Group 1 - Monteverde & Associates PC is recognized as a Top 50 Firm in the 2024 ISS Securities Class Action Services Report and has recovered millions for shareholders [1] - Playa Hotels & Resorts N.V. is proposed to be acquired by Hyatt Hotels Corporation for $13.50 per share in cash, with the tender offer expiring on May 23, 2025 [1] - The AZEK Company Inc. is set to merge with James Hardie Industries plc, where AZEK shareholders will receive $26.45 in cash and 1.0340 ordinary shares of James Hardie per AZEK share [2] - 180 Degree Capital Corp. is merging with Mount Logan Capital Inc., with an estimated post-merger shareholder ownership of approximately 40% for current 180 Degree Capital shareholders [2] - iCAD, Inc. will merge with RadNet, Inc., where iCAD stockholders will receive 0.0677 shares of RadNet common stock for each share of iCAD common stock held [2] Group 2 - Monteverde & Associates PC operates from the Empire State Building and has a successful track record in litigating and recovering money for shareholders [3] - The firm emphasizes that no company, director, or officer is above the law, encouraging shareholders with concerns to seek additional information [4]

Table of contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _____________________________________________________________________________________________ FORM 10-Q _____________________________________________________________________________________________ x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1 ...

Group 1 - The AZEK Company reported revenue of $452.23 million for the quarter ended March 2025, reflecting an 8.1% increase year-over-year [1] - Earnings per share (EPS) for the quarter was $0.45, up from $0.39 in the same quarter last year, with a surprise of +2.27% compared to the consensus estimate of $0.44 [1] - The reported revenue exceeded the Zacks Consensus Estimate of $443.6 million, resulting in a surprise of +1.95% [1] Group 2 - Net Sales in the Commercial segment were $15.19 million, slightly above the three-analyst average estimate of $15.07 million, but represented a year-over-year decline of -4.3% [4] - Net Sales in the Residential segment reached $437.04 million, surpassing the three-analyst average estimate of $431.37 million, with a year-over-year increase of +8.6% [4] - Adjusted EBITDA for the Commercial segment was $1.90 million, exceeding the average estimate of $1.78 million, while the Residential segment's Adjusted EBITDA was $122.47 million, also above the estimated $119.21 million [4] Group 3 - The AZEK Company's stock has returned +11.3% over the past month, compared to the Zacks S&P 500 composite's +11.5% change [3] - The company currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - In Q2 of fiscal 2025, consolidated net sales reached $452 million, an increase of 8% year over year [26] - Adjusted EBITDA for Q2 increased by $11 million or 10% year over year to $124 million, with an adjusted EBITDA margin of 27.5%, a 40 basis point improvement year over year [28][25] - Net income for Q2 increased by $5 million year over year to $54 million, or $0.37 per share [28] Business Line Data and Key Metrics Changes - Residential segment net sales for Q2 were $437 million, up 9% year over year, driven by sell-through growth and new products [29] - Residential segment adjusted EBITDA for Q2 was $122 million, up 11% year over year, with an adjusted EBITDA margin of 28% [29] - Commercial segment net sales for Q2 were $15 million, down 4% year over year, primarily due to weaker demand [29] Market Data and Key Metrics Changes - The residential segment achieved 9% year-over-year growth in Q2, with mid-single-digit sell-through growth [7] - The company noted a stable contractor backlog of approximately seven weeks, indicating steady demand [19][103] - Channel inventory levels are below historical averages, reflecting a conservative inventory strategy [20][76] Company Strategy and Development Direction - The proposed merger with James Hardie aims to enhance material conversion and create significant synergies, targeting $125 million in cost synergies and $500 million in incremental sales synergies [11][13] - The company is focused on product innovation, channel expansion, and sustainability, aiming for double-digit long-term growth [10][9] - Investments in new product launches and a vertically integrated recycling network are central to the company's growth strategy [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties while maintaining strong growth momentum [20][21] - The company anticipates steady demand across its outdoor living portfolio, with positive sell-through trends continuing into April [19] - Despite acknowledging potential economic challenges, management believes the company is well-positioned to outperform the market [21][22] Other Important Information - The company has been recognized on Barron's list of the 100 Most Sustainable U.S. Companies for the first time [18] - The acquisition of Northwest Polymers enhances the company's recycling capabilities, supporting long-term growth and margin expansion [17] Q&A Session Summary Question: Guidance on decking and railing versus exteriors in the second half - Management did not provide specific guidance but noted that deck, rail, and accessories have been outgrowing exteriors [40] Question: Near-term cost structure and PVC pricing - Management indicated that costs have been steady, with some modest inflation offset through pricing actions [41] Question: Sales synergies from the merger - Management highlighted significant sales synergies and emphasized stability in the sales organization during the integration process [46] Question: Recycling asset acquisitions and cost reductions - Management mentioned ongoing investments in recycling to achieve incremental cost savings, with a focus on long-term benefits [49] Question: Demand across retail and pro channels - Growth is observed in both channels, with slightly higher growth in the pro channel compared to retail [55] Question: Impact of tariffs on supply chain - The annualized tariff exposure is estimated between $12 million and $15 million, with pricing actions taken to mitigate impacts [57] Question: Customer reactions to the merger - Positive feedback has been received from contractors and channel partners regarding the merger, indicating excitement about strategic benefits [66] Question: Concerns about affordability due to price increases in components - Management acknowledged tariff impacts on certain products but noted efforts to remain competitive [106]

Financial Data and Key Metrics Changes - In Q2 of fiscal 2025, consolidated net sales reached $452 million, an increase of 8% year over year [25] - Adjusted EBITDA for Q2 increased by $11 million or 10% year over year to $124 million, with an adjusted EBITDA margin of 27.5%, a 40 basis point improvement year over year [27][22] - Net income for Q2 increased by $5 million year over year to $54 million, or $0.37 per share [27] Business Line Data and Key Metrics Changes - Residential segment net sales for Q2 were $437 million, up 9% year over year, driven by sell-through growth and channel expansion [28] - Commercial segment net sales for the quarter were $15 million, down 4% year over year, primarily due to weaker demand in the spring products business [28] - Residential segment adjusted EBITDA for Q2 was $122 million, up 11% year over year, with an adjusted EBITDA margin of 28% [28] Market Data and Key Metrics Changes - The residential segment achieved 9% year-over-year growth in Q2, with high single-digit sell-through growth contributing to this performance [6] - The overall market for repair and remodel has been challenging, but the company has consistently outperformed this market [6][20] - Contractor backlogs remain stable at approximately seven weeks, indicating steady demand [18][101] Company Strategy and Development Direction - The company is focused on material conversion, product innovation, and channel expansion, targeting double-digit long-term growth and sustained margin expansion [10][11] - The proposed merger with James Hardie is expected to enhance growth opportunities and create significant synergies, with an estimated $125 million in cost synergies and $500 million in incremental sales synergies [11][13] - Investments in new product launches and a vertically integrated recycling network are key components of the company's growth strategy [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledges uncertainty in the broader economy but remains confident in the company's ability to outperform the market [19][20] - The company expects residential sell-through growth scenarios in the low single-digit to mid-single-digit range for the second half of the fiscal year [31] - Despite macroeconomic challenges, the company believes it can sustain margins while investing in growth initiatives [19][21] Other Important Information - The company has been recognized for its sustainability efforts, being named to Barron's list of the 100 Most Sustainable U.S. Companies for the first time [17] - The acquisition of Northwest Polymers enhances the company's recycling capabilities and supports long-term growth objectives [16] Q&A Session Summary Question: Guidance for the second half regarding decking and railing versus exteriors - Management did not provide specific guidance but noted that deck, rail, and accessories have been outgrowing exteriors [39] Question: Near-term cost structure and PVC pricing - Management indicated that costs have been steady, with some modest inflation offset through pricing actions [40][42] Question: Sales synergies from the merger with James Hardie - Management expressed confidence in significant sales synergies but noted it is early to discuss specifics [46][48] Question: Focus on acquiring additional recycling assets - Management highlighted ongoing investments in recycling to achieve cost savings, with a focus on regional supply [49] Question: Demand across retail and pro channels - Growth is seen in both channels, with slightly higher growth in the pro channel, and some regional weakness noted in the Northeast due to weather [53][55] Question: Impact of tariffs on pricing - The annualized tariff exposure is estimated between $12 million and $15 million, with pricing actions taken to offset these costs [56] Question: Customer reactions to the merger - Positive feedback has been received from contractors and channel partners regarding the merger, indicating excitement about the strategic benefits [61][65] Question: Sell-through assumptions for the back half of the year - Management clarified that the guidance reflects a conservative approach, not indicating a decline in sell-through [66][84] Question: Inventory positioning in the channel - The company is maintaining conservative inventory levels, ensuring they are below historical averages [71][76] Question: Mix pressures and contractor backlogs - No significant shifts in product mix were noted, and contractor backlogs remain steady at seven weeks [100][101]

Financial Performance - Q2 2025 net sales increased by 8.1% year-over-year[46] - Adjusted EBITDA Margin increased by 40 bps year-over-year to 27.5%[44, 46] - The company reaffirms FY 2025 net sales outlook between $1.52 billion and $1.55 billion, representing 5% to 8% year-over-year growth[44] - The company reaffirms Adjusted EBITDA outlook between $403 million and $418 million, representing 6% to 10% year-over-year growth[44] - Residential segment growth was at 9% year-over-year[44] Strategic Initiatives and Market Position - The company is the industry leader in outdoor living[17, 36] - The company is benefiting from long-term material conversion trends[16] - The company is targeting double-digit annual net sales growth[17] - The company is expanding Adj EBITDA margin to a target of approximately 27.5%[17] - The company estimates that wood alternative decking could reach approximately 50% of decking opportunities share over the next 10-15 years and up to 75% over time[33]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Second Quarter Fiscal 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%20Fiscal%202025%20Financial%20Highlights) Q2 FY2025 saw consolidated net sales up **8%** to **$452.2 million** and Adjusted EBITDA up **10%** to **$124.4 million** Q2 FY2025 Key Financial Metrics | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Consolidated Net Sales | $452.2 million | +8% | | Residential Segment Net Sales | $437.0 million | +9% | | Net Income | $54.3 million | +9% | | EPS | $0.37 per share | +$0.03 | | Adjusted Net Income | $65.6 million | +12% | | Adjusted Diluted EPS | $0.45 per share | +$0.06 | | Adjusted EBITDA | $124.4 million | +10% | | Adjusted EBITDA Margin | 27.5% | +40 bps | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO highlights strong Q2 performance, residential growth, margin expansion, new product success, and sustainability awards - The Residential business grew **9% year-over-year**, fueled by positive mid-single-digit sell-through growth and expanded channel presence[3](index=3&type=chunk) - Disciplined cost initiatives led to a **10 basis point expansion** in net profit margin and a **40 basis point expansion** in Adjusted EBITDA margin, despite investments in marketing and production[5](index=5&type=chunk) - New product launches, including TimberTech Harvest+ decking and Reliance Rail, are gaining traction and driving expanded shelf space[6](index=6&type=chunk) - The company received several sustainability awards, including being named to Barron's 100 Most Sustainable U.S. Companies list for the first time[7](index=7&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) Q2 FY2025 consolidated net sales grew **8%** to **$452.2 million**, with net income up **9%** and Adjusted EBITDA up **10%** Q2 FY2025 Consolidated Results vs. Q2 FY2024 | Metric | Q2 2025 | Q2 2024 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $452.2M | $418.4M | +$33.8M | +8% | | Gross Profit | $167.7M | $157.1M | +$10.6M | +6.7% | | Net Income | $54.3M | $49.8M | +$4.5M | +9% | | Adjusted EBITDA | $124.4M | $113.3M | +$11.1M | +10% | - The increase in net sales was primarily driven by higher sales volume in the Residential segment, while the Commercial segment saw a decrease due to weaker demand in its Scranton Products business[9](index=9&type=chunk) [Balance Sheet, Cash Flow and Liquidity](index=3&type=section&id=Balance%20Sheet%2C%20Cash%20Flow%20and%20Liquidity) AZEK maintained strong liquidity with **$146.7 million** cash; operating cash flow significantly increased to **$47.1 million** - As of March 31, 2025, the company had cash and cash equivalents of **$146.7 million** and total gross debt of **$538.4 million**[15](index=15&type=chunk) - Net Cash Provided by Operating Activities for the quarter increased by **$61.9 million** year-over-year to **$47.1 million**[16](index=16&type=chunk) - Free Cash Flow for the quarter improved by **$34.7 million** year-over-year to **$0.7 million**, despite a **$27.2 million** increase in capital expenditures[16](index=16&type=chunk) [Outlook and Strategic Initiatives](index=3&type=section&id=Outlook%20and%20Strategic%20Initiatives) [Fiscal Year 2025 Outlook](index=3&type=section&id=Fiscal%20Year%202025%20Outlook) AZEK reaffirmed FY2025 guidance, projecting consolidated net sales of **$1.52 to $1.55 billion** and Adjusted EBITDA of **$403 to $418 million** Full-Year Fiscal 2025 Guidance (Consolidated) | Metric | Range | Growth (YoY) | | :--- | :--- | :--- | | Net Sales | $1.52B - $1.55B | **5% to 8%** | | Adjusted EBITDA | $403M - $418M | **6% to 10%** | | Adjusted EBITDA Margin | **26.5% - 27.0%** | N/A | | Capital Expenditures | **$110M - $120M** | N/A | Full-Year Fiscal 2025 Guidance (By Segment) | Segment | Metric | Range | Growth (YoY) | | :--- | :--- | :--- | :--- | | **Residential** | Net Sales | $1.452B - $1.479B | **6% to 8%** | | | Adj. EBITDA | $392M - $405M | **7% to 11%** | | **Commercial** | Net Sales | $68M - $71M | N/A | | | Adj. EBITDA | $11M - $13M | N/A | Second Half Fiscal 2025 Outlook (Consolidated) | Metric | Growth (YoY) | | :--- | :--- | | Net Sales | **0% to 4%** | | Adjusted EBITDA | **1% to 8%** | [Merger Agreement with James Hardie](index=4&type=section&id=Merger%20Agreement%20with%20James%20Hardie) Merger agreement with James Hardie Industries plc confirmed, expected to close in **H2 2025** pending approvals - AZEK entered into a merger agreement with James Hardie Industries plc on **March 23, 2025**[23](index=23&type=chunk) - The transaction is expected to close in the **second half of calendar year 2025**, subject to regulatory and shareholder approvals[23](index=23&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$2.30 billion** as of March 31, 2025, with corresponding rises in liabilities and equity Key Balance Sheet Items (in thousands) | Account | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $146,719 | $164,025 | | Total current assets | $560,565 | $471,377 | | Total assets | $2,299,253 | $2,167,711 | | Total current liabilities | $228,472 | $217,038 | | Total liabilities | $845,080 | $810,846 | | Total stockholders' equity | $1,454,173 | $1,356,865 | [Consolidated Statements of Comprehensive Income](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Q2 FY2025 net sales reached **$452.2 million** with net income of **$54.3 million**, showing growth from prior year Income Statement Summary (in thousands) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net sales | $452,231 | $418,408 | | Gross profit | $167,693 | $157,073 | | Operating income | $79,394 | $73,962 | | Net income | $54,285 | $49,758 | | Diluted EPS | $0.37 | $0.34 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly improved to **$60.6 million** for the six months ended March 31, 2025 Cash Flow Summary (Six Months Ended Mar 31, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $60,619 | $(31,094) | | Net cash provided by (used in) investing activities | $(85,862) | $95,167 | | Net cash provided by (used in) financing activities | $7,937 | $(114,988) | | Net decrease in cash and cash equivalents | $(17,306) | $(50,915) | [Segment Performance and Non-GAAP Reconciliations](index=12&type=section&id=Segment%20Performance%20and%20Non-GAAP%20Reconciliations) [Segment Results from Operations](index=12&type=section&id=Segment%20Results%20from%20Operations) Residential segment drove performance with **8.6%** sales growth, while Commercial segment faced declines in Q2 [Residential Segment](index=12&type=section&id=Residential%20Segment) The Residential segment achieved strong Q2 FY2025 results, with net sales up **8.6%** to **$437.0 million** and Adjusted EBITDA up **11.0%** Residential Segment Performance (Q2 FY2025 vs Q2 FY2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $437.0M | $402.5M | +8.6% | | Segment Adjusted EBITDA | $122.5M | $110.4M | +11.0% | | Segment Adjusted EBITDA Margin | 28.0% | 27.4% | +60 bps | [Commercial Segment](index=12&type=section&id=Commercial%20Segment) Commercial segment experienced a challenging Q2 FY2025, with net sales declining **4.3%** and Adjusted EBITDA falling **34.4%** Commercial Segment Performance (Q2 FY2025 vs Q2 FY2024) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $15.2M | $15.9M | -4.3% | | Segment Adjusted EBITDA | $1.9M | $2.9M | -34.4% | | Segment Adjusted EBITDA Margin | 12.5% | 18.3% | -580 bps | [Non-GAAP Financial Measures Reconciliations](index=14&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliations) Detailed reconciliations for key non-GAAP metrics, including Adjusted EBITDA, Gross Profit, and Free Cash Flow [Adjusted EBITDA Reconciliation](index=14&type=section&id=Adjusted%20EBITDA%20Reconciliation) Q2 FY2025 Net Income of **$54.3 million** reconciled to Adjusted EBITDA of **$124.4 million**, with a **27.5%** margin Adjusted EBITDA Reconciliation (Q2 FY2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net Income | $54,285 | | Interest expense, net | $7,353 | | Depreciation and amortization | $33,433 | | Income tax expense | $17,756 | | Stock-based compensation costs | $4,716 | | Other costs | $6,830 | | **Adjusted EBITDA** | **$124,373** | [Adjusted Gross Profit Reconciliation](index=16&type=section&id=Adjusted%20Gross%20Profit%20Reconciliation) GAAP Gross Profit of **$167.7 million** for Q2 FY2025 reconciled to Adjusted Gross Profit of **$170.9 million** (**37.8%** margin) Adjusted Gross Profit Reconciliation (Q2 FY2025, in thousands) | Line Item | Amount | | :--- | :--- | | Gross Profit | $167,693 | | Amortization | $3,054 | | Acquisition costs | $120 | | Other costs | $73 | | **Adjusted Gross Profit** | **$170,940** | [Adjusted Net Income and Adjusted Diluted EPS Reconciliation](index=17&type=section&id=Adjusted%20Net%20Income%20and%20Adjusted%20Diluted%20EPS%20Reconciliation) Q2 FY2025 GAAP Net Income of **$54.3 million** (**$0.37 per diluted share**) reconciled to Adjusted Net Income of **$65.6 million** (**$0.45 per diluted share**) Adjusted Net Income & EPS Reconciliation (Q2 FY2025) | Metric | GAAP | Adjustments | Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Net Income | $54.3M | +$11.3M | $65.6M | | Diluted EPS | $0.37 | +$0.08 | $0.45 | [Adjusted SG&A Reconciliation](index=19&type=section&id=Adjusted%20SG%26A%20Reconciliation) GAAP SG&A of **$88.3 million** for Q2 FY2025 reconciled to Adjusted SG&A of **$71.4 million**, excluding specific costs Adjusted SG&A Reconciliation (Q2 FY2025, in thousands) | Line Item | Amount | | :--- | :--- | | SG&A | $88,267 | | Less: Amortization | ($5,513) | | Less: Share-based compensation costs | ($4,716) | | Less: Acquisition and divestiture costs | ($342) | | Less: Other costs | ($6,294) | | **Adjusted SG&A** | **$71,402** | [Free Cash Flow Reconciliation](index=20&type=section&id=Free%20Cash%20Flow%20Reconciliation) Free Cash Flow for Q2 FY2025 was **$0.7 million**, derived from operating activities less capital expenditures Free Cash Flow Reconciliation (Q2 FY2025, in thousands) | Line Item | Amount | | :--- | :--- | | Net cash provided by operating activities | $47,054 | | Less: Purchases of property, plant and equipment | ($46,401) | | **Free Cash Flow** | **$653** | [Net Leverage Reconciliation](index=20&type=section&id=Net%20Leverage%20Reconciliation) Net Leverage ratio was **1.0x** as of March 31, 2025, based on net debt and trailing twelve-month Adjusted EBITDA Net Leverage Calculation (as of March 31, 2025, in thousands) | Metric | Amount | | :--- | :--- | | Gross debt | $538,392 | | Less: Cash and cash equivalents | ($146,719) | | **Net debt** | **$391,673** | | Trailing Twelve Month Adjusted EBITDA | $401,415 | | **Net leverage** | **1.0x** | [Supplementary Information](index=4&type=section&id=Supplementary%20Information) [Conference Call and Website Information](index=4&type=section&id=Conference%20Call%20and%20Website%20Information) Details for the **May 6, 2025**, earnings conference call and access to webcast and replay information were provided - A conference call to discuss the results was scheduled for **May 6, 2025, at 4:00 p.m. (CT)**[24](index=24&type=chunk) - A live webcast and an earnings presentation are available on the Investor Relations section of the company's website[25](index=25&type=chunk)[26](index=26&type=chunk) [About The AZEK Company](index=4&type=section&id=About%20The%20AZEK%20Company) AZEK is a leading manufacturer of sustainable outdoor living products, emphasizing recycled content and recent awards - AZEK is an industry-leading manufacturer of low-maintenance, sustainable outdoor living products, with key brands like TimberTech®, Versatex®, and StruXure®[27](index=27&type=chunk) - The company's products are made from **up to 85% recycled material**, helping to keep **hundreds of millions of pounds** of waste out of landfills annually[27](index=27&type=chunk) - Recent recognitions include being named to Newsweek's America's Most Responsible Companies, Barron's 100 Most Sustainable U.S. Companies, and TIME's World's Best Companies in Sustainable Growth for 2025[28](index=28&type=chunk) [Special Note Regarding Forward-Looking Statements](index=5&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) Cautions investors that the release contains forward-looking statements subject to risks, including the proposed merger - The earnings release contains forward-looking statements concerning future performance, guidance, growth goals, and the proposed merger with James Hardie[29](index=29&type=chunk) - These statements are subject to risks and uncertainties, and actual future results may differ materially from expectations. The company disclaims any obligation to update these statements[29](index=29&type=chunk)[31](index=31&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) Explains the use of non-GAAP measures like Adjusted EBITDA to supplement GAAP results, noting their limitations - The company uses non-GAAP financial measures to provide investors with additional information about its financial performance and to enhance the understanding of past and future prospects[32](index=32&type=chunk) - Key non-GAAP measures used include Adjusted Gross Profit, Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, and Free Cash Flow[35](index=35&type=chunk) - The company cautions that these non-GAAP measures have limitations and may not be comparable to similarly titled measures used by other companies[33](index=33&type=chunk)

Group 1 - The AZEK Company is expected to report quarterly earnings of $0.44 per share, reflecting a 12.8% increase year over year [1] - Analysts forecast revenues of $443.6 million, indicating a 6% year-over-year growth [1] - There has been no revision in the consensus EPS estimate for the quarter over the past 30 days, suggesting stability in analysts' projections [1] Group 2 - Analysts project 'Net Sales- Commercial' to reach $15.07 million, a decrease of 5% from the prior-year quarter [4] - The estimated 'Net Sales- Residential' is $431.37 million, representing a 7.2% increase year over year [4] - The average prediction for 'Adjusted EBITDA- Residential' is $119.21 million, up from $110.39 million in the previous year [4] Group 3 - Shares of The AZEK Company have increased by 8.1% in the past month, outperforming the Zacks S&P 500 composite, which moved up by 0.4% [5] - The company holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the overall market in the near future [5]

Core Viewpoint - The AZEK Company is expected to report a year-over-year increase in earnings and revenues for the quarter ended March 2025, with a consensus EPS estimate of $0.44, reflecting a 12.8% increase, and revenues projected at $443.6 million, up 6% from the previous year [1][3]. Earnings Report Expectations - The earnings report is anticipated to be released on May 6, 2025, and could influence the stock price positively if results exceed expectations, while a miss could lead to a decline [2]. Estimate Revisions Trend - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly altered their outlook for the company [4]. Earnings Whisper and ESP - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate being lower than the consensus for The AZEK Company, resulting in an Earnings ESP of -2.72%, suggesting a bearish outlook [5][10]. Historical Performance - The AZEK Company has beaten consensus EPS estimates three out of the last four quarters, with a notable surprise of +21.43% in the last reported quarter [12][13]. Bottom Line - The AZEK Company does not appear to be a strong candidate for an earnings beat based on current estimates and rankings, indicating that investors should consider additional factors before making investment decisions [16].

Core Viewpoint - James Hardie Industries' shares fell by 15.8% following the announcement of its agreement to combine with Azek, raising questions about the justification for the decline [1] Group 1: Deal Overview - James Hardie is acquiring Azek for a total transaction value of $8.75 billion, combining shares and cash, with James Hardie shareholders owning 74% and Azek shareholders 26% of the combined company [2] - Azek's 2025 guidance projects sales of $1.535 billion and adjusted EBITDA of $411 million, indicating high valuations for the $8.75 billion deal [2] Group 2: Strategic Rationale - Management anticipates generating $350 million in EBITDA synergies from the merger, representing 5.9% of combined sales, which is considered a strong target [3] - The acquisition enhances James Hardie's revenue share from the less cyclical repair and remodel market and increases its North American housing exposure from 74% to 81% [3][4] Group 3: Market Context - The deal occurs amid high interest rates, which have not decreased as expected, leading to negative sentiment regarding the acquisition in a challenged industry [5] - Historical trends suggest that interest rates may eventually decline, potentially making the acquisition a strategic opportunity in the long run [5]