CSW Industrials, Inc. · NYSE:CSW
CSW Industrials — Investor Presentation (September 2024)
39 slides from CSW Industrials's investor presentation, September 2024
Slide 1: Investor Presentation September 2024
CSW Industrials Investor Presentation September 2024
Slide 2: Forward Looking Statement and 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: CSW Industrials Key Highlights
CSW Industrials, Inc. (Nasdaq: CSWI) Key Highlights 2015 Publicly Listed on Nasdaq2 ~$5.2B A diversified industrial growth company with a strategic focus on providing niche, Market Capitalization3 value-added products in the end markets we serve. $647M Three Segments (Segment percentages reflect TTM
Slide 4: Continuously Evolving Our Portfolio
Continuously Evolving Our Portfolio CSW Industrials has consistently evolved through strategic acquisitions and initiatives, resulting in a proven track record of sustained growth and margin expansion. 2015 portfolio TTM Q1’25 portfolio1 Revenue by segment Revenue by segment Other Specialized Reliab
Slide 5: 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 6: 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 7: Compelling Investment Thesis
Compelling Investment Thesis Growth exceeding end • Total revenue CAGR of 17.8% from FY19 through FY241 markets served • Organic revenue CAGR of 10.1% from FY19 through FY241, 2 Robust margin • 43.9% Adjusted Gross Profit Margin annual average FY19 – FY241 profile • 22.2% Adjusted EBITDA Margin annu
Slide 8: 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 • 952% market cap growth1 Allocate Capital Efficiently • 212% Revenue growth2 • 276% Adjusted EBITDA growth3 Invest in Organic
Slide 9: Strong Long-Term Free Cash Flow and EPS Growth
Strong Long-Term Free Cash Flow and EPS Growth Free Cash Flow1/Share and Adjusted EPS (FY20 – FY24) Legend Free Cash Flow1/Share FCF / Share FY20-FY24 CAGR: 24.5% Adjusted EPS $9.48 Adjusted EPS FY20-FY24 CAGR: 21.8% $6.92 $7.01 $6.20 $4.39 $3.94 $3.80 $3.36 $3.38 $3.19 FY20 FY21 FY22 FY23 FY24 Inve
Slide 10: Stated Capital Allocation Principles
Stated Capital Allocation Principles CSW Industrials is committed to maintaining a strong balance sheet with ample liquidity through both cash and available credit to capitalize on growth opportunities, both organically and inorganically. Capital Allocation Policy issued in November 2018 and reaffir
Slide 11: Allocating Capital Efficiently
Allocating Capital Efficiently Capital allocation decisions are prioritized on a risk-adjusted returns basis, with TTM Capital Allocation1 the ultimate goal of driving long-term shareholder value. ($ in millions) $169.3M Organic Growth Inorganic Growth Capital Expenditures $14.7 • Invest in enhancin
Slide 12: 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 13: Long Standing Track Record of Successful Acquisitions
Long Standing Track Record of Successful Acquisitions We have a successful record of making attractive and synergistic acquisitions that support expansion of our broad portfolio of solutions. Acquisition Metrics Key Highlights • Identify and execute accretive acquisitions that will broaden and compl
Slide 14: 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 15: 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 16: Business Segment Overview
Business Segment Overview
Slide 17: Segments Summary
Segments Summary Contractor Solutions Specialized Reliability Solutions Engineered Building Solutions • $557.0M TTM Q1’25 Revenue, • $148.7M TTM Q1’25 Revenue, • $118.0M TTM Q1’25 Revenue, $185.2M Adjusted EBITDA, and $28.2M EBITDA, and $22.0M EBITDA, and 33.3% Adjusted EBITDA margin 19.0% EBITDA m
Slide 18: 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 19: Contractor Solutions: Products
Contractor Solutions: Products Water & Gas Pipe Thread Sealant Connectors Indoor Air Quality (IAQ) Products Surge Protective Devices Grilles, Registers, and Diffusers Condensate overflow switches and clean out devices Secondary Condensate Drain Pans Investor Presentation 19 September 2024
Slide 20: HVAC/R Mini-Split Niche Market: Products
HVAC/R Mini-Split Niche Market: Products Slimduct & Fortress Novent Lineset duct and fitting systems, Code compliant, locking caps protect against refrigerant 5 sizes, 4 colors theft and inhalation. A2L refrigerant compatible AC Leak Freeze with UV Leak stop sealant, Nokink non clogging, non reactiv
Slide 21: 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 22: Specialized Reliability Solutions: Products
Specialized Reliability Solutions: Products Investor Presentation 22 September 2024
Slide 23: Specialized Reliability Solutions: Shell Whitmore JV Products
Specialized Reliability Solutions: Shell Whitmore JV Products Investor Presentation 23 September 2024
Slide 24: 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 25: Engineered Building Solutions: Products
Engineered Building Solutions: Products Investor Presentation 25 September 2024
Slide 26: Fiscal 2025 First Quarter Summary of Financial Results
Fiscal 2025 First Quarter Summary of Financial Results
Slide 27: Consolidated Results: 1Q25 Summary
Consolidated Results: 1Q25 Summary Consolidated Financial Highlights (1Q25 vs 1Q24): Summary Quarterly Consolidated Results • All time record quarterly revenue of $226.2M, an 11% increase ($ in millions) ◦ $15.7M increase from organic revenue as a result of increased volumes and pricing actions ◦ $7
Slide 28: Contractor Solutions: 1Q25 Segment Summary
Contractor Solutions: 1Q25 Segment Summary Summary Quarterly Segment Financials (1Q25 vs 1Q24): Segment Results ($ in millions) • Segment Revenue of $160.4M, a 15% increase ◦ Organic increase of $13.3M, due to an increase in unit volumes 33.4% 36.3% and pricing actions 31.2% Margin Margin ◦ Inorgani
Slide 29: Specialized Reliability Solutions: 1Q25 Segment Summary
Specialized Reliability Solutions: 1Q25 Segment Summary Summary Quarterly Segment Results Segment Financials (1Q25 vs 1Q24): ($ in millions) • Segment Revenue of $36.8M, a $0.9M, or 2% decrease ◦ Primarily driven by a slight decrease in volume ◦ Revenue growth in the general industrials and rail tra
Slide 30: Engineered Building Solutions: 1Q25 Segment Summary
Engineered Building Solutions: 1Q25 Segment Summary Segment Financials (1Q25 vs 1Q24): Summary Quarterly Segment Results • Segment Revenue of $30.9M, a 12% increase ($ in millions) ◦ Growth driven by commercial initiatives ◦ Bill to book ratio for the trailing eight quarters was 1.1 to 1 • Segment E
Slide 31: Appendix
Appendix
Slide 32: 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 Jeff A. Underwood Chairman, CEO Executive VP and CFO Executive VP and Senior VP, General Senior VP and
Slide 33: Reconciliation of Fiscal First Quarter Segment Operating Income to Segment EBITDA
Reconciliation of Fiscal First Quarter Segment Operating Income to Segment EBITDA (unaudited) (unaudited) (unaudited) (Amounts in thousands) Three months ended June 30, 2024 Three months ended June 30, 2023 Three months ended June 30, 2022 CS SRS EBS Other CSWI CS SRS EBS Other CSWI CS SRS EBS Other
Slide 34: Reconciliation of TTM Q1'25 Segment Operating Income to Adjusted Segment EBITDA
Reconciliation of TTM Q1’25 Segment Operating Income to Adjusted Segment EBITDA (unaudited) (Amounts in thousands) Trailing Twelve Months Ended June 30, 2024 CS SRS EBS Other CSWI Revenue, net $ 556,958 $ 148,693 $ 118,047 $ (8,042) $ 815,656 Operating Income $ 152,254 $ 22,451 $ 20,168 $ (25,902) $
Slide 35: Reconciliation of Fiscal Year Company Net Income to Adjusted EBITDA
Reconciliation of Fiscal Year Company Net Income to Adjusted EBITDA Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended (Amounts in thousands) 3/31/2024 3/31/2023 3/31/2022 3/31/2021 3/31/2020 3/31/2019 3/31/2015 Net Income attributable to CSWI $ 101,648 $ 96,435 $ 66,385 $
Slide 36: Reconciliation of Fiscal Year Company Gross Profit to Adjusted Gross Profit
Reconciliation of Fiscal Year Company Gross Profit to Adjusted Gross Profit (Amounts in thousands) Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended 3/31/2024 3/31/2023 3/31/2022 3/31/2021 3/31/2020 3/31/2019 Revenue, net $ 792,840 $ 757,904 $ 626,435 $ 419,205 $ 385,871 $ 350,155 Co
Slide 37: Reconciliation of Fiscal Year Company Operating Cash Flow to Free Cash Flow/Share
Reconciliation of Fiscal Year Company Operating Cash Flow to Free Cash Flow/Share Year Ended Year Ended Year Ended Year Ended Year Ended (Amounts in thousands) 3/31/2024 3/31/2023 3/31/2022 3/31/2021 3/31/2020 Net Cash Provided by Operating Activities $ 164,332 $ 121,453 $ 69,089 $ 66,254 $ 71,397 L
Slide 38: Reconciliation of Fiscal Year Company EPS to Adjusted EPS
Reconciliation of Fiscal Year Company EPS to Adjusted EPS (Amounts in thousands) Year Ended Year Ended Year Ended Year Ended Year Ended 3/31/2024 3/31/2023 3/31/2022 3/31/2021 3/31/2020 Net Income attributable to CSWI $ 101,648 $ 96,435 $ 66,385 $ 40,099 $ 44,656 Diluted Shares 15,581 15,546 15,807
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