Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q2 2012 Earnings Presentation
21 slides from Armstrong World Industries's earnings presentation, Jul 30, 2012
Slide 1: Earnings Call Presentation 2nd Quarter 2012
Earnings Call Presentation 2nd Quarter 2012 July 30, 2012
Slide 2: Safe Harbor Statement
Safe Harbor Statement Our disclosures in this presentation, including without limitation, those relating to future financial results guidance, and in our other public documents and comments contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Those s
Slide 3: Basis of Presentation
All figures throughout the presentation are in $ millions unless otherwise noted. Figures may not add due to rounding. Basis of Presentation Explanation When reporting our financial results within this presentation, we make several adjustments. Management uses the non-GAAP measures below in managing
Slide 4: Key Metrics - Second Quarter 2012
As reported Net Sales: $710 million in 2012 and $749 million in 2011 As reported Operating Income : $77 million in 2012 and $73 million in 2011 As reported EPS: $0.70 in 2012 and $0.64 in 2011 Key Metrics - Second Quarter 2012 2012 2011 Variance Net Sales (1) $707 $729 (3.0)% Operating Income (2) 85
Slide 5: Second Quarter 2012 vs. PY - Adjusted EBITDA to Reported Net Income
2012 2011 V EBITDA- Adjusted $110 $108 $2 Depreciation and Amortization (25) (26) 1 Operating Income - Adjusted $85 $82 $3 Foreign Exchange Movements - 1 (1) Cost Reduction Initiatives (7) (4) (3) Accelerated Depreciation (not included above) (1) (4) 3 Restructuring - (2) 2 Operating Income - As Rep
Slide 6: Second Quarter Sales and EBITDA by Segment - 2012 vs. PY
Second Quarter Sales and EBITDA by Segment - 2012 vs. PY 6
Slide 7: EBITDA Bridge - Second Quarter 2012 vs. Prior Year
($19) EBITDA Bridge - Second Quarter 2012 vs. Prior Year 7 $11 $8 $6 $2 $108 $110
Slide 8: Free Cash Flow - Second Quarter 2012 vs. Prior Year
Free Cash Flow - Second Quarter 2012 vs. Prior Year 8
Slide 9: Key Metrics - 1st Half of 2012
As reported Net Sales: $1,378 million in 2012 and $1,434 million in 2011. As reported Operating Income: $119 million in 2012 and $125 million in 2011 As reported EPS: $1.01 in 2012 and $ 0.87 in 2011. 2012 Actual 2011 Actual Variance Net Sales (1) $1,370 $1,406 (2.5)% Operating Income (2) 142 148 (4
Slide 10: 1H Sales and EBITDA by Segment - 2012 vs. 2011
1H Sales and EBITDA by Segment - 2012 vs. 2011 10
Slide 11: EBITDA Bridge - 1H 2012 vs. Prior Year
($31) EBITDA Bridge - 1H 2012 vs. Prior Year 11 ($1)
Slide 12: Free Cash Flow - 1H 2012 vs. Prior Year
Free Cash Flow - 1H 2012 vs. Prior Year 12
Slide 13: Cost Savings Program
Cost Savings Program 13 Incremental Savings ($M) Expected Total Cumulative Savings $35M $150M $200M $20 $15 $65 $50 $40 Structural Manufacturing and Productivity Improvements Cumulative savings of $200 million expected from manufacturing and SG&A. Cost Out Program Evolution 2010 - program introduced
Slide 14: Key Metrics - Guidance 2012
2012 Estimate Range 2012 Estimate Range 2012 Estimate Range 2011 Variance Variance Variance Net Sales(1) 2,750 to 2,850 2,819 (2)% to 1% Operating Income(2) 290 to 320 272 7% to 18% EBITDA 400 to 430 377 6% to 14% Earnings Per Share(3) $2.40 to $2.70 $2.23 8% to 21% Free Cash Flow 30 to 70 170 (82)%
Slide 15: 2012 Financial Outlook
2012 Financial Outlook $20 - $30 million increase Adjusted Gross Margin +50 to +100 bps vs. 2011 $12 million; 60% manufacturing, 40% SG&A Flat vs. 2011 $10 - $20 million. Adjusted ETR of ~40% Sales $740 - $780 million EBITDA $120 - $140 million $225 - $250 million $10 - $15 million associated with a
Slide 16: Appendix
Appendix 16
Slide 17: 1H 2012 - Adjusted EBITDA to Reported Net Income
2012 2011 V EBITDA- Adjusted $192 $201 ($9) Depreciation and Amortization (50) (53) 3 Operating Income - Adjusted $142 $148 ($6) Foreign Exchange Movements 1 2 (1) Cost Reduction Initiatives (9) (9) - Accelerated Depreciation and Impairments (not included above) (15) (9) (6) Restructuring - (7) 7 Op
Slide 18: Adjusted Operating Income to Free Cash Flow
2012 Estimate Range 2012 Estimate Range 2012 Estimate Range Adjusted Operating Income 290 to 320 D&A 110 110 110 Adjusted EBITDA 400 to 430 Changes in Working Capital (15) to (30) Capex (225) to (250) Pension Credit (12) (12) (12) Interest Expense (50) to (55) Cash Taxes (10) to (20) Other, includin
Slide 19: Reported to Adjusted Net Sales, Operating Income and EPS
Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter 2012 Reported Comparability(1) Adjustments FX(2) Adj 2012 Adjusted 2011 Reported Comparability(1) Adjustments FX(2) Adj 2011 Adjusted 2011 Adjusted Ne
Slide 20: Segment Operating Income Reconciliation
Eliminates impact of foreign exchange movements and non-recurring items; see earnings press release and 10-Q for additional detail. Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter 2012 Reported Comparability(1) Adjustments 2012 Adjusted 2011 R
Slide 21: Cash Flow
Second Quarter Second Quarter YTD YTD ($ millions) 2012 2011 2012 2011 Net cash from operations 63 68 30 32 Net cash (used for) investing (27) (15) (42) (23) Add back (subtract) adjustments to reconcile to free cash flow Restricted cash - (3) (2) (3) Free Cash Flow 36 50 (14) 6 Cash Flow 21
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