CSW Industrials Reports Record Results for Fiscal 2026 Second Quarter and First Half

Core Insights - CSW Industrials reported record revenue, net income, adjusted EBITDA, and adjusted EPS for the fiscal 2026 second quarter and first half, driven by strong performance from recent acquisitions in the HVAC/R and plumbing markets [4][5][7]. Fiscal 2026 Second Quarter Highlights - Revenue for the second quarter reached $277.0 million, a 21.5% increase from the prior year, with $61.9 million or 27.2% attributed to inorganic growth from acquisitions [5][7]. - Net income attributable to CSW was $40.7 million, up 12.8% from $36.1 million, with diluted EPS increasing by 6.7% to $2.41 [7][11]. - Adjusted EBITDA grew 19.9% to $72.9 million, with an adjusted EBITDA margin of 26.3% [12][7]. Fiscal 2026 First Half Highlights - Total revenue for the first half was $540.6 million, representing a 19.0% increase from $454.1 million in the prior year [23][29]. - Net income attributable to CSW increased 9.3% to $81.6 million, with adjusted EPS rising 8.6% to $5.81 [29][30]. - Adjusted EBITDA for the first half was $141.7 million, a 12.4% increase from the previous year [30]. Segment Performance - The Contractor Solutions segment generated revenue of $208.5 million, a 31.2% increase, with inorganic growth from acquisitions offsetting a 7.7% decline in organic revenue [18][19]. - The Specialized Reliability Solutions segment reported flat revenue at $38.8 million, with operating income decreasing by 12.5% due to increased material costs [20]. - The Engineered Building Solutions segment saw a 2.3% decrease in revenue to $31.9 million, driven by market softness and strategic pricing pressures [21]. Acquisition Activity - The company announced a definitive agreement to acquire MARS Parts for $650 million, expected to close in November 2025, marking its largest acquisition to date [17][4]. - Over the past decade, CSW has invested approximately $1.7 billion in acquisitions, enhancing its product offerings [4][17]. Financial Position - The company paid down $35.0 million of debt in the quarter, resulting in a net leverage ratio of 0.12x [7]. - Operating expenses as a percentage of revenue improved to 22.5%, down from 23.0% in the prior year, reflecting better cost management [8].