cswi-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________________________________

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 001-37454


CSW INDUSTRIALS, INC. (Exact name of registrant as specified in its charter)


Delaware						47-2266942
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

5420 Lyndon B. Johnson Freeway, Suite 500, Dallas, Texas						75240
(Address of principal executive offices)						(Zip Code)

(214) 884-3777

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol (s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

CSWI

Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

(Do not check if smaller reporting company)

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of August 1, 2022, there were 15,427,373 shares of the issuer’s common stock outstanding.

CSW INDUSTRIALS, INC.

FORM 10-Q

TABLE OF CONTENTS


		Page No.
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	1
	Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Comprehensive Income for the three months ended Jun e 30, 2022 and 2021 (unaudited)	2
	Condensed Consolidated Balance Sheets as of June 30, 2022 and March 31, 202 2 (unaudited)	3
	Condensed Consolidated Statements of Equity as of June 30, 2022 and 202 1 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2022 and 2021 (unaudited)	5
	Notes to the Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 6.	Exhibits	29
SIGNATURES		30

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

CSW INDUSTRIALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



	Three Months Ended June 30,
(Amounts in thousands, except per share amounts)	2022		2021*
Revenues, net	$	199,934	$	161,266
Cost of revenues	(113,509)		(92,240)
Gross profit	86,425		69,026
Selling, general and administrative expenses	(45,552)		(40,124)

Operating income	40,873		28,902
Interest expense, net	(1,784)		(1,538)
Other income (expense), net	169		(172)
Income before income taxes	39,258		27,192
Provision for income taxes	(9,620)		(6,507)
Net income	29,638		20,685
Less: Income attributable to redeemable noncontrolling interest	(195)		(224)

Net income attributable to CSW Industrials, Inc.	$	29,443	$	20,461


Net income per share attributable to CSW Industrials, Inc.
Basic	$	1.88	$	1.30
Diluted	$	1.88	$	1.30

Weighted average number of shares outstanding:
Basic	15,643		15,715
Diluted	15,652		15,781

*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K.

See accompanying notes to condensed consolidated financial statements.

CSW INDUSTRIALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,
(Amounts in thousands)	2022		2021*
Net income	$	29,638	$	20,685
Other comprehensive income (loss):
Foreign currency translation adjustments	(2,278)		489
Cash flow hedging activity, net of taxes of $(67) and $29, respectively	253		(109)
Pension and other postretirement effects, net of taxes of $(1) and $(2), respectively	3		7
Other comprehensive income (loss)	(2,022)		387
Comprehensive income	$	27,616	$	21,072
Less: Comprehensive income attributable to redeemable noncontrolling interest	(195)		(224)
Comprehensive income attributable to CSW Industrials, Inc.	$	27,421	$	20,848

*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K.

See accompanying notes to condensed consolidated financial statements.

CSW INDUSTRIALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(Amounts in thousands, except per share amounts)	June 30, 2022		March 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	15,519	$	16,619
Accounts receivable, net of allowance for expected credit losses of $1,354 and $1,177, respectively	143,874		122,804
Inventories, net	161,463		150,114
Prepaid expenses and other current assets	10,074		10,610

Total current assets	330,930		300,147
Property, plant and equipment, net of accumulated depreciation of $83,485 and $80,393, respectively	85,627		87,032
Goodwill	224,055		224,658
Intangible assets, net	295,318		300,837
Other assets	81,993		82,686

Total assets	$	1,017,923	$	995,360

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	51,826	$	47,836
Accrued and other current liabilities	69,427		69,005
Current portion of long-term debt	561		561

Total current liabilities	121,814		117,402
Long-term debt	273,074		252,214
Retirement benefits payable	1,060		1,027
Other long-term liabilities	139,735		140,306

Total liabilities	535,683		510,949
Commitments and contingencies (See Note 14)
Redeemable noncontrolling interest	15,520		15,325
Equity:
Common shares, $0.01 par value	162

SEC Form 10-Q filed by CSW Industrials Inc.