy we committed we'll So next comments, will questions. delivering year and growth take drivers and as focused to your forward, go be remain we and those

Operator

Sachs. Your from comes line Goldman from Susan Instructions] [Operator the of question first Maklari

Susan Maklari

stay also continues first discretionary some you're about My projects corner office delays what bit do Congrats think driving weak. that watching in the when things to that? in is seeing the guess think mentioned comments, change see order to you to What what demand especially of a that you about the the on a your side, in out I there? turn quarter. some for? of are you needs you're some is question in And us there, talking great Dick,

Victor Grizzle

Yes.

the think that a conditions there's And activity. issues discretionary of renovation I back economic of work, the there. I kind area impact the expectations And uncertainty up uncertainty the business their think -- back marketplace. some I uncertainty discretionary think around still some on especially that interest level overall think to materialize, can clear half Even I softer didn't lot that renovation this economy. and driving the remains think I given gives pause think though I we the there's still think of geopolitical I for rates, in of was get has with before to overall, still

side really regards the comment first some specialty of speaking of to the your the with On architectural to business. delays

about little those many namely business can a quarter-to-quarter Specialty And delays. Architectural being ebbs the some ebbs I backlogs, and seeing, so As we're for talked in project larger think, get activity And this the influence we terms some projects, highlighting projects as larger of our and bit what we've of example, projects quarter-to-quarter. overall the airport of delay call, of have these flows in on and times project-intensive I and in some was that's, flows. can really the and

those excited segment well space. our quarter-to-quarter. of so the overall, positioned Some that can overall. we're move We're But Transportation really about numbers in

Susan Maklari

Okay. on us. of a very that nice Architectural the a margin sustainability in the this you've quarterly And about saw thoughts any kind quarter. gathering color. the think Clearly forward that seen? as guide improvement basis do you you That's follow-up, to you've helpful here? from on lift closer Specialties How that a And path given of longer-term the

Victor Grizzle

our doing the the out operating I'm the to surprised, it's pleased, to Yes. called outside has operating hard leverage. the and productivity, plants what not to right of I also the the very leverage are notable. prepared And working that drive area as on right? pleased side really mainly in we're my But we're on getting The efficiencies plant, we're plants. with inside team it's been but improve Susan, SG&A pull is remarks, the levers

right I is surprised think all not They're with pulling I levers. We're And think their executing. this with the Again, sustainable. case. very they're the pleased we're execution.

As we our . XX% the way to making to business. go forward, leverage that believe plants, investments We or around on going the the we've that continue so target. productivity good we're to over year getting this minimum last levers been operating in our on those in well we're back work

Operator

Next question of Capital from Shmois comes from the line Loop Markets. Garik

Garik Shmois

nice to the first, I Congrats Wanted volumes ask Fiber, saw with quarter. Mineral home benefits at in you to respect on and think the center.

Just curious drove as to that. what

you and think some seem destocking. expecting were talk if versus maybe doesn't there. like sell-through hearing some underlying could trends to It I you of the occurred. about you're that that But sell-in

Victor Grizzle

Yes.

the these data the open overall very were can you the about they half much at that point-of-sale data first that and data, of what -- point-of-sale that build about on And some which market. and when ebbs for around with build inventory there that talk behind we center, big we channel point-of-sale up quarter-to-quarter, inventory the some noticeable often a were us, in some look pretty seeing specifically, the and mimicking box inventory. pretty in you their new of was around On strong see flows that, that. the new resetting stores we with very the home of that share the again, gearing buildup products their was were how we and right, inventory And our drawdown is inventory was products there

to back we they And demand, out, of so a and and to that and that running as this buy stores. good out they be their more coming in up the ahead be half in is expected coming pretty got of expected

we better and What really the fourth the come that saw come sort any expect expected them, quarter, we to did that, see expected. some conditions quarter. That's -- out in of still out I seeing in that as see out think and in same the are I But of don't didn't And not down drawdown. back that that slowed market we the fourth that of we our in than do their us they me. drawdown half it probably is have think, the inventory to we more overall, fast. the of that we're So to at looking in third answer might quarter intentional level you'll intend expectations. for

your So to did there? answer get question. I question that Does your

Garik Shmois

to but a think growth, correctly, growth growth to Canopy And as I type then sustainable just pinning helpful. XXX on per -- of these expect points Curious from that about it volume called due said go-forward to noticeable initiatives some I should if out, you to I volume of that's you we how growth wanted No, your ask basis particular. you X heard points of maybe in on maybe quarter, basis? this some of initiatives not some

Victor Grizzle

we X% -- reported to outlooked in we growth think I quarter. the contribution our Well, volume

been talking X% contribution. a We have X% to about

renovated. Canopy range ongoing So also healthy terrific space initiatives. I right events done. the in it turning overall also the -- that and our easy is Healthy profitable. has it an base we that contribution needs we're activity renovation continue a believe that to spaces give get But in terrific initiative, these on platform. them basis mention this terms of of what healthy team space initiative. we it We're make job stimulate positive contributed. reasons in from I'd We an more expect quarter a to help doing trying do And our way That installed in to have large to catalysts like largely had on to the contribution from in our to

we're think going see points X growth . X forward. of from I So these to contribution continue initiatives going to to

Operator

comes question the line Your Truist. of next Hughes Keith from from

Keith Hughes

be to going of in the the little the kind trend? the A you talk it's guide. on how about EBITDA weakness going the makeup quarter, fourth be midpoint. Can bit what's at implied going to is question fourth on a to quarter of There's

Christopher Calzaretta

in we kind This market. we've relative through to fourth quarter. It's some kind little that launches as how higher softer out of and heavier on contributing to retail were thought expectations. But of come that's by you bit that. at of mentioned, that due some look we a center home taken really I'll the see to fourth modeled year-over-year better year to promotional earlier take got the this prior if quarter our of with if year. really volume you Keith, is -- that And previous again, the period comp a to as -- also, SG&A. the some assumptions comp Vic prior volume in also, There's base a spending of which incentive decline SG&A fourth some out period. Yes, compared year Chris. then as well volume can that new that have there driven is come pegged quarter, product We've that some where Yes, a benefits we're to look lapping to expected the due implied little in you the

So just quarter. as fourth a couple of points of I input about there the think

the bit little is other AS again a finish project side, maybe AS to can [indiscernible]. which the to due on choppy mention to The softer year delays, be piece anticipated

Garik Shmois

this Okay. And do input When think then in know in [indiscernible]. a was costs what Mineral positive you I Fiber, it quarter. about

Christopher Calzaretta

Yes.

single-digit slight costs So I'd flattish, say, Raws percentage about now with inflation some range. maybe we're that terms a for there looking about versus better-than-expected basis, in as forward, total prior costs year year input some . on deflation full freight energy high so out looking so expected. were materials there. in raw and there,

Operator

line question the next from from Jefferies. of Ng comes Phil Your

Philip Ng

signs pretty about on then was quarter. at constructive a you're on And seeing starting the to strong commentary it's office really least stabilize. some Congrats

on to Should get those color stabilize You still can for trendline color your great to a gave kind that of in AS. what lower? base us terms growth are back some of business? you route same there's Or we risk KPIs bidding, XXXX? Mineral Any assume seeing Fiber planform from quoting on that starting in on activity things and some you're could

Victor Grizzle

in out fairly consistent by ago. what with moving activity kind and from XQ, a down then of we of again, vertical, still positive Overall quarter-to-quarter negative And bidding saw was in slightly year territory.

within those big or other. look not one kind numbers I some the numbers as So at way as of directional. margins the

on being So the new drag with bidding activity renovation being construction still positive. overall fairly

I that Phil, feels even like, you if if the activity that will. it fairly know, here, will, feels just bottom So a of new along to be seems don't bouncing you sideways kind moving, bidding

numbers. So overall kind I think I what the see of business. That's that's in can for the

Philip Ng

And you more volumes mineral fiber? us remind in rental big discretionary of piece can for terms how your is Vic, overall

Victor Grizzle

Well, and rental new versus XX% half then more those. XX% rental, that of is -- projects both as our area. it elements if will, you business, can the is and XX%, larger renovation you discretionary split of that half you of of There's in match, of type can And patch projects.

think So talked certainly, continue people are I who we and can some last to wait year, we as about waiting, see of that.

education those into the certain come time as the Although marketplace. as for of some delayed parts back clears goes market, and seeing and such some we're uncertainty up healthcare of the of projects

just to not to flow, of going and there's like It's it's it the getting some directional. ebb continue So get terms -- feels stabilization didn't worse. here it it in again, better,

quoting that activity we're think I and bidding the again, I seeing. within think overall consistent that's

Philip Ng

color share a you product. see opportunity the an value up for the some of of that over you during of center home provided to the Was Okay. dynamic. And guys appreciate I quarter? operational year? Vic, sense. But of that for you set great your course the I how transpiring And perfect some then, issues mineral That the fiber on makes competitors understand pick on one kind had that higher do

Victor Grizzle

in short aware their If over in not in it's talking share the get the term. moves customers it we issue time. shifts did terms industry Yes. We you're out material wasn't calls. share We're about. were some of of And material of this any and able -- help to

for in to move expect year. the not we do rest be the material share quarter, So really the a continuing nor this of

Operator

line the Jadrosich of from America. Rafe comes question from of next Bank Your

Rafe Jadrosich

break you what the anticipated out Can quarter there revaluation impact just the in And the for fourth quarter? any inventory third is was guidance? impact in

Christopher Calzaretta

quarter. the raw have bit costs call But prepared inventory moderated the Yes, Chris. a don't yes, compared given and levels. I previous input that it's Rafe, their valve material to as in out fact have said the in materials there remarks, my we impact as

by You that flowing of through see we the what way P&L inventory of valves. the benefit call

of So within coming experienced saw close we've a There's earlier full an in the be year. close just headwind picked fourth this bit up pretty kind year. quarter. to that that first of benefit offsetting and we year half to of the assumed And headwind shy we're recouped the in going we the the

even context. potentially So hopefully, income of Again, rolling that that the But and drive additional the just bit tailwind moderate It's raws of some if further, statement. little there. inventory. the not timing write-off inflation a If that how dynamic it's through adds of a works. that's could

Rafe Jadrosich

And $X of headwind? the half a was impact first it. million of Got

Christopher Calzaretta

quarter the . million. Yes, was first $X

Rafe Jadrosich

Got it.

of guidance a sort the Okay. growth versus to quarter. volume in level, losing XQ from outlook. Does an day that quarter assume That's not despite kind worse guidance from year-over-year growth easiest the implies deterioration of in end And And quarter. fourth we're then the in helpful. fiber guidance in demand The here? What XXXX date compared a and still the are the to just in sort implied activity fourth what's third seeing guidance implies the comp. deterioration actually economic of selling you mineral year-over-year

Christopher Calzaretta

Sure. Yes.

as seen that's And it course fourth of what single-digit year. range, and a it quarter. call So out mentioned, pretty we've is it which center Rick coming home low assumes retail, that in consistent the market then the that volume I this with assumes both throughout in down called

little where So with last incentive line. promotional bit the you. we're comp that's that little spend on year year. some saw comp a lapping pertains benefits as it work to then as which higher really that incentive EBITDA, again, and new how SG&A period then of And bit this a a some product launches, we for top EBITDA heavier associated drives

Operator

from Research Your question of line Kathryn from next comes Group. the Thompson Thompson

Kathryn Thompson

finally little the just better are contributing new the And and driver any I particular, in of to little did that? on there a that better for than the Just one growth initiatives to expectations of want JV really a the understanding, bit within earnings. overall JV bit understanding are get

Victor Grizzle

Mineral similar, backdrop, Very than Kathryn, market Yes. expected. the think, better I the was volume Fiber to business, our

steel nice that. I to to purchases job around and sure margins levels good in they their back be. The team driving the to to manage is contributing that that contributor, make nice we're think but to a doing need where operationally, overall they're that their a a steel job was and inventory doing pricing continuing

think I outsized initially market backdrop building better those was it's a just in than that probably way, So blocks expected. an

Kathryn Thompson

this. I then I string this, just Okay. touched more little want a to bit And you on on but know pull

the and just better able of little but you've How contributed bit tower market side, combination kind overall not performance end do does talked the better then what than you're has that just difficult -- touched necessary of on. on the other to just also differentiate or Mineral Fiber. how is how do to You that? you to to conditions, mix the How a -- market about provide. which contributing a given to especially market And easy broad current it one

Victor Grizzle

about. understand sorry, don't you go . talking question. ahead. I your Are I'm

Kathryn Thompson

really, is be is concerted End mix. market how shift easy end happened for this just to more is Well, just Or a market the And mix your easy that? draw market effort end to like on how it difficult better? is mix? Or end? your to or it like

Victor Grizzle

we're end Well, of these market all architects specifications. that with driving the present are

the we're important support and in of have is those where the that work they to we're So projects. have where we supporting types workload because architects the ours [indiscernible] and again, architectural their and the the of on them can based on And connected asset sure presence have community activity at to business. that's making a the they shifts really market this

us of it's for fairly market the easy say presence where to move our architects. strong because going at activity is our the the I'd table with So and seat

Operator

line comes from the next from John Your UBS. question Lovallo of

John Lovallo

Mineral in a I to the there talked first the to on bit Fiber Vic, one, you some of guess XXXX. volume in X% ability side, on the target we that? maybe thoughts market, updated the if X% little Any achieve markets. But through about think choppiness stabilization the about certain

Victor Grizzle

building I Well, blocks there. think the still are

going as that growth this get to in to the to we XXXX structurally X growth You're then levels levels. think X that the quarter, and to Again, high to there initiatives. back initiatives. X% back a nice we're growth Mineral some remember were we to don't the referring market expect to building longer-term our our And volume we've still to points of change to contribution in XXXX getting range from X point X% nothing recovery reported contribution we're of rate Fiber, end for blocks the there's X-point

recovery fiber blocks, part X% we're get that It the But equation. to this at may a to are on X% and growth market mineral level. back thoughts, a out change get that point. when building position us my in there not outlook for becomes to still some to depending all of the pushed John, So

John Lovallo

Okay. really do I you're driving questions. And That's market the it I is? Canopy do this higher you when is a you are then that couple guess think against? we a And that is experiencing think curious it of think runway? that? just win mean, what and where underserved you competing there's longer-term helpful. as rate about How there, sustainable Who

Victor Grizzle

renovated I giving No, that Canopy go do. transact. to and a their there we're place get to or demonstrating ceiling that underserved and customer to platform, tiles it's think expensive doesn't think They're Yes. go out there that to is out it's finding frankly, do hard to where on that not an they very them know the to

where get of get and will, a way us them make this go you to is done These of this don't the coming and educate customers way. if creating know button, the the and customers in . customers. we're cost-effective from ceiling aware are And not and platform. site reach to Canopy typical for tiles. are easy type -- to It's so easy very Armstrong them help most them, to that know kind by are out, the don't Armstrong And this buying part Armstrong that

to if the days that's to the this on you adding here specification, We're around them value way our and comments they project project works. as reference to distribution. through ability will, can projects helping a the matter our we're do more weeks. they We're are productively, more iterate works, of developing. in the Your my is rate with win these designs architects that to go to improving the And our -- down GCs strengthen rate channels, versus from the all win contractors, through strengthening

we're in here. that to continuing A&D and community AUV value-added traction incremental my growth And value service. grow. was So is We're our adding is both volume the through driving this reference

by but the we're incrementality in encouraged an such we're of innings automated this, the early really tool. of So design

Operator

question Your Baumgarten of & Associates. the Adam final . comes from line from Zelman

Adam Baumgarten

or mid-range it versus Just was quarter. more volume throughout trends the high quarter within curious few or a on on strong across either mineral quarters? mix weak the prior Anywhere of products? just across that the product end And then or is fiber where particularly the suite, positive kind maybe the impactful this type segment, low

Victor Grizzle

question. Yes, it's a good

Again, end Our in want continues lower continues at at put The product the they greater renovation than the be renovate. activity, when mix be market. people growth positive. to the end stuff of the higher newest market to the to of

it's and year. grow downturns as high new that faster then type in at And help the [indiscernible] recessions garden higher than and in materializing higher and we've to the is of we continue natural end seen that going for portfolio. also variety this and past end years. growing down XXXX. the and And a continues That's in the to the cycle. on level. And end. -- here that your pulled display at And . our is in think down at therefore, a product this that's getting on architects I a been in mix innovation supports portfolio. And AUV number market that's by full there's -- rate we're the low highest even So innovation is richer of drive of introduction a the end its at of draw a

Adam Baumgarten

it. Got

just do And market then do you for if declines quarter, quarter the industry? kind think maybe stacks just think gained or just the up the we growth the volume about how volume modest of the the the most Okay. or that grew in part. And versus share you with in think you

Victor Grizzle

what the consistent the about we've talking down were seen low rest. think I Well, market with digits is as in single we

I more of our carefully difference our late think are growth if you rate initiatives the renovation, renovation by kind of growth is really just the pie that and about accelerating sitting growing the And of events the size are initiatives. creating there.

as we're create in renovation we're able it. we're capture ahead we of think and more to I that term So short here the

. in is put growth where of in just that would from, weakness coming the that the see. I So offsetting we market of some bucket it terms

Operator

to turn CEO, Vic are and for over I'll There Grizzle, the now questions. President no back call remarks. further closing

Victor Grizzle

Thank you.

quickly obviously close real in results to with very pleased we're Just the quarter. third here, our

think to It's have morning joining with we're demonstrate Thank we're model all again, executing a And pleased I you variety more very particularly to of strength Thank testament we're questions. garden this business. that. our a our to being our you a strategy. year pleased for able the your our our the business call. we and demonstrate resilience diligently resilience demonstrate strong the hard finish and full for And that very year the to of of and could on . working that XXXX. are like and in employees all that experiencing strength in downturn to

Operator

This call. concludes today's conference

You disconnect. may now

Armstrong World Industries (AWI) 24 Oct 232023 Q3 Earnings call transcript