Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q4 2011 Earnings Presentation
22 slides from Armstrong World Industries's earnings presentation, Feb 27, 2012
Slide 1: Earnings Call Presentation 4th Quarter 2011
Earnings Call Presentation 4th Quarter 2011 February 27, 2012
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
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 - Fourth Quarter 2011
As reported Net Sales: $652 million in 2011 and $643 million in 2010. As reported Operating Income (Loss): $22 million in 2011 and ($30) million in 2010 As reported EPS: $0.14 in 2011 and $(0.36) in 2010. Key Metrics - Fourth Quarter 2011 2011 2010 Variance Net Sales (1) $647 $641 0.9% Operating Inc
Slide 5: Fourth Quarter 2011 - Adjusted EBITDA to Reported Net Income
2011 2010 V EBITDA- Adjusted $51 $47 $4 Depreciation and Amortization (25) (28) 3 Operating Income - Adjusted $26 $19 $7 Foreign Exchange Movements 1 1 - Cost Reduction Initiatives (3) (9) 6 Accelerated Depreciation (not included above) - (11) 11 Executive Transition Costs - (1) 1 Restructuring (1)
Slide 6: Fourth Quarter Sales and EBITDA by Segment - 2011 vs. 2010
(CHART) Fourth Quarter Sales and EBITDA by Segment - 2011 vs. 2010 6
Slide 7: EBITDA Bridge - Fourth Quarter 2011 vs. Prior Year
(CHART) ($6) EBITDA Bridge - Fourth Quarter 2011 vs. Prior Year 7 $8 $12 $5 $2
Slide 8: Free Cash Flow - Fourth Quarter 2011 vs. Prior Year
(CHART) $(7) ($4) Free Cash Flow - Fourth Quarter 2011 vs. Prior Year 8
Slide 9: Key Metrics - Full Year 2011
As reported Net Sales: $2,860 million in 2011 and $2,766 million in 2010. As reported Operating Income: $239 million in 2011 and $81 million in 2010 As reported EPS: $1.90 in 2011 and $ 0.19 in 2010. 2011 Actual 2010 Actual Variance Net Sales (1) $2,819 $2,786 1.2% Operating Income (2) 272 188 43.7%
Slide 10: Full Year Sales and EBITDA by Segment - 2011 vs. 2010
(CHART) Full Year Sales and EBITDA by Segment - 2011 vs. 2010 10
Slide 11: EBITDA Bridge - Full Year 2011 vs. Prior Year
(CHART) ($25) EBITDA Bridge - Full Year 2011 vs. Prior Year 11 $67 $65 $10 $48
Slide 12: Free Cash Flow - Full Year 2011 vs. Prior Year
(CHART) ($33) ($16) Free Cash Flow - Full Year 2011 vs. Prior Year 12
Slide 13: Cost Savings Program
Cost Savings Program Cost Savings Program 13 Incremental Savings ($M) Cumulative Expected Total Savings $35M $150M Savings of $185M $20 $15 $65 $50 $35 SG&A Savings Structural Manufacturing and Productivity Improvements Cumulative savings of $185 million expected from manufacturing and SG&A, net of
Slide 14: AWI - Return on Invested Capital (ROIC) - As Reported
(CHART) AWI - Return on Invested Capital (ROIC) - As Reported Highest ROIC (7.4%) since emergence in 2006 14 Trailing 12 months
Slide 15: Key Metrics - Guidance 2012
2012 Estimate Range 2012 Estimate Range 2012 Estimate Range 2011 Variance Variance Variance Net Sales(1) 2,900 to 3,000 2,819 3% to 6% Operating Income(2) 310 to 350 272 14% to 29% EBITDA 420 to 460 377 11% to 22% Earnings Per Share(3) $2.75 to $3.15 $2.23 23% to 41% Free Cash Flow 50 to 100 170 (71
Slide 16: 2012 Financial Outlook
2012 Financial Outlook $25 - $35 million increase Adjusted Gross Margin +100 to +150 bps vs. 2011 $15 - $25 million; 60% manufacturing, 40% SG&A $0 - $5 million vs. 2011 $10 - $20 million. Adjusted ETR of ~40% Sales $670 - $710 million EBITDA $75 - $90 million $240 - $270 million $5 - $10 million as
Slide 17: Appendix
Appendix 17
Slide 18: Full 2011 - Adjusted EBITDA to Reported Net Income
2011 2010 V EBITDA- Adjusted $377 $303 $74 Depreciation and Amortization (105) (115) 10 Operating Income - Adjusted $272 $188 $84 Foreign Exchange Movements 3 1 2 Cost Reduction Initiatives (15) (17) 2 Laminate Duty refunds - 7 (7) Accelerated Depreciation (not included above) (9) (31) 22 Executive
Slide 19: Adjusted Operating Income to Free Cash Flow
2012 Estimate Range 2012 Estimate Range 2012 Estimate Range Adjusted Operating Income 310 to 350 D&A 110 110 110 Adjusted EBITDA 420 to 460 Changes in Working Capital (20) to - Capex (240) to (270) Pension Credit (15) to (25) Interest Expense (40) to (45) Cash Taxes (10) to (20) Other, including cas
Slide 20: Comparability and FX Adjustments to Reported Results
Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter 2011 Reported Comparability(1) Adjustments FX(2) Adj 2011 Adjusted 2010 Reported Comparability(1) Adjustments FX(2) Adj 2010 Adjusted 2010 Adjusted Ne
Slide 21: Operating Income by Segment - Reported to Adjusted
Eliminates impact of foreign exchange movements and non-recurring items; see earnings press release and 10-Q for additional detail. Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter 2011 Reported Comparability(1) Adjustments 2011 Adjusted 2010 R
Slide 22: Cash Flow
Fourth Quarter Fourth Quarter Full Year Full Year ($ millions) 2011 2010 2011 2010 Net cash from operations 82 49 212 190 Net cash provided by (used for) investing 24 (37) (18) (41) Add back (subtract) adjustments to reconcile to free cash flow Restricted cash (20) 30 (28) 30 Acquisition (divestitur
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