 Key Highlights Net sales of 203.2 million, down 25 versus the prior year quarter Operating income of 62.4 million, down 28 versus the prior year quarter Adjusted EBITDA down 36 versus the prior year quarter FY 2020 Outlook: Revenue down 10-18 and adjusted Free Cash Flow margin 22-25 Acquired Turf Design, the leading manufacturer of felt ceilings, walls, and barrier solutionsLANCASTER, Pa., July 28, 2020 GLOBE NEWSWIRE -- 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 second quarter of 2020.Second Quarter Results from Continuing OperationsDollar amounts in millions except per-share data For the Three Months Ended June 30, 2020 2019 Change Net sales 203.2 272 25.3 Operating income 62.4 87.2 28.4 Earnings from continuing operations 49.5 63.7 22.3 Diluted earnings per share 1.03 1.28 19.5 Net sales decreased compared to the prior year quarter, driven by lower volumes in both the Mineral Fiber and Architectural Specialties segments as a result of lower market demand due to COVID-19, as well as unfavorable Mineral Fiber AUV. The unfavorable AUV was driven by mix primarily due to regional weakness in major metropolitan areas impacted by COVID-19. Like for like price was positive in the quarter.Operating income decreased from the prior year quarter, driven primarily by lower volume in the Mineral Fiber segment and lower earnings from our WAVE joint venture, partially offset by lower SGA expenses and improved manufacturing productivity. The second quarter of 2020 also benefitted from a 14 million gain on the sale of our idled mineral fiber plant in China, which was reported as a component of our Unallocated Corporate segment. The second quarter of 2020 was unprecedented in many ways, and created numerous challenges for our teams and partners. I am pleased that the Armstrong team found ways to operate safely, prioritize the needs of our customers, and quickly pivot our focus to the products and solutions that will be needed as the economy reopens. We are seeing sequential improvement in the quarter and are focused on a future that will demand safer interior environments in schools, offices, healthcare facilities and other spaces, said Vic Grizzle, President and CEO of AWI. Im also very pleased to announce our acquisition of Chicago-based Turf Design. Turf is the leader in the fast growing specialty category of felt ceilings, walls and screening systems. This is an exciting acquisition for AWI, which further strengthens our leading position in specialty ceiling and wall solutions, and enhances our design and go-to-market capabilities and capacities. Lastly, in a demonstration of confidence in our continued cash flow generation, our Board of Directors has authorized an increase in our share repurchase program from 700 million to 1.2 billion and extended the term until 2023.Additional non-GAAP Financial Metrics from Continuing OperationsDollar amounts in millions except per-share data For the Three Months Ended June 30, 2020 2019 Change Adjusted EBITDA 69 108 36.3 Adjusted net income 36 63 42.7 Adjusted diluted earnings per share 0.75 1.27 40.6 Adjusted free cash flow 63 55 14.6 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 June 30, 2020 2019 Change Adjusted EBITDA Mineral Fiber 62 96 34.8 Architectural Specialties 6 12 47.9 Consolidated Adjusted EBITDA 69 108 36.3 Consolidated adjusted EBITDA declined 36 in the second quarter when compared to the same prior year period, driven primarily by lower volumes, partially offset by lower SGA expenses and improved manufacturing productivity. Second Quarter Segment HighlightsMineral FiberDollar amounts in millions For the Three Months Ended June 30, 2020 2019 Change Net sales as reported 157.9 214.1 26.2 Operating income as reported 45.6 79.4 42.6 Adjusted EBITDA 62 96 34.8 Mineral Fiber net sales decreased due to lower volume and unfavorable AUV. The unfavorable AUV was driven by mix due primarily to regional weakness in major metropolitan areas impacted by COVID-19. Like for like price was positive in the quarter. Operating income decreased in the second quarter primarily due to the negative impact of lower volumes, lower WAVE earnings and the impact of unfavorable AUV, partially offset by improved manufacturing productivity, higher Transition Service Agreement cost reimbursements, and a reduction in incentive compensation expenses.Architectural SpecialtiesDollar amounts in millions For the Three Months Ended June 30, 2020 2019 Change Net sales as reported 45.3 57.9 21.8 Operating income as reported 4.3 9.5 54.7 Adjusted EBITDA 6 12 47.9 Net sales in Architectural Specialties declined due to a reduction in demand across almost all product categories and geographies as a result of the COVID-19 pandemic.Operating income decreased due to the negative impact of lower sales volume, as well as additional amortization expense related to acquisitions made in 2019.Unallocated CorporateUnallocated corporate income of 13 million compared to 2 million of expense in the prior year quarter, primarily due to the 14 million gain on the sale of our idled mineral fiber plant in China.Year to Date Results from Continuing OperationsDollar amounts in millions For the Six Months Ended June 30, 2020 2019 Change Net sales as reported 451.9 514.1 12.1 Operating income as reported 138.4 141.9 2.5 Adjusted EBITDA 166 200 17.3 Net sales decreased driven mainly by lower volumes in both the Mineral Fiber and Architectural Specialties segments and unfavorable AUV in the Mineral Fiber segment. Operating income decreased from the prior year period, primarily due to decreased sales as a result of the COVID-19 pandemic, partially offset by the gain on sale of the idled China plant, lower SGA expenses and improved manufacturing productivity.Market and 2020 OutlookMarket conditions have been improving since April as more cities and states reopen construction sites. However, we continue to see variability in regional demand and, accordingly, have decided not to reinitiate our customary financial guidance for 2020 at this time. As we currently outlook the remainder of the year, assuming sequential market improvement and no second wave of market shutdowns, we expect sales for the full year to be down 10-18 and adjusted EBITDA margins to be greater than 35. We also continue to expect to generate a free cash flow margin of 25, said Brian MacNeal, CFO of AWI. Our balance sheet, liquidity, and ability to generate cash remain strong, and we are keeping a close eye on key economic indicators to help gauge the duration and severity of COVID-19s impact on the economy.Earnings Webcast Management will host a live internet broadcast beginning at 11:00 a.m. eastern time today, to discuss second quarter 2020 results. This event will be broadcast live on the Companys website. To access the call and accompanying slide presentation, go to and click Investors. The replay of this event will also be available on the Companys website for up to one year after the date of the call.Uncertainties Affecting Forward-Looking StatementsDisclosures 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 Managements 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. 