THEAZEK, COMPANY 3 rd Quarter FY 2024 Earnings Presentation August 7, 2024 AZEK NYSE DISCLAIMER 2 Important Notice Non-GAAP Measures This presentation contains "forward-looking statements" within the meaning of federal securities laws, including the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation, including statements regarding future operations are forward-looking statements ...

The AZEK Company Inc. (NYSE:AZEK) Q3 2024 Earnings Conference Call August 7, 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 Philip Ng - Jefferies Michael Rehaut - JPMorgan Tim Wojs - Baird Matthew Bouley - Barclays Mike Dahl - RBC Capital Markets Susan Maklari - Goldman Sachs Ryan Merkel - William Blair Keith Hughes - Truist John Lovallo - UBS Rafe ...

The AZEK Company (AZEK) came out with quarterly earnings of $0.42 per share, beating the Zacks Consensus Estimate of $0.36 per share. This compares to earnings of $0.30 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 16.67%. A quarter ago, it was expected that this company would post earnings of $0.39 per share when it actually produced earnings of $0.39, delivering no surprise.Over the last four quarters, the company has surp ...

Exhibit 99.1 August 7, 2024 The AZEK Company Announces Third Quarter and Year-To-Date Fiscal 2024 Results; Reaffirms Second Half of Fiscal 2024 Outlook and Raises Bottom End of Full-Year Fiscal 2024 Outlook Residential Segment Execution Delivered Above-Market Growth, Strong Net Profit Margin and Record Adjusted EBITDA Margin Initiatives Drove Mid-Single-Digit Residential Sell-Through Growth and Double-Digit Deck, Rail & Accessories Sell-Through Growth THIRD QUARTER FISCAL 2024 FINANCIAL HIGHLIGHTS • Consoli ...

The AZEK Company (AZEK) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August ...

The AZEK Company (AZEK) came out with quarterly earnings of $0.39 per share, in line with the Zacks Consensus Estimate. This compares to earnings of $0.18 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this company would post earnings of $0.05 per share when it actually produced earnings of $0.10, delivering a surprise of 100%.Over the last four quarters, the company has surpassed consensus EPS estimates three times.The AZEK Company, which belong ...

Financial Performance - Net sales for the three months ended March 31, 2024 increased by $40.7 million, or 10.8%, to $418.4 million from $377.7 million for the same period in 2023[126]. - Gross profit for the three months ended March 31, 2024 increased by $46.2 million, or 41.7%, to $157.1 million, with gross profit as a percentage of net sales rising to 37.5% from 29.4%[128]. - Net income for the three months ended March 31, 2024 increased by $31.5 million, or 173.0%, to $49.8 million compared to $18.2 million for the same period in 2023[132]. - Net sales for the six months ended March 31, 2024 increased by $64.9 million, or 10.9%, to $658.9 million from $594.0 million for the same period in 2023[134]. - Gross profit for the six months ended March 31, 2024 increased by $94.7 million, or 61.8%, to $247.7 million from $153.1 million for the same period in 2023, with gross profit as a percent of net sales rising to 37.6%[136]. - Net income for the six months ended March 31, 2024 increased by $86.4 million to $74.9 million compared to a net loss of $11.5 million for the same period in 2023[141]. - Operating income for the six months ended March 31, 2024 increased by $80.0 million, or 1551.8%, to $85.2 million from $5.2 million for the same period in 2023[138]. Segment Performance - The Residential segment saw a net sales increase of 17.7%, while the Commercial segment experienced a decrease of 55.4% for the three months ended March 31, 2024[126]. - Net sales for the Commercial segment for the six months ended March 31, 2024 decreased by $39.0 million, or 54.0%, to $33.3 million from $72.4 million for the same period in 2023, primarily due to the sale of the Vycom business[147]. - Segment Adjusted EBITDA for the Residential segment for the six months ended March 31, 2024 increased by $90.1 million, or 124.8%, to $162.4 million from $72.2 million for the same period in 2023[145]. - Segment Adjusted EBITDA for the Commercial segment was $5.8 million for the six months ended March 31, 2024, down from $13.0 million in the prior year, reflecting lower net sales[148]. Costs and Expenses - Cost of sales for the three months ended March 31, 2024 decreased by $5.5 million, or 2.1%, to $261.3 million, primarily due to lower raw material costs[127]. - Selling, general and administrative expenses increased by $9.0 million, or 12.1%, to $83.2 million, representing 19.9% of net sales for the three months ended March 31, 2024[129]. - Cost of sales for the six months ended March 31, 2024 decreased by $29.8 million, or 6.8%, to $411.1 million, driven by lower raw material costs[135]. - Selling, general and administrative expenses increased by $12.7 million, or 8.6%, to $160.4 million, representing 24.4% of net sales for the six months ended March 31, 2024[137]. Cash Flow and Liquidity - Free cash flow for Q1 2024 was $(34,004,000), compared to $40,777,000 in Q1 2023[153]. - Free cash flow for the six months ended March 31, 2024, was $(67.97) million, a decrease from $16.86 million in the same period of 2023, primarily due to increased capital expenditures[168]. - Net cash provided by (used in) operating activities was $(31.1) million for the six months ended March 31, 2024, compared to $64.1 million in 2023, reflecting a $95.2 million decrease[173]. - Cash and cash equivalents as of March 31, 2024, totaled $227.4 million, with total indebtedness of $591.0 million[169]. - The company plans to maintain adequate liquidity over the next 12 months to meet cash requirements through operating cash flows and available credit[169]. Share Repurchase and Financing - The company repurchased 526,718 shares of Class A common stock at an average price of $47.93 per share, totaling approximately $25.2 million during the three and six months ended March 31, 2024[178]. - Net cash used in financing activities for the six months ended March 31, 2024, was $115.0 million, a significant increase from $11.4 million in the same period of 2023, primarily due to $125.0 million in treasury stock repurchases[175]. - The Revolving Credit Facility allows for maximum borrowings of up to $150.0 million, with interest rates based on the Secured Overnight Financing Rate (SOFR) plus a spread of 125 to 175 basis points[179]. - The Term Loan Agreement matures on April 28, 2029, with an interest rate option that includes a margin of 1.50% for alternative base rate borrowings[180]. Tax and Regulatory Matters - Income tax expense for the three months ended March 31, 2024 increased by $7.9 million to $15.3 million, primarily due to higher pre-tax income[132]. - Income tax expense increased by $35.4 million to $32.0 million for the six months ended March 31, 2024 compared to an income tax benefit of $3.4 million for the same period in 2023[140]. - The company is evaluating the impact of recently issued accounting standards on its disclosures, including ASU 2023-07 and ASU 2023-09, which will be adopted in fiscal years beginning October 1, 2024, and October 1, 2025, respectively[186]. Internal Controls and Risks - The company is currently addressing material weaknesses in internal controls over financial reporting as of March 31, 2024[194]. - There were no changes in internal control over financial reporting during the quarter ended March 31, 2024, that materially affected internal controls[195]. - The company does not believe that a 10% change in the value of the U.S. dollar would materially affect its operating results[191]. - The cost of sales is subject to inflationary pressures, with potential adverse effects if selling prices do not increase accordingly[191]. - The company relies on various petrochemical resins and does not have fixed price contracts with major vendors, exposing it to price volatility[192].

From a technical perspective, The AZEK Company (AZEK) is looking like an interesting pick, as it just reached a key level of support. AZEK recently overtook the 20-day moving average, and this suggests a short-term bullish trend.The 20-day simple moving average is a well-liked trading tool because it provides a look back at a stock's price over a 20-day period. Additionally, short-term traders find this SMA very beneficial, as it smooths out short-term price trends and shows more trend reversal signals than ...

From a technical perspective, The AZEK Company (AZEK) is looking like an interesting pick, as it just reached a key level of support. AZEK recently overtook the 50-day moving average, and this suggests a short-term bullish trend.One of the three major moving averages, the 50-day simple moving average is commonly used by traders and analysts to determine support or resistance levels for different types of securities. However, the 50-day is considered to be more important since it's the first marker of an up ...

Financial Data and Key Metrics - Consolidated net sales for Q2 increased 11% YoY to $418 million, with adjusted net sales (excluding Vycom divestiture) up 17% YoY [22] - Residential segment net sales grew 18% YoY, driven by double-digit sell-through growth and strong demand [22] - For the six months ended March 31, 2024, consolidated net sales increased 11% YoY to $658.9 million, with adjusted net sales up 19% YoY [22] - Adjusted EBITDA for Q2 is expected to range between $167 million to $169 million, with margins between 25.3% to 25.6% [23] - Full-year 2024 guidance for consolidated net sales is raised to $1.407 billion to $1.438 billion, and adjusted EBITDA to $364 million to $380 million [27] Business Line Performance - Residential segment grew 19% YoY over the last 12 months and 20% YoY for the first six months of fiscal 2024 [12] - TimberTech brand saw increased sample orders, website visits, and over 1,000 new contractors added to its loyalty program [13] - New product innovations like TimberTech Composite Terrain Plus and horizontal cable railing are driving contractor productivity and incremental growth [14] - Siding and railing products are gaining market share and contributing to growth [14] Market Performance - Retail point-of-sale data showed healthy growth YoY, with total retail POS growth exceeding pro channel sell-through growth [21] - Channel inventories are down approximately 15% compared to historical averages [20] - The company expanded its recycling footprint with a new Texas-based operation, improving sourcing and reducing logistical costs [17] Strategic Initiatives and Industry Competition - The company is investing in R&D, innovation, brand awareness, and manufacturing operations to strengthen its position as a category leader [13] - TimberTech products received industry recognition, including the Green Builders 2024 Sustainable Product of the Year Award and HGTV Magazine's 2024 green list [14] - The company is focusing on expanding its recycling network, increasing the use of recycled materials, and lowering conversion costs [17] - Investments in new capacity, such as the Boise decking facility, are nearing planned utilization levels [17] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about driving above-market growth and margin expansion, with strong double-digit sell-through growth in the residential segment [18] - The company raised its fiscal 2024 outlook due to strong Q2 performance and increased confidence in execution [7] - Management expects the R&R market to remain flat, with mid-single-digit sell-through growth for the remainder of the fiscal year [25] - The company is targeting adjusted EBITDA margins of 27.5% earlier than planned, driven by margin expansion initiatives [31] Other Important Information - The company identified a $4 million FIFO accounting impact due to inventory restatement, which affected Q2 results [11] - Share repurchases totaled $25.2 million in Q2, with $125 million repurchased year-to-date and $76 million remaining under the authorization [24] - Capital expenditures for fiscal 2024 are expected to range between $85 million to $95 million, consistent with the target of 5% to 7% of revenue [29] Q&A Session Summary Question: Sell-through deceleration from double-digit to single-digit growth - Management clarified that the deceleration has not yet occurred and is based on a conservative assumption of a flat R&R market [35] - The company expects to end the year with channel inventories 10% to 15% below historical averages [37] Question: New business wins and incremental investments - The company highlighted recent wins in both retail and pro channels, with incremental costs associated with these transitions [40] - Investments are primarily focused on supporting channel transitions, including sales rep and servicing costs [42] Question: Drivers of market share gains - Share gains are attributed to product portfolio expansion, downstream sales force investments, and SG&A increases over the past two years [46] - The company is focusing on premium segments, with products like TimberTech receiving industry-leading fire resistance ratings [47] Question: Demand trends and consumer health - Management described demand as steady, with positive dealer sentiment and stable contractor backlogs [52][53] - The company expects potential acceleration in demand if interest rates decline [52] Question: Margin expansion and long-term targets - The company is confident in achieving its 27.5% adjusted EBITDA margin target earlier than planned, with further opportunities in recycling and product configuration [60] - Gross margins are expected to benefit from sourcing and recycling initiatives, as well as lower conversion costs [61] Question: Impact of inventory restatement on future profitability - The $4 million FIFO impact is the only expected effect on future profitability, with no further impacts anticipated [75][76] Question: Cost trends and pricing - Commodity prices and conversion costs remain stable, with no significant inflation or deflation expected [78] - Pricing is expected to remain flat for the remainder of fiscal 2024, with potential for more traditional pricing opportunities in 2025 [93] Question: Inorganic growth opportunities - The company is focused on tuck-in acquisitions that strengthen its core residential business and expand its recycling capabilities [96][97] Question: Composite decking market growth - The composite decking market is estimated to be growing around 5% YoY, with the company outperforming this growth rate [99]