Nature Of Operations

12 Months Ended

Dec. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NOTE 3. NATURE OF OPERATIONS

Our operating segments are as follows: Mineral Fiber, Architectural Specialties and Unallocated Corporate.

Mineral Fiber – produces suspended mineral fiber and fiberglass ceiling systems. Our mineral fiber products offer various performance attributes such as acoustical control, rated fire protection, and energy efficiency, along with other health and sustainability features and aesthetic appeal. Ceiling products are primarily sold to resale distributors, ceiling systems contractors and wholesalers, and retailers (including large home centers). The Mineral Fiber segment also includes the results of WAVE, which manufactures and sells suspension system (grid) products and ceiling component products that are invoiced by both AWI and WAVE. Segment results relating to WAVE consist primarily of equity earnings and reflect our 50% equity interest in the joint venture. Ceiling component products consist of ceiling perimeters and trim, in addition to grid products that support drywall ceiling systems. For some customers, WAVE sells its suspension system products to AWI for resale to customers. Mineral Fiber segment results reflect those sales transactions. The Mineral Fiber segment also includes all assets and liabilities not specifically allocated to our Architectural Specialties or Unallocated Corporate segment, including all property and related depreciation associated with our Lancaster, Pennsylvania headquarters. Operating results for the Mineral Fiber segment include a significant majority of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations.

Architectural Specialties – designs, produces and sources specialty ceilings, walls, and other interior and exterior architectural applications primarily for use in commercial settings. Products are available in numerous materials, such as metal, felt, wood, resin, wood fiber and glass-reinforced-gypsum in various colors, shapes and designs. These products offer a range of design and performance attributes such as acoustical control, rated fire protection, light, aesthetic appeal, energy conservation and building performance. We sell standard, premium and customized products, a portion of which are sourced from third-party producers. Architectural Specialties products are sold primarily to resale distributors and direct customers, primarily ceiling systems contractors. This segment’s revenues are primarily project driven, which can lead to more variability in sales patterns. Operating results for the Architectural Specialties segment include a portion of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations.

Unallocated Corporate – includes certain assets, liabilities, income and expenses that have not been allocated to our other business segments and consists of: cash and cash equivalents, our Overcast investment and related equity earnings/losses, the net funded status of our U.S. Retirement Income Plan (“RIP”), the estimated fair value of interest rate swap contracts, outstanding borrowings under our senior secured credit facility and income tax balances.

Our CODM is our President and Chief Executive Officer. Segment operating income (loss) is the measure of segment profit or loss reviewed by the CODM. The following tables are presented at the level of disaggregation regularly reviewed by the CODM to evaluate operating performance and allocate resources to segments.


For the year ended 2024	Mineral Fiber			Architectural Specialties		Unallocated Corporate			Total
Net sales to external customers	$	986.0		$	459.7	$	-		$	1,445.7
Cost of goods sold		586.2			276.3		1.6			864.1
Gross profit (loss)		399.8			183.4		(1.6	)		581.6
SG&A expenses		180.8			126.7		1.0			308.5
Loss related to change in fair value of contingent consideration		0.2			1.4		-			1.6
Loss on sales of fixed assets, net		0.6			-		-			0.6
Equity (earnings) loss from unconsolidated affiliates, net		(104.3	)		-		0.9			(103.4	)
Segment operating income (loss)	$	322.5		$	55.3	$	(3.5	)	$	374.3

Segment assets	$	1,063.8		$	602.2	$	176.7		$	1,842.7
Investment in unconsolidated affiliates		22.6			-		4.6			27.2
Depreciation and amortization		80.2			23.0		-			103.2
Purchases of property, plant and equipment		64.3			18.5		-			82.8

For the year ended 2023	Mineral Fiber			Architectural Specialties		Unallocated Corporate			Total
Net sales to external customers	$	932.4		$	362.8	$	-		$	1,295.2
Cost of goods sold		574.1			222.4		1.7			798.2
Gross profit (loss)		358.3			140.4		(1.7	)		497.0
SG&A expenses		161.9			99.4		1.2			262.5
Loss related to change in fair value of contingent consideration		-			0.1		-			0.1
Equity (earnings) from unconsolidated affiliates, net		(89.3	)		-		-			(89.3	)
Segment operating income (loss)	$	285.7		$	40.9	$	(2.9	)	$	323.7

Segment assets	$	1,091.9		$	421.1	$	159.4		$	1,672.4
Investment in unconsolidated affiliates		17.4			-		-			17.4
Depreciation and amortization		75.3			13.9		-			89.2
Purchases of property, plant and equipment		67.2			16.6		-			83.8

For the year ended 2022	Mineral Fiber			Architectural Specialties		Unallocated Corporate			Total
Net sales to external customers	$	887.4		$	345.7	$	-		$	1,233.1
Cost of goods sold		559.4			222.3		2.3			784.0
Gross profit (loss)		328.0			123.4		(2.3	)		449.1
SG&A expenses		144.7			90.7		1.6			237.0
Loss related to change in fair value of contingent consideration		-			11.0		-			11.0
Equity (earnings) from unconsolidated affiliates, net		(77.6	)		-		-			(77.6	)
Segment operating income (loss)	$	260.9		$	21.7	$	(3.9	)	$	278.7

Segment assets	$	1,096.9		$	387.5	$	202.8		$	1,687.2
Investment in unconsolidated affiliates		23.9			-		-			23.9
Depreciation and amortization		69.5			14.2		-			83.7
Purchases of property, plant and equipment		63.8			11.0		-			74.8

In 2024, we sold an idled Mineral Fiber plant in St. Helens, Oregon for total proceeds of $9.4 million, with a $4.6 million gain recorded upon sale. Also in 2024, we sold a parcel of undeveloped land adjacent to our corporate campus in Lancaster, Pennsylvania within our Mineral Fiber segment for total proceeds of $12.8 million. Upon classification to held for sale during the third quarter of 2024, we recognized an impairment loss of $4.9 million and during the fourth quarter of 2024 we recognized a $0.3 million loss upon sale. Finally, in 2024 we sold a building and related land of an Architectural Specialties design center in Chicago, Illinois for total proceeds of $2.1 million, with no gain or loss recorded upon sale. The impact of these transactions is recorded within loss on sales of fixed assets, net on our Consolidated Statements of Earnings and Comprehensive Income.

The sum of the segments’ operating income (loss) equals the total consolidated operating income as reported on our Consolidated Statements of Earnings and Comprehensive Income. The following reconciles our total consolidated operating income to earnings (loss) from continuing operations before income taxes. These items are only measured and managed on a consolidated basis:


	2024			2023			2022
Total consolidated operating income	$	374.3		$	323.7		$	278.7
Interest expense		39.8			35.3			27.1
Other non-operating (income), net		(12.6	)		(9.9	)		(6.0	)
Earnings from continuing operations before income taxes	$	347.1		$	298.3		$	257.6

Accounting policies of the segments are the same as those described in the summary of significant accounting policies.

The sales in the table below are allocated to geographic areas based on the location of our selling entities.


	2024		2023		2022
Geographic Areas
Net sales
Mineral Fiber:
United States	$	909.5	$	854.2	$	816.3
Canada		76.5		78.2		71.1
Total Mineral Fiber		986.0		932.4		887.4

Architectural Specialties:
United States		448.8		349.3		322.1
Canada		10.9		13.5		23.6
Total Architectural Specialties		459.7		362.8		345.7
Total net sales	$	1,445.7	$	1,295.2	$	1,233.1

Our product-based Mineral Fiber and Architectural Specialties segment net sales represent the product-based group offerings we sell to external customers.


	2024		2023
Property, plant and equipment, net as of December 31,
Mineral Fiber:
United States	$	477.9	$	494.9
Total Mineral Fiber		477.9		494.9

Architectural Specialties:
United States		116.6		66.5
Canada		4.3		5.0
Total Architectural Specialties		120.9		71.5
Total property, plant and equipment, net	$	598.8	$	566.4