Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q3 2020 Earnings Presentation
19 slides from Armstrong World Industries's earnings presentation, Oct 27, 2020
Slide 1: Correction - Earnings Call Presentation 3rd Quarter 2020
Exhibit 99.2 October 27, 2020 Correction - Earnings Call Presentation 3rd Quarter 2020
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 adjustments to normalize the results. Management uses these non-GAAP measures in managing the business and believes the adjustments provide meaningful comparisons of operating performance betwe
Slide 4: Consolidated Company Key Metrics - Third Quarter 2020
Consolidated Company Key Metrics-Third Quarter 2020 4 2020 2019 Variance Net Sales $246 $277 -11% Adj. EBITDA $92 $114 -19% % of Sales 37% 41% (370) bps (1) Adj. Earnings Per Share $1.07 $1.38 -22% Adj. Free Cash Flow $46 $99 -54% Cash $139 $98 $41 Revolver Availability $315 $380 ($65) Liquidity $45
Slide 5: Mineral Fiber Third Quarter Results
Mineral Fiber Third Quarter Results 5 Sales $219 $187 Key Highlights Down • COVID-19 impacts demand (14%) • Manufacturing gains driven by productivity • Sales continued to improve sequentially in the quarter Q3 2020 Q3 2019 Q1 Q2 Q3 2019 Adjusted EBITDA $82 $96 $99 Current Quarter Comments AUV (5) (
Slide 6: Architectural Specialties Third Quarter Results
Architectural Specialties Third Quarter Results 6 Sales Key Highlights $59 $59 • Sales up 1% as acquisitions of Turf Design and Up 1% Moz Designs add $8 million Q3 2020 Q3 2019 Q1 Q2 Q3 2019 Adjusted EBITDA $10 $12 $14 Current Quarter Comments Sales 4 (2) 5 Direct margin improvement relating to acqu
Slide 7: Adjusted EBITDA Bridge - Third Quarter 2020 vs. PY
Adjusted EBITDA Bridge – Third Quarter 2020 vs. PY 7 Normalized(1) $120 $114 $100 $3 $2 ($16) ($0) $92 ($4) ($7) $80 $60 $40 $20 $0 Q3 2019 Volume Price/Mix Input Costs Mfg Cost SG&A WAVE Q3 2020 "AUV" Lower volumes due to COVID-19… Sequential improvement within quarter (1) May not sum due to roundi
Slide 8: Free Cash Flow Bridge - Third Quarter 2020 vs. PY
Adjusted Free Cash Flow Bridge - Third Quarter 2020 vs. PY 8 Normalized(1) $120 $99 $100 $80 $60 $2 $2 ($48) ($3) $46 ($6) $40 $20 $0 (2) Q3 2019 Operating Capex Interest WAVE Other Q3 2020 Cash Flow Paid Dividends Cash earnings decline driven by volume declines due to Covid-19 NOTE: Adjustments inc
Slide 9: Consolidated Company Key Metrics - YTD 2020
Consolidated Company Key Metrics – YTD 2020 9 2020 2019 Variance Net Sales $698 $791 -12% Adj. EBITDA $257 $314 -18% % of Sales 37% 40% (280) bps Adj. Earnings Per Share (1) $2.86 $3.66 -22% Adj. Free Cash Flow $145 $173 -16% Adj. EBITDA Change (Left-hand scale) % Change in Net Sales (Right-hand sca
Slide 10: Adjusted EBITDA Bridge - YTD 2020 vs. PY
Adjusted EBITDA Bridge – YTD 2020 vs. PY 10 $320 $314 $280 $8 $6 $7 $257 ($50) ($15) $240 ($14) $200 $160 $120 $80 $40 $0 YTD 2019 Volume Price/Mix Input Costs Mfg Cost SG&A WAVE YTD 2020 "AUV" Balancing short-term cost containment with long-term growth drivers
Slide 11: Free Cash Flow Bridge - YTD 2020 vs. PY
Adjusted Free Cash Flow Bridge – YTD 2020 vs. PY 11 $180 $173 $160 $9 $11 $0 $145 $140 ($10) ($39) $120 $100 $80 $60 $40 YTD 2019 Operating Cash Capex Interest WAVE Other YTD 2020 Flow Paid Dividends Cash earnings decline driven by volume declines due to Covid-19
Slide 12: 2020 Guidance
2020 Guidance 12 All projections assume sequential market improvement and no second wave of construction site shutdowns 2019 Actual 2020 Guidance Flat AUV, negative volume $1,038 $920 - $935 Revenue Continued sequential improvement (11%) – (10%) YoY Includes recently announced acquisitions Adj
Slide 13: Appendix
Appendix =m 2 ANA @mstrong WORLD INDUSTRIES
Slide 14: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 14 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 V 2020 2019 V Earnings (Loss) from continuing operations, Reported $54 $91 ($37) ($119) $191 ($310) Add: Income tax expense (benefit), as reported $15 $16 ($1) ($51) $49 ($100
Slide 15: 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 2020 Diluted 2019 Diluted V 2020 Diluted 2019 Diluted V Share Share Share Share Earnings (Loss) from continuing operations, As Reported
Slide 16: Free Cash Flow Reconciliation
Adjusted Free Cash(1) Flow Reconciliation 16 For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 V 2020 2019 V Net cash provided by operating activities $69 $74 ($5) $148 $121 $27 Net cash (used for) investing activities ($63) ($39) ($24) ($52) ($71) $19 Add: A
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, 2020 2019 V 2020 2019 V 2020 2019 V Operating Income (Loss) – As Reported $58 $104 ($46) $9 $12 ($3) $5 ($2) $7 Add: RIP Cost (1) - -
Slide 18: EBITDA - Guidance Reconciliation
EBITDA – Guidance Reconciliation 18 Adjusted EBITDA For the Year Ending December 31, 2020 Low to High Net (loss) ($106) to ($97) Add: Interest expense 25 25 Add: RIP Expense (1) 360 360 (Less): Income tax benefit (25) (24) Add: Net Environmental Expenses 1 1 (Less): Gain on Sale of Idled China (21)
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 (loss) ($106) ($2.21) to ($97) ($2.02) Add: Interest expense 25 25 Add: RIP expense (2) 360 360 (Less): Incom
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