Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q4 2020 Earnings Presentation
20 slides from Armstrong World Industries's earnings presentation, Feb 23, 2021
Slide 1: Earnings Call Presentation 4th Quarter 2020
Exhibit 99.2 February 23, 2021 Earnings Call Presentation 4th Quarter 2020
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, the impacts of COVID-19 on our business, and in our other public documents and comments contain forward-looking statements within the
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 - Fourth Quarter 2020
Consolidated Company Key Metrics-Fourth Quarter 2020 4 2020 2019 Variance Net Sales $239 $247 -3% Adj. EBITDA $73 $90 -19% % of Sales 30% 36% (580) bps Adj. Earnings Per Share (1) $0.77 $1.11 -31% Adj. Free Cash Flow $68 $71 -5% Cash $137 $45 $92 Revolver Availability $275 $385 ($110) Liquidity $412
Slide 5: Mineral Fiber Fourth Quarter Results
Mineral Fiber Fourth Quarter Results 5 Sales $197 Key Highlights $183 Down • COVID-19 impacts demand (7%) • Strength in Big Box channel and weakness in major metro areas drive lower mix • Manufacturing gains driven by productivity • Sales continued to improve sequentially in the quarter Q4 2020 Q4 2
Slide 6: Architectural Specialties Fourth Quarter Results
Architectural Specialties Fourth Quarter Results 6 Sales Key Highlights $56 Up 13% $50 • Sales up 13% as acquisitions of Turf Design, Moz Designs, and Arktura LLC add $11 million • AS Organic* Sales down (9%) or ($5) million Q4 2020 Q4 2019 Q1 Q2 Q3 Q4 Current Quarter Comments 2019 Adjusted EBITDA $
Slide 7: Adjusted EBITDA Bridge - Fourth Quarter 2020 vs. PY
Adjusted EBITDA Bridge – Fourth Quarter 2020 vs. PY 7 Normalized(1) $120 $100 $90 $2 $2 ($0) $80 $73 ($7) ($11) ($3) $60 $40 $20 $0 Q4 2019 Volume Price/Mix Input Costs Mfg Cost (2) SG&A WAVE Q4 2020 "AUV" 2020 - 8 - - (2) (3) - 3 Acquisitions Mix fall through driven by growth in big box channel…Seq
Slide 8: Adjusted Free Cash Flow Bridge - Fourth Quarter 2020 vs. PY
Adjusted Free Cash Flow Bridge - Fourth Quarter 2020 vs. PY 8 Normalized(1) $80 $71 $5 $0 $68 ($1) ($0) $60 ($8) $40 $20 $0 (2) Q4 2019 Operating Capex Interest WAVE Other Q4 2020 Cash Flow Paid Dividends Cash earnings decline driven by volume declines due to Covid-19 NOTE: Adjustments include cash
Slide 9: Consolidated Company Key Metrics - FY 2020
Consolidated Company Key Metrics – FY 2020 9 2020 2019 Variance Net Sales $937 $1,038 -10% Adj. EBITDA $330 $403 -18% % of Sales 35% 39% (360) bps Adj. Earnings Per Share (1) $3.63 $4.78 -24% Adj. Free Cash Flow $212 $244 -13% Adj. EBITDA Change (Left-hand scale) % Change in Net Sales (Right-hand sc
Slide 10: Adjusted EBITDA Bridge - FY 2020 vs. PY
Adjusted EBITDA Bridge – FY 2020 vs. PY 10 Normalized(1) $403 $400 $360 $10 $10 $330 $320 ($51) ($4) ($21) ($18) $280 $240 $200 $160 $120 $80 $40 $0 FY 2019 Volume Price/Mix Input Costs Mfg Cost (2) SG&A WAVE FY 2020 "AUV" 2020 - 14 - - (3) (6) - 5 Acquisitions Balancing short-term cost containment
Slide 11: Adjusted Free Cash Flow Bridge - FY 2020 vs. PY
Adjusted Free Cash Flow Bridge – FY 2020 vs. PY 11 $260 $244 $240 $9 $220 $16 $7 $212 $200 ($17) ($47) $180 $160 $140 $120 $100 FY 2019 Operating Cash Capex Interest WAVE Other FY 2020 Flow Paid Dividends Cash earnings decline driven by volume declines due to Covid-19
Slide 12: 2021 Guidance
2021 Guidance 12 2020 Actual 2021 Guidance MF AUV 4%-6%, positive like-for-like pricing & mix $937 $1,030 - $1,060 Growth Initiatives, primarily kanopi & Healthy Revenue Spaces, drive MF volume up 0%-2% 10% – 13% YoY 2020 acquisitions benefit AS 25%-30% AUV and volume gains fall through $360
Slide 13: 2021 Sales Guidance
2021 Sales Guidance 13 AWI 2021 Sales Guidance 40% 20% 0% Q1 Q2 2H -20% Q2 2020 key city shutdowns drives changes to historic seasonality COVID-19 impacts create unusual seasonality in 2021
Slide 14: Appendix
Appendix =m 2 ANA @mstrong WORLD INDUSTRIES
Slide 15: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 15 For the Three Months For the Twelve Months Ended December 31, Ended December 31, 2020 2019 V 2020 2019 V Earnings (Loss) from continuing operations, Reported $35 $51 ($17) ($84) $242 ($326) Add: Income tax expense (benefit), as reported $8 $8 - ($43) $57 ($100) Earn
Slide 16: Adjusted Diluted Earnings Per Share Reconciliation
Adjusted Diluted Earnings Per Share Reconciliation 16 CONSOLIDATED For the Three Months Ended December 31, For the Twelve Months Ended December 31, Per Per Per Per 2020 Diluted 2019 Diluted V 2020 Diluted 2019 Diluted V Share Share Share Share Earnings (Loss) from continuing operations, As Reported
Slide 17: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash(1) Flow Reconciliation 17 For the Three Months Ended For the Year Ended December 31, December 31, 2020 2019 V 2020 2019 V Net cash provided by operating activities $70 $62 $8 $219 $183 $36 Net cash (used for) investing activities ($89) ($18) ($71) ($141) ($89) ($52) Add: Acquisiti
Slide 18: Segment Reported Operating Income (Loss) to Adjusted EBITDA
Segment Reported Operating Income (Loss) to Adjusted EBITDA 18 ARCHITECTURAL UNALLOCATED MINERAL FIBER SPECIALTIES CORPORATE For the Three Months Ended December 31, 2020 2019 V 2020 2019 V 2020 2019 V Operating Income (Loss) – As Reported $45 $59 ($14) $1 $6 ($5) ($2) ($3) $0 Add: RIP Cost (1) - - -
Slide 19: EBITDA - Guidance Reconciliation
EBITDA – Guidance Reconciliation 19 Adjusted EBITDA For the Year Ending December 31, 2021 Low to High Netincome $189 to $198 Add: Interest expense 25 25 (Less): RIP credit (1) (9) (9) Add: Income tax expense 60 63 Add: RIP expense (2) 6 6 Add: D&A 90 90 Adjusted EBITDA $360 to $372 (1) RIP credit re
Slide 20: Adjusted EPS & Free Cash Flow - Guidance Reconciliation
Adjusted EPS & Free Cash Flow – Guidance Reconciliation 20 Adjusted Diluted Earnings Per Share For the Year Ending December 31, 2021 Per Diluted Per Diluted Low to High Share (1) Share (1) Net income $189 $3.93 to $198 $4.12 Add: Interest expense 25 25 (Less): RIP Credit (2) (9) (9) Add: Income tax
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