Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q1 2022 Earnings Presentation
19 slides from Armstrong World Industries's earnings presentation, Apr 26, 2022
Slide 1: 1st Quarter 2022 Earnings Presentation
1st Quarter 2022 Earnings Presentation April 26, 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement Our disclosures in this presentation, including without limitation, those relating to future financial results market conditions and guidance, the impacts of COVID-19 on our business, and in our other public documents and comments contain forward-looking statements within the m
Slide 3: Basis of Presentation Explanation
Basis of Presentation Explanation • Results throughout this presentation are presented on a normalized basis. • We remove the impact of certain discrete expenses and income in certain measures including adjusted net sales, adjusted EBITDA, adjusted diluted earnings per share (EPS) and adjusted free
Slide 4: Double-Digit Sales Improvement Driven by MF AUV and AS Growth
Double-Digit Sales Improvement Driven by MF AUV and AS Growth Q1 2022 Summary Adj. Net Sales* 12% increase in Net Sales driven by both Mineral Fiber (“MF”) 1 and Architectural Specialties (“AS”) $253 +12% $283 +24% +8% Mineral Fiber Average Unit Value (“AUV”) growth of 12%, driven 2 by like-for-like
Slide 5: Adj. EBITDA Bridge VPY
Q1 2022 Consolidated Company Key Metrics Q1 2021 Q1 2022 Variance Adj. Net Sales* $253 $283 12% Adj. EBITDA* $85 $87 3% Adj. EBITDA Margin*(%) 34% 31% (270bps) Adj. Earnings Per Share* $0.95 $1.02 7% Adj. Free Cash Flow* $23 $20 (13%) $19 Adj. EBITDA* Bridge VPY $100 $85 $2 ($6) ($0) $87 ($10) ($3)
Slide 6: Favorable MF AUV Partially Offset by Volume Headwinds
Favorable MF AUV Partially Offset by Volume Headwinds Mineral Fiber Q1 2022 Results Net Sales Mineral Fiber Key Highlights $203 $189 • AUV up 12% vs. Q1 2021 on positive like-for-like +8% pricing partially offset by unfavorable channel mix • Continued to achieve price over inflation and expand gross
Slide 7: Record-Setting Sales Performance and Strong EBITDA Growth
Record-Setting Sales Performance and Strong EBITDA Growth Architectural Specialties Q1 2022 Results Adj. Net Sales* Key Highlights $79 $64 • Adjusted Net Sales* up 24% on increased volumes, +24% share gains and pricing actions • Adjusted EBITDA* up 88% on sales fall through and adjusted EBITDA* marg
Slide 8: Adjusted Free Cash Flow Decline Driven by Lower WAVE Dividends
Adjusted Free Cash Flow Decline Driven by Lower WAVE Dividends First Quarter 2022 vs. PY $30 $1 $23 $1 $0 $20 $20 ($1) ($4) $10 $0 Q1 2021 Adj. Operating Capex Interest WAVE Other Q1 2022 Cash Flow(1) Paid Dividends 8 *Non-GAAP measure. See appendix for reconciliation to nearest GAAP measure. (1) In
Slide 9: 2022 Guidance
2022 Guidance Double-digit growth on both top and bottom line (Changes in assumptions) 2021 Actual 2022 Guidance Key Assumptions • MF AUV +10% to +12% on positive like-for-like pricing & mix benefits $1,215 – $1,255 • Market recovery and benefits from growth initiatives expected to drive MF Net Sale
Slide 10: Appendix
Appendix
Slide 11: Inventories/Sales Ratio
Supporting Data Exhibit 1: Building Supply Wholesalers Sales and Inventories(1) 2017Q2 2017Q4 2018Q2 2018Q4 2019Q2 2019Q4 2020Q2 2020Q4 2021Q2 2021Q4 60% 1.80 1.60 1.40 Sales and Inventory % VPY 40% Inventories/Sales Ratio 1.20 1.00 20% 0.80 0.60 0% 0.40 0.20 -20% 0.00 Sales (2) Inventories (3) Rati
Slide 12: Q1 2022 Adjusted EBITDA Reconciliation
Q1 2022 Adjusted EBITDA Reconciliation For the Three Months Ended March 31, 2022 2021 V Earnings from continuing operations, Reported $44 $38 $7 Add: Income tax expense, as reported 15 12 3 Earnings before tax, Reported $59 $50 $10 Add: Interest/other income and expense, net 4 4 (1) Operating Income
Slide 13: Q1 2022 Adjusted Diluted Earnings per Share Reconciliation
Q1 2022 Adjusted Diluted Earnings per Share Reconciliation For the Three Months Ended March 31, Per Diluted Per Diluted 2022 2021 V Share Share Earnings from continuing operations, Reported $44 $0.94 $38 $0.78 $7 Add: Income tax expense, reported 15 12 3 Earnings from continuing operations before in
Slide 14: Adjusted Free Cash Flow Reconciliation
2022 Adjusted Free Cash Flow Reconciliation . For the Three Months Ended March 31, 2022 2021 V Net cash provided by operating activities $17 $20 ($3) Net cash (used for) investing activities - ($9) $9 Net cash provided by operating and investing activities $17 $11 $6 Add: Payment related to the sale
Slide 15: Segment Reported Operating Income (Loss) to Adj. EBITDA
2022 Segment Reported Operating Income (Loss) to Adj. EBITDA ARCHITECTURAL MINERAL FIBER UNALLOCATED CORPORATE SPECIALTIES For the Three Months Ended March 31, 2022 2021 V 2022 2021 V 2022 2021 V Operating Income (Loss), As Reported $58 $61 ($3) $7 ($5) $11 ($1) ($2) $1 Add: RIP expense(1) - - - - -
Slide 16: Adjusted Net Sales Reconciliation
2022 Adjusted Net Sales Reconciliation Consolidated For the Three Months Ended March 31, 2022 2021 V Reported Net Sales $283 $252 $31 Deferred revenue adjustment (1) - 1 (1) Adjusted Net Sales $283 $253 $30 (1) Represents the impact of acquisition-related deferred revenue adjustments to fair value.
Slide 17: Adjusted EBITDA Guidance Reconciliation
2022 Adjusted EBITDA Guidance Reconciliation Consolidated For the Year Ending December 31, 2022 Low to High Net Income $232 to $241 Add: Interest expense 22 26 (Less): RIP credit (1) (4) (4) Add: Income tax expense 76 79 Operating Income $326 to $341 Add: RIP expense (2) 4 4 Add: Depreciation 65 68
Slide 18: Adjusted EPS Guidance Reconciliation
2022 Adjusted EPS Guidance Reconciliation Consolidated For the Year Ending December 31, 2022 Per Diluted Per Diluted Low to High Share(1) Share(1) Net income $232 $4.87 to $241 $5.05 Add: Interest expense 22 26 (Less): RIP credit (2) (4) (4) Add: Income tax expense 76 79 Operating Income $326 to $34
Slide 19: Adjusted Free Cash Flow Guidance Reconciliation
2022 Adjusted Free Cash Flow Guidance Reconciliation Consolidated For the Year Ending December 31, 2022 Low to High Net cash provided by operating activities $210 to $230 Add: Return of investment from joint venture 95 105 Adjusted net cash provided by operating activities $305 to $335 (Less): Capit
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