Financial Data and Key Metrics Changes - The company reported consolidated net sales of $285 million for Q1 2025, reflecting a year-over-year increase driven by double-digit sell-through growth and channel expansion [29][30] - Adjusted EBITDA for Q1 increased by $11 million or 20% year-over-year to $66 million, with an adjusted EBITDA margin of 23.1% [32][34] - Net income for Q1 decreased by $7 million year-over-year to $18 million, primarily due to the prior year's gain from the Vycom divestiture [32][33] Business Line Data and Key Metrics Changes - The residential segment net sales were $272 million, up 22% year-over-year, with adjusted EBITDA for the segment increasing by 24% to $64 million [34] - The commercial segment net sales were $13 million, down 23% year-over-year, primarily due to the Vycom divestiture and weaker demand in the Scranton Products business [35] Market Data and Key Metrics Changes - The company ended the quarter with channel inventory levels conservatively below historical averages, down roughly 15% from historical average days on hand [25][17] - Positive demand signals were observed from digital metrics and contractor surveys, indicating project backlogs in the six to seven weeks range [16][25] Company Strategy and Development Direction - The company is focused on wood conversion, product innovation, and channel expansion, with new product launches expected to address a wider range of price points and consumer needs [10][18] - Investments in recycling capabilities were highlighted, including the acquisition of a regional PVC and polyethylene recycling operation in Indiana [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating current market dynamics and delivering strong financial performance, despite uncertainties in the broader housing and repair markets [46] - The fiscal 2025 outlook was raised modestly, with expectations for residential segment net sales growth in the range of 6% to 8% year-over-year [18][39] Other Important Information - The company plans to continue investing in its business, both organically and inorganically, with a capital expenditure range of $85 million to $95 million for fiscal 2025 [42] - The company expects a GAAP tax rate for the full year between 25% to 26% [43] Q&A Session Summary Question: Can you discuss the demand and sell-through growth? - Management indicated that while sell-through was up double-digits in Q1, the annual outlook still implies mid-single-digit sell-through for the year due to conservative market growth assumptions [49][51] Question: What is the impact of new product investments? - New product investments are expected to create some inefficiencies initially, but revenue is anticipated to ramp up as products are launched and inventory is staged [53][55] Question: How does the acquisition impact recycling capacity? - The recent acquisition adds new technology and additional recycling sourcing streams, enhancing the company's ability to convert recycled materials internally [61][63] Question: What is the outlook for share repurchases? - The company plans to be opportunistic with share repurchases, with expectations that cash generation will improve in the back half of the year [131][133] Question: How is the company addressing market share gains? - Management noted that the company is expanding its position in the pro channel and launching new products to capture a larger share of the market [67][68]

The AZEK Company (AZEK) reported $285.43 million in revenue for the quarter ended December 2024, representing a year-over-year increase of 18.7%. EPS of $0.17 for the same period compares to $0.10 a year ago.The reported revenue represents a surprise of +7.42% over the Zacks Consensus Estimate of $265.72 million. With the consensus EPS estimate being $0.14, the EPS surprise was +21.43%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to ...

The AZEK Company (AZEK) came out with quarterly earnings of $0.17 per share, beating the Zacks Consensus Estimate of $0.14 per share. This compares to earnings of $0.10 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 21.43%. A quarter ago, it was expected that this company would post earnings of $0.26 per share when it actually produced earnings of $0.29, delivering a surprise of 11.54%.Over the last four quarters, the company ...

Exhibit 99.1 February 4, 2025 "The AZEK team delivered another strong quarter of growth from our initiatives and disciplined operational execution," said AZEK CEO Jesse Singh. "Our Residential segment grew net sales by 22% year-over-year driven by double digit sell-through growth in the quarter and expanded market presence 1 • Consolidated Net Sales increased 19% year-over-year to $285.4 million • Residential Segment Net Sales increased 22% year-over-year to $272.0 million • Gross profit margin of 36.3%; Ad ...

Wall Street analysts expect The AZEK Company (AZEK) to post quarterly earnings of $0.14 per share in its upcoming report, which indicates a year-over-year increase of 40%. Revenues are expected to be $265.68 million, up 10.5% from the year-ago quarter.Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Before a company announces its earnings, it is essential ...

With years of investing experience in the financial markets, I have honed my skills in identifying and capitalizing on investment opportunities across diverse sectors. My investment approach is based on fundamental analysis of stocks, focusing on companies with a strong competitive moat, consistent growth in free cash flow, and a track record of robust financial performance.My investment philosophy is rooted in long-term, fundamental investing. I steer clear of short-term trading tactics and options, believ ...

The AZEK Company Inc. (NYSE: AZEK ) is expected to continue benefiting from growth in the Residential segment. While the Repair & Remodeling market may face some near-term challenges, I believe AZEK is well-positioned to outperform the overallWe primarily focus on GARP (Growth at reasonable Price) opportunities in industrial, consumer, and technology sectors. Please click the "Follow" button to receive our latest research. If you have any questions, feel free to reach out to us through the comments section ...

The AZEK Company Inc. (AZEK) reported better-than-expected fourth-quarter fiscal 2024 (ended Sept. 30, 2024) results, wherein adjusted earnings and net sales topped the Zacks Consensus Estimate. However, both metrics declined year over year.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.The year-over-year decline in the top-line performance was due to soft contributions from both the reportable segments of the company. Furthermore, the $35 million shift in earlier product purchases ...

[Part I](index=3&type=section&id=PART%20I) [Business](index=3&type=section&id=Item%201.%20Business) A leading manufacturer of sustainable outdoor living products, focusing on converting the market from wood to engineered alternatives - The company is a leading designer and manufacturer of sustainable outdoor living products, including decking, railing, trim, and pergolas[9](index=9&type=chunk) - A core strategy is accelerating material conversion from wood to its low-maintenance engineered products, driven by investments in brand building, product innovation, and channel expansion[12](index=12&type=chunk) - Sustainability is a key pillar, with the company utilizing approximately **520 million pounds of waste and scrap in fiscal 2024**; some products are made from up to **85% recycled material**[10](index=10&type=chunk) [Our Brands and Products](index=4&type=section&id=Our%20Brands%20and%20Products) The company's Residential segment drives 95% of sales with brands like TimberTech, while the Commercial segment focuses on partitions and lockers Fiscal Year 2024 Segment Net Sales | Segment | Net Sales (in millions) | Percentage of Total Net Sales | | :--- | :--- | :--- | | Residential | $1,369 | ~95% | | Commercial | $73 | ~5% | - The Residential segment's sales are primarily driven by repair and remodel activity, which accounted for approximately **80% of its net sales** in fiscal 2024[14](index=14&type=chunk) - On November 1, 2023, the company **divested the Vycom business**, which was part of the Commercial segment[13](index=13&type=chunk)[24](index=24&type=chunk) [Customers and Distribution](index=7&type=section&id=Customers%20and%20Distribution) The company utilizes a multi-channel distribution network, with a majority of sales flowing through its top ten distributors - The largest distributor accounted for approximately **19% of net sales** for the year ended September 30, 2024[28](index=28&type=chunk) - The Residential segment's distribution network includes **~50 distributors**, over 170 branch locations, and more than 10,000 professional dealers and retail outlets[28](index=28&type=chunk) [Raw Materials and Suppliers](index=8&type=section&id=Raw%20Materials%20and%20Suppliers) The company relies on petrochemical resins, reclaimed materials, and wood fiber, with some dependency on a single supplier for critical compounds - Key raw materials include various petrochemical resins, reclaimed materials, wood fiber, and aluminum[34](index=34&type=chunk) - The company relies on a **single supplier** for certain critical capped compounds for its decking and railing products, posing a potential supply chain risk[36](index=36&type=chunk) [Competition](index=9&type=section&id=Competition) AZEK competes with traditional wood products and other wood-alternative manufacturers by emphasizing aesthetics, innovation, and sustainability - Primary competition comes from traditional wood products, which constitute the **majority of the decking and railing market**[38](index=38&type=chunk) - Key competitors in the wood-alternative space include **Trex Company Inc., Fiberon, and Deckorators**[38](index=38&type=chunk) [Our FULL-CIRCLE Strategy](index=10&type=section&id=Our%20FULL-CIRCLE%20Strategy) The company's sustainability strategy focuses on using recycled materials, reducing waste, and fostering a positive social impact - In fiscal 2024, the company utilized approximately **520 million pounds of scrap and waste** in its manufacturing processes[44](index=44&type=chunk) - As of September 30, 2024, the company had **2,276 full-time, non-unionized employees**[44](index=44&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from economic conditions, supply chain disruptions, raw material costs, and identified material weaknesses in internal controls - Demand is highly sensitive to economic conditions, including inflation, interest rates, and consumer spending on home repair and remodeling[50](index=50&type=chunk) - The company faces risks from raw material supply shortages, price volatility, and **reliance on single suppliers** for critical components[53](index=53&type=chunk) - **Material weaknesses have been identified in internal control over financial reporting**, which resulted in a restatement of prior financial statements[76](index=76&type=chunk) - The company's **substantial indebtedness** could adversely affect its financial condition, limit its flexibility, and expose it to interest rate risk[101](index=101&type=chunk) [Cybersecurity](index=29&type=section&id=Item%201C.%20Cybersecurity) AZEK manages cybersecurity risk through a formal program based on the NIST Framework, with oversight from the Audit Committee - The company has a cybersecurity risk management program integrated into its enterprise risk management function, based on the **NIST Framework**[122](index=122&type=chunk) - Oversight is provided by the Audit Committee, which receives regular reports on cybersecurity risks and mitigation efforts at least **semi-annually**[125](index=125&type=chunk) - A new **Chief Digital and Technology Officer** has been hired to oversee technology and cybersecurity, supported by a Chief Information Officer and a third-party CISO consultant[125](index=125&type=chunk) [Properties](index=30&type=section&id=Item%202.%20Properties) The company operates 15 manufacturing and recycling facilities across the United States, with key locations in Pennsylvania, Ohio, and Idaho Principal Physical Properties (as of Sep 30, 2024) | Location | Owned Square Feet | Leased Square Feet | | :--- | :--- | :--- | | Scranton, PA | — | 934,593 | | Wilmington, OH | 500,000 | 272,002 | | Aliquippa, PA | 236,600 | — | | Ashland, OH | — | 200,344 | | Eagan, MN | — | 92,958 | | Chicago, IL | — | 25,722 | | Boise, ID | — | 355,426 | | Dahlonega, GA | — | 76,684 | [Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently facing any legal claims that are expected to have a material adverse effect on its business or financial condition - Currently, there are **no claims or proceedings** against the company that are expected to have a material adverse effect[129](index=129&type=chunk) [Part II](index=32&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=32&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on the NYSE, and it actively repurchases shares while retaining earnings for growth instead of paying dividends - The company **does not expect to pay any cash dividends** in the foreseeable future, intending to retain earnings to finance growth[137](index=137&type=chunk) - In June 2024, the Board authorized an additional **$600 million for share repurchases**, on top of the ~$76 million remaining from a prior authorization[135](index=135&type=chunk) Issuer Purchases of Equity Securities (Quarter Ended Sep 30, 2024) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 1 - July 31, 2024 | — | $ — | | Aug 1 - Aug 31, 2024 | 1,756,629 | $40.55 | | Sep 1 - Sep 30, 2024 | — | $ — | | **Total** | **1,756,629** | **$40.55** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2024 saw higher sales and significantly improved profitability, driven by strong Residential segment performance and lower material costs Key Financial Results (Fiscal Year Ended Sep 30) | Metric (in thousands) | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,441,448 | $1,370,316 | 5.2% | | Gross Profit | $541,793 | $430,268 | 25.9% | | Operating Income | $212,089 | $123,792 | 71.3% | | Net Income | $153,379 | $62,361 | 146.0% | - The increase in FY 2024 net sales was primarily due to **higher sales volume in the Residential segment**, partially offset by the divestiture of the Vycom business[163](index=163&type=chunk) - **Gross margin improved to 37.6%** in FY 2024 from 31.4% in FY 2023, driven by lower raw material costs, increased use of recycled materials, and higher plant utilization[165](index=165&type=chunk) - A **gain of $37.7 million** was recognized from the sale of the Vycom business on November 1, 2023[170](index=170&type=chunk)[365](index=365&type=chunk) [Segment Results of Operations](index=40&type=section&id=Segment%20Results%20of%20Operations) The Residential segment's sales and profit growth offset the Commercial segment's decline, which was caused by the Vycom business divestiture Residential Segment Performance (FY 2024 vs FY 2023) | Metric (in thousands) | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,368,813 | $1,222,866 | 11.9% | | Segment Adjusted EBITDA | $365,273 | $252,830 | 44.5% | Commercial Segment Performance (FY 2024 vs FY 2023) | Metric (in thousands) | 2024 | 2023 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $72,635 | $147,450 | (50.7)% | | Segment Adjusted EBITDA | $14,068 | $31,008 | (54.6)% | [Non-GAAP Financial Measures](index=42&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA and Adjusted Net Income increased significantly in fiscal 2024, while Free Cash Flow decreased due to working capital changes Key Non-GAAP Financial Measures (Fiscal Year Ended Sep 30) | Metric (in thousands) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Adjusted Gross Profit | $557,188 | $448,564 | $440,369 | | Adjusted Net Income | $176,929 | $106,139 | $141,201 | | Adjusted EBITDA | $379,341 | $283,838 | $290,385 | | Free Cash Flow | $147,332 | $273,997 | $(65,103) | [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity through cash reserves and a revolving credit facility, having recently refinanced its debt in September 2024 - As of Sep 30, 2024, the company had **$164.0 million in cash** and **$372.8 million available** under its 2024 Revolving Credit Facility[216](index=216&type=chunk)[220](index=220&type=chunk) - In September 2024, the company entered into a new Senior Secured Credit Agreement, consisting of a **$440.0 million term loan facility** and a **$375.0 million revolving credit facility**[231](index=231&type=chunk) Share Repurchases (Fiscal Year Ended Sep 30) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total shares repurchased (thousands) | 5,866 | 4,152 | | Reacquisition cost (thousands) | $244,828 | $116,578 | | Average price per share | $40.03 | $28.08 | [Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rates, credit concentration with large distributors, and volatile raw material prices - A **100 basis point change** in interest rates would result in a **$1.4 million change** in annual interest expense on its unhedged variable rate debt as of September 30, 2024[244](index=244&type=chunk) - The company has entered into **interest rate swaps on a notional amount of $300 million** to hedge against interest rate volatility[246](index=246&type=chunk) - Credit risk is concentrated, with **one customer accounting for 20.4%** of gross trade receivables as of September 30, 2024[247](index=247&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls were not effective due to two material weaknesses in internal control over financial reporting - Management concluded that **disclosure controls and procedures were not effective** as of September 30, 2024[254](index=254&type=chunk) - **Two material weaknesses** were identified in internal control over financial reporting: inadequate oversight to prevent misstatements from improper journal entries, and ineffective controls over the period-end reporting process[255](index=255&type=chunk) - Remediation efforts are underway, including redesigning controls, enhancing segregation of duties, and providing additional training to employees[258](index=258&type=chunk) [Part III](index=57&type=section&id=PART%20III) [Directors, Executive Officers, Corporate Governance, Compensation, and Security Ownership](index=57&type=section&id=Items%2010,%2011,%2012,%2013%20and%2014) Detailed information on governance, compensation, and ownership is incorporated by reference from the company's upcoming proxy statement - The company has adopted a **Code of Ethics for Senior Officers** and a Code of Conduct and Ethics for all employees, which are available on its investor relations website[268](index=268&type=chunk) [Part IV](index=58&type=section&id=PART%20IV) [Exhibits, Financial Statement Schedules](index=58&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists all financial statements and exhibits filed with the Form 10-K, with schedules omitted as they are not applicable [Financial Statements](index=63&type=section&id=Financial%20Statements) [Report of Independent Registered Public Accounting Firm](index=64&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor issued a fair opinion on the financial statements but an adverse opinion on internal controls due to identified material weaknesses - The auditor, PricewaterhouseCoopers LLP, issued an **adverse opinion** on the effectiveness of the company's internal control over financial reporting as of September 30, 2024[299](index=299&type=chunk) - The adverse opinion was due to **material weaknesses** related to inadequate oversight and ineffective controls in the period-end financial reporting process[299](index=299&type=chunk) - The audit identified **inventory existence and accuracy** as a critical audit matter, requiring a high degree of auditor effort[305](index=305&type=chunk) [Consolidated Financial Statements](index=66&type=section&id=Consolidated%20Financial%20Statements) The statements show total assets of $2.17 billion and a significant increase in net income to $153.4 million for fiscal year 2024 Consolidated Balance Sheet Highlights (As of Sep 30, 2024) | Account (in thousands) | Amount | | :--- | :--- | | Total Current Assets | $471,377 | | Total Assets | $2,167,711 | | Total Current Liabilities | $217,038 | | Total Liabilities | $810,846 | | Total Stockholders' Equity | $1,356,865 | Consolidated Income Statement Highlights (Year Ended Sep 30, 2024) | Account (in thousands) | Amount | | :--- | :--- | | Net Sales | $1,441,448 | | Gross Profit | $541,793 | | Operating Income | $212,089 | | Net Income | $153,379 | [Notes to Consolidated Financial Statements](index=70&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail key events including the Vycom divestiture, debt refinancing, and significant share repurchase activity during fiscal 2024 - On November 1, 2023, the company sold its Vycom business for net proceeds of approximately $131.8 million, recognizing a **gain of $37.7 million**[365](index=365&type=chunk) - As of September 30, 2024, the company had **$440.0 million in debt outstanding** under its 2024 Term Loan Facility[377](index=377&type=chunk) - The company **repurchased 5.9 million shares for $244.8 million** during fiscal year 2024 under its share repurchase program[408](index=408&type=chunk) - Total stock-based compensation expense for fiscal year 2024 was **$25.8 million**[411](index=411&type=chunk)

The AZEK Company Inc. (NYSE:AZEK) Q4 2024 Earnings Conference Call November 19, 2024 5:00 PM ET Company Participants Eric Robinson - Investor Relations Jesse Singh - Chief Executive Officer Peter Clifford - Chief Operations Officer and Chief Financial Officer Conference Call Participants Anika Dholakia - Barclays Susan Maklari - Goldman Sachs Andrew Azzi - J.P. Morgan Tim Wojs - Baird Phil Ng - Jefferies Keith Hughes - Truist John Lovallo - UBS Mike Dahl - RBC Capital Markets Adam Baumgarten - Zelman & Asso ...