Armstrong World Industries, Inc. Q1 FY2026 earnings call

Mark mentioned the strategy will remain consistent, building on the strong foundation. Focus on consistent mineral fiber growth based on AUV and volume, and growing the AS segment. In the quarter, total company sales increased 7%. Mineral fiber segment saw 5% sales growth with solid AUV growth and modest volume increase. AS segment sales increased 11% driven by organic growth and acquisitions. Operational highlights include strong safety quarter with total recordable incident rate well below one and industry average, and mineral fiber plants successfully navigating winter storms with perfect order measure exceeding targets.

Mineral fiber segment: Net sales increased 5% in the quarter, driven primarily by favorable AUV of 4% and a modest increase in volumes. Adjusted EBITDA grew 4% with an adjusted EBITDA margin of 42.4%. Architectural specialties (AS) segment: Net sales increased 11% in the quarter driven by solid organic growth along with contributions from recent acquisitions. Adjusted EBITDA decreased approximately $3 million, or 12%, versus the prior year primarily due to a one-time tariff adjustment, costs of recent acquisitions and plant investments to support growth.

Reaffirming full year guidance for net sales, adjusted EBITDA, and adjusted free cash flow. Modestly raising adjusted diluted EPS guidance to a range of 10 to 14% growth versus the prior year. Revising adjusted EBITDA margin assumptions, expecting margin expansion in both segments for the full year with mineral fiber adjusted EBITDA margin of approximately 44% and AS adjusted EBITDA margin of approximately 19%. Expecting improved net sales and adjusted EBITDA growth in the second half of the year in both segments with margin improvement.

Forward-looking statements involve risks and uncertainties that may differ materially from those expected or implied. Detailed discussion of risks and uncertainties in SEC filings, including the 10Q filed early this morning.

Q: Can you talk a bit about just the bidding activity that you're seeing out there given the macro and obviously the start of the conflict in the Middle East during the quarter? Has that had any impact on the level of activity that you're seeing? And I guess within that as well, can you talk about, the new products and platforms, and how that's perhaps driving some relative elasticity for you relative to the broader market?

A: First, on bidding activity, it's fairly stable overall. Not seen a dramatic impact from geopolitical backdrop. Bidding contains continues to hang in there. Pipelines continue to be very strong. On new products, continue to feel over the right target on both energy savings and on data centers. Pipelines continue to build dramatically.

Q: On a mineral fiber volumes turns, modestly positive, but in a flat market environment, you highlighted commercial executions to push up 100 basis points. Has your view on volume trends for the second quarter and the full year changed compared to three months ago? We would appreciate any updated perspective on the drivers behind your outlook?

A: Overall, view hasn't changed in terms of mineral fiber volume outlook. Saw federal government volume come through, commercial execution and flow business contributed. Continue to be confident in outlook with initiatives and positive mix.