Armstrong World Industries Reports Record-Setting Fourth-Quarter and Full-Year 2025 Results

“These results represent another strong year for Armstrong with record-setting sales and earnings for both the quarter and the full year as the key fundamental growth drivers of our business – Mineral Fiber average unit value growth, productivity and Architectural Specialties sales growth – were on full display,” said Vic Grizzle, President and CEO of Armstrong World Industries. “For the second consecutive year, we have achieved double-digit growth in both annual sales and earnings, and for the fifth consecutive year we have delivered profitable top and bottom line growth despite challenging market conditions. This sustained profitable growth reflects the impact from successful investments in our growth initiatives, the dedication and agility of our teams, our commitment to operational excellence, and the strength of our resilient business model. Together with our disciplined strategy to strengthen our core business and expand into adjacencies, the resulting consistent cash flow generation allows for reinvestment for profitable growth. It’s these attributes that set Armstrong apart and provide a strong foundation as we transition to our next CEO, Mark Hershey, and position us for continued growth into 2026 and beyond.”

Fourth-Quarter Consolidated Results

Consolidated net sales for the fourth quarter of 2025 increased 5.6% from the prior-year period due to higher volumes of $6 million and favorable Average Unit Value ("AUV") of $15 million. Architectural Specialties net sales increased $14 million and Mineral Fiber net sales increased $6 million from the prior-year period. Architectural Specialties net sales improved primarily due to an $8 million contribution from the 2024 acquisitions of 3form, LLC and A. Zahner Company (collectively "the 2024 Acquisitions") and a $5 million increase in organic net sales. The increase in Mineral Fiber net sales was driven by favorable AUV, partially offset by lower sales volumes.

Consolidated operating income increased 12.3% in the fourth quarter of 2025 compared to the prior-year period primarily due to a $13 million margin benefit from favorable AUV and a $1 million increase in equity earnings from the Worthington Armstrong Joint Venture ("WAVE"). These benefits were partially offset by a $2 million increase in selling, general and administrative ("SG&A") expenses, driven primarily by the 2024 Acquisitions, and a $2 million increase in manufacturing costs.

Fourth-Quarter Segment Results
Mineral Fiber

Mineral Fiber net sales increased 2.7% in the fourth quarter of 2025 compared to the prior-year quarter due to $15 million of favorable AUV, partially offset by $8 million of lower sales volumes. The improvement in AUV was driven by favorable like-for-like price and, to a lesser extent, favorable mix. Sales volumes decreased as benefits from our growth initiatives were more than offset by short-term headwinds from the indirect impacts of the federal government shutdown and softer home center demand.

Mineral Fiber operating income increased 17.2% year-over-year primarily due to a $13 million benefit from favorable AUV and a $2 million decrease in manufacturing costs, primarily due to favorable inventory valuation impacts and improved manufacturing productivity, partially offset by higher input costs. Also contributing to the increase in operating income was a $1 million increase in WAVE equity earnings and a $1 million reduction in SG&A expenses. These benefits were partially offset by a $6 million negative impact from lower sales volumes.

Architectural Specialties

Architectural Specialties net sales increased 11.0% in the fourth quarter of 2025 primarily due to an $8 million increase from the 2024 Acquisitions, in addition to increased organic net sales driven by growth across most of our specialty product categories.

Architectural Specialties operating income decreased $2 million in the fourth quarter of 2025, primarily due to a $4 million increase in SG&A expenses, primarily driven by the 2024 Acquisitions, and a $4 million increase in manufacturing costs primarily driven by less favorable operating leverage due to the timing of custom projects and the 2024 Acquisitions. These negative impacts were partially offset by a $5 million margin benefit from higher sales volumes.

Full-Year Consolidated Results

Consolidated net sales for 2025 increased 12.1% versus the prior year due to higher volumes of $117 million and favorable AUV of $58 million. Architectural Specialties net sales increased $130 million and Mineral Fiber net sales increased $45 million. Architectural Specialties segment net sales improved primarily due to a $94 million year-over-year increase attributable to the 2024 Acquisitions, in addition to a $36 million increase in organic net sales driven by strong growth across most of our specialty product categories. The increase in Mineral Fiber net sales was driven by favorable AUV, due to favorable like-for-like price and, to a lesser extent, favorable mix, partially offset by lower sales volumes. Our strong execution and benefits from growth initiatives contributed both volume and mix benefits, which were partially offset by a decrease in volumes driven by softer demand, primarily from home centers.

Consolidated operating income increased 15.1% primarily due to a $55 million margin benefit from higher sales volumes, a $38 million benefit from favorable AUV and a $9 million increase in WAVE equity earnings. These increases were partially offset by a $31 million increase in SG&A expenses and a $17 million increase in manufacturing costs.

The year-over-year increase in manufacturing costs was primarily driven by increased costs within Architectural Specialties, both organically and from the 2024 Acquisitions, as well as higher input costs, partially offset by improved manufacturing productivity and favorable inventory valuations within Mineral Fiber.

The year-over-year increase in SG&A expenses was primarily driven by a $27 million increase related to the 2024 Acquisitions, a $4 million increase in incentive compensation and a $3 million increase in Architectural Specialties selling and advertising expenses driven primarily by higher net sales as well as additional investments in selling capabilities. These increases were partially offset by a $2 million increase in company-owned officer life insurance gains related to deferred compensation plans and a prior-period increase in reserves for environmental remediation matters of $2 million that did not recur in the current period.

Cash Flow
Cash flows from operating activities in 2025 increased $89 million or 33% in comparison to prior year. The favorable change in operating cash flows was primarily driven by higher cash earnings compared to the prior year, including a benefit from a decrease in income taxes paid due to the impact of 2025 federal tax reform. Also contributing to the increase in operating cash flows was a favorable timing-related working capital change in accounts receivable, partially offset by an unfavorable change in inventory. Cash flows used for investing activities decreased $76 million versus the prior year, primarily due to a $110 million reduction in cash paid for acquisitions and an increase in dividends from WAVE. These decreases were partially offset by an increase in purchases of property, plant and equipment and a decrease in proceeds from the sale of fixed assets, due primarily to 2024 cash proceeds received from the sale of our idled St. Helens manufacturing plant and undeveloped land adjacent to our corporate headquarters.

Eventscape Acquisition
On February 19, 2026, we acquired Eventscape, Inc., a globally recognized design and fabrication company known for delivering complex, design-driven architectural spaces. Based in New York City and Toronto, Canada, Eventscape specializes in the design, fabrication and installation of high-design, complex architectural features for multiple applications including ceilings, feature walls and facades. With this addition as well as the 2025 acquisitions of wood ceiling product manufacturer Geometrik Manufacturing, Inc. and exterior metal manufacturer FGM-Parallel LLC, the company has completed 15 acquisitions since 2017 as part of its strategy to expand its reach and capabilities in the Architectural Specialties market in North America.

Share Repurchase Program
In the fourth quarter of 2025, we repurchased 0.3 million shares of common stock for a total cost of $50 million, excluding the cost of commissions and taxes. For the full year 2025, we repurchased 0.8 million shares of common stock for a total cost of $129 million, excluding the cost of commissions and taxes, or at an average price of $167.75 per share. As of December 31, 2025, there was $533 million remaining under our Board of Directors' current authorized share repurchase program**.

2026 Outlook
“We delivered strong results across both segments in 2025, featuring double‑digit growth across our key financial metrics and margin expansion achieved through AUV growth, continued manufacturing productivity and disciplined cost control,” said Chris Calzaretta, AWI Senior Vice President and CFO. “These results highlight the strength of our value creation drivers and the resilience of our business model that enable us to outperform in challenging market conditions. In 2026, we remain focused on delivering another year of profitable growth with further margin expansion and adjusted free cash flow growth to support all of our capital allocation priorities. With a strong balance sheet, a focus on executing our growth initiatives and a disciplined approach to capital deployment, we are confident in our ability to continue to create value for our shareholders.”

Earnings Webcast
Management will host a live webcast conference call at 10:00 a.m. ET today, to discuss fourth-quarter and full-year 2025 results. This event will be available on the Company's website. The call and accompanying slide presentation can be found on the investor relations section of the Company's website at www.armstrong.com. The replay of this event will be available on the website for up to one year after the date of the call.

Uncertainties Affecting Forward-Looking Statements
Disclosures in this release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, those relating to future financial and operational results, market and broader economic conditions and guidance. 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. This includes annual guidance. 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” sections of our reports on Form 10-K and Form 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”), including our annual report for the year ended December 31, 2025, that the Company expects to file today. 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

Armstrong World Industries, Inc (AWI) is an Americas leader in the design and manufacture of innovative interior and exterior architectural applications including ceilings, specialty walls and exterior metal solutions. For more than 165 years, Armstrong has delivered products and capabilities that enable architects, designers and contractors to transform building design and construction with elevated aesthetics, acoustics and sustainable attributes. With $1.6 billion in revenue in 2025, AWI has approximately 4,000 employees and a manufacturing network of 24 facilities, plus seven facilities dedicated to its WAVE joint venture.

More details on the Company’s performance can be found in its report on Form 10-K for the year ended December 31, 2025, that the Company expects to file with the SEC today.

Reported Financial Results
(Amounts in millions, except per share data)