Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q3 2019 Earnings Presentation
19 slides from Armstrong World Industries's earnings presentation, Oct 28, 2019
Slide 1: Earnings Call Presentation 3rd Quarter 2019
Earnings Call Presentation 3rd Quarter 2019 October 28, 2019 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
All figures throughout the presentation are in $ millions unless otherwise noted. Figures may not add due to rounding. 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 adjustm
Slide 4: Consolidated Company Key Metrics - Third Quarter 2019
Consolidated Company Key Metrics-Third Quarter 2019 (1) As reported EPS: $1.28 in 2019 and $0.90 in 2018 2019 2018 Variance Net Sales $277.10000000000002 $0 $260.5 6.3723608445297675E-2 Adj. EBITDA $113.5 $0 $100.08 $0 0.1340927258193445 % of Sales 0.40959942259112231 0.3841842610364683 250 Adj. Ear
Slide 5: EBITDA Bridge - Third Quarter 2019 vs. PY
Adjusted EBITDA Bridge – Third Quarter 2019 vs. PY $7 $3 $1 ($2) $2 $3 Positive price realization in Mineral Fiber segment coupled with a 23% increase in Architectural Specialties sales drove adjusted EBITDA up 13%
Slide 6: Free Cash Flow Bridge - Third Quarter 2019 vs. PY
Adjusted Free Cash Flow Bridge - Third Quarter 2019 vs. PY ($2) Strong cash earnings growth slightly offset by increased CapEx and interest $22 ($2) $8 ($2) (1) NOTE: Adjustments include cash used or proceeds received for acquisitions and divestures, legacy environmental matters and litigation (1) I
Slide 7: Mineral Fiber Third Quarter Results
Average Unit Value (AUV) expanded 2% versus the prior year quarter Manufacturing gains driven by productivity and the benefits of St Helens plant closure in 2018 WAVE equity earnings increased 16% driven by positive volume and mix Mineral Fiber Third Quarter Results EBITDA growth driven by Average U
Slide 8: Architectural Specialties Third Quarter Results
Sales up 23% driven by increases in both base business and M&A Adjusted EBITDA up 18% as sales gains were partially offset by higher manufacturing and SG&A investments Architectural Specialties Third Quarter Results Continued strong sales and profit performance Key Highlights Q1 Q2 Q3 2018 Adjusted
Slide 9: Consolidated Company Key Metrics - YTD 2019
Consolidated Company Key Metrics – YTD 2019 As reported EPS: $3.63 in 2018 2019 2018 Variance Net Sales $791.24 $0 $736.36699999999996 7.4999999999999997E-2 Adj. EBITDA $313.53100000000001 $0 $273.80099999999999 $0 0.14510538675899665 % of Sales 0.39625271725393052 0.37182682005032819 240 Adj. Earni
Slide 10: EBITDA Bridge - YTD 2019 vs. PY
Adjusted EBITDA Bridge – YTD 2019 vs. PY $8 $29 ($3) $1 $5 $2 Strong price and mix drive adjusted EBITDA up 15% ($3) (1) (1) Other includes discontinued operation costs recognized in the Americas and international cost allocation adjustments.
Slide 11: Free Cash Flow Bridge - YTD 2019 vs. PY
Adjusted Free Cash Flow Bridge – YTD 2019 vs. PY $17 Strong cash earnings offset by timing of income tax ($3) $2 $11 ($2) $173
Slide 12: 2019 Guidance
2019 Guidance $4.40 – $4.50 21% – 23% YoY Growth $3.66 Adjusted EBITDA Adjusted EPS* Adjusted Free Cash Flow Revenue $975 $353 $1,040 - $1,050 7% – 8% YoY Growth $400 - $405 13%-15% YoY Growth (3%)-(1%) Mineral Fiber volume 5% - 7% Average Unit Value (AUV) increase >15% Architectural Specialties vol
Slide 13: Appendix
Appendix = @mstrong WORLD INDUSTRIES
Slide 14: EBITDA Reconciliation
Adjusted EBITDA Reconciliation U.S. pension expense represents only the service cost related to the U.S. pension plan that is recorded within Operating Income. For all periods presented, we were not required and did not make cash contributions to our U.S. Retirement Income Plan. WAVE settled a porti
Slide 15: Diluted Earnings Per Share Reconciliation
Adjusted Diluted Earnings Per Share Reconciliation U.S. pension (credit) represents the entire actuarial net periodic pension (credit) cost recorded as a component of earnings from continuing operations. For all periods presented, we were not required and did not make cash contributions to our U.S.
Slide 16: Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation Prior year Adjusted Free Cash Flow did not adjust for Environmental Recoveries in the first quarter. Includes related income tax payments. Adjusted free cash flow is defined as cash from operations and dividends received from the WAVE joint venture, less expend
Slide 17: Segment Reported Operating Income (Loss) to Adjusted EBITDA
Segment Reported Operating Income (Loss) to Adjusted EBITDA U.S. pension expense represents only the service cost related to the U.S. pension plan that is recorded within Operating Income. For all periods presented, we were not required and did not make cash contributions to our U.S. Retirement Inco
Slide 18: Net Sales & EBITDA - Guidance Reconciliation
Net Sales & EBITDA – Guidance Reconciliation Net Sales Adjusted EBITDA For the Year Ending December 31, 2019 Low to High Reported Net Sales $1,040 to $1,050 For the Year Ending December 31, 2019 Low to High Net income $232.5 to $236.3 Add: Interest expense 40 40 Add: Income tax expense 72.5 73.8 (Le
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 2019 is calculated based on an estimated effective tax rate of 25% and on 49.5 million of diluted shares outstanding. For the Year Ending December 31, 2019 Lo
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