Armstrong World Industries Reports Record Second-Quarter 2025 Sales and Earnings

Armstrong World Industries, Inc., an Americas leader in the design and manufacture of innovative interior and exterior architectural applications including ceilings, specialty walls and exterior metal solutions, reported second-quarter 2025 financial results highlighted by strong net sales and earnings growth with operating and adjusted EBITDA margin expansion in both the Mineral Fiber and Architectural Specialties segments compared to the prior year.

“With strong performance across our enterprise, we delivered robust top and bottom-line growth with margin expansion in both our Mineral Fiber and Architectural Specialties segments,” said AWI President and CEO, Vic Grizzle. “These record-setting results continue to demonstrate the resilience of our business model and strong execution on our growth initiatives including our acquisitions, innovation and digital tools. While macro-economic uncertainty persists, we are confident in our ability to navigate these challenges and continue generating profitable growth through strong commercial and operational execution.”

Second-Quarter Consolidated Results

• Quarterly net sales increased 16% to $425 million with a 7% increase in Mineral Fiber net sales and a 37% increase in Architectural Specialties net sales
• Operating income increased 30% and diluted net earnings per share increased 34%
• Adjusted EBITDA up 23% and adjusted diluted net earnings per share up 29%
• Operating income margin expanded 300 basis points and adjusted EBITDA margin expanded 200 basis points
• Raising full-year 2025 guidance

(All comparisons are versus the prior-year period unless otherwise stated)

Consolidated net sales for the second quarter of 2025 increased 16.3% over the prior-year period due to higher volumes of $46 million and favorable Average Unit Value (dollars per unit sold, or “AUV”) of $14 million. Architectural Specialties net sales increased $43 million and Mineral Fiber net sales increased $17 million from the prior-year period. Architectural Specialties segment net sales improved primarily due to a $28 million contribution from the 2024 acquisitions of 3form, LLC (“3form”) and A. Zahner Company (“Zahner”) and increased organic net sales driven by strengthening broad-based penetration throughout our specialty product categories. The increase in Mineral Fiber net sales was primarily driven by favorable AUV and modestly improved sales volumes.

Consolidated operating income increased 29.7% in the second quarter of 2025 primarily due to a $25 million benefit from sales volume growth, an $8 million margin benefit from favorable AUV and a $6 million increase in equity earnings from the Worthington Armstrong Joint Venture (“WAVE”). These benefits were partially offset by a $6 million increase in manufacturing costs and a $4 million increase in selling, general and administrative (“SG&A”) expenses. Increased sales volumes and higher operating costs were driven primarily by the acquisitions of 3form and Zahner, which contributed $28 million to the increase in net sales and $5 million to the increase in operating income in the second quarter of 2025 compared to the prior-year period.

Second-Quarter Segment Results

Mineral Fiber

Mineral Fiber net sales increased 6.7% in the second quarter of 2025 compared to the prior-year quarter due to $14 million of favorable AUV and $3 million of higher sales volumes, both of which were primarily driven by strong commercial execution and benefits from growth initiatives. The improvement in AUV was driven by both favorable like-for-like price and favorable mix.

Mineral Fiber operating income increased 20.4% year-over-year primarily due to an $8 million benefit from favorable AUV, a $6 million increase in WAVE equity earnings and a $4 million decrease in SG&A expenses.

Architectural Specialties

Architectural Specialties net sales increased $43 million in the second quarter of 2025, driven primarily by a $28 million increase from the 2024 acquisitions of 3form and Zahner, in addition to increased organic net sales driven by strengthening broad-based penetration throughout our specialty product categories.

Architectural Specialties operating income increased 80.3% in the second quarter of 2025, driven by operating leverage and improved custom project margins on strong organic growth, in addition to contributions from the acquisitions of 3form and Zahner. The benefit from higher net sales was partially offset by a $4 million increase in manufacturing costs and a $7 million increase in SG&A expenses, both of which were primarily attributable to the 2024 acquisitions.

Unallocated Corporate

Unallocated Corporate operating loss was $1 million in the second quarter of 2025 and 2024.

Cash Flow

Year-to-date cash flows from operating activities in 2025 increased $39 million or 46% in comparison to the prior-year period. The favorable change in operating cash flows was primarily driven by higher cash earnings and an increase in income taxes payable, partially offset by unfavorable timing-related working capital changes. Year-to-date cash flows from investing activities increased $95 million versus the prior-year period, primarily due to cash paid in 2024 for the 3form acquisition.

Share Repurchase Program

During the second quarter of 2025, we repurchased 0.2 million shares of common stock for a total cost of $30 million, excluding the cost of commissions and taxes. As of June 30, 2025, there was $610 million remaining under the Board of Directors’ current authorized share repurchase program**.

**

In July 2016, our Board of Directors approved our share repurchase program authorizing us to repurchase outstanding shares of common stock (the “Program”). Since inception of the Program, we have been authorized to repurchase up to an aggregate of $1,700 million of our outstanding shares of common stock through December 2026. Since inception and through June 30, 2025, we have repurchased 15.0 million shares under the Program for a total cost of $1,090 million, excluding commissions and taxes, or an average share price of $72.67 per share.

Updating 2025 Outlook

“We delivered strong profitability in the second quarter, highlighted by robust adjusted EBITDA margin expansion in both segments. Given these strong first half results, we are increasing our guidance for all key metrics,” said Chris Calzaretta, AWI Senior Vice President and CFO. “Given continued uncertainty in the macroeconomic backdrop, we remain focused on disciplined cost control and capital allocation. As a result of these efforts, we are well-positioned to deliver strong results for the remainder of the year as we continue to demonstrate the resilience of our business model and create value for our shareholders.”

For full results click here.

About Armstrong World Industries

Armstrong World Industries, Inc. (AWI) is a leader in the design and manufacture of innovative ceiling and wall system solutions in the Americas. With $1.2 billion in revenue in 2022, AWI has approximately 3,000 employees and a manufacturing network of 16 facilities, plus seven facilities dedicated to its WAVE joint venture.

Contact:

Theresa Womble – Media Contact – tlwomble@armstrongceilings.com – (717) 396-6354

Source: Armstrong World Industries, Inc.