Csw Industrials, Inc. · NYSE:CSW
Csw Industrials — FY2022 Earnings Presentation
45 slides from Csw Industrials's earnings presentation, May 2022
Slide 1: Investor Presentation: Fiscal 2022 4th Quarter and Full Year Results
May 2022 Fiscal 2022 4th Quarter and Investor Presentation Full Year Results
Slide 2: Forward Looking Statement; Non-GAAP Financial Information
Forward Looking Statement This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to, among other things, the business, financial condition and results of operations of CSW Industrials, Inc. (“CSWI” or the “Company”).
Slide 3: Index
Index 4 Overview and Investment Thesis 7 Fiscal 2022 4th Quarter Results 12 Fiscal 2022 Full Year Results 17 Driving Long-Term Shareholder Value 25 Corporate Sustainability Update 28 Business Segment Overview 41 Appendix
Slide 4: CSW Industrials (Nasdaq: CSWI) Key Highlights
CSW Industrials (Nasdaq: CSWI) Key Highlights 2015 Publicly Listed on Nasdaq2 ~$1.7B A diversified industrial growth company with a strategic focus on providing niche, Market Capitalization3 value-added products in the end markets we serve. ~$430MM Three Segments (Segment percentages reflect TTM1 Re
Slide 5: Compelling Investment Thesis
Compelling Investment Thesis Consistently demonstrating growth in excess of end markets served Sustained multi-year • Total revenue CAGR of 13.9% from FY17 through FY221 revenue growth • Organic revenue CAGR of 8.2% from FY17 through FY221 Robust margin profile provided by niche products, applicatio
Slide 6: Our Guiding Objectives
Our Guiding Objectives At CSWI, how we succeed matters, and accordingly we will: Position CSWI for Treat Our Serve Our Manage Our Supply Sustainable, Long-Term Employees Well Customers Well Chains Effectively Growth and Profitability • Meaningful, continued safety • Maintain incremental inventory •
Slide 7: Fiscal 2022 4th Quarter Summary of Financial Results
th Fiscal 2022 4 Quarter Summary of Financial Results
Slide 8: Consolidated Results: 4Q22 Summary
Consolidated Results: 4Q22 Summary Consolidated Financial Highlights (4Q22 vs 4Q21): Summary Quarterly • Record quarterly revenue of $173.3MM, 29.9% increase Consolidated Results1 ($ in millions) ◦ $32.0MM organic growth, representing 80% of total revenue growth, from price actions and increased vol
Slide 9: Contractor Solutions: 4Q22 Segment Summary
Contractor Solutions: 4Q22 Segment Summary Summary Quarterly Segment Financials (4Q22 vs 4Q21): Segment Results ($ in millions) • Segment Revenue increased 37.1% to $120.4MM ◦ Inorganic growth of $7.9MM from the Shoemaker acquisition $120.4 28.9% ◦ Organic growth of $24.7MM, due to increased volumes
Slide 10: Engineered Building Solutions: 4Q22 Segment Summary
Engineered Building Solutions: 4Q22 Segment Summary Segment Financials (4Q22 vs 4Q21): Summary Quarterly Segment Results ($ in millions) • Segment Revenue of $23.9MM ◦ Modest decline as prior period demand softness in mixed-use construction outpaced strength in other categories of the architecturall
Slide 11: Specialized Reliability Solutions: 4Q22 Segment Summary
Specialized Reliability Solutions: 4Q22 Segment Summary Summary Quarterly Segment Financials (4Q22 vs 4Q21): Segment Results ($ in millions) • Segment Revenue increased 43.2% (all organic), to $30.8MM, primarily driven by: ◦ Demand recovery in the energy, mining, rail and general industrial end mark
Slide 12: Fiscal 2022 Full Year Summary of Financial Results
Fiscal 2022 Full Year Summary of Financial Results
Slide 13: Consolidated Results: FY22 Summary
Consolidated Results: FY22 Summary Consolidated Financial Highlights (FY22 vs FY21): Summary FY22 • Record revenue of $626.4MM, a 49.4% increase Consolidated Results1 ($ in millions) ◦ $103.2MM inorganic contribution from TRUaire and Shoemaker acquisitions ◦ $104.0MM organic growth, or 50% of total
Slide 14: Contractor Solutions: FY22 Segment Summary
Contractor Solutions: FY22 Segment Summary Summary FY22 Segment Financials (FY22 vs FY21): Segment Results ($ in millions) • Record Segment Revenue of $416.5MM, a 69.6% increase ◦ Inorganic growth from TRUaire and Shoemaker of $103.2MM $416.5 29.7% ◦ Organic growth of $67.7MM, driven primarily by in
Slide 15: Engineered Building Solutions: FY22 Segment Summary
Engineered Building Solutions: FY22 Segment Summary Segment Financials (FY22 vs FY21): Summary FY22 Segment Results • Segment Revenue of $97.3MM ($ in millions) ◦ 100% organic growth ◦ Enhanced marketing efforts to promote existing and newly developed products, market share gains due to competitive
Slide 16: Specialized Reliability Solutions: FY22 Segment Summary
Specialized Reliability Solutions: FY22 Segment Summary Summary FY22 Segment Financials (FY22 vs FY21): Segment Results ($ in millions) • Segment Revenue increased 48.1% (all organic), to $116.0MM, primarily driven by: ◦ Demand recovery in the energy, mining, rail and general industrial end markets
Slide 17: Driving Long-Term Shareholder Value
Driving Long-Term Shareholder Value
Slide 18: Seeking Sustainable Growth in Shareholder Value
Seeking Sustainable Growth in Shareholder Value Our demonstrated track record of growth and enhancing long-term shareholder value. • ~$1.7B market cap, as of 5/6/22, Maintain Our Strong Balance Sheet compared to ~$500MM at 2015 public debut Allocate Capital Efficiently • $626.4MM TTM revenue, versus
Slide 19: Maintaining Our Strong Balance Sheet
Maintaining Our Strong Balance Sheet CSWI is committed to maintaining a strong balance sheet, with ample liquidity through cash on hand and available credit, to maximize growth opportunities, both organically and inorganically. Liquidity Position as of 3/31/22 Strong liquidity position to support or
Slide 20: Allocating Capital Efficiently
Allocating Capital Efficiently Capital allocation decisions will continue to be prioritized on a risk-adjusted TTM Capital Allocation1 ($ in millions) returns basis, with the goal of driving long-term shareholder value. $75.5MM Organic Growth Inorganic Growth • Invest in enhancing innovative, value-
Slide 21: Investing in Innovative Products
Investing in Innovative Products Our product innovation strategy is focused on commercially attractive products and solutions, while maintaining a flexible manufacturing strategy. Key Innovation Attributes Include: Serving Niche Applications Providing Incremental Value-Selling Through Resulting in L
Slide 22: Strategic, Disciplined Approach to M&A
Strategic, Disciplined Approach to M&A As a diversified industrial growth company, our goal is to increase free cash flow through sustainable organic growth, accretive inorganic growth, and operational efficiencies. CSW Industrials Target Criteria: • Seek long-term growth well in excess • Expand in
Slide 23: Strategic, Disciplined M&A Execution
Strategic, Disciplined M&A Execution Demonstrated track record of acquisitions that align with our stated strategy AC Leak Petersen Freeze Greco Metals Aluminum Shoemaker Deacon Railings MSD TRUaire Manufacturing 15 1 6 17 18 19 2 0 2 1 22 20 20 20 20 20 20 20 20 Contractor Solutions Specialized Rel
Slide 24: Accessing Distribution Channels to Accelerate Growth
Accessing Distribution Channels to Accelerate Growth We have focused on growing our distribution network in recent years, enhancing revenue growth from new product introductions and acquisitions. Without CSWI: Limited Distribution With CSWI: Broad Distribution <40 >200 Distributor Groups Distributor
Slide 25: Corporate Sustainability
Corporate Sustainability
Slide 26: Corporate Culture and Values
Corporate Culture and Values The Goal of Our Corporate Culture is to Maximize Performance CSWI’s corporate culture will shape and guide our Company by helping each team member understand how to make his/her contribution to the Company we serve. Our culture manifests the observed behaviors, norms, an
Slide 27: Corporate Culture and Values: Diversity, Inclusion, and Respect
Corporate Culture and Values Our Commitment to Diversity, Inclusion, and Respect: We seek to create, nurture, and sustain an inclusive and diverse environment that attracts and retains the highest caliber team members, leveraging their skills and expertise to serve our customers. We are dedicated to
Slide 28: Business Segment Overview
Business Segment Overview
Slide 29: Segment Summary
Segment Summary Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions • $416.5MM TTM Revenue, • $97.3MM TTM Revenue, • $116.0MM TTM Revenue, $123.9MM adjusted EBITDA, and $13.1MM adjusted EBITDA, and $15.1MM adjusted EBITDA, and 29.7% adjusted EBITDA margin 13.4% adjus
Slide 30: Contractor Solutions Segment – Overview
Contractor Solutions Segment – Overview Summary: End Markets Served: • Highly diversified product portfolio • Future growth focus on new product providing industry leading products introductions through organic HVAC/R in both direct-to-customer and innovation and inorganic additions distributor mode
Slide 31: Contractor Solutions Segment – Overview
Contractor Solutions Segment – Overview Strategic Growth that Outpaces End Markets: • Continue to develop and market innovative products providing low cost and high value, while supporting additional revenue growth for distributors and efficiencies for professional contractors • Acquire, develop, an
Slide 32: Contractor Solutions: Products
Contractor Solutions: Products Investor Presentation 32 May 2022
Slide 33: Products Serving Niche HVAC/R Mini-Split Market
Products Serving Niche HVAC/R Mini-Split Market Investor Presentation 33 May 2022
Slide 34: Engineered Building Solutions Segment – Overview
Engineered Building Solutions Segment – Overview Summary: End Markets Served: • Decades of experience creating • Multiple manufacturing locations products that protect lives provides efficiency to meet the needs Smoke & Fire of general contractors and architects Protection • Endless use cases for co
Slide 35: Engineered Building Solutions Segment – Overview
Engineered Building Solutions Segment – Overview Where Form Meets Function: • Market leader in providing unique solutions to architects and contractors that meet code requirements, while adding functionality, performance, and aesthetically-pleasing designs • Whether for new construction or renovatio
Slide 36: Engineered Building Solutions: Products
Engineered Building Solutions: Products Investor Presentation 36 May 2022
Slide 37: Specialized Reliability Solutions Segment – Overview
Specialized Reliability Solutions Segment – Overview Summary: End Markets Served: • Our product portfolio allows us to • Focus on adding value by innovating effectively compete and capture new and existing products to Rail/Transport enhanced margins relative to larger accelerate organic growth Speci
Slide 38: Specialized Reliability Solutions Segment – Overview
Specialized Reliability Solutions Segment – Overview Mission Critical Meets Mission Accomplished: • Established reputation for solving equipment maintenance challenges and increasing the reliability, performance, and lifespan of industrial assets utilized in the most demanding environments and extre
Slide 39: Specialized Reliability Solutions: Products
Specialized Reliability Solutions: Products Investor Presentation 39 May 2022
Slide 40: Specialized Reliability Solutions: Shell Whitmore JV Products
Specialized Reliability Solutions: Shell Whitmore JV Products Investor Presentation 40 May 2022
Slide 41: Appendix
Appendix
Slide 42: CSWI Executive Team
CSWI Executive Team Veteran leadership with broad industry experience, dedicated to enhancing shareholder value. Joe Armes James Perry Donal Sullivan Luke Alverson Chairman, CEO Executive VP Executive VP Senior VP, General & President & CFO & General Manager Counsel & Secretary Joe has served as the
Slide 43: Reconciliation of Fiscal Fourth Quarter Segment Operating Income to Adjusted EBITDA
Reconciliation of Fiscal Fourth Quarter Segment Operating Income to Adjusted Segment Operating Income and to Adjusted Segment EBITDA (Unaudited) (Unaudited) (Unaudited) (Amounts in thousands) Three Months Ended March 31, 2022 Three Months Ended March 31, 2021* Three Months Ended March 31, 2020* Engi
Slide 44: Reconciliation of YTD Segment Operating Income to Adjusted EBITDA
Reconciliation of YTD Segment Operating Income to Adjusted Segment Operating Income and to Adjusted Segment EBITDA (Unaudited) (Unaudited) (Unaudited) (Amounts in thousands) Fiscal Year Ended March 31, 2022 Fiscal Year Ended March 31, 2021* Fiscal Year Ended March 31, 2020* Engineered Specialized En
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