Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q2 2011 Earnings Presentation
20 slides from Armstrong World Industries's earnings presentation, Aug 1, 2011
Slide 1: Earnings Call Presentation 2nd Quarter 2011
Earnings Call Presentation 2nd Quarter 2011 August 1, 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement Our disclosures in this presentation and in our other public documents and comments contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Those statements provide our future expectations or forecasts and can be identified by our
Slide 3: Basis of Presentation Explanation
Comparable Dollars Other Adjustments Net Sales Yes No Gross Profit Yes Yes SG&A Expense Yes Yes Equity Earnings Yes Yes Operating Income Yes Yes Net Income Yes Yes Cash Flow No No Return on Capital Yes Yes EBITDA Yes Yes Basis of Presentation Explanation • We report in comparable dollars to remove t
Slide 4: Key Metrics - Second Quarter 2011
2011 Actual 2010 Actual Variance Net Sales (1) $733 $733 0% Operating Income (2) 82 60 36.7% % of Sales 11.2% 8.2% 300 bps EBITDA 109 88 23.9% % of Sales 14.9% 12.0% 290 bps Earnings Per Share (3) $0.70 $0.57 22.8% Free Cash Flow 50 89 (39) Net (Cash) Debt 542 (141) 683 Key Metrics - Second Quarter
Slide 5: Q2 2011 - Adjusted EBITDA to Reported Net Income
2011 2010 V EBITDA- Adjusted $109 $88 $21 Depreciation and Amortization (27) (28) 1 Operating Income - Adjusted $82 $60 $22 Foreign Exchange Movements 1 - 1 Cost Reduction Initiatives (5) (2) (3) Accelerated Depreciation (not included above) (3) - (3) Restructuring (2) - (2) Impairments - (5) 5 Oper
Slide 6: Q2 Sales and EBITDA by Segment - 2011 vs. 2010
Q2 Sales and EBITDA by Segment - 2011 vs. 2010
Slide 7: EBITDA Bridge - Q2 2011 versus Prior Year
EBITDA Bridge - Q2 2011 versus Prior Year ($11) ($1)
Slide 8: Free Cash Flow - Second Quarter 2011 versus Prior Year
Free Cash Flow - Second Quarter 2011 versus Prior Year
Slide 9: Key Metrics - 1st Half 2011
2011 Actual 2010 Actual Variance Net Sales (1) $1,414 $1,393 1.5% Operating Income (2) 149 87 71.3% % of Sales 10.5% 6.3% 430 bps EBITDA 202 144 40.3% % of Sales 14.3% 10.3% 400 bps Earnings Per Share (3) $1.21 $0.80 51.3% Free Cash Flow 6 59 (53) Net (Cash) Debt 542 (141) 683 Key Metrics - 1 st Hal
Slide 10: 1H Sales and EBITDA by Segment - 2011 vs. 2010
1H Sales and EBITDA by Segment - 2011 vs. 2010
Slide 11: EBITDA Bridge - 1H 2011 versus Prior Year
EBITDA Bridge - 1H 2011 versus Prior Year ($13)
Slide 12: Key Metrics - Guidance 2011
2011 Estimate Range 2010 Variance Net Sales (1) 2,900 to 3,000 2,766 5% to 8% Operating Income (2) 280 to 310 189 48% to 64% EBITDA 385 to 415 303 27% to 37% Earnings Per Share (3) $2.29 to $2.58 $1.73 32% to 49% Free Cash Flow 80 to 120 180 (56%) to (33%) Key Metrics - Guidance 2011 (1) Sales figur
Slide 13: $165 Million Savings Program
$165 Million Savings Program $165M savings from manufacturing and SG&A, net of inflation. Manufacturing savings driven by plant closures and LEAN. Cumulative Savings $35M $125M $165M
Slide 14: Financial Outlook
2011 Financial Outlook ¾ Raw Material & Energy Inflation* $50 - $60 million increase ¾ Manufacturing Productivity* Gross Margin +175 to +225 bps vs. 2010 ¾ U.S. Pension Credit ~$25 million, down ~$25 million vs. 2010 60% manufacturing, 40% SG&A ¾ Earnings from WAVE $5 - $10 million vs. 2010 ¾ Cash T
Slide 15: Appendix
Appendix
Slide 16: 1H 2011 - Adjusted EBITDA to Reported Net Income
2011 2010 V EBITDA- Adjusted $202 $144 $58 Depreciation and Amortization (53) (57) 4 Operating Income - Adjusted $149 $87 $62 Foreign Exchange Movements (1) - (1) Cost Reduction Initiatives (25) (13) (12) Accelerated Depreciation (not included above) 9 - 9 Restructuring (7) - (7) Impairments - (8) 8
Slide 17: Adjusted Operating Income to Free Cash Flow
2011 Estimate Range Adjusted Operating Income 280 to 310 D&A 105 Adjusted EBITDA 385 to 415 Changes in Working Capital 5 to 25 Capex (180) to (200) Pension Credit (25) Interest Expense (50) Cash Taxes (25) Other, including cash payments for restructuring and one-time items (30) Free Cash Flow 80 to
Slide 18: Consolidated Results
Second Quarter 2011 Reported Comparability (1 ) Adjustments FX (2) Adj 2011 Adjusted 2010 Reported Comparability (1 ) Adjustments FX (2) Adj 2010 Adjusted Net Sales 749 - (16) 733 725 - 8 733 Operating Income 73 10 (1) 82 53 7 - 60 EPS $0.64 $0.07 ($0.01) $0.70 $0.46 $0.11 $ - $0.57 Full Year 2011 2
Slide 19: Segment Operating Income (Loss)
Second Quarter 2011 Reported Comparability (1) Adjustments 2011 Adjusted 2010 Reported Comparability (1) Adjustments 2010 Adjusted Building Products 57 4 61 53 2 55 Resilient Flooring 11 6 17 10 2 12 Wood Flooring 14 (1) 13 1 - 1 Cabinets 1 - 1 - - - Unallocated Corporate (Expense) Income (10) - (10
Slide 20: Cash Flow
Second Quarter Full Year ($-millions) 2011 2010 2011 2010 Net Cash From Operations 68 84 32 56 Plus / (Minus) Net Cash from Investing (18) 5 (26) 3 Equals Free Cash Flow 50 89 6 59 Cash Flow Financial Overview Appendix
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