Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q3 2017 Earnings Presentation
21 slides from Armstrong World Industries's earnings presentation, Oct 30, 2017
Slide 1: Earnings Call Presentation 3rd Quarter 2017
Earnings Call Presentation 3rd Quarter 2017 October 30, 2017 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 the non-GAAP measures below in managing the business and believes the adj
Slide 4: Consolidated Company Key Metrics - Third Quarter 2017
Consolidated Company Key Metrics - Third Quarter 2017 As reported Net Sales: $352 million in 2017 and $335 million in 2016 As reported Operating Income: $69 million in 2017 and $71 million in 2016 As reported EPS: $0.81 in 2017 and $0.99 in 2016 Excludes $1 million of Unallocated Corporate expenses
Slide 5: EBITDA Bridge – Third Quarter 2017 vs. PY
Adjusted EBITDA Bridge – Third Quarter 2017 vs. PY $3 $5 $0 $5 $0 ($5) $4
Slide 6: Free Cash Flow Bridge – Third Quarter 2017 vs. PY
Adjusted Free Cash Flow Bridge – Third Quarter 2017 vs. PY $5 $0 $5 $3 ($2) ($4)
Slide 7: Americas Third Quarter Results
Excluding the favorable impact of foreign exchange of $1 million, constant currency sales increased 3.2% driven by mid-single digit average unit value (“AUV”) growth from both solid mix performance and positive like for like pricing. Overall segment volumes declined driven by the impact of the hurri
Slide 8: EMEA Third Quarter Results
Excluding the favorable impact of foreign exchange of $3 million, constant currency sales decreased 1.0%, driven by the UK market. EMEA Third Quarter Results Adjusted EBITDA margins improved 40 bps driven by the margin impact of volume and AUV achievement Key Highlights 2016 Q3 Adjusted EBITDA $7.54
Slide 9: Pacific Rim Third Quarter Results
Excluding the favorable impact of foreign exchange of $1 million, constant currency sales increased 17.5% from broad based sales strength driven by China. Pacific Rim Third Quarter Results Broad based sales strength driven by China drove 18% constant currency sales growth Key Highlights 2016 Q3 Adju
Slide 10: Consolidated Company Key Metrics – YTD
Consolidated Company Key Metrics – YTD As reported Net Sales: $998 million in 2017 and $937 million in 2016 As reported Operating Income: $210 million in 2017 and $144 million in 2016 As reported EPS: $2.14 in 2017 and $1.16 in 2016 Excludes $4 million of Unallocated Corporate expenses related to th
Slide 11: EBITDA Bridge – YTD vs. PY
Adjusted EBITDA Bridge – YTD vs. PY $19 $15 ($6) ($1) $1 ($5)
Slide 12: Free Cash Flow Bridge – YTD vs. PY
Adjusted Free Cash Flow Bridge – YTD vs. PY(1) $63 Excludes payments made for the acquisition of Tectum in the first quarter of 2017. ($16) $2 ($9) $1
Slide 13: 2017 Guidance
2017 Guidance $2.80 – $2.90 21% – 25% YoY Growth $2.32 Adjusted EBITDA(2) Adjusted EPS(3) Adjusted Free Cash Flow(4) Adjusted Revenue(1) $1,230 $317 $1,305 – $1,340 6% – 9% YoY Growth $365 – $375 15% – 18% YoY Growth $140 – $155 20% – 32% YoY Growth $117 Note: Dollars in millions except per share va
Slide 14: Appendix
Appendix = @mstrong
Slide 15: WAVE Support Cost Revisions
WAVE Support Cost Revisions $2 million in the Americas and $1 million for our International segments. Of the total $3 million net benefit in the third quarter, $2 million represents the YTD true up. Q3 2017 Full Year 2017 COGS $2.5 $3.5 SG&A $4.5 $6 WAVE Equity Earnings $-4 $-5.5 Adj. EBITDA $3.0(1)
Slide 16: Net Sales & Adjusted EBITDA Reconciliation
Adjusted Net Sales & Adjusted EBITDA Reconciliation Reported results include $10.7 million of interest expense recorded in the first quarter of 2016 related to the settlement of interest rate swaps incurred in connection with the Company’s refinancing of its credit facility. U.S. pension expense rep
Slide 17: Diluted Earnings Per Share Reconciliation
Adjusted Diluted Earnings Per Share Reconciliation U.S. pension (credit) expense represents the actuarial net periodic benefit cost expected to be recorded as a component of operating income. For all periods presented, we were not required and did not make cash contributions to our U.S. Retirement I
Slide 18: 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 19: Segment Reported Operating Income (Loss) to Adjusted EBITDA
Segment Reported Operating Income (Loss) to Adjusted EBITDA Q3 2017 vs. PY YTD 2017 vs. PY U.S. pension expense represents the actuarial net periodic benefit cost expected to be recorded as a component of operating income. For all periods presented, we were not required and did not make cash contrib
Slide 20: Net Sales & EBITDA – Guidance Reconciliation
Adjusted Net Sales & EBITDA – Guidance Reconciliation U.S. pension (credit) represents the actuarial net periodic benefit cost expected to be recorded as a component of operating income. For all periods presented, we were not required and did not make cash contributions to our U.S. Retirement Income
Slide 21: EPS & Free Cash Flow – Guidance Reconciliation
Adjusted EPS & Free Cash Flow – Guidance Reconciliation Based on ~54 million diluted shares outstanding U.S. pension (credit) represents the actuarial net periodic benefit cost expected to be recorded as a component of operating income. For all periods presented, we were not required and did not mak
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