CSW Industrials, Inc. (Nasdaq: CSWI or the "Company") today
reported results for the fiscal third quarter 2021 and year-to-date
periods ended December 31, 2020.
Fiscal Third Quarter and Year-to-Date
2021 Highlights
- Quarterly revenue of $89.9 million,
a 7.4% increase (2.1% organic) compared to $83.7 million in the
prior year period
- Quarterly earnings per diluted
common share (EPS) of $0.16, or $0.59 as adjusted to exclude
transaction expenses, compared to $0.48 in the prior year
period
- Heating, ventilation, air
conditioning, and refrigeration (HVAC/R) and architecturally
specified building products (ASBP) end markets report 20.8% (15.7%
organic) and 3.3% (all organic) year-to-date sales growth,
respectively, over the prior year period
- Year-to-date 2021 EPS of $2.06, or
$2.49 adjusted to exclude transaction expenses, compared to
adjusted EPS of $2.35 in the prior year-to-date period
- Year-to-date net cash provided by
operating activities of $54.0 million
- Successfully closed the previously
announced acquisition of TRUaire on December 15, 2020, for total
consideration of $385.7 million, enhancing future organic HVAC/R
growth potential
- Maintained balance sheet strength
with a post-acquisition leverage ratio, in accordance with our
credit facility, net of cash on hand, of ~1.95x
- Subsequent to quarter close,
announced a definitive agreement to form a strategic joint venture
and an expanded distribution relationship with Shell
Lubricants
Joseph B. Armes, CSW Industrials’ Chairman,
President, and Chief Executive Officer, commented, “Our third
quarter results extended the trend of strong performance,
highlighted by 23% growth in adjusted EPS. During the quarter, we
consummated the TRUaire acquisition, broadening our HVAC/R product
portfolio, increasing our market share, and meaningfully expanding
sales into our fastest growing and most profitable end market.
Subsequent to quarter end, our Whitmore operating company and Shell
Lubricants announced an agreement to form a joint venture that we
expect will be an organic growth catalyst, and will conduct
operations at our world-class specialty chemical manufacturing
facility.”
Armes continued, “We continue to be guided by
the objectives we outlined in May of 2020: to treat our employees
well, serve our customers well, manage our supply chains
effectively, and thus position CSWI for sustainable, long-term
growth and profitability. Consistent with our capital allocation
strategy, we have continued investing for organic and inorganic
growth to maximize risk adjusted returns for our shareholders.
Since our spin-off in October of 2015, we have invested $465
million in six acquisitions, and since the third quarter of 2018
have returned approximately $100 million to shareholders through
our quarterly dividend and share repurchase programs.”
Fiscal Third Quarter 2021 Results of
Operations
Fiscal third quarter consolidated revenue was
$89.9 million, compared to $83.7 million in the prior year period,
with $10.1 million of increased sales in the Industrial Products
segment, partially offset by a sales decrease of $3.9 million in
the Specialty Chemicals segment. Organic sales growth of 2.1%, as
compared to the prior year quarter, was driven primarily by
increased sales into the HVAC/R ($4.7 million) and ASBP ($3.7
million) end markets, partially offset by decreased sales volumes
into the energy ($2.0 million), rail ($1.7 million), plumbing ($1.0
million), general industrial ($0.7 million), and mining ($0.6
million) end markets.
Strength in the HVAC/R end market was primarily
attributable to a sustained number of people working from home and
the incremental contribution from the TRUaire acquisition ($4.5
million). Increased sales in ASBP were associated with the
acceleration of projects already underway and continued success in
taking market share, despite the general reduction in activity
across the construction industry. The modest reduction in sales
into the plumbing end market was primarily associated with selling
HVAC/R products to traditional plumbing customers; hence normal
HVAC/R buying patterns impacted plumbing end market sales. As
compared to the prior year period, COVID-19 pandemic-driven demand
degradation continued to impact sales in the other end markets
served. Despite this, cumulative fiscal third quarter sales into
the energy, mining, rail, and general industrial end markets
slightly exceeded the fiscal first and second quarters of 2021.
Consolidated gross profit in the fiscal third
quarter was $39.3 million, compared to $37.7 million, in the prior
year period, with the increased profit resulting primarily from
increased sales. Gross profit margin as a percentage of sales was
43.7%, compared to 45.0% in the prior year period, with this slight
decline primarily due to costs associated with the accelerated
lower margin projects in the ASBP end market as mentioned
above.
Consolidated GAAP operating expenses in the
current quarter were $35.2 million, or 39.2% of revenue, compared
to the prior year period of $27.2 million, or 32.5% of revenue. The
increased operating expenses were due to transaction expenses
related to the TRUaire acquisition ($6.9 million) and the efforts
to establish the joint venture ("JV") ($1.1 million), resulting in
increased operating expenses as a percentage of sales. Adjusted to
exclude these transaction expenses, fiscal third quarter 2021
operating expenses were $27.3 million, or 30.3% of revenue, a 220
basis-point improvement over the prior year period.
Reported operating income in the current period
was $4.1 million, compared to $10.5 million in the prior year
period. Adjusted to exclude the aforementioned transaction
expenses, fiscal third quarter 2021 operating income was $12.1
million, a 15.1% increase over the prior year period. Reported
operating income margin in fiscal third quarter 2021 was 4.6%, or
13.4% on an adjusted basis, a 90 basis-point improvement over the
prior year period. There were no adjustments to operating income in
fiscal third quarter 2020.
Net income in the fiscal third quarter of 2021
was $2.3 million, or $0.16 per diluted share, compared to $7.3
million, or $0.48 in the prior year period. Adjusted to exclude
tax-effected transaction expenses in the current period, adjusted
net income was $8.8 million, or $0.59 per diluted share.
Industrial Products segment revenue was $58.8
million, a $10.1 million increase, or 20.8%, from the prior year
period, as increased organic sales volumes into the HVAC/R ($4.5
million) and ASBP ($3.7 million) end markets, plus the inorganic
growth from TRUaire ($4.5 million), were partially offset by
decreased sales volumes into plumbing ($1.0 million), rail ($0.8
million), and general industrials ($0.8 million) end markets. GAAP
segment operating income was $3.0 million, compared to
$8.6 million the prior year period, due primarily to the $6.9
million TRUaire transaction expenses, which were partially offset
by increased sales. Operating income margin in the fiscal third
quarter was 5.1%, compared to 17.8% in the prior year period, due
to TRUaire transaction expenses. Adjusted to exclude transaction
expenses, adjusted segment operating income was $9.9 million, or
16.9% of revenue. There were no adjustments in fiscal third quarter
2020.
Specialty Chemicals segment revenue was $31.1
million, a $3.9 million decrease from the prior year period
primarily due to decreased sales volumes into energy ($2.0
million), rail ($0.9 million), and mining ($0.6 million) end
markets. GAAP segment operating income was $4.7 million, a $0.7
million decrease compared to the prior year period, due to
decreased sales and transaction expenses related to the efforts to
establish the JV, partially offset by decreases in sales
commissions, travel and personnel expenses. Reported operating
income margin in the fiscal third quarter was 15.1%, compared to
the prior year period of 15.4%. Adjusted to exclude JV-related
transaction expenses, adjusted segment operating income was $5.8
million, or 18.5% of revenue. There were no adjustments in fiscal
third quarter 2020.
Following quarter end, the Company declared its
ninth consecutive quarterly regular cash dividend of $0.135 per
share, which will be paid on February 12, 2021, to shareholders of
record on January 29, 2021.
The Company’s effective tax rate for the fiscal
third quarter was 23.2% on a GAAP basis.
Year-to-Date 2021 Results of
Operations
Consolidated revenue of $285.8 million in the
current year-to-date period compared favorably to $287.4 million in
the prior year period as improving sales in the fiscal second and
third quarters nearly offset declines realized in the fiscal first
quarter. As compared to the prior year period, strong sales growth
into the HVAC/R ($18.4 million) and ASBP ($2.8 million) end markets
were more than offset by decreased sales volumes primarily into the
energy ($7.9 million), general industrial ($7.2 million), rail
($4.6 million), and mining ($1.5 million) end markets. HVAC/R end
market sales growth of 20.8% over the prior year period was due to
organic growth of 15.7%, or $14.0 million, and inorganic growth
from the TRUaire acquisition of $4.5 million, while all of the ASBP
growth was organic. As mentioned in the fiscal third quarter end
market commentary, COVID-19 pandemic driven demand degradation has
impacted other end market sales, with a more positive sales trend
in recent months.
Consolidated gross profit of $130.8 million
decreased 1.1%, or $1.5 million, compared to the prior year
period. Modestly lower gross profit was primarily associated with
the previously discussed acceleration of lower margin projects in
the ASBP end market, and an $0.8 million gain on sale of property,
plant, and equipment in the prior year that did not recur,
partially offset by increased inorganic sales. As a result, gross
margin as a percentage of sales decreased 20 basis points to 45.8%,
compared to 46.0% in the prior year.
GAAP consolidated operating expenses were $88.3
million, or 30.9% of revenue, compared to the prior year period of
$81.4 million, or 28.3% of revenue. The increase in operating
expenses in the current period was primarily due to the TRUaire
acquisition ($7.1 million) and JV-related ($1.1 million)
transaction expenses, as well as severance costs ($0.5 million)
resulting from the departure of a former executive officer,
partially offset by reduced spend on travel-related expenses ($2.5
million). The increase in operating expenses as a percentage of
sales was primarily attributable to these increased expenses.
Adjusted to exclude fiscal third quarter non-recurring items,
adjusted operating expenses in the current period were $80.3
million, or 28.1% of revenue. There were no operating expense
adjustments in the prior year period.
GAAP operating income in the current period was
$42.6 million, compared to the prior year period of $50.9 million.
The $8.4 million decrease was driven by the increase in operating
expenses and the decrease in gross profit as discussed above.
Adjusted to exclude transaction and fiscal third quarter
non-recurring expenses in the current period, operating income was
$50.5 million, or 17.7% of revenue, as compared to 17.5% as
adjusted in the prior year period for the aforementioned gain on
sale that did not recur.
GAAP net income in the current year period was
$30.7 million, or $2.06 per diluted share. Adjusted to exclude the
tax-effected transaction expenses in the fiscal third quarter,
adjusted year-to-date 2021 net income was $37.2 million, or
$2.49 per diluted share. In the prior year period, GAAP net income
from continuing operations was $31.4 million, or $2.07 per
diluted share. After adjusting the prior year period to exclude
one-time items, the most significant being the charge in the fiscal
second quarter to terminate the U.S. qualified pension plan ($5.4
million after-tax, or $0.35 per diluted share), gain on sale of
property, and a normalized tax rate, the adjusted net income from
continuing operations was $35.8 million, or $2.35 per diluted
share.
The effective tax rate on continuing operations
for the first nine months ended December 31, 2020, was 23.8%
on a GAAP basis.
The Company’s effective tax rate for fiscal 2021
is expected to be in a range of 24% to 26%.
For the first nine months of the current fiscal
year, Industrial Products segment revenue increased 10.1% (7.6%
organic) to $192.5 million, compared to $174.8 million in the prior
year period. The increase was primarily due to organic sales volume
growth into the HVAC/R ($13.9 million) and ASBP ($4.5 million) end
markets, and additional inorganic growth from the TRUaire
acquisition ($4.5 million), partially offset by decreased sales
volumes into the general industrial ($2.8 million) and rail ($2.4
million) end markets. Reported GAAP segment operating income was
$39.0 million, compared to $42.1 million in the prior year.
Reported segment operating income margin was 20.3% in the fiscal
first three quarters, as compared to 24.1% in the prior year
period. Adjusted for the fiscal third quarter TRUaire transaction
expenses ($6.9 million), operating income in the current year
period was $46.0 million, or 23.9% of revenue.
For the first nine months of the fiscal year,
Specialty Chemicals segment revenue was $93.3 million, compared to
$112.6 million in the prior year period, as COVID-19
pandemic-driven demand degradation negatively impacted sales in
nearly all end markets served. Reported GAAP segment operating
income in the current period was $14.5 million, compared to
$19.2 million in the prior year period. The decline in
reported operating income was due to lower revenues ($19.3
million), JV-related transaction expenses ($1.1 million), and a
gain on sale of property, plant and equipment in the prior year
that did not recur ($0.8 million), partially offset by decreases in
travel-related expenses, personnel-related expenses, and sales
commissions. In the current period, segment operating income margin
was 15.5%, compared to 17.0% in the prior year period, due to the
operating income impacts noted above. Adjusted to exclude the
JV-related expenses, current year adjusted segment operating income
was $15.5 million, or 16.6% of revenue, as compared to prior year
adjusted segment operating income of $18.4 million, or 16.3% of
revenue.
Operating cash flow from continuing operations
for the first nine months of the fiscal year was $54.0 million, as
compared to $60.4 million in the prior year period. The decrease in
operating cash flow was attributable to the aforementioned
transaction expenses in the current year period.
All percentages are calculated based upon the
attached financial statements and reconciliations of non-GAAP
financial measures.
Conference Call Information
The Company will host a conference call today at
10:00 a.m. ET to discuss the results, followed by a question and
answer session for the investment community. A live webcast of the
call can be accessed at https://cswindustrials.gcs-web.com/. To
access the call, participants may dial 1-877-407-0784,
international callers may use 1-201-689-8560, and request to join
the CSW Industrials earnings call.
A telephonic replay will be available shortly
after the conclusion of the call and until, Friday February 19,
2021. Participants may access the replay at 1-844-512-2921,
international callers may use 1-412-317-6671, and enter access code
13715018. The call will also be available for replay via webcast
link on the CSWI Investor Relations website.
Safe Harbor Statement
This press release includes forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934,
which are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, as amended. Words
or phrases such as "may," "should," "expects," "could," "intends,"
"plans," "anticipates," "estimates," "believes," "forecasts,"
"predicts" or other similar expressions are intended to identify
forward-looking statements, which include, without limitation,
earnings forecasts, effective tax rate, statements relating to our
business strategy and statements of expectations, beliefs, future
plans and strategies and anticipated developments concerning our
industry, business, operations, and financial performance and
condition.
The forward-looking statements included in this
press release are based on our current expectations, projections,
estimates, and assumptions. These statements are only predictions,
not guarantees. Such forward-looking statements are subject to
numerous risks and uncertainties that are difficult to predict.
These risks and uncertainties may cause actual results to differ
materially from what is forecast in such forward-looking
statements, and include, without limitation, the risk factors
described from time to time in our filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K.
All forward-looking statements included in this
press release are based on information currently available to us,
and we assume no obligation to update any forward-looking statement
except as may be required by law.
Non-GAAP Financial Measures
This press release includes an analysis of
adjusted earnings per share, adjusted net income, and adjusted
operating income, which are non-GAAP financial measures of
performance. For a reconciliation of these measures to the most
directly comparable GAAP measures and for a discussion of why we
consider these non-GAAP measures useful, see the “Reconciliation of
Non-GAAP Measures” section of this release.
About CSW Industrials, Inc.
CSWI is a diversified industrial growth company
with well-established, scalable platforms and domain expertise
across two segments: Industrial Products and Specialty Chemicals.
CSWI's broad portfolio of leading products provides performance
optimizing solutions to its customers. CSWI's products include
mechanical products for HVAC/R applications, building products,
sealants, and high-performance specialty lubricants. Markets that
CSWI serves include: HVAC/R, architecturally-specified building
products, general industrial, plumbing, rail, energy, and mining.
For more information, please visit www.cswindustrials.com.
Investor Relations
Adrianne D. GriffinVice President, Investor
Relations, & Treasurer214-489-7113
adrianne.griffin@cswi.com
CSW INDUSTRIALS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
INCOME (Unaudited)
|
|
Three Months EndedDecember
31, |
|
Nine Months Ended December 31, |
(Amounts in thousands, except per share amounts) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenues, net |
|
$ |
89,932 |
|
|
$ |
83,716 |
|
|
$ |
285,836 |
|
|
$ |
287,373 |
|
Cost of revenues |
|
(50,594 |
) |
|
(46,025 |
) |
|
(155,009 |
) |
|
(155,043 |
) |
Gross profit |
|
39,338 |
|
|
37,691 |
|
|
130,827 |
|
|
132,330 |
|
Selling, general and administrative expenses |
|
(35,222 |
) |
|
(27,203 |
) |
|
(88,277 |
) |
|
(81,398 |
) |
Operating income |
|
4,116 |
|
|
10,488 |
|
|
42,550 |
|
|
50,932 |
|
Interest expense, net |
|
(469 |
) |
|
(286 |
) |
|
(1,071 |
) |
|
(1,086 |
) |
Other expense, net |
|
(592 |
) |
|
(848 |
) |
|
(1,259 |
) |
|
(8,302 |
) |
Income before income taxes |
|
3,055 |
|
|
9,354 |
|
|
40,220 |
|
|
41,544 |
|
Provision for income taxes |
|
(709 |
) |
|
(2,072 |
) |
|
(9,560 |
) |
|
(10,099 |
) |
Income from continuing operations |
|
2,346 |
|
|
7,282 |
|
|
30,660 |
|
|
31,445 |
|
Loss from discontinued operations, net of tax |
|
— |
|
|
26 |
|
|
— |
|
|
(148 |
) |
Net income |
|
$ |
2,346 |
|
|
$ |
7,308 |
|
|
$ |
30,660 |
|
|
$ |
31,297 |
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per common share: |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.16 |
|
|
$ |
0.48 |
|
|
$ |
2.07 |
|
|
$ |
2.09 |
|
Discontinued operations |
|
— |
|
|
— |
|
|
— |
|
|
(0.01 |
) |
Net income |
|
$ |
0.16 |
|
|
$ |
0.48 |
|
|
$ |
2.07 |
|
|
$ |
2.08 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings (loss) per common share: |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.16 |
|
|
$ |
0.48 |
|
|
$ |
2.06 |
|
|
$ |
2.07 |
|
Discontinued operations |
|
— |
|
|
— |
|
|
— |
|
|
(0.01 |
) |
Net income |
|
$ |
0.16 |
|
|
$ |
0.48 |
|
|
$ |
2.06 |
|
|
$ |
2.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CSW INDUSTRIALS,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited)
(Amounts in thousands, except per share amounts) |
|
December 31, 2020 |
|
March 31, 2020 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
18,260 |
|
|
$ |
18,338 |
|
Accounts receivable, net of allowance for expected credit losses of
$503 and $1,170, respectively |
|
75,005 |
|
|
74,880 |
|
Inventories, net |
|
101,560 |
|
|
53,753 |
|
Prepaid expenses and other current assets |
|
20,998 |
|
|
3,074 |
|
Total current assets |
|
215,823 |
|
|
150,045 |
|
Property, plant and equipment, net of accumulated depreciation of
$77,666 and $71,355, respectively |
|
86,254 |
|
|
57,178 |
|
Goodwill |
|
222,262 |
|
|
91,686 |
|
Intangible assets, net |
|
279,502 |
|
|
46,185 |
|
Other assets |
|
76,736 |
|
|
24,151 |
|
Total assets |
|
$ |
880,577 |
|
|
$ |
369,245 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
25,667 |
|
|
$ |
21,978 |
|
Accrued and other current liabilities |
|
50,531 |
|
|
36,607 |
|
Current portion of long-term debt |
|
561 |
|
|
561 |
|
Total current liabilities |
|
76,759 |
|
|
59,146 |
|
Long-term debt |
|
254,916 |
|
|
10,337 |
|
Retirement benefits payable |
|
1,854 |
|
|
1,879 |
|
Other long-term liabilities |
|
144,331 |
|
|
21,142 |
|
Total liabilities |
|
477,860 |
|
|
92,504 |
|
Equity: |
|
|
|
|
Common shares, $0.01 par value |
|
161 |
|
|
159 |
|
Shares authorized – 50,000 |
|
|
|
|
Shares issued – 16,163 and 16,055, respectively |
|
|
|
|
Additional paid-in capital |
|
103,538 |
|
|
48,327 |
|
Treasury shares, at cost (511 and 1,311 shares, respectively) |
|
(34,075 |
) |
|
(75,377 |
) |
Retained earnings |
|
339,731 |
|
|
315,078 |
|
Accumulated other comprehensive loss |
|
(6,638 |
) |
|
(11,446 |
) |
Total equity |
|
402,717 |
|
|
276,741 |
|
Total liabilities and equity |
|
$ |
880,577 |
|
|
$ |
369,245 |
|
|
|
|
|
|
|
|
|
|
CSW INDUSTRIALS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)
|
|
Nine Months Ended December 31, |
(Amounts in thousands) |
|
2020 |
|
2019 |
Cash flows from operating activities: |
|
|
|
|
Net income |
|
$ |
30,660 |
|
|
$ |
31,297 |
|
Less: Loss from discontinued operations |
|
— |
|
|
(148 |
) |
Income from continuing operations |
|
30,660 |
|
|
31,445 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation |
|
6,079 |
|
|
6,008 |
|
Amortization of intangible and other assets |
|
5,698 |
|
|
5,238 |
|
Provision for inventory reserves |
|
1,169 |
|
|
183 |
|
Provision for doubtful accounts |
|
227 |
|
|
837 |
|
Share-based and other executive compensation |
|
3,945 |
|
|
3,776 |
|
Net gain on disposals of property, plant and equipment |
|
(42 |
) |
|
(844 |
) |
Pension plan curtailment benefit |
|
— |
|
|
6,559 |
|
Net pension benefit |
|
121 |
|
|
(156 |
) |
Net deferred taxes |
|
456 |
|
|
(369 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
|
14,115 |
|
|
10,143 |
|
Inventories |
|
(1,581 |
) |
|
(5,099 |
) |
Prepaid expenses and other current assets |
|
(4,494 |
) |
|
3,236 |
|
Other assets |
|
(340 |
) |
|
20 |
|
Accounts payable and other current liabilities |
|
(1,787 |
) |
|
(265 |
) |
Retirement benefits payable and other liabilities |
|
(180 |
) |
|
(359 |
) |
Net cash provided by operating activities, continuing
operations |
|
54,046 |
|
|
60,353 |
|
Net cash used in operating activities, discontinued operations |
|
— |
|
|
(442 |
) |
Net cash provided by operating activities |
|
54,046 |
|
|
59,911 |
|
Cash flows from investing activities: |
|
|
|
|
Capital expenditures |
|
(6,886 |
) |
|
(7,595 |
) |
Proceeds from sale of assets |
|
604 |
|
|
1,239 |
|
Cash paid for acquisitions |
|
(278,680 |
) |
|
(11,837 |
) |
Net cash used in investing activities, continuing operations |
|
(284,962 |
) |
|
(18,193 |
) |
Net cash used in investing activities |
|
(284,962 |
) |
|
(18,193 |
) |
Cash flows from financing activities: |
|
|
|
|
Borrowings on line of credit |
|
255,000 |
|
|
7,500 |
|
Repayments of line of credit and term loan |
|
(10,421 |
) |
|
(27,921 |
) |
Purchase of treasury shares |
|
(10,488 |
) |
|
(2,784 |
) |
Payments of deferred loan costs |
|
(149 |
) |
|
— |
|
Proceeds from stock option activity |
|
1,331 |
|
|
— |
|
Dividends |
|
(5,970 |
) |
|
(6,088 |
) |
Net cash provided by (used in) financing activities |
|
229,303 |
|
|
(29,293 |
) |
Effect of exchange rate changes on cash and equivalents |
|
1,535 |
|
|
808 |
|
Net change in cash and cash equivalents |
|
(78 |
) |
|
13,233 |
|
Cash and cash equivalents, beginning of period |
|
18,338 |
|
|
26,651 |
|
Cash and cash equivalents, end of period |
|
$ |
18,260 |
|
|
$ |
39,884 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP
Measures
We use adjusted earnings per share, adjusted net
income and adjusted operating income, together with financial
measures prepared in accordance with GAAP, such as revenue, income
from operations, operating expense, operating income and net
income, to assess our historical and prospective operating
performance and to enhance our understanding of our core operating
performance. We also believe these measures are useful for
investors to assess the operating performance of our business
without the effect of non-operating items.
CSW INDUSTRIALS, INC. |
RECONCILIATION OF OPERATING INCOME TO ADJUSTED OPERATING
INCOME FROM CONTINUING OPERATIONS |
(Unaudited) |
(Amounts in thousands) |
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Nine Months Ended December 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
GAAP Operating Income, Continuing Operations |
$ |
4,116 |
|
|
$ |
10,488 |
|
|
$ |
42,550 |
|
|
$ |
50,932 |
|
|
|
|
|
|
|
|
|
Adjusting items: |
|
|
|
|
|
|
|
Gain on sale of property & other |
— |
|
|
— |
|
|
— |
|
|
(776 |
) |
Transaction costs and other professional fees |
7,960 |
|
|
— |
|
|
7,960 |
|
|
— |
|
Adjusted Operating Income, Continuing Operations |
$ |
12,076 |
|
|
$ |
10,488 |
|
|
$ |
50,510 |
|
|
$ |
50,156 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CSW INDUSTRIALS, INC. |
RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME,
CONTINUING OPERATIONS |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Nine Months Ended December 31, |
(Amounts in thousands, except share data) |
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
GAAP Net Income, Continuing Operations |
$ |
2,346 |
|
|
$ |
7,282 |
|
|
$ |
30,660 |
|
|
$ |
31,445 |
|
|
|
|
|
|
|
|
|
Adjusting items, net of tax: |
|
|
|
|
|
|
|
Gain on sale of property & other |
— |
|
|
357 |
|
|
— |
|
|
(225 |
) |
Transaction costs and other professional fees |
6,499 |
|
|
— |
|
|
6,499 |
|
|
— |
|
Pension Termination |
— |
|
|
— |
|
|
— |
|
|
5,377 |
|
Discrete Tax Provisions & Other |
— |
|
|
(267 |
) |
|
— |
|
|
(811 |
) |
Adjusted Net Income, Continuing Operations |
$ |
8,845 |
|
|
$ |
7,372 |
|
|
$ |
37,159 |
|
|
$ |
35,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Net Income per diluted common share, Continuing
Operations |
$ |
0.16 |
|
|
$ |
0.48 |
|
|
$ |
2.06 |
|
|
$ |
2.07 |
|
|
|
|
|
|
|
|
|
Adjusting items, per diluted common share: |
|
|
|
|
|
|
|
Gain on sale of property & other |
— |
|
|
0.02 |
|
|
— |
|
|
(0.02 |
) |
Asset Impairment |
— |
|
|
— |
|
|
— |
|
|
— |
|
Transaction costs and other professional fees |
0.43 |
|
|
— |
|
|
0.43 |
|
|
— |
|
Pension Termination |
— |
|
|
— |
|
|
— |
|
|
0.35 |
|
Discrete Tax Provisions & Other |
— |
|
|
(0.02 |
) |
|
— |
|
|
(0.05 |
) |
Adjusted Net Income per diluted common share |
$ |
0.59 |
|
|
$ |
0.48 |
|
|
$ |
2.49 |
|
|
$ |
2.35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CSW INDUSTRIALS, INC. |
RECONCILIATION OF SEGMENT OPERATING INCOME TO ADJUSTED
SEGMENT OPERATING INCOME |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2020 |
|
Three Months Ended December 31, 2019 |
(Amounts in thousands) |
Industrial Products |
Specialty Chemicals |
Corporate and Other |
Consolidated Continuing Operations |
|
Industrial Products |
Specialty Chemicals |
Corporate and Other |
Consolidated Continuing Operations |
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
58,786 |
|
$ |
31,146 |
|
$ |
— |
|
|
$ |
89,932 |
|
|
$ |
48,673 |
|
$ |
35,043 |
|
$ |
— |
|
|
$ |
83,716 |
|
Operating Income |
$ |
2,998 |
|
$ |
4,715 |
|
$ |
(3,597 |
) |
|
$ |
4,116 |
|
|
$ |
8,643 |
|
$ |
5,414 |
|
$ |
(3,569 |
) |
|
$ |
10,488 |
|
|
|
|
|
|
|
|
|
|
|
Adjusting items: |
|
|
|
|
|
|
|
|
|
Transaction costs and other professional fees |
6,919 |
|
1,041 |
|
— |
|
|
7,960 |
|
|
— |
|
— |
|
— |
|
|
— |
|
Adjusted Operating Income |
$ |
9,917 |
|
$ |
5,756 |
|
$ |
(3,597 |
) |
|
$ |
12,076 |
|
|
$ |
8,643 |
|
$ |
5,414 |
|
$ |
(3,569 |
) |
|
$ |
10,488 |
|
% of Revenue |
16.9% |
|
18.5% |
|
|
|
|
|
13.4% |
|
|
17.8% |
|
15.4% |
|
|
|
|
|
12.5% |
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended December 31, 2020 |
|
Nine Months Ended December 31, 2019 |
(Amounts in thousands) |
Industrial Products |
Specialty Chemicals |
Corporate and Other |
Consolidated Continuing Operations |
|
Industrial Products |
Specialty Chemicals |
Corporate and Other |
Consolidated Continuing Operations |
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
192,518 |
|
$ |
93,318 |
|
$ |
— |
|
|
$ |
285,836 |
|
|
$ |
174,794 |
|
$ |
112,579 |
|
$ |
— |
|
|
$ |
287,373 |
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
$ |
39,032 |
|
$ |
14,476 |
|
$ |
(10,958 |
) |
|
$ |
42,550 |
|
|
$ |
42,099 |
|
$ |
19,179 |
|
$ |
(10,346 |
) |
|
$ |
50,932 |
|
|
|
|
|
|
|
|
|
|
|
Adjusting items: |
|
|
|
|
|
|
|
|
|
Gain on sale of property and other |
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
(776 |
) |
— |
|
|
(776 |
) |
Transaction costs and other professional fees |
6,919 |
|
1,041 |
|
— |
|
|
7,960 |
|
|
— |
|
— |
|
— |
|
|
— |
|
Adjusted Operating Income |
$ |
45,951 |
|
$ |
15,517 |
|
$ |
(10,958 |
) |
|
$ |
50,510 |
|
|
$ |
42,099 |
|
$ |
18,403 |
|
$ |
(10,346 |
) |
|
$ |
50,156 |
|
% of Revenue |
23.9% |
|
16.6% |
|
|
|
|
|
17.7% |
|
|
24.1% |
|
16.3% |
|
|
|
|
|
17.5% |
|
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