Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q4 2019 Earnings Presentation
19 slides from Armstrong World Industries's earnings presentation, Feb 24, 2020
Slide 1: Earnings Call Presentation 4th Quarter 2019
Exhibit 99.2 February 24, 2020 Earnings Call Presentation 4th Quarter 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 Our disclosures in this presentation, including without limitation, those relating to future financial results market conditions and guidance, and in our other public documents and comments contain forward-looking statements within the meaning of the Private Securities Litiga
Slide 3: Basis of Presentation Explanation
Basis of Presentation Explanation 3 When reporting our financial results within this presentation, we make several adjustments. Management uses these non-GAAP measures in managing the business and believes the adjustments provide meaningful comparisons of operating performance between periods. As re
Slide 4: Consolidated Company Key Metrics - Fourth Quarter 2019
Consolidated Company Key Metrics-Fourth Quarter 2019 4 2019 2018 Variance Net Sales $247 $239 3% Adj. EBITDA $90 $79 14% % of Sales 36% 33% 330 bps Adj. Earnings Per Share (1) $1.11 $0.80 40% Adj. Free Cash Flow (2) $71 $88 -19% Net Debt $566 $494 $71 Normalized(3) Adj. EBITDA Change (Left-hand scal
Slide 5: Adjusted EBITDA Bridge - Fourth Quarter 2019 vs. PY
Adjusted EBITDA Bridge – Fourth Quarter 2019 vs. PY 5 Normalized(1) $95 $90 $3 $90 $1 $1 $3 $1 $85 $3 $80 $79 $75 $70 Q4 2018 Volume Price/Mix Input Costs Mfg Cost SG&A WAVE Q4 2019 "AUV" AUV growth coupled with manufacturing productivity and strong WAVE performance drive adjusted EBITDA up 14% (1)
Slide 6: Free Cash Flow Bridge - Fourth Quarter 2019 vs. PY
Adjusted Free Cash Flow Bridge - Fourth Quarter 2019 vs. PY 6 Normalized(1) $100 $88 $4 $80 $13 ($0) $71 ($9) $63 ($0) $60 WAVE 2018 Special Dividend Impact ($34) $40 ($25) $20 $0 (2) Q4 2018 Operating Capex Interest WAVE Other Q4 2019 Cash Flow Paid Dividends Strong cash earnings growth impacted by
Slide 7: Mineral Fiber Fourth Quarter Results
Mineral Fiber Fourth Quarter Results 7 Sales Key Highlights $197 Up 3% • Average Unit Value (AUV) expanded 5% versus $191 the prior year quarter • Manufacturing gains driven by productivity • WAVE equity earnings increased 18% driven by positive volume and mix Q4 2019 Q4 2018 Q1 Q2 Q3 Q4 2018 Adjust
Slide 8: Architectural Specialties Fourth Quarter Results
Architectural Specialties Fourth Quarter Results 8 Sales Key Highlights • Sales up 4% driven by M&A, partially offset due $50 Up 4% to unfavorable project timing and extended lead times from a third party supplier $48 • Adjusted EBITDA up 2% as sales gains were partially offset by higher manufacturi
Slide 9: Consolidated Company Key Metrics - FY 2019
Consolidated Company Key Metrics – FY 2019 9 2019 2018 Variance Net Sales $1,038 $975 6% Adj. EBITDA $403 $353 14% % of Sales 39% 36% 270 bps Adj. Earnings Per Share (1) $4.78 $3.66 31% Adj. Free Cash Flow (2) $244 $236 3% Adj. EBITDA Change (Left-hand scale) % Change in Net Sales (Right-hand scale)
Slide 10: Adjusted EBITDA Bridge - FY 2019 vs. PY
Adjusted EBITDA Bridge – FY 2019 vs. PY 10 Normalized(1) $5 $403 $400 $5 $1 $31 ($2) $380 $10 $360 $353 $340 $320 $300 FY 2018 Volume Price/Mix Input Costs Mfg Cost SG&A WAVE FY 2019 "AUV" Strong price and mix drive adjusted EBITDA up 14% (1) May not sum due to rounding
Slide 11: Free Cash Flow Bridge - FY 2019 vs. PY
Adjusted Free Cash Flow Bridge – FY 2019 vs. PY 11 Normalized(1) $260 $2 $2 $244 $30 $1 ($2) $236 ($23) $220 $211 WAVE 2018 Special Dividend Impact ($25) $180 FY 2018 Operating Cash Capex Interest WAVE Other FY 2019 Flow (2) Paid Dividends Strong cash earnings impacted by WAVE special dividend recei
Slide 12: 2020 Guidance
2020 Guidance 12 2019 Actual 2020 Guidance Mineral Fiber up 5% - 7% Revenue $1,100 - $1,125 $1,038 Architectural Specialties** >15% 6% – 8% YoY Growth 1-3 Acquisitions – incremental to guidance Earnings contribution from AUV Adjusted $435 - $445 Architectural Specialties volume contributio
Slide 13: Appendix
Appendix =m 2 ANA @mstrong WORLD INDUSTRIES
Slide 14: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 14 For the Three Months For the Year Ended Ended December 31, December 31, 2019 2018 V 2019 2018 V Earnings from continuing operations, Reported $51 $37 $15 $242 $190 $53 Add: Income tax expense, as reported $8 $11 - $57 $53 $4 Earnings before tax, Reported $60 $47 $12
Slide 15: Diluted Earnings Per Share Reconciliation
Adjusted Diluted Earnings Per Share Reconciliation 15 CONSOLIDATED For the Three Months Ended December 31, For the Year Ended December 31, Per Per Per Per 2019 Diluted 2018 Diluted V 2019 Diluted 2018 Diluted V Share Share Share Share Earnings from continuing operations, As Reported $51 $1.04 $37 $0
Slide 16: Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation 16 For the Three Months Ended For the Year Ended December 31, December 31, 2019 2018 V 2019 2018 V As Reported Net cash provided by operating activities $62 $44 $18 $183 $203 ($21) As Reported Net cash (used for) provided by investing activities ($18) $24 ($42)
Slide 17: Segment Reported Operating Income (Loss) to Adjusted EBITDA
Segment Reported Operating Income (Loss) to Adjusted EBITDA 17 ARCHITECTURAL UNALLOCATED MINERAL FIBER SPECIALTIES CORPORATE For the Three Months Ended December 31, 2019 2018 V 2019 2018 V 2019 2018 V Operating Income (Loss) – As Reported $59 $49 $10 $6 $6 - ($3) ($2) ($1) Add: U.S. Pension Cost (1)
Slide 18: Net Sales & EBITDA - Guidance Reconciliation
Net Sales & EBITDA – Guidance Reconciliation 18 Net Sales For the Year Ending December 31, 2020 Low to High Reported Net Sales $1,100 to $1,125 Adjusted EBITDA For the Year Ending December 31, 2020 Low to High Net income $268 to $275 Add: Interest expense 30 30 Add: Income tax expense 83 85 (Less):
Slide 19: EPS & Free Cash Flow - Guidance Reconciliation
Adjusted EPS & Free Cash Flow – Guidance Reconciliation 19 Adjusted Diluted Earnings Per Share For the Year Ending December 31, 2020 Per Diluted Per Diluted Low to High Share (1) Share (1) Net Income $268 $5.57 to $275 $5.73 Add: Interest expense 30 30 (Less): U.S. Pension credit (2) (20) (20) Add:
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