Armstrong World Industries Inc

Hello and thank you for standing by. My name is Paige and I will be your conference operator today. At this time, I would like to welcome everyone to the Armstrong World Industries second quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. I would now like to turn the conference over to Theresa Womble, Vice President, Investor Relations and Corporate Communications. Please go ahead.

Thank you and welcome everyone to our call this morning. On today's call, Mark Hershey, our CEO, and Chris Calzaretta, our CFO, will discuss Armstrong World Industries' second quarter 2026 results and the rest of year 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 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. Both are available on our Investor Relations website. During this call, we will be making forward-looking statements that represent the view we have of our financial and operational performance as of today's date, July 28, 2026. These statements involve risks and uncertainties that may differ materially from those expected or implied. We provide a detailed discussion of risks and uncertainties in our SEC filings, including the 10-Q filed earlier this morning. We undertake no obligation to update any forward-looking statements beyond what is required by applicable securities law. With that, I will now turn the call over to Mark.

Good morning, and thank you for joining our call. Today, we reported second quarter results featuring record net sales and adjusted EBITDA with solid contributions from both our mineral fiber and architectural specialties segments. On a total company basis, net sales increased 11% and adjusted EBITDA increased 8% versus the prior year, while adjusted diluted earnings per share increased 13%. These results were modestly ahead of our expectations and reflect strong execution despite continued flattish market conditions, which were similar to what we experienced in the first quarter. Our ability to achieve these results in a muted market environment is a testament to the focused execution of our teams and the power of the value creation building blocks at Armstrong. These building blocks include earning consistent mineral fiber average unit value or AUV growth, driving operational productivity in our manufacturing plants, and delivering profitable growth in our expanding architectural specialties portfolio. Looking first at mineral fiber results, we posted an 8% increase in net sales driven by AUV growth of 6% and volume growth of 2%. Both price and mix contributed meaningfully to our AUV result this quarter, with mixed performance driven by continued increased demand for products at the higher end of our portfolio, namely for our smooth white acoustical tiles, what we call our SWAT products. Our ability to meet evolving customer needs with innovative, high-value products that meet a range of functional and design requirements continues to be an Armstrong hallmark. Turning to mineral fiber volume. This quarter marked the fourth quarter out of the last five in which we generated volume growth and represented the highest quarterly growth rate since early 2023. A combination of consistent commercial execution by our selling, marketing, service, and support teams and ongoing incremental benefits from our growth initiatives drove the healthy increase in volume. These sales results highlight the strength of our commercial organization and their longstanding relationships within our markets. relationships with distributors and other channel partners, and importantly, with the architects, designers, and contractors that specify and install our products. Those established relationships are supported directly by our broad market coverage and teams uniquely focused on sealing solutions. Coupled with our proven track record for product quality and customer service, from seamless ordering to reliable delivery, We are well positioned to sustain success across variable market conditions. Mineral fiber adjusted EBITDA performance was strong this quarter, with 7% year-over-year growth and an adjusted EBITDA margin approaching 45%, even as we continued our SG&A investments for growth and experienced some input cost inflation. Our manufacturing plants supported that performance by running well, with the quality and perfect order of fulfillment measures we discussed last quarter remaining at very strong levels. Consistent operational execution coupled with focused productivity initiatives at the plant level remain critical enablers of our impressive margin performance in mineral fiber. We are well positioned to achieve our full year 2026 adjusted EBITDA margin guidance of approximately 44%, which would represent a record performance for this segment and the fourth consecutive year of mineral fiber margin expansion. Importantly, our mineral fiber results in the quarter were well supported by our growth initiatives, which remain squarely focused on delivering mineral fiber AUV along with volume growth ahead of market through leading innovation and differentiated services. These include our strengthening digital initiatives, namely our Canopy online selling platform and Project Works, our automated design service, along with our more recent product innovation focused on energy efficiency and data center solutions. Within the digital initiatives, both Canopy and Project Works continue to gain traction and deliver value for the company. Canopy has continued to strategically evolve both in terms of the breadth of products available on the platform and the types of customers it serves. Put simply, the core premise of Canopy is proving out that latent demand exists for a specific portion of the installed ceilings base which can be reached by a tailored and efficient path to purchase. Canopy offers a digital channel that is highly engaging and easy to use for this underserved part of the market. In addition to supporting small business owners, we are finding that companies with multiple facilities across a wide geography can use Canopy to provide their locations or branches with a consistent and reliable means of refreshing their space with materials pre-approved by their central design or procurement teams reliably fulfilled through our trusted distribution network. And as we've scaled and optimized Canopy, we are increasingly pleased with its profitability performance. Project Works also continues to deliver value by strengthening our project specifications and win rates and further differentiating our market position with our customers. both quoted values and fulfilled projects processed through Project Works continue to grow, supporting our AUV and sales volume. As we are frequently reminded by architects, designers, and contractors, ceilings are complex, and they are becoming more complicated as the design community pursues a broader range of visuals and integrated solutions. Particularly as demand for skilled installation labor remains constrained, and project timelines remain compressed, Project Works directly addresses the efficiency and accuracy needs of our customers. Similarly, our product innovation continues to center on the most immediate megatrends within the built environment, namely the demand for energy efficient building solutions and the expansion of data center infrastructure. Innovations like our TempLock energy saving ceiling tiles and our expanded data center product portfolio deliver customer value. driving both AUV and volume growth. With our 10 block offering, we remain focused on raising awareness of its multiple value propositions from energy savings to thermal comfort for occupants to eligibility for tax incentives. To that end, we are expanding and scaling our go-to-market platform and supporting those resources with energy modeling capabilities, project case studies, and testimonials to influence building owners and energy savings companies that drive this decision making. These efforts are helping to secure specifications and in the process build a pipeline with more project opportunities, which more than doubled since the end of the first quarter. These are encouraging and confidence building signs for this important initiative and our commercial teams, reflecting not only our sales and marketing efforts, but also the market need for more solutions to meet the rapidly expanding demand for Energy Efficient Buildings as electricity costs continue to rise and the focus on grid reliability increases. Similarly, as we discussed last quarter, the data center market represents another focus area for growth. While we have served data centers with fielding products for years, mainly in the front office portion of those facilities, we have expanded into structural grid and containment offerings to capture more share within these projects. With a broader solution set for data centers, we are positioned to more effectively serve demand from hyperscalers, co-locators, and enterprise customers. And we're seeing healthy growth in both our project quoting and intake pipelines, with wins year-to-date in 2026 increasing more than 50% compared to last year. This is a growing vertical that we will continue to serve as it evolves with both our ceiling tile and Acoustical Grid Solutions, as we have in the past, as well as with an expanded set of structural and containment solutions from our wave joint venture. For context, as we have noted in the past, it's important to remember that mineral fiber ceiling tile and standard grid applications and data centers represent a smaller percentage of project spend compared to typical commercial buildings. But this is a growing and addressable vertical for those solutions and for our expanded structural offerings. that we expect to serve for years to come. Collectively, we are encouraged with how these initiatives are progressing, further differentiating Armstrong with customers and contributing incremental AUV, as well as up to 150 basis points of above market mineral fiber volume growth for the full year. Turning to architectural specialties, we posted strong top line growth this quarter, driven by healthy organic sales growth of 9% stemming from broad-based demand across our portfolio. This performance, coupled with contributions from our recent acquisitions, lifted AS net sales 17% above prior year results. On the bottom line, we are also pleased with the adjusted EBITDA margin performance of the business, coming in above our full year goal of 20% on both a total segment and an organic basis, and reflecting solid sequential improvement consistent with the expectations we shared last quarter. These results reflect improved SG&A leverage and solid execution in our AS plants, along with price actions and disciplined cost control as we work to address rising costs on certain substrates. Second quarter order intake for the segment was strong and continued at a double digit rate, supporting our full year outlook and giving us early visibility to our 2027 backlog. Like last quarter, our strong quoting and ordering activity levels were fueled by projects across a range of verticals, led by transportation and education. And looking specifically at transportation, we continue to serve and win more projects by leveraging our industry-leading portfolio of solutions. In addition to expanded intake at JFK, SFO, and LAX airports, we had a new project win this quarter at the San Antonio International Airport and with the Ohio Department of Transportation. Our success within the transportation vertical demonstrates the power of our broad portfolio, our deep technical expertise and our dedicated project management, design assistance and installation support service offerings. These are all intentionally designed to serve architects, contractors and airport authorities as they navigate challenging specifications and phased construction schedules by reducing risk, and improving project outcomes. With that, I'll turn the call to Chris to discuss our financial results in more detail.