Csw Industrials, Inc. · NYSE:CSW
Csw Industrials — Q1 FY2023 Earnings Presentation
39 slides from Csw Industrials's earnings presentation, August 2022
Slide 1: Investor Presentation August 2022 Fiscal 1st Quarter 2023 Results
August 2022 Fiscal 1st Quarter Investor Presentation 2023 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 2023 1st Quarter Results 12 Driving Long-Term Shareholder Value 19 Corporate Sustainability Update 22 Business Segment Overview 35 Appendix
Slide 4: CSW Industrials, Inc. Key Highlights
CSW Industrials, Inc. (Nasdaq: CSWI) Key Highlights 2015 Publicly Listed on Nasdaq2 ~$1.9B 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 T
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 • Focus on safety: • Emphasize consistent • Utilize balance sheet
Slide 7: Fiscal 2023 1st Quarter Summary of Financial Results
st Fiscal 2023 1 Quarter Summary of Financial Results
Slide 8: Consolidated Results: 1Q23 Summary
Consolidated Results: 1Q23 Summary Consolidated Financial Highlights (1Q23 vs 1Q22): Summary Quarterly • Record Revenue of $199.9MM, 24.0% increase Consolidated Results1 ($ in millions) ◦ $8.6MM inorganic contribution from Shoemaker acquisition ◦ $30.1MM organic growth, or 77.7% of total growth, fro
Slide 9: Contractor Solutions: 1Q23 Segment Summary
Contractor Solutions: 1Q23 Segment Summary Summary Quarterly Segment Financials (1Q23 vs 1Q22): Segment Results ($ in millions) • Record Segment Revenue of $137.6MM, 24.8% increase $137.6 31.2% 35.8% ◦ Inorganic growth of $8.6MM from the Shoemaker acquisition $110.2 Margin Margin ◦ Organic growth of
Slide 10: Engineered Building Solutions: 1Q23 Segment Summary
Engineered Building Solutions: 1Q23 Segment Summary Segment Financials (1Q23 vs 1Q22): Summary Quarterly Segment Results • Record Segment Revenue $28.5MM, an 11.2% ($ in millions) increase ◦ New product development and enhanced commercialization of products with broad application across the end mark
Slide 11: Specialized Reliability Solutions: 1Q23 Segment Summary
Specialized Reliability Solutions: 1Q23 Segment Summary Summary Quarterly Segment Financials (1Q23 vs 1Q22): Segment Results ($ in millions) • Record Segment Revenue of $35.7MM, a 40.4% increase ◦ Demand recovery in all end markets served ◦ Incremental unit volumes and cumulative benefit of implemen
Slide 12: Driving Long-Term Shareholder Value
Driving Long-Term Shareholder Value
Slide 13: Seeking Sustainable Growth in Shareholder Value
Seeking Sustainable Growth in Shareholder Value Our demonstrated track record of growth and enhancing long-term shareholder value. Since Inception Maintain Our Strong Balance Sheet • 280% market cap growth1 • 254% Revenue growth2 Allocate Capital Efficiently • 253% adjusted EBITDA growth33 Invest in
Slide 14: Maintaining Our Strong Balance Sheet
Maintaining Our Strong Balance Sheet CSWI is committed to maintaining a strong balance sheet, with ample liquidity through cash on hand and available credit, to maximize growth opportunities, both organically and inorganically. Liquidity Position as of 6/30/22 Strong liquidity position to support or
Slide 15: Allocating Capital Efficiently
Allocating Capital Efficiently Capital allocation decisions will continue to be prioritized on a risk-adjusted TTM Capital Allocation1 ($ in millions) returns basis, with the goal of driving long-term shareholder value. $65.7MM Organic Growth Inorganic Growth • Invest in enhancing innovative, value-
Slide 16: 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 C
Slide 17: 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 18: 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 19: Corporate Sustainability
Corporate Sustainability
Slide 20: Corporate Culture and Values
Corporate Culture and Values The Goal of Our Corporate Culture is to Our Core Values Provide the Framework for Maximize Performance Our Corporate Culture: CSWI’s corporate culture will shape and guide our Accountability Respect Company by helping each team member understand how to make his/her contr
Slide 21: 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 22: Business Segment Overview
Business Segment Overview
Slide 23: Segments Summary
Segments Summary Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions • $443.9MM TTM Revenue, • $100.2MM TTM Revenue, $13.6MM • $126.3MM TTM Revenue, $19.4MM $127.4MM EBITDA, and 28.7% EBITDA, and 13.6% EBITDA margin EBITDA, and 15.4% EBITDA margin EBITDA margin • Pro
Slide 24: 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 25: 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 26: Contractor Solutions: Products
Contractor Solutions: Products Investor Presentation 26 August 2022
Slide 27: Products Serving Niche HVAC/R Mini-Split Market
Products Serving Niche HVAC/R Mini-Split Market Investor Presentation 27 August 2022
Slide 28: 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 29: 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 30: Engineered Building Solutions: Products
Engineered Building Solutions: Products Investor Presentation 30 August 2022
Slide 31: 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 32: 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 33: Specialized Reliability Solutions: Products
Specialized Reliability Solutions: Products Investor Presentation 33 August 2022
Slide 34: Specialized Reliability Solutions: Shell Whitmore JV Products
Specialized Reliability Solutions: Shell Whitmore JV Products Investor Presentation 34 August 2022
Slide 35: Appendix
Appendix
Slide 36: 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 37: Reconciliation of Fiscal First Quarter Segment Operating Income to Segment EBITDA
Reconciliation of Fiscal First Quarter Segment Operating Income to Adjusted Segment Operating Income and to Segment EBITDA (Unaudited) (Unaudited) (Unaudited) (Amounts in thousands) Three Months Ended June 30, 2022 Three Months Ended June 30, 2021* Three Months Ended June 30, 2020* Engineered Specia
Slide 38: Reconciliation of TTM Segment Operating Income to Segment EBITDA
Reconciliation of TTM Segment Operating Income to Segment EBITDA (Unaudited) (Amounts in thousands) Trailing Twelve Months Ended June 30, 2022 Engineered Specialized Contractor Building Reliability Corporate Consolidated Solutions Solutions Solutions and Other Operations Revenue, net $ 443,873 $ 126
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