Q2 sales and profits sag at Armstrong World Industries
Armstrong World Industries (AWI), the manufacturer of ceiling, wall and suspension system solutions, reported that second quarter sales dropped 25.3% to $203.2 million from second quarter 2019 sales of $272 million.
The Lancaster, Pa.-based company posted net earnings of $50.3 million for the second quarter, falling 7.7% from net earnings of $54.5 million in the second quarter a year ago.
Operating income for the second quarter declined 28.4% to $62.4 million from an operating income of $87.2 million for the same period last year. Earnings from continuing operations decreased 22.3% to $49.5 million for the quarter as compared to earnings from continuing operations of $63.7 million for the corresponding quarter a year ago.
AWI reported that sales for the quarter were impacted by lower volumes in the company’s mineral fiber and architectural specialties segments as a result of lower market demand due to COVID-19.
The company also announced today that it has acquired Turf Design, Inc., a Chicago-based commercial interiors design house and maker of custom felt ceiling and wall solutions with annual revenues of approximately $25 million.
According to AWI, Turf is the leader in the specialty felt category and operates an 8,000 square-foot innovation center and design showroom in downtown Chicago, together with a 75,000 sq. ft. fabrication facility in Elgin, Ill., where it makes a wide range of custom-specified felt ceilings and wall products for a variety of applications.
Turf will continue to operate from its current facilities and retain its company name, brands, and organizational and go-to-market structures, AWI said.
AWI funded the acquisition with available cash and its revolving credit facility. Financial terms of the transaction were not disclosed.
The Bottom Line: Sales at AWI fall more than 25% in the quarter to $203.2 million as profits slip 7.7% to $50.3 million
What the CEO said: “The second quarter of 2020 was unprecedented in many ways, and created numerous challenges for our teams and partners,” said Vic Grizzle, president and CEO of AWI.
“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.”
Company info: The full second quarter 2020 report from Armstrong World Industries is available here.