Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q2 2019 Earnings Presentation
19 slides from Armstrong World Industries's earnings presentation, Jul 29, 2019
Slide 1: Earnings Call Presentation 2nd Quarter 2019
Exhibit 99.2 July 29, 2019 Earnings Call Presentation 2nd Quarter 2019
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 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 Litiga
Slide 3: Basis of Presentation Explanation
Basis of Presentation Explanation 3 When reporting our financial results within this presentation, we make several adjustments. Management uses these non-GAAP measures in managing the business and believes the adjustments provide meaningful comparisons of operating performance between periods. As re
Slide 4: Consolidated Company Key Metrics - Second Quarter 2019
Consolidated Company Key Metrics-Second Quarter 2019 4 2019 2018 Variance Net Sales $272 $249 9% Adj. EBITDA $108 $95 14% % of Sales 40% 38% 160 bps Adj. Earnings Per Share (1) $1.27 $0.97 31% Adj. Free Cash Flow $55 $69 -19% Net Debt $557 $494 $63 Adj. EBITDA Change (Left-hand scale) % Change in Ne
Slide 5: EBITDA Bridge – Second Quarter 2019 vs. PY
Adjusted EBITDA Bridge – Second Quarter 2019 vs. PY 5 $115 $1 $110 $11 $0 $108 ($1) ($2) $105 $100 $4 $95 $95 $90 $85 $80 Q2 2018 Volume Price/Mix Input Costs Mfg Cost SG&A WAVE Q2 2019 "AUV" Strong price realization in Mineral Fiber segment coupled with a 38% increase in Architectural Specialties s
Slide 6: Free Cash Flow Bridge - Second Quarter 2019 vs. PY
Adjusted Free Cash Flow Bridge - Second Quarter 2019 vs. PY 6 $80 $69 $60 $1 $3 $55 ($1) ($0) ($16) $40 $20 $0 (1) Q2 2018 Operating Capex Interest WAVE Other Q2 2019 Cash Flow Paid Dividends Strong cash earnings growth offset by lower payables and timing of tax payment NOTE: Adjustments include cas
Slide 7: Mineral Fiber Second Quarter Results
Mineral Fiber Second Quarter Results 7 Sales Key Highlights $214 Up 4% • Average Unit Value (AUV) expanded 6% versus $207 the prior year quarter • Manufacturing gains driven by productivity and the benefits of St Helens plant closure in 2018 • Lower SG&A expenses as a result of prior year cost savin
Slide 8: Architectural Specialties Second Quarter Results
Architectural Specialties Second Quarter Results 8 Sales Key Highlights Up 38% $58 • Sales up 38% driven by base business growth of 23% and the acquisition of Architectural $42 Components Group, Inc. (ACGI) in March • Adjusted EBITDA up 39% as sales gains were partially offset by higher manufacturin
Slide 9: Consolidated Company Key Metrics – 1st Half 2019
Consolidated Company Key Metrics – 1st Half 2019 9 2019 2018 Variance Net Sales $514 $476 8% Adj. EBITDA $200 $174 15% % of Sales 39% 36% 240 bps Adj. Earnings Per Share (1) $2.28 $1.82 25% Adj. Free Cash Flow $74 $72 2% Adj. EBITDA Change (Left-hand scale) % Change in Net Sales (Right-hand scale) A
Slide 10: EBITDA Bridge – 1st Half 2019 vs. PY
Adjusted EBITDA Bridge – 1st Half 2019 vs. PY 10 $210 $26 $2 $200 $200 $2 ($0) ($1) ($4) $190 $180 $1 $174 $170 $160 1H 2018 Volume Price/Mix Input Costs Mfg Cost SG&A WAVE Other (1) 1H 2019 "AUV" Strong price and mix drive adjusted EBITDA up 15% (1) Other includes discontinued operation costs recog
Slide 11: Free Cash Flow Bridge – 1st Half 2019 vs. PY
Adjusted Free Cash Flow Bridge – 1st Half 2019 vs. PY 11 $100 $80 $3 $74 $72 $4 ($0) ($4) ($2) $60 $40 $20 $0 1H 2018 Operating Cash Capex Interest WAVE Other 1H 2019 Flow Paid Dividends Strong cash earnings offset by timing of income tax
Slide 12: 2019 Guidance
2019 Guidance 12 2018 Actual 2019 Guidance Green Bold = Change Flat Mineral Fiber volume Revenue $1,040 - $1,075 5% - 7% Average Unit Value (AUV) increase $975 7% – 10% YoY Growth >15% Architectural Specialties volume 1-3 Acquisitions – add 1% - 3% Earnings contribution from AUV Adjusted $
Slide 13: Appendix
Appendix Sms = @mstrong WORLD INDUSTRIES
Slide 14: EBITDA Reconciliation
Adjusted EBITDA Reconciliation 14 For the Three Months For the Six Months Ended Ended June 30, June 30, 2019 2018 V 2019 2018 V Earnings from continuing operations, Reported $64 $48 $16 $100 $89 $11 Add: Income tax expense, as reported $19 $18 $2 $33 $26 $7 Earnings before tax, Reported $83 $65 $18
Slide 15: Diluted Earnings Per Share Reconciliation
Adjusted Diluted Earnings Per Share Reconciliation 15 CONSOLIDATED For the Three Months Ended March 31, For the Three Months Ended June 30, For the Six Months Ended June 30, Per Per Per Per Per Per 2019 Diluted 2018 Diluted V 2019 Diluted 2018 Diluted V 2019 Diluted 2018 Diluted V Share Share Share
Slide 16: Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation 16 For the Three Months Ended For the Six Months Ended June 30, June 30, 2019 2018 V 2019 2018 V As Reported Net cash provided by $32 $63 ($31) $47 $89 ($42) operating activities As Reported Net cash provided by (used for) $6 ($7) $14 ($32) ($1) ($30) investing
Slide 17: Segment Reported Operating Income (Loss) to Adjusted EBITDA
Segment Reported Operating Income (Loss) to Adjusted EBITDA 17 ARCHITECTURAL UNALLOCATED MINERAL FIBER SPECIALTIES CORPORATE For the Three Months Ended June 30, 2019 2018 V 2019 2018 V 2019 2018 V Operating Income (Loss) – As Reported $79 $60 $20 $10 $9 $1 ($2) ($2) - Add: U.S. Pension Cost (1) - -
Slide 18: Net Sales & EBITDA – Guidance Reconciliation
Net Sales & EBITDA – Guidance Reconciliation 18 Net Sales For the Year Ending December 31, 2019 Low to High Reported Net Sales $1,040 to $1,075 Adjusted EBITDA For the Year Ending December 31, 2019 Low to High Net income $226 to $241 Add: Interest expense 40 40 Add: Income tax expense 69 74 (Less):
Slide 19: EPS & Free Cash Flow – Guidance Reconciliation
Adjusted EPS & Free Cash Flow – Guidance Reconciliation 19 Adjusted Diluted Earnings Per Share For the Year Ending December 31, 2019 Per Diluted Per Diluted Low to High Share (1) Share (1) Net Income $226 $4.60 to $241 $4.90 Add: Interest expense 40 40 (Less): U.S. Pension credit (15) (15) Add: Inco
Armstrong World Industries — Q2 2019 Earnings Presentation on 6ix