CSW Industrials Reports Record Results for Fiscal 2026 Third Quarter

Core Insights - CSW Industrials reported record revenue and adjusted EBITDA for the fiscal third quarter and year-to-date of 2026, reflecting the success of its growth strategy, including acquisitions that expanded its HVAC/R and plumbing product offerings [4][5] Fiscal 2026 Third Quarter Highlights - Revenue for the fiscal third quarter was $233.0 million, a 20.3% increase from the prior year, with $45.0 million or 23.2% attributed to inorganic growth from acquisitions [5][6] - Gross profit increased to $92.4 million, a 15.4% growth from $80.1 million in the prior year, although gross margin contracted by 170 basis points to 39.7% [6][7] - Earnings per diluted share (EPS) was $0.62, down 61.3% from $1.60, while adjusted EPS decreased 21.1% to $1.42 [6][11] - Adjusted EBITDA reached a record $44.8 million, up 6.6% from the previous year [12] Fiscal 2026 Year-to-Date Highlights - Year-to-date revenue was $773.6 million, representing a 19.4% increase from $647.8 million, with $150.6 million of this growth being inorganic from acquisitions [22][23] - Gross profit for the year-to-date period was $327.1 million, a 12.2% increase from $291.4 million, with gross margin at 42.3% compared to 45.0% in the prior year [23] - Net income attributable to CSW decreased to $91.8 million from $101.6 million, with EPS at $5.47 compared to $6.30 in the prior year [28] Segment Results - Contractor Solutions segment revenue was $168.0 million, a 27.1% increase, driven by $42.7 million from acquisitions, but organic revenue decreased by 5.1% [17][18] - Specialized Reliability Solutions segment revenue grew to $38.3 million, a 10.8% increase, with organic growth of 4.0% and inorganic growth of 6.8% [19] - Engineered Building Solutions segment revenue was $28.5 million, a slight decrease of 1.3% compared to the prior year [20] Financial Position - Net debt at the end of the quarter was $764.2 million, with a net leverage ratio of 2.3x, within the target range of 1-3x [6][31] - The company returned $106.2 million to shareholders through share repurchases and dividends [32] Cash Flow and Capital Expenditures - Cash flows from operations for the fiscal year-to-date period were $151.3 million, an increase from $141.1 million in the prior year [30] - Free cash flow was $22.7 million, compared to $7.8 million in the prior year, primarily driven by deferred cash tax payments [14]