ARMSTRONG WORLD INDUSTRIES INC
For the period ended Sep 30, 2026. Filed Oct 27, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 27, 2026
AWI$171.23+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-28.
0001193125-26-318838
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-27.
0001193125-26-432651
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 86 previous paragraphs and 83 current paragraphs.
44 unchanged; 30 reworded; 9 added; 11 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Cost of goods sold in the third quarter of 2026 were $285.1 million, or 59.9% of net sales, compared to $246.7 million, or 58.0% of net sales, for the same period in 2025. The increase in cost of goods sold as a percent of net sales was primarily due to input cost inflation, most notably higher freight and raw material costs, higher tariffs on certain goods sold, and the impact of our 2026 and 2025 acquisitions. These increases were partially offset by favorable AUV benefits and ongoing manufacturing productivity.
Current report
Income tax expense was $32.5 million in the third quarter of 2026 compared to $23.2 million in the third quarter of 2025. The effective tax rate was 26.1% for the third quarter of 2026 compared to 21.2% in the prior-year quarter. Income tax expense was $84.3 million in the first nine months of 2026 compared to $72.3 million in the first nine months of 2025. The effective tax rate for the first nine months of 2026 was 24.8% compared to 22.9% for the same period of 2025. The increases in the effective tax rate for the third quarter and in the first nine months of 2026 compared to the same periods in 2025 were primarily due to the absence of prior-year benefits recognized from statute closures and federal investment tax credits.
Current report
Mineral Fiber net sales increased $18 million in the third quarter of 2026 compared to the prior-year quarter due to $16 million of favorable AUV and $2 million of higher sales volumes. The improvement in AUV was driven by favorable like-for-like price and, to a lesser extent, favorable mix. The increase in volumes was driven primarily by timing-related demand from our Canadian customers and partially due to benefits from our growth initiatives.
Current report
Cost of goods sold during the three months ended September 30, 2026 was $171.7 million, or 58.8% of net sales, compared to $155.3 million, or 56.7% of net sales, in the prior-year period. The current-year period increase in costs of goods sold as a percent of sales was primarily due to freight and raw material inflation. Gross profit increased $2 million, or 1.4%, compared to the prior-year quarter due to a $9 million benefit from favorable AUV, a $1 million benefit from higher sales volumes, in addition to the benefit of ongoing manufacturing productivity. These benefits were partially offset by an $8 million increase in manufacturing costs, including freight and raw material inflation.
Current report
SG&A expenses during the three months ended September 30, 2026 were $46.2 million, or 15.8% of net sales, compared to $49.1 million, or 17.9% of net sales, in the prior-year quarter. The decrease in SG&A expenses was primarily driven by a $3 million decrease in incentive compensation.
Current report
SG&A expenses during the nine months ended September 30, 2026 were $138.7 million, or 16.6% of net sales, compared to $132.3 million, or 16.8% of net sales, in the prior-year period. The increase in SG&A expenses was primarily driven by a $2 million increase in selling expenses and a $2 million increase in information technology productivity investments. People costs were unchanged from the prior-year period as higher salaries and benefits and $2 million of severance expenses were offset by a $4 million decrease in incentive compensation.
Current report
Cost of goods sold during the three months ended September 30, 2026 was $113.1 million, or 61.6% of net sales, compared to $91.1 million, or 60.3% of net sales, in the prior-year period. The increase in cost of goods sold as a percent of net sales was primarily driven by the inorganic impact from our 2026 and 2025 acquisitions and lower project margins primarily related to elevated metal costs and the ongoing impact of tariffs on imports from Canada. Gross profit increased $11 million, or 17.5%, compared to the prior-year quarter due to a $9 million benefit from higher organic net sales and a $1 million inorganic benefit.
Current report
Cost of goods sold during the nine months ended September 30, 2026 was $321.9 million, or 61.9% of net sales, compared to $267.3 million, or 59.9% of net sales, in the prior-year period. The increase in cost of goods sold as a percent of net sales was primarily driven by the inorganic impact from our 2026 and 2025 acquisitions and lower project margins primarily related to elevated metal costs and the ongoing impact of tariffs on imports from Canada. Gross profit increased $19 million, or 10.7%, from the prior-year period due to a $19 million benefit from higher organic net sales and a $3 million inorganic benefit. These benefits were partially offset by a $4 million increase in organic manufacturing costs. Cost of goods sold for the first nine months of 2026 were also impacted by $4 million of tariff refunds, most notably IEEPA tariff refunds, partially offset by $3 million of tariff adjustments based on duties for certain steel and aluminum products.
Current report
SG&A expenses during the three months ended September 30, 2026 were $44.9 million, or 24.4% of net sales, compared to $40.7 million, or 26.9% of net sales, in the prior-year quarter. The increase in SG&A expenses was primarily driven by a $3 million inorganic increase and a $1 million increase in organic selling expenses to support growth, partially offset by a $1 million decrease in incentive compensation.
Removed paragraphs (11)
Previous report
Cost of goods sold in the first six months of 2026 were $531.6 million, or 60.3% of net sales, compared to $481.6 million, or 59.7% of net sales, for the same period in 2025. The year-over-year increase in cost of goods sold as a percent of net sales for the first six months of 2026 was primarily driven by our 2026 and 2025 acquisitions and a $2 million negative net impact from tariffs, including a tariff adjustment recorded in the first quarter of 2026 and the ongoing impact of tariffs on our Canadian imports, partially offset by IEEPA refunds recognized during the second quarter of 2026. These increases in cost of goods sold as a percent of net sales were partially offset by favorable AUV benefits and ongoing manufacturing productivity.
Previous report
Income tax expense was $30.2 million in the second quarter of 2026 compared to $27.5 million in the second quarter of 2025. The effective tax rate was 23.8% for the second quarter of 2026 compared to 23.9% in the second quarter of 2025. The slight decline in the effective tax rate was due to favorable impacts from executive compensation limitations and excess tax benefits related to stock-based compensation, largely offset by the absence of an investment tax credit recognized in the second quarter of 2025.
Previous report
Income tax expense was $51.8 million in the first six months of 2026 compared to $49.1 million in the first six months of 2025. The effective tax rate for the first six months of 2026 was 24.1% compared to 23.8% for the same period of 2025. The modest increase in the effective tax rate was due to the absence of an investment tax credit recognized in the prior year, partially offset by benefits from lower executive compensation limitations and higher excess tax benefits related to stock-based compensation.
Previous report
Mineral Fiber net sales increased $21 million in the second quarter of 2026 compared to the prior-year quarter due to $16 million of favorable AUV, including like-for-like price and mix driven by continued demand at the high-end of our product portfolio, and $5 million of higher sales volumes, primarily due to strong commercial execution and benefits from growth initiatives, in addition to slightly improved market conditions.
Previous report
Cost of goods sold during the three months ended June 30, 2026 was $166.8 million, or 57.9% of net sales, compared to $156.7 million, or 58.7% of net sales, in the prior-year period. Gross profit increased $11 million, or 10.1%, compared to the prior-year quarter due to a $12 million benefit from favorable AUV and a $3 million benefit from higher sales volumes. These benefits were partially offset by a $4 million increase in manufacturing costs, including freight, raw material and energy inflation, partially offset by ongoing manufacturing productivity.
Previous report
SG&A expenses during the three months ended June 30, 2026 were $48.7 million, or 16.9% of net sales, compared to $43.8 million, or 16.4% of net sales, in the prior-year quarter. The increase in SG&A expenses was primarily driven by investments to support growth, most notably a $2 million increase in people costs, including incentive compensation, and a $1 million increase in selling expenses. Also contributing to the increase was a $1 million increase in accruals for environmental remediation matters.
Previous report
SG&A expenses during the six months ended June 30, 2026 were $92.5 million, or 17.0% of net sales, compared to $83.2 million, or 16.2% of net sales, in the prior-year period. The increase in SG&A expenses was primarily driven by a $3 million increase in people costs, including incentive compensation, a $2 million increase in severance expenses, a $1 million decrease in company-owned officer life insurance gains related to deferred compensation plans and a $1 million increase in accruals for environmental remediation matters.
Previous report
Equity earnings from our WAVE joint venture were $61.0 million in the first six months of 2026, compared to $58.9 million in the prior-year period. The increase in WAVE equity earnings was primarily driven by the benefit of favorable AUV and higher sales volumes, partially offset by higher steel costs.
Previous report
Cost of goods sold during the three months ended June 30, 2026 was $109.8 million, or 59.7% of net sales, compared to $91.8 million, or 58.2% of net sales, in the prior-year period, with the increase in cost of goods sold as a percent of net sales primarily driven by the inorganic impact from our 2026 and 2025 acquisitions. Gross profit increased $8 million, or 12.5%, compared to the prior-year quarter due to a $5 million benefit from higher organic net sales and a $4 million inorganic benefit. Cost of goods sold was also impacted by the net benefit from tariff-related items, which included $2 million of IEEPA tariff refunds recognized in the second quarter of 2026, largely offset by the ongoing impact of tariffs on our Canadian imports.
Previous report
Cost of goods sold during the six months ended June 30, 2026 was $208.8 million, or 62.1% of net sales, compared to $176.2 million, or 59.7% of net sales, in the prior-year period, with the increase in cost of goods sold as a percent of net sales primarily driven by the inorganic impact and a net increase in impacts from tariff-related items. Gross profit increased $9 million, or 7.3%, compared to the prior-year period due to an $11 million benefit from higher organic net sales and a $6 million inorganic benefit. Partially offsetting these benefits was an $8 million increase in manufacturing costs, driven by a $4 million inorganic increase and a $4 million organic increase. The increase in organic manufacturing costs was also impacted by a $2 million negative net impact from tariffs, including a tariff adjustment recorded in the first quarter of 2026.
Previous report
SG&A expenses during the three months ended June 30, 2026 were $44.7 million, or 24.3% of net sales, compared to $40.3 million, or 25.6% of net sales, in the prior-year quarter. The increase in SG&A expenses was primarily driven by investments to support growth, including a $1 million increase in organic selling expenses and a $1 million increase in people costs, including incentive compensation. Also contributing to the increase was a $2 million inorganic increase.
Reworded paragraphs (30)
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, Gross Domestic Product (“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 governmental trade policies, including tariffs, and geopolitical events, including the ongoing conflict in Iran. These matters did not have a material direct impact on our financial condition, liquidity or results of operations in the first six months of 2026 or 2025.
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, Gross Domestic Product (“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 governmental trade and other policies, including tariffs, and geopolitical events, including the ongoing conflict in Iran. These matters did not have a material direct impact on our financial condition, liquidity or results of operations in the first nine months of 2026 or 2025. However, the broader economic effects of these matters have contributed to a more challenging operating environment as compared to the prior year.
Previous wording
Sales Volumes. For the three months ended June 30, 2026, sales volumes increased $31 million compared to the prior-year period, due primarily to a $15 million increase in organic Architectural Specialties net sales and an $11 million inorganic increase resulting from our February 2026 acquisition of Eventscape, our December 2025 acquisition of Parallel and our September 2025 acquisition of Geometrik. Also contributing to the increase in net sales was a $5 million increase from higher sales volumes in our Mineral Fiber segment. For the six months ended June 30, 2026, sales volumes increased $47 million compared to the prior-year period, due primarily to a $24 million increase in organic Architectural Specialties net sales and a $17 million inorganic increase due to our 2026 and 2025 acquisitions. Also contributing to the increase in net sales was a $6 million increase driven by higher sales volumes in our Mineral Fiber segment.
Current wording
Sales Volumes. For the three months ended September 30, 2026, sales volumes increased $35 million compared to the prior-year period, primarily driven by a $25 million increase in organic Architectural Specialties net sales and an $8 million inorganic increase resulting from our 2026 and 2025 acquisitions. Also contributing to the increase in net sales was a $2 million increase from higher sales volumes in our Mineral Fiber segment. For the nine months ended September 30, 2026, sales volumes increased $82 million compared to the prior-year period, due primarily to a $49 million increase in organic Architectural Specialties net sales and a $25 million inorganic increase due to our 2026 and 2025 acquisitions. Also contributing to the increase in net sales was an $8 million increase driven by higher sales volumes in our Mineral Fiber segment.
Previous wording
Favorable AUV increased our total consolidated net sales for the three and six months ended June 30, 2026 by $16 million and $27 million, respectively, compared to the same periods in 2025. 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 manage or evaluate performance using AUV 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 three and nine months ended September 30, 2026 by $16 million and $43 million, respectively, compared to the same periods in 2025. 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 evaluate performance using AUV for this segment but rather attribute all changes in net sales to volume, including gross to net sales adjustments.
Previous wording
During the first quarter of 2026, we implemented price increases on Mineral Fiber ceiling products and WAVE implemented price increases on grid products. In the second quarter of 2026, we announced and implemented price increases on certain Architectural Specialties products, and WAVE announced and implemented price increases on grid products. Also in the second quarter of 2026, we announced price increases on Mineral Fiber products and WAVE announced price increases on grid products, both of which will become effective in the third 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 and the competitive environment.
Current wording
During the first and third quarters of 2026, we implemented price increases on Mineral Fiber ceiling products. During the first and second quarters of 2026, we implemented price increases on certain Architectural Specialties products. WAVE implemented price increases on grid products during the first, second and third quarters of 2026. In October of 2026, we announced price increases on Mineral Fiber ceiling products and certain Architectural Specialties products, and WAVE announced price increases on grid products, all of which will become effective in the fourth 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 and the competitive environment.
Previous 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, we also purchase significant amounts of packaging materials and consume substantial amounts of energy, such as electricity and natural gas, and water. Fluctuations in the prices of these inputs impact our financial results. In the second quarter and first half of 2026, higher freight, raw material and energy costs negatively impacted operating income by $4 million and $6 million, respectively, compared to the same periods in 2025.
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, we also purchase significant amounts of packaging materials and consume substantial amounts of energy, such as electricity and natural gas, and water. Fluctuations in the prices of these inputs impact our financial results. During the three months ended September 30, 2026, higher freight and raw material costs negatively impacted operating income by $6 million compared to the same period in 2025. During the nine months ended September 30, 2026, higher freight, raw material and energy costs negatively impacted operating income by $12 million compared to the same period in 2025.
Previous wording
In connection with our acquisitions of Eventscape in February 2026, Geometrik in September 2025, Insolcorp, LLC (“Insolcorp”) in October 2023 and BOK Modern, LLC (“BOK”) in July 2023, we recorded certain acquisition-related expenses and losses to operating income during the three and six months ended June 30, 2026 and 2025, summarized as follows (dollar amounts in millions):
Current wording
In connection with our acquisitions of Eventscape in February 2026, Geometrik in September 2025, Insolcorp, LLC (“Insolcorp”) in October 2023 and BOK Modern, LLC (“BOK”) in July 2023, we recorded certain acquisition-related expenses, (gains) and losses to operating income during the three and nine months ended September 30, 2026 and 2025, summarized as follows (dollar amounts in millions):
Previous wording
Acquisition costs above reflect certain third-party professional fees incurred due to the Eventscape acquisition. The change in fair value of contingent consideration was related to our Eventscape, Geometrik, Insolcorp and BOK acquisitions and is remeasured quarterly during each acquisition’s earn-out periods. See Note 15 to the Condensed Consolidated Financial Statements for further information. Depreciation of fixed assets acquired and amortization of intangible assets acquired have been excluded from the table above.
Current wording
Acquisition costs above reflect certain third-party professional fees incurred due to the Eventscape and Geometrik acquisitions. The change in fair value of contingent consideration was related to our Eventscape, Geometrik, Insolcorp and BOK acquisitions and is remeasured quarterly during each acquisition’s earn-out periods. See Note 15 to the Condensed Consolidated Financial Statements for further information. Depreciation of fixed assets acquired and amortization of intangible assets acquired have been excluded from the table above.
Previous wording
As of June 30, 2026 and December 31, 2025, we had approximately 4,000 and 3,800 full-time and part-time employees, respectively.
Current wording
As of September 30, 2026 and December 31, 2025, we had approximately 4,100 and 3,800 full-time and part-time employees, respectively.
Previous wording
Consolidated net sales for the second quarter of 2026 increased 11.2% from the prior-year quarter due to higher volumes of $31 million and favorable AUV of $16 million. Architectural Specialties net sales increased $26 million and Mineral Fiber net sales increased $21 million from the prior-year quarter. Architectural Specialties segment net sales improved due to a $15 million increase in organic net sales and an $11 million inorganic contribution. The increase in Mineral Fiber net sales was driven by favorable AUV and improved sales volumes.
Current wording
Consolidated net sales for the third quarter of 2026 increased 11.9% from the prior-year quarter due to higher volumes of $35 million and favorable AUV of $16 million. Architectural Specialties net sales increased $33 million and Mineral Fiber net sales increased $18 million from the prior-year quarter. Architectural Specialties segment net sales improved due to a $25 million increase in organic net sales and an $8 million inorganic contribution. The increase in Mineral Fiber net sales was driven by favorable AUV and improved sales volumes.
Previous wording
Consolidated net sales for the first six months of 2026 increased 9.2% over the prior-year period due to higher volumes of $47 million and favorable AUV of $27 million. Architectural Specialties net sales increased $41 million and Mineral Fiber net sales increased $33 million over the prior-year period. Architectural Specialties segment net sales improved due to a $24 million increase in organic net sales and a $17 million inorganic contribution. The increase in Mineral Fiber net sales was driven by favorable AUV and improved sales volumes.
Current wording
Consolidated net sales for the first nine months of 2026 increased 10.2% over the prior-year period due to higher volumes of $82 million and favorable AUV of $43 million. Architectural Specialties net sales increased $74 million and Mineral Fiber net sales increased $51 million over the prior-year period. Architectural Specialties segment net sales improved due to a $49 million increase in organic net sales and a $25 million inorganic contribution. The increase in Mineral Fiber net sales was driven by favorable AUV and improved sales volumes.
Previous wording
Cost of goods sold in the second quarter of 2026 were $277.0 million, or 58.7% of net sales, compared to $248.8 million, or 58.6% of net sales, for the same period in 2025. The slight increase in cost of goods sold as a percent of net sales was primarily driven by our 2026 and 2025 acquisitions. This increase was partially offset by favorable AUV benefits and ongoing manufacturing productivity. Cost of goods sold was also impacted by the net benefit from tariff-related items, including $2 million of International Emergency Economic Powers Act (“IEEPA”) tariff refunds recognized during the second quarter of 2026, largely offset by the ongoing impact of tariffs on our Canadian imports.
Current wording
Cost of goods sold in the first nine months of 2026 were $816.7 million, or 60.2% of net sales, compared to $728.3 million, or 59.1% of net sales, for the same period in 2025. The increase in cost of goods sold as a percent of net sales was primarily driven by input cost inflation, most notably higher freight and raw material costs, higher tariffs on certain goods sold, and the impact of our 2026 and 2025 acquisitions. These increases were partially offset by favorable AUV benefits and ongoing manufacturing productivity. Cost of goods sold for the first nine months of 2026 were also impacted by $4 million of tariff refunds, most notably International Emergency Economic Powers Act (“IEEPA”) tariff refunds, partially offset by $3 million of tariff adjustments based on duties for certain Architectural Specialties steel and aluminum products.
Previous wording
SG&A expenses in the second quarter of 2026 were $93.7 million, or 19.9% of net sales, compared to $84.4 million, or 19.9% of net sales, in the prior-year quarter. The increase in SG&A expenses was primarily driven by investments to support growth, most notably a $3 million increase in people costs, including incentive compensation, and a $2 million increase in selling expenses. Also contributing to the increase was a $2 million inorganic increase due to our 2025 and 2026 acquisitions.
Current wording
SG&A expenses in the third quarter of 2026 were $91.3 million, or 19.2% of net sales, compared to $90.1 million, or 21.2% of net sales, in the prior-year quarter. The slight increase in SG&A expenses was primarily driven by a $3 million inorganic increase due to our 2025 and 2026 acquisitions and a $2 million increase in selling expenses to support growth, largely offset by a $4 million decrease in incentive compensation.
Previous wording
SG&A expenses in the first six months of 2026 were $182.1 million, or 20.6% of net sales, compared to $162.1 million, or 20.1% of net sales, for the same period in 2025. The increase in SG&A expenses was primarily driven by investments to support growth, most notably a $5 million increase in people costs, including incentive compensation, and a $2 million increase in organic Architectural Specialties selling expenses. Also contributing to the increase was a $5 million inorganic increase, including Eventscape acquisition costs, and a $3 million increase in severance expenses.
Current wording
SG&A expenses in the first nine months of 2026 were $273.4 million, or 20.1% of net sales, compared to $252.1 million, or 20.5% of net sales, for the same period in 2025. The increase in SG&A expenses was primarily driven by an $8 million inorganic increase, including a $2 million increase in acquisition costs, in addition to investments to support growth, including a $5 million increase in selling expenses and a $2 million increase in information technology productivity investments. Also contributing to the increase was a $3 million increase in people costs, driven by higher salaries and benefits of $6 million and a $3 million increase in severance expenses, partially offset by a $5 million decrease in incentive compensation.
Previous wording
Losses related to changes in the fair value of contingent consideration were $0.9 million in the second quarter of 2025, compared to $0.1 million for the second quarter of 2025, and $0.9 million in the first six months of 2026, compared to $0.4 million for the same period in 2025. Changes in the fair value of contingent consideration were related to our Insolcorp, Geometrik and Eventscape acquisitions. See Note 15 to the Condensed Consolidated Financial Statements for further information.
Current wording
Gains related to changes in the fair value of contingent consideration were $0.1 million in the third quarter of 2026, compared to losses of $0.1 million in the third quarter of 2025. Losses related to changes in the fair value of contingent consideration were $0.8 million in the first nine months of 2026, compared to $0.5 million for the same period in 2025. Changes in the fair value of contingent consideration were related to our Insolcorp, BOK, Geometrik and Eventscape acquisitions. See Note 15 to the Condensed Consolidated Financial Statements for further information.
Previous wording
Equity earnings from unconsolidated affiliates were $60.7 million in the first six months of 2026, compared to $58.5 million in the same period of 2025. WAVE equity earnings were $61.0 million in the first six months of 2026, compared to $58.9 million in the same period of 2025. The increase in WAVE equity earnings was primarily driven by the benefit of favorable AUV and higher sales volumes, partially offset by higher steel costs. See Note 8 to the Condensed Consolidated Financial Statements for further information.
Current wording
Equity earnings from unconsolidated affiliates were $31.7 million in the third quarter of 2026, compared to $28.0 million in the third quarter of 2025, and were $92.4 million in the first nine months of 2026, compared to $86.5 million in the same period in 2025. WAVE equity earnings were $31.8 million in the third quarter of 2026, compared to $28.2 million in the third quarter of 2025, and $92.8 million in the first nine months of 2026, compared to $87.1 million in the same period of 2025. The increases in WAVE equity earnings in both periods were primarily driven by higher sales volumes and the benefit of favorable AUV, partially offset by higher steel costs. See Note 8 to the Condensed Consolidated Financial Statements for further information.
Previous wording
Interest expense was $7.8 million in the second quarter of 2026, compared to $8.6 million in the second quarter of 2025. Interest expense was $15.1 million in the first six months of 2026 compared to $17.1 million in the first six months of 2025. The decreases in interest expense were due to a decrease in effective interest rates and lower average debt balances.
Current wording
Interest expense was $7.5 million in the third quarter of 2026, compared to $8.2 million in the third quarter of 2025. The decrease in interest expense for the third quarter of 2026 compared to the prior-year quarter was due to a decrease in effective interest rates, partially offset by higher average debt balances. Interest expense was $22.6 million in the first nine months of 2026 compared to $25.3 million in the first nine months of 2025. The decrease in interest expense in the first nine months of 2026 compared to the same period in 2026 was due to a decrease in effective interest rates and lower average debt balances.
Previous wording
Other non-operating income, net, was $0.9 million in the second quarter of 2026 compared to $0.7 million in the second quarter of 2025, and $2.4 million in the first six months of 2026 compared to $1.4 million in the same period of 2025. The increases in other non-operating income, net, were primarily driven by the non-service cost components of pension and postretirement net periodic benefits.
Current wording
Other non-operating income, net, was $0.7 million in the third quarter of 2026 compared to $0.5 million in the third quarter of 2025, and $3.1 million in the first nine months of 2026 compared to $1.9 million in the same period of 2025. The increases in other non-operating income, net, were primarily driven by the non-service cost components of pension and postretirement net periodic benefits.
Previous wording
Total Other Comprehensive Loss (“OCL”) was $0.5 million in the second quarter of 2026 compared to total Other Comprehensive Income (“OCI”) of $1.9 million in the second quarter of 2025. The change from OCI to OCL was due to unfavorable Canadian dollar foreign currency translation adjustments, partially offset by interest rate swap derivative gains. OCI was $0.5 million in the first six months of 2026 compared to OCI of $1.3 million in the first six months of 2025. The decrease in OCI was due to unfavorable Canadian dollar foreign currency translation adjustments, partially offset by interest rate swap derivative gains. Derivative gains and losses represent the mark-to-market value fair adjustments for our derivative assets and liabilities, and the recognition of gains and losses previously deferred in Accumulated Other Comprehensive (Loss). Foreign currency translation adjustments represent the change in the U.S. dollar value of assets and liabilities denominated in foreign currencies.
Current wording
Total Other Comprehensive Income (“OCI”) was $3.3 million in the third quarter of 2026 compared to total Other Comprehensive Loss (“OCL”) of $0.3 million in the third quarter of 2025. The change from OCL to OCI was due to interest rate swap derivative gains and favorable Canadian dollar foreign currency translation adjustments. OCI was $3.8 million in the first nine months of 2026 compared to OCI of $1.0 million in the first nine months of 2025. The increase in OCI was primarily due to interest rate swap derivative gains, partially offset by unfavorable Canadian dollar foreign currency translation adjustments. Derivative gains and losses represent the fair value adjustments for our derivative assets and liabilities, and the recognition of gains and losses previously deferred in Accumulated Other Comprehensive (Loss). Foreign currency translation adjustments represent the change in the U.S. dollar value of assets and liabilities denominated in foreign currencies.
Previous wording
For the first six months of 2026, Mineral Fiber net sales increased $33 million from the prior-year period, primarily due to $27 million of favorable AUV, driven by favorable like-for-like price and, to a lesser extent, favorable mix, and $6 million of higher sales volumes, primarily due to strong commercial execution and benefits from growth initiatives.
Current wording
For the first nine months of 2026, Mineral Fiber net sales increased $51 million from the prior-year period due to $43 million of favorable AUV, driven by favorable like-for-like price and, to a lesser extent, favorable mix, and $8 million of higher sales volumes. The increased volumes and favorable mix were driven by our solid commercial execution and benefits from our growth initiatives.
Previous wording
Cost of goods sold during the six months ended June 30, 2026 was $322.1 million, or 59.1% of net sales, compared to $304.7 million, or 59.5% of net sales, in the prior-year period. Gross profit increased $16 million, or 7.7%, compared to the prior-year period due to a $21 million benefit from favorable AUV and a $4 million benefit from higher sales volumes. These benefits were partially offset by a $9 million increase in manufacturing costs, including freight, raw material and energy inflation, partially offset by ongoing manufacturing productivity.
Current wording
Cost of goods sold during the nine months ended September 30, 2026 was $493.8 million, or 59.0% of net sales, compared to $460.0 million, or 58.5% of net sales, in the prior-year period. Gross profit increased $18 million, or 5.4%, compared to the prior-year period due to a $29 million benefit from favorable AUV, a $5 million benefit from higher sales volumes and ongoing manufacturing productivity. These benefits were partially offset by a $17 million increase in manufacturing costs, including freight, raw material and energy inflation and unfavorable inventory valuation impacts.
Previous wording
Equity earnings from unconsolidated affiliates were $33.4 million in the second quarter of 2026, compared to $31.9 million in the second quarter of 2025. WAVE equity earnings were $33.6 million in the second quarter of 2026, compared to $32.1 million in the second quarter of 2025. The increase in WAVE equity earnings was primarily driven by the impact of higher sales volumes and the benefit of favorable AUV, partially offset by higher steel costs.
Current wording
Equity earnings from our WAVE joint venture were $31.8 million in the third quarter of 2026, compared to $28.2 million in the third quarter of 2025, and $92.8 million in the first nine months of 2026, compared to $87.1 million in the same period of 2025. The year-over-year increases in WAVE equity earnings for the third quarter and first nine months of 2026 were primarily driven by higher sales volumes and the benefit of favorable AUV, partially offset by higher steel costs.
Previous wording
Architectural Specialties net sales increased $26 million in the second quarter of 2026 compared to the prior-year quarter due to a $15 million increase in organic net sales driven by strong growth across most of our specialty product categories and an $11 million inorganic contribution.
Current wording
Architectural Specialties net sales increased $33 million in the third quarter of 2026 compared to the prior-year quarter due to a $25 million increase in organic net sales driven by strong growth across most of our specialty product categories and an $8 million inorganic contribution.
Previous wording
For the first six months of 2026, Architectural Specialties net sales increased $41 million from the prior-year period due to a $24 million increase in organic net sales driven by strong growth across most of our specialty product categories and a $17 million inorganic contribution.
Current wording
For the first nine months of 2026, Architectural Specialties net sales increased $74 million from the prior-year period due to a $49 million increase in organic net sales driven by strong growth across most of our specialty product categories and a $25 million inorganic contribution.
Previous wording
SG&A expenses during the six months ended June 30, 2026 were $89.1 million, or 26.5% of net sales, compared to $78.4 million, or 26.6% of net sales, in the prior-year period. The increase in SG&A expenses was primarily driven by investments to support growth, including a $2 million increase in organic selling expenses and a $2 million increase in people costs, including incentive compensation. Also contributing to the increase was a $5 million inorganic increase, including Eventscape acquisition costs, and a $1 million increase in severance expenses.
Current wording
SG&A expenses during the nine months ended September 30, 2026 were $134.0 million, or 25.8% of net sales, compared to $119.0 million, or 26.7% of net sales, in the prior-year period. The increase in SG&A expenses was primarily driven by an $8 million inorganic increase, including a $2 million increase in acquisition costs. Also contributing to the increase were investments to support growth, including a $3 million increase in organic selling expenses and a $3 million increase in people costs, which included a $1 million increase in severance expenses.
Previous wording
Unallocated Corporate operating loss was $1 million in the second quarter of 2026 and 2025, and $2 million in the first six months of 2026 and 2025.
Current wording
Unallocated Corporate operating loss was $1 million in the third quarter of 2026 and 2025, and $2 million in the first nine months of 2026 and 2025.
Previous wording
Net cash provided by operating activities for the first six months of 2026 was $125.9 million, compared to $122.6 million for the first six months of 2025. The favorable change in operating activities is primarily due to an increase in cash earnings and favorable timing related changes in accounts payable and accrued expenses, partially offset by unfavorable timing related changes in receivables.
Current wording
Net cash provided by operating activities for the first nine months of 2026 was $222.1 million, compared to $245.5 million for the first nine months of 2025. The unfavorable change in operating activities was primarily due to unfavorable timing related changes in receivables and higher income tax payments, partially offset by favorable timing related changes in accounts payable and accrued expenses and an increase in net earnings.
Previous wording
Net cash used for investing activities was $44.9 million in the first six months of 2026, compared to $13.2 million of cash provided by investing activities in the first six months of 2025. The unfavorable change in cash used for investing activities was primarily due to the acquisition of Eventscape, partially offset by an increase in dividends from WAVE.
Current wording
Net cash used for investing activities was $34.8 million in the first nine months of 2026, compared to $16.8 million of cash provided by investing activities in the first nine months of 2025. The unfavorable change in cash used for investing activities was primarily due to the acquisition of Eventscape, partially offset by an increase in dividends from WAVE.
Previous wording
Net cash used for financing activities was $114.2 million in the first six months of 2026, compared to $134.7 million for the first six months of 2025. The favorable change in cash used for financing activities was primarily due to increased net borrowings due to the Eventscape acquisition, partially offset by an increase in repurchases of our outstanding common stock and an increase in payments of tax withholdings for share-based compensation plans.
Current wording
Net cash used for financing activities was $228.0 million in the first nine months of 2026, compared to $252.0 million for the first nine months of 2025. The favorable change in cash used for financing activities was due to higher net proceeds from borrowings, partially offset by an increase in repurchases of our outstanding common stock and an increase in payments of tax withholdings for share-based compensation plans.
Previous wording
As of June 30, 2026, the total principal balances outstanding under our senior credit facility included $405.5 million under Term Loan A and $90.0 million under the revolving credit facility.
Current wording
As of September 30, 2026, the total principal balances outstanding under our senior credit facility included $402.9 million under Term Loan A and $70.0 million under the revolving credit facility.
Previous wording
As of June 30, 2026, we had $78.6 million of cash and cash equivalents, $54.4 million in the U.S. and $24.2 million in foreign jurisdictions, primarily Canada. As of June 30, 2026, we also had $410 million 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 payments of debt obligations.
Current wording
As of September 30, 2026, we had $71.4 million of cash and cash equivalents, $54.6 million in the U.S. and $16.8 million in foreign jurisdictions, primarily Canada. As of September 30, 2026, we also had $430 million 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 payments of debt obligations.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Equity earnings from our WAVE joint venture were $33.6 million in the three months ended June 30, 2026, compared to $32.1 million in the prior-year period. The increase in WAVE equity earnings was primarily driven by the impact of higher sales volumes and the benefit of favorable AUV, partially offset by higher steel costs.