Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q4 2018 Earnings Presentation
19 slides from Armstrong World Industries's earnings presentation, Feb 25, 2019
Slide 1: Earnings Call Presentation 4th Quarter 2018
Earnings Call Presentation 4th Quarter 2018 February 25, 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 - Fourth Quarter 2018
Consolidated Company Key Metrics-Fourth Quarter 2018 (1) As reported EPS: $0.74 in 2018 and $1.92 in 2017 2018 2017 Variance Net Sales $238.89999999999998 $0 $214.36 0.11448031349132282 Adj. EBITDA $78.94 $0 $68 $0 0.16088235294117648 % of Sales 0.33043114273754709 0.31722336256764322 130 Adj. Earni
Slide 5: EBITDA Bridge - Fourth Quarter 2018 vs. PY
Adjusted EBITDA Bridge – Fourth Quarter 2018 vs. PY $6 $9 ($4) ($2) $1 $2 AUV growth and volume growth in both segments drive adjusted EBITDA up 16%
Slide 6: Free Cash Flow Bridge - Fourth Quarter 2018 vs. PY
Adjusted Free Cash Flow Bridge - Fourth Quarter 2018 vs. PY ($5) WAVE special dividend drives free cash flow up 19% ($13) ($1) $37 ($9) (1) (1) Includes cash earnings, working capital and other current assets and liabilities. $62
Slide 7: Mineral Fiber Fourth Quarter Results
Mineral fiber sales grew $13 million as price, volume and mix were all positive Gross margins expanded 500 bps EBITDA up 18% as strong AUV gains more than offset inflationary headwinds Mineral Fiber Fourth Quarter Results Price, volume and mix all contribute to a strong quarter Key Highlights 2017 Q
Slide 8: Architectural Specialties Fourth Quarter Results
Sales up $11 million driven by organic sales growth of 16%, acquisitions added 1400 bps Adjusted EBITDA up 5% as volume gains were partially offset by higher selling expenses Architectural Specialties Fourth Quarter Results Continued strong sales and profit performance Key Highlights 2017 Q4 Adjuste
Slide 9: Consolidated Company Key Metrics - FY 2018
Consolidated Company Key Metrics – FY 2018 As reported EPS: $3.63 in 2018 and $4.08 in 2017 2018 2017 Variance Net Sales $975.3 $893.59999999999991 9.1427931960608833E-2 Adj. EBITDA $353.03699999999998 64 $318.815 0.1073412480592193 % of Sales 0.36197785296831742 0.35677596239928383 50 Adj. Earnings
Slide 10: EBITDA Bridge - FY 2018 vs. PY
Adjusted EBITDA Bridge – FY 2018 vs. PY $15 $29 ($18) ($5) $6 AUV growth and volume gains in Architectural Specialties drive adjusted EBITDA up 11% $8 WAVE 2017 Allocation Impact ($4) $3
Slide 11: Free Cash Flow Bridge - 2018 vs. PY
Adjusted Free Cash Flow Bridge – 2018 vs. PY $14 Record free cash flow performance…24% of Sales $18 ($1) $38 $19 (1) NOTE: Adjustments include acquisition costs, environmental expenses (recoveries) and items related to Knauf sale (1) Includes cash earnings, working capital and other current assets a
Slide 12: 2019 Guidance
2019 Guidance $4.30 – $4.60 18% – 26% YoY Growth $3.66 Adjusted EBITDA Adjusted EPS* Adjusted Free Cash Flow Revenue $975 $353 $1,040 - $1,075 7% – 10% YoY Growth $390 - $410 >10% Growth 0% - 2% Mineral Fiber volume >3% Average Unit Value (AUV) increase >15% Architectural Specialties volume 1-3 Acqu
Slide 13: Appendix
Appendix = @mstrong WORLD INDUSTRIES
Slide 14: EBITDA Reconciliation
Adjusted EBITDA Reconciliation CONSOLIDATED For the Three Months Ended December 31, For the Year Ended December 31, qtr YTD 2018 2017 V 2018 2017 V Earnings from continuing operations, Reported 36.599999999999994 104.10000000000001 -67.500000000000014 189.6 220.59999999999997 -30.999999999999972 rou
Slide 15: Diluted Earnings Per Share Reconciliation
Adjusted Diluted Earnings Per Share Reconciliation Based on ~50 million diluted shares outstanding for the three months ended Dec 31, 2018, ~52 million diluted shares outstanding for the year ended Dec 31, 2018, and ~54 million diluted shares outstanding for the three months and year ended Dec 31, 2
Slide 16: Adjusted 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 to Adjusted EBITDA
Segment Reported Operating Income (Loss) to Adjusted EBITDA Q4 2018 vs. PY FY 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 48.9 40.799999999999997 8.1000000000000014 6.1 7.1
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 $1,075 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): U.S
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 adjusted effective tax rate of 25% and based on ~49 million of diluted shares outstanding. Excludes $35 million WAVE dividend r
Armstrong World Industries — Q4 2018 Earnings Presentation on 6ix