CSW Industrials Reports Fiscal 2024 Third Quarter and Year-to-Date Results with Record Revenue, Adjusted EPS, and Adjusted EBITDA in Each Reporting Period
- Record results reported for the fiscal 2024 third quarter and nine-month year-to-date periods
- Total revenue increased 2% to $175.0 million in the third quarter
- Net income of $9.2 million for the third quarter
- Total revenue increased 4% to $582.0 million for the year-to-date period
- Net income of $69.9 million for the year-to-date period
- Adjusted EBITDA increased 18% to $36.8 million in the third quarter
- Adjusted EBITDA increased 16% to $144.2 million for the year-to-date period
- CSWI paid down $20 million of debt and returned cash to shareholders of $8.9 million in dividends and $5.8 million in share repurchases
- None.
Insights
The reported financials by CSW Industrials, Inc. indicate a positive trajectory in terms of revenue growth and profitability, which is crucial information for investors and stakeholders. The increase in total revenue by 2% to $175.0 million, primarily due to organic growth, suggests the company's core operations are strengthening despite market challenges. The improvement in earnings per share (EPS), both reported and adjusted, as well as the 18% increase in adjusted EBITDA, are key indicators of financial health, reflecting operational efficiency and margin expansion.
Of particular note is the company's debt reduction efforts, having paid down $100 million of debt, which enhances the balance sheet and reduces financial risk. This is complemented by a robust cash flow from operations, up 28% to $47.0 million for the quarter, enabling such strategic financial moves. The leverage ratio improvement from 0.85x to 0.69x Debt to EBITDA is a positive signal to the market, potentially impacting the company's credit rating and lowering its cost of capital.
The increased effective tax rate to 43.2%, adjusted to 32.5%, may raise concerns, but it appears to be influenced by one-time factors related to acquisitions. Investors should monitor how these rates stabilize in future periods. Overall, the fiscal report demonstrates a company that is managing its finances effectively in a challenging environment, which could be seen as a positive indicator for its stock performance in the mid to long term.
CSW Industrials' performance in a contractionary market speaks to its competitive positioning and operational resilience. The reported organic growth in revenue, particularly in the architecturally-specified building products, plumbing, HVAC/R, energy and mining end markets, indicates a strong demand for the company's offerings. The ability to grow adjusted EBITDA by 18% on just 2% revenue growth demonstrates impressive operating leverage and effective cost management.
The company's strategic focus on margin expansion, achieved through reduced freight costs and successful pricing initiatives, showcases its ability to navigate cost pressures and inflationary challenges. This is further evidenced by the gross margin improvement of 380 basis points to 42.3%. In the context of the broader industrial sector, this performance could set CSW Industrials apart from competitors who may be struggling with similar market conditions.
Looking ahead, the management's expectation of finishing the fiscal year with record performance could indicate continued growth and profitability, which may positively influence investor sentiment. However, the market will likely watch for signs of sustained revenue growth and margin stability to confirm the long-term viability of the current strategy.
The release of tax indemnification assets related to the TRUaire and Falcon acquisitions and the associated uncertain tax position accrual for Falcon are noteworthy from a legal and compliance standpoint. Such adjustments can have a significant one-time impact on financial statements and tax obligations. It is important for investors to understand that these are non-recurring events and to not overestimate their influence on the company's ongoing financial performance.
Furthermore, the company's effective management of its leverage ratio, as evidenced by the reduction to 0.69x Debt to EBITDA, indicates strong compliance with credit facility covenants. This is an important aspect for maintaining good standing with creditors and securing favorable terms for future financing needs. The company's proactive approach to debt management and maintaining liquidity demonstrates a commitment to financial discipline and risk mitigation, which is crucial for investor confidence, especially in industries subject to cyclical and economic fluctuations.
DALLAS, Feb. 01, 2024 (GLOBE NEWSWIRE) -- CSW Industrials, Inc. (Nasdaq: CSWI or the "Company") today reported record results for the fiscal 2024 third quarter and nine-month fiscal year-to-date periods ended December 31, 2023.
Fiscal 2024 Third Quarter Highlights (comparisons to fiscal 2023 third quarter)
- Total revenue increased
2% to$175.0 million due to organic growth - Net income attributable to CSWI of
$9.2 million , or$16.7 million adjusted to exclude the release of tax indemnification asset related to the TRUaire acquisition, compared to$15.6 million - Earnings per diluted share (EPS) of
$0.59 , or$1.07 adjusted, compared to$1.01 ; adjusted EPS increased6% - Adjusted EBITDA increased
18% to$36.8 million , with margin expansion of 270 bps to21% - Cash flow from operations of
$47.0 million , compared to$36.8 million , an increase of28% - Paid down
$20 million of debt, further improving the strength of the balance sheet, resulting in a leverage ratio (Debt to EBITDA), in accordance with our credit facility, of 0.69x - Effective tax rate increased to
43.2% , or32.5% adjusted to exclude the previously disclosed release of tax indemnification assets related to the TRUaire and Falcon acquisitions and the related uncertain tax position accrual for Falcon, due to the finalization of the international tax deduction and credits for the filing of the fiscal 2023 U.S. federal tax return
Fiscal 2024 Year-to-Date Highlights (comparisons to fiscal 2023 year-to-date period)
- Total revenue increased
4% to$582.0 million , of which2% or$12.3 million , was organic growth - Net income attributable to CSWI increased to
$69.9 million , or$77.4 million adjusted, compared to$69.4 million ; adjusted net income increased12% - EPS improved to a record
$4.49 , or$4.97 adjusted, compared to$4.46 ; adjusted EPS improved11% - Adjusted EBITDA increased
16% to$144.2 million , with margin expansion of 260 bps to25% - Record cash flow from operations of
$141.9 million , compared to$84.1 million , an increase of69% - Paid down
$100.0 million of debt and returned cash to shareholders of$8.9 million in dividends and$5.8 million in share repurchases
Comments from the Chairman, President, and Chief Executive Officer
Joseph B. Armes, CSW Industrials’ Chairman, President, and Chief Executive Officer, commented, "Throughout this fiscal year, the team has outperformed the markets we serve, despite challenging conditions and market contraction. The third quarter was no exception. In the third quarter, CSWI once again delivered impressive operating leverage as adjusted EBITDA grew by
Mr. Armes continued, "We expect to finish the fiscal year strong and deliver record performance for the full year in revenue, adjusted EBITDA, and adjusted EPS for the Company, while maintaining our strong free cash flow generation."
"This morning in a separate press release, we announced the appointment of Jeff Underwood to Senior Vice President of CSWI and General Manager, Contractor Solutions, effective April 1, 2024. Mr. Underwood will succeed Don Sullivan, current Executive Vice President of CSWI and General Manager, Contractor Solutions. Mr. Sullivan will remain on the CSWI Executive Leadership Team and assume the new role of Chief Strategy Officer for the enterprise. Additional details can be found in the separate news release from this morning," said Mr. Armes.
Fiscal 2024 Third Quarter Consolidated Results
Fiscal third quarter revenue was a record
Gross profit in the fiscal third quarter was
Operating expenses as a percentage of revenue were
Operating income increased to
Other expense, net was
Net income attributable to CSWI decreased to
Fiscal 2024 third quarter adjusted EBITDA increased to
The Company’s effective tax rate for the fiscal third quarter was
During the fiscal third quarter, the Company paid down
Following quarter end, the Company declared its twentieth consecutive quarterly regular cash dividend in the amount of
Fiscal 2024 Third Quarter Segment Results
Contractor Solutions segment revenue was
Specialized Reliability Solutions segment revenue was
Engineered Building Solutions segment revenue was
Fiscal 2024 Year-to-Date Consolidated Results
Fiscal year-to-date revenue was
Gross profit in the fiscal year-to-date period was
Operating expenses as a percentage of revenue were
In the current period, operating income was
Other expense, net was
In the current period, reported net income attributable to CSWI improved to
Fiscal 2024 year-to-date adjusted EBITDA increased
Net cash provided by operating activities for fiscal 2024 year-to-date was a record
The Company’s effective tax rate for fiscal 2024 year-to-date was
The Company expects an adjusted tax rate of approximately
Fiscal 2024 Year-to-Date Segment Results
Contractor Solutions segment revenue was
Specialized Reliability Solutions segment revenue was
Engineered Building Solutions segment revenue was
All percentages are calculated based upon the attached financial statements.
Conference Call Information
The Company will host a conference call today at 10:00 a.m. ET to discuss the results, followed by a question and answer session for the investment community. A live webcast of the call can be accessed at https://cswindustrials.gcs-web.com/. To access the call, participants may dial 1-877-407-0784, international callers may use 1-201-689-8560, and request to join the CSW Industrials earnings call.
A telephonic replay will be available shortly after the conclusion of the call and until February 15, 2024. Participants may access the replay at 1-844-512-2921, international callers may use 1-412-317-6671, and enter access code 13744004. The call will also be available for replay via webcast link on the Investors portion of the CSWI website at www.cswindustrials.com.
Safe Harbor Statement
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as "may," "should," "expects," "could," "intends," "plans," "anticipates," "estimates," "believes," "forecasts," "predicts" or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, effective tax rate, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations, and financial performance and condition.
The forward-looking statements included in this press release are based on our current expectations, projections, estimates, and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the risk factors described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.
All forward-looking statements included in this press release are based on information currently available to us, and we assume no obligation to update any forward-looking statement except as may be required by law.
Non-GAAP Financial Measures
This press release includes an analysis of adjusted earnings per share attributable to CSWI, adjusted net income attributable to CSWI, and adjusted operating income, which are non-GAAP financial measures of performance. Attributable to CSWI is defined to exclude the income attributable to the non-controlling interest in the Whitmore JV.
CSWI utilizes adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) as an additional consolidated, non-GAAP financial measure, which consists of consolidated net income including income attributable to the non-controlling interest in the Whitmore JV, adjusted to remove the impact of income taxes, interest expense, depreciation and amortization, and significant nonrecurring items. Free cash flow is a non-GAAP financial measure and is defined as cash flow from operations less capital expenditures.
For a reconciliation of these measures to the most directly comparable GAAP measures and for a discussion of why we consider these non-GAAP measures useful, see the “Reconciliation of Non-GAAP Measures” section of this release.
About CSW Industrials, Inc.
CSW Industrials is a diversified industrial growth company with industry-leading operations in three segments: Contractor Solutions, Specialized Reliability Solutions and Engineered Building Solutions. CSWI provides niche, value-added products with two essential commonalities: performance and reliability. The primary end markets we serve with our well-known brands include: HVAC/R, plumbing, general industrial, architecturally-specified building products, energy, mining, and rail transportation. For more information, please visit www.cswindustrials.com.
Investor Relations
Alexa Huerta
Vice President, Investor Relations & Treasurer
214-489-7113
alexa.huerta@cswindustrials.com
| CSW INDUSTRIALS, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| (Amounts in thousands, except per share amounts) | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues, net | $ | 174,967 | $ | 171,093 | $ | 581,980 | $ | 562,219 | ||||||||
| Cost of revenues | (100,986 | ) | (105,295 | ) | (324,873 | ) | (329,349 | ) | ||||||||
| Gross profit | 73,981 | 65,798 | 257,107 | 232,870 | ||||||||||||
| Selling, general and administrative expenses | (46,400 | ) | (42,686 | ) | (142,327 | ) | (133,568 | ) | ||||||||
| Operating income | 27,581 | 23,112 | 114,780 | 99,302 | ||||||||||||
| Interest expense, net | (2,765 | ) | (4,200 | ) | (10,080 | ) | (9,090 | ) | ||||||||
| Other expense, net | (8,428 | ) | (737 | ) | (6,188 | ) | (529 | ) | ||||||||
| Income before income taxes | 16,388 | 18,175 | 98,512 | 89,683 | ||||||||||||
| Provision for income taxes | (7,083 | ) | (2,676 | ) | (27,968 | ) | (20,232 | ) | ||||||||
| Net income | 9,305 | 15,499 | 70,544 | 69,451 | ||||||||||||
| Less: (Income) Loss attributable to redeemable noncontrolling interest | (83 | ) | 100 | (655 | ) | (79 | ) | |||||||||
| Net income attributable to CSW Industrials, Inc. | $ | 9,222 | $ | 15,599 | $ | 69,889 | $ | 69,372 | ||||||||
| Net income per share attributable to CSW Industrials, Inc. | ||||||||||||||||
| Basic | $ | 0.59 | $ | 1.01 | $ | 4.50 | $ | 4.47 | ||||||||
| Diluted | $ | 0.59 | $ | 1.01 | $ | 4.49 | $ | 4.46 | ||||||||
| Weighted average number of shares outstanding: | ||||||||||||||||
| Basic | 15,546 | 15,476 | 15,537 | 15,520 | ||||||||||||
| Diluted | 15,596 | 15,512 | 15,578 | 15,554 | ||||||||||||
| CSW INDUSTRIALS, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEET | ||||||||
| (Unaudited) | ||||||||
| December 31, 2023 | March 31, 2023 | |||||||
| (Amounts in thousands, except for per share amounts) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 24,988 | $ | 18,455 | ||||
| Accounts receivable, net of allowance for expected credit losses of | 104,522 | 122,753 | ||||||
| Inventories, net | 151,386 | 161,569 | ||||||
| Prepaid expenses and other current assets | 26,612 | 20,279 | ||||||
| Total current assets | 307,508 | 323,056 | ||||||
| Property, plant and equipment, net of accumulated depreciation of | 89,344 | 88,235 | ||||||
| Goodwill | 243,498 | 242,740 | ||||||
| Intangible assets, net | 304,647 | 318,903 | ||||||
| Other assets | 48,134 | 70,519 | ||||||
| Total assets | $ | 993,131 | $ | 1,043,453 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 43,421 | $ | 40,651 | ||||
| Accrued and other current liabilities | 67,706 | 67,388 | ||||||
| Total current liabilities | 111,127 | 108,039 | ||||||
| Long-term debt | 153,000 | 253,000 | ||||||
| Retirement benefits payable | 1,127 | 1,158 | ||||||
| Other long-term liabilities | 119,686 | 137,117 | ||||||
| Total liabilities | 384,940 | 499,314 | ||||||
| Commitments and contingencies | ||||||||
| Redeemable noncontrolling interest | 19,119 | 18,464 | ||||||
| Equity: | ||||||||
| Common shares, | 164 | 163 | ||||||
| Additional paid-in capital | 134,247 | 123,336 | ||||||
| Treasury shares, at cost (932 and 902 shares, respectively) | (91,016 | ) | (82,734 | ) | ||||
| Retained earnings | 554,289 | 493,319 | ||||||
| Accumulated other comprehensive loss | (8,612 | ) | (8,409 | ) | ||||
| Total equity | 589,072 | 525,675 | ||||||
| Total liabilities, redeemable noncontrolling interest and equity | $ | 993,131 | $ | 1,043,453 | ||||
| CSW INDUSTRIALS, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| (Amounts in thousands) | Nine Months Ended December 31, | |||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 70,544 | $ | 69,451 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 10,077 | 9,463 | ||||||
| Amortization of intangible and other assets | 17,584 | 16,842 | ||||||
| Provision for inventory reserves | 2,541 | 1,878 | ||||||
| Provision for doubtful accounts | 544 | 1,613 | ||||||
| Share-based and other executive compensation | 8,555 | 7,296 | ||||||
| Loss (gain) on disposals of property, plant and | (1,336 | ) | 48 | |||||
| Net pension benefit | 50 | 141 | ||||||
| Impairment of assets | 90 | 156 | ||||||
| Deferred taxes | 2,732 | (1,094 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 17,846 | 21,963 | ||||||
| Inventories | 7,796 | (28,270 | ) | |||||
| Prepaid expenses and other current assets | (6,720 | ) | (8,343 | ) | ||||
| Other assets | 1,066 | 185 | ||||||
| Accounts payable and other current liabilities | 9,601 | (7,348 | ) | |||||
| Retirement benefits payable and other liabilities | 944 | 91 | ||||||
| Net cash provided by operating activities | 141,914 | 84,072 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (11,668 | ) | (8,268 | ) | ||||
| Proceeds from sale of assets held for investment | 1,665 | 70 | ||||||
| Proceeds from sale of assets | 157 | — | ||||||
| Cash paid for acquisitions | (5,284 | ) | (55,524 | ) | ||||
| Net cash used in investing activities | (15,130 | ) | (63,722 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Borrowings on line of credit | 72,308 | 122,777 | ||||||
| Repayments of line of credit and term loan | (172,308 | ) | (99,018 | ) | ||||
| Payments of deferred loan costs | — | (662 | ) | |||||
| Purchase of treasury shares | (10,640 | ) | (39,064 | ) | ||||
| Proceeds from stock option activity | — | 272 | ||||||
| Proceeds from acquisition of redeemable noncontrolling interest shareholder | — | 2,000 | ||||||
| Dividends | (8,855 | ) | (7,924 | ) | ||||
| Net cash used in financing activities | (119,495 | ) | (21,619 | ) | ||||
| Effect of exchange rate changes on cash and equivalents | (756 | ) | (629 | ) | ||||
| Net change in cash and cash equivalents | 6,533 | (1,898 | ) | |||||
| Cash and cash equivalents, beginning of period | 18,455 | 16,619 | ||||||
| Cash and cash equivalents, end of period | $ | 24,988 | $ | 14,721 | ||||
Reconciliation of Non-GAAP Measures
We use adjusted earnings per share attributable to CSWI, adjusted net income attributable to CSWI, adjusted operating income, adjusted EBITDA, and free cash flow, together with financial measures prepared in accordance with GAAP, such as revenue, cost of revenue, operating expense, operating income, net income attributable to CSWI and cash flows provided by operating activities, to assess our historical and prospective operating performance and to enhance our understanding of our core operating performance. We also believe these measures are useful for investors to assess the operating performance of our business without the effect of non-recurring items. In the following tables, there could be immaterial differences in amounts presented due to rounding.
| CSW INDUSTRIALS, INC. | ||||||||||||
| RECONCILIATION OF NET INCOME ATTRIBUTABLE TO CSWI TO ADJUSTED NET INCOME ATTRIBUTABLE TO CSWI | ||||||||||||
| (Unaudited) | ||||||||||||
| (Amounts in thousands) | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||
| GAAP Net income attributable to CSWI | $ | 9,222 | $ | 15,599 | $ | 69,889 | $ | 69,372 | ||||
| Adjusting items, net of tax: | ||||||||||||
| Reversal of indemnification receivable | 7,500 | — | 7,500 | — | ||||||||
| Adjusted Net Income attributable to CSWI | $ | 16,722 | $ | 15,599 | $ | 77,389 | $ | 69,372 | ||||
| GAAP Net Income attributable to CSW Industrials, Inc. per diluted common share | $ | 0.59 | $ | 1.01 | $ | 4.49 | $ | 4.46 | ||||
| Adjusting items, per diluted common share: | ||||||||||||
| Reversal of indemnification receivable | 0.48 | — | 0.48 | — | ||||||||
| Adjusted Net Income attributable to CSW Industrials, Inc. per diluted common share | $ | 1.07 | $ | 1.01 | $ | 4.97 | $ | 4.46 | ||||
| CSW INDUSTRIALS, INC. | ||||||||||||||||
| RECONCILIATION OF NET INCOME ATTRIBUTABLE TO CSWI TO ADJUSTED EBITDA | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| (Amounts in thousands) | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net Income attributable to CSWI | $ | 9,222 | $ | 15,599 | $ | 69,889 | $ | 69,372 | ||||||||
| Plus: Income (Loss) attributable to redeemable noncontrolling interest | 83 | (100 | ) | 655 | 79 | |||||||||||
| Net Income | $ | 9,305 | $ | 15,499 | $ | 70,544 | $ | 69,451 | ||||||||
| Adjusting Items: | ||||||||||||||||
| Interest Expense | 2,764 | 4,200 | 10,080 | 9,090 | ||||||||||||
| Income Tax Expense | 7,083 | 2,676 | 27,968 | 20,232 | ||||||||||||
| Depreciation & Amortization | 9,134 | 8,853 | 27,094 | 25,905 | ||||||||||||
| EBITDA | $ | 28,286 | $ | 31,227 | $ | 135,686 | $ | 124,679 | ||||||||
| Adjusting Items: | ||||||||||||||||
| Reversal of Indemnification Receivable | 8,519 | — | 8,519 | — | ||||||||||||
| Adjusted EBITDA | $ | 36,805 | $ | 31,227 | $ | 144,205 | $ | 124,679 | ||||||||
| Adjusted EBITDA % Revenue | 21.0 | % | 18.3 | % | 24.8 | % | 22.2 | % | ||||||||
| CSW INDUSTRIALS, INC. | |||||||||||||||
| RECONCILIATION OF SEGMENT OPERATING INCOME TO SEGMENT ADJUSTED EBITDA | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (Amounts in thousands) | Three Months Ended December 31, 2023 | ||||||||||||||
| Specialized | Engineered | ||||||||||||||
| Contractor | Reliability | Building | Corporate | Consolidated | |||||||||||
| Solutions | Solutions | Solutions | and Other | Operations | |||||||||||
| Revenue, net | $ | 115,412 | $ | 33,712 | $ | 27,861 | $ | (2,017 | ) | $ | 174,967 | ||||
| Operating Income | $ | 25,751 | $ | 3,740 | $ | 3,537 | $ | (5,447 | ) | $ | 27,581 | ||||
| % Revenue | 22.3 | % | 11.1 | % | 12.7 | % | 15.8 | % | |||||||
| Adjusting Items: | |||||||||||||||
| Other Income (Expense) | (8,433 | ) | (9 | ) | (8 | ) | 21 | (8,428 | ) | ||||||
| Depreciation & Amortization | 7,178 | 1,477 | 437 | 42 | 9,134 | ||||||||||
| Reversal of Indemnification Receivable | 8,519 | — | — | — | 8,519 | ||||||||||
| Adjusted EBITDA | $ | 33,015 | $ | 5,208 | $ | 3,966 | $ | (5,383 | ) | $ | 36,805 | ||||
| % Revenue | 28.6 | % | 15.4 | % | 14.2 | % | 21.0 | % | |||||||
| (Amounts in thousands) | Three Months Ended December 31, 2022 | ||||||||||||||
| Specialized | Engineered | ||||||||||||||
| Contractor | Reliability | Building | Corporate | Consolidated | |||||||||||
| Solutions | Solutions | Solutions | and Other | Operations | |||||||||||
| Revenue, net | $ | 111,906 | $ | 36,334 | $ | 24,619 | $ | (1,767 | ) | $ | 171,093 | ||||
| Operating Income | $ | 21,829 | $ | 3,921 | $ | 2,257 | $ | (4,896 | ) | $ | 23,112 | ||||
| % Revenue | 19.5 | % | 10.8 | % | 9.2 | % | 13.5 | % | |||||||
| Adjusting Items: | |||||||||||||||
| Other Income (Expense) | (308 | ) | (324 | ) | (31 | ) | (74 | ) | (738 | ) | |||||
| Depreciation & Amortization | 6,906 | 1,464 | 433 | 50 | 8,853 | ||||||||||
| EBITDA | $ | 28,427 | $ | 5,061 | $ | 2,659 | $ | (4,919 | ) | $ | 31,227 | ||||
| % Revenue | 25.4 | % | 13.9 | % | 10.8 | % | 18.3 | % | |||||||
| CSW INDUSTRIALS, INC. | |||||||||||||||
| RECONCILIATION OF SEGMENT OPERATING INCOME TO SEGMENT ADJUSTED EBITDA | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (Amounts in thousands) | Nine Months Ended December 31, 2023 | ||||||||||||||
| Specialized | Engineered | ||||||||||||||
| Contractor | Reliability | Building | Corporate | Consolidated | |||||||||||
| Solutions | Solutions | Solutions | and Other | Operations | |||||||||||
| Revenue, net | $ | 395,268 | $ | 108,037 | $ | 84,659 | $ | (5,984 | ) | $ | 581,980 | ||||
| Operating Income | $ | 104,443 | $ | 15,534 | $ | 13,029 | $ | (18,227 | ) | $ | 114,780 | ||||
| % Revenue | 26.4 | % | 14.4 | % | 15.4 | % | 19.7 | % | |||||||
| Adjusting Items: | |||||||||||||||
| Other Income (Expense) | (7,686 | ) | (100 | ) | 2 | 1,595 | (6,188 | ) | |||||||
| Depreciation & Amortization | 21,118 | 4,512 | 1,332 | 132 | 27,094 | ||||||||||
| Reversal of Indemnification Receivable | 8,519 | — | — | — | 8,519 | ||||||||||
| Adjusted EBITDA | $ | 126,394 | $ | 19,947 | $ | 14,363 | $ | (16,500 | ) | $ | 144,205 | ||||
| % Revenue | 32.0 | % | 18.5 | % | 17.0 | % | 24.8 | % | |||||||
| (Amounts in thousands) | Nine Months Ended December 31, 2022 | ||||||||||||||
| Specialized | Engineered | ||||||||||||||
| Contractor | Reliability | Building | Corporate | Consolidated | |||||||||||
| Solutions | Solutions | Solutions | and Other | Operations | |||||||||||
| Revenue, net | $ | 379,832 | $ | 108,958 | $ | 78,978 | $ | (5,549 | ) | $ | 562,219 | ||||
| Operating Income | $ | 90,416 | $ | 13,658 | $ | 10,172 | $ | (14,945 | ) | $ | 99,302 | ||||
| % Revenue | 23.8 | % | 12.5 | % | 12.9 | % | 17.7 | % | |||||||
| Adjusting Items: | |||||||||||||||
| Other Income | 243 | (375 | ) | (190 | ) | (207 | ) | (528 | ) | ||||||
| Depreciation & Amortization | 19,895 | 4,519 | 1,343 | 149 | 25,905 | ||||||||||
| EBITDA | $ | 110,554 | $ | 17,802 | $ | 11,326 | $ | (15,003 | ) | $ | 124,679 | ||||
| % Revenue | 29.1 | % | 16.3 | % | 14.3 | % | 22.2 | % | |||||||
| CSW INDUSTRIALS, INC. | ||||||||||||||||
| RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| (Amounts in thousands) | Three Months Ended December 31, | Nine Months Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net cash provided by operating activities | $ | 46,978 | $ | 36,779 | $ | 141,914 | $ | 84,072 | ||||||||
| Less: Capital Expenditures | (3,883 | ) | (3,752 | ) | (11,668 | ) | (8,268 | ) | ||||||||
| Free Cash Flow | $ | 43,095 | $ | 33,027 | $ | 130,246 | $ | 75,804 | ||||||||
| Free Cash Flow % Adjusted Net Income | 256.4 | % | 213.1 | % | 166.9 | % | 109.1 | % | ||||||||
FAQ
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