Csw Industrials, Inc. · NYSE:CSW
Csw Industrials — Investor Presentation (November 2021)
45 slides from Csw Industrials's investor presentation, November 2021
Slide 1: Investor Presentation: Fiscal 2022 2nd Quarter and 1st Half Results
November 2021 Fiscal 2022 2nd Quarter and Investor Presentation 1st Half 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 2nd Quarter Results 12 Fiscal 2022 1st Half Results 17 Driving Long-Term Shareholder Value 24 Corporate Sustainability Update 27 Business Segment Overview 40 Appendix
Slide 4: CSW Industrials (Nasdaq: CSWI) Key Highlights
CSW Industrials (Nasdaq: CSWI) Key Highlights 2015 Publicly Listed on Nasdaq2 ~$2.2B A growth-oriented, diversified industrial company with a strategic focus on providing Market Capitalization3 niche, value-added products in the end markets we serve. Three Segments (Segment percentages reflect TTM1
Slide 5: Compelling Investment Thesis
Compelling Investment Thesis Consistently demonstrating growth in excess of end markets served Sustained multi-year • Total revenue CAGR of 9.4% from FY16 through FY211 revenue growth • Organic revenue CAGR of 5.8% from FY16 through FY211 Robust margin profile provided by niche products, application
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 • Emphasize consistent • Acknowledg
Slide 7: Fiscal 2022 2nd Quarter Summary of Financial Results
nd Fiscal 2022 2 Quarter Summary of Financial Results
Slide 8: Consolidated Results: 2Q22 Summary
Consolidated Results: 2Q22 Summary Consolidated Financial Highlights (2Q22 vs 2Q21): Summary Quarterly • Revenue of $155.6MM, 48.3% increase Consolidated Results1 ($ in millions) ◦ $35.2MM TRUaire acquisition inorganic contribution ◦ $15.4MM, or 14.7%, organic growth from price actions and increased
Slide 9: Contractor Solutions: 2Q22 Segment Summary
Contractor Solutions: 2Q22 Segment Summary Summary Quarterly Segment Financials (2Q22 vs 2Q21): Segment Results ($ in millions) • Segment Revenue increased 63.1% (7.6% organic) to $103.3MM, primarily driven by: $103.3 31.3% ◦ TRUaire inorganic growth of $35.2MM 36.4% Margin 36.1% $63.4 Margin ◦ Orga
Slide 10: Engineered Building Solutions: 2Q22 Segment Summary
Engineered Building Solutions: 2Q22 Segment Summary Segment Financials (2Q22 vs 2Q21): Summary Quarterly Segment Results ($ in millions) • Segment Revenue flat ◦ Prior period declines in the backlog reduced incremental current period revenue • Segment adjusted EBITDA and margin decrease $24.1 19.7%
Slide 11: Specialized Reliability Solutions: 2Q22 Segment Summary
Specialized Reliability Solutions: 2Q22 Segment Summary Summary Quarterly Segment Financials (2Q22 vs 2Q21): Segment Results ($ in millions) • Segment Revenue increased 58.0% (all organic), to $28.5MM, primarily driven by: ◦ Increased sales volumes into energy, rail, & mining end markets ◦ Successfu
Slide 12: Fiscal 1st Half 2022 Summary of Financial Results
st Fiscal 1 Half 2022 Summary of Financial Results
Slide 13: Consolidated Results: 1H22 Summary
Consolidated Results: 1H22 Summary Consolidated Financial Highlights (1H22 vs 1H21): Summary 1H22 Consolidated Results1 • Revenue of $316.9MM, a 61.7% increase ($ in millions) ◦ $68.8MM inorganic contribution from TRUaire acquisition ◦ $52.1MM, or 26.6% organic growth, with growth in all segments $3
Slide 14: Contractor Solutions: 1H22 Segment Summary
Contractor Solutions: 1H22 Segment Summary Summary 1H22 Segment Financials (1H22 vs 1H21): Segment Results ($ in millions) • Segment Revenue increased 88.6% to $213.6MM, primarily driven by: $213.6 33.6% ◦ Inorganic growth from TRUaire of $68.8MM Margin ◦ Organic growth of $31.5MM, or 27.9%, driven
Slide 15: Engineered Building Solutions: 1H22 Segment Summary
Engineered Building Solutions: 1H22 Segment Summary Segment Financials (1H22 vs 1H21): Summary 1H22 Segment Results • Segment Revenue increased 7.9% (all organic) to ($ in millions) $49.5MM, primarily driven by: ◦ Enhanced marketing efforts to promote existing and newly developed products, market sh
Slide 16: Specialized Reliability Solutions: 1H22 Segment Summary
Specialized Reliability Solutions: 1H22 Segment Summary Summary 1H22 Segment Financials (1H22 vs 1H21): Segment Results ($ in millions) • Segment Revenue increased 45.6% (all organic), to $53.9MM, primarily driven by: ◦ Increased sales volumes into all end markets served ◦ Successfully implemented o
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. • ~$2.2B market cap, as of 10/29/21, Maintain Our Strong Balance Sheet compared to ~$500MM in 2015 public debut Allocate Capital Efficiently • $540.2MM TTM revenue, vers
Slide 19: Maintaining Our Strong Balance Sheet
Maintaining Our Strong Balance Sheet CSWI is committed to maintaining a strong balance sheet, with ample liquidity through cash and available credit to maximize growth opportunities, both organically and inorganically. Liquidity Position as of 9/30/21 Strong liquidity position to support organic & i
Slide 20: Allocating Capital Efficiently
Allocating Capital Efficiently Capital allocation decisions will continue to be prioritized on a risk-adjusted TTM Capital Allocation1 ($ in millions) returns basis, with the goal of driving long-term shareholder value. $304.1MM 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: 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 24: Corporate Sustainability Update
Corporate Sustainability Update
Slide 25: 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 26: Corporate Culture and Values
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 27: Business Segment Overview
Business Segment Overview
Slide 28: Segment Summary
Segment Summary Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions • $345.9MM TTM Revenue, • $99.3MM TTM Revenue, • $95.3MM TTM Revenue, $113.0MM adjusted EBITDA, and $14.1MM adjusted EBITDA, and $9.8MM adjusted EBITDA, and 32.7% adjusted EBITDA margin 14.2% adjuste
Slide 29: 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 30: 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 31: Contractor Solutions: Products
Contractor Solutions: Products Investor Presentation 31 November 2021
Slide 32: Products Serving Niche HVAC/R Mini-Splits
Products Serving Niche HVAC/R Mini-Splits Investor Presentation 32 November 2021
Slide 33: 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 34: 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 35: Engineered Building Solutions: Products
Engineered Building Solutions: Products Investor Presentation 35 November 2021
Slide 36: 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 37: 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 38: Specialized Reliability Solutions: Products
Specialized Reliability Solutions: Products Investor Presentation 38 November 2021
Slide 39: Specialized Reliability Solutions: Shell Whitmore JV Products
Specialized Reliability Solutions: Shell Whitmore JV Products Investor Presentation 39 November 2021
Slide 40: Appendix
Appendix
Slide 41: 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 42: Reconciliation of Fiscal Second Quarter Segment Operating Income to Adjusted EBITDA
Reconciliation of Fiscal Second Quarter Segment Operating Income to Adjusted Segment Operating Income and to Adjusted Segment EBITDA (Unaudited) (Unaudited) (Unaudited) (Amounts in thousands) Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Three Months Ended September 30,
Slide 43: 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) Six Months Ended September 30, 2021 Six Months Ended September 30, 2020 Six Months Ended September 30, 2019 Engineered Special
Slide 44: Reconciliation of TTM Segment Operating Income to Adjusted EBITDA
Reconciliation of TTM Segment Operating Income to Adjusted Segment Operating Income and to Adjusted Segment EBITDA (Unaudited) (Amounts in thousands) Trailing Twelve Months Ended September 30, 2021 Specialized Engineered Contractor Reliability Building Corporate Consolidated Solutions Solutions Solu
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