Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q1 2023 Earnings Presentation
16 slides from Armstrong World Industries's earnings presentation, Apr 25, 2023
Slide 1: 1st Quarter 2023 Earnings Presentation
1st Quarter 2023 Earnings Presentation April 25, 2023
Slide 2: Safe Harbor Statement
Safe Harbor Statement Disclosures in this presentation contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation, those relating to future financial and operational results, expected savings from cost management initia
Slide 3: Basis of Presentation Explanation
Basis of Presentation Explanation Results throughout this presentation are presented on a normalized basis. We remove the impact of certain discrete expenses and income in certain measures including adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), adjusted diluted
Slide 4: GAAP and non-GAAP Financial Results
GAAP and non-GAAP Financial Results AWI Consolidated Company Results Q1 2023 Q1 2022 Net Sales $310.2 $282.6 Net Earnings $47.3 $44.4 Operating Income $70.2 $63.2 Adj. EBITDA* $96 $87 Operating Income Margin (Operating Income % of Net Sales) 22.6% 22.4% Adj. EBITDA Margin* (Adj. EBITDA % of Net Sale
Slide 5: Solid Performance with Top & Bottom-Line Growth
Solid Performance with Top & Bottom-Line Growth 1st Quarter 2023 Key Takeaways $310M (+10% VPY) Net Sales Net Sales up 10% Driven by 12% Mineral Fiber sales growth and 3% AS sales growth $96M (+9% VPY) Mineral Fiber segment Adj. EBITDA* up 13% Adj. EBITDA* Driven by 9% volume growth, AUV1 improvemen
Slide 6: Strong Volume Growth Partially Offset by Mix Headwinds
Strong Volume Growth Partially Offset by Mix Headwinds Mineral Fiber Q1 2023 Results $228 Q1 Mineral Fiber Key Highlights $203 ● MF volume of 9% driven by weak Net Sales prior-year comp and current-year home Growth VPY +12% center inventory build ● Muted AUV growth driven by positive Q1 '22 Q1 '23 l
Slide 7: Muted Topline Growth With Project Timing Headwinds
Muted Topline Growth With Project Timing Headwinds Architectural Specialties Q1 2023 Results Q1 Architectural Specialties $79 $82 Key Highlights Net Sales ● Modest topline growth vs. strong prior- year comp and unfavorable project Growth VPY +3% timing ● Growth across most product categories Q1 '22
Slide 8: Volume and Favorable AUV More Than Offset Input Cost Headwinds
Volume and Favorable AUV More Than Offset Input Cost Headwinds Q1 2023 Consolidated Company Key Metrics Q1 2022 Q1 2023 Variance Net Sales $283 $310 10% Adj. EBITDA* $87 $96 9% Adj. EBITDA Margin* (Adj. EBITDA % of Net Sales) 30.9% 30.9% (10bps) Adj. Diluted Net Earnings Per Share* $1.02 $1.12 10% A
Slide 9: Adjusted Free Cash Flow Funds Balanced Capital Allocation Strategy
Adjusted Free Cash Flow Funds Balanced Capital Allocation Strategy Q1 2023 Adj. Free Cash Flow* Q1 Capital Deployment Grows 52% vs PY CapEx Dividends Share Repurchases 2023 $22 $12 $27 2022 $12 $11 $30 *Non-GAAP measure. See slide 4 and appendix for reconciliation to nearest GAAP measure. 1. Include
Slide 10: Maintaining Full Year 2023 Guidance
Maintaining Full Year 2023 Guidance Driving Growth in a Challenging Macroeconomic Environment Commentary1 Expect lower market demand, partially offset by initiatives, to result in mid-single digit MF Net Sales Growth Adjusted EBITDA* volume decline $1,260M to $1,310M $395M to $420M Expect above aver
Slide 11: Appendix
Appendix
Slide 12: Full Year 2023 Assumptions
Full Year 2023 Assumptions Segment Net Sales Adjusted EBITDA Margin* Mineral Fiber +1% to +5% growth YoY >37% Architectural Specialties** >6% growth YoY >18% Consolidated Company Metrics Full Year 2023 Capital expenditures $75M to $85M Depreciation and amortization $83M to $88M Interest expense $35M
Slide 13: Q1 2023 Adjusted EBITDA and Adjusted Diluted EPS Reconciliation
Q1 2023 Adjusted EBITDA Reconciliation Q1 2023 Adjusted Diluted EPS Reconciliation For the Three Months Ended March 31, For the Three Months Ended March 31, 2023 2022 V 2023 2022 V Net earnings $47 $44 $3 Net earnings $47 $44 $3 Add: Income tax expense 17 15 2 Add: Income tax expense 17 15 2 Earning
Slide 14: Q1 2023 Segment Operating Income to Adj. EBITDA and Free Cash Flow
Q1 2023 Segment Operating For the Three Months Ended March 31: MF AS UC Income (Loss) to Adj. EBITDA 2023 2022 V 2023 2022 V 2023 2022 V Net sales $228 $203 $25 $82 $79 $2 - - - Operating income (loss) $64 $58 $6 $7 $7 $1 ($1) ($1) - Add: RIP expense1 - - - - - - 1 1 - Add: Acquisition-related impac
Slide 15: 2023 Adj. EBITDA Guidance Reconciliation
2023 Adj. EBITDA Guidance Reconciliation 2023 Segment Adj. EBITDA Guidance Reconciliation For the Year Ending December 31, 2023 Full Year 2023 Low High (Supports low-end Adj. EBITDA Margin % assumption) Net earnings $206 $217 MF AS UC Add: Income tax expense 68 73 Net sales $892 $366 $- Earnings bef
Slide 16: 2023 Adj. Diluted EPS and Free Cash Flow Guidance Reconciliation
2023 Adj. Diluted EPS Guidance Reconciliation 2023 Adj. Free Cash Flow Guidance Reconciliation For the Year Ending December 31, 2023 For the Year Ending December 31, 2023 Low High Low High Net earnings $206 $217 Net cash provided by operating activities $220 $240 Add: Income tax expense 68 73 Add: R
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