Armstrong World Industries Inc

I would like to welcome everyone to the Armstrong World Industries' four-quarter and full year 2024 earnings call. All lines have been placed in mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star again. Thank you. I would now like to turn the call over to Teresa Womble, VP of Investor Relations and Corporate Communication. You may begin your conference.

Thank you, John, and welcome everyone to our call this morning. On today's call, we have Vic Rizal, our CEO, and Chris Casareta, our CFO, to discuss Armstrong World Industries' fourth quarter and full year 2024 results and our 2025 outlook. We have provided a presentation to accompany these results that is available on the Investors section of the Armstrong World Industries website. Our discussion of operating and financial performance today will include non-GAAP financial measures within the meaning of SEC Regulation G. A reconciliation of these measures with the most directly comparable GAAP measures is included in the earnings press release and in the appendix of the presentation issued this morning. During our call, we will be making forward-looking statements that represent the view we have of our financial and operating performance as of today's date, February 25, 2025. These statements involve risks and uncertainties that may differ materially from those expected or implied. We provide a detailed discussion of the risks and uncertainties in our SEC filings, including the 10-K filed earlier this morning. We undertake no obligation to update any forward-looking statement beyond what is required by applicable securities law. Now, I will turn the call over to Vic.

Thank you, Theresa. Good morning, and thank you all for joining our call. Today, we announced record-setting fourth quarter and full year 2024 results as our teams continue to execute our strategic priorities and deliver consistent growth. At the total company level for the full year, our net sales increased nearly 12% from 2023 results, and our adjusted EBITDA grew 13%, with our adjusted EBITDA margin expanding 50 basis points. Our adjusted free cash flow also rose 13%, and our adjusted diluted earnings per share were up 19%. This marks the fourth consecutive year we have generated net sales and earnings growth in the face of challenging market conditions. This would not have been possible without the dedication and relentless focus on execution by our teams. I'm extremely proud of our team's commitment to consistent execution, excellence and innovation, and to serving our customers well, all of which enabled these record-setting results. So I want to say thank you to all of our 3,600 Armstrong colleagues and to our distribution and channel partners who we work closely with to deliver for our customers. Both mineral fiber and architectural specialty segments positively contribute to these record-setting results. Mineral fiber ended the year with approximately 6% net sales growth, 11% adjusted EBITDA growth, and adjusted EBITDA margin expansion of more than 200 basis points. And with the addition of two acquisitions, 3Form and Zaner, architectural specialties generated year-over-year net sales growth of 27% and adjusted EBITDA growth of 24%. Importantly, on an organic basis, the architectural specialty segment also expanded adjusted EBITDA margin by 40 basis points to approximately 19%. This furthers our progress toward our goal of a 20% margin in this segment. Now, turning to our fourth quarter results, in mineral fiber, we achieved 9% average unit value or AUV growth, which was the strongest quarterly growth rate of the year. and was driven by both mix and like-for-like pricing. For the full year, AUV grew 7%, nicely above our historical average. Similar to our results last quarter, our growth initiatives continue to contribute positively to the mineral fiber AUV and volume results, and largely offset softer market conditions. Strong AUV growth, along with solid productivity gains and impressive performance from our wave joint venture drove 10% mineral fiber EBITDA growth and 70 basis points of EBITDA margin expansion to 37.5%. This was the best fourth quarter EBITDA margin in the mineral fiber segment since 2019. In fact, we've generated year-over-year EBITDA margin expansion in this segment in each of the last eight quarters. Delivering this consistent performance requires strong execution across the business, including our sales teams, our manufacturing, and innovation teams. These results demonstrate the resilience of our growth model in all parts of the economic cycle. Now turning to our fourth quarter results in architectural specialties. Sales for this segment increased 41%, with more than half of that growth driven by our recent acquisitions of Boch, 3Form, and Zaner. The organic architectural specialty sales also continue to accelerate this quarter, up 15% year over year with solid demand across our portfolio. Order intake also increased on a broad-based strength across our product portfolio. As we've noted throughout 2024, we continue to see benefits from large transportation projects. Acquisitions have been and continue to play an important role in expanding our portfolio of diverse materials and unique capabilities enabling us to sell more into more spaces. Since 2016, we've completed 12 acquisitions in the specialty space, creating the broadest portfolio of products and design capabilities with a world-class manufacturing network. This has become a clear competitive advantage as we have grown and has opened new opportunities for growth. This is particularly evident in the metal category. Over the past decade, Armstrong has successfully developed and acquired world-class metal design and manufacturing capabilities for interior ceilings and specialty walls. As a result of this work, we have established an industry-leading position in interior architectural metal solutions in North America. Now we are taking this industry leadership position to the exterior of a building. Our most recent acquisition, Zaner, accelerates our ability to grow our position in exterior architectural metal applications with a company that is globally known as the leading expert in the design, engineering, and fabrication of complex, highly crafted exterior architectural metal projects. Simply said, for the most iconic exterior architectural metal projects, architects and designers go to Zaner. The addition of Zaner allows us to accelerate our penetration to this adjacent, highly specifiable market category, building on the capabilities of Polk Modern that we acquired in 2023. We believe that metal exterior applications are a natural extension of our interior architectural metal platform within the architectural specialty segment with high growth potential. With the addition of this adjacency, we estimate we've added another $1 billion to the addressable market for our architectural specialty segment, bringing its total addressable market to more than $2.5 billion. We're excited to apply our growth model to this adjacent market and to continue our above-market growth rate for years to come. So let me pause there for a second and head over to Chris for more details on our financial results.