Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q3 2018 Earnings Presentation
19 slides from Armstrong World Industries's earnings presentation, Oct 30, 2018
Slide 1: Earnings Call Presentation 3rd Quarter 2018
Earnings Call Presentation 3rd Quarter 2018 October 30, 2018 Exhibit 99.2
Slide 2: Safe Harbor Statement
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 Litigation Reform Act. Those s
Slide 3: Basis of Presentation Explanation
All dollar figures throughout the presentation are in $ millions (except earnings per share) unless otherwise noted. Figures may not add due to rounding. When reporting our financial results within this presentation, we make several adjustments. Management uses the non-GAAP measures in managing the
Slide 4: Consolidated Company Key Metrics - Third Quarter 2018
Consolidated Company Key Metrics - Third Quarter 2018 (1) As reported EPS: $1.23 in 2018 and $0.69 in 2017 2018 2017 Variance Net Sales $260.5 $233.9 0.11372381359555361 Adj. EBITDA $100.3 64 $90.832999999999998 0.10422423568526851 % of Sales 0.38355640535372848 0.38817521367521368 -50 Adj. Earnings
Slide 5: EBITDA Bridge – Third Quarter 2018 vs. PY
Adjusted EBITDA Bridge – Third Quarter 2018 vs. PY $3 $12 ($6) ($6) $1 $4 Adjusted EBITDA up 10% $0 (1) Other includes discontinued operation costs recognized in the Americas and international cost allocation adjustments. (1) WAVE 2017 Allocation Impact ($4)$3
Slide 6: Free Cash Flow Bridge – Third Quarter 2018 vs. PY
Adjusted Free Cash Flow Bridge – Third Quarter 2018 vs. PY $15 Cash flow up 20% $0 $17 $4 $0 $7 (1) (1) Includes working capital and other current assets and liabilities
Slide 7: Mineral Fiber Third Quarter Results
Mineral fiber sales grew $15 million as average unit value (AUV) was boosted by strong price and mix improvements Gross margins expanded EBITDA up 7% as strong AUV gains more than offset inflationary headwinds Mineral Fiber Third Quarter Results Strong AUV gains partially offset by input cost inflat
Slide 8: Architectural Specialties Third Quarter Results
Sales up $13 million driven by organic sales growth of 26% and acquisitions added 11% points Adjusted EBITDA up 47% as volume gains fall through Architectural Specialties Third Quarter Results Continued strong sales and profit performance Key Highlights 2017 Q3 Adjusted EBITDA $8 Sales 5 Strong orga
Slide 9: Consolidated Company Key Metrics – YTD 2018
Consolidated Company Key Metrics – YTD 2018 As reported EPS: $2.89 in 2018 and $2.16 in 2017 2018 2017 Variance Net Sales $736.4 $679.3 8.4057117621080479E-2 Adj. EBITDA $274.096 64 $250.8 9.2886762360446573E-2 % of Sales 0.37140379403794038 0.36795774647887325 30 Adj. Earnings Per Share (1) $2.87 $
Slide 10: EBITDA Bridge – YTD 2018 vs. PY
Adjusted EBITDA Bridge – YTD 2018 vs. PY $8 $20 ($13) ($6) $4 $7 Adjusted EBITDA up 9% $4 (1) (1) Other includes discontinued operation costs recognized in the Americas and international cost allocation adjustments. WAVE 2017 Allocation Impact ($4)$3
Slide 11: Free Cash Flow Bridge – YTD 2018 vs. PY
Adjusted Free Cash Flow Bridge – YTD 2018 vs. PY ($21) Working capital includes the receipt of $26 million from insurance settlements reached in the second half of 2017 $74 $23 $0 $1 $2 (1) (1) Includes working capital and other current assets and liabilities
Slide 12: 2018 Guidance
2018 Guidance $3.60 – $3.82 19% – 27% YoY Growth $3.02 Adjusted EBITDA Adjusted EPS(1) Adjusted Free Cash Flow(2) Revenue $894 $319(3) $935– $955 5% – 7% YoY Growth $345 – $360 >10% YoY Growth $175 – $190 20% – 30% YoY Growth $147 As reported expected earnings per share in 2018 of $4.00 - $4.10. Cas
Slide 13: Appendix
Appendix = @mstrong WORLD INDUSTRIES
Slide 14: EBITDA Reconciliation
Adjusted EBITDA Reconciliation CONSOLIDATED For the Three Months Ended September 30, For the Nine Months Ended September 30, qtr YTD 2018 2017 V 2018 2017 V Earnings from continuing operations, Reported 64.200000000000017 37.300000000000026 26.899999999999991 153 116.49999999999996 36.50000000000004
Slide 15: Diluted Earnings Per Share Reconciliation
Adjusted Diluted Earnings Per Share Reconciliation Based on ~52 million diluted shares outstanding for the three months ended September 30, 2018, ~53 million diluted shares outstanding for the nine months ended September 30, 2018, and ~54 million diluted shares outstanding for the three and nine mon
Slide 16: Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation Adjusted free cash flow is defined as cash from operations and dividends received from the WAVE joint venture, less expenditures for property and equipment, and is adjusted to remove the impact of cash used or proceeds received for acquisitions and divestitures
Slide 17: Segment Reported Operating Income (Loss) to Adjusted EBITDA
Segment Reported Operating Income (Loss) to Adjusted EBITDA Q3 2018 vs. PY YTD 2018 vs. PY MINERAL FIBER ARCHITECTURAL SPECIALTIES UNALLOCATED CORPORATE rounding factor 2016 V 2018 2017 V 2018 2017 V 2018 2017 V Operating Income (Loss) – As Reported 71.8 73.099999999999994 -1.2999999999999972 11.3 7
Slide 18: Net Sales & EBITDA – Guidance Reconciliation
Net Sales & EBITDA – Guidance Reconciliation Net Sales Adjusted EBITDA For the Year Ending December 31, 2018 Low to High Reported Net Sales $935 to $955 For the Year Ending December 31, 2018 Low to High Net income $208 to $213 Add: Interest expense 35 35 Add: Income tax expense 65 70 (Less): U.S. pe
Slide 19: EPS & Free Cash Flow – Guidance Reconciliation
Adjusted EPS & Free Cash Flow – Guidance Reconciliation Adjusted Diluted Earnings Per Share Adjusted Free Cash Flow Adjusted EPS guidance for 2018 is calculated based on an adjusted effective tax rate of 25% and based on ~52 million of diluted shares outstanding. Excludes $35 million WAVE dividend r
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