Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q3 2011 Earnings Presentation
19 slides from Armstrong World Industries's earnings presentation, Oct 31, 2011
Slide 1: Earnings Call Presentation
Earnings Call Presentation 3rd Quarter 2011 October 31, 2011
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 of 1995. Those statements provide our future expectations or forecasts and can be identified
Slide 3: Basis of Presentation Explanation
Comparable Dollars Other Adjustments Net Sales Yes No Gross Profit Yes Yes SG&A Expense Yes Yes Equity Earnings Yes Yes Operating Income Yes Yes Net Income Yes Yes Cash Flow No No Return on Capital Yes Yes EBITDA Yes Yes Basis of Presentation Explanation • We report in comparable dollars to remove t
Slide 4: Key Metrics - Third Quarter 2011
2011 Actual 2010 Actual Variance Net Sales (1) $757 $752 0.7% Operating Income (2) 97 83 16.9% % of Sales 12.8% 11.0% 180 bps EBITDA 124 112 10.7% % of Sales 16.4% 14.9% 150 bps Earnings Per Share (3) $0.86 $0.82 4.9% Free Cash Flow 73 79 (6) Net (Cash) Debt 467 (236) 703 Key Metrics - Third Quarter
Slide 5: Third Quarter 2011 - Adjusted EBITDA to Reported Net Income
2011 2010 V EBITDA- Adjusted $124 $112 $12 Depreciation and Amortization (27) (29) 2 Operating Income - Adjusted $97 $83 $14 Foreign Exchange Movements 2 (1) 3 Cost Reduction Initiatives (3) (7) 4 Laminate Duty Refund - 7 (7) Accelerated Depreciation (not included above) - (20) 20 CEO transition cos
Slide 6: Third Quarter Sales and EBITDA by Segment - 2011 vs. 2010
Third Quarter Sales and EBITDA by Segment - 2011 vs. 2010
Slide 7: EBITDA Bridge - Third Quarter 2011 versus Prior Year
EBITDA Bridge - Third Quarter 2011 versus Prior Year ($9)
Slide 8: Free Cash Flow - Third Quarter 2011 versus Prior Year
Free Cash Flow - Third Quarter 2011 versus Prior Year
Slide 9: Key Metrics - September YTD 2011
2011 Actual 2010 Actual Variance Net Sales (1) $2,172 $2,145 1.3% Operating Income (2) 246 170 44.7% % of Sales 11.3% 7.9% 340 bps EBITDA 325 256 27.0% % of Sales 15.0% 11.9% 300 bps Earnings Per Share (3) $2.07 $1.61 28.6% Free Cash Flow 79 137 (58) Net (Cash) Debt 467 (236) 703 Key Metrics - Septe
Slide 10: September YTD Sales and EBITDA by Segment - 2011 vs. 2010
September YTD Sales and EBITDA by Segment - 2011 vs. 2010
Slide 11: EBITDA Bridge - September YTD 2011 versus Prior Year
EBITDA Bridge - September YTD 2011 versus Prior Year ($22)
Slide 12: Key Metrics - Guidance 2011
2011 Estimate Range 2010 Variance Net Sales (1) 2,850 to 2,900 2,766 3% to 5% Operating Income (2) 275 to 295 189 46% to 56% EBITDA 380 to 400 303 25% to 32% Earnings Per Share (3) $2.25 to $2.45 $1.73 30% to 42% Free Cash Flow 80 to 120 180 (56%) to (33%) Key Metrics - Guidance 2011 (1) Sales figur
Slide 13: Financial Outlook
2011 Financial Outlook ¾ Raw Material & Energy Inflation $50 - $60 million increase ¾ Manufacturing Productivity* Gross Margin +150 to +200 bps vs. 2010 ¾ U.S. Pension Credit ~$25 million, down ~$25 million vs. 2010 60% manufacturing, 40% SG&A ¾ Earnings from WAVE $5 - $10 million vs. 2010 ¾ Cash Ta
Slide 14: Appendix
Appendix
Slide 15: September YTD - Adjusted EBITDA to Reported Net Income
2011 2010 V EBITDA- Adjusted $325 $256 $69 Depreciation and Amortization (79) (86) 7 Operating Income - Adjusted $246 $170 $76 Foreign Exchange Movements 3 (2) 5 Cost Reduction Initiatives (12) (9) (3) Laminate Duty refunds - 7 (7) Accelerated Depreciation (not included above) (9) (19) 10 CEO transi
Slide 16: Adjusted Operating Income to Free Cash Flow
2011 Estimate Range Adjusted Operating Income 275 to 295 D&A 105 Adjusted EBITDA 380 to 400 Changes in Working Capital (10) to 10 Capex (150) to (170) Pension Credit (25) Interest Expense (50) Cash Taxes (25) Other, including cash payments for restructuring and one-time items (30) Free Cash Flow 80
Slide 17: Consolidated Results
Third Quarter 2011 Reported Comparability (1) Adjustments FX (2) Adj 2011 Adjusted 2010 Reported Comparability (1) Adjustments FX (2) Adj 2010 Adjusted Net Sales 774 - (17) 757 740 - 12 752 Operating Income 93 6 (2) 97 45 37 1 83 EPS $0.89 ($0.02) ($0.01) $0.86 $0.42 $0.40 $ - $0.82 September YTD 20
Slide 18: Segment Operating Income (Loss)
Third Quarter 2011 Reported Comparability (1) Adjustments 2011 Adjusted 2010 Reported Comparability (1) Adjustments 2010 Adjusted Building Products 72 1 73 59 10 69 Resilient Flooring 11 4 15 10 14 24 Wood Flooring 17 - 17 (13) 11 (2) Cabinets 2 - 2 (1) - (1) Unallocated Corporate (Expense) Income (
Slide 19: Cash Flow
Third Quarter September YTD ($ millions) 2011 2010 2011 2010 Net Cash From Operations 98 85 130 141 Less: Net Cash from Investing (25) (6) (51) (4) Equals Free Cash Flow 73 79 79 137 Cash Flow Financial Overview Appendix
Armstrong World Industries — Q3 2011 Earnings Presentation on 6ix