Exhibit 99.2 July 31, 2017 Earnings Call Presentation 2 nd Quarter 2017
Safe Harbor Statement 2 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 statements provide our future expectations or forecasts and can be identified by our use of words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “outlook,” “target,” “predict,” “may,” “will,” “would,” “could,” “should,” “seek,” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. Forward-looking statements, by their nature, address matters that are uncertain and involve risks because they relate to events and depend on circumstances that may or may not occur in the future. As a result, our actual results may differ materially from our expected results and from those expressed in our forward-looking statements. A more detailed discussion of the risks and uncertainties that may affect our ability to achieve the projected performance is included in the “Risk Factors” and “Management’s Discussion and Analysis” sections of our reports on Forms 10-K and 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”) . Forward-looking statements speak only as of the date they are made. We undertake no obligation to update any forward-looking statements beyond what is required under applicable securities law. In addition, we will be referring to non-GAAP financial measures within the meaning of SEC Regulation G. A reconciliation of the differences between these measures with the most directly comparable financial measures calculated in accordance with GAAP are included within this presentation and available on the Investor Relations page of our website at www.armstrongceilings.com. The guidance in this presentation is only effective as of the date given, July 31, 2017, and will not be updated or affirmed unless and until we publicly announce updated or affirmed guidance.
Basis of Presentation Explanation 3 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 adjustments provide meaningful comparisons of operating performance between periods. As reported results will be footnoted throughout the presentation. What Items Are Adjusted • We report in comparable dollars to remove the effects of Comparable currency translation on the P&L. The budgeted exchange Dollars Other Adjustments rate for 2017 is used for all currency translations in 2017 Net Sales Yes No and prior years. Guidance is presented using the 2017 budgeted exchange rate for the year. Gross Profit Yes Yes • We remove the impact of discrete expenses and income. SG&A Expense Yes Yes Examples include plant closures, restructuring actions, Equity Earnings Yes Yes separation costs and other large unusual items. We also adjust for our U.S. pension plan (credit) expense (1) . Operating Income Yes Yes • Net Income Yes Yes Taxes for adjusted net income and adjusted diluted EPS are calculated using a constant 39% for 2017 guidance, Cash Flow No Yes and 2017 and 2016 results, which are based on the Return on Capital Yes Yes expected long term tax rate. EBITDA Yes Yes • Results throughout this presentation are presented on a continuing operations basis. All figures throughout the presentation are in $ millions unless otherwise noted. Figures may not add due to rounding. (1) 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 Income Plan based on guidelines established by the Pension Benefit Guaranty Corporation, nor do we expect to make cash contributions to the plan in 2017.
Consolidated Company Key Metrics - Second Quarter 2017 4 2017 2016 Variance Adj. Net Sales (1) $330 $310 6.1% Adj. Operating Income (2) $73 $61 18.9% % of Sales 22.1% 19.7% 240 bps Adj. EBITDA 92 81 13.8% % of Sales 28.0% 26.1% 190 bps Adj. Earnings Per Share (3) $0.73 $0.56 31.1% Adj. Free Cash Flow 28 24 19.2% Net Debt 801 774 27 EBITDA Change (Left-hand scale) % Change in Sales (Right-hand scale) 12 12% EBITDA Change ($M) (4) 10 10% 8 8% % Sales Change 8% 8 8% 5% 6 6% 3 4 4% 2 2% - 0% (2) (2%) (1) (4) (4%) Americas EMEA Pacific Rim (1) As reported Net Sales: $331 million in 2017 and $314 million in 2016 (2) As reported Operating Income: $78 million in 2017 and $52 million in 2016 (3) As reported EPS: $0.77 in 2017 and $0.29 in 2016 Excludes $1 million of Unallocated Corporate expenses related to the separation of Armstrong Flooring, Inc. (“AFI”) in the second quarter of 2016. (4)
Adjusted EBITDA Bridge – Second Quarter 2017 vs. PY 5 $100 $95 $5 $92 $5 ($1) ($1) $90 ($2) $5 $85 $81 $80 $75 $70 $65 $60 Q2 2016 Volume Price/Mix Input Costs Mfg Cost SG&A D&A/Other Q2 2017 "AUV"
Adjusted Free Cash Flow Bridge – Second Quarter 2017 vs. PY (1) 6 $80 $44 $70 $60 $50 $1 $1 $40 ($25) $28 $30 ($15) $24 ($2) $20 $10 $0 Q2 2016 Cash Working Capex Interest WAVE Other Q2 2017 Earnings Capital Paid Dividends (1) Excludes payments made for the acquisition of Tectum in the first quarter of 2017.
7 Americas Second Quarter Results Constant Currency Sales Key Highlights $226 Up 5.4% • Excluding the unfavorable impact of foreign exchange of $1 million, constant currency sales increased 5.4% due to $215 strong average unit value (“AUV”) achievement from both solid mix performance and positive “like for like” pricing. Volumes modestly improved driven by the U.S. Commercial channel which was partially offset by declines in Canada, Latin America and the Big Box channel. Q2 2017 Q2 2016 Americas 2016 Q2 $80 Adjusted EBITDA AUV 6 Driven by positive "like for like" pricing and favorable mix as we sell a richer mix of products Positive volume in the U.S. Commercial channel partially offset by declines in Canada, Latin Volume 1 America and the Big Box channel Manufacturing & 1 Productivity offsetting inflation Input Costs WAVE (1) Equity earnings down slightly versus an all-time record quarter in the prior year D&A/Other 1 2017 Q2 $88 Adjusted EBITDA AUV accelerated 90 bps sequentially over the first quarter driving 140 bps of adjusted EBITDA margin expansion Dollar amounts on the page are shown in millions
8 EMEA Second Quarter Results Constant Currency Sales Key Highlights Up $68 • 7.7% Excluding the unfavorable impact of foreign exchange of $2 million, constant currency sales increased 7.7%, $63 driven by strong sales in the Middle East and Russia along with AUV improvement. Q2 2017 Q2 2016 EMEA 2016 Q2 ($1) Adjusted EBITDA Driven by higher sales in the Middle East and Russia Volume 2 AUV 1 Like for like pricing was positive Manufacturing & Productivity and favorable inventory valuations 2 Input Costs SG&A (2) Selling and marketing investments to drive topline growth 2017 Q2 $2 Adjusted EBITDA Adjusted EBITDA margins improved 450 bps driven by higher volumes, good productivity and improved AUV achievement Dollar amounts on the page are shown in millions
Pacific Rim Second Quarter Results 9 Constant Currency Sales Key Highlights • Excluding the impact of foreign exchange, constant $35 Up 8.0% currency sales increased 8.0% driven by China and India partially offset by Australia. $33 Q2 2017 Q2 2016 Pacific Rim 2016 Q2 $3 Adjusted EBITDA AUV (1) Lower mix Volume 2 Sales growth driven by India and China Manufacturing & (1) Sourcing strategy changes Input Costs D&A/Other (1) 2017 Q2 $2 Adjusted EBITDA Strength in India and China drove 8% sales growth Dollar amounts on the page are shown in millions
Consolidated Company Key Metrics – 1 st Half 2017 10 2017 2016 Variance Adj. Net Sales (1) $647 $598 8.2% Adj. Operating Income (2) 129 113 14.0% % of Sales 20.0% 18.9% 110 bps Adj. EBITDA 167 152 10.3% % of Sales 25.9% 25.4% 50 bps Adj. Earnings Per Share (3) $1.28 $1.05 21.9% Adj. Free Cash Flow 33 17 94.1% EBITDA Change (Left-hand scale) % Change in Sales (Right-hand scale) 14 14% 12% 12 12% EBITDA Change ($M) (4) % Sales Change 9 10 10% 7% 8 8% 7% 6 6% 4 4 4% 2 2% - 0% (2) (2%) (1) (4) (4%) Americas EMEA Pacific Rim (1) As reported Net Sales: $646 million in 2017 and $602 million in 2016 (2) As reported Operating Income: $141 million in 2017 and $73 million in 2016 (3) As reported EPS: $1.33 in 2017 and $0.17 in 2016 Excludes $3 million of Unallocated Corporate expenses related to the separation of Armstrong Flooring, Inc. (“AFI”) in the first half of 2016. (4)
Adjusted EBITDA Bridge – 1 st Half 2017 vs. PY 11 $190 $10 $180 $1 $17 ($6) $170 $167 ($6) ($1) $160 $152 $150 $140 $130 $120 1H 2016 Volume Price/Mix Input Costs Mfg Cost SG&A D&A/Other 1H 2017 "AUV"
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