Csw Industrials, Inc. · NYSE:CSW
Csw Industrials — Q3 2024 Earnings Presentation
40 slides from Csw Industrials's earnings presentation, Feb 1, 2024
Slide 1: Investor Presentation: Third Quarter Results
February 2024 Fiscal 2024 Investor Presentation Third Quarter 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 11 Fiscal 2024 Third Quarter Results 16 Fiscal 2024 Year-to-Date Results 21 Corporate Sustainability Update 24 Business Segment Overview 34 Appendix
Slide 4: CSW Industrials, Inc. Key Highlights
CSW Industrials, Inc. (Nasdaq: CSWI) Key Highlights 2015 Publicly Listed on Nasdaq2 ~$3.4B A diversified industrial growth company with a strategic focus on providing niche, Market Capitalization3 value-added products in the end markets we serve. ~$494MM Three Segments (Segment percentages reflect T
Slide 5: Compelling Investment Thesis
Compelling Investment Thesis Growth exceeding end • Total revenue CAGR of 18.4% from FY18 through FY231 markets served • Organic revenue CAGR of 11.4% from FY18 through FY231 Robust margin • 43.6% adjusted Gross Profit Margin annual average FY18 – FY231 profile • 21.6% adjusted EBITDA Margin annual
Slide 6: Sustainable Growth in Shareholder Value
Sustainable Growth in Shareholder Value Our demonstrated track record of growth and enhancing long-term shareholder value. Since Inception Maintain Our Strong Balance Sheet • 619% market cap growth1 • 191% Revenue growth2 Allocate Capital Efficiently • 221% adjusted EBITDA growth3 Invest in Organic
Slide 7: Allocating Capital Efficiently
Allocating Capital Efficiently Capital allocation decisions are prioritized on a risk-adjusted returns basis, TTM Capital Allocation1 with the ultimate goal of driving long-term shareholder value. ($ in millions) $42.7MM Organic Growth Inorganic Growth • Invest in enhancing innovative, value- • Prio
Slide 8: 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 Criteria: • Long-term growth well in excess of GDP • Strong margin c
Slide 9: Our Distribution Channels Accelerate Growth
Our Distribution Channels Accelerate Growth We have focused Without CSWI: Limited Distribution With CSWI: Broad Distribution on expanding our distribution network in recent years, enhancing revenue growth from new product introductions and acquisitions. Newly designed products, while innovative & he
Slide 10: Our Guiding Objectives
Our Guiding Objectives At CSWI, how we succeed matters, and accordingly we will: Position CSWI for Treat Our Team Serve Our Manage Our Supply Sustainable, Long-Term Members Well Customers Well Chains Effectively Growth and Profitability • Focus on Safety: • Emphasize consistent • Continuous improvem
Slide 11: Fiscal 2024 Third Quarter Summary of Financial Results
Fiscal 2024 Third Quarter Summary of Financial Results
Slide 12: Consolidated Results: 3Q24 Summary
Consolidated Results: 3Q24 Summary Consolidated Financial Highlights (3Q24 vs 3Q23): Summary Quarterly Consolidated Results1, 3 • Record fiscal third quarter Revenue of $175.0MM, a 2% increase ($ in millions) ◦ $3.9MM increase from organic revenue as a result of increased volumes and pricing actions
Slide 13: Contractor Solutions: 3Q24 Segment Summary
Contractor Solutions: 3Q24 Segment Summary Summary Quarterly Segment Financials (3Q24 vs 3Q23): Segment Results 1 ($ in millions) • Segment Revenue of $115.4MM, a 3% increase ◦ Organic increase of $3.5MM, due to an increase in unit volumes 25.4% 28.6% 20.8% Margin Margin Margin • Segment adjusted EB
Slide 14: Specialized Reliability Solutions: 3Q24 Segment Summary
Specialized Reliability Solutions: 3Q24 Segment Summary Summary Quarterly Segment Financials (3Q24 vs 3Q23): Segment Results ($ in millions) • Segment Revenue of $33.7MM, a $2.6MM or 7% decrease ◦ Temporary shipment delay at quarter-end, expected to be fully 15.2% 13.9% 15.4% recovered in the fourth
Slide 15: Engineered Building Solutions: 3Q24 Segment Summary
Engineered Building Solutions: 3Q24 Segment Summary Segment Financials (3Q24 vs 3Q23): Summary Quarterly Segment Results • Segment Revenue of $27.9MM, a 13% increase ($ in millions) ◦ Strengthened project bookings in recent quarters converted to revenue and pricing actions ◦ Bill to book ratio for t
Slide 16: Fiscal Year-to-Date 2024 Summary of Financial Results
Fiscal Year-to-Date 2024 Summary of Financial Results
Slide 17: Consolidated Results: 3Q24 YTD Summary
Consolidated Results: 3Q24 YTD Summary Consolidated Financial Highlights (3Q24 YTD vs 3Q23 YTD): Summary 3Q24 YTD Consolidated Results1, 2 • Record Q3 YTD Revenue of $582.0MM, a 4% increase ($ in millions) ◦ $12.3MM organic increase due to increase in unit volumes and pricing initiatives • Adjusted
Slide 18: Contractor Solutions: 3Q24 YTD Segment Summary
Contractor Solutions: 3Q24 YTD Segment Summary Summary 3Q24 YTD Segment Results 1 Segment Financials (3Q24 YTD vs 3Q23 YTD): ($ in millions) • Segment Revenue increased 4% to $395.3MM, primarily driven by: 29.1% 32.0% ◦ Inorganic growth of $7.5MM from the Cover Guard, AC Guard, 30.1% Margin Margin M
Slide 19: Specialized Reliability Solutions: 3Q24 YTD Segment Summary
Specialized Reliability Solutions: 3Q24 YTD Segment Summary Summary 3Q24 YTD Segment Financials (3Q24 YTD vs 3Q23 YTD): Segment Results ($ in millions) • Segment Revenue decreased 1%, to $108.0MM, primarily driven by: ◦ Temporary shipment delay at the end of the fiscal third quarter, expected to be
Slide 20: Engineered Building Solutions: 3Q24 YTD Segment Summary
Engineered Building Solutions: 3Q24 YTD Segment Summary Segment Financials (3Q24 YTD vs 3Q23 YTD): Summary 3Q24 YTD Segment Results ($ in millions) • Segment Revenue increased 7% to $84.7MM, primarily driven by: ◦ strengthened project bookings in recent quarters converting to revenue and pricing ini
Slide 21: Corporate Sustainability
Corporate Sustainability
Slide 22: Corporate Culture and Values
Corporate Culture and Values The Goal of Our Corporate Culture is to Maximize Performance CSWI is committed to recruiting great talent, offering rewarding career destinations, and recognizing team members. Our employee-centric culture features a diverse and inclusive environment where every team mem
Slide 23: 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 24: Business Segment Overview
Business Segment Overview
Slide 25: Segments Summary
Segments Summary Contractor Solutions Specialized Reliability Solutions Engineered Building Solutions • $529.2MM TTM Revenue, • $146.5MM TTM Revenue, • $109.7MM TTM Revenue, $169.1MM adjusted EBITDA, and $28.1MM EBITDA, and $17.5MM EBITDA, and 31.9% adjusted EBITDA margin 19.2% EBITDA margin 15.9%
Slide 26: Contractor Solutions Segment: Markets & Brands
Contractor Solutions Segment: Markets & Brands Summary: End Markets Served: ◦ Highly diversified product portfolio providing ◦ Future growth focus on new product industry leading products in both direct-to- introductions through organic innovation and customer and distributor models inorganic additi
Slide 27: Contractor Solutions: Products
Contractor Solutions: Products Water & Gas Pipe Thread Sealant Connectors Push-to-connect refrigerant fittings Surge Protective Devices Grilles, Registers, and Diffusers Condensate overflow switches and clean out devices Secondary Condensate Drain Pans Investor Presentation 27 February 2024
Slide 28: Niche HVAC/R Mini-Split Niche Market: Products
Niche HVAC/R Mini-Split Niche Market: Products Slimduct & Fortress Lineset duct and fitting systems, PRO-Fit Quick Connect 5 sizes, 4 colors Push-to-connect refrigerant fittings. Quick-release removal AC Leak Freeze with UV Nokink Leak stop sealant, Flexible, easy flare line connector non clogging,
Slide 29: Specialized Reliability Solutions Segment: Markets & Brands
Specialized Reliability Solutions Segment: Markets & Brands Summary: End Markets Served: ◦ Our product portfolio allows us to compete and ◦ Innovating new and existing products to capture enhanced margins relative to larger peers accelerate organic growth ◦ Focus on end markets with sustainable grow
Slide 30: Specialized Reliability Solutions: Products
Specialized Reliability Solutions: Products Investor Presentation 30 February 2024
Slide 31: Specialized Reliability Solutions: Shell Whitmore JV Products
Specialized Reliability Solutions: Shell Whitmore JV Products Investor Presentation 31 February 2024
Slide 32: Engineered Building Solutions Segment: Markets & Brands
Engineered Building Solutions Segment: Markets & Brands Summary: End Markets Served: ◦ Market leader in providing unique solutions to ◦ Multiple manufacturing locations provide architects and contractors that meet code efficiency to meet the needs of general requirements, while adding functionality,
Slide 33: Engineered Building Solutions: Products
Engineered Building Solutions: Products Investor Presentation 33 February 2024
Slide 34: Appendix
Appendix
Slide 35: CSWI Executive Team
CSWI Executive Team Veteran leadership with broad industry experience, dedicated to enhancing shareholder value. Joseph B. Armes James E. Perry Donal J. Sullivan Luke E. Alverson Danielle R. Garde Chairman, CEO Executive VP and CFO Executive VP and GM, Senior VP, General Senior VP and and President
Slide 36: M&A Execution Timeline
M&A Execution Timeline Demonstrated track record of acquisitions aligned with our stated strategy Contractor Solutions Specialized Reliability Solutions Engineered Building Solutions Investor Presentation 36 February 2024
Slide 37: Reconciliation of Fiscal Third Quarter Segment Operating Income to Adjusted Segment EBITDA
Reconciliation of Fiscal Third Quarter Segment Operating Income to Adjusted Segment EBITDA (Unaudited) (Unaudited) (Unaudited) (Amounts in thousands) Three Months Ended December 31, 2023 Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 Specialized Engineered Specialized Engi
Slide 38: Reconciliation of Q3 YTD Segment Operating Income to Adjusted Segment EBITDA
Reconciliation of Q3 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, 2023 Nine Months Ended December 31, 2022 Nine Months Ended December 31, 2021 Specialized Eng
Slide 39: Reconciliation of TTM Segment Operating Income to Adjusted Segment EBITDA
Reconciliation of TTM Segment Operating Income to Adjusted Segment EBITDA (Unaudited) (Amounts in thousands) Trailing Twelve Months Ended December 31, 2023 Specialized Engineered Contractor Reliability Building Corporate Consolidated Solutions Solutions Solutions and Other Operations Revenue, net $
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