CSW Industrials Q3 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Thu, January 29, 2026 astatine 10:27 AM CST 46 min read

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Thursday, Jan. 29, 2026 astatine 10 a.m. ET

• Chairman, President, and Chief Executive Officer — Joseph B. Armes

• Chief Financial Officer and Executive Vice President — James E. Perry

Joseph Armes: Thank you, Alexa, and bully morning, everyone. It is my pleasance to statesman by reporting that our squad delivered grounds fiscal 3rd 4th results successful some gross and adjusted EBITDA. Despite marketplace headwinds and economical uncertainty that has been contiguous for astir of this fiscal year, and which has been astir pronounced successful the residential HVACR extremity market. Before commencing our regular quarterly commentary, I privation to supply further discourse for our strategical initiatives fiscal results successful the quarter. CSW is simply a larger and much diversified institution contiguous than it was conscionable 3 months agone erstwhile we past spoke to you.

Capitalizing connected our beardown equilibrium expanse and guided by our disciplined attack to superior allocation, we continued to put successful maturation opportunities successful a meaningful way. In this astir caller quarter, we completed 3 acquisitions including the acquisition of Mars Parts, wrong our Contractor Solutions conception our largest acquisition to date, astatine $650 million. We besides acquired Hydrotech's Holdings, and ProAction Fluids, wrong our Specialized Reliability Solutions segment. Which amounted to $26.5 cardinal successful aggregate investment. Considering the past 12 months to see the Aspen Manufacturing acquisition, we successfully executed 4 highly revenue, EBITDA, and currency travel accretive synergistic transactions with a full concern of astir $1 billion.

In addition, we've invested $70 cardinal successful unfastened marketplace stock repurchases during the quarter, emphasizing our dedication to maximizing shareholder returns. Our fiscal was to support a semipermanent position and to put opportunistically with large subject adjacent amid short-term volatility. Our superior operation present reflects these investments. In November, we strategically funded these acquisitions with currency connected manus and low-cost indebtedness capital, portion ever maintaining a nett indebtedness to EBITDA ratio good wrong our people scope of 1 to 3 times. This ensures that we support a resilient equilibrium expanse with ample liquidity for aboriginal investment. As we person committed to bash successful penning to you, our shareholders.

These dynamics, with the magnified seasonality effects from the summation of the Aspen Manufacturing and Mars Parts businesses, marque year-over-year comparisons of definite show metrics little relevant. The involvement disbursal generated by our caller superior operation surely impacts reported and adjusted EPS comparisons peculiarly erstwhile comparing to anterior twelvemonth periods erstwhile we were successful a nett currency position. Additionally, having deployed astir $1 cardinal successful acquisition superior successful the past year, our amortization of intangible assets volition summation significantly, which besides challenges comparisons. These items are excluded erstwhile providing EBITDA and adjusted EBITDA results which is wherefore we proceed to constituent you toward these metrics arsenic the champion multi-period comparison.