Slide 1: Earnings Call Presentation 2nd Quarter 2014
Earnings Call Presentation 2nd Quarter 2014 July 28, 2014 July 28, 2014
Slide 2: 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 statements provide our
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 the non-GAAP measures below in managing the business and believes the adj
Slide 4: Key Metrics - Second Quarter 2014
Key Metrics - Second Quarter 2014 2014 2013 Variance Net Sales (1) $705 $703 0.4% Operating Income (2) 66 70 (5.1%) % of Sales 9.4% 10.0% (60 bps) EBITDA 99 97 2.5% % of Sales 14.0% 13.7% 30 bps Earnings Per Share (3) $0.60 $0.60 (0.8%) Free Cash Flow 10 32 (70.3%) Net Debt 963 764 199 ROIC(4) 7.3%
Slide 5: Second Quarter 2014 vs. PY - Adjusted EBITDA to Reported Net Income
Second Quarter 2014 vs. PY- Adjusted EBITDA to Reported Net Income 2014 2013 V EBITDA- Adjusted $99 $97 $2 Depreciation and Amortization (33) (27) (6) Operating Income - Adjusted $66 $70 ($4) Foreign Exchange Movements - (1) 1 Goodwill Impairment 1 - 1 Cost Reduction Initiatives 7 3 4 Operating Inco
Slide 6: Second Quarter Sales and EBITDA by Segment - 2014 vs. PY
Second Quarter Sales and EBITDA by Segment - 2014 vs. PY (CHART)
Slide 7: EBITDA Bridge - Second Quarter 2014 vs. PY
(CHART) EBITDA Bridge - Second Quarter 2014 vs. PY ($3) ($10)
Slide 8: Free Cash Flow - Second Quarter 2014 vs. Prior Year
(CHART) Free Cash Flow - Second Quarter 2014 vs. Prior Year ($8) ($22) ($1)
Slide 9: Key Metrics - 1st Half 2014
Key Metrics - 1st Half 2014 2014 2013 Variance Net Sales (1) $1,337 $1,317 1.5% Operating Income (2) 120 123 (1.9%) % of Sales 9.0% 9.3% (30 bps) EBITDA 182 175 4.5% % of Sales 13.6% 13.2% 40 bps Earnings Per Share (3) $1.02 $0.81 24.9% Free Cash Flow (45) (19) Unfavorable As reported Net Sales: $1,
Slide 10: 1H Sales and EBITDA by Segment - 2014 vs. PY
1H Sales and EBITDA by Segment - 2014 vs. PY (CHART)
Slide 11: EBITDA Bridge - 1H 2014 vs. Prior Year
(CHART) EBITDA Bridge - 1H 2014 vs. Prior Year ($8) ($11) $1 $10
Slide 12: Free Cash Flow - 1H 2014 vs. Prior Year
(CHART) Free Cash Flow - 1H 2014 vs. Prior Year
Slide 13: Key Metrics - Guidance 2014
2014 Estimate Range (1) 2014 Estimate Range (1) 2014 Estimate Range (1) 2013 (2) Variance Variance Variance Net Sales(3) 2,700 to 2,800 2,700 0% to 4% Operating Income(4) 245 to 270 257 (5%) to 5% EBITDA 370 to 400 366 1% to 9% Earnings Per Share(5) $2.15 to $2.40 $1.98 9% to 21% Free Cash Flow 20 t
Slide 14: 2014 Financial Outlook
2014 Financial Outlook $30 - $40 million vs. 2013 Adjusted Gross Margin 25 to 75 bps vs. 2013 Raw Material & Energy Inflation Manufacturing Productivity* Earnings from WAVE Cash Taxes/ETR* Q3 Capital Spending Exclusions from EBITDA* Net sales include foreign exchange impactAs reported ETR of 49% for
Slide 15: Appendix
@mstrong Appendix Inspiring Great Spaces
Slide 16: 1H 2014 vs. PY - Adjusted EBITDA to Reported Net Income
1H 2014 vs. PY- Adjusted EBITDA to Reported Net Income 2014 2013 V EBITDA- Adjusted $182 $175 $7 Depreciation and Amortization (62) (52) (10) Operating Income - Adjusted $120 $123 ($3) Foreign Exchange Movements 1 (1) 2 Goodwill Impairment 1 - 1 Cost Reduction Initiatives 8 9 (1) Operating Income -
Slide 17: Adjusted Operating Income to Free Cash Flow
Adjusted Operating Income to Free Cash Flow 2014 Estimate Range 2014 Estimate Range 2014 Estimate Range Adjusted Operating Income 245 to 270 Depreciation and Amortization 125 to 130 Adjusted EBITDA 370 to 400 Changes in Working Capital (30) to (40) Capex (195) to (215) Interest Expense (45) to (50)
Slide 18: Consolidated Results
Consolidated Results Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter 2014 Reported Comparability(1) Adjustments FX(2) Adj 2014 Adjusted 2013 Reported Comparability(1) Adjustments FX(2) Adj 2013 Adjusted Net Sales
Slide 19: Segment Operating Income (Loss)
Segment Operating Income (Loss) Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter 2014 Reported Comparability(1) Adjustments 2014 Adjusted 2013 Reported Comparability(1) Adjustments 2013 Adjusted Building Products 65 - 65 65 1 66 Resilient Floor
Slide 20: Cash Flow
Cash Flow Second Quarter Second Quarter YTD YTD ($ millions) 2014 2013 2014 2013 Net cash from operations $56 $57 $23 $43 Net cash (used for) investing (46) (25) (68) (62) Free Cash Flow $10 $32 ($45) ($19)