CSW Industrials(US:CSWI)2025-10-30 10:44Financial Performance - Total revenue for fiscal 2026 second quarter reached a record $277.0 million, a 21.5% increase compared to the prior year period[5] - Net income attributable to CSW for the second quarter was $40.7 million, reflecting a 12.8% increase from $36.1 million in the prior year[5] - Adjusted EBITDA for the second quarter grew 19.9% to a record $72.9 million, with an adjusted EBITDA margin of 26.3%[12] - Total revenue for the first half of fiscal 2026 was $540.6 million, representing a 19.0% growth from $454.1 million in the prior year[23] - Adjusted EPS for the second quarter increased 15.2% to $2.96 per diluted share, compared to $2.57 in the prior year[11] - Operating income for the second quarter was $56.8 million, with an operating income margin of 20.5%[9] - Total revenues for the six months ended September 30, 2025, were $540.6 million, compared to $454.1 million for the same period in 2024, reflecting a growth of 19.0%[49] - Net income attributable to CSW Industrials, Inc. for the six months ended September 30, 2025, was $81.6 million, compared to $74.6 million in the prior year, an increase of 9.5%[49] - The diluted earnings per share for the six months ended September 30, 2025, was $4.84, compared to $4.73 in 2024, reflecting a 2.3% increase[59] Segment Performance - Contractor Solutions segment revenue increased by $86.0 million or 26.9% to $405.2 million, with inorganic growth from acquisitions contributing $105.6 million or 33.1% of this growth[33] - Segment operating income for Contractor Solutions was $106.1 million, with an adjusted operating income of $107.7 million, compared to $96.1 million in the prior year[33] - Specialized Reliability Solutions segment revenue grew to $75.6 million, a slight increase of $0.3 million or 0.4% from the prior year[34] - Segment operating income for Specialized Reliability Solutions decreased to $10.3 million, representing 13.7% of revenue, down from 17.2% in the prior year[34] - Engineered Building Solutions segment revenue was $63.8 million, a $0.2 million or 0.4% increase, while operating income decreased by 25.2% to $8.8 million[36] - The Contractor Solutions Segment reported revenue of $208,468,000 for the three months ended September 30, 2025, a 31.3% increase from $158,834,000 in 2024[64] Cash Flow and Investments - Cash flows from operations for the second quarter were $61.8 million, a decrease from $67.4 million in the prior year[13] - Cash flows from operating activities for the six months ended September 30, 2025, totaled $122,467,000, slightly down from $130,169,000 in 2024[54] - The company reported a net cash used in investing activities of $331,439,000 for the six months ended September 30, 2025, compared to $41,349,000 in 2024, primarily due to cash paid for acquisitions[54] - The company’s cash and cash equivalents at the end of the period were $31,471,000, a significant decrease from $273,220,000 at the end of the same period in 2024[54] Debt and Taxation - The company paid down $35.0 million of debt in the quarter, resulting in a net leverage ratio of 0.12x[5] - The effective tax rate for the fiscal second quarter was 26.4%, slightly up from 26.1% in the prior year[16] - The company’s effective tax rate for the six months ended September 30, 2025, was 25.4%, consistent with 26.2% in 2024[61] Capital Expenditures and Depreciation - Capital expenditures for the six months ended September 30, 2025, were $5,984,000, down from $8,587,000 in 2024[54] - Depreciation and amortization for the three months ended September 30, 2025, totaled $14,392,000, compared to $9,951,000 in the same period of 2024[69] Acquisition Activity - The company announced a definitive agreement to acquire MARS Parts for $650 million, expected to close in November 2025[17] Adjusted Metrics - Adjusted net income attributable to CSW for the six months ended September 30, 2025, was $97,883,000, up 15.9% from $84,304,000 in 2024[59] - Adjusted EBITDA for the six months ended September 30, 2025, reached $141,681,000, representing a 12.3% increase from $126,075,000 in 2024[66] - Adjusted EBITDA for Contractor Solutions was $132.6 million, or 32.7% of revenue, down from $112.0 million or 35.1% in the prior year[33] - Adjusted free cash flow for the three months ended September 30, 2025, was $58,746,000, which is 80.5% of adjusted EBITDA[73]