Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q3 2021 Earnings Presentation
20 slides from Armstrong World Industries's earnings presentation, Oct 26, 2021
Slide 1: Earnings Call Presentation
October 26, 2021 Earnings Call Presentation 3rd Quarter 2021
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, the impacts of COVID-19 on our business, and in our other public documents and comments contain forward-looking statements within the
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: Third-Quarter 2021 Highlights
Third-Quarter 2021 Highlights 4 Adjusted Net Sales* Market conditions continue to improve driving strong +19% $292 sales growth versus prior year $246 +31% +15% Record-level Mineral Fiber (MF) Average Unit Value (AUV) growth, up 14% on both like-for-like price and mix improvements…price over inflati
Slide 5: Adj. EBITDA Bridge VPY
Third Quarter 2021 Consolidated Company Key Metrics 5 Q3 2020 Q3 2021 Variance Adj. Net Sales* $246 $292 19% Adj. EBITDA* $92 $99 8% % of Sales 37% 34% (320) bps Adj. Diluted Earnings Per Share* $1.07 $1.17 9% Adj. Free Cash Flow* $46 $58 28% Cash $139 $94 ($45) Liquidity $454 $439 ($15) Net Debt $5
Slide 6: Mineral Fiber Third Quarter 2021 Results
Mineral Fiber Third Quarter 2021 Results 6 Net Sales $215 Key Highlights $187 • AUV up 14% vs. Q3 2020 on positive like-for-like Up 15% pricing and channel mix improvements • Sequential improvement in sales per shipping day • AUV fall-through at historical rate • Strong performance from WAVE joint v
Slide 7: Architectural Specialties Third Quarter 2021 Results
Architectural Specialties Third Quarter 2021 Results 7 Adj. Net Sales** Key Highlights $78 Up 31% • 2020 Acquisitions added $16 in sales and $2 in $59 EBITDA versus prior year • Improved sales and pricing actions drove organic* sales growth of 6% • Adjusted EBITDA** margin expanded 350 bps sequentia
Slide 8: Consolidated Company Key Metrics – Q3 YTD 2021
Consolidated Company Key Metrics – Q3 YTD 2021 8 Q3 YTD 2020 Q3 YTD 2021 Variance Adj. Net Sales* $698 $825 18% Adj. EBITDA* $257 $284 10% % of Adj. Net Sales 37% 34% (240) bps Adj. Diluted Earnings Per Share* $2.93 $3.28 12% Adj. Free Cash Flow* $145 $145 0% $350 $35 $43 $20 $300 $284 ($11) Adj. EB
Slide 9: Adjusted Free Cash Flow Bridge – Q3 YTD 2021 vs. PY
Adjusted Free Cash Flow* Bridge – Q3 YTD 2021 vs. PY 9 $180 $15 $160 $7 $145 $1 $145 $140 ($15) ($7) $120 $100 $80 $60 $40 $20 $0 Q3 YTD 2020 Adj. Operating Capex Interest WAVE Other Q3 YTD 2021 Cash Flow (1) Paid Dividends Planned increase in CapEx vs prior year offsets YTD cash favorability *Non-G
Slide 10: 2021 Guidance – October Update
2021 Guidance – October Update ⁽¹⁾ 10 Updated from prior guide 2020 Actual Prior Guidance Current Guidance MF AUV 9%-11%, positive like-for-like pricing & mix Growth initiatives, kanopi and Healthy Spaces drive Revenue $937 $1,085 – $1,105 $1,095 – $1,105 MF volume up 1% - 2% 16% – 18% YoY 17% –
Slide 11: Clear Strategy Driving Value Creation
Clear Strategy Driving Value Creation 11 Strategic Overview Mineral Fiber Architectural Digital Disciplined Capital Revitalization Specialties Growth Transformation Allocation Healthy Spaces to drive Continued integration of 10-3-1 path from Consistent capex renovation “renaissance” acquisit
Slide 12: Appendix
Appendix =m 2 ANA @mstrong WORLD INDUSTRIES
Slide 13: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 13 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 V 2021 2020 V Earnings (Loss) from continuing operations, $51 $54 ($3) $143 ($119) $262 Reported Add: Income tax expense (benefit), as reported 17 15 1 48 (51) 99 Earnings (Lo
Slide 14: Adjusted Diluted Earnings Per Share Reconciliation
Adjusted Diluted Earnings Per Share Reconciliation 14 For the Three Months Ended September 30, For the Nine Months Ended September 30, Per Per Per Per 2021 Diluted 2020 Diluted V 2021 Diluted 2020 Diluted V Share Share Share Share Earnings from continuing operations before income taxes, $51 $1.06 $5
Slide 15: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash(1) Flow Reconciliation 15 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 V 2021 2020 V Reported net cash provided by operating activities $56 $70 ($14) $138 $148 ($10) Reported net cash provided by (used for) investing activities 1 (63)
Slide 16: Segment Reported Operating Income (Loss) to Adjusted EBITDA
Segment Reported Operating Income (Loss) to Adjusted EBITDA 16 ARCHITECTURAL MINERAL FIBER UNALLOCATED CORPORATE SPECIALTIES For the Three Months Ended September 30, 2021 2020 V 2021 2020 V 2021 2020 V Net Sales $215 $187 $27 $78 $59 $19 - - - Operating Income (Loss) – As Reported $69 $58 $10 $5 $9
Slide 17: Adjusted Net Sales Reconciliation
Adjusted Net Sales Reconciliation 17 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2021 2020 V 2021 2020 V Reported Net Sales $292 $246 $46 $824 $698 $126 Deferred revenue adjustment (1) - - - 1 - 1 Adjusted Net Sales $292 $246 $46 $825 $698 $127 (1) Represents the
Slide 18: 2021 Adjusted EBITDA Guidance Reconciliation
2021 Adjusted EBITDA Guidance Reconciliation 18 For the Year Ending December 31, 2021 Low to High Net Income $189 to $194 Add: Interest expense 23 23 (Less): RIP credit (1) (4) (4) Add: Income tax expense 62 63 Operating Income $270 to $277 Add: RIP expense (2) 4 4 Add: Depreciation 63 63 Add: Amort
Slide 19: 2021 Adjusted EPS Guidance Reconciliation
2021 Adjusted EPS Guidance Reconciliation 19 For the Year Ending December 31, 2021 Per Per Low Diluted to High Diluted Share (1) Share (1) Net income $189 $3.94 to $194 $4.04 Add: Interest expense 23 23 (Less): RIP credit (2) (4) (4) Add: Income tax expense 62 63 Operating income $270 to $277 Add: R
Slide 20: 2021 Adjusted Free Cash Flow Guidance Reconciliation
2021 Adjusted Free Cash Flow Guidance Reconciliation 20 For the Year Ending December 31, 2021 Low to High Net cash provided by operating activities $203 to $213 Add: Return of investment from joint venture 75 80 Adjusted net cash provided by operating activities $278 to $293 Less: Capital expenditur
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