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Armstrong World Industries, Inc. (AWI - Free Report) acquired Johnstown, which is an Ohio-based manufacturer of metal ceilings and specialty systems Steel Ceilings, Inc. (“SCI”). This acquisition bolsters Armstrong's presence in the fields of architectural, radiant and security solutions. The financial terms of the transaction are not yet disclosed.
Armstrong’s shares gained 0.7% yesterday, ending the session at $69.95.
Buyout Synergies
SCI, with annual sales of about $10 million, is a manufacturer of standard and custom aluminum and stainless metal ceilings that include architectural, radiant, and security solutions.
Meanwhile, SCI merged with a North American manufacturer of radiant ceilings, Airtite Radiant Ceiling Systems, back in 2009. This buyout had broadly expanded SCI’s portfolio in the area of radiant ceilings. Currently, SCI offers a wide range of American-made products that comprise standard and custom metal ceilings and acoustic wall panels, and radiant ceilings.
Armstrong, a global leader in the design and manufacture of innovative commercial and residential ceiling, wall and suspension system solutions, has already been reaping benefits from investments in new products as well as the Tectum acquisition. Armstrong acquired Tectum in January 2017, accelerating its penetration into specialty ceilings and walls. Throughout 2017, its team integrated Tectum into the Armstrong platform and the results have exceeded expectations.
Now having fully integrated the business, it can begin making modest capital investments to further enhance capabilities and profitability in this product line. Moreover, continued sales leverage and capital investments at Tectum will enable the Architectural Specialty business to expand margins in 2018 and beyond.
Notably, the company’s Architectural Specialties segment sales increased 18% year over year in the second quarter of 2018, primarily driven by higher sales volume from increased market penetration and new construction activity. The segment’s operating profit rose 6.2% year over year owing to the positive impact of higher sales volume.
Now, the latest SCI buyout is expected to further expand Armstrong's portfolio of architectural specialty products and widen its customer reach.
For 2018, Armstrong maintained net sales growth in the range of 5-7%, aided by a modest upturn in volume, average unit values or AUV improvement in the Mineral Fiber segment and continued double-digit sales growth in the Architectural Specialties segment.
Acquisitions to Bolster Share Price
Shares of the company have broadly outperformed the industry so far this year. Armstrong has gained 15.5% in the said period against its industry’s decline of 12%. Accretive acquisitions, productivity improvements in plants, focus on restructuring activities as well as investment in new products are expected to aid Armstrong, which is currently a Zacks Rank #2 (Buy) stock, in generating higher profit.
Other Stocks to Consider
Other top-ranked stocks in the sector include NCI Building Systems, Inc. , PGT Innovations, Inc. and Construction Partners, Inc. (ROAD - Free Report) . While NCI Building and PGT sport a Zacks Rank #1 (Strong Buy), Construction Partners carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
NCI Building and PGT’s earnings per share are expected to increase 77.5% and 78.7%, respectively, this year.
Earnings estimates for Construction Partners have increased 1.8% over the past 60 days for the current fiscal.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Armstrong Buys SCI, Boosts Architectural Specialty Products
Armstrong World Industries, Inc. (AWI - Free Report) acquired Johnstown, which is an Ohio-based manufacturer of metal ceilings and specialty systems Steel Ceilings, Inc. (“SCI”). This acquisition bolsters Armstrong's presence in the fields of architectural, radiant and security solutions. The financial terms of the transaction are not yet disclosed.
Armstrong’s shares gained 0.7% yesterday, ending the session at $69.95.
Buyout Synergies
SCI, with annual sales of about $10 million, is a manufacturer of standard and custom aluminum and stainless metal ceilings that include architectural, radiant, and security solutions.
Meanwhile, SCI merged with a North American manufacturer of radiant ceilings, Airtite Radiant Ceiling Systems, back in 2009. This buyout had broadly expanded SCI’s portfolio in the area of radiant ceilings. Currently, SCI offers a wide range of American-made products that comprise standard and custom metal ceilings and acoustic wall panels, and radiant ceilings.
Armstrong, a global leader in the design and manufacture of innovative commercial and residential ceiling, wall and suspension system solutions, has already been reaping benefits from investments in new products as well as the Tectum acquisition. Armstrong acquired Tectum in January 2017, accelerating its penetration into specialty ceilings and walls. Throughout 2017, its team integrated Tectum into the Armstrong platform and the results have exceeded expectations.
Now having fully integrated the business, it can begin making modest capital investments to further enhance capabilities and profitability in this product line. Moreover, continued sales leverage and capital investments at Tectum will enable the Architectural Specialty business to expand margins in 2018 and beyond.
Notably, the company’s Architectural Specialties segment sales increased 18% year over year in the second quarter of 2018, primarily driven by higher sales volume from increased market penetration and new construction activity. The segment’s operating profit rose 6.2% year over year owing to the positive impact of higher sales volume.
Now, the latest SCI buyout is expected to further expand Armstrong's portfolio of architectural specialty products and widen its customer reach.
For 2018, Armstrong maintained net sales growth in the range of 5-7%, aided by a modest upturn in volume, average unit values or AUV improvement in the Mineral Fiber segment and continued double-digit sales growth in the Architectural Specialties segment.
Acquisitions to Bolster Share Price
Shares of the company have broadly outperformed the industry so far this year. Armstrong has gained 15.5% in the said period against its industry’s decline of 12%. Accretive acquisitions, productivity improvements in plants, focus on restructuring activities as well as investment in new products are expected to aid Armstrong, which is currently a Zacks Rank #2 (Buy) stock, in generating higher profit.
Other Stocks to Consider
Other top-ranked stocks in the sector include NCI Building Systems, Inc. , PGT Innovations, Inc. and Construction Partners, Inc. (ROAD - Free Report) . While NCI Building and PGT sport a Zacks Rank #1 (Strong Buy), Construction Partners carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
NCI Building and PGT’s earnings per share are expected to increase 77.5% and 78.7%, respectively, this year.
Earnings estimates for Construction Partners have increased 1.8% over the past 60 days for the current fiscal.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>