分组1 - CSW Industrials reported quarterly earnings of $2.24 per share, exceeding the Zacks Consensus Estimate of $2.23 per share, and up from $2.04 per share a year ago, representing an earnings surprise of 0.45% [1] - The company posted revenues of $230.55 million for the quarter ended March 2025, which missed the Zacks Consensus Estimate by 0.63%, compared to $210.86 million in the same quarter last year [2] - CSW Industrials has surpassed consensus EPS estimates four times over the last four quarters and topped consensus revenue estimates three times during the same period [2] 分组2 - The stock has underperformed the market, losing about 10.9% since the beginning of the year, while the S&P 500 has declined by only 0.6% [3] - The current consensus EPS estimate for the coming quarter is $2.83 on revenues of $251 million, and for the current fiscal year, it is $9.45 on revenues of $953 million [7] - The Zacks Industry Rank for Chemical - Specialty is currently in the bottom 43% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - FY25 total revenue reached $878.3 million[9], reflecting a portfolio evolution from approximately $500 million[12] in FY15 - Adjusted EBITDA for the trailing twelve months (TTM) was $227.9 million[21], representing a 25.9% adjusted EBITDA margin[21] - The company achieved a total revenue CAGR of 14.1% from FY16 through FY25[21] - Adjusted EPS for FY25 was $8.41[12], demonstrating a CAGR of 25.8% from FY21 to FY25[27] - Free cash flow per share for FY25 was $9.32[141] Capital Allocation and Growth - Approximately $1 billion[10] has been invested in acquisitions since inception[25] - The company has $564 million[21] available on its $700 million[9] revolving credit facility, along with $33 million[9] cash on hand - TTM capital allocation includes $415.1 million[34] in acquisitions, $166 million[34] in debt repayments, $18.3 million[34] in share repurchases, and $14.6 million[34] in dividends - Contractor Solutions segment revenue for TTM reached $617.3 million[66], with an adjusted EBITDA of $205.4 million[66] and a 33.3% adjusted EBITDA margin[66] Aspen Manufacturing Acquisition - Aspen Manufacturing contributed $125 million[56] in revenue for FY25 - The acquisition of Aspen Manufacturing is expected to add approximately $9.5 million[56] of additional intangible amortization expense in fiscal year 2026

Revenue Performance - Total revenue for fiscal 2025 fourth quarter reached a record $230.5 million, a 9.3% increase compared to the prior year period[4] - For fiscal 2025, total revenue increased 10.8% to $878.3 million, with $47.5 million or 6.0% attributed to inorganic growth from acquisitions[19] - Contractor Solutions segment revenue for the fourth quarter was $165.9 million, a 17.5% increase, driven by both organic and inorganic growth[15] - Contractor Solutions segment revenue increased by $80.8 million or 15.1% year-over-year, reaching $617.3 million, driven by $47.5 million from acquisitions and $33.3 million from organic growth[30] - Engineered Building Solutions segment revenue increased by $6.4 million or 5.6% to $121.1 million, attributed to backlog conversion and market expansion[33] - For the year ended March 31, 2025, consolidated net revenue was $878,301,000, up from $792,840,000 in 2024, reflecting a year-over-year increase of 10.8%[64] Net Income and Earnings - Net income attributable to CSWI for the fourth quarter was $35.1 million, representing an 18.7% increase from $31.8 million in the prior year[4] - Net income attributable to CSWI for the full year improved 34.4% to $136.7 million, with adjusted EPS increasing 20.0% to $8.41[26] - Net income attributable to CSW Industrials, Inc. for the year was $136.652 million, up from $101.648 million in the prior year, reflecting a year-over-year increase of 34.4%[47] - Net income for the year ended March 31, 2025, increased to $137,484,000, up from $102,539,000 in 2024, representing a growth of 34%[51] - Adjusted net income attributable to CSWI for the year ended March 31, 2025, was $137,249,000, compared to $109,148,000 in 2024, reflecting a 26% increase[53] EBITDA and Operating Income - Adjusted EBITDA for the fourth quarter grew 7.1% to $59.8 million, with a margin of 25.9%[4] - Adjusted EBITDA for the year ended March 31, 2025, reached $227,860,000, up from $200,011,000 in 2024, indicating a growth of 14%[58] - Adjusted EBITDA for the Contractor Solutions segment was $205.4 million, or 33.3% of revenue, compared to $173.7 million, or 32.4% of revenue in the prior year[31] - Adjusted Operating Income for the year ended March 31, 2025, was $185,641,000, which is 21.1% of revenue, compared to $159,118,000 or 20.1% of revenue for the year ended March 31, 2024[64] Cash Flow and Liquidity - Cash and cash equivalents rose significantly to $225.845 million from $22.156 million year-over-year, indicating improved liquidity[49] - Cash flows from operating activities for the year ended March 31, 2025, totaled $168,362,000, slightly higher than $164,332,000 in 2024[51] - Free cash flow for the three months ended March 31, 2025, was $22,762,000, which is 38.1% of Adjusted EBITDA, compared to $17,511,000 or 31.4% for the same period in 2024[66] - For the year ended March 31, 2025, free cash flow was $152,096,000, representing 66.7% of Adjusted EBITDA, compared to $147,757,000 or 73.9% for the year ended March 31, 2024[66] Acquisitions and Investments - The company invested $84.7 million in acquisitions and returned $32.9 million to shareholders through dividends and share repurchases[4] - Following the fiscal year-end, the company announced the acquisition of Aspen Manufacturing for $313.5 million[4] - CSW Industrials closed the acquisition of Aspen Manufacturing for $313.5 million on May 1, 2025, with specific outlook metrics provided for fiscal year 2026[35] - Net cash used in investing activities increased significantly to $102,221,000 in 2025 from $42,504,000 in 2024, primarily due to cash paid for acquisitions[51] Operating Margins and Tax Rates - Operating income margin for fiscal 2025 improved to 20.6%, reflecting effective management of operating expenses[22] - The effective tax rate for the year ended March 31, 2025, was 23.7%, compared to 27.0% in 2024, showing an improvement in tax efficiency[55] - The adjusted effective tax rate for the year ended March 31, 2025, was 25.5%, compared to 26.1% in 2024, indicating a slight decrease[55] - The operating income margin for the Contractor Solutions segment improved to 26.9%, or 27.6% adjusted, an increase of 110 basis points from the prior year[31]

Core Insights - CSW Industrials, Inc. reported record results for the fiscal 2025 fourth quarter, driven by strategic acquisitions and strong organic growth in Contractor Solutions [1][4][5] Fiscal 2025 Fourth Quarter Highlights - Revenue for the fourth quarter reached $230.5 million, a 9.3% increase from the prior year, with $13.5 million from inorganic growth and $6.2 million from organic growth [5][6] - Adjusted net income was $37.7 million, reflecting an 18.7% increase compared to $31.8 million in the prior year [6][12] - Earnings per diluted share (EPS) increased to $2.24, a 9.8% rise from $2.04 [6][12] - Adjusted EBITDA grew 7.1% to $59.8 million, with a margin of 25.9% [6][13] Fiscal 2025 Full Year Highlights - Total revenue for the year was $878.3 million, a 10.8% increase from $792.8 million, with $47.5 million from inorganic growth and $37.9 million from organic growth [18][24] - Net income attributable to CSWI increased 25.7% to $136.7 million, with adjusted EPS improving 20.0% to $8.41 [24][25] - Adjusted EBITDA for the year rose 13.9% to $227.9 million, with an adjusted EBITDA margin of 25.9% [25] Segment Performance - Contractor Solutions segment revenue was $165.9 million, a 17.5% increase, with organic growth of 8.0% and inorganic growth contributing significantly [15] - Specialized Reliability Solutions segment revenue decreased by 9.2% to $37.7 million, primarily due to contraction in certain end markets [16] - Engineered Building Solutions segment revenue was $28.7 million, a 4.5% decrease, attributed to project timing [17] Acquisition and Future Outlook - The company completed the acquisition of Aspen Manufacturing for $313.5 million on May 1, 2025, which is expected to enhance its product offerings and customer relationships [4][34] - The company anticipates continued revenue and adjusted EBITDA growth across all segments in fiscal 2026, supported by a disciplined capital allocation strategy [4][34]

Acquisitions and Growth Strategy - CSWI completed the acquisition of Aspen Manufacturing for approximately $330.4 million, enhancing its Contractor Solutions segment with high-quality HVAC/R products[16]. - The company invested nearly $200 million in multiple acquisitions during fiscal years 2023, 2024, and 2025, including the acquisition of Aspen Manufacturing, LLC[42]. - The acquisition of PF WaterWorks was finalized for $45.6 million, expanding the Company's plumbing product portfolio with eco-friendly solutions[164]. - The company has completed 17 acquisitions since its inception, focusing on product-line acquisitions with low integration risk, enhancing revenue growth and profitability[41]. - The company aims for both organic growth and strategic acquisitions to expand its product portfolio and market presence[12]. - The company acquired PSP Products, Inc. for $51.3 million, funded by cash on hand and borrowings, enhancing its HVAC/R offerings[165]. - The acquisition of Dust Free, LP was completed for $34.2 million, contributing to the Contractor Solutions segment's product portfolio[166]. Financial Performance - The company reported net revenues of $878.3 million for the year ended March 31, 2025, an increase of $85.5 million or 10.8% compared to the previous year[182]. - Organic sales increased by $37.9 million or 4.8% year-over-year, driven by increased unit volumes and pricing actions[182]. - Gross profit for the year ended March 31, 2025 was $393.3 million, a 12.1% increase from the prior year, with a gross profit margin of 44.8%[186]. - The gross profit margin increased from 44.2% in 2024 to 44.8% in 2025, reflecting improved operational efficiency and pricing strategies[186]. - Operating income for the year ended March 31, 2025 increased by $22.1 million, or 13.9%, compared to 2024, driven by a $42.6 million increase in gross profit[190]. - Selling, general and administrative expenses for the year ended March 31, 2025 increased by $20.4 million, or 10.7%, compared to 2024, primarily due to expenses related to acquisitions and increased employee compensation[188]. - Interest expense, net for the year ended March 31, 2025 decreased by $12.5 million, or 97.9%, compared to 2024, due to reduced average borrowing and strong operating cash flows[192]. - The effective tax rate for the year ended March 31, 2025 was 23.7%, compared to 27.0% for 2024, influenced by state tax expenses and executive compensation limitations[196]. Business Segments - CSWI operates in three segments: Contractor Solutions, Specialized Reliability Solutions, and Engineered Building Solutions, serving diverse end markets including HVAC/R, plumbing, and energy[18]. - The Contractor Solutions segment focuses on efficiency and performance-enhancing products, with a strong reputation among HVAC/R contractors[20]. - The Specialized Reliability Solutions segment provides high-performance products for industrial applications, competing on product differentiation and quality[27]. - Engineered Building Solutions offers life-safety products that meet code requirements, targeting commercial and multi-family residential markets[32]. - Net revenues for the Contractor Solutions segment for the year ended March 31, 2025 increased by $80.8 million, or 15.1%, compared to 2024, with acquisitions contributing $47.5 million[202]. - Operating income for the Contractor Solutions segment for the year ended March 31, 2025 increased by $23.9 million, or 16.8%, compared to 2024, with an operating margin of 26.9%[204]. - Net revenues for the Specialized Reliability Solutions segment for the year ended March 31, 2025 decreased by $2.0 million, or 1.3%, compared to 2024, primarily due to lower unit volumes[207]. - Operating income for the Specialized Reliability Solutions segment for the year ended March 31, 2025 increased by $0.4 million, or 1.8%, compared to 2024, with an operating margin of 15.4%[209]. Employee Engagement and Culture - The company achieved a voluntary retention rate of 85% for all employees, reflecting a 2% improvement from the prior fiscal year[54]. - Approximately 82% of employees participated in the fiscal 2025 engagement survey, which indicated high overall employee engagement scores[53]. - The company has a 401(k) plan with a 93% participation rate, significantly higher than the industry benchmark of approximately 64%[61]. - The company has a culture of continuous improvement in manufacturing processes, aiming to reduce costs and improve product quality[39]. - The competitive labor market may lead to increased wage inflation and challenges in attracting and retaining qualified personnel, impacting operational efficiency[95]. Risks and Challenges - The company faces risks from cyclical end markets such as HVAC/R, construction, and energy, which can lead to significant fluctuations in operating results and cash flows[71]. - Supply chain disruptions and inflationary pressures have negatively impacted manufacturing and logistics costs, affecting gross margins[82]. - The company faces risks from cybersecurity breaches that could disrupt operations and expose sensitive data, which may lead to financial losses and legal claims[90]. - The company recognizes the inherent risks associated with international operations, including political and economic uncertainties, which could disrupt business activities[79]. - The company is evaluating the potential impacts of tariffs and implementing options to mitigate any adverse effects on its operations and financial performance[69]. - Climate change regulations may impose new requirements that could affect profitability and operating margins, with potential compliance costs impacting competitiveness[74]. - Changes in interest rates, influenced by inflation management efforts, could have direct and indirect adverse impacts on the company's business[83]. - The company may face difficulties in integrating acquired businesses, which could adversely affect financial results and operational performance[96]. - Regulatory changes could lead to increased compliance costs and affect product development and sales[112]. - Environmental regulations may impact demand for products, particularly those that are environmentally friendly[113]. - Compliance with environmental laws may result in substantial costs and operational changes, including potential fines and remediation expenses[115]. - The company is subject to anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, with non-compliance potentially leading to significant penalties[117]. - The company maintains a compliance program for anti-corruption and trade control laws, but risks of non-compliance remain[119]. Market Conditions - Seasonal sales patterns are observed in the HVAC/R market, with revenue peaks during spring and summer months[26]. - The HVAC/R market represented approximately 56% of net revenues in the year ended March 31, 2025, indicating its significance to the company's overall performance[169]. - The company expects year-over-year growth in revenue and profit across all segments for fiscal year 2026 despite macroeconomic uncertainties[177]. Corporate Governance and Compliance - Effective internal controls are necessary for reliable financial reporting and fraud prevention, with potential harm to reputation and operating results if not maintained[111]. - The company is subject to restrictive covenants in its debt agreements, limiting operational flexibility and financial planning[102]. - The company has a reserve of $14.7 million related to uncertain tax positions as of March 31, 2025, highlighting potential tax liabilities[109]. - The company had approximately 2,600 full-time employees as of March 31, 2025, with 1,400 located in Vietnam, indicating a significant reliance on international labor[93]. - As of March 31, 2025, the company recorded goodwill of $264.1 million on its consolidated balance sheet, which is subject to annual evaluation for impairment[101]. Shareholder Information - As of May 19, 2025, there were 283 holders of record for the Company's common stock[151]. - The Company has a share repurchase program with a maximum dollar value of $196.4 million remaining as of the end of March 2025[154]. - The Company reported a total of 21,851 shares repurchased during the quarter ended March 31, 2025, at an average price of $293.19 per share[154].

Core Viewpoint - CSW Industrials, Inc. is set to release its earnings results for the fiscal fourth quarter and year ended March 31, 2025, on May 22, 2025, before market opens [1] Earnings Call Details - A conference call will be held on the same day at 10:00 am Eastern Time to discuss the earnings results [1] - Participants can access the call via a toll-free number 1-877-407-0784 or international callers can use 1-201-689-8560 [2] - A live webcast of the call will be available on the company's website [2] Replay Information - A telephone replay will be available shortly after the call until June 5, 2025, accessible at 1-844-512-2921 for domestic callers and 1-412-317-6671 for international callers, with access code 13753549 [3] - An archived replay will also be available on the Investors section of the CSW Industrials website [3] Company Overview - CSW Industrials is a diversified industrial growth company operating in three segments: Contractor Solutions, Specialized Reliability Solutions, and Engineered Building Solutions [4] - The company provides niche, value-added products known for performance and reliability, serving markets such as HVAC/R, plumbing, electrical, general industrial, and more [4]

Core Viewpoint - CSW Industrials, Inc. has successfully completed the acquisition of Aspen Manufacturing for approximately $313.5 million in cash, enhancing its HVAC/R product offerings and expected to drive market share gains [1][2][4] Group 1: Acquisition Details - The acquisition price of $313.5 million represents about 11 times Aspen Manufacturing's estimated 2024 adjusted EBITDA of $28.5 million [1] - The funding for the acquisition was sourced from cash on hand and borrowings under an existing $500 million revolving credit facility, while maintaining sufficient liquidity and a strong balance sheet [1] Group 2: Strategic Implications - This acquisition is expected to expand CSW Industrials' HVAC/R product offerings by incorporating Aspen Manufacturing's leading evaporator coils and air handlers [2] - The integration of Aspen Manufacturing is anticipated to enhance CSW's service offerings and maximize market channels, leveraging its established distribution channels and manufacturing expertise [2] Group 3: Product Overview - Aspen Manufacturing's product suite includes a wide range of high-quality residential and light commercial evaporator coils, blowers, and air handling units, all designed and assembled in the United States [3]

Core Viewpoint - CSW Industrials, Inc. is transferring its common stock listing from Nasdaq to the New York Stock Exchange (NYSE), marking a significant milestone as the company approaches its ten-year anniversary as an independent public entity [1][3]. Company Announcement - The common stock is expected to begin trading on the NYSE on June 9, 2025, under the new ticker symbol "CSW" [2]. - Trading on Nasdaq will continue until the market closes on June 6, 2025 [2]. Executive Commentary - Joseph B. Armes, the Company's Chairman, CEO, and President, expressed enthusiasm about the move to the NYSE, highlighting the anticipated benefits of increased liquidity and visibility for shareholders, including employees participating in the employee stock ownership plan [3]. - Chris Taylor, NYSE Chief Development Officer, welcomed CSW Industrials, emphasizing its role as a key player in the industrial solutions sector [3]. Company Overview - CSW Industrials is a diversified industrial growth company operating in three segments: Contractor Solutions, Specialized Reliability Solutions, and Engineered Building Solutions [4]. - The company provides niche, value-added products known for performance and reliability, serving markets such as HVAC/R, plumbing, electrical, general industrial, architecturally-specified building products, energy, mining, and rail transportation [4].

Core Viewpoint - CSW Industrials, Inc. has declared a quarterly cash dividend of $0.27 per share, marking a 12.5% increase from the previous quarter's dividend [1][2]. Dividend Details - The declared dividend amount is $0.27 per share [3]. - The record date for shareholders is April 25, 2025 [3]. - The dividend will be payable on May 9, 2025 [3]. Financial Performance - Since October 2017, CSW Industrials has returned $222.4 million in cash to shareholders through share repurchases and dividends [2]. - The company has demonstrated strong balance sheet, cash flows, and profitability, leading to the sixth increase in its quarterly dividend [2]. Company Overview - CSW Industrials operates in three segments: Contractor Solutions, Specialized Reliability Solutions, and Engineered Building Solutions [3]. - The company provides niche, value-added products known for performance and reliability, serving markets such as HVAC/R, plumbing, electrical, general industrial, and more [3].

Core Viewpoint - CSW Industrials, Inc. has entered into a definitive agreement to acquire Aspen Manufacturing for approximately $313.5 million in cash, which is expected to enhance CSWI's HVAC/R product portfolio and market position [2][5]. Group 1: Acquisition Details - The acquisition price of $313.5 million represents approximately 11 times Aspen Manufacturing's estimated 2024 adjusted EBITDA of $28.5 million [2][6]. - CSWI plans to fund the acquisition using a combination of cash on hand and debt from its existing $500 million credit facility, with the closing expected in the first quarter of CSWI's 2026 fiscal year [2][3]. Group 2: Aspen Manufacturing Overview - Aspen Manufacturing, based in Humble, Texas, is a leading independent manufacturer of evaporator coils and air handlers for the HVAC/R industry, with estimated 2024 revenues of $122.4 million [3][4]. - The company is recognized for its high-quality products, all of which are designed, engineered, and assembled in the United States [3][4]. Group 3: Strategic Fit and Market Position - Aspen Manufacturing is well-positioned to address the current refrigerant transition, manufacturing products compatible with both legacy and new refrigerants [4]. - The acquisition aligns with CSWI's strategy to expand its HVAC/R product offerings and leverage existing distribution channels to increase market share [6][11].