Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q2 2022 Earnings Presentation
19 slides from Armstrong World Industries's earnings presentation, Jul 26, 2022
Slide 1: 2nd Quarter 2022 Earnings Presentation
2nd Quarter 2022 Earnings Presentation July 26, 2022
Slide 2: Safe Harbor Statement
Safe Harbor Statement Our disclosures in this presentation, including without limitation, those relating to future financial results market conditions and guidance, the impacts of COVID-19 on our business, and in our other public documents and comments contain forward-looking statements within the m
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 net sales, adjusted EBITDA, adjusted diluted earnings per share (EPS) and adjusted free
Slide 4: Double-Digit Sales Improvement Driven by MF AUV and AS Growth
Double-Digit Sales Improvement Driven by MF AUV and AS Growth Q2 2022 Summary Net Sales 15% increase in Net Sales from prior-year driven by both Mineral 1 Fiber (“MF”) and Architectural Specialties (“AS”) $280 +15% $321 +20% +13% Mineral Fiber Average Unit Value (“AUV”) growth of 12%, driven 2 by po
Slide 5: Positive AUV & Volumes Offset by Inflation & SG&A
Positive AUV & Volumes Offset by Inflation & SG&A Q2 2022 Consolidated Company Key Metrics Q2 2021 Q2 2022 Variance Adj. Net Sales $280 $321 15% Adj. EBITDA* $100 $102 2% Adj. EBITDA Margin*(%) 35.6% 31.6% (390bps) Adj. Diluted Earnings Per Share* $1.16 $1.29 11% $21 $125 Adj. EBITDA* Bridge VPY $7
Slide 6: Favorable MF AUV and Volume Rebound Muted by Inflation
Favorable MF AUV and Volume Rebound Muted by Inflation Mineral Fiber Q2 2022 Results Net Sales Mineral Fiber Key Highlights $235 • AUV up 12% vs. Q2 2021 on positive like-for-like pricing $208 +13% • Sales volume growth versus strong prior-year result despite slow start to quarter • Manufacturing pr
Slide 7: Record-Setting Sales Performance and Strong EBITDA Growth
Record-Setting Sales Performance and Strong EBITDA Growth Architectural Specialties Q2 2022 Results Net Sales Key Highlights $87 • Net Sales up 20% on recent acquisition performance, $72 +20% positive impact from pricing actions and an increase in custom project sales • Adjusted EBITDA* up 35% on sa
Slide 8: Adjusted Free Cash Flow Decline Driven by Working Capital Impacts and Lower WAVE Dividends
Adjusted Free Cash Flow Decline Driven by Working Capital Impacts and Lower WAVE Dividends Adj. Free Cash Flow* YTD Second Quarter 2022 vs. PY $100 $87 $3 $1 $1 $64 ($17) ($10) $50 $0 Q2 2021 Adj. Operating Capex Interest WAVE Other Q2 2022 Cash Flow(1) Paid Dividends 8 *Non-GAAP measure. See append
Slide 9: Favorable AUV and Positive Volumes Pressured by Costs
Favorable AUV and Positive Volumes Pressured by Costs Q2 YTD 2022 Consolidated Company Key Metrics YTD 2021 YTD 2022 Variance Adj. Net Sales* $533 $604 13% Adj. EBITDA* $185 $189 2% Adj. EBITDA Margin*(%) 34.7% 31.3% (340bps) Adj. Diluted Earnings Per Share* $2.11 $2.30 9% Adj. Free Cash Flow* $87 $
Slide 10: Updating 2022 Guidance
Updating 2022 Guidance Double-digit growth on both top and bottom line (Changes in assumptions) 2021 Actual 2022 Guidance Key Assumptions • MF AUV +11% to +13% on positive like-for-like pricing & mix benefits $1,225 – $1,245 • Benefits from growth initiatives and market recovery offsetting distribut
Slide 11: Appendix
Appendix
Slide 12: Q2 2022 Adjusted EBITDA Reconciliation
Q2 2022 Adjusted EBITDA Reconciliation For the Three Months Ended June 30th, For the Six Months Ended June 30th, 2022 2021 V 2022 2021 V Earnings from continuing operations, Reported $52 $55 ($3) $97 $93 $4 Add: Income tax expense, as reported 15 19 (4) 30 31 (1) Earnings before tax, Reported $67 $7
Slide 13: Q2 2022 Adjusted Diluted Earnings per Share Reconciliation
Q2 2022 Adjusted Diluted Earnings per Share Reconciliation For the Three Months Ended June 30, For the Six Months Ended June 30, Per Per Per Per 2022 Diluted 2021 Diluted V 2022 Diluted 2021 Diluted V Share Share Share Share Earnings from continuing operations, Reported $52 $1.11 $55 $1.14 ($3) $97
Slide 14: 2022 Adjusted Free Cash Flow Reconciliation
2022 Adjusted Free Cash Flow Reconciliation . For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 V 2022 2021 V Net cash provided by operating activities $46 $62 ($16) $63 $82 ($19) Net cash (used for) provided by investing activities ($2) $2 ($4) ($2) ($7) $5 Net cash pr
Slide 15: 2022 Segment Reported Operating Income (Loss) to Adj. EBITDA
2022 Segment Reported Operating Income (Loss) to Adj. EBITDA ARCHITECTURAL UNALLOCATED ARCHITECTURAL UNALLOCATED MINERAL FIBER MINERAL FIBER SPECIALTIES CORPORATE SPECIALTIES CORPORATE For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 V 2022 2021 V 2022 2021 V 2022 2021
Slide 16: 2022 Adjusted Net Sales Reconciliation
2022 Adjusted Net Sales Reconciliation For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2021 V 2022 2021 V Reported Net Sales $321 $280 $41 $604 $532 $72 Add: Deferred revenue adjustment (1) - - - - 1 (1) Adjusted Net Sales $321 $280 $41 $604 $533 $71 (1) Represents the imp
Slide 17: 2022 Adjusted EBITDA Guidance Reconciliation
2022 Adjusted EBITDA Guidance Reconciliation For the Year Ending December 31, 2022 Low to High Net Income $232 to $237 Add: Interest expense 24 26 (Less): RIP credit (1) (4) (4) Add: Income tax expense 72 74 Operating Income $324 to $333 Add: RIP expense (2) 4 4 Add: Depreciation 65 67 Add: Amortiza
Slide 18: 2022 Adjusted Diluted EPS Guidance Reconciliation
2022 Adjusted Diluted EPS Guidance Reconciliation For the Year Ending December 31, 2022 Per Diluted Per Diluted Low to High Share(1) Share(1) Net Income $232 $4.98 to $237 $5.08 Add: Interest expense 24 26 (Less): RIP credit (2) (4) (4) Add: Income tax expense 72 74 Operating Income $324 to $333 Add
Slide 19: 2022 Adjusted Free Cash Flow Guidance Reconciliation
2022 Adjusted Free Cash Flow Guidance Reconciliation For the Year Ending December 31, 2022 Low to High Net cash provided by operating activities $195 to $215 Add: Return of investment from joint venture 95 105 Adjusted net cash provided by operating activities $290 to $320 (Less): Capital expenditur
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