CSW Industrials Inc.

10/30/2025 | Press release | Distributed by Public on 10/30/2025 04:27

Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our operations financial condition and results of operations should be read together with our consolidated financial statements and related notes included in this Quarterly Report, as well as our consolidated financial statements and related notes for the fiscal year ended March 31, 2025 included in our Annual Report. This discussion and analysis contains forward-looking statements based on current expectations relating to future events and our future performance that involve risks and uncertainties. See "Cautionary Note Regarding Forward-Looking Statements" below. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those risk factors set forth in our Annual Report and in this Quarterly Report.
Overview
CSW Industrials, Inc. (the "Company," "CSW," "we," "our" or "us") is a diversified industrial growth company with a strategic focus on providing niche, value-added products in the end markets we serve. We operate in three business segments: Contractor Solutions, Specialized Reliability Solutions and Engineered Building Solutions. Our products include mechanical products for heating, ventilation, air conditioning and refrigeration ("HVAC/R"), plumbing products, grilles, registers and diffusers ("GRD"), building safety solutions and high-performance specialty lubricants and sealants. End markets that we serve include HVAC/R, architecturally-specified building products, plumbing, electrical, general industrial, energy, rail transportation and mining. Our manufacturing operations are concentrated in the United States ("U.S."), Vietnam and Canada, and we have distribution operations in the U.S., Australia, Canada and the United Kingdom ("U.K."). Our products are sold directly to end users or through designated channels in over 100 countries around the world, primarily including the U.S., Canada, the U.K. and Australia.
Drawing on our innovative and proven technologies, we seek to deliver solutions primarily to contractors that place a premium on superior performance and reliability. We believe our brands are well-known in the specific end markets we serve and have a reputation for high quality. We rely on both organic growth and inorganic growth through acquisitions to provide an increasingly broad portfolio of performance optimizing solutions that meet our customers' ever-changing needs. We have a successful record of making attractive, synergistic acquisitions in support of this objective, and we remain focused on identifying additional acquisition opportunities in our core end markets.
Many of our products are used to protect the capital assets of our customers that are expensive to repair or replace and are critical to their operations. We have a source of recurring revenue from the maintenance, repair and overhaul and consumable nature of many of our products. We also provide some custom engineered products that strengthen and enhance our customer relationships. The reputation of our product portfolio is built on more than 100 well-respected brand names, such as AC Guard®, Air Sentry®, Aspen ManufacturingTM, Balco®, Cover Guard®, Deacon®, Dust Free®, Falcon Stainless®, Greco®, Jet-Lube®, Kopr-Kote®, Leak Freeze®, Metacaulk®, No. 5®, OilSafe®, PF WaterWorksTM, PSP ProductsTM, RectorSeal®, Safe-T-Switch®, Shoemaker Manufacturing®, Smoke Guard®, TRUaire® and Whitmore®.
As of the date of this report, there continues to be uncertainty regarding overall macroeconomic conditions, including increased geopolitical tensions, risk of recessions, and the effects of potential trade policies including tariffs. In April 2025, the President of the United States issued an executive order to regulate imports by imposing country-specific tariffs on multiple nations around the world, including Vietnam and China, which are relevant to our business due to our manufacturing presence in Vietnam and our use of third-party manufacturing in China and other foreign countries. In addition, the United States imposed and/or reimposed certain commodity-specific tariffs, including tariffs on steel, aluminum and copper, which are used as inputs for some of our products. We have responded by negotiating cost reductions with certain suppliers, transitioning certain sources of supply, and by raising prices to our customers on certain products across our three segments to partially offset the impact. The current situation is dynamic, and the ultimate effect will be dependent on the magnitude and duration of the tariffs and the countries implicated, as well as our ability to mitigate their impact, where we continue to actively assess and implement mitigation options.
On June 9, 2025, we transferred the listing of our common stock from the Nasdaq Global Select Market to the New York Stock Exchange. Our common stock now trades on the New York Stock Exchange under the stock symbol "CSW".
Our Outlook
We expect to maintain a strong balance sheet in fiscal year 2026, which provides us with access to capital through our cash on hand, internally-generated cash flow, and availability under our Revolving Credit Facility. Our capital allocation strategy continues to guide our investing decisions, with a priority to direct capital to the highest risk adjusted return opportunities, within the categories of organic growth, strategic acquisitions and the return of cash to shareholders through our share repurchase and dividend programs. With the strength of our financial position, we will continue to invest in financially and strategically attractive expanded product offerings, key elements of our long-term strategy of targeting long-term profitable growth. We will continue to invest our capital in maintaining our facilities and in continuous improvement initiatives. We recognize the importance of, and remain committed to, continuing to drive organic growth, as well as investing additional capital in opportunities with attractive risk-adjusted returns, driving increased penetration in the end markets we serve. We remain disciplined in our approach to acquisitions, particularly as it relates to our assessment of valuation, prospective synergies, diligence, cultural fit and ease of integration, especially in light of economic conditions.
RESULTS OF OPERATIONS
The following discussion provides an analysis of our consolidated results of operations and results for each of our segments.
All acquisitions are described in Note 2 to our consolidated financial statements included in this Quarterly Report. Aspen Manufacturing, LLC ("Aspen Manufacturing") activity has been included in our results within our Contractor Solutions segment since the May 1, 2025 acquisition date. PF WaterWorks, L.P. ("PF WaterWorks") activity has been included in our results within our Contractor Solutions segment since the November 4, 2024 acquisition date. PSP Products, Inc. ("PSP Products") activity has been included in our results within our Contractor Solutions segment since the August 1, 2024 acquisition date.
Revenues, net
Three Months Ended September 30,
(Amounts in thousands) 2025 2024
Revenues, net $ 276,951 $ 227,926
Six Months Ended September 30,
(Amounts in thousands) 2025 2024
Revenues, net $ 540,597 $ 454,103
Net revenues for the three months ended September 30, 2025 increased $49.0 million, or 21.5%, as compared with the three months ended September 30, 2024. The increase was primarily due to the acquisitions of Aspen Manufacturing, PSP Products, and PF WaterWorks ($61.9 million or 27.2%). Organic revenue decreased $12.9 million, or 5.6%, due to lower unit volumes partially offset by pricing actions. Net revenue increased in the HVAC/R, electrical, plumbing, general industrial, and mining end markets and decreased in the energy, architecturally-specified building product and rail transportation end markets.
Net revenues for the six months ended September 30, 2025 increased $86.5 million, or 19.0%, as compared with the six months ended September 30, 2024. The increase was primarily due to the acquisitions of Aspen Manufacturing, PSP Products, and PF WaterWorks ($105.6 million or 23.3%). Organic revenue decreased $19.1 million, or 4.2%, due to lower unit volumes partially offset by pricing actions. Net revenue increased in the HVAC/R, electrical, plumbing, and mining end markets and decreased in the energy, rail transportation, and architecturally-specified building product end markets.
Gross Profit and Gross Profit Margin
Three Months Ended September 30,
(Amounts in thousands, except percentages) 2025 2024
Gross profit $ 119,185 $ 103,901
Gross profit margin 43.0 % 45.6 %
Six Months Ended September 30,
(Amounts in thousands, except percentages) 2025 2024
Gross profit $ 234,627 $ 211,322
Gross profit margin 43.4 % 46.5 %
Gross profit for the three months ended September 30, 2025 increased $15.3 million, or 14.7%, as compared with the three months ended September 30, 2024. The increase was primarily a result of increased revenue and favorable ocean freight costs, partially offset by increases in tariffs and material costs directly and indirectly driven by tariffs. Gross profit margin of 43.0% for the three months ended September 30, 2025 decreased as compared to 45.6% for the three months ended September 30, 2024. The decrease was driven by the inclusion of recent acquisitions and increases in tariffs and material costs, partially offset by pricing actions and favorable ocean freight costs.
Gross profit for the six months ended September 30, 2025 increased $23.3 million, or 11.0%, as compared with the six months ended September 30, 2024. The increase was primarily a result of the increase in revenue and favorable ocean freight costs, partially offset by increases in tariffs and material costs directly and indirectly driven by tariffs. Gross profit margin of 43.4% for the six months ended September 30, 2025 decreased as compared to 46.5% for the three months ended September 30, 2024. The decrease was driven by the inclusion of recent acquisitions, increases in aforementioned tariffs and material costs and unfavorable revenue mix, partially offset by pricing actions and favorable ocean freight costs.
Operating Expenses
Three Months Ended September 30,
(Amounts in thousands, except percentages) 2025 2024
Operating expenses $ 62,405 $ 52,352
Operating expenses as a percentage of revenues, net 22.5 % 23.0 %
Six Months Ended September 30,
(Amounts in thousands, except percentages) 2025 2024
Operating expenses $ 122,971 $ 104,712
Operating expenses as a percentage of revenues, net 22.7 % 23.1 %
Operating expenses for the three months ended September 30, 2025 increased $10.1 million, or 19.2%, as compared with the three months ended September 30, 2024. The increase was primarily due to added expenses related to the inclusion of Aspen Manufacturing, PSP Products, and PF WaterWorks in the current period, including amortization of intangible assets, as well as the transaction expenses related to completed and contemplated acquisitions. The decrease in operating expenses as a percentage of revenues was attributable to revenue increasing by a greater percentage than the increase in operating expenses.
Operating expenses for the six months ended September 30, 2025 increased $18.3 million, or 17.4%, as compared with the six months ended September 30, 2024. The increase was primarily due to added expenses related to the inclusion of Aspen Manufacturing, PSP Products, and PF WaterWorks in the current period, including amortization of intangible assets, as well as the transaction expenses related to completed and contemplated acquisitions. The decrease in operating expenses as a percentage of revenues was attributable to revenue increasing by a greater percentage than the increase in operating expenses.
Operating Income
Three Months Ended September 30,
(Amounts in thousands, except percentages) 2025 2024
Operating income $ 56,780 $ 51,549
Operating margin 20.5 % 22.6 %
Six Months Ended September 30,
(Amounts in thousands, except percentages) 2025 2024
Operating income $ 111,656 $ 106,610
Operating margin 20.7 % 23.5 %
Operating income for the three months ended September 30, 2025 increased $5.2 million, or 10.1%, as compared with the three months ended September 30, 2024, as a result of the increase in gross profit, partially offset by the increase in operating expenses, as discussed above.
Operating income for the six months ended September 30, 2025 increased $5.0 million, or 4.7%, as compared with the six months ended September 30, 2024, as a result of the increase in gross profit, partially offset by the increase in operating expenses, as discussed above.
Other Income and Expense
Net interest expense of $1.3 million for the three months ended September 30, 2025 was comparable to the three months ended September 30, 2024. Net interest expense of $2.3 million for the six months ended September 30, 2025 decreased $1.5 million as compared to the net interest expense of $3.9 million for the six months ended September 30, 2024. The decrease in the six months ended September 30, 2025 was due to the lower average borrowing under our Revolving Credit Facility.
Other income, net of $0.0 million for the three months ended September 30, 2025 changed $0.7 million, as compared to the net income of $0.7 million for the three months ended September 30, 2024. Other income, net of $0.5 million for the six months ended September 30, 2025 changed $1.0 million, as compared to the net expense of $0.4 million for the six months ended September 30, 2024. The change in the three and six months ended September 30, 2025 was due to the foreign currency gains/losses related to transactions in currencies other than functional currencies.
Provision for Income Taxes and Effective Tax Rate
For the three months ended September 30, 2025, we earned $55.5 million from operations before taxes and provided for income taxes of $14.7 million, resulting in an effective tax rate of 26.4%. For the six months ended September 30, 2025, we earned $109.9 million from operations before taxes and provided for income taxes of $27.9 million, resulting in an effective tax rate of 25.4%. The provision for income taxes differed from the statutory rate for the three and six months ended September 30, 2025 primarily due to state income tax (net of federal benefit), executive compensation limitations, and provision for global intangible low-taxed income ("GILTI"); offset by adjustment to tax payable, foreign tax credits, excess tax deductions related to equity compensation and foreign-derived intangible income ("FDII").
For the three months ended September 30, 2024, we earned $49.5 million from operations before taxes and provided for income taxes of $12.9 million, resulting in an effective tax rate of 26.1%. For the six months ended September 30, 2024, we earned $102.3 million from operations before taxes and provided for income taxes of $26.9 million, resulting in an effective tax rate of 26.2%. The provision for income taxes differed from the statutory rate for the three and six months ended September 30, 2024 primarily due to state income tax (net of federal benefit), provision for GILTI, executive compensation limitations, and increases to penalties and interest on uncertain tax positions ("UTP"); offset by foreign tax credits and excess tax deductions related to equity compensation and FDII.
The Company expects $6.7 million of reserves for UTPs to either be settled or expire within the next 12 months as the statutes of limitations expire.
The Organization for Economic Cooperation and Development introduced a framework under pillar two ("Pillar Two"), which includes a global minimum tax rate of 15% applied on a county-by-country basis for companies with global revenues and
profits above certain thresholds. Certain jurisdictions in which we do business have enacted laws implementing Pillar Two. We are monitoring these developments and do not believe these rules will have a material impact on our financial condition and/or consolidated results.
On July 4, 2025, the "One Big Beautiful BillAct" (the "Act") was enacted into law. The Act includes changes to the U.S. tax law that are applicable to the Company, including the reinstatement of 100% bonus depreciation and 100% expensing of research and development costs, a change in the calculation of deductible interest expense, and changes to the U.S. tax treatment of GILTI and FDII. We evaluated the Act during the three months ended September 30, 2025 and estimated the Act to have an immaterial impact on our income tax expenses. We expect the Act will change the timing of our cash tax payments in the current fiscal year and future periods. We will continue to evaluate the impact of the Act as additional guidance becomes available. We have not recognized any impact of the Act as of September 30, 2025.
Business Segments
We conduct our operations through three business segments based on how we manage the business. We evaluate segment performance and allocate resources based on each segment's operating income. The key operating results for our three segments are discussed below.
Contractor Solutions Segment Results
The Contractor Solutions segment manufactures efficiency and performance enhancing products predominantly for residential and commercial HVAC/R, plumbing and electrical applications, which are designed primarily for professional end-use customers.
Three Months Ended September 30,
(Amounts in thousands) 2025 2024
Revenues, net $ 208,469 $ 158,834
Operating income 53,375 46,254
Operating margin 25.6 % 29.1 %
Six Months Ended September 30,
(Amounts in thousands) 2025 2024
Revenues, net $ 405,208 $ 319,253
Operating income 106,133 96,138
Operating margin 26.2 % 30.1 %
Net revenues for the three months ended September 30, 2025 increased $49.6 million, or 31.2%, as compared with the three months ended September 30, 2024. The increase was primarily due to the acquisitions of Aspen Manufacturing, PSP Products, and PF WaterWorks ($61.9 million or 39.0%). Organic revenue decreased $12.3 million, or 7.7%, due to lower unit volumes partially offset by pricing actions. Net revenue increased in the HVAC/R, electrical, and plumbing end markets.
Net revenues for the six months ended September 30, 2025 increased $86.0 million, or 26.9%, as compared with the six months ended September 30, 2024. The increase was primarily due to the acquisitions of Aspen Manufacturing, PSP Products, and PF WaterWorks ($105.6 million or 33.1%). Organic revenue decreased $19.6 million, or 6.2%, due to lower unit volumes partially offset by pricing actions. Net revenue increased in the HVAC/R, electrical, and plumbing end markets.
Operating income for the three months ended September 30, 2025 increased $7.1 million, or 15.4%, as compared with the three months ended September 30, 2024. The increase was primarily due to the increased revenue and favorable ocean freight costs, partially offset by increased tariffs. Operating income margin of 25.6% for the three months ended September 30, 2025 decreased as compared to 29.1% for the three months ended September 30, 2024. This decrease was due to the inclusion of recent acquisitions and the increase in tariffs, partially offset by pricing actions and lower ocean freight costs.
Operating income for the six months ended September 30, 2025 increased $10.0 million, or 10.4%, as compared with the six months ended September 30, 2024. The increase was primarily due to the increased revenue and favorable ocean freight
costs, partially offset by increased tariffs. Operating income margin of 26.2% for the six months ended September 30, 2025 decreased as compared to 30.1% for the six months ended September 30, 2024. This decrease was due to the inclusion of recent acquisitions, increased tariffs and unfavorable revenue mix, partially offset by pricing actions and lower ocean freight costs.
Specialized Reliability Solutions Segment Results
The Specialized Reliability Solutions segment provides products for increasing reliability, efficiency, performance and lifespan of industrial assets and solving equipment maintenance challenges.
Three Months Ended September 30,
(Amounts in thousands) 2025 2024
Revenues, net $ 38,806 $ 38,534
Operating income 5,093 5,819
Operating margin 13.1 % 15.1 %
Six Months Ended September 30,
(Amounts in thousands) 2025 2024
Revenues, net $ 75,613 $ 75,326
Operating income 10,336 12,970
Operating margin 13.7 % 17.2 %
Net revenues for the three months ended September 30, 2025 was comparable to the three months ended September 30, 2024, with a slight increase of $0.3 million or 0.7%. Net revenue increased in the general industrial and mining end markets and decreased in the energy and rail transportation end markets.
Net revenues for the six months ended September 30, 2025 was comparable to the six months ended September 30, 2024, with a slight increase of $0.3 million or 0.4%.Net revenue increased in the mining and general industrial energy end markets and decreased in the energy and rail transportation end markets.
Operating income for the three months ended September 30, 2025 decreased $0.7 million or 12.5% as compared to the three months ended September 30, 2024. The decrease was primarily due to the escalation in material costs, indirectly driven by tariffs, as well as increased freight costs to support incremental growth of international shipments. Operating income margin of 13.1% for the three months ended September 30, 2025 decreased as compared to 15.1% for the three months ended September 30, 2024 due to the aforementioned increase in expenses.
Operating income for the six months ended September 30, 2025 decreased $2.6 million or 20.3% as compared to the six months ended September 30, 2024. The decrease was primarily due to the escalation in material costs driven by tariffs and commodity pricing and the one-time expenses associated with consolidating a manufacturing plant. Operating income margin of 13.7% for the six months ended September 30, 2025 decreased as compared to 17.2% for the six months ended September 30, 2024 due to the aforementioned increase in cost of materials and manufacturing plant consolidation expenses.
Engineered Building Solutions Segment Results
The Engineered Building Solutions segment provides primarily code-driven, life-safety products that are engineered to provide aesthetically-pleasing solutions for the construction, refurbishment and modernization of commercial, institutional and multi-family residential buildings.
Three Months Ended September 30,
(Amounts in thousands) 2025 2024
Revenues, net $ 31,914 $ 32,673
Operating income 4,831 6,082
Operating margin 15.1 % 18.6 %
Six Months Ended September 30,
(Amounts in thousands) 2025 2024
Revenues, net $ 63,809 $ 63,566
Operating income 8,830 11,806
Operating margin 13.8 % 18.6 %
Net revenues for the three months ended September 30, 2025 decreased $0.8 million or 2.3% as compared to the three months ended September 30, 2024 due to a slight decrease in volume driven by softness in the market and strategic pricing in response to competitive pressures.
Net revenues for the six months ended September 30, 2025 was comparable to the six months ended September 30, 2024, with a slight increase of $0.2 million.
Operating income for the three months ended September 30, 2025 decreased $1.3 million, or 20.6%, as compared with the three months ended September 30, 2024. The decrease was driven by lower revenue, increased material costs and the aforementioned pricing strategies. Operating income margin of 15.1% for the three months ended September 30, 2025 decreased as compared to 18.6% for the three months ended September 30, 2024 due to the aforementioned material costs increases and pricing strategies.
Operating income for the six months ended September 30, 2025 decreased $3.0 million, or 25.2%, as compared with the six months ended September 30, 2024. The decrease was driven primarily by increased material costs, higher warranty expenses and pricing strategies. Operating income margin of 13.8% for the six months ended September 30, 2025 decreased as compared to 18.6% for the six months ended September 30, 2024 due to the aforementioned lower revenue, material costs and warranty expenses increases, and pricing strategies.
LIQUIDITY AND CAPITAL RESOURCES
General
Existing cash on hand, cash generated by operations and borrowings available under our Revolving Credit Facility ("Revolver Borrowings") are our primary sources of short-term liquidity. Our ability to consistently generate strong cash flow from our operations is one of our most significant financial strengths: it enables us to invest in our people and our brands, make capital investments and strategic acquisitions, provide a cash dividend program, and from time-to-time, repurchase shares of our common stock. Additionally, we use our Revolver Borrowings to support our working capital requirements, capital expenditures and strategic acquisitions. We seek to maintain adequate liquidity to meet working capital requirements, fund capital expenditures, make scheduled interest payments on debt and meet our contingent consideration obligations. Absent a material deterioration of market conditions, we believe that cash flows from operating activities and financing activities (which would primarily consist of Revolver Borrowings), will provide adequate resources to satisfy our working capital, scheduled interest payments on debt, anticipated dividend payments, periodic share repurchases, contingent consideration obligations and anticipated capital expenditure requirements for both our short-term and long-term needs.
Cash Flow Analysis
Six Months Ended September 30,
(Amounts in thousands) 2025 2024
Net cash provided by operating activities $ 122,467 $ 130,169
Net cash used in investing activities (331,439) (41,349)
Net cash provided by financing activities 15,141 161,897
Our cash balance (including cash and cash equivalents) at September 30, 2025 was $31.5 million, as compared with $225.8 million at March 31, 2025.
For the six months ended September 30, 2025, our cash provided by operating activities from operations was $122.5 million, as compared with $130.2 million for six months ended September 30, 2024.
•Working capital provided cash for the six months ended September 30, 2025 due to lower accounts receivable ($11.7 million) and higher accounts payable and other current liabilities ($7.3 million), partially offset by higher inventories ($10.1 million) and higher prepaid expenses and other current assets ($5.7 million).
•Working capital provided cash for the six months ended September 30, 2024 due to higher accounts payable and other current liabilities ($40.3 million) and lower accounts receivable ($11.3 million), partially offset by higher inventories ($25.3 million) and higher prepaid and other current assets ($2.1 million).
Cash flows used in investing activities from operations during the six months ended September 30, 2025 were $331.4 million, as compared with $41.3 million used in investing activities for the six months ended September 30, 2024.
•Capital expenditures during the six months ended September 30, 2025 and 2024 were $6.0 million and $8.6 million, respectively. Our capital expenditures have been focused on capacity expansion (including $0.6 million and $0.4 million during the current and prior year periods for the Whitmore JV), enterprise resource planning systems, new product introductions, continuous improvement and automation of manufacturing facilities.
•During the six months ended September 30, 2025, we acquired Aspen Manufacturing for an aggregate purchase price, net of cash received, of $325.3 million, including $313.5 million in cash consideration and working capital adjustment of $11.8 million, as discussed in Note 2 to our consolidated financial statements in this Quarterly Report.
•During the six months ended September 30, 2024, we acquired PSP for an aggregate purchase price of $51.3 million, including $32.5 million in cash consideration at closing, as discussed in Note 2 to our consolidated financial statements in this Quarterly Report.
•During the six months ended September 30, 2024, $0.5 million was paid to acquire a long-term investment.
Cash flows provided by financing activities during the six months ended September 30, 2025 and 2024 were $15.1 million and $161.9 million, respectively.
•Net borrowings (repayments) on our Revolving Credit Facility (as discussed in Note 7 to our consolidated financial statements included in this Quarterly Report) of $60.0 million and $(166.0) million during the six months ended September 30, 2025 and 2024, respectively.
•As discussed in Note 11 to our consolidated financial statements included in this Quarterly Report, repurchases of shares under our share repurchase program of $23.0 million and $8.9 million during the six months ended September 30, 2025 and 2024, respectively.
•In connection with the vesting of equity awards under our Long Term Incentive Plan, $4.4 million and $3.3 million were tendered by employees to satisfy minimum tax withholding requirements during the six months ended September 30, 2025 and 2024, respectively.
•Payments of $2.8 million of underwriting discounts and fees in connection with our Third Credit Agreement during the six months ended September 30, 2025, as discussed in Note 7 to our consolidated financial statements included in this Quarterly Report.
•During the six months ended September 30, 2024, we received proceeds of $347.4 million in connection with our September 2024 follow-on equity offering, net of underwriting fees and discounts and expenses incurred directly related to the offering, as discussed in Note 11 to our consolidated financial statements in this Quarterly Report.
•Dividend payments of $9.1 million and $6.5 million during the six months ended September 30, 2025 and 2024, respectively.
Acquisitions and Dispositions
We regularly evaluate acquisition opportunities of various sizes. The cost and terms of any financing to be raised in conjunction with any acquisition, including our ability to raise capital, is a critical consideration in any such evaluation. Note 2 to our consolidated financial statements included in this Quarterly Report contains a discussion of the recent acquisitions.
Financing
Credit Facilities
See Note 7 to our consolidated financial statements included in this Quarterly Report for a discussion of our indebtedness. We were in compliance with all covenants as of September 30, 2025. See Note 9 to our consolidated financial statements included in this Quarterly Report for a discussion of our interest rate swaps.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management's discussion and analysis of financial condition and results of operations are based on our consolidated financial statements and related footnotes contained within this Quarterly Report. Our critical accounting policies used in the preparation of our consolidated financial statements were discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our Annual Report. No significant changes to these policies, as described in our Annual Report, have occurred in the six months ended September 30, 2025.
The process of preparing consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions to determine certain of the assets, liabilities, revenues and expenses. These estimates and assumptions are based upon what we believe is the best information available at the time of the estimates or assumptions. The estimates and assumptions could change materially as conditions within and beyond our control change. Accordingly, actual results could differ materially from those estimates.
Based on an assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, we believe that our consolidated financial statements provide a meaningful and fair perspective of our consolidated financial condition and results of operations. This is not to suggest that other general risk factors, such as changes in worldwide demand, changes in material costs, performance of acquired businesses and others, could not adversely impact our consolidated financial condition, results of operations and cash flows in future periods. See "Cautionary Note Regarding Forward-Looking Statements" below.
ACCOUNTING DEVELOPMENTS
We have presented the information about pronouncements not yet implemented in Note 1 to our consolidated financial statements included in this Quarterly Report.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements appearing in this Quarterly Report constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include expected restructuring charges and the results of the restructuring, financial projections, statements of plans and objectives for future operations, statements of future economic performance, and statements of assumptions relating thereto. In some cases, forward-looking statements can be identified by the use of terminology such as "may," "expects," "plans," "anticipates," "estimates," "believes," "potential," "projects," "forecasts," "intends," or the negative thereof or other comparable terminology. Forward-looking statements may include, but are not limited to, statements that relate to, or statements that are subject to risks, contingencies or uncertainties that relate to:
•our business strategy;
•changes in local political, economic, social and labor conditions;
•potential disruptions from wars and military conflicts, including geopolitical uncertainty due to the conflicts in the Middle East and Ukraine;
•future levels of revenues, operating margins, income from operations, net income or earnings per share;
•the ability to respond to inflationary pressure, including reductions on consumer discretionary income and our ability to pass along rising costs through increased selling prices;
•anticipated levels of demand for our products and services;
•the actual impact to supply, production levels and costs from global supply chain logistics and transportation challenges;
•future levels of research and development, capital, environmental or maintenance expenditures;
•our beliefs regarding the timing and effects on our business of health and safety, tax, environmental or other legislation, rules and regulations;
•the success or timing of completion of ongoing or anticipated capital, restructuring or maintenance projects;
•expectations regarding the acquisition or divestiture of assets and businesses;
•our ability to obtain appropriate insurance and indemnities;
•the potential effects of judicial or other proceedings, including tax audits, on our business, financial condition, results of operations and cash flows;
•the anticipated effects of actions of third parties such as competitors, or federal, foreign, state or local regulatory authorities, or plaintiffs in litigation;
•the expected impact of accounting pronouncements;
•changes in global trade policies and tariffs; and
•the other factors listed under "Risk Factors" in our Annual Report and other filings with the SEC.
Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements for a number of important factors, including those listed under "Risk Factors" in our Annual Report and in this Quarterly Report. You should not put undue reliance on any forwarding-looking statements in this Quarterly Report. We assume no obligation to update or revise these forward-looking statements, except as required by law.
CSW Industrials Inc. published this content on October 30, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 30, 2025 at 10:27 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]