Adjusted EBITDA declined 15% to $174 million, with adjusted EBITDA margin falling to 9.5% from 10.7% a year ago due to pricing and cost pressures as well as lower volumes.
Capital expenditures totaled $130 million, with $48 million in maintenance CapEx and $82 million in expansionary CapEx focused on capacity expansion, geographic growth, and automation.
Construction segment sales declined 4% to $552 million with a 6% decline in selling prices partially offset by a 2% increase in units; operating profits declined by $16 million.
Earnings per share for the quarter were $1.70.
Gross profits declined due to lower volumes, higher material and manufacturing costs, and operational challenges, especially in site-built and composite decking businesses.
Net sales for Q2 2025 were $1.8 billion, down 3.5% from $1.9 billion last year, driven by a 3% decline in units and a 1% decline in pricing with recent acquisitions providing a modest offset.
Operating cash flow was $113 million for the quarter, including a seasonal net working capital increase of $166 million expected to convert to cash by end of Q3.
Packaging segment sales declined 2% to $429 million with a 4% decrease in selling prices and 2% unit growth from acquisitions; operating profits declined by $3 million.
Retail segment sales declined 3% due to a 7% decline in unit sales offset by a 4% increase in price; operating profits declined by $6 million.
The company returned capital to shareholders through $42 million in dividends and $261 million in share repurchases.
Balance sheet remains strong with $55.1 million cash, no debt, and $120 million credit facility availability.
Board declared a quarterly dividend of $0.26 per share.
Capital expenditures were $1.4 million in the quarter, with expected full-year 2025 capex of $2 million to $3 million focused on maintenance.
Global Industrial reported second quarter 2025 revenue of $358.9 million, a 3.2% increase year-over-year, driven by growth in largest strategic accounts and offset by declines in smaller transactional customers.
Gross margin reached a record 37.1%, up 190 basis points from Q2 2024 and 220 basis points sequentially, reflecting price capture and favorable FIFO inventory timing.
Operating income rose 26.9% to a record $33.5 million, with operating margin at 9.3%.
Selling, distribution, and administrative expenses increased 3.5% to $99.5 million but remained flat as a percentage of sales at 27.7%, reflecting cost control and efficiency gains.
Strong cash flow generation was noted with operating cash flow from continuing operations at $31.8 million.
Adjusted diluted earnings per share rose 29% year-over-year, marking the highest quarterly EPS growth since 2016 separation from flooring business.
Architectural Specialties segment net sales grew 37%, with 15% organic growth and strong contributions from 2024 acquisitions 3form and Zahner; adjusted EBITDA grew 61% with margin at approximately 22%.
In Q2 2025, Armstrong World Industries increased net sales by 16% and adjusted EBITDA by 23%, expanding adjusted EBITDA margin by 200 basis points to 36%.
Mineral Fiber segment net sales grew 7% with 5% AUV growth and modest volume contribution; adjusted EBITDA grew 16% with margin expansion of 350 basis points to approximately 45%.
Strong adjusted free cash flow generation allowed continued capital allocation including $14 million dividends and $30 million share repurchases in Q2, with $610 million remaining under repurchase authorization.
Adjusted operating earnings per share was $0.20 in Q2 compared to $0.23 in Q1, impacted by nonrecurring items and maintenance outages.
Depreciation and amortization were favorable due to non-repeat of accelerated depreciation from mill closures, partially offset by DS Smith integration costs.
DS Smith legacy operations contributed positively with a full quarter of earnings but faced softness in demand and higher fiber costs.
Free cash flow for Q2 was $54 million, with full-year guidance of $100 million to $300 million.
Operations and costs were unfavorable sequentially due to nonrecurring costs, natural gas curtailment, and maintenance outages.
Packaging Solutions EMEA experienced softer demand and a spike in fiber costs, partially offset by favorable energy costs.
Packaging Solutions North America saw improved on-time delivery from 92% to 97% and reduced volume gap to market by 200 basis points.
Second quarter revenue was at expectation, driven by a full quarter of DS Smith and strong price realization.
Volume was seasonally higher in North America but softer in EMEA, with lower volume in Global Cellulose Fibers (GCF) due to outages.
Dafinchi