CSW Industrials Provides Updates to Share Repurchase Program and Revolving Credit Facility; Reaffirms Capital Allocation Strategy
December 16 2022 - 8:04AM
CSW Industrials, Inc. (Nasdaq: CSWI) today provides the following
updates:
- Announces a new $100 million share
repurchase program, authorized by Board of Directors, to replace
the existing program
- Increases revolving credit facility
committed amount to $500 million
- Reaffirms commitment to capital
allocation strategy previously published on November 7, 2018
Joseph B. Armes, CSWI Chairman, Chief Executive
Officer, and President commented, “This new $100 million share
repurchase program underscores our Board’s confidence in CSWI’s
resilient business model, future growth, and cash generation. The
incremental $100 million of capital available through our revolving
credit facility reflects a strong reception from the bank market
and is a testament to CSWI’s track record of financial performance.
We appreciate the support of our lender group and look forward to
our continued collaboration as we execute our growth strategy.”
Armes continued, “With our sustained financial
performance, strong balance sheet, and stated objective of
enhancing long-term shareholder value, I am pleased to reaffirm our
commitment to our previously articulated capital allocation
strategy. Our broadly discussed capital allocation principles
remain unchanged, and we believe reaffirming this strategic
commitment adds incremental accountability to our shareholders.
Since the Company’s spin-off in 2015, we have invested $566 million
in acquisitions, returned $131 million to our shareholders through
share repurchases, and paid $31 million in dividends to our
shareholders, demonstrating our commitment to enhance long-term
shareholder value.”
New $100 Million Share Repurchase
Program
CSWI today announced its Board of Directors
authorized a new $100 million share repurchase program, which
replaces the existing $100 million program. Under the Company’s
prior programs, the Company has repurchased 1.9 million shares to
date.
Under the newly authorized program, shares may
be repurchased from time to time in the open market or in privately
negotiated transactions. All repurchases will be made at the
Company’s discretion, based on ongoing assessments of the business’
prospects, capital allocation priorities, the market price of its
common stock and general market conditions. The Board of
Directors has established an expiration of December 31, 2024, for
completion of the repurchase program; however, the program may be
extended in the future, or it may be limited or terminated at any
time without notice.
Revolving Credit Capacity Increase of
$100 Million
On May 18, 2021, CSWI entered into a five-year,
$400 million Revolving Credit Facility agreement that contained a
$150 million accordion feature. On December 15, 2022, the Company
amended the Revolving Credit Facility to utilize a portion of the
accordion feature, thus increasing the commitment from $400 million
to $500 million, and concurrently reduced the available incremental
accordion by a corresponding amount.
The Company expects to employ the incremental
commitment for general corporate purposes and to support its
strategic growth initiatives. The additional commitment further
bolsters liquidity and provides additional flexibility to execute
the fiscal 2024 plan.
Stated Capital Allocation Principles
CSW Industrials is committed to maintaining a
strong balance sheet with ample liquidity through both cash and
available credit to maximize growth opportunities, both organically
and inorganically. Capital allocation will be evaluated and
prioritized on a risk-adjusted returns basis as detailed below.
- Investment to support organic
growth opportunities.
- Investment in inorganic growth
opportunities:
- The Company will continue to
prioritize accretive, synergistic acquisitions within its existing
segments and end markets served.
- The Company will also consider
broader strategic opportunities as appropriate.
- Return of excess free cash to
stockholders as appropriate through opportunistic share repurchases
and dividends.
Through these efforts, the Company targets a
sustained leverage ratio of 1x to 3x total debt to EBITDA. The
Company retains the flexibility to exceed the maximum sustained
leverage ratio for a limited time to support strategic investment
opportunities.
About CSW Industrials
CSW Industrials is a diversified industrial
growth company with industry-leading operations in three segments:
Contractor Solutions, Engineered Building Solutions, and
Specialized Reliability Solutions. CSWI provides niche, value-added
products with two essential commonalities: performance and
reliability. The primary end markets we serve with our well-known
brands include: HVAC/R, plumbing, general industrial,
architecturally-specified building products, energy, mining, and
rail. For more information, please
visit www.cswindustrials.com.
Investor Relations
Adrianne D. GriffinVice President Investor Relations, &
Treasurer214-489-7113adrianne.griffin@cswi.com
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