The AZEK Company Announces First Quarter Fiscal 2022 Financial Results
AZEK reported a strong start to fiscal 2022 with net sales up 22.3% to $259.7 million. The Residential segment grew 19.1% to $221.1 million, while net income rose by $6.6 million to $16.7 million. Adjusted EBITDA increased by $10.1 million to $58.5 million, showing robust operational performance. AZEK's outlook for fiscal 2022 anticipates net sales growth of 17% to 21% and adjusted EBITDA growth of 18% to 22%. The successful acquisition of StruXure enhances product offerings and supports growth targets.
- Net sales increased 22.3% year over year to $259.7 million.
- Net income rose by $6.6 million to $16.7 million.
- Adjusted EBITDA increased by $10.1 million to $58.5 million.
- Fiscal 2022 net sales growth expected between 17% and 21%.
- Adjusted EBITDA growth projected at 18% to 22% for fiscal 2022.
- Acquired StruXure enhances product portfolio and growth potential.
- Adjusted EBITDA margin declined by 30 basis points to 22.5%.
- Segment Adjusted EBITDA margin for Residential segment declined by 30 basis points to 31.4%.
- Segment Adjusted EBITDA margin for Commercial segment declined by 10 basis points to 12.3%.
Capacity Coming Online and Improved Service Levels Drive Strong Start to Year; Successful “Early Buy” Strengthens AZEK’s Position Heading into Selling Season; Entered High Growth Adjacency with StruXure Acquisition
FIRST QUARTER FISCAL 2022 HIGHLIGHTS
-
Consolidated net sales increased
22.3% year over year to$259.7 million -
Residential segment net sales increased
19.1% year over year to$221.1 million -
Net income increased by
$6.6 million $16.7 million -
Adjusted EBITDA increased
$10.1 million $58.5 million
OUTLOOK HIGHLIGHTS
- Increasing Fiscal 2022 Net Sales and Adjusted EBITDA Outlook, inclusive of recent acquisitions; reaffirming Fiscal 2022 pre-acquisition guidance
-
Fiscal 2022 Net Sales Outlook – Expecting consolidated net sales growth of
17% to21% year over year, inclusive of recent acquisitions -
Fiscal 2022 Adjusted EBITDA Outlook – Expecting Adjusted EBITDA growth of
18% to22% year over year, inclusive of recent acquisitions -
Second Quarter Fiscal 2022 Outlook – Expecting consolidated net sales growth between
24% and27% year over year, inclusive of recent acquisitions, and Adjusted EBITDA growth between17% and20% year over year, inclusive of startup costs and the impact from recent acquisitions
CEO COMMENTS
“We begin fiscal 2022 in a position of strength with incremental capacity coming online leading to meaningfully improved service levels for our customers,”
“We continue to see strong momentum in our business and our leading indicators point to ongoing market expansion. During the quarter, we continued to invest in our strategic initiatives and completed two acquisitions. In December, we acquired StruXure Outdoor, a designer and manufacturer of high quality and innovative aluminum pergolas and cabanas. StruXure’s products are a natural complement to our
“AZEK’s momentum is driven by a clear and focused strategy to revolutionize outdoor living and to create a more sustainable future. We continue to see strong underlying market demand driven by positive demographic trends, an increasing focus on outdoor living, and the ongoing desire to convert from wood to our types of low-maintenance, high-performance alternative materials. We are on track to meet and exceed our long-term goals and we remain confident in our ability to deliver above market sales growth and core margin expansion during fiscal 2022,” Singh said.
FIRST QUARTER FISCAL 2022 CONSOLIDATED RESULTS
Net sales for the three months ended
Net income for the three months ended
Net margin expanded to
Adjusted EBITDA increased by
Adjusted Net Income increased
FIRST QUARTER FISCAL 2022 SEGMENT RESULTS
Residential Segment
Net sales for the three months ended
Segment Adjusted EBITDA for the three months ended
Commercial Segment
Net sales for the three months ended
Segment Adjusted EBITDA was
BALANCE SHEET, CASH FLOW and LIQUIDITY
As of
OUTLOOK
“We have started the year strong, with a successful “Early Buy” period, the launch of several new products and increased capacity that has led to improved service levels across our business. We continue to see a strong market and material conversion momentum within both Decking and Exteriors. Our
For full-year fiscal 2022,
For the second quarter fiscal 2022,
CONFERENCE CALL INFORMATION
To access the live conference call, please register for the call in advance by visiting https://conferencingportals.com/event/kqzNUoaC. Registration will also be available during the call. After registering, a confirmation e-mail with dial-in details and unique conference call codes for entry will be sent. To ensure you are connected for the full call please register at least 10 minutes before the start of the call.
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," 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, are forward-looking statements. Other forward-looking statements may include, without limitation, other 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 potential new products and product innovation, statements regarding the potential impact of the COVID-19 pandemic, statements about future pricing for our products or our raw materials and our ability to offset increases to our raw material costs and other inflationary pressures, statements about the markets in which we operate and the economy more generally, including growth of our various markets and growth in the use of engineered products as well as our ability to share in such growth, statements about future conversion opportunities from wood and other materials and our ability to capture market share from such opportunities, and all other statements with respect to our expectations, beliefs, plans, strategies, objectives, prospects, assumptions or future events or performance contained in this earnings release are forward-looking statements. We have based these forward-looking statements primarily on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the section titled "Risk Factors" set forth in Part I, Item 1A of the Annual Report on Form 10-K for fiscal 2021 (our “2021 Annual Report”) and in our other filings with the
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 Net Income, Adjusted Diluted EPS and Adjusted EBITDA exclude the expense of depreciation, in the case of Adjusted Gross Profit and Adjusted EBITDA, and amortization, in each case, of our assets, and, although these are non-cash expenses, the assets being depreciated 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 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 represents a measure 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 is 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 I, Item 2 of our Quarterly Report on Form 10-Q for the first quarter of fiscal 2022 and our Consolidated Financial Statements and related notes included therein.
Condensed Consolidated Balance Sheets
(In thousands of (Unaudited) |
||||||||
|
|
|
|
|
|
|
|
|
in thousands |
|
2021 |
|
|
2021 |
|
||
ASSETS: |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
66,056 |
|
|
$ |
250,536 |
|
Trade receivables, net of allowances |
|
|
63,057 |
|
|
|
77,316 |
|
Inventories |
|
|
289,059 |
|
|
|
188,888 |
|
Prepaid expenses |
|
|
17,641 |
|
|
|
14,212 |
|
Other current assets |
|
|
1,206 |
|
|
|
1,446 |
|
Total current assets |
|
|
437,019 |
|
|
|
532,398 |
|
Property, plant and equipment - net |
|
|
435,304 |
|
|
|
391,012 |
|
|
|
|
992,513 |
|
|
|
951,390 |
|
Intangible assets - net |
|
|
272,692 |
|
|
|
242,572 |
|
Other assets |
|
|
77,578 |
|
|
|
70,462 |
|
Total assets |
|
$ |
2,215,106 |
|
|
$ |
2,187,834 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY: |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
64,490 |
|
|
$ |
69,474 |
|
Accrued rebates |
|
|
49,150 |
|
|
|
44,339 |
|
Accrued interest |
|
|
214 |
|
|
|
72 |
|
Current portion of long-term debt obligations |
|
|
— |
|
|
|
— |
|
Accrued expenses and other liabilities |
|
|
48,684 |
|
|
|
56,522 |
|
Total current liabilities |
|
|
162,538 |
|
|
|
170,407 |
|
Deferred income taxes |
|
|
50,753 |
|
|
|
46,371 |
|
Long-term debt—less current portion |
|
|
464,999 |
|
|
|
464,715 |
|
Other non-current liabilities |
|
|
85,665 |
|
|
|
79,177 |
|
Total liabilities |
|
|
763,955 |
|
|
|
760,670 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
Preferred stock, |
|
— |
|
|
— |
|
||
Class A common stock, |
|
|
155 |
|
|
|
155 |
|
Class B common stock,
100 shares issued and outstanding at |
|
|
— |
|
|
|
— |
|
Additional paid‑in capital |
|
|
1,622,516 |
|
|
|
1,615,236 |
|
Accumulated deficit |
|
|
(171,520 |
) |
|
|
(188,227 |
) |
Total stockholders' equity |
|
|
1,451,151 |
|
|
|
1,427,164 |
|
Total liabilities and stockholders' equity |
|
$ |
2,215,106 |
|
|
$ |
2,187,834 |
|
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands of (Unaudited) |
||||||||
|
|
Three Months Ended |
|
|||||
in thousands |
|
2021 |
|
|
2020 |
|
||
Net sales |
|
$ |
259,708 |
|
|
$ |
212,278 |
|
Cost of sales |
|
|
171,099 |
|
|
|
139,300 |
|
Gross profit |
|
|
88,609 |
|
|
|
72,978 |
|
Selling, general and administrative expenses |
|
|
63,169 |
|
|
|
53,448 |
|
Operating income (loss) |
|
|
25,440 |
|
|
|
19,530 |
|
|
|
|
|
|
|
|
|
|
Other expenses: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
4,148 |
|
|
|
6,026 |
|
Total other expenses |
|
|
4,148 |
|
|
|
6,026 |
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
|
|
21,292 |
|
|
|
13,504 |
|
Income tax expense (benefit) |
|
|
4,585 |
|
|
|
3,356 |
|
Net income (loss) |
|
$ |
16,707 |
|
|
$ |
10,148 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share - basic |
|
$ |
0.11 |
|
|
$ |
0.07 |
|
Net income (loss) per common share - diluted |
|
|
0.11 |
|
|
|
0.07 |
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) |
|
$ |
16,707 |
|
|
$ |
10,148 |
|
Weighted-average common shares outstanding - basic and diluted |
|
|
|
|
|
|
|
|
Basic |
|
|
154,407,244 |
|
|
|
153,226,378 |
|
Diluted |
|
|
156,854,925 |
|
|
|
156,018,731 |
|
Condensed Consolidated Statements of Cash Flows
(In thousands of (Unaudited) |
||||||||
|
|
Three Months Ended |
|
|||||
|
|
2021 |
|
|
2020 |
|
||
Operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
16,707 |
|
|
$ |
10,148 |
|
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
15,202 |
|
|
|
11,635 |
|
Amortization of intangibles |
|
|
12,880 |
|
|
|
12,643 |
|
Non-cash interest expense |
|
|
1,154 |
|
|
|
670 |
|
Non-cash lease expense |
|
|
(39 |
) |
|
|
(35 |
) |
Deferred income tax (benefit) provision |
|
|
4,381 |
|
|
|
2,908 |
|
Non-cash compensation expense |
|
|
3,970 |
|
|
|
2,878 |
|
Loss (gain) on disposition of property |
|
|
18 |
|
|
|
212 |
|
Changes in certain assets and liabilities: |
|
|
|
|
|
|
|
|
Trade receivables |
|
|
18,057 |
|
|
|
29,652 |
|
Inventories |
|
|
(88,515 |
) |
|
|
(36,081 |
) |
Prepaid expenses and other currents assets |
|
|
(3,330 |
) |
|
|
(2,876 |
) |
Accounts payable |
|
|
606 |
|
|
|
(5,097 |
) |
Accrued expenses and interest |
|
|
(11,626 |
) |
|
|
(6,465 |
) |
Other assets and liabilities |
|
|
(85 |
) |
|
|
106 |
|
Net cash provided by (used in) operating activities |
|
|
(30,620 |
) |
|
|
20,298 |
|
Investing activities: |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(65,333 |
) |
|
|
(27,021 |
) |
Proceeds from disposition of fixed assets |
|
|
32 |
|
|
|
17 |
|
Acquisitions, net of cash acquired |
|
|
(91,310 |
) |
|
|
— |
|
Net cash provided by (used in) investing activities |
|
|
(156,611 |
) |
|
|
(27,004 |
) |
Financing activities: |
|
|
|
|
|
|
|
|
Repayments of finance lease obligations |
|
|
(559 |
) |
|
|
(426 |
) |
Exercise of vested stock options |
|
|
3,310 |
|
|
|
2,364 |
|
Payments of initial public offering related costs |
|
|
— |
|
|
|
(210 |
) |
Net cash provided by (used in) financing activities |
|
|
2,751 |
|
|
|
1,728 |
|
Net increase (decrease) in cash and cash equivalents |
|
|
(184,480 |
) |
|
|
(4,978 |
) |
Cash and cash equivalents – Beginning of period |
|
|
250,536 |
|
|
|
215,012 |
|
Cash and cash equivalents – End of period |
|
$ |
66,056 |
|
|
$ |
210,034 |
|
Supplemental cash flow disclosure: |
|
|
|
|
|
|
|
|
Cash paid for interest, net of amounts capitalized |
|
$ |
2,782 |
|
|
$ |
5,847 |
|
Cash paid for income taxes, net |
|
|
(129 |
) |
|
|
(56 |
) |
Supplemental non-cash investing and financing disclosure: |
|
|
|
|
|
|
|
|
Capital expenditures in accounts payable at end of period |
|
$ |
5,748 |
|
|
$ |
4,035 |
|
Right-of-use operating and finance lease assets obtained in exchange for lease liabilities |
|
|
8,915 |
|
|
|
1,645 |
|
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 unaudited Condensed Consolidated Financial Statements for the three months ended
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|||||
( |
|
2021 |
|
|
2020 |
|
|
$ Variance |
|
|
% Variance |
|
|||
Net sales |
|
$ |
221,133 |
|
|
$ |
185,640 |
|
|
$ |
35,493 |
|
|
19.1 |
% |
Segment Adjusted EBITDA |
|
|
69,431 |
|
|
|
58,776 |
|
|
|
10,655 |
|
|
18.1 |
% |
Segment Adjusted EBITDA Margin |
|
|
31.4 |
% |
|
|
31.7 |
% |
|
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 unaudited Condensed Consolidated Financial Statements for the three months ended
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|||||
( |
|
2021 |
|
|
2020 |
|
|
$ Variance |
|
|
% Variance |
|
|||
Net sales |
|
$ |
38,575 |
|
|
$ |
26,638 |
|
|
$ |
11,937 |
|
|
44.8 |
% |
Segment Adjusted EBITDA |
|
|
4,748 |
|
|
|
3,316 |
|
|
|
1,432 |
|
|
43.2 |
% |
Segment Adjusted EBITDA Margin |
|
|
12.3 |
% |
|
|
12.4 |
% |
|
N/A |
|
|
N/A |
|
|
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation
|
|
Three Months Ended |
|
|||||
( |
|
2021 |
|
|
2020 |
|
||
Net income (loss) |
|
$ |
16,707 |
|
|
$ |
10,148 |
|
Interest expense |
|
|
4,148 |
|
|
|
6,026 |
|
Depreciation and amortization |
|
|
28,082 |
|
|
|
24,278 |
|
Income tax expense (benefit) |
|
|
4,585 |
|
|
|
3,356 |
|
Stock-based compensation |
|
|
4,016 |
|
|
|
2,980 |
|
Acquisition costs (1) |
|
|
497 |
|
|
|
— |
|
Other costs (2) |
|
|
485 |
|
|
|
1,664 |
|
Total adjustments |
|
|
41,813 |
|
|
|
38,304 |
|
Adjusted EBITDA |
|
$ |
58,520 |
|
|
$ |
48,452 |
|
|
|
Three Months Ended |
|
|||||
|
|
2021 |
|
|
2020 |
|
||
Net income (loss) |
|
|
6.4 |
% |
|
|
4.8 |
% |
Interest expense |
|
|
1.6 |
% |
|
|
2.8 |
% |
Depreciation and amortization |
|
|
10.8 |
% |
|
|
11.4 |
% |
Income tax expense (benefit) |
|
|
1.8 |
% |
|
|
1.6 |
% |
Stock-based compensation |
|
|
1.5 |
% |
|
|
1.4 |
% |
Acquisition costs |
|
|
0.2 |
% |
|
|
0.0 |
% |
Other costs |
|
|
0.2 |
% |
|
|
0.8 |
% |
Total adjustments |
|
|
16.1 |
% |
|
|
18.0 |
% |
Adjusted EBITDA Margin |
|
|
22.5 |
% |
|
|
22.8 |
% |
(1) |
Acquisition costs reflect costs directly related to completed acquisitions of |
|||
(2) |
Other costs include costs for legal expense of |
|||
Adjusted Gross Profit and Adjusted Gross Profit Margin Reconciliation
|
|
Three Months Ended |
|
|||||
( |
|
2021 |
|
|
2020 |
|
||
Gross Profit |
|
$ |
88,609 |
|
|
$ |
72,976 |
|
Depreciation and amortization (1) |
|
|
18,481 |
|
|
|
15,796 |
|
Adjusted Gross Profit |
|
$ |
107,090 |
|
|
$ |
88,772 |
|
|
|
Three Months Ended |
|
|||||
|
|
2021 |
|
|
2020 |
|
||
Gross Margin |
|
|
34.1 |
% |
|
|
34.4 |
% |
Depreciation and amortization |
|
|
7.1 |
% |
|
|
7.4 |
% |
Adjusted Gross Profit Margin |
|
|
41.2 |
% |
|
|
41.8 |
% |
(1) |
Depreciation and amortization for the three months ended |
|||
Adjusted Net Income and Adjusted Diluted EPS Reconciliation
|
|
Three Months Ended |
|
|||||
( |
|
2021 |
|
|
2020 |
|
||
Net income (loss) |
|
$ |
16,707 |
|
|
$ |
10,148 |
|
Amortization |
|
|
12,880 |
|
|
|
12,643 |
|
Stock-based compensation (1) |
|
|
1,960 |
|
|
|
2,686 |
|
Acquisition costs (2) |
|
|
497 |
|
|
|
— |
|
Other costs (3) |
|
|
485 |
|
|
|
1,664 |
|
Tax impact of adjustments (4) |
|
|
(3,772 |
) |
|
|
(3,999 |
) |
Adjusted Net Income |
|
$ |
28,757 |
|
|
$ |
23,142 |
|
|
|
Three Months Ended |
|
|||||
|
|
2021 |
|
|
2020 |
|
||
Net income (loss) |
|
$ |
0.11 |
|
|
$ |
0.07 |
|
Amortization |
|
|
0.08 |
|
|
|
0.08 |
|
Stock-based compensation |
|
|
0.01 |
|
|
|
0.02 |
|
Acquisition costs |
|
|
— |
|
|
|
— |
|
Other costs |
|
|
— |
|
|
|
0.01 |
|
Tax impact of adjustments |
|
|
(0.02 |
) |
|
|
(0.03 |
) |
Adjusted Diluted EPS (5) |
|
$ |
0.18 |
|
|
$ |
0.15 |
|
(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 (loss) per common share of 156,854,925 and 156,018,731 for the three months ended |
|||
Net Leverage Reconciliation |
||||
Twelve Months Ended
|
||||
(In thousands) |
2021 |
|||
Net income (loss) |
$ |
99,709 |
|
|
Interest expense |
|
18,433 |
|
|
Depreciation and amortization |
|
105,408 |
|
|
Tax expense (benefit) |
|
29,897 |
|
|
Stock-based compensation costs |
|
23,706 |
|
|
Acquisition costs |
|
497 |
|
|
Initial public offering and secondary offering costs |
|
2,592 |
|
|
Other costs |
|
4,013 |
|
|
Total adjustments |
|
184,546 |
|
|
Adjusted EBITDA |
$ |
284,255 |
|
|
Long-term debt — less current portion |
$ |
464,999 |
|
|
Unamortized deferred financing fees |
|
2,371 |
|
|
Unamortized original issue discount |
|
284 |
|
|
Gross debt |
$ |
467,654 |
|
|
Cash and cash equivalents |
|
(66,056 |
) |
|
Net debt |
$ |
401,598 |
|
|
Net Leverage |
1.4x |
|||
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 variability in the provision for income taxes, the estimates for warranty and rebate accruals and timing of the gain or loss on disposal of property, plant and equipment. 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/20220203005337/en/
Investor Relations Contact:
312-809-1093
ir@azekco.com
Media Contact:
(415) 819-2126
AZEKquestions@zenogroup.com
Source:
FAQ
What were AZEK's net sales for Q1 fiscal 2022?
What was AZEK's adjusted EBITDA for Q1 fiscal 2022?
What is AZEK's forecast for fiscal 2022 net sales growth?
How much did AZEK's net income grow in Q1 fiscal 2022?
What impact did the StruXure acquisition have on AZEK?
