Csw Industrials, Inc. · NYSE:CSW
Csw Industrials — Q3 2022 Earnings Presentation
45 slides from Csw Industrials's earnings presentation, February 2022
Slide 1: Investor Presentation: Fiscal 2022 3rd Quarter and Year-to-Date Results
February 2022 Fiscal 2022 3rd Quarter and Investor Presentation Year-to-Date 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 3rd Quarter Results 12 Fiscal 2022 Year-to-Date Results 17 Driving Long-Term Shareholder Value 24 Corporate Sustainability Update 27 Business Segment Overview 40 Appendix
Slide 4: CSW Industrials Key Highlights
CSW Industrials (Nasdaq: CSWI) Key Highlights 2015 Publicly Listed on Nasdaq2 ~$1.8B A growth-oriented, diversified industrial company with a strategic focus on providing Market Capitalization3 niche, value-added products in the end markets we serve. ~$430MM Three Segments (Segment percentages refle
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 3rd Quarter Summary of Financial Results
rd Fiscal 2022 3 Quarter Summary of Financial Results
Slide 8: Consolidated Results: 3Q22 Summary
Consolidated Results: 3Q22 Summary Consolidated Financial Highlights (3Q22 vs 3Q21): Summary Quarterly • Revenue of $136.3MM, 51.5% increase Consolidated Results1 ($ in millions) ◦ $26.8MM inorganic contribution from TRUaire and Shoemaker acquisitions ◦ $19.6MM organic growth, or 21.7% of total grow
Slide 9: Contractor Solutions: 3Q22 Segment Summary
Contractor Solutions: 3Q22 Segment Summary Summary Quarterly Segment Financials (3Q22 vs 3Q21): Segment Results ($ in millions) • Segment Revenue increased 85.6% to $82.5MM ◦ Inorganic growth ($26.8MM) from the TRUaire and Shoemaker $82.5 acquisitions 27.6% 20.2% ◦ Organic growth of $11.2MM, due to
Slide 10: Engineered Building Solutions: 3Q22 Segment Summary
Engineered Building Solutions: 3Q22 Segment Summary Segment Financials (3Q22 vs 3Q21): Summary Quarterly Segment Results ($ in millions) • Segment Revenue decreased 7.0% as ◦ Prior period declines in the backlog reduced current period revenue • Segment adjusted EBITDA and margin decreased ◦ Shift in
Slide 11: Specialized Reliability Solutions: 3Q22 Segment Summary
Specialized Reliability Solutions: 3Q22 Segment Summary Summary Quarterly Segment Financials (3Q22 vs 3Q21): Segment Results ($ in millions) • Segment Revenue increased 57.9% (all organic), to $31.4MM, primarily driven by: ◦ Demand recovery in the energy, mining, rail and general industrial end mark
Slide 12: Fiscal Year-to-Date 2022 Summary of Financial Results
Fiscal Year-to-Date 2022 Summary of Financial Results
Slide 13: Consolidated Results: 3Q22 YTD Summary
Consolidated Results: 3Q22 YTD Summary Consolidated Financial Highlights (3Q22 YTD vs 3Q21 YTD): Summary 3Q22 YTD • Revenue of $453.1MM, a 58.5% increase Consolidated Results1 ($ in millions) ◦ $95.6MM inorganic contribution from the TRUaire and Shoemaker acquisitions ◦ $71.7MM organic growth, or 25
Slide 14: Contractor Solutions: 3Q22 YTD Segment Summary
Contractor Solutions: 3Q22 YTD Segment Summary Summary 3Q22 YTD Segment Financials (3Q22 YTD vs 3Q21 YTD): Segment Results ($ in millions) • Segment Revenue increased 87.7% to $296.0MM, primarily driven by: ◦ Inorganic growth from TRUaire and Shoemaker of $95.6MM $296.0 29.9% ◦ Organic growth of $42
Slide 15: Engineered Building Solutions: 3Q22 YTD Segment Summary
Engineered Building Solutions: 3Q22 YTD Segment Summary Segment Financials (3Q22 YTD vs 3Q21 YTD): Summary 3Q22 YTD Segment Results • Segment Revenue increased 2.6% (all organic) to ($ in millions) $73.4MM, primarily driven by: ◦ Enhanced marketing efforts to promote existing and newly developed pro
Slide 16: Specialized Reliability Solutions: 3Q22 YTD Segment Summary
Specialized Reliability Solutions: 3Q22 YTD Segment Summary Summary 3Q22 YTD Segment Financials (3Q22 YTD vs 3Q21 YTD): Segment Results ($ in millions) • Segment Revenue increased 49.9% (all organic), to $85.3MM, primarily driven by: ◦ Demand recovery in the energy, mining, rail and general industri
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. • ~$1.8B market cap, as of 1/31/22, Maintain Our Strong Balance Sheet compared to ~$500MM at 2015 public debut Allocate Capital Efficiently • $586.5MM TTM revenue, versu
Slide 19: Maintaining Our Strong Balance Sheet
Maintaining Our Strong Balance Sheet CSWI is committed to maintaining a strong balance sheet, with ample liquidity through cash on hand and available credit, to maximize growth opportunities, both organically and inorganically. Liquidity Position as of 12/31/21 Strong liquidity position to support o
Slide 20: Allocating Capital Efficiently
Allocating Capital Efficiently Capital allocation decisions will continue to be prioritized on a risk-adjusted TTM Capital Allocation1 ($ in millions) returns basis, with the goal of driving long-term shareholder value. $65.0MM 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
Corporate Sustainability
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 • $383.9MM TTM Revenue, • $97.5MM TTM Revenue, • $106.8MM TTM Revenue, $117.3MM adjusted EBITDA, and $13.5MM adjusted EBITDA, and $10.9MM adjusted EBITDA, and 30.6% adjusted EBITDA margin 13.8% adjus
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 February 2022
Slide 32: Products Serving Niche HVAC/R Mini-Split Market
Products Serving Niche HVAC/R Mini-Split Market Investor Presentation 32 February 2022
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 February 2022
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 February 2022
Slide 39: Specialized Reliability Solutions: Shell Whitmore JV Products
Specialized Reliability Solutions: Shell Whitmore JV Products Investor Presentation 39 February 2022
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 Third Quarter Segment Operating Income to Adjusted Segment EBITDA
Reconciliation of Fiscal Third Quarter Segment Operating Income to Adjusted Segment Operating Income and to Adjusted Segment EBITDA (Unaudited) (Unaudited) (Unaudited) (Amounts in thousands) Three Months Ended December 31, 2021 Three Months Ended December 31, 2020 Three Months Ended December 31, 201
Slide 43: Reconciliation of YTD Segment Operating Income to Adjusted Segment EBITDA
Reconciliation of YTD Segment Operating Income to Adjusted Segment Operating Income and to Adjusted Segment EBITDA (Unaudited) (Unaudited) (Unaudited) (Amounts in thousands) Nine Months Ended December 31, 2021 Nine Months Ended December 31, 2020 Nine Months Ended December 31, 2019 Engineered Special
Slide 44: Reconciliation of TTM Segment Operating Income to Adjusted Segment 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 December 31, 2021 Specialized Engineered Contractor Reliability Building Corporate Consolidated Solutions Solutions Solut
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