Company Quick10K Filing
Quick10K
Armstrong World Industries
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$93.05 49 $4,556
10-Q 2019-09-30 Quarter: 2019-09-30
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-K 2018-12-31 Annual: 2018-12-31
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
10-Q 2015-09-30 Quarter: 2015-09-30
10-Q 2015-06-30 Quarter: 2015-06-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-K 2014-12-31 Annual: 2014-12-31
10-Q 2014-09-30 Quarter: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-K 2013-12-31 Annual: 2013-12-31
8-K 2019-10-28 Earnings, Regulation FD, Exhibits
8-K 2019-09-30 Enter Agreement, Exhibits
8-K 2019-09-30 M&A, Regulation FD, Exhibits
8-K 2019-07-29 Earnings, Regulation FD, Exhibits
8-K 2019-07-24 Other Events, Exhibits
8-K 2019-07-11 Shareholder Vote
8-K 2019-06-05 Regulation FD
8-K 2019-04-29 Earnings, Regulation FD, Exhibits
8-K 2019-04-24 Other Events, Exhibits
8-K 2019-04-04
8-K 2019-03-05 Exhibits
8-K 2019-02-25 Earnings, Regulation FD, Exhibits
8-K 2019-02-20 Other Events, Exhibits
8-K 2019-01-22 Exhibits
8-K 2018-12-07 Regulation FD, Exhibits
8-K 2018-11-07 Regulation FD, Exhibits
8-K 2018-11-06 Other Events, Exhibits
8-K 2018-10-30 Earnings, Regulation FD, Exhibits
8-K 2018-09-17 Regulation FD
8-K 2018-08-02 Regulation FD, Exhibits
8-K 2018-07-27 Earnings, Regulation FD, Exhibits
8-K 2018-07-18 Enter Agreement, Exhibits
8-K 2018-07-12 Shareholder Vote, Other Events
8-K 2018-06-06 Regulation FD, Exhibits
8-K 2018-02-20 Officers
ATR Aptargroup 7,599
NWL Newell Brands 6,960
ENTG Entegris 5,812
BERY Berry Global Group 5,121
MYE Myers Industries 607
TUP Tupperware Brands 599
AFI Armstrong Flooring 176
CMT Core Molding Technologies 51
DSWL Deswell Industries 42
FORD Forward Industries 10
AWI 2019-09-30
Part I - Financial Information
Item 1. Financial Statements
Note 1. Business and Basis of Presentation
Note 2. Segment Results
Note 3. Revenue
Note 4. Acquisitions
Note 6. Accounts and Notes Receivable
Note 7. Inventories
Note 8. Other Current Assets
Note 9. Equity Investment
Note 10. Leases
Note 11. Goodwill and Intangible Assets
Note 12. Other Non-Current Assets
Note 13. Accounts Payable and Accrued Expenses
Note 14. Income Tax Expense
Note 15. Debt
Note 16. Pensions and Other Benefit Programs
Note 17. Financial Instruments
Note 18. Derivative Financial Instruments
Note 19. Other Long-Term Liabilities
Note 20. Shareholders' Equity
Note 21. Accumulated Other Comprehensive Income (Loss)
Note 22. Litigation and Related Matters
Note 23. Earnings per Share
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 awi-ex311_9.htm
EX-31.2 awi-ex312_7.htm
EX-32.1 awi-ex321_6.htm
EX-32.2 awi-ex322_8.htm

Armstrong World Industries Earnings 2019-09-30

AWI 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

awi-10q_20190930.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to                

Commission File Number: 1-2116

 

ARMSTRONG WORLD INDUSTRIES, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Pennsylvania

23-0366390

( State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

2500 Columbia Avenue, Lancaster, Pennsylvania

17603

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (717) 397-0611

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, $0.01 par value per share

 

AWI

 

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

 

Non-accelerated filer

 

 

 

Smaller reporting company

 

Emerging growth company

 

 

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Number of shares of Armstrong World Industries, Inc.’s common stock outstanding as of October 23, 2019 – 48,497,950.

 


TABLE OF CONTENTS

 

 

 

 

 

PAGE

Cautionary Note Regarding Forward-Looking Statements

 

3

 

 

 

PART I - FINANCIAL INFORMATION

 

 

Item 1.

 

Financial Statements

 

4

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

32

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

40

Item 4.

 

Controls and Procedures

 

40

 

 

 

PART II - OTHER INFORMATION

 

 

Item 1.

 

Legal Proceedings

 

41

Item 1A.

 

Risk Factors

 

41

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

41

Item 3.

 

Defaults Upon Senior Securities

 

41

Item 4.

 

Mine Safety Disclosures

 

41

Item 5.

 

Other Information

 

41

Item 6.

 

Exhibits

 

42

Signatures

 

43

 

 

 

2


When we refer to “AWI,” the “Company,” “we,” “our” or “us,” we are referring to Armstrong World Industries, Inc. and its subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q and the documents incorporated by reference herein may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements are subject to various risks and uncertainties and include all statements that are not historical statements of fact and those regarding our intent, belief or expectations, including, but not limited to, our expectations concerning our residential and commercial markets and their effect on our operating results; our expectations regarding the payment of dividends; and our ability to increase revenues, earnings and EBITDA (as such terms are defined by documents incorporated by reference herein). Words such as “anticipate,” “expect,” “intend,” “plan,” “target,” “project,” “predict,” “believe,” “may,” “will,” “would,” “could,” “should,” “seek,” “estimate” and similar expressions are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of factors that could lead to actual results materially different from those described in the forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors that could have a material adverse effect on our financial condition, liquidity, results of operations or future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to:

 

economic conditions;

 

construction activity;

 

competition;

 

key customers;

 

customer consolidation;

 

availability and costs of raw materials and energy;

 

Worthington Armstrong Venture (“WAVE”), our joint venture with Worthington Industries, Inc;

 

negative tax consequences;

 

environmental matters;

 

strategic transactions;

 

covenants in our debt agreements;

 

our indebtedness;

 

our liquidity;

 

claims, litigation and cybersecurity breaches;

 

international operations;

 

defined benefit plan obligations;

 

the tax consequences of the separation of our flooring business from our ceilings business;

 

intellectual property rights;

 

costs savings and productivity initiatives;

 

labor; and

 

other risks detailed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), press releases and other communications, including those set forth under “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2018, as amended, and in the documents incorporated by reference herein and therein.

Such forward-looking statements speak only as of the date they are made. We expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations with regard thereto or change in events, conditions or circumstances on which any forward-looking statement is based.

3


PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

Armstrong World Industries, Inc., and Subsidiaries 

Condensed Consolidated Statements of Earnings and Comprehensive Income 

(amounts in millions, except per share data) 

Unaudited

 

  

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net sales

 

$

277.1

 

 

$

260.5

 

 

$

791.2

 

 

$

736.4

 

Cost of goods sold

 

 

165.4

 

 

 

162.6

 

 

 

484.7

 

 

 

485.0

 

Gross profit

 

 

111.7

 

 

 

97.9

 

 

 

306.5

 

 

 

251.4

 

Selling, general and administrative expenses

 

 

41.3

 

 

 

35.3

 

 

 

134.3

 

 

 

113.7

 

Equity earnings from joint venture

 

 

(42.9

)

 

 

(18.7

)

 

 

(83.0

)

 

 

(59.2

)

Operating income

 

 

113.3

 

 

 

81.3

 

 

 

255.2

 

 

 

196.9

 

Interest expense

 

 

11.7

 

 

 

9.9

 

 

 

31.6

 

 

 

28.9

 

Other non-operating (income), net

 

 

(5.1

)

 

 

(9.2

)

 

 

(16.0

)

 

 

(27.3

)

Earnings from continuing operations before income taxes

 

 

106.7

 

 

 

80.6

 

 

 

239.6

 

 

 

195.3

 

Income tax expense

 

 

16.0

 

 

 

16.4

 

 

 

48.8

 

 

 

42.3

 

Earnings from continuing operations

 

 

90.7

 

 

 

64.2

 

 

 

190.8

 

 

 

153.0

 

Net earnings from discontinued operations, net of tax expense (benefit) of $2.5, ($0.5), $7.2 and $1.2

 

 

4.8

 

 

 

5.0

 

 

 

3.0

 

 

 

14.4

 

(Loss) gain from disposal of discontinued businesses, net of tax (benefit) of ($5.0), ($4.6), ($4.9) and ($4.9)

 

 

(22.3

)

 

 

7.0

 

 

 

(27.0

)

 

 

(16.1

)

Net (loss) gain from discontinued operations

 

 

(17.5

)

 

 

12.0

 

 

 

(24.0

)

 

 

(1.7

)

Net earnings

 

$

73.2

 

 

$

76.2

 

 

$

166.8

 

 

$

151.3

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

78.6

 

 

 

(7.0

)

 

 

84.6

 

 

 

(21.9

)

Derivative (loss) gain, net

 

 

(2.7

)

 

 

(0.5

)

 

 

(15.9

)

 

 

5.3

 

Pension and postretirement adjustments

 

 

5.5

 

 

 

2.7

 

 

 

11.2

 

 

 

7.6

 

Total other comprehensive income (loss)

 

 

81.4

 

 

 

(4.8

)

 

 

79.9

 

 

 

(9.0

)

Total comprehensive income

 

$

154.6

 

 

$

71.4

 

 

$

246.7

 

 

$

142.3

 

Earnings per share of common stock, continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.86

 

 

$

1.26

 

 

$

3.90

 

 

$

2.94

 

Diluted

 

$

1.83

 

 

$

1.23

 

 

$

3.84

 

 

$

2.89

 

(Loss) earnings per share of common stock, discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.36

)

 

$

0.24

 

 

$

(0.49

)

 

$

(0.03

)

Diluted

 

$

(0.35

)

 

$

0.23

 

 

$

(0.48

)

 

$

(0.03

)

Net earnings per share of common stock:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.50

 

 

$

1.50

 

 

$

3.41

 

 

$

2.91

 

Diluted

 

$

1.48

 

 

$

1.46

 

 

$

3.36

 

 

$

2.86

 

Average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

48.7

 

 

 

50.7

 

 

 

48.8

 

 

 

51.9

 

Diluted

 

 

49.5

 

 

 

51.9

 

 

 

49.6

 

 

 

52.8

 

 

See accompanying notes to Condensed Consolidated Financial Statements beginning on page 8.

 

 

 

4


Armstrong World Industries, Inc., and Subsidiaries

Condensed Consolidated Balance Sheets 

(amounts in millions, except share and per share data) 

 

 

 

Unaudited

 

 

 

 

 

 

 

September 30, 2019

 

 

December 31, 2018

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

98.0

 

 

$

325.7

 

Accounts and notes receivable, net

 

 

88.8

 

 

 

79.9

 

Inventories, net

 

 

69.4

 

 

 

61.2

 

Assets of discontinued operations

 

 

-

 

 

 

244.3

 

Income taxes receivable

 

 

26.4

 

 

 

1.7

 

Other current assets

 

 

14.1

 

 

 

4.8

 

Total current assets

 

 

296.7

 

 

 

717.6

 

Property, plant, and equipment, less accumulated depreciation and amortization of

   $439.5 and $412.9, respectively

 

 

508.8

 

 

 

501.0

 

Lease right-of-use assets

 

 

35.2

 

 

 

-

 

Prepaid pension costs

 

 

72.9

 

 

 

52.8

 

Investment in joint venture

 

 

65.7

 

 

 

40.8

 

Goodwill and intangible assets, net

 

 

459.4

 

 

 

442.0

 

Deferred income taxes

 

 

10.6

 

 

 

14.8

 

Income taxes receivable

 

 

0.8

 

 

 

0.8

 

Other non-current assets

 

 

59.6

 

 

 

68.5

 

Total assets

 

$

1,509.7

 

 

$

1,838.3

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current installments of long-term debt

 

$

-

 

 

$

55.0

 

Accounts payable and accrued expenses

 

 

141.8

 

 

 

383.3

 

Liabilities of discontinued operations

 

 

-

 

 

 

110.3

 

Income taxes payable

 

 

0.4

 

 

 

0.9

 

Total current liabilities

 

 

142.2

 

 

 

549.5

 

Long-term debt, less current installments

 

 

650.5

 

 

 

764.8

 

Lease non-current liabilities

 

 

30.1

 

 

 

-

 

Postretirement benefit liabilities

 

 

54.6

 

 

 

58.8

 

Pension benefit liabilities

 

 

48.4

 

 

 

50.3

 

Other long-term liabilities

 

 

41.2

 

 

 

38.0

 

Income taxes payable

 

 

20.2

 

 

 

26.5

 

Deferred income taxes

 

 

155.2

 

 

 

124.4

 

Total non-current liabilities

 

 

1,000.2

 

 

 

1,062.8

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Common stock, $0.01 par value per share, 200 million shares authorized, 62,171,708

   shares issued and 48,431,228 shares outstanding as of September 30, 2019 and

   61,553,724, shares issued and 48,808,239 shares outstanding as of December 31, 2018

 

 

0.6

 

 

 

0.6

 

Capital in excess of par value

 

 

549.4

 

 

 

547.4

 

Retained earnings

 

 

970.3

 

 

 

829.8

 

Treasury stock, at cost, 13,740,480 shares as of September 30, 2019 and 12,745,485

   shares as of December 31, 2018

 

 

(773.4

)

 

 

(692.2

)

Accumulated other comprehensive (loss)

 

 

(379.6

)

 

 

(459.6

)

Total shareholders' equity

 

 

367.3

 

 

 

226.0

 

Total liabilities and shareholders' equity

 

$

1,509.7

 

 

$

1,838.3

 

 

See accompanying notes to Condensed Consolidated Financial Statements beginning on page 8. 

5


Armstrong World Industries, Inc., and Subsidiaries

Condensed Consolidated Statements of Shareholders’ Equity 

(amounts in millions, except share data) 

Unaudited 

 

Three Months Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common Stock

 

 

Paid-In

 

 

Retained

 

 

Treasury Stock

 

 

Comprehensive

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Shares

 

 

Amount

 

 

(Loss)

 

 

Total

 

June 30, 2019

 

 

48,661,946

 

 

$

0.6

 

 

$

538.1

 

 

$

905.7

 

 

 

13,393,176

 

 

$

(740.3

)

 

$

(461.0

)

 

$

243.1

 

Stock issuance, net

 

 

116,586

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Cash dividends - $0.175 per common share

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(8.6

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(8.6

)

Share-based employee compensation

 

 

-

 

 

 

-

 

 

 

11.3

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

11.3

 

Net earnings

 

 

-

 

 

 

-

 

 

 

-

 

 

 

73.2

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

73.2

 

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

81.4

 

 

 

81.4

 

Acquisition of treasury stock

 

 

(347,304

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

347,304

 

 

 

(33.1

)

 

 

-

 

 

 

(33.1

)

September 30, 2019

 

 

48,431,228

 

 

$

0.6

 

 

$

549.4

 

 

$

970.3

 

 

 

13,740,480

 

 

$

(773.4

)

 

$

(379.6

)

 

$

367.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common Stock

 

 

Paid-In

 

 

Retained

 

 

Treasury Stock

 

 

Comprehensive

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Earnings