Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q3 2013 Earnings Presentation
22 slides from Armstrong World Industries's earnings presentation, Oct 28, 2013
Slide 1: Earnings Call Presentation 3rd Quarter 2013
Earnings Call Presentation 3rd Quarter 2013 October 28, 2013
Slide 2: Safe Harbor Statement
Safe Harbor Statement Our disclosures in this presentation, including without limitation, those relating to future financial results 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 figures throughout the presentation are in $ millions unless otherwise noted. Figures may not add due to rounding. Basis of Presentation Explanation When reporting our financial results within this presentation, we make several adjustments. Management uses the non-GAAP measures below in managing
Slide 4: Key Metrics - Third Quarter 2013
As reported Net Sales: $730 million in 2013 and $695 million in 2012As reported Operating Income: $94 million in 2013 and $109 million in 2012As reported EPS: $0.94 in 2013 and $1.24 in 2012Cash flow information includes cash flows attributable to CabinetsUnadjusted Key Metrics - Third Quarter 2013
Slide 5: Third Quarter 2013 vs. PY - Adjusted EBITDA to Reported Net Income
2013 2012 V EBITDA- Adjusted $124 $135 ($11) Depreciation and Amortization (28) (24) (4) Operating Income - Adjusted $96 $111 ($15) Foreign Exchange Movements (1) (1) - Cost Reduction Initiatives (1) (1) - Operating Income - As Reported $94 $109 ($15) Interest (Expense) (12) (14) 2 EBT $82 $95 ($13)
Slide 6: Third Quarter Sales and EBITDA by Segment - 2013 vs. PY
Third Quarter Sales and EBITDA by Segment - 2013 vs. PY 6 (CHART)
Slide 7: EBITDA Bridge - Third Quarter 2013 vs. Prior Year
(CHART) $6 EBITDA Bridge - Third Quarter 2013 vs. Prior Year 7 ($8) ($0) $1 $11
Slide 8: Free Cash Flow - Third Quarter 2013 vs. Prior Year
Free Cash Flow - Third Quarter 2013 vs. Prior Year 8 Cash flow information includes cash flows attributable to Cabinets ($5) $2 ($5) $26 $2 ($3)
Slide 9: Key Metrics - September YTD 2013
As reported Net Sales: $2,059 million in 2013 and $2,006 million in 2012.As reported Operating Income: $208 million in 2013 and $229 million in 2012As reported EPS: $1.50 in 2013 and $ 2.26 in 2012.Cash flow information includes cash flows attributable to CabinetsUnadjusted 2013 Actual 2012 Actual V
Slide 10: September YTD Sales and EBITDA by Segment - 2013 vs. 2012
(CHART) September YTD Sales and EBITDA by Segment - 2013 vs. 2012 10
Slide 11: EBITDA Bridge - September YTD 2013 vs. Prior Year
(CHART) $3 EBITDA Bridge - September YTD 2013 vs. Prior Year 11 ($12) ($5) $13 $4
Slide 12: Free Cash Flow - September YTD 2013 vs. Prior Year
(CHART) Free Cash Flow - September YTD 2013 vs. Prior Year 12 ($22) ($19) ($2) ($6)
Slide 13: Key Metrics - Guidance 2013
2013 Estimate Range (1) 2013 Estimate Range (1) 2013 Estimate Range (1) 2012 (1) Variance Variance Variance Net Sales(2) 2,700 to 2,740 2,623 3% to 4% Operating Income(3) 260 to 280 302 (14)% to (7)% EBITDA 370 to 390 402 (8)% to (3)% Earnings Per Share(4) $2.00 to $2.20 $2.53 (21)% to (13)% Free Ca
Slide 14: 2013 Financial Outlook
2013 Financial Outlook $55 - $65 million vs. 2012Adjusted Gross Margin (100) to (150) bps vs. 201216.0% to 16.25% of salesDown $10 million; 60% manufacturing, 40% SG&A $0 - $5 million vs. 2012 $10 - $20 million; Adjusted long-term ETR of ~39%(2) Sales(1) $645- $685 million; EBITDA $70 - $90 million
Slide 15: Growth Engine Financial Performance
Growth Engine Financial Performance 15 Profit growth lags sales as plants start up, but catch up when utilization increases Market growth plus AS acquisition and JV drives historic growthPlant openings, priority sales and marketing investments, and tactical acquisitions drive future growth 12% CAGR
Slide 16: Appendix
Appendix 16
Slide 17: Divested Businesses
CabinetsAnnounced sale in Q3 2012 and finalized sale in Q4 2012Treated as discontinued operation starting with Q3 2012PatriotCompleted sale in Q3 2012Results included in the Wood Flooring segment 17 Divested Businesses Patriot impact on Y-o-Y Comparisons Q3 2012 Q4 2012 2012 1H 2013 Q3 2013 2013 Net
Slide 18: September YTD 2013 vs. PY - Adjusted EBITDA to Reported Net Income
2013 2012 V EBITDA- Adjusted $301 $329 ($28) Depreciation and Amortization (80) (74) (6) Operating Income - Adjusted $221 $255 ($34) Foreign Exchange Movements (3) - (3) Cost Reduction Initiatives (10) (10) - Accelerated Depreciation and Impairments (not included above) - (11) 11 Impairment - (5) 5
Slide 19: Adjusted Operating Income to Free Cash Flow
2013 Estimate Range 2013 Estimate Range 2013 Estimate Range Adjusted Operating Income 260 to 280 D&A 110 110 110 Adjusted EBITDA 370 to 390 Changes in Working Capital (10) to (20) Capex (180) to (200) Interest Expense (65) to (70) Cash Taxes (10) to (20) Other, including cash payments for restructur
Slide 20: Reported to Adjusted Net Sales, Operating Income and EPS
Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter 2013 Reported Comparability(1) Adjustments FX(2) Adj 2013 Adjusted 2012 Reported Comparability(1) Adjustments FX(2) Adj 2012 Adjusted 2012 Adjusted Net Sales 73
Slide 21: Segment Operating Income
Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter 2013 Reported Comparability(1) Adjustments 2013 Adjusted 2012 Reported Comparability(1) Adjustments 2012 Adjusted Building Products 87 (2) 85 81 1 82 Resilient Flooring 22 2 24 25 1 26 Wood Flooring 3 -
Slide 22: Cash Flow
Third Quarter Third Quarter September YTD September YTD ($ millions) 2013 2012 2013 2012 Net cash from operations $119 $111 $162 $141 Net cash (used for) investing (24) (19) (87) (62) Add back (subtract) adjustments to reconcile to free cash flow Restricted cash - - - (2) Divestiture - (14) - (14) F
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