CSW 2025 Q4 Earnings Record Net Income Climbs 18.7%

CSW Industrials, Inc. (Nasdaq: CSWI or the "Company") today reported record results for the fiscal 2025 fourth quarter period ended March 31, 2025. Fiscal 2025 Fourth Quarter Highlights (comparisons to fiscal 2024 fourth quarter) Total revenue increased 9.3% to a fourth quarter record of $230.5 million, driven by inorganic growth of 6.3% from the recent acquisitions of Dust Free, PSP Products, and PF WaterWorks, and organic growth of 3.0% Contractor Solutions delivered organic revenue growth of 8.0% in the fourth quarter Net income attributable to CSWI of $35.1 million, or $37.7 million adjusted, increased 18.7% to a fourth quarter record, compared to $31.8 million Earnings per diluted share ("EPS") of $2.08, or $2.24 adjusted, increased 9.8% to a fourth quarter record, compared to $2.04 Adjusted EBITDA grew 7.1% to a fourth quarter record of $59.8 million, with a margin of 25.9% compared to 26.5% Subsequent to fiscal year-end, acquired Aspen Manufacturing for $313.5 million and closed on a new, 5-year, $700 million revolving credit facility. CSW Industrials, Inc.'s fiscal 2025 fourth quarter results surpassed expectations with notable increases in revenue and net income. The company maintained its guidance for fiscal 2026, projecting continued growth across revenue, adjusted EBITDA, and EPS.

Revenue
CSW Industrials achieved a 9.3% increase in total revenue for Q4 2025, reaching $230.5 million. The Contractor Solutions segment contributed significantly, with revenue rising to $165.9 million, driven by 9.5% inorganic growth from acquisitions and 8.0% organic growth. Specialized Reliability Solutions faced a decline, recording $37.7 million, while Engineered Building Solutions experienced a decrease to $28.7 million, impacted by project timing.

Earnings/Net Income
CSW's EPS rose 2.1% to $2.09 in 2025 Q4 from $2.05 in 2024 Q4, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $35.05 million in 2025 Q4, marking 9.6% growth from $32 million in 2024 Q4. The Company has sustained profitability for 10 years over the corresponding fiscal quarter, reflecting stable business performance. The EPS reflects positive growth, indicating a strong performance.

Price Action
The stock price of Csw has edged down 1.38% during the latest trading day, has dropped 7.64% during the most recent full trading week, and has edged up 1.10% month-to-date.

Post-Earnings Price Action Review
CSW Industrials' post-earnings strategy of buying shares when there is a revenue miss and holding for 30 days has yielded impressive results. The approach achieved a 407.27% return, significantly outperforming the benchmark return of 87.97%. While the strategy experienced a maximum drawdown of -40.02% and maintained a Sharpe ratio of 1.20, indicating some risk, the overall compound annual growth rate (CAGR) was 38.59%, demonstrating substantial growth over the backtested period. The strategy underscores a high-risk, high-reward approach, with notable gains despite fluctuations, showcasing the potential for strong returns amidst market volatility.

CEO Commentary
Joseph Armes, Chairman, CEO and President of CSW Industrials, expressed pride in delivering record results for revenue and adjusted earnings in Q4 2025, attributing growth to operational excellence and a resilient business model. He highlighted a 14.1% compound annual growth rate in revenue since the spin-off, expecting continued success while noting potential challenges from market fluctuations. Armes underscored the strategic acquisition of Aspen Manufacturing, enhancing their HVAC/R offerings, and emphasized a focus on sustainable growth through disciplined capital allocation and further acquisitions. His tone remained optimistic, reflecting confidence in the company’s future prospects and ability to outperform market trends.

Guidance
CSW Industrials anticipates revenue growth in fiscal 2026, with adjusted EBITDA and EPS also expected to increase. The company projects Aspen's revenue to rise in the high single to low double digits, with an EBITDA margin around 24%. They expect overall adjusted EBITDA margins for Contractor Solutions to be in the low 30s, while estimating a net interest expense of approximately $5.3 million for the full year. The effective tax rate is forecasted at 26%, with a focus on continued growth in cash flow and profitability despite anticipated increases in amortization expenses.

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