Armstrong World Industries, Inc. (NYSE:AWI) Q4 2022 Earnings Call Transcript

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Stephen Kim: Yes. Historically, I know that certain AUV is limited to Mineral Fiber in your comments suggest that’s going to continue. It’s just, I think in your presentation, it looked like 29 and for the whole company, and it was 30 for Mineral Fiber, but that’s fine. I’m sure it’s probably just rounding or something. If I could ask about WAVE, the €“ your comment about a rebound in WAVE, certainly welcome. And I was curious as to whether we could expect to see that, kind of a favorable year-over-year comparison in 1Q? And should we generally think that the spread of the earnings in the WAVE would be pretty consistent quarter-to-quarter throughout 2023 or is there some sort of deviation there that we should be thinking about?

Vic Grizzle: Yes. Again, I’ll stay away from the quarterly guidance on WAVE. It’s a big part of our €“ in terms of our equity earnings, right, to our EBITDA level. But again, WAVE had the same, kind of destocking in the first half of the year last year as we did on the tile side. So, sold through the same channel again under the same pressures. What happened throughout the year though, so when you get to the back half of the year, I think we’re going to continue to have favorable comps and WAVE maybe different than what we €“ certainly different than when we had in the tile business. So, if that helps with your phasing and how to think about it, that’s probably as good as I can do on that front. And again, we’re going to continue to watch the margins there and make sure that our pricing is staying ahead of inflation. And this is an opportunity for us to expand margins in that business given the expectations of what steel prices are going to do.

Stephen Kim: Yes, sure. That’s great. Last one for me is in Architectural Specialties. Kind of a two-parter there, but curious if you could €“ that division is getting pretty large now. And I’m just curious if you could sort of call out any specific product categories within Architectural Specialties that we might want to be keeping our eye on, where maybe the trends are a little stronger than even the segment as a whole. And is there any kind of grid product associated with the Architectural Specialties that shows up in WAVE or is that sequestered within Architectural Specialties segment?

Vic Grizzle: Yes. That’s a good question. Probably the highlight of what’s going on in Architectural Specialties is the broad nature of the demand and the growth. It’s not in one vertical or one product category, it’s really across the board. And it’s very encouraging that we’re broadly playing in these new spaces in commercial buildings. And that’s a really encouraging sign. The metal part of our business continues to grow nicely. A lot of these airport projects are using metal and ceilings and that’s a big driver for the metal business. So, as basic or foundational, if you will, in Architectural Specialties that metal is, it’s just €“ it illustrates, I think, how and where the growth can come from in the Architectural Specialties for many years to come.

So, we’ll continue to keep our eye on some of the more specialty or newer materials like the felt category, for example, and looking for ways to further expand our participation in those categories. I think those are the new runways that we can add to the growth in Architectural Specialties.

Chris Calzaretta: And maybe just to close out there, Stephen. So, the grid sales you should be thinking about going through the WAVE equity earnings line.

Stephen Kim: All right. That’s helpful. Thanks.

Operator: Thank you. Our next question comes from Kathryn Thompson with Thompson Research Group. You may proceed.

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