The AZEK Company Announces First Quarter 2023 Results
The AZEK Company reported its fiscal first quarter 2023 results, revealing consolidated net sales of $216.3 million, down 16.7% year-over-year, primarily due to a 33% decline in volume linked to channel inventory reductions. The net loss was $25.8 million, equating to an EPS of ($0.17), while adjusted EBITDA fell to $15.1 million from $58.5 million in the prior year. Despite these challenges, the company has completed its Residential channel inventory normalization and is optimistic about upcoming product launches and market opportunities. For full-year fiscal 2023, AZEK anticipates a 10% volume decline but expects adjusted EBITDA between $250 to $265 million.
- Successful completion of Residential channel inventory normalization.
- Launch of new TimberTech® products expected to drive sales.
- Recycling partnerships with thredUP and Trusscore to enhance sustainability.
- Reaffirmation of fiscal 2023 planning assumptions with an optimistic outlook.
- Net sales decreased by 16.7%, primarily due to a 33% decline in volume.
- Net loss increased to $25.8 million from a profit of $16.7 million in the prior year.
- Adjusted EBITDA decreased significantly from $58.5 million to $15.1 million.
Delivered Fiscal First Quarter 2023 Results Modestly Ahead of Expectations, Driven by Favorable Sales and Operational Execution; Residential Channel Inventory Normalization Completed; Reaffirming 2023 Planning Assumptions
FIRST QUARTER FISCAL 2023 FINANCIAL HIGHLIGHTS
-
Consolidated
Net Sales of$216.3 million -
Net Income (Loss) of
( ; Adjusted Net Income (Loss) of$25.8) million ( $13.9) million -
EPS of (
) per share; Adjusted Diluted EPS of ($0.17 ) per share$0.09 -
Adjusted EBITDA of
$15.1 million
RECENT COMPANY HIGHLIGHTS
- Continued progress on strategic initiatives, including 2023 new product launches, channel expansion, and lower cost recycle programs
-
Launched brand refresh for
TimberTech , AZEK Exteriors and StruXure, connecting these brands together under consistent messaging to better serve our customers - Announced recycle partnerships with thredUP and Trusscore, expanding our direct supply of post-consumer and post-industrial polyethylene and PVC plastic to re-purpose into AZEK’s outdoor living products
-
Named a Real Leaders® 2023
Impact Company in recognition of AZEK’s business growth and purpose-driven strategy; Ranked in the top25% of America's Most Just Companies byJUST Capital
CEO COMMENTS
“In the fiscal first quarter of 2023, we delivered financial results modestly ahead of expectations, driven by favorable sales combined with solid operational execution,” said
“We executed against our stated growth initiatives in the quarter, with the successful launch of several new products and shelf space gains across both the Pro and Retail channels, building on our momentum from prior quarters and solidifying our position as the innovation leader in outdoor living. For 2023, we launched new
“We continue to progress against our recycle goals, including the recent announcement of recycling partnerships with thredUP and Trusscore. These new
“We have a clear strategy and
FIRST QUARTER FISCAL 2023 CONSOLIDATED RESULTS
Net sales for the three months ended
Net income (loss) decreased by
Adjusted EBITDA decreased by
Adjusted Net Income (Loss) decreased
BALANCE SHEET, CASH FLOW and LIQUIDITY
As of
OUTLOOK
“Demand and sell-through trends were consistent with our expectations for the fiscal first quarter of 2023, with dollar value growth driven by positive pricing carryover partially offset by volumes down roughly mid-single digits year-over-year. With the fiscal first quarter and Residential channel inventory normalization behind us, we are focused on delivering against our plan in the balance of the fiscal year. Sell-through demand trends for our Residential business have been modestly better than the planning assumptions outlined in our last update, and we remain cautiously optimistic as we move into our traditional selling season. Our execution during the fiscal first quarter against our strategic initiatives gives us increased confidence in our plan for the year and we are reaffirming our fiscal 2023 planning assumptions. We expect our growth and margin expansion initiatives will enable us to deliver against our planning assumptions and generate meaningful free cash flow (operating cash flows minus capital expenditures) after several years of elevated capital investments,” said
For full-year fiscal 2023,
“The fiscal second quarter is historically a channel replenishment period for our industry ahead of the traditional building season, and we were once again able to secure additional shelf space and product placement as an outcome of our winter negotiations. Given our improved lead times and the current environment, we are working with our channel partners in a disciplined manner to establish lower inventory levels coming into the season and expect channel inventory build to be meaningfully lower than fiscal Q2 2022,” continued
For the fiscal second quarter of 2023, taking the factors above into consideration,
“Over the years, we have leveraged our premium positions in Decking, Railing, and Exteriors to position
CONFERENCE CALL AND WEBSITE INFORMATION
Interested investors and other parties can also listen to a webcast of the live conference call by logging onto the Investor Relations section of the Company's website at https://investors.azekco.com/events-and-presentations/.
For those unable to listen to the live conference call, a replay will be available approximately two hours after the call through the archived webcast on the
ABOUT THE AZEK® COMPANY
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This earnings release contains forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this earnings release, including statements regarding future operations are forward-looking statements. In some cases, forward looking statements may be identified by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "could," "would," "expect," "objective," "plan," "potential," "seek," "grow," "target," "if," or the negative of these terms and similar expressions intended to identify forward-looking statements. Projected financial information and performance, including our guidance and outlook as well as statements about our future growth and margin expansion goals and factors, assumptions and variables underlying these projections and goals, are forward-looking statements. In particular and unless specifically provided herein, no financial information for fiscal year 2023, including net sales guidance, operating results or otherwise, should be inferred or extrapolated from the guidance provided in this earnings release. Other forward-looking statements may include, without limitation, statements with respect to our ability to meet the future targets and goals we establish, including our environmental, social and governance targets, and the ultimate impact of our actions on our business as well as the expected benefits to the environment, our employees, and the communities in which we do business; statements about our future expansion plans, capital investments, capacity targets and other future strategic initiatives; statements about any stock repurchase plans; statements about potential new products and product innovation; statements regarding the potential impact of the COVID-19 pandemic or geopolitical conflicts, such as the conflict between
These statements are based on information available to us as of the date of this earnings release. While we believe that such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. We disclaim any intention and undertake no obligation to update or revise any of our forward-looking statements after the date of this release to reflect actual results or future events or circumstances whether as a result of new information, future events or otherwise, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
NON-GAAP FINANCIAL MEASURES
To supplement our earnings release and consolidated financial statements prepared and presented in accordance with generally accepted accounting principles in
However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. As a result, non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, our earnings release and our consolidated financial statements prepared and presented in accordance with GAAP.
We define Adjusted Gross Profit as gross profit before depreciation and amortization, business transformation costs, acquisition costs and certain other costs as described below. Adjusted Gross Profit Margin is equal to Adjusted Gross Profit divided by net sales.
We define Adjusted Net Income as net income (loss) before amortization, share-based compensation costs, business transformation costs, acquisition costs, initial public offering and secondary offering costs and certain other costs as described below.
We define Adjusted Diluted EPS as Adjusted Net Income divided by weighted average common shares outstanding – diluted, to reflect the conversion or exercise, as applicable, of all outstanding shares of restricted stock awards, restricted stock units and options to purchase shares of our common stock.
We define Adjusted EBITDA as net income (loss) before interest expense, net, income tax (benefit) expense and depreciation and amortization and by adding to or subtracting therefrom items of expense and income as described above.
Adjusted EBITDA Margin is equal to Adjusted EBITDA divided by net sales. Net Leverage is equal to gross debt less cash and cash equivalents, divided by trailing twelve month Adjusted EBITDA. We believe Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin and Net Leverage are useful to investors because they help identify underlying trends in our business that could otherwise be masked by certain expenses that can vary from company to company depending on, among other things, its financing, capital structure and the method by which its assets were acquired, and can also vary significantly from period to period. We also add back depreciation and amortization and share-based compensation because we do not consider them indicative of our core operating performance. We believe their exclusion facilitates comparisons of our operating performance on a period-to-period basis. Therefore, we believe that showing gross profit and net income, as adjusted to remove the impact of these expenses, is helpful to investors in assessing our gross profit and net income performance in a way that is similar to the way management assesses our performance. Additionally, EBITDA and EBITDA margin are common measures of operating performance in our industry, and we believe they facilitate operating comparisons. Our management also uses Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin in conjunction with other GAAP financial measures for planning purposes, including as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance. Management considers Adjusted Gross Profit and Adjusted Net Income as useful measures because our cost of sales includes the depreciation of property, plant and equipment used in the production of products and the amortization of various intangibles related to our manufacturing processes. Further, management considers Net Leverage as a useful measure to assess our borrowing capacity.
Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin and Net Leverage have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
- These measures do not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;
- These measures do not reflect changes in, or cash requirements for, our working capital needs;
- Adjusted EBITDA and Adjusted EBITDA Margin do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;
- Adjusted EBITDA and Adjusted EBITDA Margin do not reflect our income tax expense or the cash requirements to pay our taxes;
- Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA and Adjusted EBITDA Margin exclude the expense of amortization of our assets, and Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted EBITDA and Adjusted EBITDA Margin also exclude the expense of depreciation of our assets, and, although these are non-cash expenses, the assets being depreciated or amortized may have to be replaced in the future;
- Adjusted Net Income, Adjusted Diluted EPS and Adjusted EBITDA exclude the expense associated with our equity compensation plan, although equity compensation has been, and will continue to be, an important part of our compensation strategy;
- Adjusted Gross Profit, Adjusted Net Income, Adjusted Diluted EPS and Adjusted EBITDA exclude certain business transformation costs, acquisition costs and other costs, each of which can affect our current and future cash requirements; and
- Other companies in our industry may calculate Adjusted Gross Profit, Adjusted Gross Profit Margin, Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin and Net Leverage differently than we do, limiting their usefulness as comparative measures.
Because of these limitations, none of these metrics should be considered indicative of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations.
Segment Adjusted EBITDA
Depending on certain circumstances, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin may be calculated differently, from time to time, than our Adjusted EBITDA and Adjusted EBITDA Margin, which are further discussed under the heading “Non-GAAP Financial Measures.” Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin represent measures of segment profit reported to our chief operating decision maker for the purpose of making decisions about allocating resources to a segment and assessing its performance. For more information regarding how Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin are determined, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Segment Results of Operations” set forth in Part II, Item 7 of our Annual Report on Form 10-K for fiscal 2022 and our Consolidated Financial Statements and related notes included therein.
Consolidated Balance Sheets
(In thousands of |
||||||||
|
|
|
|
|
|
|
||
in thousands |
|
2022 |
|
2022 |
||||
ASSETS: |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
86,865 |
|
|
$ |
120,817 |
|
Trade receivables, net of allowances |
|
|
68,290 |
|
|
|
90,159 |
|
Inventories |
|
|
320,883 |
|
|
|
299,905 |
|
Prepaid expenses |
|
|
22,526 |
|
|
|
17,212 |
|
Other current assets |
|
|
14,946 |
|
|
|
2,501 |
|
Total current assets |
|
|
513,510 |
|
|
|
530,594 |
|
Property, plant and equipment - net |
|
|
513,130 |
|
|
|
517,913 |
|
|
|
|
993,995 |
|
|
|
993,995 |
|
Intangible assets - net |
|
|
233,998 |
|
|
|
245,835 |
|
Other assets |
|
|
94,068 |
|
|
|
94,754 |
|
Total assets |
|
$ |
2,348,701 |
|
|
$ |
2,383,091 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY: |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
48,563 |
|
|
$ |
48,987 |
|
Accrued rebates |
|
|
54,556 |
|
|
|
50,479 |
|
Accrued interest |
|
|
140 |
|
|
|
4,436 |
|
Current portion of long-term debt obligations |
|
|
6,000 |
|
|
|
6,000 |
|
Accrued expenses and other liabilities |
|
|
67,488 |
|
|
|
72,589 |
|
Total current liabilities |
|
|
176,747 |
|
|
|
182,491 |
|
Deferred income taxes |
|
|
66,052 |
|
|
|
65,195 |
|
Long-term debt—less current portion |
|
|
583,726 |
|
|
|
584,879 |
|
Other non-current liabilities |
|
|
109,404 |
|
|
|
106,083 |
|
Total liabilities |
|
|
935,929 |
|
|
|
938,648 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
Stockholders' equity: |
|
|
|
|
|
|
||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Class A common stock, |
|
|
155 |
|
|
|
155 |
|
Class B common stock, |
|
|
— |
|
|
|
— |
|
Additional paid‑in capital |
|
|
1,633,827 |
|
|
|
1,630,378 |
|
Accumulated deficit |
|
|
(138,838 |
) |
|
|
(113,002 |
) |
Accumulated other comprehensive income (loss) |
|
|
(1,796 |
) |
|
|
— |
|
|
|
|
(80,576 |
) |
|
|
(73,088 |
) |
Total stockholders' equity |
|
|
1,412,772 |
|
|
|
1,444,443 |
|
Total liabilities and stockholders' equity |
|
$ |
2,348,701 |
|
|
$ |
2,383,091 |
Consolidated Statements of Comprehensive Income (Loss)
(In thousands of |
||||||||
|
|
Three Months Ended |
||||||
in thousands |
|
2022 |
|
2021 |
||||
Net sales |
|
$ |
216,259 |
|
|
$ |
259,708 |
|
Cost of sales |
|
|
168,680 |
|
|
|
171,099 |
|
Gross profit |
|
|
47,579 |
|
|
|
88,609 |
|
Selling, general and administrative expenses |
|
|
73,444 |
|
|
|
63,169 |
|
Operating income (loss) |
|
|
(25,865 |
) |
|
|
25,440 |
|
Other expenses: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
9,299 |
|
|
|
4,148 |
|
Total other expenses |
|
|
9,299 |
|
|
|
4,148 |
|
Income (loss) before income taxes |
|
|
(35,164 |
) |
|
|
21,292 |
|
Income tax expense (benefit) |
|
|
(9,328 |
) |
|
|
4,585 |
|
Net income (loss) |
|
$ |
(25,836 |
) |
|
$ |
16,707 |
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
Unrealized gain (loss) due to change in fair value of derivatives, net of tax |
|
$ |
(1,796 |
) |
|
$ |
— |
|
Total other comprehensive income (loss) |
|
|
(1,796 |
) |
|
|
— |
|
Comprehensive income (loss) |
|
$ |
(27,632 |
) |
|
$ |
16,707 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.17 |
) |
|
$ |
0.11 |
|
Diluted |
|
|
(0.17 |
) |
|
|
0.11 |
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
150,877,635 |
|
|
|
154,407,244 |
|
Diluted |
|
|
150,877,635 |
|
|
|
156,854,925 |
|
Consolidated Statements of Cash Flows
(In thousands of |
||||||||
|
|
Three Months Ended |
||||||
|
|
2022 |
|
2021 |
||||
Operating activities: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
(25,836 |
) |
|
$ |
16,707 |
|
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities: |
|
|
|
|
|
|
||
Depreciation |
|
|
22,002 |
|
|
|
15,202 |
|
Amortization of intangibles |
|
|
11,837 |
|
|
|
12,880 |
|
Non-cash interest expense |
|
|
412 |
|
|
|
1,154 |
|
Non-cash lease expense |
|
|
(56 |
) |
|
|
(39 |
) |
Deferred income tax (benefit) provision |
|
|
1,504 |
|
|
|
4,381 |
|
Non-cash compensation expense |
|
|
5,801 |
|
|
|
3,970 |
|
Fair value adjustment for contingent consideration |
|
|
400 |
|
|
|
— |
|
Loss (gain) on disposition of property, plant and equipment |
|
|
(66 |
) |
|
|
18 |
|
Changes in certain assets and liabilities: |
|
|
|
|
|
|
||
Trade receivables |
|
|
21,869 |
|
|
|
18,057 |
|
Inventories |
|
|
(20,978 |
) |
|
|
(88,515 |
) |
Prepaid expenses and other currents assets |
|
|
(16,711 |
) |
|
|
(3,330 |
) |
Accounts payable |
|
|
13,029 |
|
|
|
606 |
|
Accrued expenses and interest |
|
|
(7,831 |
) |
|
|
(11,626 |
) |
Other assets and liabilities |
|
|
1,033 |
|
|
|
(85 |
) |
Net cash provided by (used in) operating activities |
|
|
6,409 |
|
|
|
(30,620 |
) |
Investing activities: |
|
|
|
|
|
|
||
Purchases of property, plant and equipment |
|
|
(30,328 |
) |
|
|
(65,333 |
) |
Proceeds from disposition of fixed assets |
|
|
65 |
|
|
|
32 |
|
Acquisitions, net of cash acquired |
|
|
— |
|
|
|
(91,310 |
) |
Net cash provided by (used in) investing activities |
|
|
(30,263 |
) |
|
|
(156,611 |
) |
Financing activities: |
|
|
|
|
|
|
||
Payments on 2022 Term Loan Agreement |
|
|
(1,500 |
) |
|
|
— |
|
Repayments of finance lease obligations |
|
|
(650 |
) |
|
|
(559 |
) |
Exercise of vested stock options |
|
|
— |
|
|
|
3,310 |
|
Cash paid for shares withheld for taxes |
|
|
(460 |
) |
|
|
— |
|
Purchases of treasury stock |
|
|
(7,488 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
|
(10,098 |
) |
|
|
2,751 |
|
Net increase (decrease) in cash and cash equivalents |
|
|
(33,952 |
) |
|
|
(184,480 |
) |
Cash and cash equivalents – Beginning of period |
|
|
120,817 |
|
|
|
250,536 |
|
Cash and cash equivalents – End of period |
|
$ |
86,865 |
|
|
$ |
66,056 |
|
Supplemental cash flow disclosure: |
|
|
|
|
|
|
||
Cash paid for interest, net of amounts capitalized |
|
$ |
13,020 |
|
|
$ |
2,782 |
|
Cash paid for income taxes, net |
|
|
112 |
|
|
|
(129 |
) |
Supplemental non-cash investing and financing disclosure: |
|
|
|
|
|
|
||
Capital expenditures in accounts payable at end of period |
|
$ |
16,275 |
|
|
$ |
5,748 |
|
Right-of-use operating and finance lease assets obtained in exchange for lease liabilities |
|
|
1,968 |
|
|
|
8,915 |
|
Segment Results from Operations |
||||||||||||||||
Residential Segment |
||||||||||||||||
The following table summarizes certain financial information relating to the Residential segment results that have been derived from our audited Consolidated Financial Statements for the three months ended |
||||||||||||||||
|
|
Three Months Ended |
|
|
|
|
||||||||||
( |
|
2022 |
|
2021 |
|
$ Variance |
|
% Variance |
||||||||
Net sales |
|
$ |
179,484 |
|
|
$ |
221,133 |
|
|
$ |
(41,649 |
) |
|
|
(18.8 |
)% |
Segment Adjusted EBITDA |
|
|
26,007 |
|
|
|
69,431 |
|
|
|
(43,424 |
) |
|
|
(62.5 |
)% |
Segment Adjusted EBITDA Margin |
|
|
14.5 |
% |
|
|
31.4 |
% |
|
N/A |
|
|
N/A |
|
Commercial Segment |
||||||||||||||||
The following table summarizes certain financial information relating to the Commercial segment results that have been derived from our audited Consolidated Financial Statements for the three months ended |
||||||||||||||||
|
|
Three Months Ended |
|
|
|
|
|
|
||||||||
( |
|
2022 |
|
2021 |
|
$ Variance |
|
% Variance |
||||||||
Net sales |
|
$ |
36,775 |
|
|
$ |
38,575 |
|
|
$ |
(1,800 |
) |
|
|
(4.7 |
)% |
Segment Adjusted EBITDA |
|
|
5,154 |
|
|
|
4,748 |
|
|
|
406 |
|
|
|
8.6 |
% |
Segment Adjusted EBITDA Margin |
|
|
14.0 |
% |
|
|
12.3 |
% |
|
N/A |
|
|
N/A |
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation |
||||||||
|
|
Three Months Ended |
||||||
( |
|
2022 |
|
2021 |
||||
Net income (loss) |
|
$ |
(25,836 |
) |
|
$ |
16,707 |
|
Interest expense |
|
|
9,299 |
|
|
|
4,148 |
|
Depreciation and amortization |
|
|
33,840 |
|
|
|
28,082 |
|
Income tax expense (benefit) |
|
|
(9,328 |
) |
|
|
4,585 |
|
Stock-based compensation |
|
|
3,957 |
|
|
|
4,016 |
|
Acquisition costs (1) |
|
|
2,435 |
|
|
|
497 |
|
Other costs (2) |
|
|
733 |
|
|
|
485 |
|
Total adjustments |
|
|
40,936 |
|
|
|
41,813 |
|
Adjusted EBITDA |
|
$ |
15,100 |
|
|
$ |
58,520 |
|
|
Three Months Ended |
||||||
|
|
2022 |
|
2021 |
||||
Net income (loss) |
|
|
(11.9 |
)% |
|
|
6.4 |
% |
Interest expense |
|
|
4.3 |
% |
|
|
1.6 |
% |
Depreciation and amortization |
|
|
15.7 |
% |
|
|
10.8 |
% |
Income tax expense (benefit) |
|
|
(4.3 |
)% |
|
|
1.8 |
% |
Stock-based compensation |
|
|
1.8 |
% |
|
|
1.5 |
% |
Acquisition costs |
|
|
1.1 |
% |
|
|
0.2 |
% |
Other costs |
|
|
0.3 |
% |
|
|
0.2 |
% |
Total adjustments |
|
|
18.9 |
% |
|
|
16.1 |
% |
Adjusted EBITDA Margin |
|
|
7.0 |
% |
|
|
22.5 |
% |
__________________________
(1) |
Acquisition costs reflect costs directly related to completed acquisitions of |
(2) |
Other costs include costs for legal expense of |
Adjusted Gross Profit Reconciliation |
||||||||
|
|
Three Months Ended |
||||||
( |
|
2022 |
|
2021 |
||||
Gross Profit |
|
$ |
47,579 |
|
|
$ |
88,609 |
|
Depreciation and amortization (1) |
|
|
24,319 |
|
|
|
18,481 |
|
Adjusted Gross Profit |
|
$ |
71,898 |
|
|
$ |
107,090 |
|
|
|
Three Months Ended |
||||||
|
|
2022 |
|
2021 |
||||
Gross Margin |
|
|
22.0 |
% |
|
|
34.1 |
% |
Depreciation and amortization |
|
|
11.2 |
% |
|
|
7.1 |
% |
Adjusted Gross Profit Margin |
|
|
33.2 |
% |
|
|
41.2 |
% |
__________________________
(1) |
Depreciation and amortization for the three months ended |
Adjusted Net Income and Adjusted Diluted EPS Reconciliation |
||||||||
|
|
Three Months Ended |
||||||
( |
|
2022 |
|
2021 |
||||
Net income (loss) |
|
$ |
(25,836 |
) |
|
$ |
16,707 |
|
Amortization |
|
|
11,837 |
|
|
|
12,880 |
|
Stock-based compensation (1) |
|
|
1,259 |
|
|
|
1,960 |
|
Acquisition costs (2) |
|
|
2,435 |
|
|
|
497 |
|
Other costs (3) |
|
|
733 |
|
|
|
485 |
|
Tax impact of adjustments (4) |
|
|
(4,280 |
) |
|
|
(3,772 |
) |
Adjusted Net Income (Loss) |
|
$ |
(13,852 |
) |
|
$ |
28,757 |
|
|
|
Three Months Ended |
||||||
|
|
2022 |
|
2021 |
||||
Net income (loss) |
|
$ |
(0.17 |
) |
|
$ |
0.11 |
|
Amortization |
|
|
0.08 |
|
|
|
0.08 |
|
Stock-based compensation |
|
|
0.01 |
|
|
|
0.01 |
|
Acquisition costs |
|
|
0.02 |
|
|
|
— |
|
Other costs |
|
|
— |
|
|
|
— |
|
Tax impact of adjustments |
|
|
(0.03 |
) |
|
|
(0.02 |
) |
Adjusted Diluted EPS (5) |
|
$ |
(0.09 |
) |
|
$ |
0.18 |
|
__________________________
(1) |
Stock-based compensation costs reflect expenses related to our initial public offering. Expenses related to our recurring awards granted each fiscal year are excluded from the Adjusted Net Income reconciliation. |
(2) |
Acquisition costs reflect costs directly related to completed acquisitions of |
(3) |
Other costs include costs for legal expense of |
(4) |
Tax impact of adjustments are based on applying a combined |
(5) |
Weighted average common shares outstanding used in computing diluted net income per common share of 150,877,635 and 156,854,925 for the three months ended |
Net Leverage Reconciliation |
||||
Twelve Months Ended
|
||||
(In thousands) |
2022 |
|||
Net income |
$ |
32,682 |
|
|
Interest expense |
|
30,107 |
|
|
Depreciation and amortization |
|
124,291 |
|
|
Tax expense (benefit) |
|
14,841 |
|
|
Stock-based compensation costs |
|
18,046 |
|
|
Acquisition costs |
|
14,789 |
|
|
Inventories |
|
19,297 |
|
|
Other costs |
|
3,567 |
|
|
Total adjustments |
|
224,938 |
|
|
Adjusted EBITDA |
$ |
257,620 |
|
|
Long-term debt — less current portion |
$ |
583,726 |
|
|
Current portion |
|
6,000 |
|
|
Unamortized deferred financing fees |
|
4,533 |
|
|
Unamortized original issue discount |
|
4,241 |
|
|
Finance leases |
|
79,163 |
|
|
Gross debt |
$ |
677,663 |
|
|
Cash and cash equivalents |
|
(86,865 |
) |
|
Net debt |
$ |
590,798 |
|
|
Net leverage |
2.3x |
|
Outlook
We have not reconciled Adjusted EBITDA guidance to its most comparable GAAP measure as a result of the uncertainty regarding, and the potential variability of, reconciling items such as the costs of acquisitions, which are a core part of our ongoing business strategy, and other costs. Such reconciling items that impact Adjusted EBITDA have not occurred, are outside of our control or cannot be reasonably predicted. Accordingly, a reconciliation of Adjusted EBITDA to its most comparable GAAP measure is not available without unreasonable effort. However, it is important to note that material changes to these reconciling items could have a significant effect on our Adjusted EBITDA guidance and future GAAP results.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230208005326/en/
Investor Relations Contact:
312-809-1093
ir@azekco.com
Media Contact:
312-809-1093
media@azekco.com
Source:
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