Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q3 2019 Earnings Presentation
19 slides from Armstrong World Industries's earnings presentation, Oct 28, 2019
Slide 1: Earnings Call Presentation 3rd Quarter 2019
Exhibit 99.2 October 28, 2019 Earnings Call Presentation 3rd 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 - Third Quarter 2019
Consolidated Company Key Metrics-Third Quarter 2019 4 2019 2018 Variance Net Sales $277 $261 6% Adj. EBITDA $114 $100 13% % of Sales 41% 38% 250 bps Adj. Earnings Per Share (1) $1.38 $1.15 20% Adj. Free Cash Flow $99 $74 34% Net Debt $553 $494 $58 Adj. EBITDA Change (Left-hand scale) % Change in Net
Slide 5: Adjusted EBITDA Bridge - Third Quarter 2019 vs. PY
Adjusted EBITDA Bridge – Third Quarter 2019 vs. PY 5 $120 $3 $114 $115 $2 $1 $3 ($2) $110 $7 $105 $100 $100 $95 $90 $85 $80 Q3 2018 Volume Price/Mix Input Costs Mfg Cost SG&A WAVE Q3 2019 "AUV" Positive price realization in Mineral Fiber segment coupled with a 23% increase in Architectural Specialti
Slide 6: Adjusted Free Cash Flow Bridge - Third Quarter 2019 vs. PY
Adjusted Free Cash Flow Bridge - Third Quarter 2019 vs. PY 6 $120 $8 $100 $22 $99 ($2) ($2) ($2) $80 $74 $60 $40 $20 $0 (1) Q3 2018 Operating Capex Interest WAVE Other Q3 2019 Cash Flow Paid Dividends Strong cash earnings growth slightly offset by increased CapEx and interest NOTE: Adjustments inclu
Slide 7: Mineral Fiber Third Quarter Results
Mineral Fiber Third Quarter Results 7 Sales Key Highlights $219 Up 3% $213 • Average Unit Value (AUV) expanded 2% versus the prior year quarter • Manufacturing gains driven by productivity and the benefits of St Helens plant closure in 2018 • WAVE equity earnings increased 16% driven by positive vol
Slide 8: Architectural Specialties Third Quarter Results
Architectural Specialties Third Quarter Results 8 Sales Key Highlights $59 Up 23% • Sales up 23% driven by increases in both base $48 business and M&A • Adjusted EBITDA up 18% as sales gains were partially offset by higher manufacturing and SG&A investments Q3 2019 Q3 2018 Q1 Q2 Q3 2018 Adjusted EBI
Slide 9: Consolidated Company Key Metrics - YTD 2019
Consolidated Company Key Metrics – YTD 2019 9 2019 2018 Variance Net Sales $791 $736 8% Adj. EBITDA $314 $274 15% % of Sales 40% 37% 240 bps Adj. Earnings Per Share (1) $3.66 $2.99 22% Adj. Free Cash Flow $173 $148 17% Adj. EBITDA Change (Left-hand scale) % Change in Net Sales (Right-hand scale) Adj
Slide 10: Adjusted EBITDA Bridge - YTD 2019 vs. PY
Adjusted EBITDA Bridge – YTD 2019 vs. PY 10 $320 $5 $1 $2 $314 $29 ($3) $300 ($3) $8 $280 $274 $260 $240 $220 $200 $180 $160 1H 2018 Volume Price/Mix Input Costs Mfg Cost SG&A WAVE Other (1) 1H 2019 "AUV" Strong price and mix drive adjusted EBITDA up 15% (1) Other includes discontinued operation cos
Slide 11: Adjusted Free Cash Flow Bridge - YTD 2019 vs. PY
Adjusted Free Cash Flow Bridge – YTD 2019 vs. PY 11 $200 $11 $173 $17 $2 ($2) $160 $148 ($3) $120 $80 $40 $0 YTD 2018 Operating Cash Capex Interest WAVE Other YTD 2019 Flow Paid Dividends Strong cash earnings offset by timing of income tax
Slide 12: 2019 Guidance
2019 Guidance 12 Prior Updated 2018 Actual 2019 Guidance 2019 Guidance Green Bold = Change (3%)-(1%) Mineral Fiber volume $1,040 - $1,075 $1,040 - $1,050 5% - 7% Average Unit Value (AUV) increase Revenue $975 7% – 10% YoY 7% – 8% YoY >15% Architectural Specialties volume Growth Growth 1-3 Ac
Slide 13: Appendix
Appendix Sms = @mstrong WORLD INDUSTRIES
Slide 14: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 14 For the Three Months For the Nine Months Ended Ended September 30, September 30, 2019 2018 V 2019 2018 V Earnings from continuing operations, Reported $91 $64 $27 $191 $153 $38 Add: Income tax expense, as reported $16 $16 - $49 $42 $7 Earnings before tax, Reported $
Slide 15: Adjusted Diluted Earnings Per Share Reconciliation
Adjusted Diluted Earnings Per Share Reconciliation 15 CONSOLIDATED For the Three Months Ended September 30, For the Nine Months Ended September 30, Per Per Per Per 2019 Diluted 2018 Diluted V 2019 Diluted 2018 Diluted V Share Share Share Share Earnings from continuing operations, As Reported $91 $1.
Slide 16: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation 16 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 V 2019 2018 V As Reported Net cash provided by operating activities $74 $70 $4 $121 $159 ($38) As Reported Net cash provided by (used for) investing activities ($39) $
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 September 30, 2019 2018 V 2019 2018 V 2019 2018 V Operating Income (Loss) – As Reported $104 $72 $32 $12 $11 - ($2) ($2) - 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, 2019 Low to High Reported Net Sales $1,040 to $1,050 Adjusted EBITDA For the Year Ending December 31, 2019 Low to High Net income $233 to $236 Add: Interest expense 40 40 Add: Income tax expense 73 74 (Less):
Slide 19: Adjusted 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, 2019 Per Diluted Per Diluted Low to High Share (1) Share (1) Net Income $233 $4.70 to $236 $4.80 Add: Interest expense 40 40 (Less): U.S. Pension credit (15) (15) Add: Inco
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