AWI  Armstrong World Industries Inc

Exchange

NYSE

Sector

Consumer Non-Durables

Industry

Plastic Products

Market Cap.

2.52B

Vuru Grade

28.21/100

Current Price

$46.75
-0.75 (-1.58%)

Company Metrics

  • P/E 24.95
  • P/S 2.07
  • P/B 9.70
  • EPS 1.87
  • Cash ROIC -0.40%
  • Cash Ratio 0.63
  • Dividend 0.00 / 0.00 %
  • Avg. Vol. 545,787.00
  • Shares 53.90M
  • Market Cap. 2.52B

Company Description

Armstrong World Industries, Inc. engages in the design, manufacture, and sale of flooring products and ceiling systems in the Americas, Europe, and the Pacific Rim. The company's Resilient Flooring segment produces vinyl sheet, vinyl tile, and linoleum flooring, as well as sources and sells laminate flooring products, ceramic tile products, adhesives, installation and maintenance materials, and ac... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Armstrong World Industries jumps after guidance beats
CNBC - Feb 27, 2017
Shares of Armstrong World Industries soared more than 11 percent after the company gave full-year guidance above analyst expectations.
Armstrong World Industries Could Use A Little More Headroom
Seeking Alpha - Feb 22, 2017
Armstrong World Industries (NYSE:AWI) is good at what it does - it is the market leader in commercial ceilings in North America, at/near the top in Europe, and posts strong margins - but it isn't always enough to be good at what you do.
Armstrong World Industries (AWI) Victor Grizzle on Q2 2016 Results - Earnings ...
Seeking Alpha - Jul 30, 2016
Good day, ladies and gentlemen and welcome to the Second Quarter 2016 Armstrong World Industries Inc. Earnings Call. At this time, all participants are in a listen-only mode.
Armstrong Flooring splits with Armstrong World Industries
Jackson Sun - Apr 4, 2016
Armstrong Flooring (NYSE: AFI) announced the completion of its separation from Armstrong World Industries, Inc. (NYSE: AWI).
Armstrong World (AWI) Closes Armstrong Flooring Spin-Off - Zacks.com
Armstrong World Industries Inc (AWI) Expected to Post Quarterly Sales of $301 ...
Sports Perspectives - 16 hours ago
Armstrong World Industries logo Equities research analysts expect Armstrong World Industries Inc (NYSE:AWI) to report $301.96 million in sales for the current quarter, Zacks reports.
Armstrong World Industries Inc (AWI) Earns Buy Rating from Analysts at Nomura - The Cerbat Gem
Armstrong World Industries (AWI) Receives News Impact Rating of 0.47 - BBNS
Armstrong World Industries' (AWI) CEO Vic Grizzle on Q4 2016 Results ...
Seeking Alpha - Feb 27, 2017
For a more detailed discussion of the risks and uncertainties that may affect Armstrong World Industries, please review our SEC filings, including the 10-K filed earlier this morning.
Armstrong World Industries Inc (AWI) Stock Price Up 11.8% Following Strong ... - Chaffey Breeze
The Upcoming Split At Armstrong World Industries Will Unlock Tremendous Value
Seeking Alpha - Mar 16, 2016
Armstrong World Industries will continue to hold the Ceiling assets, whereas a new entity, Armstrong Flooring Industries (AFI) will have the flooring subsidiaries.
Armstrong World Industries Completes Tectum Acquisition
Zacks.com - Jan 17, 2017
The acquisition will help Armstrong World to focus on delivering innovative ceiling solutions to customers. Further, Tectum products will enhance Armstrong World's efficiency in high-abuse spaces such as gymnasiums and auditoriums. Tectum's roof deck ...
Armstrong World Industries Acquires Tectum, Inc.
Yahoo Finance - Jan 16, 2017
LANCASTER, Pa., January 16, 2017 - Armstrong World Industries, Inc. (AWI) today announced the completion of its previously disclosed acquisition of the business and assets of Tectum, Inc. (Tectum).
Armstrong World Industries Reports First Quarter 2016 Results
PR Newswire (press release) - May 9, 2016
LANCASTER, Pa., May 9, 2016 /PRNewswire/ -- Armstrong World Industries, Inc. (NYSE: AWI), a global leader in the design and manufacture of innovative commercial and residential ceiling, wall and suspension system solutions, today reported first quarter ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for AWI to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate AWI's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$46.75 Current Price

$-1.61 Growth Price (DCF)

Why is this negative?


Show Free Cash Flow numbers

$13.33 Book Price

Overvalued by 71.48%


Very Poor Cash Return on Invested Capital over the past 5 years

AWI has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

AWI has lost $0.40 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 21.20M - -14.10M 33.00M -54.90M
divided by
Invested Capital 2.13B 2.37B 2.03B 2.01B 1.39B
Cash ROIC 0.99% - -0.69% 1.64% -3.94%

Excellent Return on Equity over the past 5 years

Over the past 5 years, AWI has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

AWI has generated $18.72 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 131.30M 94.10M 63.80M 94.20M 104.70M
divided by
Stockholders' Equity 719.10M 673.20M 649.10M 768.80M 266.40M
Return on Equity 18.26% 13.98% 9.83% 12.25% 39.30%

Good Business Performance over the past 10 years

It's likely AWI has been unable to maintain profitability in tough economic times, making it a somewhat cyclical business. The other possibility is AWI has expended significant capital on items such as property, plant and equipment in specific years. Look for correlations.

AWI has created positive free cash flow for 7 or 8 of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 472.60M 119.20M 155.10M 97.70M 61.60M 21.20M - -14.10M 33.00M -54.90M

Weak Balance Sheet

AWI's financial position is not ideal. The key is to check whether AWI is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 514.30M 355.00M 569.50M 315.80M 480.60M 336.40M 135.20M 185.30M 244.80M 141.90M
Current Assets 1.50B 1.26B 1.33B 1.02B 1.21B 1.02B 884.00M 811.50M 880.80M 406.20M
Total Assets 4.65B 3.35B 3.30B 2.92B 2.99B 2.85B 2.92B 2.61B 2.69B 1.76B
Current Liabilities 497.30M 385.40M 357.30M 382.90M 386.10M 384.70M 410.90M 388.10M 436.30M 224.10M
Total Liabilities 2.21B 1.61B 1.40B 1.83B 1.86B 2.14B 2.24B 1.96B 1.92B 1.49B
Stockholder' Equity 2.44B 1.74B 1.90B 1.09B 1.13B 719.10M 673.20M 649.10M 768.80M 266.40M
Current Ratio 3.02 3.27 3.73 2.67 3.13 2.65 2.15 2.09 2.02 1.81
TL-to-TA 0.48 0.48 0.42 0.63 0.62 0.75 0.77 0.75 0.71 0.85

Consistent Reinvestment of Profits over the past 10 years

AWI has consistently retained profits. This may put AWI in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, AWI can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 147.50M 66.70M 144.40M -35.30M 77.10M 113.10M 207.20M 271.00M 365.20M 469.90M
Retained Earnings Growth - -54.78% 116.49% -124.45% 318.41% 46.69% 83.20% 30.79% 34.76% 28.67%

Highly Competitive Industry over the past 10 years

It's likely that AWI is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely AWI invests heavily in R&D and Sales, General & Administrative expenses.

Only $3.70 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 145.30M 81.00M 77.70M 11.00M 112.40M 131.30M 94.10M 63.80M 94.20M 104.70M
divided by
Revenue 3.55B 3.39B 2.78B 2.77B 2.86B 2.62B 2.72B 2.52B 2.42B 1.23B
Net Profit Margin 4.09% 2.39% 2.79% 0.40% 3.93% 5.01% 3.46% 2.54% 3.89% 8.48%

Inconsistent Gross Profit Margins over the past 10 years

AWI has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$31.65 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 864.40M 761.00M 621.00M 611.80M 2.86B 633.20M 622.70M 583.30M 602.80M 371.20M
divided by
Revenue 3.55B 3.39B 2.78B 2.77B 2.86B 2.62B 2.72B 2.52B 2.42B 1.23B
Gross Margin 24.35% 22.43% 22.34% 22.12% 100.00% 24.18% 22.89% 23.19% 24.91% 30.07%

High Capital Intensity over the past 10 years

AWI spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

230.85% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 102.60M 95.00M 105.10M 92.70M 150.60M 198.80M 213.70M 222.90M 170.70M 104.20M
divided by
Net Income 145.30M 81.00M 77.70M 11.00M 112.40M 131.30M 94.10M 63.80M 94.20M 104.70M
Capital Expenditure Ratio 70.61% 117.28% 135.26% 842.73% 133.99% 151.41% 227.10% 349.37% 181.21% 99.52%

Inconsistent Dividend History over the past 10 years

AWI has started distributing dividends in the past couple years or has recently suspended their dividend distribution. The reliability of future distributions is unclear.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - 256.40M 1.30M 798.60M 300,000.00 507.10M 1.40M 1.30M 1.20M -
divided by
Shares Outstanding 56.70M 56.60M 57.00M 58.20M 58.80M 59.50M 58.40M 55.40M 55.90M 55.70M
Dividend Paid Per Share - 4.53 0.02 13.72 0.01 8.52 0.02 0.02 0.02 -
Price at Year End 26.23 15.54 29.73 42.97 43.87 50.06 57.27 50.94 46.11 41.80
Dividend Yield - 29.15% 0.08% 31.93% 0.01% 17.02% 0.04% 0.05% 0.05% -

History of Stock Buybacks over the past 10 years

AWI has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 56.70M 56.60M 57.00M 58.20M 58.80M 59.50M 58.40M 55.40M 55.90M 55.70M
Stock Bought Back - 0.18% -0.70% -2.06% -1.02% -1.18% 1.88% 5.42% -0.89% 0.36%
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