CSW Industrials(US:CSWI)2026-01-29 11:44Financial Performance - Total revenue for fiscal Q3 2026 reached a record $233.0 million, a 20.3% increase compared to the prior year period[5] - Adjusted EBITDA for fiscal Q3 2026 increased 6.6% to a record $44.8 million, with an adjusted EBITDA margin of 19.2%, down from 21.7% in the prior year[12] - Net income attributable to CSW decreased 61.9% to $10.3 million, with EPS of $0.62, a decrease of 61.3% compared to $1.60 in the prior year[11] - Year-to-date revenue for fiscal 2026 was $773.6 million, representing a 19.4% growth from $647.8 million in the prior year[21] - For the three months ended December 31, 2025, consolidated revenue was $232,992,000, an increase from $193,649,000 in the same period of 2024, representing a growth of 20.3%[64] - For the nine months ended December 31, 2025, consolidated revenue was $773,589,000, up from $647,752,000 in 2024, indicating a year-over-year increase of 19.4%[69] Segment Performance - Contractor Solutions segment revenue increased 27.1% to $168.0 million, driven by $42.7 million in inorganic growth from acquisitions[17] - Specialized Reliability Solutions segment revenue grew 10.8% to $38.3 million, with organic growth of 4.0% and inorganic growth of 6.8%[18] - Contractor Solutions segment revenue increased by $121.8 million or 27.0% year-over-year, driven by $148.2 million from acquisitions[33] - Specialized Reliability Solutions segment revenue grew to $113.9 million, a 3.6% increase from the prior year period[34] - Engineered Building Solutions segment revenue was $92.3 million, with a 21.1% decrease in operating income to $12.2 million[35] - Reported revenue for the Contractor Solutions Segment for the three months ended December 31, 2025, was $167,999, compared to $132,150 in 2024, reflecting strong growth[60] Cash Flow and Investments - Free cash flow for fiscal Q3 2026 was $22.7 million, an increase of $15.0 million compared to the prior year period[14] - The company invested approximately $1.0 billion in acquisitions and $12.1 million in organic capital expenditures year-to-date[5] - Fiscal 2026 year-to-date, the Company deployed approximately $1.0 billion in acquisitions and $12.1 million in organic capital expenditures, while returning $106.2 million to shareholders through share repurchases and dividends[31] - Cash flows from operating activities for the nine months ended December 31, 2025, were $151,335, an increase of 7.7% from $141,069 in 2024[53] - Net cash used in investing activities for the nine months ended December 31, 2025, was $1,012,136, significantly higher than $97,539 in 2024, primarily due to cash paid for acquisitions[53] - Net cash provided by financing activities for the nine months ended December 31, 2025, was $675,492, compared to $148,884 in 2024, driven by increased borrowings[53] Debt and Leverage - The Company reported a net debt of $764.2 million, resulting in a net Debt-to-EBITDA leverage ratio of 2.3x[30] - The Company ended the quarter with $200.1 million outstanding on the revolving line of credit and $600.0 million Term Loan A[30] - The company has entered into a three-year syndicated interest rate hedge to lock in the SOFR rate at 3.416% for the first $300.0 million borrowing under the Term Loan A[30] Tax and Income - The effective tax rate for the fiscal year-to-date was 21.4%, compared to 23.3% in the prior year-to-date period[32] - The effective tax rate for the nine months ended December 31, 2025, was 21.4%, down from 23.3% in 2024[57] - Adjusted net income attributable to CSW for the nine months ended December 31, 2025, was $121,516, an increase of 5.9% from $114,718 in 2024[56] - Adjusted EBITDA for the nine months ended December 31, 2025, was $186,492, representing 24.1% of revenue, compared to 26.0% in 2024[63] Operating Expenses - Operating expenses as a percentage of revenue were 32.2%, up from 26.1% in the prior year, reflecting increased costs related to acquisitions[8] - Adjusted Operating Income for the nine months ended December 31, 2025, was $139,083,000, which is 18.0% of revenue, compared to $137,064,000 or 21.2% of revenue for the same period in 2024[69] - Operating income for the three months ended December 31, 2025, was $17,338,000, which is 7.4% of revenue, down from $29,595,000 or 15.3% of revenue in 2024[64] Other Financial Metrics - The company reported a significant increase in accounts receivable, totaling $44,460 for the nine months ended December 31, 2025, compared to $32,316 in 2024[53] - Capital expenditures for the nine months ended December 31, 2025, were $12,130, slightly higher than $11,735 in 2024, indicating ongoing investment in operations[53] - Nonrecurring inventory write-downs amounted to $2,051,000 for the three months ended December 31, 2025[64] - Depreciation and amortization for the three months ended December 31, 2025, totaled $19,058,000, compared to $11,012,000 for the same period in 2024[65] - The company incurred acquisition-related integration expenses of $3,944,000 for the three months ended December 31, 2025[64]