CSW Industrials, Inc. · NYSE:CSW
CSW Industrials — Investor Presentation (October 2020)
45 slides from CSW Industrials's investor presentation, October 2020
Slide 1: Investor Presentation
Investor Presentation October 2020
Slide 2: Forward Looking Statements and Non-GAAP Financial Information
Forward Looking 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, Statements financial condition and results of operations of CSW Industrials, Inc. (“CSWI” or the “Company”).
Slide 3: CSW Industrials (Nasdaq: CSWI)
CSW Industrials (Nasdaq: CSWI) A growth-oriented, diversified industrial company with a strategic focus on providing niche, value-added products Key Highlights: in the end markets we serve. Two Segments Serving Diverse End Markets: 2015 Publicly listed on Nasdaq2 Mining 3% Specialty Rail 5% Energy 5
Slide 4: Compelling Investment Thesis
Compelling Investment Thesis Sustained multi- Consistently demonstrating growth in excess of end markets served year revenue Total revenue CAGR of 9.6% from FY16 through FY201 growth Organic revenue CAGR of 7.2% from FY16 through FY201 Robust margin profile provided by niche products, applicatio
Slide 5: 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, a
Slide 6: 2021 Guiding Objectives
2021 Guiding Objectives At CSWI, we will: Position Our Company for Treat Our Serve Our Manage Our Supply Sustainable, Long- Employees Well Customers Well Chains Effectively Term Growth and Profitability Provide continuing Operate with minimal Selectively build Respond decisively and employme
Slide 7: Fiscal 2nd Quarter 2021 Summary of Financial Results
Fiscal 2nd Quarter 2021 Summary of Financial Results CSWI Product Spotlight Fortress® Lineset covers are a precision system of premade ducting offering strength and longevity at a modest price point. Perfect for a Fortress Lineset Covers variety of A/C systems, Fortress® conceals/protects lineset, w
Slide 8: 2Q21: Highest Quarterly Revenue and Operating Income
2Q21: Highest Quarterly Revenue and Operating Income Consolidated Financial Highlights: Summary Quarterly Consolidated Results1 Record Revenue of $104.9 million, a 3.6% increase ($ in millions) (100% organic) compared to $101.3 million in the prior year Highest ever quarterly sales into the HVAC
Slide 9: Diversified Revenue Across End Markets Served
Diversified Revenue Across End Markets Served1 ($ in millions) $91.6MM $101.3MM $104.9MM Mining 3% Mining 3% Mining 2% Rail 4% Rail 3% Rail 5% Energy 4% Energy 8% Energy 8% General Industrial 10% General Industrial 13% General Industrial 17% Plumbing 11% Plumbing 10% Plumbing 9% Architecturally Spec
Slide 10: 2Q21: Industrial Products Summary
2Q21: Industrial Products Summary1 Revenue Revenue increased 15.5% to $72.5MM Adjusted Operating Income from $62.8MM in the prior year period as ($ in millions) demand in HVAC/R and plumbing rebounded in 2Q21 due to ongoing work from home, higher than average temperatures, and distributor inventor
Slide 11: 2Q21: Specialty Chemicals Summary
2Q21: Specialty Chemicals Summary1 Revenue Revenue decreased 15.8% to $32.4MM Adjusted Operating Income from $38.6MM in the prior year period as increased sales volumes into the plumbing ($ in millions) and HVAC/R end markets were more than offset by pandemic driven demand decline in energy, gener
Slide 12: Fiscal 1st Half 2021 Summary of Financial Results
Fiscal 1st Half 2021 Summary of Financial Results CSWI Product Spotlight Safe-T-Switch® Model SC1 inline cleanout device allows quick and easy Safe-T-Switch® SC1 access for cleaning of condensate drain lines. Device includes an integrated, easy-access Schrader valve for pressure cleaning. The direct
Slide 13: 1H21: Further Enhanced Liquidity and Leverage
1H21: Further Enhanced Liquidity and Leverage 1st Half 2021 Consolidated Financial Highlights: Net cash provided by operating activities from continuing operations Increased Operating increased to $44.8 million in 1H21, a 19.4% increase over $37.5 million in the Cash Flow prior year period Stron
Slide 14: 1H21: Industrial Products Summary
1H21: Industrial Products Summary1 Revenue Revenue increased 6.0% to $133.7 million Adjusted Operating Income in the prior year period due to increased ($ in millions) demand in HVAC/R and plumbing end markets, partially offset by other end markets served Segment operating income increased to $3
Slide 15: 1H21: Specialty Chemicals Summary
1H21: Specialty Chemicals Summary1 Revenue Revenue decreased 20.0% to $62.2 million Adjusted Operating Income from $77.5 million in the prior year period ($ in millions) due to pandemic driven demand decline in all end markets served Segment operating income decreased to $9.8 million due primari
Slide 16: Diversified Revenue Across End Markets Served
Diversified Revenue Across End Markets Served1 ($ in millions) $181.2MM $203.7MM $195.9MM Mining 3% Mining 3% Mining 3% Rail 5% Rail 5% Rail 3% Energy 5% Energy 8% Energy 8% General Industrial 10% General Industrial 13% General Industrial 15% Plumbing 11% Plumbing 10% Plumbing 11% Architecturally Sp
Slide 17: Driving Long-Term Shareholder Value
Driving Long-Term Shareholder Value CSWI Product Spotlight PRO-Fit Quick Connect fittings are designed to connect refrigerant PRO-Fit lines without an open flame, brazing, or swaging. They are suitable for joining refrigerant lines in seconds after cutting the line, deburring the Quick Connect ends,
Slide 18: Seeking Sustainable Growth in Shareholder Value
Seeking Sustainable Growth in Shareholder Value Demonstrated track record Maintain Our Strong Balance Sheet of proven growth and enhancing long-term shareholder value Allocate Capital Efficiently 2015 public debut with market cap of ~$500MM, ~$1.2B as of 10/23/20 FY15 revenue1 of $262MM, Maximiz
Slide 19: Maintaining Our Strong Balance Sheet
Maintaining Our Strong Balance Sheet CSWI is committed to maintaining a strong balance sheet, with ample liquidity through cash and available credit to maximize growth opportunities, both organically and inorganically. Attributes Liquidity Position1 ($ in millions) Cash balance of $47.3 million1
Slide 20: Allocating Capital Efficiently
Allocating Capital Efficiently Capital allocation decisions will continue to be prioritized on a risk-adjusted returns basis, with the goal of driving long-term shareholder value. Organic Growth Inorganic Growth TTM Capital Allocation1 ($ in millions) Invest in enhancing innovative, Prioritize a
Slide 21: 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 <40 Newly designed products, while innovative & helpful for contracto
Slide 22: 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: Attractive in our target Products that are in Enhancing products via Driving
Slide 23: 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 efficiency. CSW Industrials Target Criteria: Seek long-term growth well in excess of GDP Expect st
Slide 24: CSWI Acquisition History
CSWI Acquisition History Acquisitions Aligned with Target Metrics Identified and executed accretive acquisitions that broadened and complemented our portfolio of brands and products Optimize costs in strategic acquisitions and eliminate most non-manufacturing related costs in product line acquis
Slide 25: Business Segment Discussion
Business Segment Discussion CSWI Product Spotlight OilSafe®, is a lubrication management system used to establish best OilSafe practices throughout our customer’s workflow. Every step is color-coded to eliminate risk and human error - simplifying maintenance and Lubrication Management extending the
Slide 26: Two Business Segments With Diverse Product Offerings
Two Business Segments With Diverse Product Offerings Industrial Products Specialty Chemicals Specialty mechanical products, controls, fire & smoke Consumables that enhance performance characteristics and protection; architecturally specified building products; reliability, including pipe thread seal
Slide 27: Industrial Products – Segment Overview
Industrial Products – Segment Overview Summary: Highly diversified product portfolio Focus on adding value by innovating ~$243MM providing industry leading products in new and existing products to TTM1 Revenue both direct-to-customer and accelerate organic growth. distributor models. Future gr
Slide 28: Specialty Chemicals – Segment Overview
Specialty Chemicals – Segment Overview Summary: Our product portfolio allows us to Focus on adding value by innovating ~$136MM effectively compete and capture new and existing products to TTM1 Revenue enhanced margins relative to larger accelerate organic growth. Specialty Chemical peers. Futu
Slide 29: Appendix
Appendix CSWI Product Spotlight Air Sentry Breathers provide the first line of defense in contamination Air Sentry® control, using patented designs to clean air. These are often used to replace existing breather caps or air vents on fluid holding storage tanks. Desiccant Breathers End Market: Genera
Slide 30: CSWI Executive Team: Corporate
CSWI Executive Team: Corporate Joe Armes James Perry Luke Alverson Chairman, CEO & Executive VP & CFO Senior VP, General President Counsel & Secretary Joe has served as the Company’s James has been EVP and CFO since Luke has served as SVP, General Chairman of the Board of Directors & May 2020. From
Slide 31: CSWI Executive Team: Business Segments
CSWI Executive Team: Business Segments Don Sullivan Craig Foster Executive VP & GM, Industrial Products Senior VP & GM, Specialty Chemicals Don has served as the EVP & GM, Industrial Products since Craig has served as SVP & GM, Specialty Chemicals since May 2020. Mr. Sullivan previously served as th
Slide 32: Products Serving the Architecturally Specified Building Products End Market
Products Serving the Architecturally Specified Building Products End Market 32 Investor Presentation October 2020
Slide 33: Products Serving the Energy End Market
Products Serving the Energy End Market 33 Investor Presentation October 2020
Slide 34: Products Serving the HVAC/R End Market
Products Serving the HVAC/R End Market 34 Investor Presentation October 2020
Slide 35: Products Serving Niche HVAC/R Mini-Split Market
Products Serving Niche HVAC/R Mini-Split Market 35 Investor Presentation October 2020
Slide 36: Products Serving the General Industrial End Market
Products Serving the General Industrial End Market 36 Investor Presentation October 2020
Slide 37: Products Serving the Mining End Market
Products Serving the Mining End Market 37 Investor Presentation October 2020
Slide 38: Products Serving the Plumbing End Market
Products Serving the Plumbing End Market 38 Investor Presentation October 2020
Slide 39: Products Serving the Rail End Market
Products Serving the Rail End Market 39 Investor Presentation October 2020
Slide 40: Reconciliation of Fiscal Second Quarter Segment Operating Income to Adjusted Segment Operating Income
Reconciliation of Fiscal Second Quarter Segment Operating Income to Adjusted Segment Operating Income (Amounts in thousands, except percentages) (unaudited) For the Three Months Ended September 30, 2020 For the Three Months Ended September 30, 2019 For the Three Months Ended September 30, 2018 Conso
Slide 41: Reconciliation of Fiscal Year-to-Date Segment Operating Income to Adjusted Segment Operating Income
Reconciliation of Fiscal Year-to-Date Segment Operating Income to Adjusted Segment Operating Income (Amounts in thousands, except percentages) (unaudited) Year To Date September 30, 2020 Year To Date September 30, 2019 Year To Date September 30, 2018 Consolidated Consolidated Consolidated Industrial
Slide 42: Reconciliation of Fiscal Year Segment Operating Income to Adjusted Segment Operating Income
Reconciliation of Fiscal Year Segment Operating Income to Adjusted Segment Operating Income (in thousands, except percentages) Fiscal Year Ended March 31, 2020 Fiscal Year Ended March 31, 2019 Fiscal Year Ended March 31, 2018 Consolidated Consolidated Consolidated Industrial Specialty Corporate Cont
Slide 43: Reconciliation of TTM Operating Income to Adjusted Operating Income
Reconciliation of TTM1 Operating Income to Adjusted Operating Income (Amounts in thousands, except percentages) (Una udi ted) Trailing Twelve Month Actuals by Quarter 3Q20 4Q20 1Q21 2Q21 T12M Revenue $ 83,716 $ 98,498 $ 90,964 $ 104,940 $378,118 Adj Gros s Ma rgi n 37,691 44,719 42,752 48,736 173,89
Slide 44: Reconciliation of Net Income to Adjusted Net Income, Continuing Operation
Reconciliation of Net Income to Adjusted Net Income, Continuing Operation (unaudited) (Amounts in thousands, Except Share Data) Quarter Ended September 30, Six Months Ended September 30, 2020 2019 2020 2019 GAAP Net Income, Continuing Operations $ 16,354 $ 8,818 $ 28,312 $ 24,163 Adjusting items, ne
Slide 45: CSW Industrials
CSW INDUSTRIALS
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