8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 28, 2019

ARMSTRONG WORLD INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	1-2116	23-0366390
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(IRS Employer Identification No.)
2500 Columbia Avenue P.O. Box 3001 Lancaster, Pennsylvania		17603
(Address of principal executive offices)		(Zip Code)

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

NA

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

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. ◻

Section 2 - Financial Information

Item 2.02 Results of Operations and Financial Condition.

On October 28, 2019, Armstrong World Industries, Inc. (the “Company”) issued a press release announcing its third quarter 2019 consolidated financial results. The full text of the press release is attached hereto as Exhibit 99.1.

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished herewith and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.

Section 7 – Regulation FD

Item 7.01 Regulation FD Disclosure.

On October 28, 2019, the Company issued a press release announcing that it will report its third quarter 2019 consolidated financial results via a webcast and conference call on Monday, October 28, 2019 at 11:00 a.m. Eastern Time which can be accessed through the “Investors” section of the Company’s website, www.armstrongceilings.com. During this report, the Company will reference a slide presentation, a copy of which is attached hereto as Exhibit 99.2 and incorporated herein by reference.

The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2, is being furnished herewith and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Act, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

No. 99.1	Press Release of Armstrong World Industries, Inc. dated October 28, 2019
No. 99.2	Earnings Call Presentation Third Quarter 2019 dated October 28, 2019
No. 104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

ARMSTRONG WORLD INDUSTRIES, INC.
By:	/s/ Mark A. Hershey
	Mark A. Hershey
	Senior Vice President, General Counsel, Secretary and Chief Compliance Officer

Date: October 28, 2019

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EX-99.1

Exhibit 99.1

Armstrong World Industries Reports

Third Quarter 2019 Results

Key Highlights

• Net sales of $277.1 million, up 6% versus the prior year quarter

• Operating income of $113.3 million, up 39% versus the prior year quarter

• Adjusted EBITDA grew 13% versus the prior year quarter

• Adjusted EPS grew 20% versus the prior year quarter

• Quarterly cash dividend increased 14%

LANCASTER, Pa., October 28, 2019 -- Armstrong World Industries, Inc. (NYSE:AWI), a leader in the design, innovation and manufacture of commercial and residential ceiling, wall and suspension system solutions, today reported financial results for the third quarter.

Third Quarter Results from Continuing Operations

(Dollar amounts in millions except per-share data)	For the Three Months Ended September 30,
	2019		2018		Change
Net sales	$	277.1	$	260.5		6.4	%
Operating income	$	113.3	$	81.3		39.4	%
Earnings from continuing operations	$	90.7	$	64.2		41.3	%
Diluted earnings per share	$	1.83	$	1.23		48.8	%

Consolidated net sales increased compared to the prior year quarter, driven by higher volumes in the Architectural Specialties segment, as well as higher Mineral Fiber average unit value (“AUV”), in which both positive like-for-like pricing and positive mix contributed.

Operating income increased over the prior year quarter, driven primarily by positive Mineral Fiber AUV, volume growth in the Architectural Specialties segment and higher equity earnings from our WAVE joint venture.  Included in equity earnings is a net $21 million gain on WAVE’s sale of its European and Pacific Rim businesses.  Excluding the net gain, WAVE’s equity earnings are up 16% compared to prior year.

The company also announced an agreement to purchase MRK Industries, a manufacturer of specialty metal ceilings and walls with annual revenues of approximately $14 million.  This transaction is expected to close in the fourth quarter of 2019.    

“This was another quarter of strong Architectural Specialties sales growth and Mineral Fiber operational performance,” said Vic Grizzle, President and CEO of AWI.  “I’m also pleased to announce another acquisition, which will be our fifth in the last three years.  With our robust pipeline, we expect our M&A activity to continue as we actively expand our strategic capabilities.  As previously reported, our Board approved a 14% increase to our regular quarterly dividend,reflecting a vote of confidence in our significant free cash flow generation and our ability to continue to grow free cash flow at double digits.”

Additional (non-GAAP*) Financial Metrics from Continuing Operations

(Dollar amounts in millions except per-share data)	For the Three Months Ended September 30,
	2019		2018		Change
Adjusted EBITDA	$	114	$	100		13.4	%
Adjusted net income	$	68	$	60		14.8	%
Adjusted diluted earnings per share	$	1.38	$	1.15		20.1	%
Adjusted free cash flow	$	99	$	74		34.1	%

* The Company uses the above non-GAAP adjusted measures in managing the business and believes the adjustments provide meaningful comparisons of operating performance between periods.  The Company also believes that the adjustments help users of our financial information understand the effect of those adjusted items on our selected reported results and provide useful alternative measurements of performance.  See Supplemental Reconciliations of GAAP to non-GAAP results (below) for a breakdown of the adjustments and a reconciliation of the selected reported results to these non-GAAP measures.

(Dollar amounts in millions)	For the Three Months Ended September 30,
	2019		2018		Change
Adjusted EBITDA
Mineral Fiber	$	99	$	88		12.7	%
Architectural Specialties		14		12		18.1	%
Consolidated Adjusted EBITDA	$	114	$	100		13.4	%

Consolidated adjusted EBITDA improved 13% in the third quarter when compared to the same prior year period, driven by favorable AUV fall-through to profit in the Mineral Fiber segment and volume growth in the Architectural Specialties segment.

Third Quarter Segment Highlights

Mineral Fiber

(Dollar amounts in millions)	For the Three Months Ended September 30,
	2019		2018		Change
Net sales (as reported)	$	218.6	$	212.8		2.7	%
Operating income (as reported)	$	103.5	$	71.8		44.2	%
Adjusted EBITDA	$	99	$	88		12.7	%

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Mineral Fiber net sales increased due to favorable AUV and higher volume.

Operating income increased driven by higher equity earnings from WAVE due to WAVE’s gain on the sale of its European and Pacific Rim businesses, the margin impact of higher sales and lower SG&A expenses.

Architectural Specialties

(Dollar amounts in millions)	For the Three Months Ended September 30,
	2019		2018		Change
Net sales (as reported)	$	58.5	$	47.7		22.6	%
Operating income (as reported)	$	11.6	$	11.3		2.7	%
Adjusted EBITDA	$	14	$	12		18.1	%

Net sales in Architectural Specialties grew primarily from higher sales volume through increased market penetration, as well as the recent acquisitions of ACGI, Plasterform and Steel Ceilings.  

Operating income increased due to the positive impact of higher sales volume, partially offset by additional investments in selling and design capacities.

Unallocated Corporate

Unallocated corporate expense of $1.8 million was flat with the prior year quarter.

Year to Date Results from Continuing Operations

(Dollar amounts in millions)	For the Nine Months Ended September 30,
	2019		2018		Change
Net sales (as reported)	$	791.2	$	736.4		7.5	%
Operating income (as reported)	$	255.2	$	196.9		29.6	%
Adjusted EBITDA	$	314	$	274		14.5	%

Net sales increased driven mainly by volume growth in the Architectural Specialties segment and higher AUV in the Mineral Fiber segment, in which both positive mix and positive like-for-like pricing contributed.

Operating income increased over the prior year period, primarily through increased sales, lower manufacturing expenses and higher equity earnings from WAVE, which included a gain on the sale of its European and Pacific Rim businesses.

Market Outlook and 2019 Guidance

“We are tightening our guidance ranges as we enter the fourth quarter.  Our updated sales expectation is now $1.04 to $1.05 billion, an annual growth of 7% to 8%, and our adjusted EBITDA expectation is now $400 to $405 million, an annual growth of 13% to 15%” said Brian MacNeal, CFO of AWI.

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Earnings Webcast

Management will host a live Internet broadcast beginning at 11:00 a.m. Eastern time today, to discuss third quarter results. This event will be broadcast live on the Company's website. To access the call and accompanying slide presentation, go to www.armstrongceilings.com and click Investors. The replay of this event will also be available on the Company's website for up to one year after the date of the call.

Uncertainties Affecting Forward-Looking Statements

Disclosures in this release, including without limitation, those relating to future financial results, market conditions and guidance, and in our other public documents and comments, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements provide our future expectations or forecasts and can be identified by our use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “outlook,” “target,” “predict,” “may,” “will,” “would,” “could,” “should,” “seek,” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance.Forward-looking statements, by their nature, address matters that are uncertain and involve risks because they relate to events and depend on circumstances that may or may not occur in the future. As a result, our actual results may differ materially from our expected results and from those expressed in our forward-looking statements. A more detailed discussion of the risks and uncertainties that could cause our actual results to differ materially from those projected, anticipated or implied is included in the “Risk Factors” and “Management’s Discussion and Analysis” section of our report on Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”). Forward-looking statements speak only as of the date they are made. We undertake no obligation to update any forward-looking statements beyond what is required under applicable securities law.

About Armstrong and Additional Information

More details on the Company’s performance can be found in its quarterly report on Form 10-Q for the quarter ended September 30, 2019 that the Company expects to file with the SEC today.

Armstrong World Industries, Inc. (AWI) is a leader in the design and manufacture of innovative commercial and residential ceiling, wall and suspension system solutions in the Americas. With approximately $1 billion in revenue, AWI has approximately 2,500 employees and a manufacturing network of 11 facilities.  For more information, visit www.armstrongceilings.com.

Additional forward looking non-GAAP metrics are available on the Company’s website at www.armstrongceilings.com under the Investors tab. The website is not part of this release and references to our website address in this release are intended to be inactive textual references only.

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As Reported Financial Highlights

FINANCIAL HIGHLIGHTS

Armstrong World Industries, Inc. and Subsidiaries

(Amounts in millions, except for per-share amounts, quarterly data is unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended 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 of $2.5, ($0.5), $7.2 and $1.2		4.8			5.0			3.0			14.4
(Loss) from disposal of discontinued businesses, net of tax expense (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

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SEGMENT RESULTS

Armstrong World Industries, Inc. and Subsidiaries

(Amounts in millions)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Net sales to external customers
Mineral Fiber	$	218.6		$	212.8		$	629.4		$	610.2
Architectural Specialties		58.5			47.7			161.8			126.2
Total net sales to external customers	$	277.1		$	260.5		$	791.2		$	736.4
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
Segment operating income (loss)
Mineral Fiber	$	103.5		$	71.8		$	230.5		$	175.0
Architectural Specialties		11.6			11.3			30.3			28.2
Unallocated Corporate		(1.8	)		(1.8	)		(5.6	)		(6.3	)
Total consolidated operating income	$	113.3		$	81.3		$	255.2		$	196.9

Selected Balance Sheet Information

(Amounts in millions)

	Unaudited September 30, 2019		December 31, 2018
Assets
Current assets	$	296.7	$	717.6
Property, plant and equipment, net		508.8		501.0
Other noncurrent assets		704.2		619.7
Total assets	$	1,509.7	$	1,838.3
Liabilities and shareholders’ equity
Current liabilities	$	142.2	$	549.5
Noncurrent liabilities		1,000.2		1,062.8
Equity		367.3		226.0
Total liabilities and shareholders’ equity	$	1,509.7	$	1,838.3

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Selected Cash Flow Information

(Amounts in millions)

(Unaudited)

	For the Three Months Ended September 30,
	2019			2018
Net earnings	$	166.8		$	151.3
Other adjustments to reconcile net earnings to net cash provided by operating activities		45.6			22.6
Changes in operating assets and liabilities, net		(91.0	)		(14.9	)
Net cash provided by operating activities		121.4			159.0
Net cash (used for) provided by investing activities		(70.9	)		285.9
Net cash (used for) financing activities		(289.0	)		(262.5	)
Effect of exchange rate changes on cash and cash equivalents		0.8			(5.0	)
Net (decrease) increase in cash and cash equivalents		(237.7	)		177.4
Cash and cash equivalents at beginning of year		335.7			159.6
Cash and cash equivalents at end of period	$	98.0		$	337.0

Supplemental Reconciliations of GAAP to non-GAAP Results (unaudited)

(Amounts in millions, except per share data)

To supplement its consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company provides additional measures of performance adjusted to exclude the impact of certain discrete expenses and income.  Examples include plant closures, restructuring charges and related costs, impairments, separation costs, environmental site expenses and related insurance recoveries, and certain other gains and losses.The Company also excludes U.S. pension income/expense in the non-GAAP results as it represents the actuarial net periodic benefit credit/cost recorded as a component of operating income. For all periods presented, the Company was not required and did not make cash contributions to the U.S. Retirement Income Plan based on guidelines established by the Pension Benefit Guaranty Corporation, nor does the Company expect to make cash contributions to the plan in 2019. Adjusted free cash flow is defined as cash from operating and investing activities, adjusted to remove the impact of cash used or proceeds received for acquisitions and divestitures, legacy environmental matters and litigation. The Company believes adjusted free cash flow is useful because it provides insight into the amount of cash that the Company generates for discretionary uses, after expenditures for capital commitments and adjustments for acquisitions and divestitures. The Company uses these adjusted performance measures in managing the business, including communications with its Board of Directors and employees, and believes that they provide users of this financial information with meaningful comparisons of operating performance between current results and results in prior periods. The Company believes that these non-GAAP financial measures are appropriate to enhance understanding of its past performance, as well as prospects for its future performance. A reconciliation of these adjustments to the most directly comparable GAAP measures is included in this release and on the Company’s website. These non-GAAP measures should not be considered in isolation or as a substitute for the most comparable GAAP measures. Non-GAAP financial measures utilized by the Company may not be comparable to non-GAAP financial measures used by other companies.

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In the following charts, numbers may not sum due to rounding.

Consolidated Results From Continuing Operations – Adjusted EBITDA

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Earnings from continuing operations, Reported	$	91		$	64		$	191		$	153
Add: Income tax expense, as reported		16			16			49			42
Earnings before tax, Reported	$	107		$	81		$	240		$	195
Add: Interest/other income and expense, net		7			1			16			2
Operating Income, Reported	$	113		$	81		$	255		$	197
Add: U.S. Pension Cost (1)		1			1			4			4
Add: WAVE Pension Settlement (2)		-			-			1			-
Add: Litigation Expense		-			3			20			3
Add: Cost Reduction Initiatives		-			2			-			7
Add: Net Proforma International Allocations, Other		1			1			-			5
Add/(Less): Net Environmental Expenses (Recoveries)		1			(5	)		1			(3	)
Add: WAVE FSA (3)		4			-			4			-
(Less): AWI Portion of WAVE's Gain on Sale to Knauf		(25	)		-			(25	)		-
Operating Income, Adjusted	$	95		$	84		$	260		$	214
Add: D&A		19			17			53			60
Adjusted EBITDA	$	114		$	100		$	314		$	274

(1) U.S. pension expense represents only the service cost related to the U.S. pension plan that is recorded within Operating Income. For all periods presented, we were not required and did not make cash contributions to our U.S. Retirement Income Plan.

(2) WAVE settled a portion of their pension plan that resulted in a non-cash accounting charge.

(3) WAVE Fresh Start Accounting asset amortization.

Mineral Fiber

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Operating Income, Reported	$	104		$	72		$	231		$	175
Add: WAVE Pension Settlement (1)		-			-			1			-
Add: Litigation Expense		-			3			20			3
Add: Cost Reduction Initiatives		-			2			-			7
Add: Net Proforma International Allocations, Other		1			-			-			3
Add/(Less): Net Environmental Expenses (Recoveries)		1			(6	)		1			(3	)
Add: WAVE FSA (2)		4			-			4			-
(Less): AWI Portion of WAVE's Gain on Sale to Knauf		(25	)		-			(25	)		-
Operating Income, Adjusted	$	84		$	71		$	232		$	185
Add: D&A		16			17			45			60
Adjusted EBITDA	$	99		$	88		$	277		$	244

(1) WAVE settled a portion of their pension plan that resulted in a non-cash accounting charge.

(2) WAVE Fresh Start Accounting asset amortization.

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Architectural Specialties

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2019		2018		2019		2018
Operating Income, Reported	$	12	$	11	$	30	$	28
Add: D&A		3		1		6		2
Adjusted EBITDA	$	14	$	12	$	36	$	30

Unallocated Corporate

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Operating (Loss), Reported	$	(2	)	$	(2	)	$	(6	)	$	(6	)
Add: U.S. Pension Cost (1)		1			1			4			4
Add: Net Proforma International Allocations, Other		-			1			-			2
Operating (Loss), Adjusted	$	(1	)	$	-		$	(2	)	$	-
Add: D&A		1			-			2			-
Adjusted EBITDA	$	-		$	-		$	-		$	-

(1) U.S. pension expense represents only the service cost related to the U.S. pension plan that is recorded within Operating Income. For all periods presented, we were not required and did not make cash contributions to our U.S. Retirement Income Plan.

Adjusted Free Cash Flow

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2019			2018			2019			2018
Net cash provided by operations	$	74		$	70		$	121		$	159
Net cash provided by (used for) investing activities		(39	)		287			(71	)		286
Add: Acquisitions, net		-			12			43			24
Add: Litigation, net		-			-			20			-
Add/(Less): Environmental Payments (Recoveries), net		9			1			4			(26	)
Add/(Less): Proceeds from sale of international, net (1)		55			(295	)		55			(295	)
(Less): Other		-			(1	)		-			-
Adjusted Free Cash Flow	$	99		$	74		$	173		$	148

(1) Includes related income tax payments.

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Consolidated Results From Continuing Operations – Adjusted Diluted Earnings Per Share

	For the Three Months Ended September 30,											For the Nine Months Ended September 30,
	2019						2018					2019						2018
	Total			Per Diluted Share			Total			Per Diluted Share		Total			Per Diluted Share			Total			Per Diluted Share
Earnings from continuing operations, As Reported	$	91		$	1.83		$	64		$	1.23	$	191		$	3.84		$	153		$	2.89
Add: Income tax expense, as reported		16						16					49						42
Earnings from continuing operations before income taxes, As Reported	$	107					$	81				$	240					$	195
(Less): U.S. Pension (Credit) (1)		(2	)					(7	)				(6	)					(20	)
Add: WAVE Pension Settlement (2)		-						-					1						-
Add: Litigation Expense		-						3					20						3
Add: Cost Reduction Initiatives		-						3					-						21
Add: Net Proforma International Allocations, Other		1						1					-						5
Add/(Less): Net Environmental Expenses (Recoveries)		1						(5	)				1						(3	)
Add: WAVE FSA (3)		4						-					4						-
(Less): AWI Portion of WAVE's Gain on Sale to Knauf		(25	)					-					(25	)					-
Adjusted earnings from continuing operations before income  taxes	$	85					$	75				$	235					$	201
(Less): Adjusted Income tax expense (4)		(17	)					(15	)				(54	)					(44	)
Adjusted net income	$	68		$	1.38		$	60		$	1.15	$	181		$	3.66		$	158		$	2.99
Adjusted EPS Change versus Prior Year					20	%										22	%
Diluted Shares Outstanding	49.6						51.9					49.6						52.8
As Reported Tax Rate (5)	20%						20%					23%						22%

(1) U.S. pension (credit) represents the entire actuarial net periodic pension (credit) recorded as a component of earnings from continuing operations. For all periods presented, we were not required and did not make cash contributions to our U.S. Retirement Income Plan.

(2) WAVE settled a portion of their pension plan that resulted in a non-cash accounting charge.

(3) WAVE Fresh Start Accounting asset amortization.

(4) Adjusted tax expense is calculated using the as reported tax rate multiplied by the adjusted earnings from continuing operations before income taxes.

(5) As reported tax rate for 2019 is actual tax rate excluding WAVE’s gain on sale to Knauf.  

10

EX-99.2

Earnings Call Presentation 3rd Quarter 2019 October 28, 2019 Exhibit 99.2

Our disclosures in this presentation, including without limitation, those relating to future financial results market conditions and guidance, and in our other public documents and comments contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Those statements provide our future expectations or forecasts and can be identified by our use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “outlook,” “target,” “predict,” “may,” “will,” “would,” “could,” “should,” “seek,” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. Forward-looking statements, by their nature, address matters that are uncertain and involve risks because they relate to events and depend on circumstances that may or may not occur in the future. As a result, our actual results may differ materially from our expected results and from those expressed in our forward-looking statements. A more detailed discussion of the risks and uncertainties that may affect our ability to achieve the projected performance is included in the “Risk Factors” and “Management’s Discussion and Analysis” sections of our reports on Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”). Forward-looking statements speak only as of the date they are made. We undertake no obligation to update any forward-looking statements beyond what is required under applicable securities law. In addition, we will be referring to non-GAAP financial measures within the meaning of SEC Regulation G. A reconciliation of the differences between these measures with the most directly comparable financial measures calculated in accordance with GAAP are included within this presentation and available on the Investor Relations page of our website at www.armstrongceilings.com. The guidance in this presentation is only effective as of the date given, October 28, 2019 and will not be updated or affirmed unless and until we publicly announce updated or affirmed guidance. Safe Harbor Statement

All figures throughout the presentation are in $ millions unless otherwise noted. Figures may not add due to rounding. When reporting our financial results within this presentation, we make several adjustments. Management uses these non-GAAP measures in managing the business and believes the adjustments provide meaningful comparisons of operating performance between periods. As reported results will be footnoted throughout the presentation. Basis of Presentation Explanation Results throughout this presentation are presented on a normalized basis with the exception of cash flow. With the sale of our EMEA and Pacific Rim businesses, we no longer adjust our sales for movements in foreign exchange rates as we expect these to have minimal impact on revenue. We remove the impact of certain discrete expenses and income. Examples include plant closures, restructuring actions, separation costs, environmental site expenses and related insurance recoveries, and other large unusual items. We also adjust for our U.S. pension plan (credit) expense(1). We are using actual tax rates to report 2019 and 2018 results as well as in our guidance for 2019. Prior to this year we used a normalized book tax rate when reporting EPS. U.S. pension (credit) expense represents the actuarial net periodic benefit cost expected to be recorded as a component of earnings from continuing operations. For all periods presented, we were not required and did not make cash contributions to our U.S. Retirement Income Plan based on guidelines established by the Pension Benefit Guaranty Corporation.

Consolidated Company Key Metrics-Third Quarter 2019 (1) As reported EPS: $1.28 in 2019 and $0.90 in 2018 2019 2018 Variance Net Sales $277.10000000000002 $0 $260.5 6.3723608445297675E-2 Adj. EBITDA $113.5 $0 $100.08 $0 0.1340927258193445 % of Sales 0.40959942259112231 0.3841842610364683 250 Adj. Earnings Per Share (1) $1.3772415785584677 $1.146866625130883 0.20087336084201923 Adj. Free Cash Flow $99.200000000000045 $74 0.34054054054054117 Net Debt $552.5 $494.09999999999997 $58.400000000000034

Adjusted EBITDA Bridge – Third Quarter 2019 vs. PY $7 $3 $1 ($2) $2 $3 Positive price realization in Mineral Fiber segment coupled with a 23% increase in Architectural Specialties sales drove adjusted EBITDA up 13%

Adjusted Free Cash Flow Bridge - Third Quarter 2019 vs. PY ($2) Strong cash earnings growth slightly offset by increased CapEx and interest $22 ($2) $8 ($2) (1) NOTE: Adjustments include cash used or proceeds received for acquisitions and divestures, legacy environmental matters and litigation (1) Includes cash earnings, working capital and other current assets and liabilities $99

Average Unit Value (AUV) expanded 2% versus the prior year quarter Manufacturing gains driven by productivity and the benefits of St Helens plant closure in 2018 WAVE equity earnings increased 16% driven by positive volume and mix Mineral Fiber Third Quarter Results EBITDA growth driven by Average Unit Value (AUV), productivity & WAVE Key Highlights Q1 Q2 Q3 2018 Adjusted EBITDA $70 $86 $88 Current Quarter Comments AUV 15 11 4 Fall through of mix and price Volume (8) (3) - Manufacturing 4 1 3 Productivity and benefits from 2018 restructuring Input costs (3) (1) 1 Lower energy and freight costs SG&A 2 4 1 WAVE 2 (2) 3 Fall through of volume and mix 2019 Adjusted EBITDA $82 $96 $99 Margins expanded 400 bps % Change 17% 11% 13%

Sales up 23% driven by increases in both base business and M&A Adjusted EBITDA up 18% as sales gains were partially offset by higher manufacturing and SG&A investments Architectural Specialties Third Quarter Results Continued strong sales and profit performance Key Highlights Q1 Q2 Q3 2018 Adjusted EBITDA $9 $9 $12 Current Quarter Comments Sales 5 7 7 Strong sales growth falls through to bottom line Period Expense (2) (1) (2) Manufacturing expenses relating to acquisitions SG&A (2) (3) (3) SG&A expenses relating to acquisitions 2019 Adjusted EBITDA $10 $12 $14 Margins contracted 100 bps, Organic margins expanded 210 bps % Change 15% 39% 18%

Consolidated Company Key Metrics – YTD 2019 As reported EPS: $3.63 in 2018 2019 2018 Variance Net Sales $791.24 $0 $736.36699999999996 7.4999999999999997E-2 Adj. EBITDA $313.53100000000001 $0 $273.80099999999999 $0 0.14510538675899665 % of Sales 0.39625271725393052 0.37182682005032819 240 Adj. Earnings Per Share (1) $3.66 $2.99 0.22408026755852828 Adj. Free Cash Flow $172.9 $148.19999999999999 0.1666666666666668

Adjusted EBITDA Bridge – YTD 2019 vs. PY $8 $29 ($3) $1 $5 $2 Strong price and mix drive adjusted EBITDA up 15% ($3) (1) (1) Other includes discontinued operation costs recognized in the Americas and international cost allocation adjustments.

Adjusted Free Cash Flow Bridge – YTD 2019 vs. PY $17 Strong cash earnings offset by timing of income tax ($3) $2 $11 ($2) $173

2019 Guidance $4.40 – $4.50 21% – 23% YoY Growth $3.66 Adjusted EBITDA Adjusted EPS* Adjusted Free Cash Flow Revenue $975 $353 $1,040 - $1,050 7% – 8% YoY Growth $400 - $405 13%-15% YoY Growth (3%)-(1%) Mineral Fiber volume 5% - 7% Average Unit Value (AUV) increase >15% Architectural Specialties volume 1-3 Acquisitions – add 1% - 3% Earnings contribution from AUV Architectural Specialties volume contribution Manufacturing productivity Second year of restructuring savings $65 - $70 of total capital expenditures Cash tax rate 20% - 25% No special dividend from WAVE in 2019 2018 Actual Updated 2019 Guidance $40 of interest expense 25% book tax rate 49.5 million average diluted shares outstanding $225 - $235 7% - 11% growth ex WAVE special dividend $236 *As reported EPS: $3.63 in 2018 Green Bold = Change $4.30 – $4.60 18% – 26% YoY Growth $1,040 - $1,075 7% – 10% YoY Growth $390 - $410 >10% Growth Prior 2019 Guidance $220 - $240 4% - 14% growth ex WAVE special dividend

Appendix

Adjusted EBITDA Reconciliation U.S. pension expense represents only the service cost related to the U.S. pension plan that is recorded within Operating Income. For all periods presented, we were not required and did not make cash contributions to our U.S. Retirement Income Plan. WAVE settled a portion of their pension plan that resulted in a non-cash accounting charge. WAVE Fresh Start Accounting asset amortization. CONSOLIDATED For the Three Months Ended September 30, For the Nine Months Ended September 30, qtr YTD 2019 2018 V 2019 2018 V Earnings from continuing operations, Reported 90.7 64.200000000000017 26.499999999999986 190.80000000000007 153 37.800000000000068 rounding Add: Income tax expense, as reported 16 16.399999999999999 0 48.8 42.3 6.5 Earnings before tax, Reported 106.7 80.600000000000009 26.099999999999994 239.60000000000005 195.29999999999998 44.300000000000068 rounding Add: Interest/other income and expense, net 6.6000000000000032 0.70000000000000107 5.9000000000000021 15.600000000000001 1.5999999999999979 14.000000000000004 Operating Income, Reported 113.3 81.3 32 255.20000000000002 196.89999999999998 58.30000000000004 Add: U.S. Pension Cost (1) 1.1902507499999999 1.4346807500000001 0 3.57077475 4.3040422500000002 -0.73326750000000018 Add: WAVE Pension Settlement (2) 0 0 0 1.2182105000000001 0 1.2182105000000001 Add: Litigation Expense 0 2.7 -2.7 19.576218000000001 2.7 16.876218000000001 Add: Cost Reduction Initiatives 0 2 -2 0 7 -7 changed c12 to a dash from $0 (redo formula) Add: Net Proforma International Allocations, Other 0.5 0.90640799999999988 0 0 4.8390000000000004 -4.8390000000000004 Add/(Less): Net Environmental Expenses (Recoveries) 0.83229399999999998 -5.3599999999999994 6.1922939999999995 0.82098799999999994 -2.9259499999999998 3.7469379999999997 Add: WAVE FSA (3) 4.3963679999999998 0 4.3963679999999998 4.3963679999999998 0 4.3963679999999998 (Less): AWI Portion of WAVE's Gain on Sale to Knauf -25.473917 0 -25.473917 -25.121790059999999 0 -25.121790059999999 Add: D&A 18.886794249999994 16.512271249999998 2.3745229999999964 53.470230810000032 59.880613750000009 -6.4103829399999768 Adjusted EBITDA 113.5 100.08 13.420000000000002 313.53100000000001 273.80099999999999 39.730000000000018 rounding 0.13409272581934453 0.14510538675899656

Adjusted Diluted Earnings Per Share Reconciliation U.S. pension (credit) represents the entire actuarial net periodic pension (credit) cost recorded as a component of earnings from continuing operations. For all periods presented, we were not required and did not make cash contributions to our U.S. Retirement Income Plan. WAVE settled a portion of their pension plan that resulted in a non-cash accounting charge. WAVE Fresh Start Accounting asset amortization. Adjusted tax expense is calculated using the as reported tax rate multiplied by the adjusted earnings from continuing operations before income taxes. We have updated our previously reported first quarter results to be consistent with this methodology. As reported tax rate for 2019 is actual tax rate excluding WAVE’s gain on sale to Knauf. CONSOLIDATED For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 Per Diluted 2018 Per Diluted V 2019 Per Diluted 2018 Per Diluted V Share Share Share Share Earnings from continuing operations, As Reported $90.7 $1.83 $64 $1.23 $26.700000000000003 $190.80000000000007 $3.84 $153 $2.89 $37.800000000000068 Add: Income tax expense, as reported $16 $16 0 $48.8 $42.3 $6.5 Earnings from continuing operations before income taxes, As Reported $106.7 $81 $25.700000000000003 $239.60000000000008 $195.3 $44.300000000000068 (Less): U.S. Pension (Credit) (1) $-1.8847795000000001 $-6.5689367499999998 $4.6841572500000002 $-5.6543384999999997 $-19.70681025 $14.05247175 Add: WAVE Pension Settlement (2) 0 0 0 $1.2182105000000001 0 $1.2182105000000001 Add: Litigation Expense 0 $2.7 $-2.7 $19.576218000000001 $2.7 $16.876218000000001 Add: Cost Reduction Initiatives 0 $2.5 $-2.5 0 $20.5 $-20.5 Add: Net Proforma International Allocations, Other $0.5 $0.90640799999999988 0 0 $4.8390000000000004 $-4.8390000000000004 $0 Add/(Less): Net Environmental Expenses (Recoveries) $0.83229399999999998 $-5.3599999999999994 $6.1922939999999995 $0.82098799999999994 $-2.9259499999999998 $3.7469379999999997 0 Add: WAVE FSA (3) $4.3963679999999998 0 $4.3963679999999998 $4.3963679999999998 0 $4.3963679999999998 (Less): AWI Portion of WAVE's Gain on Sale to Knauf $-25.473917 0 $-25.473917 $-25.121790059999999 0 $-25.121790059999999 Adjusted earnings from continuing operations before income taxes $85.069965500000009 $74.777471250000019 $10.29249424999999 $234.83565594000012 $200.70623975000001 $34.129416190000114 (Less): Adjusted Income tax expense (4) $-16.758783203500002 $-15.215267102977666 $-1.5435161005223357 $-53.542529554320033 $-43.5 $-10.042529554320033 Adjusted net income $68.311182296500007 $1.3772415785584677 $59.562204147022356 $1.1476339912721072 $8.7489781494776508 $181.2931263856801 $3.66 $158 $2.99 $23.293126385680097 Adjusted EPS Change versus Prior Year 0.20007039616511321 0.22408026755852839 Diluted Shares Outstanding 49.6 51.9 49.6 52.8 As reported Tax Rate 0.19700000000000001 0.2034739454094292 0.22800000000000001 0.21658986175115205

Adjusted Free Cash Flow Reconciliation Prior year Adjusted Free Cash Flow did not adjust for Environmental Recoveries in the first quarter. Includes related income tax payments. Adjusted free cash flow is defined as cash from operations and dividends received from the WAVE joint venture, less expenditures for property and equipment, and is adjusted to remove the impact of cash used or proceeds received for acquisitions and divestitures, legacy environmental matters and litigation. The Company believes adjusted free cash flow is useful because it provides insight into the amount of cash that the Company has available for discretionary uses, after expenditures for capital commitments and adjustments for acquisitions and divestitures. Free cash flow includes discontinued international operations. For the Three Months Ended September 30, For the Nine Months Ended September 30, 2019 2018 V 2019 2018 V As Reported Net cash provided by operating activities $74.400000000000034 $70.000000000000014 $4.4000000000000199 $121.4 $159 $-37.599999999999994 As Reported Net cash provided by (used for) investing activities $-39.29999999999999 $287.2 $-,326.5 $-70.899999999999991 $285.89999999999998 $-,356.79999999999995 Subtotal $35.100000000000044 $357.2 $-,322.9999999999997 $50.500000000000014 $444.9 $-,394.4 Add: Acquisitions, net - $12.4 $-12.4 $43.4 $24 $19.399999999999999 Add: Litigation, net - - - $20 - $20 Add/(Less): Environmental Payments (Recoveries), net (1) $8.9 $1.4 $7.5 $4.0999999999999996 $-25.7 $29.799999999999997 Add/(Less): Proceeds from sale of international, net (2) $55 $-,295 $350 $54.9 $-,295 $349.9 (Less): Other - $-1.4 - - - - Adjusted Free Cash Flow (3) $99.000000000000043 $74 $25.000000000000043 $172.9 $148.19999999999999 $24.7 0.33783783783783844 0.16666666666666669

Segment Reported Operating Income (Loss) to Adjusted EBITDA U.S. pension expense represents only the service cost related to the U.S. pension plan that is recorded within Operating Income. For all periods presented, we were not required and did not make cash contributions to our U.S. Retirement Income Plan. Wave settled a portion of their pension plan that resulted in a non-cash accounting charge. WAVE Fresh Start Accounting asset amortization. MINERAL FIBER ARCHITECTURAL SPECIALTIES UNALLOCATED CORPORATE For the Three Months Ended September 30, 2016 V 2019 2018 V 2019 2018 V 2019 2018 V Operating Income (Loss) – As Reported 103.5 71.8 31.700000000000003 11.600000000000001 11.3 0 -1.7999999999999996 -1.8 0 Add: U.S. Pension Cost (1) 0 0 0 0 0 0 1.1902507499999999 1.4346807500000001 0 Add: Litigation Expense 0 2.7 -2.7 0 0 0 0 0 0 Add: Cost Reduction Initiatives 0 2.4500000000000002 -2.4500000000000002 0 0 0 0 0 0 Add: Net Proforma International Allocations, Other 0.5 0 0.5 0 0 0 0 0.60640799999999995 -0.60640799999999995 Add/(Less): Net Environmental Expenses (Recoveries) 0.83229399999999998 -5.81 6.6422939999999997 0 0 0 0 0 0 Add: WAVE FSA (3) 4.3963679999999998 0 4.3963679999999998 0 0 0 0 0 0 (Less): AWI Portion of WAVE's Gain on Sale to Knauf -25.473917 0 -25.473917 0 0 0 0 0 0 Less: Depreciation and Amortization 15.666044999999997 16.655000000000001 -0.98895500000000425 2.5619999999999994 0.62799999999999834 1.9340000000000011 0.60974924999999969 -0.71772875000000003 1.3274779999999997 EBITDA – Adjusted 99.289000000000001 88.094999999999999 11.194000000000003 14.162000000000001 11.988 2.1740000000000013 0 0 0 0.13 0.18

Net Sales & EBITDA – Guidance Reconciliation Net Sales Adjusted EBITDA For the Year Ending December 31, 2019 Low to High Reported Net Sales $1,040 to $1,050 For the Year Ending December 31, 2019 Low to High Net income $232.5 to $236.3 Add: Interest expense 40 40 Add: Income tax expense 72.5 73.8 (Less): U.S. pension (credit) -15 -15 Add: D&A 70 70 Adjusted EBITDA $400 to $405.1

Adjusted EPS & Free Cash Flow – Guidance Reconciliation Adjusted Diluted Earnings Per Share Adjusted Free Cash Flow Adjusted EPS guidance for 2019 is calculated based on an estimated effective tax rate of 25% and on 49.5 million of diluted shares outstanding. For the Year Ending December 31, 2019 Low to High Net cash provided by operating activities $220 to $235 Add: Return of investment from joint venture 70 70 Adjusted net cash provided by operating activities $290 to $305 (Less): Capital Expenditures -65 -70 Adjusted Free Cash Flow $225 to $235 For the Year Ending December 31, 2019 Low Per DilutedShare(1) to High Per DilutedShare(1) Net Income $232.5 $4.7 to $236.3 $4.8 low high Add: Interest expense 40 40 (Less): U.S. Pension credit -15 -15 Add: Income tax expense 72.5 73.8 (Less): Interest expense -40 -40 (Less): Income tax expense -72.5 -73.8 rate 0.25 0.25 Adjusted Net Income $217.5 $4.4000000000000004 to $221.3 $4.5 shares 49 49 $226.25 $4.6173469387755102 to $241.3 $4.924489795918368 $40 $40 $-20 $-20 $68.775000000000006 $73.775000000000006 $315.10000000000002 $335.1 $5 $5 $-40 $-40 $280.10000000000002 to $300.10000000000002 $-70.025000000000006 $-75.025000000000006 $210.07500000000002 $4.2872448979591837 to $225.07500000000002 $4.5933673469387761

XML

Document And Entity Information	Oct. 28, 2019
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 28, 2019
Entity Registrant Name	ARMSTRONG WORLD INDUSTRIES, INC.
Entity Central Index Key	0000007431
Trading Symbol	AWI
Entity Emerging Growth Company	false
Entity Incorporation, State or Country Code	PA
Entity File Number	1-2116
Entity Tax Identification Number	23-0366390
Entity Address, Address Line One	2500 Columbia Avenue P.O. Box 3001
Entity Address, City or Town	Lancaster
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	17603
City Area Code	(717)
Local Phone Number	397-0611
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.01 par value per share
Security Exchange Name	NYSE