ARMSTRONG WORLD INDUSTRIES INC

Previous wording

AWI is an Americas leader in the design, innovation and manufacture of interior and exterior architectural applications including ceilings, specialty walls and exterior metal solutions. Our products primarily include mineral fiber, fiberglass, metal, felt, wood, resin, wood fiber and glass-reinforced-gypsum. We also manufacture ceiling suspension system (grid) products through a joint venture with Worthington Enterprises, Inc. called Worthington Armstrong Venture (“WAVE”).

Current wording

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. We manufacture and source products made of numerous materials, including mineral fiber, fiberglass, metal, felt, architectural resin and glass, wood, wood fiber and glass-reinforced-gypsum. We also manufacture ceiling suspension system (grid) products through a joint venture with Worthington Enterprises, Inc. called Worthington Armstrong Venture (“WAVE”).

Previous wording

In December 2024, we acquired all the issued and outstanding stock of A. Zahner Company (“Zahner”), based in Kansas City, Missouri. Zahner is a designer and manufacturer of exterior metal architectural solutions. The operations, assets and liabilities of Zahner are included in our Architectural Specialties segment.

Current wording

In December 2024, we acquired all of the issued and outstanding stock of A. Zahner Company (“Zahner”), based in Kansas City, Missouri. Zahner is a designer and manufacturer of exterior metal architectural solutions. The operations, assets and liabilities of Zahner are included in our Architectural Specialties segment.

Previous wording

In April 2024, we acquired all the issued and outstanding membership interests in 3form, LLC (“3form”), based in Salt Lake City, Utah from Hunter Douglas, Inc. 3form is a designer and manufacturer of architectural resin and glass products used for specialty walls, partitions and ceilings. The operations, assets and liabilities of 3form are included in our Architectural Specialties segment.

Current wording

In April 2024, we acquired all of the issued and outstanding membership interests in 3form, LLC (“3form”), based in Salt Lake City, Utah from Hunter Douglas, Inc. 3form is a designer and manufacturer of architectural resin and glass products used for specialty walls, partitions and ceilings. The operations, assets and liabilities of 3form are included in our Architectural Specialties segment.

Previous wording

In January 2024, we entered into a strategic partnership and equity investment in Overcast Innovations LLC (“Overcast”) with McKinstry Essention, LLC whereby we contributed $5.5 million in exchange for a 19.5% ownership interest in Overcast, with future rights to increase our ownership interest. Overcast is a solutions company offering prefabricated ceiling cloud systems, modular grid platforms and engineering design services to reduce waste and inefficiencies in the built environment. Our investment and equity earnings in Overcast are included in our Unallocated Corporate segment.

Current wording

In January 2024, we entered into a strategic partnership and equity investment in Overcast Innovations LLC (“Overcast”) with McKinstry Essention, LLC whereby we contributed $5.5 million in exchange for an initial 19.5% ownership interest in Overcast (currently 19.2%). Overcast is a solutions company offering prefabricated ceiling cloud systems, modular grid platforms and engineering design services to reduce waste and inefficiencies in the built environment. Our investment and equity earnings and losses in Overcast are included in our Unallocated Corporate segment.

Previous wording

In July 2023, we acquired all the issued and outstanding stock of BOK Modern, LLC (“BOK”), based in San Rafael, California. BOK is a designer of exterior metal architectural solutions. The operations, assets and liabilities of BOK are included in our Architectural Specialties segment.

Current wording

In July 2023, we acquired all of the issued and outstanding stock of BOK Modern, LLC (“BOK”), based in San Rafael, California. BOK is a designer of exterior metal architectural solutions. The operations, assets and liabilities of BOK are included in our Architectural Specialties segment.

Previous wording

As of December 31, 2024, we operated 20 manufacturing plants, including 18 plants located within the U.S. and two plants in Canada.

Current wording

As of December 31, 2025, we operated 22 manufacturing plants, including 19 plants located within the U.S. and three plants in Canada.

Previous wording

Mineral Fiber – produces suspended mineral fiber and fiberglass ceiling systems. Our mineral fiber products offer various performance attributes such as acoustical control, rated fire protection, and energy efficiency, along with other health and sustainability features and aesthetic appeal. Ceiling products are primarily sold to resale distributors, ceiling systems contractors and wholesalers, and retailers (including large home centers). The Mineral Fiber segment also includes the results of WAVE, which manufactures and sells suspension system (grid) products and ceiling component products that are invoiced by both AWI and WAVE. Segment results relating to WAVE consist primarily of equity earnings and reflect our 50% equity interest in the joint venture. Ceiling component products consist of ceiling perimeters and trim, in addition to grid products that support drywall ceiling systems. For some customers, WAVE sells its suspension system products to AWI for resale to customers. Mineral Fiber segment results reflect those sales transactions. The Mineral Fiber segment also includes all assets and liabilities not specifically allocated to our Architectural Specialties or Unallocated Corporate segment, including all property and related depreciation associated with our Lancaster, Pennsylvania headquarters. Operating results for the Mineral Fiber segment include a significant majority of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations.

Current wording

Mineral Fiber – produces suspended mineral fiber and fiberglass ceiling systems. Our mineral fiber products offer various performance attributes such as acoustical control, rated fire protection, and energy efficiency, along with other health and sustainability features and aesthetic appeal. Ceiling products are primarily sold to resale distributors, ceiling systems contractors and wholesalers, and retailers (including large home centers). The Mineral Fiber segment also includes the results of WAVE, which manufactures and sells suspension system (grid) products and ceiling component products that are invoiced by both AWI and WAVE. Segment results relating to WAVE consist primarily of equity earnings and reflect our 50% equity interest in the joint venture. Ceiling component products consist of ceiling perimeters and trim, in addition to grid products that support drywall ceiling systems, structural and walkable grid systems. For some customers, WAVE sells its suspension system products to AWI for resale to customers. Mineral Fiber segment results reflect those sales transactions. The Mineral Fiber segment also includes all assets and liabilities not specifically allocated to our Architectural Specialties or Unallocated Corporate segment, including all property and related depreciation associated with our Lancaster, Pennsylvania headquarters. Operating results for the Mineral Fiber segment include a significant majority of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations.

Previous wording

Architectural Specialties – designs, produces and sources specialty ceilings, walls, and other interior and exterior architectural applications primarily for use in commercial settings. Products are available in numerous materials, such as metal, felt, wood, resin, wood fiber and glass-reinforced-gypsum in various colors, shapes and designs. These products offer a range of design options and performance attributes such as acoustical control, rated fire protection, light, aesthetic appeal, energy conservation and building performance. We sell standard, premium and customized products, a portion of which are sourced from third-party producers. Architectural Specialties products are sold primarily to resale distributors and direct customers, primarily ceiling systems contractors. This segment’s revenues are primarily project driven, which can lead to more variability in sales patterns. Operating results for the Architectural Specialties segment include a portion of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations.

Current wording

Architectural Specialties – designs, produces and sources specialty ceilings, walls, and other interior and exterior architectural applications primarily for use in commercial settings. Products are available in numerous materials, such as metal, felt, architectural resin and glass, wood, wood fiber and glass-reinforced-gypsum in various colors, shapes and designs. These products offer a range of design options and performance attributes such as acoustical control, rated fire protection, light, aesthetic appeal, energy conservation and building performance. We sell standard, premium and customized products, a portion of which are sourced from third-party producers. Architectural Specialties products are sold primarily to direct customers, primarily ceiling systems contractors, and resale distributors. This segment’s revenues are primarily project driven, which can lead to more variability in sales patterns. Operating results for the Architectural Specialties segment include a portion of allocated Corporate administrative expenses that represent a reasonable allocation of general services to support its operations.

Previous wording

Unallocated Corporate – includes certain assets, liabilities, income and expenses that have not been allocated to our other business segments and consists of: cash and cash equivalents, our Overcast investment and related equity earnings/losses, the net funded status of our U.S. Retirement Income Plan (“RIP”), the estimated fair value of interest rate swap contracts, outstanding borrowings under our senior secured credit facility and income tax balances.

Current wording

Unallocated Corporate – includes certain assets, liabilities, income and expenses that have not been allocated to our other business segments and consists of: cash and cash equivalents, our Overcast investment and related equity earnings and losses, the net funded status of our U.S. Retirement Income Plan (“RIP”), the estimated fair value of interest rate swap contracts, outstanding borrowings under our senior secured credit facility and income tax balances.

Previous wording

Markets. We compete in the building product markets of the Americas. We closely monitor publicly available macroeconomic data and trends that provide insight into commercial construction market activity, including, but not limited to, GDP, office vacancy rates, the Architecture Billings Index, new commercial construction starts, state and local government spending, corporate profits, and retail sales. The Company continues to monitor the impacts of tariffs and geopolitical events, including but not limited to, conflicts in Ukraine and the Middle East; none of which had a material direct impact on our financial condition, liquidity or results of operations during 2024 or 2023.

Current wording

Markets. We compete in the building product markets of the Americas. We closely monitor publicly available macroeconomic data and trends that provide insight into commercial construction market activity, including, but not limited to, GDP, office vacancy rates, the Architecture Billings Index, new commercial construction starts, state and local government spending, corporate profits and retail sales. The Company continues to monitor the impacts of tariffs and other governmental trade policies and geopolitical events, neither of which had a material direct impact on our financial condition, liquidity or results of operations during 2025 or 2024. In September 2025, GMS, Inc., one of our largest distributor customers, was acquired by The Home Depot, Inc. In addition, in October 2025, Foundation Building Materials, Inc., another one of our largest distributor customers, was acquired by Lowe's Companies, Inc. These acquisitions had no material impact on our financial condition, liquidity or results of operations during 2025. Additionally, in the fourth quarter of 2025, the U.S. federal government experienced a six‑week shutdown of non‑essential operations. While the shutdown contributed to certain short‑term indirect headwinds that impacted our results for the fourth quarter of 2025, these disruptions were temporary in nature and did not have a material impact on our financial condition, liquidity or results of operations for the full year ended December 31, 2025.

Previous wording

Favorable AUV contributed approximately $62 million to our total consolidated net sales for the year ended December 31, 2024 compared to the same period in 2023. Our Architectural Specialties segment revenues are primarily generated by individual contracts that include a mix of products, both manufactured by us and sourced from third parties, that varies by project. As such, we do not track AUV performance for this segment but rather attribute all changes in net sales to volume, including gross to net sales adjustments.

Current wording

Favorable AUV increased our total consolidated net sales for the year ended December 31, 2025 by approximately $58 million compared to the same period in 2024. Our Architectural Specialties segment revenues are primarily generated from individual contracts that include project-specific mixes of manufactured and sourced products. As such, we do not track AUV performance for this segment but rather attribute all changes in net sales to volume, including gross to net sales adjustments.

Previous wording

During the first and third quarters of 2024, we implemented price increases on Mineral Fiber ceiling products. During the first and second quarters of 2024, WAVE implemented price increases on grid products. In the fourth quarter of 2024, we announced price increases on Mineral Fiber ceiling products and WAVE announced price increases on grid products that became effective in the first quarter of 2025. We may implement future pricing actions based on numerous factors, namely the rate and pace of inflation and its impact on our business.

Current wording

During the first quarter and third quarters of 2025, we implemented price increases on Mineral Fiber ceiling products. During the first and second quarters of 2025, WAVE implemented price increases on grid products. In the fourth quarter of 2025, we announced price increases on Mineral Fiber ceiling products and WAVE announced price increases on grid products that became effective in the first quarter of 2026. Future pricing actions for Mineral Fiber, Architectural Specialties and WAVE products may be implemented based on numerous factors, including the impact of tariffs, the rate and pace of inflation and its impact on our business.

Previous wording

Operating Expenses. Our operating expenses are comprised of direct production costs (principally raw materials, labor, and energy), manufacturing overhead costs, freight, costs to purchase sourced products and selling, general and administrative (“SG&A”) expenses.

Current wording

Operating Expenses. Our operating expenses are comprised of direct production costs (principally raw materials, labor, and energy), manufacturing overhead costs, freight, costs to purchase sourced products, tariffs and selling, general and administrative (“SG&A”) expenses.

Previous wording

Our largest raw material expenditures are primarily for fiberglass, perlite, recycled paper, and starch. Other raw materials include clays, felt, pigment, resin, wood and wood fiber. We manufacture substantially all of our mineral wool at one of our manufacturing facilities. We use aluminum and steel in the production of metal building products by us and by WAVE. Finally, natural gas and packaging materials also represent significant input costs. Fluctuations in the prices of these inputs impact our financial results. In 2024, lower energy and freight costs were partially offset by higher raw material costs, resulting in a $6 million benefit to operating income compared to 2023.

Current wording

Our largest raw material expenditures are primarily for fiberglass, perlite, recycled paper, and starch. Other raw materials include clays, felt, pigment, architectural resin and glass, wood and wood fiber. We manufacture substantially all of our mineral wool at one of our manufacturing facilities. We use aluminum and steel in the production of metal building products by us and by WAVE. Finally, natural gas and packaging materials also represent significant input costs. Fluctuations in the prices of these inputs impact our financial results. In 2025, higher energy and raw material costs were partially offset by lower freight costs, resulting in a $5 million negative impact to operating income compared to 2024.

Previous wording

In connection with our acquisitions of Zahner, 3form, Insolcorp, BOK and Arktura LLC (“Arktura”) acquired in December 2020, we recorded certain acquisition-related expenses and losses to operating income for the years ended December 31, 2024, 2023, and 2022, summarized as follows (dollar amounts in millions):

Current wording

In connection with our acquisitions of Parallel in December 2025, Geometrik in September 2025, Zahner in December 2024, 3form in April 2024, Insolcorp in October 2023, BOK in July 2023 and Arktura LLC (“Arktura”) in December 2020, we recorded certain acquisition-related expenses and losses to operating income for the years ended December 31, 2025, 2024, and 2023, summarized as follows (dollar amounts in millions):

Previous wording

The inventory amounts above reflect the post-acquisition expenses associated with recording inventory at fair value as part of purchase accounting for the 3form acquisition. Acquisition costs above reflect certain contingent third-party professional fees incurred due to the Zahner and 3form acquisitions. Expenses related to the deferred cash and restricted stock awards were for Arktura’s former owners and employees that were recorded over their respective service periods, as such payments were subject to the awardees’ continued employment with AWI. The change in fair value of contingent consideration is related to our BOK and Insolcorp acquisitions and was remeasured quarterly during each acquisition's respective earn-out periods. See Note 19 to the Consolidated Financial Statements for further information.

Current wording

The inventory amounts above reflect the post-acquisition expenses associated with recording inventory at fair value as part of purchase accounting for the Geometrik and 3form acquisitions. Acquisition costs above reflect certain contingent third-party professional fees incurred due to the Parallel, Geometrik, Zahner and 3form acquisitions. Expenses related to deferred cash and restricted stock awards were for Arktura’s former owners and employees that were recorded over their respective service periods, as such payments were subject to the awardees’ continued employment with AWI. The change in fair value of contingent consideration was related to our Geometrik, Insolcorp and BOK acquisitions and is remeasured quarterly during each acquisition's earn-out periods. See Note 18 to the Consolidated Financial Statements for further information.

Previous wording

The following discussion includes year-to-year comparisons between 2024 and 2023. Discussions of year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. Please refer to Notes 3 and 6 to the Consolidated Financial Statements for a reconciliation of segment operating income to consolidated earnings from continuing operations before income taxes and additional financial information related to discontinued operations.

Current wording

The following discussion includes year-to-year comparisons between 2025 and 2024. Discussions of year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024. Please refer to Note 3 to the Consolidated Financial Statements for a reconciliation of segment operating income to consolidated earnings before income taxes.

Previous wording

Cost of goods sold during 2024 was 59.8% of net sales, compared to 61.6% for 2023. The year-over-year decrease in cost of goods sold as a percentage of net sales was driven primarily by favorable AUV margin benefit, improved manufacturing productivity and lower input costs.

Current wording

Cost of goods sold during 2025 was 59.4% of net sales, compared to 59.8% for 2024. The year-over-year decrease in cost of goods sold as a percent of net sales was primarily driven by favorable AUV benefits, improved manufacturing productivity and favorable inventory valuation impacts. These benefits were partially offset by an increase in manufacturing costs.

Previous wording

SG&A expenses in 2024 were $308.5 million, or 21.3% of net sales, compared to $262.5 million, or 20.3% of net sales, in 2023. The year-over-year increase in SG&A expenses was primarily driven by a $32 million increase related to the acquisitions of Zahner, 3form and BOK, an $8 million increase in selling expenses, primarily due to higher employee costs, a $7 million increase in incentive compensation and a $6 million decrease in company-owned officer life insurance gains related to deferred compensation plans. These increases were partially offset by a $9 million decrease in acquisition-related expenses.

Current wording

SG&A expenses in 2025 were $339.5 million, or 20.9% of net sales, compared to $308.5 million, or 21.3% of net sales, in 2024. The reduction in SG&A expenses as a percent of net sales was due to disciplined cost control, partially offset by inflation. The year-over-year increase in SG&A expenses compared to the prior year 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.

Previous wording

In 2024, we recorded $1.6 million of remeasurement losses for changes in the fair value of contingent consideration related to the acquisitions of BOK and Insolcorp. In the same period in 2023, we recorded $0.1 million of remeasurement losses for changes in the fair value of contingent consideration related to the acquisition of BOK. See Note 19 to the Consolidated Financial Statements for further information.

Current wording

In 2025, we recorded $1.4 million of remeasurement losses for changes in the fair value of contingent consideration related to the acquisitions of Geometrik, BOK and Insolcorp. In the same period in 2024, we recorded $1.6 million of remeasurement losses for changes in the fair value of contingent consideration related to the acquisitions of BOK and Insolcorp. See Note 18 to the Consolidated Financial Statements for further information.

Previous wording

Losses on sales of fixed assets, net were $0.6 million in 2024, which was comprised of a $5.2 million loss on sale for undeveloped land adjacent to our Corporate headquarters, partially offset by a $4.6 million gain on the sale of our idled Mineral Fiber plant in St. Helens, Oregon.

Current wording

In 2025, we recorded $0.8 million of net gains on sales of fixed assets, which were primarily comprised of a $0.9 million gain on the sale of a parcel of land at a Mineral Fiber plant. In 2024, we recorded $0.6 million of net losses on sales of fixed assets, which were comprised of a $5.2 million loss on the sale of undeveloped land adjacent to our Corporate headquarters, partially offset by a $4.6 million gain on the sale of our idled Mineral Fiber plant in St. Helens, Oregon.

Previous wording

Equity earnings from unconsolidated subsidiaries were $103.4 million in 2024, compared to $89.3 million in 2023. In 2024, WAVE equity earnings were $104.3 million, while Overcast equity losses were $0.9 million. The increase in WAVE earnings was primarily driven by the benefits of favorable AUV, higher volumes and lower steel costs, partially offset by higher employee costs. See Note 11 to the Consolidated Financial Statements for further information.

Current wording

Equity earnings from unconsolidated affiliates were $112.3 million in 2025, compared to $103.4 million in 2024. WAVE equity earnings were $113.2 million in 2025 compared to $104.3 million in 2024. The increase in WAVE equity earnings was primarily driven by the benefit from favorable AUV, partially offset by the negative impact of lower sales volumes. See Note 10 to the Consolidated Financial Statements for further information.

Previous wording

Interest expense was $39.8 million in 2024 compared to $35.3 million in 2023. The increase in interest expense was primarily due to higher average effective interest rates, partially offset by lower average debt balances.

Current wording

Interest expense was $33.0 million in 2025 compared to $39.8 million in 2024. The decrease in interest expense was primarily due to lower average debt balances, partially offset by higher average effective interest rates.

Previous wording

Other non-operating income, net was $12.6 million during 2024 compared to $9.9 million during 2023. Other non-operating income, net, is primarily comprised of the non-service cost components of pension and postretirement net periodic benefit costs and interest income. The increase in other non-operating income was primarily due to an increase in amortization of pension and postretirement credits.

Current wording

Other non-operating income, net was $2.4 million during 2025 compared to $12.6 million during 2024. The decrease in other non-operating income, net, was primarily driven by the non-service cost components of pension and postretirement net periodic benefit costs and a decrease in interest income.

Previous wording

Income tax expense was $82.2 million in 2024 compared to $74.5 million in 2023. The effective tax rate was 23.7% in 2024 compared to 25.0% in 2023. The effective tax rate for 2024 was lower compared to 2023 primarily due to the benefits recognized from a reduction in our valuation allowance for capital loss carryforwards, in addition to statute closures.

Current wording

Income tax expense was $91.6 million in 2025 compared to $82.2 million in 2024. The effective tax rate was 22.9% in 2025 compared to 23.7% in 2024. The effective tax rate for 2025 was lower compared to 2024 primarily due to a greater benefit recognized in the current year from statute closures as well as the benefit from an investment tax credit generated in the current year, offset partially by unfavorable adjustments related to our valuation allowance for capital loss carryforwards compared to 2024.

Previous wording

Total Other Comprehensive Loss (“OCL”) was $5.5 million in 2024 compared to $4.6 million in 2023. The change in OCL was primarily driven by changes in pension and postretirement adjustments and foreign currency translation adjustments, partially offset by lower interest rate swap derivative losses in 2024 compared to 2023. Pension and postretirement adjustments represent the actuarial gains and losses related to our defined benefit pension and postretirement plans. Foreign currency translation adjustments represent the change in the U.S. dollar value of assets and liabilities denominated in foreign currencies. Foreign currency translation adjustments during 2024 and 2023 were driven primarily by changes in the Canadian dollar. Derivative gain/loss represents the mark-to-market value adjustments of our derivative assets and liabilities, and the recognition of gains and losses previously deferred in accumulated OCI.

Current wording

Total Other Comprehensive Income (“OCI”) was $7.1 million in 2025 compared to Total Other Comprehensive Loss (“OCL”) of $5.5 million in 2024. The change from OCL to OCI was primarily driven by favorable pension and postretirement actuarial adjustments and higher foreign currency translation gains, driven primarily by the Canadian dollar. To a lesser extent, the change was also driven by lower interest rate swap derivative losses in 2025 compared to 2024. Pension and postretirement adjustments represent the actuarial gains and losses related to our defined benefit pension and postretirement plans. Foreign currency translation adjustments represent the change in the U.S. dollar value of assets and liabilities denominated in foreign currencies. Derivative losses represent the mark-to-market value adjustments of our derivative assets and liabilities, and the recognition of gains and losses previously deferred in accumulated OCL.

Previous wording

Mineral Fiber cost of goods sold during 2024 was $586 million, 59.5% of net sales, compared to $574 million, 61.6% for 2023. Gross profit increased $42 million, or 11.6%, compared to 2023. The year-over-year increase in gross profit was driven primarily by a $39 million benefit from favorable AUV benefit and an $8 million decrease in manufacturing costs due to improved manufacturing productivity and input costs, partially offset by a $5 million negative impact from lower sales volumes and a $3 million increase in depreciation and amortization expense.

Current wording

Cost of goods sold during 2025 was $603 million, or 58.5% of net sales, compared to $586 million, or 59.5% of net sales, for 2024. Gross profit increased $28 million, or 6.9%, compared to 2024 due to a $38 million benefit from favorable AUV, partially offset by a $9 million negative impact from lower sales volumes and a $2 million increase in manufacturing costs. The increase in manufacturing costs was primarily due to higher input costs, net of a $7 million benefit from favorable inventory valuations.

Previous wording

Mineral Fiber SG&A expenses were $181 million, or 18.3% of net sales in 2024 compared to $162 million, or 17.4% of net sales for 2023. The year-over-year increase in SG&A expenses was primarily driven by a $6 million decrease in company-owned officer life insurance gains related to deferred compensation plans, a $5 million increase in incentive compensation, a $4 million increase in selling expense, partially due to higher employee costs, and a $2 million increase in depreciation and amortization expense.

Current wording

SG&A expenses were $179 million, or 17.4% of net sales in 2025, compared to $181 million, or 18.3% of net sales, for 2024. The year-over-year decrease in SG&A expenses was primarily driven 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 matters of $2 million that did not recur in the current period. These decreases were partially offset by a $3 million increase in incentive compensation.

Previous wording

Equity earnings from our WAVE joint venture were $104.3 million in 2024, compared to $89.3 million in 2023. The increase in WAVE earnings was primarily driven by the benefits of favorable AUV, higher volumes and lower steel costs, partially offset by higher employee costs.

Current wording

Equity earnings from our WAVE joint venture were $113 million in 2025, compared to $104 million in 2024. The increase in WAVE equity earnings was primarily driven by the benefit from favorable AUV, partially offset by the negative impact of lower sales volumes.

Previous wording

Architectural Specialties SG&A expenses were $127 million, or 27.6% of net sales in 2024 compared to $99 million, or 27.4% of net sales for 2023. The year-over-year increase in SG&A expenses was primarily driven by a $32 million increase related to the acquisitions of Zahner, 3form and BOK, as well as a $4 million increase in selling expenses, due to higher employee costs. These increases were partially offset by a $9 million decrease in acquisition-related costs.

Current wording

SG&A expenses were $160 million, or 27.0% of net sales, in 2025 compared to $127 million, or 27.6% of net sales, for 2024. The year-over-year increase in SG&A expenses was primarily driven by a $27 million increase related to the 2024 Acquisitions and a $3 million increase in selling and advertising expenses, driven primarily by higher net sales as well as additional investments in selling capabilities.

Previous wording

Unallocated Corporate operating loss was $4 million in 2024 compared to $3 million in 2023. The increase in operating loss was primarily due to $0.9 million of Overcast equity losses in 2024.

Current wording

Unallocated Corporate operating loss was $3 million in 2025 compared to $4 million in 2024.

Previous wording

Operating activities for 2024 provided $266.8 million of cash, compared to $233.5 million in 2023. The favorable change in cash from operating activities was driven by higher cash earnings and a favorable change in accounts payable and accrued expenses due to timing-related benefits, primarily from our Mineral Fiber segment, and the impact of higher incentive compensation accruals. These positive operating cash flow benefits were partially offset by an unfavorable change in accounts receivables, driven primarily by timing-related increase in receivables, primarily due to custom projects within our Architectural Specialties segment, and an increase in cash paid for income taxes.

Current wording

Operating activities for 2025 provided $355.5 million of cash, compared to $266.8 million in 2024. The favorable change in cash from operating activities was 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 cash flows from operating activities was a favorable timing related working capital change in accounts receivable, partially offset by an unfavorable change in inventory.

Previous wording

Net cash used for investing activities was $79.3 million for 2024, compared to $10.4 million in 2023. The unfavorable change in cash used in investing activities in 2024 compared to 2023 was primarily due to $124.0 million of cash paid for the 3form and Zahner acquisitions, partially offset by proceeds received from the sales of our idled St. Helens manufacturing plant and undeveloped land adjacent to our corporate headquarters in 2024 and an increase in proceeds received from company-owned life insurance policies.

Current wording

Net cash used for investing activities was $3.6 million for 2025, compared to $79.3 million in 2024. The favorable change in cash was primarily due to a $110 million reduction in cash paid for acquisitions and an increase in dividends from WAVE, 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 sales of our idled St. Helens manufacturing plant and undeveloped land adjacent to our corporate headquarters.

Previous wording

We have a $950.0 million variable rate senior credit facility, which is comprised of a $500.0 million revolving credit facility (with a $150.0 million sublimit for letters of credit) and a $450.0 million Term Loan A. As of December 31, 2024, the revolving credit facility and Term Loan A were priced at 1.375% over the Secured Overnight Financing Rate (“SOFR”), plus a 10 basis point adjustment. The revolving credit facility and Term Loan A mature in December 2027. We also have a $25.0 million bi-lateral letter of credit facility.

Current wording

On December 10, 2025, we amended our second amended and restated $950.0 million variable rate senior secured credit facility. The amendment to our senior secured credit facility decreased our principal balance to $910.6 million and is comprised of a $500.0 million revolving credit facility (with a $150.0 million sublimit for letters of credit) and a $410.6 million Term Loan A. The terms of the amended senior secured credit facility resulted in a lower interest rate spread for both the revolving credit facility and Term Loan A (upon refinance, from 1.375% over the Secured Overnight Financing Rate (“SOFR”), plus a 10-basis point SOFR adjustment to 1.25% over SOFR, with no incremental SOFR basis point adjustment). The interest rate can fluctuate based upon our election of the floating rate, with the applicable margin subject to adjustment based on our consolidated net leverage ratio. We also extended the maturity of both the revolving credit facility and Term Loan A from December 2027 to December 2030. In connection with the refinancing, we incurred $2.7 million of bank, legal and other fees, of which $2.6 million were capitalized. These fees are reflected as a component of long-term debt and amortized into interest expense over the lives of the underlying debt. Additionally, during the fourth quarter of 2025, we wrote off $0.2 million of unamortized debt financing costs, included as a component of interest expense, related to our previous credit facility. We also have a $25.0 million bi-lateral letter of credit facility separate from the senior secured credit facility.

Previous wording

As of December 31, 2024, total borrowings outstanding under our senior credit facility were $427.5 million under Term Loan A and $100.0 million under the revolving credit facility.

Current wording

As of December 31, 2025, total borrowings outstanding under our senior credit facility were $410.6 million under Term Loan A, and the revolving credit facility was undrawn.

Previous wording

We use interest rate swaps to minimize the fluctuations in earnings caused by interest rate volatility associated with our senior credit facility.

Current wording

The Term Loan A is currently priced on a variable interest rate basis. We use interest rate swaps to minimize the fluctuations in earnings caused by interest rate volatility associated with our senior credit facility.

Previous wording

including forward interest rate swaps (dollar amounts in millions):

Current wording

The following table summarizes our interest rate swaps, including forward interest rate swaps (dollar amounts in millions):

Previous wording

Under the terms of the interest rate swap with a November 28, 2018 trade date above, we pay a fixed rate monthly and receive a floating rate based on SOFR, inclusive of a 0% floor. Under the terms of all remaining interest rate swaps above, we pay a fixed rate monthly and receive a floating rate based on SOFR. These swaps are designated as cash flow hedges against changes in SOFR for a portion of our variable rate debt.

Current wording

Under the terms of the interest rate swaps above, we pay a fixed rate monthly and receive a floating rate based on SOFR. These swaps are designated as cash flow hedges against changes in SOFR for a portion of our variable rate debt.

Previous wording

The table below reflects scheduled future payments of long-term debt, excluding $2.4 million of unamortized debt financing costs, and the related interest payments, which are projected based on market-based interest rate swap curves (dollar amounts in millions):

Current wording

The following table reflects scheduled future payments of long-term debt, excluding $3.9 million of unamortized debt financing costs, and the related interest payments, which are projected based on market-based interest rate swap curves (dollar amounts in millions):

Previous wording

As of December 31, 2024, we had $79.3 million of cash and cash equivalents, $63.9 million in the U.S. and $15.4 million in various foreign jurisdictions, primarily Canada. As of December 31, 2024, we also had $400 million of borrowing capacity available under our revolving credit facility. We believe cash on hand and cash generated from operations, together with borrowing capacity under our credit facility, will be adequate to address our near-term liquidity needs based on current expectations of our business operations, capital expenditures and scheduled payment of debt obligations. In 2025, we expect to spend approximately $90 million to $100 million on capital expenditures and approximately $54 million on dividends.

Current wording

As of December 31, 2025, we had $112.7 million of cash and cash equivalents, $92.0 million in the U.S. and $20.7 million in various foreign jurisdictions, primarily Canada. As of December 31, 2025, we also had $500 million of borrowing capacity available under our revolving credit facility. We believe cash on hand and cash generated from operations, together with borrowing capacity under our credit facility, will be adequate to address our near-term liquidity needs based on current expectations of our business operations, capital expenditures and scheduled payment of debt obligations. In 2026, we expect to spend approximately $100 million to $110 million on capital expenditures and approximately $60 million on dividends. In addition, in February 2026 we paid $64.1 million associated with the acquisition of Eventscape, Inc. and Eventscape U.S. Holdings Inc. (collectively, “Eventscape”). See Note 28 to the Consolidated Financial Statements for more information.