The AZEK Company Announces Fourth Quarter and Full-Year Fiscal 2024 Results
AZEK reported strong fiscal 2024 results with record Residential net sales of $1.37 billion, up 12% year-over-year. The company's net income increased 146% to $153 million, with net profit margin expanding by 600 basis points to 10.6%. Adjusted EBITDA grew 34% to $379 million, with margin expansion of 560 basis points to 26.3%. For fiscal 2025, AZEK expects consolidated net sales between $1.51-$1.54 billion (5-7% growth) and Adjusted EBITDA of $400-$415 million (5-9% growth). The company generated $224 million in operating cash flow and returned $243 million to shareholders through share repurchases.
AZEK ha riportato risultati fiscali 2024 solidi con vendite nette residenziali record di 1,37 miliardi di dollari, in aumento del 12% rispetto all'anno precedente. Il reddito netto dell'azienda è aumentato del 146% a 153 milioni di dollari, con un margine di profitto netto in espansione di 600 punti base, raggiungendo il 10,6%. L'EBITDA rettificato è cresciuto del 34% a 379 milioni di dollari, con un'espansione del margine di 560 punti base al 26,3%. Per l'anno fiscale 2025, AZEK prevede vendite nette consolidate comprese tra 1,51 e 1,54 miliardi di dollari (crescita del 5-7%) e un EBITDA rettificato di 400-415 milioni di dollari (crescita del 5-9%). L'azienda ha generato 224 milioni di dollari in flusso di cassa operativo e ha restituito 243 milioni di dollari agli azionisti attraverso riacquisti di azioni.
AZEK reportó resultados fiscales 2024 sólidos con ventas netas residenciales récord de 1.37 mil millones de dólares, un aumento del 12% interanual. El ingreso neto de la compañía aumentó un 146% a 153 millones de dólares, con un margen de utilidad neta que se expandió en 600 puntos base al 10.6%. El EBITDA ajustado creció un 34% a 379 millones de dólares, con una expansión de margen de 560 puntos base al 26.3%. Para el año fiscal 2025, AZEK espera ventas netas consolidadas entre 1.51 y 1.54 mil millones de dólares (crecimiento del 5-7%) y un EBITDA ajustado de 400 a 415 millones de dólares (crecimiento del 5-9%). La compañía generó 224 millones de dólares en flujo de efectivo operativo y devolvió 243 millones de dólares a los accionistas a través de recompras de acciones.
AZEK는 2024 회계연도에 13억 7천만 달러의 기록적인 주거 부문 순매출을 보고하며 강력한 결과를 발표했습니다. 이는 전년 대비 12% 증가한 수치입니다. 회사의 순이익은 1억 5천3백만 달러로 146% 증가했으며, 순이익률은 600bp 증가하여 10.6%에 도달했습니다. 조정된 EBITDA는 3억 7천9백만 달러로 34% 증가했으며, 마진은 560bp 증가하여 26.3%에 이릅니다. AZEK는 2025 회계연도에 15억 1천만 달러에서 15억 4천만 달러(5-7% 성장) 사이의 통합 순매출과 4억에서 4억 1천5백만 달러(5-9% 성장)의 조정 EBITDA를 예상합니다. 이 회사는 2억 2천4백만 달러의 운영 현금 흐름을 생성했으며, 주식 매입을 통해 주주에게 2억 4천3백만 달러를 반환했습니다.
AZEK a annoncé des résultats financiers solides pour l'exercice 2024, avec des ventes nettes résidentielles record de 1,37 milliard de dollars, en hausse de 12 % par rapport à l'année précédente. Le bénéfice net de l'entreprise a augmenté de 146 % pour atteindre 153 millions de dollars, avec une marge bénéficiaire nette en expansion de 600 points de base à 10,6 %. Le BAA ajusté a progressé de 34 % pour atteindre 379 millions de dollars, avec une expansion de la marge de 560 points de base à 26,3 %. Pour l'exercice 2025, AZEK prévoit des ventes nettes consolidées comprises entre 1,51 et 1,54 milliard de dollars (croissance de 5 à 7 %) et un BAA ajusté de 400 à 415 millions de dollars (croissance de 5 à 9 %). L'entreprise a généré un flux de trésorerie opérationnel de 224 millions de dollars et a restitué 243 millions de dollars aux actionnaires par le biais de rachats d'actions.
AZEK hat starke Ergebnisse für das Geschäftsjahr 2024 gemeldet, mit einem Rekord von 1,37 Milliarden Dollar an Nettoverkäufen im Wohnbereich, was einem Anstieg von 12 % im Vergleich zum Vorjahr entspricht. Der Nettogewinn des Unternehmens stieg um 146 % auf 153 Millionen Dollar, während die Nettogewinnmarge um 600 Basispunkte auf 10,6 % erweitert wurde. Das bereinigte EBITDA wuchs um 34 % auf 379 Millionen Dollar, mit einer Margenvergrößerung um 560 Basispunkte auf 26,3 %. Für das Geschäftsjahr 2025 erwartet AZEK konsolidierte Nettoverkäufe zwischen 1,51 und 1,54 Milliarden Dollar (Wachstum von 5-7 %) und ein bereinigtes EBITDA von 400 bis 415 Millionen Dollar (Wachstum von 5-9 %). Das Unternehmen erzielte einen operativen Cashflow von 224 Millionen Dollar und gab 243 Millionen Dollar an die Aktionäre durch Aktienrückkäufe zurück.
- Record Residential net sales of $1.37 billion, up 12% YoY
- Net income increased 146% to $153 million
- Adjusted EBITDA grew 34% to $379 million
- Generated $224 million operating cash flow
- Returned $243 million to shareholders via share repurchases
- Deck, Rail & Accessories business grew 18% YoY
- Q4 consolidated net sales decreased 10% to $348.2 million
- Q4 net income decreased by $10.9 million to $28.4 million
- Q4 net profit margin declined 200 basis points to 8.1%
Insights
AZEK delivered impressive FY2024 results with significant margin expansion. Net sales grew 5% to
Key financial highlights include record
The FY2025 outlook projects
AZEK's market positioning remains strong despite challenging conditions. The company's high-single-digit residential sell-through growth demonstrates effective market penetration strategies. New product launches like TimberTech Reliance Rail and TrimLogic expand their addressable market by nearly
Brand recognition is notably improving, with TimberTech and AZEK achieving top rankings in Builder and Remodeler Magazine's studies. The focus on sustainable materials, particularly the
Channel inventory management and strategic pricing have helped maintain margins while supporting market share gains. The company's guidance assumes a flat repair & remodel market for 2025, suggesting conservative planning while maintaining confidence in company-specific growth drivers.
Delivered Record Fiscal Year Residential Net Sales, Net Income and Adjusted EBITDA
High-Single-Digit Residential Sell-Through Growth Year Over Year in the Fiscal Fourth Quarter
FOURTH QUARTER FISCAL 2024 FINANCIAL HIGHLIGHTS
-
Consolidated Net Sales of
$348.2 million -
Residential Segment Net Sales of
$327.3 million -
Gross profit margin of
37.3% ; Adjusted Gross Profit Margin of38.4% -
Net Income of
$28.4 million 8.1% -
Adjusted EBITDA of
$91.8 million $85.9 million -
Adjusted EBITDA Margin of
26.3% -
EPS of
$0.19 $0.29
FISCAL YEAR 2024 COMPANY HIGHLIGHTS
-
Consolidated Net Sales increased
5% year-over-year to$1.44 billion 11% year-over-year -
Residential Segment Net Sales increased
12% year-over-year to$1.37 billion 18% -
Net income increased
146% to$153 million $37.7 million 10.6% -
Adjusted EBITDA increased
34% to$379 million 26.3% -
Generated
$224 million $147 million -
Returned
$243 million
FISCAL YEAR 2025 PLANNING ASSUMPTIONS
AZEK provides certain of its outlook on a non-GAAP basis, as the Company cannot predict some elements that are included in reported GAAP results, including the impact of acquisition costs and other costs. Refer to the Outlook section in the discussion of non-GAAP financial measures below for more details.
-
Expecting consolidated net sales between
$1.51 $1.54 billion 5% to7% year-over-year growth and assuming a flat repair & remodel market -
Adjusted EBITDA is expected to be in the range of
$400 $415 million 5% to9% year over year
CEO COMMENTS
"The AZEK team delivered strong financial results that reflect our team’s focus on consistently delivering growth and margin expansion,” said Jesse Singh, CEO of The AZEK Company. “The successful execution of our strategic growth initiatives in fiscal 2024 enabled us to deliver high-single-digit year-over-year Residential sell-through growth and
“During the fiscal fourth quarter, Deck, Rail & Accessories sell-through grew high single digits and Exteriors grew low single digits year over year, improving modestly relative to the prior two quarters. Overall Residential segment sell-through grew approximately high single digits, while net sales declined approximately
“We see incremental sales momentum from our recent new product launches and are excited about our recently announced slate of new product platforms and innovations for 2025, including TimberTech Reliance Rail, TimberTech Fulton Rail, and TrimLogic, expanding our access to nearly
“Our investments in marketing and sales are driving significant momentum in our brand awareness among homeowners, dealers and professional contractors alike. TimberTech Decking and Railing and AZEK Trim were recently recognized by both Builder and Remodeler Magazine's Brand Use Studies as #1 or #2 in the “brand awareness” and “brand most used in the last two years” categories. TimberTech was recognized by Good Housekeeping's 2025 Home Renovation Awards for its innovative Vintage Collection leveraging its Advanced PVC fire-resistant technology. Our accelerating brand relevance and innovative products differentiate us as the leader in sustainable outdoor living building materials,” continued Mr. Singh.
FOURTH QUARTER FISCAL 2024 CONSOLIDATED RESULTS
Net sales for the three months ended September 30, 2024 decreased by
Gross profit decreased by
Adjusted Gross Profit decreased by
Net income decreased by
Adjusted EBITDA decreased by
Adjusted Net Income decreased by
YEAR ENDED SEPTEMBER 30, 2024 CONSOLIDATED RESULTS
Net sales for the year ended September 30, 2024 increased by
Gross profit increased by
Adjusted Gross Profit increased by
Net income increased by
Adjusted EBITDA increased by
Adjusted Net Income increased by
BALANCE SHEET, CASH FLOW and LIQUIDITY
As of September 30, 2024, AZEK had cash and cash equivalents of
Net Cash Provided by Operating Activities for the three months ended September 30, 2024, decreased by
During the quarter, AZEK repurchased approximately 1 million initial shares of its Class A common stock under a
OUTLOOK
“We continue to see positive Residential sell-through growth, and demand indicators from our customer surveys are positive heading into fiscal year 2025. Channel inventories are below historical averages through our fiscal year-end. We also see positive trends in our internal digital and engagement metrics and believe that there is underlying demand that will be realized as the broader market improves. We remain optimistic about the
For the full-year fiscal 2025, AZEK expects Residential segment net sales in the range of
AZEK expects consolidated net sales in the range of
For the first quarter of fiscal 2025, AZEK expects Residential segment net sales in the range of
“We believe we are well positioned to drive above-market growth in fiscal year 2025 and double-digit growth over the long-term by continuing to execute our growth strategy. We expect to build upon the multi-year margin initiatives we have executed to achieve our annual Adjusted EBITDA Margin target of
CONFERENCE CALL AND WEBSITE INFORMATION
AZEK will hold a conference call to discuss the results today, Tuesday, November 19, 2024, at 4:00 p.m. (CT). To access the live conference call, please register for the call in advance by visiting https://registrations.events/direct/Q4I108404. Registration will also be available during the call. After registering, a confirmation e-mail will be sent including dial-in details and unique conference call codes for entry. 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 AZEK’s website at investors.azekco.com/events-and-presentations/. AZEK uses its investor relations website at investors.azekco.com as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
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 AZEK website or by dialing (800) 770- 2030 or (609) 800-9909. The conference ID for the replay is 10840. The replay will be available until 10:59 p.m. (CT) on December 3, 2024. In addition, an earnings presentation will be posted and available on the AZEK investor relations website prior to the conference call.
ABOUT THE AZEK® COMPANY
The AZEK Company Inc. (NYSE: AZEK) is the industry-leading designer and manufacturer of beautiful, low maintenance and environmentally sustainable outdoor living products, including TimberTech® Decking and Railing, Versatex® and AZEK® Trim, and StruXure® pergolas. Consistently awarded and recognized as the market leader in innovation, quality, aesthetics and sustainability, our products are made from up to
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This earnings release contains forward-looking statements within the meaning of applicable securities laws. All statements other than statements of historical facts, 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. 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. 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 our communities; statements about our future expansion plans, capital investments, capacity targets and other future strategic initiatives; statements about any stock repurchase plans, including the expected settlement date of the ASR; statements about potential new products and product innovation; statements regarding the potential impact of global events; 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 inflation and interest rates, supply and demand balance, 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 our production levels; 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. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in our Annual Reports on Form 10-K and Form 10-K/A, Quarterly Reports on Form 10-Q 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, except as required by law.
NON-GAAP FINANCIAL MEASURES
To supplement our earnings release and consolidated financial statements prepared and presented in accordance with generally accepted accounting principles in
- Adjusted Gross Profit: Beginning for the three months ended December 31, 2023, we define Adjusted Gross Profit as gross profit before amortization, acquisition costs and certain other costs. Adjusted Gross Profit Margin is equal to Adjusted Gross Profit divided by net sales. Prior to the three months ended December 31, 2023, depreciation was also excluded from Adjusted Gross Profit. We believe that including depreciation expense in our Adjusted Gross Profit definition will result in easier comparability to our peers. Presentations of Adjusted Gross Profit and Adjusted Gross Profit Margin for prior periods have been recast to conform to the current period presentation for comparability.
- Adjusted Net Income: Defined as net income (loss) before amortization, share-based compensation costs, acquisition and divestiture costs, initial public offering and secondary offering costs and certain other items of expense and income.
- Adjusted Diluted EPS: Defined 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.
- Adjusted EBITDA: Defined 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.
- Adjusted SG&A: Defined as selling, general and administrative expenses before amortization, share-based compensation costs, acquisition and divestiture costs and certain other costs.
- Net Leverage: Equal to gross debt less cash and cash equivalents, divided by trailing twelve month Adjusted EBITDA.
- Free Cash Flow: Defined as net cash provided by (used in) operating activities less purchases of property, plant and equipment.
In addition, we provide Adjusted Net Sales excluding Vycom, which is a non-GAAP measure that we define as Consolidated Net Sales excluding the impact from the divested Vycom business. We believe Adjusted Net Sales excluding Vycom is useful to investors because it reflects the ongoing trends in our business following the divestiture of Vycom.
These non-GAAP financial measures 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. Non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. See the accompanying earnings tables for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures.
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/A for fiscal 2023 and our Consolidated Financial Statements and related notes included therein.
The AZEK Company Inc. |
|||||||
Consolidated Balance Sheets |
|||||||
(In thousands of |
|||||||
|
|||||||
|
As of September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
ASSETS: |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
164,025 |
|
|
$ |
278,314 |
|
Trade receivables, net of allowances |
|
49,922 |
|
|
|
57,660 |
|
Inventories |
|
223,682 |
|
|
|
195,600 |
|
Prepaid expenses |
|
9,876 |
|
|
|
13,595 |
|
Other current assets |
|
23,872 |
|
|
|
16,123 |
|
Total current assets |
|
471,377 |
|
|
|
561,292 |
|
Property, plant and equipment, net |
|
462,201 |
|
|
|
501,023 |
|
Goodwill |
|
967,816 |
|
|
|
994,271 |
|
Intangible assets, net |
|
154,518 |
|
|
|
199,497 |
|
Other assets |
|
111,799 |
|
|
|
87,793 |
|
Total assets |
$ |
2,167,711 |
|
|
$ |
2,343,876 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY: |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
57,909 |
|
|
$ |
56,015 |
|
Accrued rebates |
|
68,211 |
|
|
|
60,974 |
|
Accrued interest |
|
|
|
||||
Current portion of long-term debt obligations |
|
3,300 |
|
|
|
6,000 |
|
Accrued expenses and other liabilities |
|
87,618 |
|
|
|
66,727 |
|
Total current liabilities |
|
217,038 |
|
|
|
189,716 |
|
Deferred income taxes |
|
42,342 |
|
|
|
59,509 |
|
Long-term debt — less current portion |
|
429,668 |
|
|
|
580,265 |
|
Other non-current liabilities |
|
121,798 |
|
|
|
104,073 |
|
Total liabilities |
$ |
810,846 |
|
|
$ |
933,563 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Class A common stock, |
|
157 |
|
|
|
156 |
|
Class B common stock, |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
1,694,066 |
|
|
|
1,662,322 |
|
Retained earnings (accumulated deficit) |
|
89,002 |
|
|
|
(64,377 |
) |
Accumulated other comprehensive income (loss) |
|
(1,682 |
) |
|
|
1,878 |
|
Treasury stock, at cost, 14,134,558 shares at September 30, 2024 and 8,268,423 shares at September 30, 2023 |
|
(424,678 |
) |
|
|
(189,666 |
) |
Total stockholders’ equity |
|
1,356,865 |
|
|
|
1,410,313 |
|
Total liabilities and stockholders’ equity |
$ |
2,167,711 |
|
|
$ |
2,343,876 |
|
The AZEK Company Inc. |
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Consolidated Statements of Comprehensive Income |
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(In thousands of |
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|
||||||||||||||
|
Three Months Ended
|
|
Years Ended
|
|||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
Net sales |
$ |
348,227 |
|
|
$ |
388,812 |
|
|
$ |
1,441,448 |
|
|
$ |
1,370,316 |
Cost of sales |
|
218,481 |
|
|
|
243,519 |
|
|
|
899,655 |
|
|
|
940,048 |
Gross profit |
|
129,746 |
|
|
|
145,293 |
|
|
|
541,793 |
|
|
|
430,268 |
Selling, general and administrative expenses |
|
78,728 |
|
|
|
84,951 |
|
|
|
327,770 |
|
|
|
305,162 |
Other general expenses |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,065 |
Loss (gain) on disposal of plant, property and equipment |
|
(115 |
) |
|
|
(29 |
) |
|
|
1,934 |
|
|
|
249 |
Operating income |
|
51,133 |
|
|
|
60,371 |
|
|
|
212,089 |
|
|
|
123,792 |
Other income and expenses: |
|
|
|
|
|
|
|
|||||||
Interest expense, net |
|
15,800 |
|
|
|
8,812 |
|
|
|
40,253 |
|
|
|
39,293 |
Loss (gain) on sale of business |
|
702 |
|
|
|
— |
|
|
|
(37,688 |
) |
|
|
— |
Total other expenses |
|
16,502 |
|
|
|
8,812 |
|
|
|
2,565 |
|
|
|
39,293 |
Income before income taxes |
|
34,631 |
|
|
|
51,559 |
|
|
|
209,524 |
|
|
|
84,499 |
Income tax expense |
|
6,268 |
|
|
|
12,328 |
|
|
|
56,145 |
|
|
|
22,138 |
Net income |
$ |
28,363 |
|
|
$ |
39,231 |
|
|
$ |
153,379 |
|
|
$ |
62,361 |
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|||||||
Unrealized gain (loss) due to change in fair value of derivatives, net of tax |
$ |
(2,609 |
) |
|
$ |
1,187 |
|
|
$ |
(3,560 |
) |
|
$ |
1,878 |
Total other comprehensive income (loss) |
|
(2,609 |
) |
|
|
1,187 |
|
|
|
(3,560 |
) |
|
|
1,878 |
Comprehensive income |
$ |
25,754 |
|
|
$ |
40,418 |
|
|
$ |
149,819 |
|
|
$ |
64,239 |
|
|
|
|
|
|
|
|
|||||||
Net income per common share: |
|
|
|
|
|
|
|
|||||||
Basic |
$ |
0.20 |
|
|
$ |
0.26 |
|
|
$ |
1.05 |
|
|
$ |
0.42 |
Diluted |
$ |
0.19 |
|
|
$ |
0.26 |
|
|
$ |
1.04 |
|
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|||||||
Weighted average shares used in calculating net income per common share: |
|
|
|
|
|
|
|
|||||||
Basic |
|
143,890,885 |
|
|
|
148,824,202 |
|
|
|
145,618,173 |
|
|
|
150,162,256 |
Diluted |
|
145,817,391 |
|
|
|
150,522,274 |
|
|
|
147,485,126 |
|
|
|
150,849,896 |
The AZEK Company Inc. |
|||||||
Consolidated Statements of Cash Flows |
|||||||
(In thousands of |
|||||||
|
|||||||
|
Years Ended
|
||||||
|
|
2024 |
|
|
|
2023 |
|
Operating activities: |
|
|
|
||||
Net income |
$ |
153,379 |
|
|
$ |
62,361 |
|
Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: |
|
|
|
||||
Depreciation expense |
|
89,612 |
|
|
|
86,206 |
|
Amortization expense |
|
39,430 |
|
|
|
46,338 |
|
Non-cash interest expense |
|
1,647 |
|
|
|
1,647 |
|
Non-cash lease expense |
|
(91 |
) |
|
|
(251 |
) |
Deferred income tax expense (benefit) |
|
(21,458 |
) |
|
|
(8,579 |
) |
Non-cash compensation expense |
|
25,923 |
|
|
|
18,518 |
|
Loss on disposition of property, plant and equipment |
|
1,934 |
|
|
|
2,220 |
|
Bad debt provision |
|
(830 |
) |
|
|
731 |
|
Gain on sale of business |
|
(37,688 |
) |
|
|
— |
|
Loss on extinguishment of debt |
|
715 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Trade receivables |
|
6,272 |
|
|
|
31,768 |
|
Inventories |
|
(47,536 |
) |
|
|
86,073 |
|
Prepaid expenses and other current assets |
|
(7,932 |
) |
|
|
(848 |
) |
Accounts payable |
|
(3,444 |
) |
|
|
22,596 |
|
Accrued expenses and interest |
|
23,884 |
|
|
|
11,890 |
|
Other assets and liabilities |
|
662 |
|
|
|
1,872 |
|
Net cash provided by operating activities |
|
224,479 |
|
|
|
362,542 |
|
Investing activities: |
|
|
|
||||
Purchases of property, plant and equipment |
|
(77,147 |
) |
|
|
(88,545 |
) |
Proceeds from sale of property, plant and equipment |
|
474 |
|
|
|
202 |
|
Divestiture, net of cash disposed |
|
131,783 |
|
|
|
— |
|
Acquisitions, net of cash acquired |
|
(5,971 |
) |
|
|
(161 |
) |
Net cash provided by (used in) investing activities |
|
49,139 |
|
|
|
(88,504 |
) |
Financing activities: |
|
|
|
||||
Proceeds under Revolving Credit Facility |
|
— |
|
|
|
25,000 |
|
Payments under Revolving Credit Facility |
|
— |
|
|
|
(25,000 |
) |
Payments on 2022 Term Loan Agreement |
|
(594,000 |
) |
|
|
(6,000 |
) |
Proceeds from 2024 Term Loan Facility |
|
438,900 |
|
|
|
— |
|
Payments of debt issuance costs related to 2024 Revolving Credit Facility |
|
(2,997 |
) |
|
|
— |
|
Repayments of finance lease obligations |
|
(2,946 |
) |
|
|
(2,619 |
) |
Payments of INTEX contingent consideration |
|
— |
|
|
|
(5,850 |
) |
Exercise of vested stock options |
|
20,852 |
|
|
|
14,954 |
|
Cash paid for shares withheld for taxes |
|
(5,214 |
) |
|
|
(1,528 |
) |
Purchases of treasury stock |
|
(242,502 |
) |
|
|
(115,498 |
) |
Net cash provided by (used in) financing activities |
|
(387,907 |
) |
|
|
(116,541 |
) |
Net increase (decrease) in cash and cash equivalents |
|
(114,289 |
) |
|
|
157,497 |
|
Cash and cash equivalents at beginning of period |
|
278,314 |
|
|
|
120,817 |
|
Cash and cash equivalents at end of period |
$ |
164,025 |
|
|
$ |
278,314 |
|
Supplemental cash flow disclosure: |
|
|
|
||||
Cash paid for interest, net of amounts capitalized |
$ |
49,232 |
|
|
$ |
46,010 |
|
Cash paid for income taxes, net |
|
87,867 |
|
|
|
34,480 |
|
Supplemental non-cash investing and financing disclosure: |
|
|
|
||||
Capital expenditures in accounts payable at end of period |
$ |
9,950 |
|
|
$ |
7,703 |
|
Right-of-use operating and finance lease assets obtained in exchange for lease liabilities |
|
25,196 |
|
|
|
3,830 |
|
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 Consolidated Financial Statements for the three months and years ended September 30, 2024 and 2023.
|
Three Months Ended
|
|
|
|
|
|
Years Ended
|
|
|
|
|
|||||||||||||||||
( |
|
2024 |
|
|
|
2023 |
|
|
$ Variance |
|
% Variance |
|
|
2024 |
|
|
|
2023 |
|
|
$ Variance |
|
% Variance |
|||||
Net sales |
$ |
327,263 |
|
|
$ |
349,658 |
|
|
$ |
(22,395 |
) |
|
(6.4 |
)% |
|
$ |
1,368,813 |
|
|
$ |
1,222,866 |
|
|
$ |
145,947 |
|
11.9 |
% |
Segment Adjusted EBITDA(1) |
|
85,943 |
|
|
|
92,706 |
|
|
|
(6,763 |
) |
|
(7.3 |
)% |
|
|
365,273 |
|
|
|
252,830 |
|
|
|
112,443 |
|
44.5 |
% |
Segment Adjusted EBITDA Margin |
|
26.3 |
% |
|
|
26.5 |
% |
|
|
N/A |
|
|
N/A |
|
|
|
26.7 |
% |
|
|
20.7 |
% |
|
|
N/A |
|
N/A |
|
(1) |
|
Effective as of December 31, 2023, Residential segment Adjusted EBITDA includes all corporate expenses, such as selling, general and administrative costs related to our corporate offices, including payroll and other professional fees. The prior periods have been recast to reflect the change. |
Commercial Segment
The following table summarizes certain financial information relating to the Commercial segment results that have been derived from our unaudited Consolidated Financial Statements for the three months and years ended September 30, 2024 and 2023.
Three Months Ended
|
|
|
|
|
|
Years Ended
|
|
|
|
|
|||||||||||||||||||
( |
|
2024 |
|
|
|
2023 |
|
|
$ Variance |
|
% Variance |
|
|
2024 |
|
|
|
2023 |
|
|
$ Variance |
|
% Variance |
||||||
Net sales |
$ |
20,964 |
|
|
$ |
39,154 |
|
|
$ |
(18,190 |
) |
|
(46.5 |
)% |
|
$ |
72,635 |
|
|
$ |
147,450 |
|
|
$ |
(74,815 |
) |
|
(50.7 |
)% |
Segment Adjusted EBITDA |
|
5,811 |
|
|
|
9,245 |
|
|
|
(3,434 |
) |
|
(37.1 |
)% |
|
|
14,068 |
|
|
|
31,008 |
|
|
|
(16,940 |
) |
|
(54.6 |
)% |
Segment Adjusted EBITDA Margin |
|
27.7 |
% |
|
|
23.6 |
% |
|
|
N/A |
|
|
N/A |
|
|
|
19.4 |
% |
|
|
21.0 |
% |
|
|
N/A |
|
|
N/A |
|
Adjusted Net Sales Excluding Vycom Reconciliation
|
Three Months Ended
|
|
Years Ended
|
|||||||||||
( |
2024 |
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net sales |
$ |
348,227 |
|
$ |
388,812 |
|
|
$ |
1,441,448 |
|
|
$ |
1,370,315 |
|
Impact from sale of Vycom business |
|
— |
|
|
(17,526 |
) |
|
|
(3,319 |
) |
|
|
(77,098 |
) |
Adjusted net sales excluding Vycom |
$ |
348,227 |
|
$ |
371,286 |
|
|
$ |
1,438,129 |
|
|
$ |
1,293,217 |
|
Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation
|
Three Months Ended
|
Years Ended
|
|||||||||||||
( |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|||
Net income |
$ |
28,363 |
|
$ |
39,231 |
|
$ |
153,379 |
|
$ |
62,361 |
|
|||
Interest expense, net |
|
15,800 |
|
|
8,812 |
|
|
40,253 |
|
|
39,293 |
|
|||
Depreciation and amortization |
|
33,030 |
|
|
34,005 |
|
|
129,042 |
|
|
132,544 |
|
|||
Tax expense |
|
6,268 |
|
|
12,328 |
|
|
56,145 |
|
|
22,138 |
|
|||
Stock-based compensation costs |
|
5,240 |
|
|
4,957 |
|
|
25,835 |
|
|
18,704 |
|
|||
Acquisition and divestiture costs(1) |
|
272 |
|
|
2,355 |
|
|
1,284 |
|
|
6,890 |
|
|||
Loss (gain) on sale of business(2) |
|
702 |
|
|
— |
|
|
(37,688 |
) |
|
— |
|
|||
Secondary offering costs |
|
— |
|
|
— |
|
|
— |
|
|
1,065 |
|
|||
Other costs(3) |
|
2,079 |
|
|
263 |
|
|
11,091 |
|
|
843 |
|
|||
Total adjustments |
|
63,391 |
|
|
62,720 |
|
|
225,962 |
|
|
221,477 |
|
|||
Adjusted EBITDA |
$ |
91,754 |
|
$ |
101,951 |
|
$ |
379,341 |
|
$ |
283,838 |
|
|||
|
|
|
|
|
|||||||||||
|
Three Months Ended
|
Years Ended
|
|||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|||
Net profit margin |
|
8.1 |
% |
|
10.1 |
% |
|
10.6 |
% |
|
4.6 |
% |
|||
Interest expense, net |
|
4.5 |
% |
|
2.3 |
% |
|
2.8 |
% |
|
2.9 |
% |
|||
Depreciation and amortization |
|
9.5 |
% |
|
8.6 |
% |
|
8.9 |
% |
|
9.5 |
% |
|||
Tax expense |
|
1.8 |
% |
|
3.2 |
% |
|
3.9 |
% |
|
1.6 |
% |
|||
Stock-based compensation costs |
|
1.5 |
% |
|
1.3 |
% |
|
1.8 |
% |
|
1.4 |
% |
|||
Acquisition and divestiture costs |
|
0.1 |
% |
|
0.6 |
% |
|
0.1 |
% |
|
0.5 |
% |
|||
Loss (gain) on sale of business |
|
0.2 |
% |
|
— |
% |
|
(2.6 |
)% |
|
— |
% |
|||
Secondary offering costs |
|
— |
% |
|
— |
% |
|
— |
% |
|
0.1 |
% |
|||
Other costs |
|
0.6 |
% |
|
0.1 |
% |
|
0.8 |
% |
|
0.1 |
% |
|||
Total adjustments |
|
18.2 |
% |
|
16.1 |
% |
|
15.7 |
% |
|
16.1 |
% |
|||
Adjusted EBITDA Margin |
|
26.3 |
% |
|
26.2 |
% |
|
26.3 |
% |
|
20.7 |
% |
|||
______________________ |
||
(1) |
|
Acquisition and divestiture costs reflect costs directly related to completed acquisitions of |
(2) |
|
Gain on sale of business relates to the sale of the Vycom business. |
(3) |
|
Other costs reflect costs related to the restatement of AZEK’s consolidated financial statements and condensed consolidated interim financial information for each of the quarters within fiscal years ended September 30, 2023 and 2022, and for the fiscal quarter ended December 31, 2023 (the “Restatement”) of |
Adjusted Gross Profit Reconciliation
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
( |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Gross profit |
$ |
129,746 |
|
|
$ |
145,293 |
|
|
$ |
541,793 |
|
|
$ |
430,268 |
|
Amortization(1) |
|
3,687 |
|
|
|
4,425 |
|
|
|
15,126 |
|
|
|
18,162 |
|
Acquisition costs(2) |
|
269 |
|
|
|
— |
|
|
|
269 |
|
|
|
— |
|
Other costs(3) |
|
— |
|
|
|
18 |
|
|
|
— |
|
|
|
134 |
|
Adjusted Gross Profit |
$ |
133,702 |
|
|
$ |
149,736 |
|
|
$ |
557,188 |
|
|
$ |
448,564 |
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Gross margin |
|
37.3 |
% |
|
|
37.4 |
% |
|
|
37.6 |
% |
|
|
31.4 |
% |
Amortization |
|
1.0 |
% |
|
|
1.1 |
% |
|
|
1.1 |
% |
|
|
1.3 |
% |
Acquisition costs |
|
0.1 |
% |
|
|
— |
% |
|
|
— |
% |
|
|
— |
% |
Other costs |
|
— |
% |
|
|
— |
% |
|
|
— |
% |
|
|
— |
% |
Adjusted Gross Profit Margin |
|
38.4 |
% |
|
|
38.5 |
% |
|
|
38.7 |
% |
|
|
32.7 |
% |
______________________ |
||
(1) |
|
Effective as of December 31, 2023, we revised the definition of Adjusted Gross Profit to no longer exclude depreciation expense. The prior periods have been recast to reflect the change. |
(2) |
|
Acquisition costs reflect inventory step-up adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition. |
(3) |
Other costs include reduction in workforce costs of |
|
Adjusted Net Income and Adjusted Diluted EPS Reconciliation
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
( |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income |
$ |
28,363 |
|
|
$ |
39,231 |
|
|
$ |
153,379 |
|
|
$ |
62,361 |
|
Amortization |
|
9,554 |
|
|
|
11,303 |
|
|
|
39,430 |
|
|
|
46,338 |
|
Stock-based compensation costs(1) |
|
9 |
|
|
|
904 |
|
|
|
4,197 |
|
|
|
4,326 |
|
Acquisition and divestiture costs(2) |
|
272 |
|
|
|
2,355 |
|
|
|
1,284 |
|
|
|
6,890 |
|
Loss (gain) on sale of business(3) |
|
702 |
|
|
|
— |
|
|
|
(37,688 |
) |
|
|
— |
|
Secondary offering costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,065 |
|
Other costs(4) |
|
2,079 |
|
|
|
263 |
|
|
|
11,091 |
|
|
|
843 |
|
Capital structure transaction costs(5) |
|
5,494 |
|
|
|
— |
|
|
|
5,494 |
|
|
|
— |
|
Tax impact of adjustments(6) |
|
(4,908 |
) |
|
|
(3,920 |
) |
|
|
(258 |
) |
|
|
(15,684 |
) |
Adjusted Net Income |
$ |
41,565 |
|
|
$ |
50,136 |
|
|
$ |
176,929 |
|
|
$ |
106,139 |
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income per common share — diluted |
$ |
0.19 |
|
|
$ |
0.26 |
|
|
|
1.04 |
|
|
|
0.41 |
|
Amortization |
|
0.08 |
|
|
|
0.07 |
|
|
|
0.27 |
|
|
|
0.30 |
|
Stock-based compensation costs |
|
— |
|
|
|
0.01 |
|
|
|
0.03 |
|
|
|
0.03 |
|
Acquisition and divestiture costs |
|
— |
|
|
|
0.02 |
|
|
|
0.01 |
|
|
|
0.04 |
|
Loss (gain) on sale of business |
|
— |
|
|
|
— |
|
|
|
(0.26 |
) |
|
|
— |
|
Secondary offering costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
Other costs |
|
0.01 |
|
|
|
— |
|
|
|
0.07 |
|
|
|
0.01 |
|
Capital structure transaction costs |
|
0.04 |
|
|
|
— |
|
|
|
0.04 |
|
|
|
— |
|
Tax impact of adjustments |
|
(0.03 |
) |
|
|
(0.03 |
) |
|
|
— |
|
|
|
(0.10 |
) |
Adjusted Diluted EPS(7) |
$ |
0.29 |
|
|
$ |
0.33 |
|
|
$ |
1.20 |
|
|
$ |
0.70 |
|
| ______________________ | ||
(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 and divestiture costs reflect costs directly related to completed acquisitions of |
(3) |
|
Gain on sale of business relates to the sale of the Vycom business. |
(4) |
|
Other costs reflect costs related to the Restatement of |
(5) |
|
Capital structure transaction costs include third party costs related to our refinancing of the 2024 Credit Facilities of |
(6) |
|
Tax impact of adjustments, except for loss (gain) on sale of business, is based on applying a combined |
(7) |
Weighted average common shares outstanding used in computing diluted net income per common share is 145,817,391 shares for fourth quarter 2024, 150,522,274 shares for fourth quarter 2023, 147,485,126 shares for fiscal year 2024, and 150,849,896 shares for fiscal year 2023. |
|
Adjusted SG&A
|
Three Months Ended
|
|
Years Ended
|
||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
SG&A |
$ |
78,728 |
|
$ |
84,951 |
|
$ |
327,770 |
|
$ |
305,162 |
Amortization |
|
5,867 |
|
|
6,878 |
|
|
24,304 |
|
|
28,176 |
Share-based compensation costs |
|
5,240 |
|
|
4,957 |
|
|
25,835 |
|
|
18,704 |
Acquisition and divestiture costs(1) |
|
3 |
|
|
2,355 |
|
|
1,015 |
|
|
6,890 |
Other costs(2) |
|
2,079 |
|
|
244 |
|
|
8,671 |
|
|
709 |
Adjusted SG&A |
$ |
65,539 |
|
$ |
70,517 |
|
$ |
267,945 |
|
$ |
250,683 |
______________________ |
||
(1) |
|
Acquisition and divestiture costs reflect costs directly related to completed acquisitions of |
(2) |
|
Other costs reflect costs related to the Restatement of |
Free Cash Flow Reconciliation
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
( |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
$ |
60,498 |
|
|
$ |
126,649 |
|
|
$ |
224,479 |
|
|
$ |
362,542 |
|
Less: Purchases of property, plant and equipment |
|
(22,714 |
) |
|
|
(34,486 |
) |
|
|
(77,147 |
) |
|
|
(88,545 |
) |
Free Cash Flow |
$ |
37,784 |
|
|
$ |
92,163 |
|
|
$ |
147,332 |
|
|
$ |
273,997 |
|
Net cash provided by (used in) investing activities |
$ |
(22,575 |
) |
|
$ |
(34,457 |
) |
|
$ |
49,139 |
|
|
$ |
(88,504 |
) |
Net cash used in financing activities |
$ |
(220,846 |
) |
|
$ |
(58,475 |
) |
|
$ |
(387,907 |
) |
|
$ |
(116,541 |
) |
Net Leverage Reconciliation
|
|
Years Ended September 30, |
||
(In thousands) |
|
|
2024 |
|
Net income |
|
$ |
153,379 |
|
Interest expense, net |
|
|
40,253 |
|
Depreciation and amortization |
|
|
129,042 |
|
Income tax expense |
|
|
56,145 |
|
Stock-based compensation costs |
|
|
25,835 |
|
Acquisition and divestiture costs |
|
|
1,284 |
|
Gain on sale of business |
|
|
(37,688 |
) |
Other costs |
|
|
11,091 |
|
Total adjustments |
|
|
225,962 |
|
Adjusted EBITDA |
|
$ |
379,341 |
|
Long-term debt — less current portion |
|
$ |
429,668 |
|
Current portion |
|
|
3,300 |
|
Unamortized deferred financing fees |
|
|
3,065 |
|
Unamortized original issue discount |
|
|
3,967 |
|
Finance leases |
|
|
89,135 |
|
Gross debt |
|
$ |
529,135 |
|
Cash and cash equivalents |
|
|
(164,025 |
) |
Net debt |
|
$ |
365,110 |
|
Net leverage |
1.0x |
|||
OUTLOOK
We have not reconciled either of Adjusted EBITDA or Adjusted EBITDA Margin 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 and Adjusted EBITDA Margin have not occurred, are outside of our control or cannot be reasonably predicted. Accordingly, a reconciliation of each of Adjusted EBITDA and Adjusted EBITDA Margin 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 and Adjusted EBITDA Margin guidance and future GAAP results.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241119098618/en/
Investor Relations Contact:
Eric
312-809-1093
ir@azekco.com
Media Contact:
Amanda Cimaglia
312-809-1093
media@azekco.com
Source: The AZEK Company Inc.
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