CSW Industrials, Inc. (Nasdaq: CSWI or the "Company") today
reported record results for the fiscal 2024 fourth quarter and full
year periods ended March 31, 2024.
Fiscal 2024
Fourth Quarter Highlights
(comparisons to fiscal 2023 fourth quarter)
- Total revenue increased 7.8% to $210.9 million, driven by
organic growth of 6.0%
- Net income attributable to CSWI increased 17.4% to
$31.8 million, compared to $27.1 million
- Earnings per diluted share (EPS) increased 16.9% to $2.04,
compared to $1.74
- EBITDA grew 13.0% to $55.8 million, including margin
expansion of 130 bps to 26.5%
- Maintained balance sheet strength and strong cash flows,
resulting in a leverage ratio (Debt to EBITDA), in accordance with
our credit facility, of approximately 0.73x
Fiscal 2024
Full Year Highlights (comparisons to fiscal 2023
full year)
- Total revenue increased 4.6% to $792.8 million, of which 3.2%,
or $23.9 million was organic growth, and $11.0 million
was inorganic growth from acquisitions
- Net income attributable to CSWI increased to
$101.6 million, or $109.1 million adjusted to exclude the
disclosed fiscal third quarter release of a tax indemnification
asset related to the TRUaire acquisition, compared to
$96.4 million; adjusted net income increased 13.2%
- EPS improved to $6.52, or $7.01 adjusted, compared to $6.20;
adjusted EPS grew 12.9%
- Adjusted EBITDA increased 14.9% to $200.0 million,
including margin expansion of 220 bps to 25.2%
- Cash flow from operations of $164.3 million, compared to
$121.5 million, an increase of 35.3%
- Invested $32.7 million in acquisitions and $16.6 million
in organic capital expenditures, while returning total cash of
$22.3 million to shareholders through share repurchases of $10.5
million and dividends of $11.8 million
Comments from the Chairman, President,
and Chief Executive Officer
Joseph B. Armes, CSW Industrials’ Chairman,
President, and Chief Executive Officer, commented, "I am very
pleased with our record financial results in fiscal 2024, driven by
organic growth that outpaced our markets and enhanced by strategic
acquisitions. Our record revenue combined with our ability to
leverage expenses has driven record profitability, resulting in
best-in-class margins and record free cash flow. As we enter into
fiscal 2025, we expect consolidated revenue growth similar to
fiscal year 2024, while maintaining our strong margin profile."
Armes continued, "I am especially proud of
CSWI's long-term track record, which is driven by our distinctive
employee-centric culture. Aligning the interests of our workforce
and our shareholders is crucial to our success, which is why our
team members own over 5% of CSWI's stock, including our Employee
Stock Ownership Plan."
Fiscal 2024
Fourth Quarter Consolidated
Results
Fiscal fourth quarter revenue was
$210.9 million, a $15.2 million or 7.8% increase over the
prior year period. Total revenue growth included $11.6 million
of organic growth (6.0% of the total 7.8% growth), with the
remainder contributed by the Dust Free acquisition. In the current
quarter, volume growth drove most of the revenue growth across all
segments, while pricing initiatives and acquisition revenue
contributed as well.
Gross profit in the fiscal fourth quarter was
$93.6 million, representing 9.7% growth over
$85.3 million in the prior year period. Gross profit margin
expanded 80 bps to 44.4%, compared to 43.6% in the prior year
period. The gross profit margin increase was primarily a result of
pricing initiatives.
Operating expenses as a percentage of revenue
were 23.4% in the current period, compared to the prior year period
of 23.3%. Operating expenses were $49.3 million in the current
year period, compared to $45.6 million in the prior year
period as we made investments for future growth.
Operating income in the current period was
$44.3 million, compared to $39.8 million in the prior
year period. Operating income as a percent of revenue was 21.0% in
fiscal 2024 fourth quarter, compared to 20.3% in the prior year
period. The 70 bps improvement in operating income margin was a
result of the previously mentioned improvement in the gross profit
margin while holding operating expenses flat.
Net income attributable to CSWI (net of
non-controlling interest in the joint venture) increased 17.4% to
$31.8 million, compared to the prior year period of
$27.1 million, and EPS increased 16.9% to $2.04, compared to
$1.74 in the prior year period.
Fiscal 2024 fourth quarter EBITDA increased
13.0% to $55.8 million, up from $49.4 million in the
prior year period. EBITDA margin expanded 130 bps to 26.5%,
compared to 25.2% in the prior year period, as revenue growth
outpaced incremental expenses.
During the fiscal fourth quarter, our revolver
debt balance increased $13.0 million, as we borrowed from the
existing revolver to fund the Dust Free acquisition. The resulting
leverage ratio for the Company (Debt to EBITDA), in accordance with
our credit facility, was 0.73x.
Following quarter-end, the Company announced a
10.5% increase in its quarterly cash dividend, to $0.21 per share.
This dividend, which was paid on May 10, 2024, to shareholders
of record on April 26, 2024, was the twenty-first consecutive
regular quarterly cash dividend.
The Company’s effective tax rate for the fiscal
fourth quarter was 23.8%.
Fiscal 2024
Fourth Quarter Segment
Results
The Contractor Solutions segment revenue was
$141.2 million, a $7.3 million or 5.4% increase from the
prior year period, comprised of organic growth of $3.8 million
(2.8% of the total 5.4% growth) driven by increased unit volumes,
and inorganic growth from the newly acquired Dust Free business of
$3.5 million. As compared to the prior year period, net
revenue growth was driven by the HVAC/R, architecturally-specified
building products, and general industrial end markets. Segment
operating income improved to $37.6 million, compared to
$35.8 million in the prior year period. The incremental profit
resulted from revenue growth and the inclusion of recently acquired
Dust Free and was partially offset by increased spending on
employee compensation and a trademark impairment related to a prior
acquisition. Segment operating income margin in the fiscal fourth
quarter was 26.6%, compared to 26.7% in the prior year period.
Segment EBITDA in the fiscal fourth quarter was $47.3 million,
or 33.5% of revenue, compared to $42.7 million, or 31.9% of
revenue in the prior year period.
The Specialized Reliability Solutions segment
revenue was $41.6 million, a $3.1 million or 8.0%
increase from the prior year period, primarily due to volume growth
and pricing initiatives. Increased net revenue was driven by growth
in the general industrial, mining, and energy end markets. Segment
operating income improved to $6.7 million, as compared to
$6.5 million in the prior year period, an increase of 3.3%.
Segment operating income margin in the fiscal fourth quarter was
16.2%, compared to the prior year period of 16.9%. Segment EBITDA
improved by 0.8% to $8.2 million in the fiscal fourth quarter,
with an EBITDA margin of 19.8% as compared to 21.3% in the prior
year period.
The Engineered Building Solutions segment
revenue was $30.1 million, a 20.4% increase compared to
$25.0 million in the prior year period, driven by commercial
and pricing initiatives. Segment operating income was
$5.7 million, or 18.9% of revenue, compared to the prior year
period of $2.7 million, or 10.9% of revenue, due to improved
project margins and expense diligence. Segment EBITDA and EBITDA
margin also improved to $6.2 million and 20.5% in the fiscal
fourth quarter, compared to $3.1 million and 12.4% in the
prior year period.
Fiscal Full Year 2024
Consolidated Results
Consolidated revenue was $792.8 million,
representing 4.6% growth over $757.9 million in the prior
year, with all segments reporting organic growth. Of the
$34.9 million total growth, $23.9 million (3.2% of the
total 4.6% growth) resulted from organic growth attributable to
unit volume increases and pricing initiatives, with the remaining
$11.0 million contributed by the Cover Guard, AC Guard,
Falcon, and Dust Free acquisitions.
GAAP consolidated gross profit in the current
year was $350.7 million, representing $32.5 million or
10.2% growth from the $318.2 million of gross profit in the
prior year, with growth in all three reporting segments.
Incremental gross profit resulted predominantly from a reduction in
ocean and domestic freight expense, pricing initiatives, increased
unit volumes and the acquisitions of Cover Guard, AC Guard, Falcon
and Dust Free. Gross profit margin as a percentage of sales
expanded 230 bps to 44.2%.
Operating expenses in the current year were
$191.6 million, compared to the prior year of
$179.1 million. The additional operating expenses were
primarily due to increased employee compensation, a trademark
impairment, travel, and depreciation and amortization, as well as
the inclusion of Dust Free expenses. Operating expenses as a
percentage of revenue increased to 24.2%, compared to 23.6% in the
prior year period.
In the current year, operating income was
$159.1 million, compared to $139.1 million in the prior
year. The incremental operating income resulted from the increased
gross profit, partially offset by the increase in operating
expenses. Operating income margin improved to 20.1% compared to the
prior year's margin of 18.3%.
Other expense, net was $5.9 million, compared to
the prior year period other income, net of less than $0.1 million.
The current year expense was primarily due to the release of tax
indemnification assets related to the TRUaire and Falcon
acquisitions, partially offset by losses arising from transactions
in currencies other than functional currencies and by a gain of
$1.4M recognized from the sale of a property previously held for
investment.
In the current year, net income attributable to
CSWI improved to $101.6 million, or $109.1 million
adjusted, an increase in adjusted net income of 13.2% from
$96.4 million in the prior year. EPS increased to $6.52, or
$7.01 adjusted, an increase in adjusted EPS of 12.9% from prior
year EPS of $6.20.
Fiscal 2024 adjusted EBITDA increased 14.9% to
$200.0 million from $174.1 million in the prior year.
Adjusted EBITDA margin as percent of revenue expanded to 25.2%,
compared to 23.0%, in the prior year.
Net cash provided by operating activities for
the fiscal 2024 year improved significantly to $164.3 million, or
35.3% growth, compared to $121.5 million in the prior year, driven
by working capital improvements and increased profit.
In line with our stated capital allocation
strategy, during fiscal 2024, the Company invested in capital
expenditures, acquisitions, dividends, and share repurchases.
Capital expenditures during the current and prior fiscal years were
$16.6 million and $14.0 million, respectively. Capital expenditures
have been focused on capacity expansion, enterprise resource
planning systems, new product introductions, safety enhancements,
continuous improvement, and automation. During the fiscal year
ended March 31, 2024, we invested $32.7 million in
acquisitions compared to $58.3 million in the prior fiscal year. In
fiscal year 2024, $27.4 million of the acquisition investment was
related to the fourth quarter acquisition of Dust Free, an
extensive line of patented products for residential and commercial
indoor air quality and HVAC applications. In addition to Dust Free,
we also closed two small product line acquisitions, totaling $2.4
million (excluding deferred payment), in the second fiscal quarter,
for Guardian Drain Lock and Sure Grade Drain. The remaining portion
of the acquisition investments made during fiscal 2024 was $2.9
million in deferred payments related to acquisitions made in fiscal
2023. Repurchases of shares under our share repurchase programs
during the current and prior fiscal years were $10.5 million
(53,133 shares) and $35.7 million (336,347 shares), respectively.
Dividend payments of $11.8 million and $10.6 million were
paid during the current and prior fiscal years, respectively.
As of March 31, 2024, $166.0 million was
outstanding on the $500.0 million Revolving Credit Facility,
resulting in borrowing capacity of $334.0 million. At the end
of fiscal 2023, $253.0 million was outstanding on the Revolving
Credit Facility. As of fiscal 2024 year end, CSWI reported a
leverage ratio, in accordance with our credit facility, of 0.73x
debt to EBITDA.
The Company’s effective tax rate for the current
year was 27.0% on a GAAP basis, and 26.1% on an adjusted basis
after excluding the previously disclosed release of tax
indemnification assets related to the TRUaire and Falcon
acquisitions and the related uncertain tax position accrual for
Falcon.
Fiscal 2024
Full Year Segment Results
The Contractor Solutions segment revenue was
$536.5 million, a $22.7 million or 4.4% increase from the
prior year. Revenue growth was comprised of organic growth of
$11.7 million (2.3% of total 4.4% growth) due to pricing
initiatives and an increase in unit volumes, as well as inorganic
growth of $11.0 million from the acquisitions of Cover Guard,
AC Guard, Falcon, and Dust Free. As compared to the prior year
period, net revenue growth was driven by growth in all end markets
served. Segment operating income was $142.0 million, compared
to the prior year of $126.2 million. The incremental profit
resulted from a reduction in ocean and domestic freight expenses,
solid revenue growth, and the inclusion of recent acquisitions of
Cover Guard, AC Guard, Falcon, and Dust Free. This incremental
profit was partially offset with increased expenses related to
employee compensation as the segment continues to build the
infrastructure to support growth, a trademark impairment, as well
as the inclusion of Dust Free. Segment operating income margin in
the current year expanded to 26.5%, compared to the prior year of
24.6%, as revenue growth outpaced the increased expenses discussed
above. Segment adjusted EBITDA in the current year was
$173.7 million, or 32.4% of revenue, compared to
$153.2 million, or 29.8% of revenue in the prior year.
The Specialized Reliability Solutions segment
revenue improved to $149.6 million, a $2.2 million or
1.5% increase from the prior year of $147.4 million, all of
which was organic, due to pricing initiatives, with growth in the
general industrial, mining, and energy end markets. In the current
year, segment operating income improved to $22.3 million, or
14.9% of revenue, compared to the prior year of $20.2 million,
or 13.7% of revenue. Improved segment operating income resulted
primarily from revenue growth, expanded gross margins, and
decreased operating expenses. Segment EBITDA and EBITDA margin
improved to $28.2 million and 18.8% in the fiscal year,
compared to $26.0 million and 17.6% in the prior year.
The Engineered Building Solutions segment
revenue was $114.7 million, a $10.8 million or 10.4%
increase from the prior year, primarily due to the continued
conversion of strong project bookings into revenue and successful
pricing initiatives. Segment operating income was
$18.7 million, a 45.1% increase compared to the prior year of
$12.9 million, due to increased net revenue, a positive impact
from pricing initiatives, and a $1.2 million gain recognized from
the sale of a property previously used in operations. Segment
operating income margin in the current year expanded to 16.3%,
compared to the prior year's margin of 12.4%. Segment EBITDA and
EBITDA margin in the current year were $20.5 million and
17.9%, compared to $14.4 million and 13.9% in the prior
year.
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 Thursday, June 6, 2024.
Participants may access the replay at 1-844-512-2921, international
callers may use 1-412-317-6671, and enter access code 13746309. The
call will also be available for replay via webcast link on the
Investors portion of the CSWI website 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 diluted earnings per share attributable to CSWI, adjusted
net income attributable to CSWI, adjusted operating income and free
cash flows, 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,
amortization and impairment, and significant nonrecurring
items.
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, Engineered Building Solutions, and
Specialized Reliability 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 HuertaVice President, Investor Relations and
Treasurer214-489-7113alexa.huerta@cswindustrials.com
|
CSW INDUSTRIALS, INC.CONSOLIDATED
STATEMENTS OF INCOME |
|
(Amounts in thousands, except
per share amounts) |
|
Three Months EndedMarch
31,(Unaudited) |
|
Year EndedMarch 31, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues, net |
|
$ |
210,859 |
|
|
$ |
195,686 |
|
|
$ |
792,840 |
|
|
$ |
757,904 |
|
Cost of revenues |
|
|
(117,221 |
) |
|
|
(110,341 |
) |
|
|
(442,095 |
) |
|
|
(439,690 |
) |
Gross profit |
|
|
93,638 |
|
|
|
85,345 |
|
|
|
350,745 |
|
|
|
318,214 |
|
Selling, general and administrative expenses |
|
|
(49,300 |
) |
|
|
(45,580 |
) |
|
|
(191,627 |
) |
|
|
(179,148 |
) |
Operating income |
|
|
44,338 |
|
|
|
39,765 |
|
|
|
159,118 |
|
|
|
139,066 |
|
Interest expense, net |
|
|
(2,643 |
) |
|
|
(4,107 |
) |
|
|
(12,723 |
) |
|
|
(13,197 |
) |
Other income (expense), net |
|
|
273 |
|
|
|
570 |
|
|
|
(5,915 |
) |
|
|
42 |
|
Income before income
taxes |
|
|
41,969 |
|
|
|
36,229 |
|
|
|
140,480 |
|
|
|
125,911 |
|
Provision for income
taxes |
|
|
(9,973 |
) |
|
|
(9,105 |
) |
|
|
(37,941 |
) |
|
|
(29,337 |
) |
Net income |
|
|
31,994 |
|
|
|
27,124 |
|
|
|
102,539 |
|
|
|
96,574 |
|
Income attributable to
redeemable noncontrolling interest |
|
|
(235 |
) |
|
|
(60 |
) |
|
|
(891 |
) |
|
|
(139 |
) |
Net income attributable to CSW
Industrials, Inc. |
|
$ |
31,759 |
|
|
$ |
27,063 |
|
|
$ |
101,648 |
|
|
$ |
96,435 |
|
|
|
|
|
|
|
|
|
|
Net income per share
attributable to CSW Industrials, Inc. |
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.05 |
|
|
$ |
1.75 |
|
|
$ |
6.54 |
|
|
$ |
6.22 |
|
Diluted |
|
|
2.04 |
|
|
|
1.74 |
|
|
|
6.52 |
|
|
|
6.20 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
15,523 |
|
|
|
15,475 |
|
|
|
15,533 |
|
|
|
15,509 |
|
Diluted |
|
|
15,586 |
|
|
|
15,523 |
|
|
|
15,581 |
|
|
|
15,546 |
|
|
CSW INDUSTRIALS, INC.CONSOLIDATED BALANCE
SHEETS |
|
|
|
March 31, |
(Amounts in thousands, except per share amounts) |
|
|
2024 |
|
|
|
2023 |
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
22,156 |
|
|
$ |
18,455 |
|
Accounts receivable, net |
|
|
142,665 |
|
|
|
122,753 |
|
Inventories, net |
|
|
150,749 |
|
|
|
161,569 |
|
Prepaid expenses and other current assets |
|
|
15,840 |
|
|
|
20,279 |
|
Total current assets |
|
|
331,410 |
|
|
|
323,056 |
|
Property, plant and equipment,
net |
|
|
92,811 |
|
|
|
88,235 |
|
Goodwill |
|
|
247,191 |
|
|
|
242,740 |
|
Intangible assets, net |
|
|
318,819 |
|
|
|
318,903 |
|
Other assets |
|
|
53,095 |
|
|
|
70,519 |
|
Total assets |
|
$ |
1,043,326 |
|
|
$ |
1,043,453 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
48,387 |
|
|
$ |
40,651 |
|
Accrued and other current liabilities |
|
|
67,449 |
|
|
|
67,388 |
|
Total current liabilities |
|
|
115,836 |
|
|
|
108,039 |
|
Long-term debt |
|
|
166,000 |
|
|
|
253,000 |
|
Retirement benefits
payable |
|
|
1,114 |
|
|
|
1,158 |
|
Other long-term
liabilities |
|
|
125,298 |
|
|
|
137,117 |
|
Total liabilities |
|
|
408,248 |
|
|
|
499,314 |
|
Commitments and contingencies
(Note 17) |
|
|
|
|
Redeemable noncontrolling
interest |
|
|
19,355 |
|
|
|
18,464 |
|
Equity: |
|
|
|
|
Common shares, $0.01 par value |
|
|
164 |
|
|
|
163 |
|
Additional paid-in capital |
|
|
137,253 |
|
|
|
123,336 |
|
Treasury shares, at cost (952 and 902 shares, respectively) |
|
|
(95,643 |
) |
|
|
(82,734 |
) |
Retained earnings |
|
|
583,075 |
|
|
|
493,319 |
|
Accumulated other comprehensive loss |
|
|
(9,126 |
) |
|
|
(8,409 |
) |
Total equity |
|
|
615,723 |
|
|
|
525,675 |
|
Total liabilities and
equity |
|
$ |
1,043,326 |
|
|
$ |
1,043,453 |
|
|
CSW INDUSTRIALS, INC.CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
|
Year Ended March 31, |
(Amounts in thousands) |
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating
activities: |
|
|
|
|
Net income |
|
$ |
102,539 |
|
|
$ |
96,574 |
|
Adjustments to reconcile net income to net cash provided by
operating |
|
|
|
|
Depreciation |
|
|
13,961 |
|
|
|
12,838 |
|
Amortization of intangible and other assets |
|
|
23,688 |
|
|
|
22,716 |
|
Provision for inventory reserves |
|
|
4,229 |
|
|
|
1,522 |
|
Provision for credit losses |
|
|
814 |
|
|
|
2,013 |
|
Share-based and other executive compensation |
|
|
11,537 |
|
|
|
9,751 |
|
Net gain on disposals of property, plant and equipment |
|
|
(2,677 |
) |
|
|
104 |
|
Net pension benefit |
|
|
67 |
|
|
|
150 |
|
Impairment of assets |
|
|
1,600 |
|
|
|
156 |
|
Net deferred taxes |
|
|
(2,497 |
) |
|
|
(6,011 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
|
|
(17,897 |
) |
|
|
1,105 |
|
Inventories |
|
|
10,364 |
|
|
|
(11,422 |
) |
Prepaid expenses and other current assets |
|
|
4,608 |
|
|
|
(1,282 |
) |
Other assets |
|
|
1,146 |
|
|
|
458 |
|
Accounts payable and other current liabilities |
|
|
12,293 |
|
|
|
(7,000 |
) |
Retirement benefits payable and other liabilities |
|
|
557 |
|
|
|
(219 |
) |
Net cash provided by operating
activities |
|
|
164,332 |
|
|
|
121,453 |
|
Cash flows from investing
activities: |
|
|
|
|
Capital expenditures |
|
|
(16,575 |
) |
|
|
(13,951 |
) |
Proceeds from sale of assets held for investment |
|
|
1,665 |
|
|
|
— |
|
Proceeds from sale of assets |
|
|
2,185 |
|
|
|
120 |
|
Cash paid for acquisitions |
|
|
(32,729 |
) |
|
|
(58,335 |
) |
Net cash used in investing
activities |
|
|
(45,454 |
) |
|
|
(72,166 |
) |
Cash flows from financing
activities: |
|
|
|
|
Borrowings on lines of credit |
|
|
112,319 |
|
|
|
143,177 |
|
Repayments of lines of credit |
|
|
(199,319 |
) |
|
|
(142,952 |
) |
Payments of deferred loan costs |
|
|
— |
|
|
|
(710 |
) |
Purchase of treasury shares |
|
|
(15,268 |
) |
|
|
(39,072 |
) |
Proceeds from stock option activity |
|
|
— |
|
|
|
272 |
|
Proceeds from acquisition of redeemable noncontrolling
interest |
|
|
— |
|
|
|
3,000 |
|
Dividends paid to shareholders |
|
|
(11,805 |
) |
|
|
(10,555 |
) |
Net cash used in financing
activities |
|
|
(114,073 |
) |
|
|
(46,840 |
) |
Effect of exchange rate
changes on cash and equivalents |
|
|
(1,104 |
) |
|
|
(611 |
) |
Net change in cash and cash
equivalents |
|
|
3,701 |
|
|
|
1,836 |
|
Cash and cash equivalents,
beginning of period |
|
|
18,455 |
|
|
|
16,619 |
|
Cash and cash equivalents, end
of period |
|
$ |
22,156 |
|
|
$ |
18,455 |
|
Supplemental non-cash
disclosure: |
|
|
|
|
Cash paid during the year for interest |
|
$ |
12,254 |
|
|
$ |
12,502 |
|
Cash paid during the year for income taxes |
|
|
39,295 |
|
|
|
41,476 |
|
Reconciliation of Non-GAAP Measures
We use adjusted earnings per share attributable
to CSWI, adjusted net income attributable to CSWI, adjusted
operating income, and adjusted EBITDA, together with financial
measures prepared in accordance with GAAP, such as revenue, cost of
revenue, operating expense, operating income and net income
attributable to CSWI, to assess our historical and prospective
operating performance and to enhance our understanding of our core
operating performance. Free cash flow is a non-GAAP financial
measure and is defined as cash flow from operations less capital
expenditures. 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) |
|
|
|
|
|
|
|
|
|
|
|
Three months endedMarch 31, |
|
Year endedMarch 31, |
(amounts in thousands, except per share |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
GAAP Net Income Attributable
to CSWI |
|
$ |
31,760 |
|
|
$ |
27,062 |
|
|
$ |
101,648 |
|
|
$ |
96,435 |
|
|
|
|
|
|
|
|
|
|
Adjusting items, net of
tax |
|
|
|
|
|
|
|
|
Reversal of tax
indemnification receivable |
|
|
— |
|
|
|
— |
|
|
|
7,500 |
|
|
|
— |
|
Adjusting Net income
attributable to CSWI |
|
$ |
31,760 |
|
|
$ |
27,062 |
|
|
$ |
109,148 |
|
|
$ |
96,435 |
|
|
|
|
|
|
|
|
|
|
GAAP Net Income Attributable
to CSW Industrials, Inc. per diluted common share |
|
$ |
2.04 |
|
|
$ |
1.74 |
|
|
$ |
6.52 |
|
|
$ |
6.20 |
|
|
|
|
|
|
|
|
|
|
Adjusting Items, per dilutive
common share: |
|
|
|
|
|
|
|
|
Reversal of tax
indemnification receivable |
|
|
— |
|
|
|
— |
|
|
|
0.48 |
|
|
|
— |
|
Adjusted Net income
attributable to CSW Industrials, Inc. per dilutive common
share |
|
$ |
2.04 |
|
|
$ |
1.74 |
|
|
$ |
7.01 |
|
|
$ |
6.20 |
|
|
CSW Industrials, Inc. |
Reconciliation of Net Income attributable to CSWI to
Adjusted EBITDA |
(unaudited) |
|
|
|
|
|
|
|
|
|
(amounts in thousands) |
|
Three months endedMarch 31, |
|
Year endedMarch 31, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
GAAP Net Income attributable
to CSWI |
|
$ |
31,760 |
|
|
$ |
27,062 |
|
|
$ |
101,648 |
|
|
$ |
96,435 |
|
Plus: Income attributable to
redeemable noncontrolling interest |
|
|
235 |
|
|
|
60 |
|
|
|
891 |
|
|
|
139 |
|
GAAP Net Income |
|
$ |
31,995 |
|
|
$ |
27,123 |
|
|
$ |
102,539 |
|
|
$ |
96,574 |
|
|
|
|
|
|
|
|
|
|
Adjusting Items: |
|
|
|
|
|
|
|
|
Interest Expense |
|
|
2,643 |
|
|
|
4,107 |
|
|
|
12,723 |
|
|
|
13,197 |
|
Income Tax Expense |
|
|
9,973 |
|
|
|
9,105 |
|
|
|
37,942 |
|
|
|
29,338 |
|
Depreciation, amortization & impairment |
|
|
11,196 |
|
|
|
9,053 |
|
|
|
38,289 |
|
|
|
34,958 |
|
EBITDA |
|
$ |
55,807 |
|
|
$ |
49,388 |
|
|
$ |
191,492 |
|
|
$ |
174,067 |
|
|
|
|
|
|
|
|
|
|
EBITDA Adjustments: |
|
|
|
|
|
|
|
|
Reversal of tax indemnification receivable |
|
|
— |
|
|
|
— |
|
|
|
8,519 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
55,807 |
|
|
$ |
49,388 |
|
|
$ |
200,011 |
|
|
$ |
174,067 |
|
Adjusted EBITDA % Revenue |
|
|
26.5 |
% |
|
|
25.2 |
% |
|
|
25.2 |
% |
|
|
23.0 |
% |
|
CSW Industrials, Inc. |
Reconciliation of Segment Operating Income to Segment
Adjusted EBITDA |
(unaudited) |
|
|
|
|
|
|
|
(amounts in thousands) |
|
Three months ended March 31, 2024 |
|
|
ContractorSolutions |
SpecializedReliabilitySolutions |
EngineeredBuildingSolutions |
Corporateand Other |
Consolidated |
Revenue, net |
|
$ |
141,226 |
|
$ |
41,577 |
|
$ |
30,081 |
|
$ |
(2,024 |
) |
$ |
210,859 |
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
37,594 |
|
$ |
6,732 |
|
$ |
5,675 |
|
$ |
(5,663 |
) |
$ |
44,338 |
|
% Revenue |
|
|
26.6 |
% |
|
16.2 |
% |
|
18.9 |
% |
|
|
21.0 |
% |
|
|
|
|
|
|
|
Adjusting Items: |
|
|
|
|
|
|
Other income (expense) |
|
|
559 |
|
|
(45 |
) |
|
(1 |
) |
|
(240 |
) |
|
273 |
|
Depreciation, amortization & impairment |
|
|
9,114 |
|
|
1,562 |
|
|
478 |
|
|
42 |
|
|
11,196 |
|
Adjusted EBITDA |
|
$ |
47,267 |
|
$ |
8,249 |
|
$ |
6,152 |
|
$ |
(5,861 |
) |
$ |
55,807 |
|
% Revenue |
|
|
33.5 |
% |
|
19.8 |
% |
|
20.5 |
% |
|
|
26.5 |
% |
|
|
|
|
|
|
|
(amounts in thousands) |
|
Three months ended March 31, 2023 |
|
|
ContractorSolutions |
SpecializedReliabilitySolutions |
EngineeredBuildingSolutions |
Corporateand Other |
Consolidated |
Revenue, net |
|
$ |
133,945 |
|
$ |
38,487 |
|
$ |
24,991 |
|
$ |
(1,738 |
) |
$ |
195,686 |
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
35,788 |
|
$ |
6,517 |
|
$ |
2,716 |
|
$ |
(5,257 |
) |
$ |
39,765 |
|
% Revenue |
|
|
26.7 |
% |
|
16.9 |
% |
|
10.9 |
% |
|
|
20.3 |
% |
|
|
|
|
|
|
|
Adjusting Items: |
|
|
|
|
|
|
Other income (expense) |
|
|
(167 |
) |
|
146 |
|
|
(42 |
) |
|
632 |
|
|
570 |
|
Depreciation & amortization |
|
|
7,056 |
|
|
1,517 |
|
|
428 |
|
|
52 |
|
|
9,053 |
|
Adjusted EBITDA |
|
$ |
42,677 |
|
$ |
8,181 |
|
$ |
3,103 |
|
$ |
(4,573 |
) |
$ |
49,388 |
|
% Revenue |
|
|
31.9 |
% |
|
21.3 |
% |
|
12.4 |
% |
|
|
25.2 |
% |
|
|
|
|
|
|
|
|
CSW Industrials, Inc. |
Reconciliation of Segment Operating Income to Segment
Adjusted EBITDA |
(unaudited) |
|
|
|
|
|
|
|
(amounts in thousands) |
|
Year ended March 31, 2024 |
|
|
ContractorSolutions |
SpecializedReliabilitySolutions |
EngineeredBuildingSolutions |
Corporateand Other |
Consolidated |
Revenue, net |
|
$ |
536,494 |
|
$ |
149,613 |
|
$ |
114,741 |
|
$ |
(8,008 |
) |
$ |
792,840 |
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
142,037 |
|
$ |
22,266 |
|
$ |
18,704 |
|
$ |
(23,890 |
) |
$ |
159,118 |
|
% Revenue |
|
|
26.5 |
% |
|
14.9 |
% |
|
16.3 |
% |
|
|
20.1 |
% |
|
|
|
|
|
|
|
Adjusting Items: |
|
|
|
|
|
|
Other income (expense) |
|
|
(7,127 |
) |
|
(145 |
) |
|
1 |
|
|
1,355 |
|
|
(5,915 |
) |
Depreciation, amortization & impairment |
|
|
30,232 |
|
|
6,074 |
|
|
1,810 |
|
|
174 |
|
|
38,289 |
|
Reversal of tax indemnification receivable |
|
|
8,519 |
|
|
— |
|
|
— |
|
|
— |
|
|
8,519 |
|
Adjusted EBITDA |
|
$ |
173,661 |
|
$ |
28,195 |
|
$ |
20,516 |
|
$ |
(22,361 |
) |
$ |
200,011 |
|
% Revenue |
|
|
32.4 |
% |
|
18.8 |
% |
|
17.9 |
% |
|
|
25.2 |
% |
|
|
|
|
|
|
|
(amounts in thousands) |
|
Year ended March 31, 2023 |
|
|
ContractorSolutions |
SpecializedReliabilitySolutions |
EngineeredBuildingSolutions |
Corporateand Other |
Consolidated |
Revenue, net |
|
$ |
513,776 |
|
$ |
147,446 |
|
$ |
103,969 |
|
$ |
(7,287 |
) |
$ |
757,904 |
|
|
|
|
|
|
|
|
Operating Income |
|
$ |
126,204 |
|
$ |
20,176 |
|
$ |
12,889 |
|
$ |
(20,202 |
) |
$ |
139,066 |
|
% Revenue |
|
|
24.6 |
% |
|
13.7 |
% |
|
12.4 |
% |
|
|
18.3 |
% |
|
|
|
|
|
|
|
Adjusting Items: |
|
|
|
|
|
|
Other income (expense) |
|
|
76 |
|
|
(228 |
) |
|
(231 |
) |
|
425 |
|
|
42 |
|
Depreciation & amortization |
|
|
26,951 |
|
|
6,035 |
|
|
1,771 |
|
|
201 |
|
|
34,958 |
|
Adjusted EBITDA |
|
$ |
153,231 |
|
$ |
25,983 |
|
$ |
14,429 |
|
$ |
(19,576 |
) |
$ |
174,067 |
|
% Revenue |
|
|
29.8 |
% |
|
17.6 |
% |
|
13.9 |
% |
|
|
23.0 |
% |
|
CSW INDUSTRIALS, INC. |
RECONCILIATION OF NET CASH PROVIDED BY OPERATING CASH FLOWS
to FREE CASH FLOW |
(Unaudited) |
|
|
|
|
|
|
|
|
|
(Amounts in thousands) |
|
Three Months EndedMarch 31, |
|
Year EndedMarch 31, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating
activities |
|
$ |
22,418 |
|
|
$ |
37,381 |
|
|
$ |
164,332 |
|
|
$ |
121,453 |
|
Less: Capital
Expenditures |
|
|
(4,907 |
) |
|
|
(5,683 |
) |
|
|
(16,575 |
) |
|
|
(13,951 |
) |
Free Cash Flow |
|
$ |
17,511 |
|
|
$ |
31,698 |
|
|
$ |
147,757 |
|
|
$ |
107,502 |
|
Free Cash Flow % Net
Income |
|
|
54.7 |
% |
|
|
116.9 |
% |
|
|
144.1 |
% |
|
|
111.3 |
% |
CSW Industrials (NASDAQ:CSWI)
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