CSW INDUSTRIALS, INC. Q1 FY2025 earnings call

• Record results in Q1 2025: Revenue $226M, EBITDA $65M, EPS $2.47, net income $39M, cash flow from operations $63M. - Gross profit margin expanded to 47.5%, EBITDA margin to 28.9%. - Paid down $51M of debt on revolving credit facility, ending with $115M outstanding. - Each segment performed well; Contractor Solutions had strong organic and acquisition-driven growth, SRS affected by Texas weather event, EBS achieved 20% EBITDA margin. - Contributed $4.2M to ESOP for ninth consecutive year, aggregate $26.5M since 2016.

Contractor Solutions: Revenue of $160 million, accounting for 71% of consolidated revenue. Organic revenue growth of $13.3 million (9.5%) and $7.2 million from the dust-free acquisition (5.1%). Segment EBITDA was $58.3 million, 36% of revenue. Specialized Reliability Solutions: Revenue decreased 2% to $36.8 million due to volume decrease, but EBITDA margin improved to 23%. Engineered Building Solutions: Revenue increased 12% to $30.9 million, with EBITDA of $6.2 million and 20% EBITDA margin.

• Continue to deliver growth outpacing served markets. - Focus on cultivating inorganic investment opportunities. - Anticipate full-year growth in revenue, EBITDA, EPS, and cash flow.

• Weather events (e.g., Texas power outage) causing revenue delays and higher expenses. - Ocean freight costs increasing, impacting margins in Q2-Q4. - Margin fluctuations due to product mix, timing, and seasonality.

Q: Talk about sustainability of sales and margin momentum going into Q2 and pull forwards.

A: Exceptional quarter, margins fluctuate, some revenue pull forward from Q2 to Q1.

Q: Impact of OEM HVAC on CSW?

A: Residential HVAC up, tailwind but CSW comps tougher.

Q: Input costs, overseas freight?

A: Freight rates up, Q2-Q4 impact, monitoring.

Q: M&A priority and weather impact?

A: M&A still priority, weather events not material to financial results