CSW Industrials Reports Fiscal Third Quarter and Year-to-Date 2021 Results
DALLAS, Feb. 05, 2021 (GLOBE NEWSWIRE) -- 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. Griffin
Vice President, Investor Relations, & Treasurer
214-489-7113
adrianne.griffin@cswi.com
CSW INDUSTRIALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended December 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% | |||||||||||||||||||||