CSW Industrials Reports Record Fiscal 2025 First Quarter Results Delivering All-Time Highs for Quarterly Revenue, Net Income, Earnings per Diluted Share, EBITDA, and Operating Cash Flow
Rhea-AI Summary
CSW Industrials (CSWI) reported record results for Q1 fiscal 2025, with significant growth across key financial metrics:
- Revenue increased 11.2% to $226.2 million, driven by 7.7% organic growth and 3.5% from the Dust Free acquisition
- Net income rose 26.1% to $38.6 million
- EPS grew 25.4% to $2.47
- EBITDA increased 19.9% to $65.3 million, with margin expansion of 210 bps to 28.9%
- Cash flow from operations up 24.7% to $62.7 million
The company paid down $51 million in debt, reducing its leverage ratio to 0.49x. Growth was driven by volume increases, pricing initiatives, and the Dust Free acquisition, with strong performance in the Contractor Solutions segment.
AI-generated analysis. Not financial advice.
Positive
- Record quarterly revenue of $226.2 million, up 11.2% year-over-year
- Net income increased 26.1% to $38.6 million
- Earnings per share grew 25.4% to $2.47
- EBITDA rose 19.9% to $65.3 million with margin expansion of 210 bps
- Cash flow from operations increased 24.7% to $62.7 million
- Paid down $51 million in debt, reducing leverage ratio to 0.49x
- Gross profit margin expanded 220 bps to 47.5%
- Contractor Solutions segment revenue grew 14.6%, with 9.5% organic growth
Negative
- Specialized Reliability Solutions segment revenue decreased 2.4% year-over-year
News Market Reaction – CSWI
On the day this news was published, CSWI gained 8.27%, reflecting a notable positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
DALLAS, July 31, 2024 (GLOBE NEWSWIRE) -- CSW Industrials, Inc. (Nasdaq: CSWI or the "Company") today reported record results for the fiscal 2025 first quarter period ended June 30, 2024.
Fiscal 2025 First Quarter Highlights (comparisons to fiscal 2024 first quarter)
- Total revenue increased
11.2% to$226.2 million , driven by organic growth of7.7% and inorganic growth of3.5% from the recent acquisition of Dust Free - Net income attributable to CSWI increased
26.1% to$38.6 million , compared to$30.6 million - Earnings per diluted share (EPS) increased
25.4% to$2.47 , compared to$1.97 - EBITDA grew
19.9% to$65.3 million , including margin expansion of 210 bps to28.9% - Cash flow from operations increased
24.7% to$62.7 million , compared to$50.3 million - Paid down
$51.0 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 0.49x
Comments from the Chairman, President, and Chief Executive Officer
Joseph B. Armes, CSW Industrials’ Chairman, President, and Chief Executive Officer, commented, "Once again, superior execution by our team has resulted in record financial results for the fiscal first quarter of 2025. CSWI's record revenue for the quarter was fueled by organic unit volume growth, pricing initiatives, and enhanced by our strategic acquisition of Dust Free. We further enhanced our healthy gross margin and drove record profitability while delivering record cash flow for the quarter. We continue to deliver on our commitment to build long-term shareholder value through disciplined capital allocation and by consistently outperforming the markets we serve."
Fiscal 2025 First Quarter Consolidated Results
Fiscal first quarter revenue was
Gross profit in the fiscal first quarter was
Operating expenses as a percentage of revenue were
Operating income in the current period was
Net income attributable to CSWI (net of non-controlling interest in the joint venture) increased
Fiscal 2025 first quarter EBITDA increased
During the fiscal first quarter, the Company paid down
Following quarter-end, the Company announced its twenty-second consecutive regular quarterly cash dividend. This dividend of
The Company’s effective tax rate for the fiscal first quarter was
Fiscal 2025 First Quarter Segment Results
The Contractor Solutions segment revenue was
The Specialized Reliability Solutions segment revenue was
The Engineered Building Solutions segment revenue was
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 Wednesday, August 14, 2024. Participants may access the replay at 1-844-512-2921, international callers may use 1-412-317-6671, and enter access code 13747993. 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, 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 and Treasurer
214-489-7113
alexa.huerta@cswindustrials.com
| CSW INDUSTRIALS, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| (unaudited) | ||||||||
| Three Months Ended June 30, | ||||||||
| (Amounts in thousands, except per share amounts) | 2024 | 2023 | ||||||
| Revenues, net | $ | 226,177 | $ | 203,360 | ||||
| Cost of revenues | (118,756 | ) | (111,193 | ) | ||||
| Gross profit | 107,421 | 92,167 | ||||||
| Selling, general and administrative expenses | (52,361 | ) | (46,961 | ) | ||||
| Operating income | 55,060 | 45,206 | ||||||
| Interest expense, net | (2,520 | ) | (4,009 | ) | ||||
| Other income, net | 260 | 314 | ||||||
| Income before income taxes | 52,800 | 41,511 | ||||||
| Provision for income taxes | (13,950 | ) | (10,455 | ) | ||||
| Net income | 38,850 | 31,056 | ||||||
| Less: Income attributable to redeemable noncontrolling interest | (259 | ) | (445 | ) | ||||
| Net income attributable to CSW Industrials, Inc. | $ | 38,591 | $ | 30,611 | ||||
| Net income per share attributable to CSW Industrials, Inc. | ||||||||
| Basic | $ | 2.48 | $ | 1.97 | ||||
| Diluted | 2.47 | 1.97 | ||||||
| Weighted average number of shares outstanding: | ||||||||
| Basic | 15,534 | 15,520 | ||||||
| Diluted | 15,596 | 15,547 | ||||||
| CSW INDUSTRIALS, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (unaudited) | ||||||||
| (Amounts in thousands, except for per share amounts) | June 30, 2024 | March 31, 2024 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 18,852 | $ | 22,156 | ||||
| Accounts receivable, net of allowance for expected credit losses of | 143,195 | 142,665 | ||||||
| Inventories, net | 156,791 | 150,749 | ||||||
| Prepaid expenses and other current assets | 12,381 | 15,840 | ||||||
| Total current assets | 331,219 | 331,410 | ||||||
| Property, plant and equipment, net of accumulated depreciation of | 92,371 | 92,811 | ||||||
| Goodwill | 246,402 | 247,191 | ||||||
| Intangible assets, net | 312,898 | 318,819 | ||||||
| Other assets | 67,636 | 53,095 | ||||||
| Total assets | $ | 1,050,526 | $ | 1,043,326 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 55,025 | $ | 48,387 | ||||
| Accrued and other current liabilities | 66,460 | 67,449 | ||||||
| Total current liabilities | 121,485 | 115,836 | ||||||
| Long-term debt | 115,000 | 166,000 | ||||||
| Retirement benefits payable | 1,103 | 1,114 | ||||||
| Other long-term liabilities | 143,166 | 125,298 | ||||||
| Total liabilities | 380,754 | 408,248 | ||||||
| Commitments and contingencies | ||||||||
| Redeemable noncontrolling interest | 19,614 | 19,355 | ||||||
| Equity: | ||||||||
| Common shares, | 164 | 164 | ||||||
| Additional paid-in capital | 143,970 | 137,253 | ||||||
| Treasury shares, at cost (968 and 952 shares, respectively) | (102,406 | ) | (95,643 | ) | ||||
| Retained earnings | 618,381 | 583,075 | ||||||
| Accumulated other comprehensive loss | (9,951 | ) | (9,126 | ) | ||||
| Total equity | 650,158 | 615,723 | ||||||
| Total liabilities, redeemable noncontrolling interest and equity | $ | 1,050,526 | $ | 1,043,326 | ||||
| CSW INDUSTRIALS, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (unaudited) | ||||||||
| Three Months Ended June 30, | ||||||||
| (Amounts in thousands) | 2024 | 2023 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 38,850 | $ | 31,056 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | 3,622 | 3,239 | ||||||
| Amortization of intangible and other assets | 6,503 | 5,868 | ||||||
| Provision for inventory reserves | 517 | 2,509 | ||||||
| Provision for credit losses | 378 | 108 | ||||||
| Share-based compensation | 3,746 | 2,805 | ||||||
| Gain on disposals of property, plant and equipment | (13 | ) | (12 | ) | ||||
| Net pension benefit | 16 | 17 | ||||||
| Impairment of assets | — | 92 | ||||||
| Deferred taxes | 2,084 | 843 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (998 | ) | (4,319 | ) | ||||
| Inventories | (6,766 | ) | 2,141 | |||||
| Prepaid expenses and other current assets | 3,438 | 2,443 | ||||||
| Other assets | 28 | (788 | ) | |||||
| Accounts payable and other current liabilities | 10,923 | 3,233 | ||||||
| Retirement benefits payable and other liabilities | 327 | 1,022 | ||||||
| Net cash provided by operating activities | 62,655 | 50,257 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (3,101 | ) | (4,971 | ) | ||||
| Proceeds from sale of assets | 13 | 12 | ||||||
| Cash paid for investments | (500 | ) | — | |||||
| Cash paid for acquisitions | (163 | ) | (112 | ) | ||||
| Proceeds from acquisitions true-up | 470 | — | ||||||
| Net cash used in investing activities | (3,281 | ) | (5,071 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Borrowings on line of credit | 7,723 | 15,432 | ||||||
| Repayments of line of credit | (58,723 | ) | (58,432 | ) | ||||
| Purchase of treasury shares | (7,891 | ) | (2,864 | ) | ||||
| Dividends | (3,262 | ) | (2,947 | ) | ||||
| Net cash used in financing activities | (62,153 | ) | (48,811 | ) | ||||
| Effect of exchange rate changes on cash and equivalents | (525 | ) | (42 | ) | ||||
| Net change in cash and cash equivalents | (3,304 | ) | (3,667 | ) | ||||
| Cash and cash equivalents, beginning of period | 22,156 | 18,455 | ||||||
| Cash and cash equivalents, end of period | $ | 18,852 | $ | 14,788 | ||||
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 EBITDA | ||||||||
| (unaudited) | ||||||||
| (Amounts in thousands) | Three months ended June 30, | |||||||
| 2024 | 2023 | |||||||
| Net Income attributable to CSWI | $ | 38,591 | $ | 30,611 | ||||
| Plus: Income attributable to redeemable noncontrolling interest | 259 | 445 | ||||||
| Net Income | $ | 38,850 | $ | 31,056 | ||||
| Adjusting Items: | ||||||||
| Interest Expense | 2,520 | 4,009 | ||||||
| Income Tax Expense | 13,950 | 10,455 | ||||||
| Depreciation & amortization | 9,932 | 8,915 | ||||||
| EBITDA | $ | 65,252 | $ | 54,435 | ||||
| EBITDA % Revenue | 28.9 | % | 26.8 | % | ||||
| CSW Industrials, Inc. | |||||||||||||||
| Reconciliation of Segment Operating Income to Segment EBITDA | |||||||||||||||
| (unaudited) | |||||||||||||||
| (Amounts in thousands) | Three months ended June 30, 2024 | ||||||||||||||
| Contractor Solutions | Specialized Reliability Solutions | Engineered Building Solutions | Corporate and Other | Consolidated | |||||||||||
| Revenue, net | $ | 160,418 | $ | 36,791 | $ | 30,893 | $ | (1,926 | ) | $ | 226,177 | ||||
| Operating Income | $ | 49,884 | $ | 7,150 | $ | 5,723 | $ | (7,698 | ) | $ | 55,060 | ||||
| % Revenue | 31.1 | % | 19.4 | % | 18.5 | % | 24.3 | % | |||||||
| Adjusting Items: | |||||||||||||||
| Other income (expense) | 396 | (63 | ) | (7 | ) | (66 | ) | 260 | |||||||
| Depreciation & amortization | 7,983 | 1,423 | 485 | 41 | 9,932 | ||||||||||
| EBITDA | $ | 58,263 | $ | 8,511 | $ | 6,201 | $ | (7,723 | ) | $ | 65,252 | ||||
| % Revenue | 36.3 | % | 23.1 | % | 20.1 | % | 28.9 | % | |||||||
| (Amounts in thousands) | Three months ended June 30, 2023 | ||||||||||||||
| Contractor Solutions | Specialized Reliability Solutions | Engineered Building Solutions | Corporate and Other | Consolidated | |||||||||||
| Revenue, net | $ | 139,954 | $ | 37,711 | $ | 27,587 | $ | (1,892 | ) | $ | 203,360 | ||||
| Operating Income | $ | 39,667 | $ | 6,966 | $ | 4,260 | $ | (5,686 | ) | $ | 45,206 | ||||
| % Revenue | 28.3 | % | 18.5 | % | 15.4 | % | 22.2 | % | |||||||
| Adjusting Items: | |||||||||||||||
| Other income (expense) | 172 | (37 | ) | 8 | 172 | 314 | |||||||||
| Depreciation & amortization | 6,895 | 1,530 | 441 | 48 | 8,915 | ||||||||||
| EBITDA | $ | 46,734 | $ | 8,458 | $ | 4,708 | $ | (5,466 | ) | $ | 54,435 | ||||
| % Revenue | 33.4 | % | 22.4 | % | 17.1 | % | 26.8 | % | |||||||
| CSW INDUSTRIALS, INC. | ||||||||
| Reconciliation of Operating Cash Flow to Free Cash Flow | ||||||||
| (Unaudited) | ||||||||
| (Amounts in thousands) | Three Months Ended June 30, | |||||||
| 2024 | 2023 | |||||||
| Net cash provided by operating activities | $ | 62,655 | $ | 50,257 | ||||
| Less: Capital Expenditures | (3,101 | ) | (4,971 | ) | ||||
| Free Cash Flow | $ | 59,554 | $ | 45,286 | ||||
| Free Cash Flow % Net Income | 153.3 | % | 145.8 | % | ||||
