Armstrong World Industries Inc · NYSE:AWI
Armstrong World Industries — Q3 2012 Earnings Presentation
22 slides from Armstrong World Industries's earnings presentation, Oct 30, 2012
Slide 1: Earnings Call Presentation 3rd Quarter 2012
Earnings Call Presentation 3rd Quarter 2012 October 31, 2012
Slide 2: Safe Harbor Statement
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 s
Slide 3: Basis of Presentation Explanation
All figures throughout the presentation are in $ millions unless otherwise noted. Figures may not add due to rounding. Basis of Presentation Explanation When reporting our financial results within this presentation, we make several adjustments. Management uses the non-GAAP measures below in managing
Slide 4: Divested Businesses Impact on 2012 Guidance
Cabinets Announced sale in Q3 2012 Proceeds of $27 million to be received later in the fourth quarter Treated as discontinued operation starting with Q3 2012 10-Q isolates current and past results of Cabinets segment Patriot Completed sale in Q3 2012 Results included in the Wood Flooring segment 4 D
Slide 5: Key Metrics - Third Quarter 2012
As reported Net Sales: $695 million in 2012 and $734 million in 2011 As reported Operating Income: $109 million in 2012 and $91 million in 2011 As reported EPS: $1.24 in 2012 and $0.88 in 2011 Cash flow information includes cash flows attributable to Cabinets Unadjusted Key Metrics - Third Quarter 2
Slide 6: Third Quarter 2012 vs. PY - Adjusted EBITDA to Reported Net Income
2012 2011 V EBITDA- Adjusted $135 $121 $14 Depreciation and Amortization (25) (26) 1 Operating Income - Adjusted $110 $95 $15 Foreign Exchange Movements - 2 (2) Cost Reduction Initiatives (1) (3) 2 Impairments - (2) 2 Restructuring - (1) 1 Operating Income - As Reported $109 $91 $18 Interest (Expens
Slide 7: Third Quarter Sales and EBITDA by Segment - 2012 vs. PY
Third Quarter Sales and EBITDA by Segment - 2012 vs. PY 7
Slide 8: EBITDA Bridge - Third Quarter 2012 vs. Prior Year
($12) EBITDA Bridge - Third Quarter 2012 vs. Prior Year 8 $3 $13 $12 $0 $121 $135
Slide 9: Free Cash Flow - Third Quarter 2012 vs. Prior Year
Free Cash Flow - Third Quarter 2012 vs. Prior Year 9 $14 $8 ($6) ($4) $0 ($7) Cash flow information includes cash flows attributable to Cabinets
Slide 10: Key Metrics - September YTD 2012
As reported Net Sales: $2,006 million in 2012 and $2,100 million in 2011. As reported Operating Income: $229 million in 2012 and $216 million in 2011 As reported EPS: $2.26 in 2012 and $1.74 in 2011. Cash flow information includes cash flows attributable to Cabinets Unadjusted 2012 Actual 2011 Actua
Slide 11: September YTD Sales and EBITDA by Segment - 2012 vs. 2011
September YTD Sales and EBITDA by Segment - 2012 vs. 2011 11
Slide 12: EBITDA Bridge - September YTD 2012 vs. Prior Year
($41) EBITDA Bridge - September YTD 2012 vs. Prior Year 12
Slide 13: Free Cash Flow - September YTD 2012 vs. Prior Year
Free Cash Flow - September YTD 2012 vs. Prior Year 13 ($15) ($5) ($34) $11 ($2) $29 Cash flow information includes cash flows attributable to Cabinets
Slide 14: Cost Savings Program
Cost Savings Program Cost Savings Program 14 Incremental Savings ($M) Total Cumulative Savings $35M $150M $200M $20 $15 $65 $50 $40 Structural Manufacturing and Productivity Improvements Cumulative savings of $200 million achieved from manufacturing and SG&A. Cost Out Program Evolution 2010 - progra
Slide 15: Key Metrics - Guidance 2012
2012 Estimate Range 2012 Estimate Range 2012 Estimate Range 2011 Variance Variance Variance Net Sales(1) 2,600 to 2,650 2,723 (5)% to (3)% Operating Income(2) 285 to 315 273 4% to 15% EBITDA 385 to 415 375 3% to 11% Earnings Per Share(3) $2.35 to $2.65 $2.23 5% to 19% Free Cash Flow 50 to 80 170 (71
Slide 16: 2012 Financial Outlook
2012 Financial Outlook $10 - $20 million increase Adjusted Gross Margin +50 to +100 bps vs. 2011 $12 million; 60% manufacturing, 40% SG&A Flat vs. 2011 $10 - $20 million. Adjusted ETR of ~40% Sales(1) $585 - $635 million EBITDA $60 - $90 million $210 - $230 million $10 - $15 million associated with
Slide 17: Appendix
Appendix 17
Slide 18: September YTD 2012 - Adjusted EBITDA to Reported Net Income
2012 2011 V EBITDA- Adjusted $328 $321 $7 Depreciation and Amortization (74) (77) 3 Operating Income - Adjusted $254 $244 $10 Foreign Exchange Movements - 3 (3) Cost Reduction Initiatives (10) (12) 2 Accelerated Depreciation and Impairments (not included above) (10) (9) (1) Impairment (5) (2) (3) Re
Slide 19: Adjusted Operating Income to Free Cash Flow
2012 Estimate Range 2012 Estimate Range 2012 Estimate Range Adjusted Operating Income 285 to 315 D&A 100 100 100 Adjusted EBITDA 385 to 415 Changes in Working Capital 5 to (15) Capex (210) to (230) Pension Credit (12) (12) (12) Interest Expense (50) to (55) Cash Taxes (10) to (20) Other, including c
Slide 20: Reported to Adjusted Net Sales, Operating Income and EPS
Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter 2012 Reported Comparability(1) Adjustments FX(2) Adj 2012 Adjusted 2011 Reported Comparability(1) Adjustments FX(2) Adj 2011 Adjusted 2011 Adjusted Net Sales 69
Slide 21: Segment Operating Income (Loss)
Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter 2012 Reported Comparability(1) Adjustments 2012 Adjusted 2011 Reported Comparability(1) Adjustments 2011 Adjusted Building Products 81 - 81 72 1 73 Resilient Flooring 25 2 27 11 4 15 Wood Flooring 14 (1
Slide 22: Cash Flow
Third Quarter Third Quarter YTD YTD ($ millions) 2012 2011 2012 2011 Net cash from operations 112 98 141 130 Net cash (used for) investing (20) (20) (61) (42) Add back (subtract) adjustments to reconcile to free cash flow Restricted cash - (5) (2) (8) Acquisition/ (Divestiture) (14) - (14) - Free Ca
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