Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2023 | May 22, 2023 | Sep. 30, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Mar. 31, 2023 | ||
Current Fiscal Year End Date | --03-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37454 | ||
Entity Registrant Name | CSW INDUSTRIALS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-2266942 | ||
Entity Address, Address Line One | 5420 Lyndon B. Johnson Freeway, Suite 500 | ||
Entity Address, City or Town | Dallas | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 75240 | ||
City Area Code | 214 | ||
Local Phone Number | 884-3777 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | CSWI | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,827.3 | ||
Entity Common Stock, Shares Outstanding | 15,508,573 | ||
Documents Incorporated by Reference | Certain information contained in the definitive proxy statement for the registrant’s Annual Meeting of Stockholders is incorporated by reference into Part III hereof. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001624794 |
Audit Information
Audit Information | 12 Months Ended |
Mar. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | GRANT THORNTON LLP |
Auditor Location | Dallas, Texas |
Auditor Firm ID | 248 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 18,455 | $ 16,619 |
Accounts receivable, net | 122,753 | 122,804 |
Inventories, net | 161,569 | 150,114 |
Prepaid expenses and other current assets | 20,279 | 10,610 |
Total current assets | 323,056 | 300,147 |
Property, plant and equipment, net | 88,235 | 87,032 |
Goodwill | 242,740 | 224,658 |
Intangible assets, net | 318,903 | 300,837 |
Other assets | 70,519 | 82,686 |
Total assets | 1,043,453 | 995,360 |
Current liabilities: | ||
Accounts payable | 40,651 | 47,836 |
Accrued and other current liabilities | 67,388 | 69,005 |
Current portion of long-term debt | 0 | 561 |
Total current liabilities | 108,039 | 117,402 |
Long-term debt | 253,000 | 252,214 |
Retirement benefits payable | 1,158 | 1,027 |
Other long-term liabilities | 137,117 | 140,306 |
Total liabilities | 499,314 | 510,949 |
Commitments and contingencies (Note 17) | ||
Redeemable noncontrolling interest | 18,464 | 15,325 |
Equity: | ||
Common shares | 163 | 162 |
Preferred shares | 0 | 0 |
Additional paid-in capital | 123,336 | 112,924 |
Treasury shares, at cost (902 and 576 shares, respectively) | (82,734) | (46,448) |
Retained earnings | 493,319 | 407,522 |
Accumulated other comprehensive loss | (8,409) | (5,074) |
Total equity | 525,675 | 469,086 |
Total liabilities and equity | $ 1,043,453 | $ 995,360 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Mar. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common shares, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common shares, authorized (in shares) | 50,000,000 | 50,000,000 |
Common shares, issued (in shares) | 16,378,000 | 16,283,000 |
Preferred shares, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred shares, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred shares, issued (in shares) | 0 | 0 |
Treasury shares (in shares) | 902,000 | 576,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | |||
Revenues, net | $ 757,904 | $ 626,435 | $ 419,205 |
Cost of revenues | (439,690) | (370,473) | (234,655) |
Gross profit | 318,214 | 255,962 | 184,550 |
Selling, general and administrative expenses | (179,148) | (158,582) | (125,330) |
Operating income | 139,066 | 97,380 | 59,220 |
Interest expense, net | (13,197) | (5,449) | (2,383) |
Other income (expense), net | 42 | (466) | (5,969) |
Income before income taxes | 125,911 | 91,465 | 50,868 |
Provision for income taxes | (29,337) | (24,146) | (10,769) |
Net income | 96,574 | 67,319 | 40,099 |
Income attributable to redeemable noncontrolling interest | (139) | (934) | 0 |
Net income attributable to CSW Industrials, Inc. | $ 96,435 | $ 66,385 | $ 40,099 |
Basic earnings per common share: (in USD per share) | $ 6.22 | $ 4.21 | $ 2.67 |
Diluted earnings per common share (in USD per share) | $ 6.20 | $ 4.20 | $ 2.65 |
Weighted average number of shares outstanding: | |||
Basic (in shares) | 15,509 | 15,755 | 15,015 |
Diluted (in shares) | 15,546 | 15,807 | 15,126 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 96,574 | $ 67,319 | $ 40,099 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (3,752) | (44) | 4,791 |
Cash flow hedging activity, net of taxes of $(41), $(142) and $(156), respectively | 156 | 533 | 587 |
Pension and other postretirement effects, net of taxes of $(67), $(138) and $(34), respectively | 261 | 433 | 72 |
Other comprehensive income (loss) | (3,335) | 922 | 5,450 |
Comprehensive income | 93,239 | 68,241 | 45,549 |
Less: Comprehensive income attributable to redeemable noncontrolling interest | (139) | (934) | 0 |
Comprehensive income attributable to CSW Industrials, Inc. | $ 93,100 | $ 67,307 | $ 45,549 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Cash flow hedging activity, taxes | $ (41) | $ (142) | $ (156) |
Pension and other postretirement effect, taxes | $ (67) | $ (138) | $ (34) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Treasury Shares | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Balance at beginning of period at Mar. 31, 2020 | $ 280,365 | $ 159 | $ (75,377) | $ 48,327 | $ 318,702 | $ (11,446) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 5,085 | 5,085 | ||||
Stock activity under stock plans | (2,812) | 2 | (2,812) | (2) | ||
Reissuance of treasury shares | 102,638 | 51,405 | 51,233 | |||
Repurchase of common shares | (7,291) | (7,291) | ||||
Net income | 40,099 | 40,099 | ||||
Dividends | (8,085) | 47 | (8,132) | |||
Other comprehensive income, net of tax | 5,450 | 5,450 | ||||
Balance at end of period at Mar. 31, 2021 | 415,449 | 161 | (34,075) | 104,690 | 350,669 | (5,996) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 8,450 | 8,450 | ||||
Stock activity under stock plans | (4,883) | 1 | (4,884) | |||
Reissuance of treasury shares | 6,649 | 6,938 | (289) | |||
Repurchase of common shares | (14,427) | (14,427) | ||||
Net income | 66,385 | 66,385 | ||||
Dividends | (9,459) | 73 | (9,532) | |||
Other comprehensive income, net of tax | 922 | 922 | ||||
Balance at end of period at Mar. 31, 2022 | 469,086 | 162 | (46,448) | 112,924 | 407,522 | (5,074) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 9,752 | 9,752 | ||||
Stock activity under stock plans | (3,416) | 1 | (3,417) | |||
Reissuance of treasury shares | 3,364 | 2,786 | 578 | |||
Repurchase of common shares | (35,655) | (35,655) | ||||
Net income | 96,435 | 96,435 | ||||
Dividends | (10,556) | 82 | (10,638) | |||
Other comprehensive income, net of tax | (3,335) | (3,335) | ||||
Balance at end of period at Mar. 31, 2023 | $ 525,675 | $ 163 | $ (82,734) | $ 123,336 | $ 493,319 | $ (8,409) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | |||
Net income | $ 96,574 | $ 67,319 | $ 40,099 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 12,838 | 11,572 | 9,194 |
Amortization of intangible and other assets | 22,716 | 25,314 | 13,843 |
Provision for inventory reserves | 1,522 | 1,553 | 1,558 |
Provision for doubtful accounts | 2,013 | 1,498 | 696 |
Share-based and other executive compensation | 9,751 | 8,450 | 5,086 |
Net gain on disposals of property, plant and equipment | 104 | (85) | (23) |
Net pension benefit | 150 | 31 | 163 |
Impairment of intangible assets | 156 | 0 | 0 |
Net deferred taxes | (6,011) | (3,261) | (1,798) |
Changes in operating assets and liabilities: | |||
Accounts receivable | 1,105 | (26,729) | (7,219) |
Inventories | (11,422) | (49,403) | (3,377) |
Prepaid expenses and other current assets | (1,282) | 3,479 | (4,246) |
Other assets | 458 | 626 | (1,532) |
Accounts payable and other current liabilities | (7,000) | 27,983 | 13,856 |
Retirement benefits payable and other liabilities | (219) | 742 | (46) |
Net cash provided by operating activities | 121,453 | 69,089 | 66,254 |
Cash flows from investing activities: | |||
Capital expenditures | (13,951) | (15,653) | (8,833) |
Proceeds from sale of assets held for investment | 0 | 0 | 6,152 |
Proceeds from sale of assets | 120 | 139 | 30 |
Cash paid for acquisitions | (58,335) | (35,942) | (287,238) |
Net cash used in investing activities | (72,166) | (51,456) | (289,889) |
Cash flows from financing activities: | |||
Borrowings on lines of credit | 143,177 | 94,000 | 255,000 |
Repayments of lines of credit | (142,952) | (83,561) | (23,561) |
Payments of deferred loan costs | (710) | (2,328) | (148) |
Purchase of treasury shares | (39,072) | (19,311) | (10,489) |
Proceeds from stock option activity | 272 | 1,327 | 1,330 |
Proceeds from acquisition of redeemable noncontrolling interest shareholder | 3,000 | 6,293 | 0 |
Dividends paid to shareholders | (10,555) | (9,459) | (8,083) |
Net cash (used in) provided by financing activities | (46,840) | (13,039) | 214,049 |
Effect of exchange rate changes on cash and equivalents | (611) | 1,937 | 1,336 |
Net change in cash and cash equivalents | 1,836 | 6,531 | (8,250) |
Cash and cash equivalents, beginning of period | 16,619 | 10,088 | 18,338 |
Cash and cash equivalents, end of period | 18,455 | 16,619 | 10,088 |
Supplemental non-cash disclosure: | |||
Cash paid during the year for interest | 12,502 | 4,955 | 1,875 |
Cash paid during the year for income taxes | $ 41,476 | $ 20,485 | $ 14,021 |
ORGANIZATION AND OPERATIONS AND
ORGANIZATION AND OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ORGANIZATION AND OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CSWI 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, Engineered Building Solutions and Specialized Reliability 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, general industrial, plumbing, energy, rail transportation and mining. Drawing on our innovative and proven technologies, we seek to deliver solutions to our professional customers that require superior performance and reliability. The reputation of our product portfolio is built on more than 100 well-respected brand names, such as AC Guard TM , Air Sentry®, Cover Guard TM , Deacon®, Falcon Stainless®, Greco®, Jet-Lube®, Kopr-Kote®, Leak Freeze®, Metacaulk®, No. 5®, OilSafe®, Safe-T-Switch®, Shoemaker Manufacturing®, Smoke Guard®, TRUaire® and Whitmore®. The COVID-19 pandemic and its resulting impacts had an overall negative impact on our financial results in the prior fiscal years ended March 31, 2022 and March 31, 2021. During our current fiscal year ended March 31, 2023, the direct and indirect impacts of the COVID-19 pandemic on our consolidated operating results were immaterial as economic activities recovered and the effects of the pandemic lessened. While the Federal COVID-19 Public Health Emergency Declaration expired on May 11, 2023, the extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. As such, we cannot reasonably estimate the future impact of the COVID-19 pandemic at this time. We are closely monitoring the Russian invasion of Ukraine and its global impact. We have no operations, employees or assets in Russia, Belarus or Ukraine, nor do we source goods or services of any material amount from those countries, whether directly or indirectly. Shortly after the Russian invasion of Ukraine began in February 2022, we indefinitely suspended all commercial activities in Russia. During the fiscal year ended March 31, 2023, we had no sales into Belarus or Ukraine. While the conflict continues to evolve and the outcome remains highly uncertain, we do not currently believe the Russia-Ukraine conflict will have a material impact on our business and results of operations. However, if the Russia-Ukraine conflict continues or worsens, leading to greater global economic or political disruptions and uncertainty, our business and results of operations could be materially impacted as a result. Basis of Presentation – The consolidated financial position, results of operations and cash flows included in this Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (“Annual Report”) include all revenues, costs, assets and liabilities directly attributable to CSWI and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The consolidated financial statements are for us and our consolidated subsidiaries, each of which is a wholly-owned subsidiary, except our 50% investment in a variable interest entity for which we have determined that we are the primary beneficiary and therefore have consolidated into our financial statements. All significant intercompany transactions have been eliminated in consolidation. Variable Interest Entities - We evaluate whether an entity is a variable interest entity (“VIE”) and determine if the primary beneficiary status is appropriate on a quarterly basis. We consolidate a VIE for which we are the primary beneficiary. When assessing the determination of the primary beneficiary, we consider all relevant facts and circumstances, including: the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE. Through this evaluation, we determined that the Whitmore JV is a VIE and the Company is the primary beneficiary of this VIE, primarily due to Whitmore having the power to direct the manufacturing activities, which are considered the most significant activities for the Whitmore JV. Use of Estimates – The process of preparing financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect reported amounts of certain assets, liabilities, revenues and expenses. We believe our estimates and assumptions are reasonable; however, actual results may differ materially from such estimates. The most significant estimates and assumptions are used in determining: • Timing and amount of revenue recognition; • Deferred taxes and tax reserves; and • Valuation of goodwill and indefinite-lived intangible assets. Cash and Cash Equivalents – We consider all highly liquid instruments purchased with original maturities of three months or less and money market accounts to be cash equivalents. We maintain our cash and cash equivalents at financial institutions for which the combined account balances in individual institutions may exceed insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of insurance coverage. We had deposits in domestic banks of $10.1 million and $11.3 million at March 31, 2023 and 2022, respectively, and balances of $8.4 million and $5.3 million were held in foreign banks at March 31, 2023 and 2022, respectively. Accounts Receivable, Allowance for Doubtful Accounts and Credit Risk – Trade accounts receivables are recorded at the invoiced amounts and do not bear interest. We record an allowance for credit losses on trade receivables that, when deducted from the gross trade receivables balance, presents the net amount expected to be collected. We estimate the allowance based on an aging schedule and according to historical losses as determined from our billings and collections history. This may be adjusted after consideration of customer-specific factors such as financial difficulties, liquidity issues or insolvency, as well as both current and forecasted macroeconomic conditions as of the reporting date. We adjust the allowance and recognize credit losses in the income statement each period. Trade receivables are written off against the allowance in the period when the receivable is deemed to be uncollectible. Subsequent recoveries of amounts previously written off are reflected as a reduction to periodic credit losses in the income statement. Our allowance for expected credit losses for short-term receivables as of March 31, 2023 was $1.4 million, compared to $1.2 million as of March 31, 2022. Credit risks are mitigated by the diversity of our customer base across many different industries and by performing creditworthiness analyses on our customers. Additionally, we mitigate credit risk through letters of credit and advance payments received from our customers. We do not believe that we have any significant concentrations of credit risk. Inventories and Related Reserves – Inventories are stated at the lower of cost or net realizable value and include raw materials, supplies, direct labor and manufacturing overhead. Inventories are accounted for using a standard costing methodology, which approximates cost on a first-in, first-out (“FIFO”) basis. Reserves are provided for slow-moving or excess and obsolete inventory based on the difference between the cost of the inventory and its net realizable value and by reviewing quantities on hand in comparison with historical and expected future usage. In estimating the reserve for excess or slow-moving inventory, management considers factors such as product aging, current and future customer demand and market conditions. Property, Plant and Equipment – Property, plant and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the individual assets. When property, plant and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and the resulting gain or loss is included in income from operations for the period. Generally, the estimated useful lives of assets are: Land improvements 5 to 40 years Buildings and improvements 7 to 40 years Plant, office and lab equipment 5 to 10 years We review property, plant and equipment for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Repairs and maintenance costs are expensed as incurred, and significant improvements that either extend the useful life or increase the capacity or efficiency of property and equipment are capitalized and depreciated. Valuation of Goodwill and Intangible Assets – The value of goodwill is tested for impairment at least annually as of January 31 or whenever events or circumstances indicate such assets may be impaired. The identification of our reporting units began at the operating segment level and considered whether components one level below the operating segment levels should be identified as reporting units for purpose of testing goodwill for impairment based on certain conditions. These conditions included, among other factors, (i) the extent to which a component represents a business and (ii) the aggregation of economically similar components within the operating segments. Other factors that were considered in determining whether the aggregation of components was appropriate included the similarity of the nature of the products and services, the nature of the production processes, the methods of distribution and the types of industries served. Accounting Standards Codification ("ASC") 350 allows an optional qualitative assessment, prior to a quantitative assessment test, to determine whether it is more likely than not that the fair value of a reporting unit exceeds its carrying amount. We bypassed the qualitative assessment and proceeded directly to the quantitative test. If the carrying value of a reporting unit exceeds it fair value, the goodwill of that reporting unit is impaired and an impairment loss is recorded equal to the excess of the carrying value over its fair value. We estimate the fair value of our reporting units based on an income approach, whereby we calculate the fair value of a reporting unit base on the present value of estimated future cash flows. A discounted cash flow analysis requires us to make various judgmental assumptions about future sales, operating margins, growth rates and discount rates, which are based on our budgets, business plans, economic projections, anticipated future cash flows and market participants and are considered non-recurring Level III inputs within the fair value hierarchy. No goodwill impairment loss was recognized as a result of the impairment tests for the years ended March 31, 2023, 2022 or 2021. We have intangible assets consisting of patents, trademarks, customer lists and non-compete agreements. Definite-lived intangible assets are assessed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. In addition, we have other trademarks and license agreements that are considered to have indefinite lives. We test indefinite-lived intangible assets for impairment at least annually as of January 31 or whenever events or circumstances indicate that the carrying amount may not be recoverable. Significant assumptions used in the impairment test include the discount rate, royalty rate, future sales projections and terminal value growth rate. These inputs are considered non-recurring Level III inputs within the fair value hierarchy. An impairment loss would be recognized when estimated future cash flows are less than their carrying amount. We recorded no impairment of intangible assets for the years ended March 31, 2023, 2022 and 2021, respectively. Property Held for Investment – One of our non-operating subsidiaries holds and manages a non-operating property, which is valued at lower of cost or market and will be disposed of as opportunities arise to maximize value. Deferred Loan Costs – Deferred loan costs related to our credit facility, which are reported in other assets and consist of fees and other expenses associated with debt financing, are amortized over the term of the associated debt using the effective interest method. Fair Values of Financial Instruments – Our financial instruments are presented at fair value in our consolidated balance sheets, with the exception of our long-term debt, as discussed in Note 8. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models may be applied. Assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Hierarchical levels, as defined by Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities. An asset or a liability’s categorization within the fair value hierarchy is based on the lowest level of significant input to its valuation. Hierarchical levels are as follows: Level I – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level II – Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level III – Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Recurring fair value measurements are limited to redeemable noncontrolling interest and investments in derivative instruments. The redemption value of the redeemable noncontrolling interest is estimated using a discounted cash flow analysis, which requires management judgment with respect to future revenue, operating margins, growth rates and discount rates and is classified as Level III under the fair value hierarchy. The fair value measurements of our derivative instruments are determined using models that maximize the use of the observable market inputs including interest rate curves and both forward and spot prices for currencies, and are classified as Level II under the fair value hierarchy. The redemption value of the redeemable noncontrolling interest is discussed in Note 3. The fair values of our derivative instruments are included in Note 10. Leases – We determine if a contract is or contains a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. Right-of-Use (“ROU”) assets and lease liabilities are initially recognized at the commencement date based on the present value of remaining lease payments over the lease term calculated using our incremental borrowing rate, unless the implicit rate is readily determinable. ROU assets represent the right to use an underlying asset for the lease term, including any upfront lease payments made and excluding lease incentives. Lease liabilities represent the obligation to make future lease payments throughout the lease term. As most of our operating leases do not provide an implicit rate, we apply our incremental borrowing rate to determine the present value of remaining lease payments. Our incremental borrowing rate is determined based on information available at the commencement date of the lease. The lease term includes renewal periods when we are reasonably certain to exercise the option to renew. The ROU asset is amortized over the expected lease term. Lease and non-lease components, when present on our leases, are accounted for separately. Leases with an initial term of 12 months or less are excluded from recognition in the balance sheet, and the expense for these short-term leases and for operating leases is recognized on a straight-line basis over the lease term. We have certain lease contracts with terms and conditions that provide for variability in the payment amount based on changes in facts or circumstances occurring after the commencement date. These variable lease payments are recognized in our consolidated income statements as the obligation is incurred. As of March 31, 2023, we did not have material leases that imposed significant restrictions or covenants, material related party leases or sale-leaseback arrangements. Derivative Instruments and Hedge Accounting – We do not use derivative instruments for trading or speculative purposes. We enter into interest rate swap agreements for the purpose of hedging our cash flow exposure to floating interest rates on certain portions of our debt. All derivative instruments are recognized on the balance sheet at their fair values. Changes in the fair value of a designated interest rate swap are recorded in other comprehensive loss until earnings are affected by the underlying hedged item. Any ineffective portion of the gain or loss is immediately recognized in earnings. Upon settlement, realized gains and losses are recognized in interest expense in the consolidated statements of operations. We discontinue hedge accounting when (1) we deem the hedge to be ineffective and determine that the designation of the derivative as a hedging instrument is no longer appropriate; (2) the derivative matures, terminates or is sold; or (3) occurrence of the contracted or committed transaction is no longer probable or will not occur in the originally expected period. When hedge accounting is discontinued and the derivative remains outstanding, we carry the derivative at its estimated fair value on the balance sheet, recognizing changes in the fair value in current period earnings. If a cash flow hedge becomes ineffective, any deferred gains or losses remain in accumulated other comprehensive loss until the underlying hedged item is recognized. If it becomes probable that a hedged forecasted transaction will not occur, deferred gains or losses on the hedging instrument are recognized in earnings immediately. We are exposed to risk from credit-related losses resulting from nonperformance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under forward exchange contracts and interest rate swap agreements and expect all counterparties to meet their obligations. If necessary, we adjust the values of our derivative contracts for our or our counterparties’ credit risk. Pension Obligations – Determination of pension benefit obligations is based on estimates made by management in consultation with independent actuaries. Inherent in these valuations are assumptions including discount rates, expected rates of return on plan assets, retirement rates, mortality rates and rates of compensation increase and other factors, all of which are reviewed annually and updated if necessary. Current market conditions, including changes in rates of return, interest rates and medical inflation rates, are considered in selecting these assumptions. Actuarial gains and losses and prior service costs are recognized in accumulated other comprehensive loss as they arise, and we amortize these costs into net pension expense over the remaining expected service period. We used a measurement date of March 31 for all periods presented. Redeemable Noncontrolling Interests - Noncontrolling interests with redemption features that are not solely within our control are considered redeemable noncontrolling interests. Our redeemable noncontrolling interest relates to Shell's 50% equity interest in the Whitmore JV and is classified in temporary equity that is reported between liabilities and shareholders' equity on our Consolidated Balance Sheets initially at its formation-date fair value. We adjust the redeemable noncontrolling interest each reporting period for the net income (or loss) attributable to the noncontrolling interest. We also make a measurement period adjustment, if any, to adjust the redeemable noncontrolling interest to the higher of the redemption value or carrying value each reporting period. These adjustments are recognized through retained earnings and are not reflected in net income or net income attributable to CSWI. The redemption value of the redeemable noncontrolling interest is estimated using a discounted cash flow analysis, which requires management judgment with respect to future revenue, operating margins, growth rates and discount rates. Net income (loss) attributable to the redeemable noncontrolling interests are presented as a separate line on the consolidated statements of operations which is necessary to identify those income (loss) specifically attributable to CSWI. The financial results and position of the redeemable noncontrolling interest acquired through the formation of the Whitmore JV are included in their entirety in our consolidated statements of operations and consolidated balance sheets beginning with the first quarter of fiscal 2022. When calculating earnings per share attributable to CSWI, we adjust net income attributable to CSWI for the excess portion of the measurement period adjustment to the extent the redemption value exceeds both the carrying value and the fair value of the redeemable noncontrolling interest on a cumulative basis. Refer to Note 3 for further information regarding the redeemable noncontrolling interest. Revenue Recognition – We recognize revenues to depict the transfer of control of promised goods or services to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Refer to Note 19 for further discussion. We recognize revenue when all of the following criteria have been met: (i) a contract with a customer exists, (ii) performance obligations have been identified, (iii) the price to the customer has been determined, (iv) the price to the customer has been allocated to the performance obligations, and (v) performance obligations are satisfied, which are more fully described below. (i) We identify a contract with a customer when a sales agreement indicates approval and commitment of the parties; identifies the rights of the parties; identifies the payment terms; has commercial substance; and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that will be transferred to the customer. In most instances, our contract with a customer is the customer's purchase order. For certain customers, we may also enter into a sales agreement that outlines a framework of terms and conditions that apply to all future purchase orders for that customer. In these situations, our contract with the customer is both the sales agreement and the specific customer purchase order. Because our contract with a customer is typically for a single transaction or customer purchase order, the duration of the contract is one year or less. As a result, we have elected to apply certain practical expedients and, as permitted by the Financial Accounting Standards Board ("FASB"), omit certain disclosures of remaining performance obligations for contracts that have an initial term of one year or less. (ii) We identify performance obligations in a contract for each promised good or service that is separately identifiable from other promises in the contract and for which the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer. Goods and services provided to our customers that are deemed immaterial are included with other performance obligations. (iii) We determine the transaction price as the amount of consideration we expect to be entitled to in exchange for fulfilling the performance obligations, including the effects of any variable consideration. (iv) For any contracts that have more than one performance obligation, we allocate the transaction price to each performance obligation in an amount that depicts the amount of consideration to which we expect to be entitled in exchange for satisfying each performance obligation. We have excluded disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less as the majority of our contracts are short-term in nature with a term of one year or less. (v) We recognize revenue when, or as, we satisfy the performance obligation in a contract by transferring control of a promised good or service to the customer. We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer. As such, we present revenue net of sales and other similar taxes. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of revenues. Costs to obtain a contract, which include sales commissions recorded in selling, general and administrative expense, are expensed when incurred as the amortization period is one year or less. We do not have customer contracts that include significant financing components. Research and Development ("R&D") – R&D costs are expensed as incurred. Costs incurred for R&D primarily include salaries and benefits and consumable supplies, as well as rent, professional fees, utilities and the depreciation of property and equipment used in R&D activities. R&D costs included in selling, general and administrative expense were $4.8 million, $4.8 million and $4.5 million for the years ended March 31, 2023, 2022 and 2021, respectively. Share-based Compensation – Share-based compensation is measured at the grant-date fair value. The exercise price of stock option awards and the fair value of restricted share awards are set at the closing price of our common stock on the Nasdaq Global Select Market on the date of grant, which is the date such grants are authorized by our Board of Directors. The fair value of performance-based restricted share awards is determined using a Monte Carlo simulation model incorporating all possible outcomes against the Russell 2000 Index. The fair value of share-based payment arrangements is amortized on a straight-line basis to compensation expense over the period in which the restrictions lapse based on the expected number of shares that will vest. To cover the exercise of options and vesting of restricted shares, we generally issue new shares from our authorized but unissued share pool, although we may instead issue treasury shares in certain circumstances. Income Taxes, Deferred Taxes, Tax Valuation Allowances and Tax Reserves – We apply the liability method in accounting and reporting for income taxes. Under the liability approach, deferred tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax rates expected to be in effect when these differences are expected to reverse. The effect on deferred tax assets and liabilities resulting from a change in tax rates is recognized in the period that includes the enactment date. The deferred income tax assets are adjusted by a valuation allowance, if necessary, to recognize future tax benefits only to the extent, based on available evidence, that it is more likely than not to be realized. This analysis is performed on a jurisdictional basis and reflects our ability to utilize these deferred tax assets through a review of past, current and estimated future taxable income in addition to the establishment of viable tax strategies that will result in the utilization of the deferred assets. We recognize income tax related interest and penalties, if any, as a component of income tax expense. Unremitted Earnings – During the fiscal quarter ended March 31, 2023, we lifted our assertion that the earnings of Greco Canada are indefinitely invested outside of the U.S. During the fiscal quarter ended March 31, 2019, we lifted our assertion that the earnings of our United Kingdom ("U.K.") and Australian subsidiaries were indefinitely invested outside of the U.S. During the fiscal quarter ended September 30, 2020, we lifted our assertion that the earnings of our Jet Lube Canada subsidiary were indefinitely invested outside of the U.S. We assert that the foreign earnings of the U.K., Australian, Vietnam and Canada subsidiaries will be remitted to the U.S. through distributions, and have made provisions for taxes that may become payable upon distribution of earnings accordingly. As of March 31, 2023, we are not indefinitely reinvested outside of the U.S. Uncertain Tax Positions – We establish income tax liabilities to remove some or all of the income tax benefit of any of our income tax positions based upon one of the following: (1) the tax position is not “more likely than not” to be sustained, (2) the tax position is “more likely than not” to be sustained, but for a lesser amount or (3) the tax position is “more likely than not” to be sustained, but not in the financial period in which the tax position was originally taken. The amount of income taxes we pay is subject to ongoing audits by federal, state, and foreign taxing authorities, which often result in proposed assessments. We establish reserves for open tax years for uncertain tax positions that may be subject to challenge by various taxing authorities. The consolidated tax provision and related accruals include the impact of such reasonably estimable losses and related interest and penalties as deemed appropriate. We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that each uncertain tax position will be examined by the relevant taxing authority that has full knowledge of all relevant information. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Earnings Per Share – We use the two-class method of calculating earnings per share, which determines earnings per share for each class of common stock and participating security as if all earnings of the period had been distributed. If the holders of restricted stock awards are entitled to vote and receive dividends during the restriction period, unvested shares of restricted stock qualify as participating securities and, accordingly, are included in the basic computation of earnings per share. Our unvested restricted shares participate on an equal basis with common shares; therefore, there is no difference in undistributed earnings allocated to each participating security. Accordingly, the presentation in Note 11 is prepared on a combined basis and is presented as earnings per common share. Diluted earnings per share is based on the weighted average number of shares as determined for basic earnings per share plus shares potentially issuable in connection with stock options and restricted stock awards not entitled to vote and receive dividends during the restriction period. Foreign Currency Translation – Assets and liabilities of our foreign subsidiaries are translated to U.S. dollars at ex |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS Falcon Stainless, Inc. On October 4, 2022, we acquired 100% of the outstanding equity of Falcon Stainless, Inc ("Falcon"), based in Temecula, California, for an aggregate purchase price of $37.1 million (including $1.0 million cash acquired), comprising cash consideration of $34.6 million and an additional payment of $2.5 million due one-year from the acquisition date assuming certain business conditions are met. The cash consideration was funded with cash on hand and borrowings under our existing Revolving Credit Facility (as defined in Note 8). Falcon's products are well-known among the professional trades for supplying enhanced water flow delivery and supplement our Contractor Solutions segment's existing product portfolio. The Falcon acquisition was accounted for as a business combination under FASB Accounting Standards Codification Topic 805, Business Combinations ("Topic 805"). The excess of the purchase price over the preliminary fair value of the identifiable assets acquired was $17.4 million allocated to goodwill, which represents the value expected to be obtained from owning products that are complementary to our existing plumbing offerings and provide a meaningful value proposition to our customers. The preliminary allocation of the fair value of the assets acquired comprises customer lists ($17.7 million), trademarks ($4.7 million), accounts receivable ($1.4 million), cash ($1.0 million), inventory ($0.7 million), other current asset ($0.1 million) and other assets ($2.9 million), net of current liabilities (0.5 million) and other liabilities ($8.3 million). Customer lists are being amortized over 15 years, while trademarks and goodwill are not being amortized. The Company's evaluation of the facts and circumstances available as of October 4, 2022, to assign fair values to assets acquired is ongoing. We expect to finalize the purchase price allocation as soon as practicable, but no later than one year from the acquisition date. Goodwill and all intangible assets are not deductible for income tax purposes. Falcon activity has been included in our Contractor Solutions segment since the acquisition date. No pro forma information has been provided due to immateriality. Cover Guard, Inc. and AC Guard, Inc. On July 8, 2022, we acquired the assets of Cover Guard, Inc. (“CG”) and AC Guard, Inc. ("ACG"), based in Orlando, Florida, for an aggregate purchase price of $18.4 million, comprised of cash consideration of $18.0 million and additional contingent considerations initially measured at $0.4 million based on CG and ACG meeting defined financial targets over a period of 5 years. In conjunction with the acquisition, we agreed to pay an additional $3.7 million, comprised of cash consideration of $1.5 million and 5-year annuity payments (value of $2.2 million) to a third party to secure the related intellectual property. The total cash consideration at closing of $19.5 million was funded with cash on hand and borrowings under our existing Revolving Credit Facility (as defined in Note 8). CG and ACG product lines further expand Contractor Solutions’ offering of leading HVAC/R accessories, including lineset covers and HVAC/R condenser protection cages. Through these differentiated products, our Contractor Solutions segment expects to achieve incremental ductless and ducted HVAC/R market penetration. As of the acquisition date, the estimated fair value of the contingent consideration was classified as a long-term liability of $0.4 million and was determined using an option pricing model simulation that determines an average projected payment value across numerous iterations. The CG and ACG acquisition was accounted for as a business combination under Topic 805. The excess of the purchase price over the preliminary fair value of the identifiable assets acquired was $1.7 million allocated to goodwill, which represents the value expected to be obtained from owning products that are complementary to our existing HVAC/R and plumbing offerings and provide a meaningful value proposition to our customers. The preliminary allocation of the fair value of the assets acquired included customer lists ($9.8 million), patent ($1.8 million), trademarks ($0.7 million), inventory ($3.1 million), accounts receivable ($1.0 million) and equipment ($0.3 million). Customer lists and patents are being amortized over 15 years and 10 years, respectively, while trademarks and goodwill are not being amortized. The Company's evaluation of the facts and circumstances available as of July 8, 2022, to assign fair values to assets acquired is ongoing. We expect to finalize the purchase price allocation as soon as practicable, but no later than one year from the acquisition date. Goodwill and all intangible assets are deductible and amortized over 15 years for income tax purposes. CG and ACG activity has been included in our Contractor Solutions segment since the acquisition date. No pro forma information has been provided due to immateriality. The additional $3.7 million we agreed to pay a third party was accounted for as an acquisition of intellectual property and will be amortized over 15 years. Shoemaker Manufacturing, LLC On December 15, 2021, we acquired 100% of outstanding equity of Shoemaker Manufacturing, LLC (“Shoemaker”), based in Cle Elum, Washington, for an aggregate purchase price of $43.6 million, including working capital and closing cash adjustments and expected contingent consideration. Shoemaker offers high-quality customizable GRD for commercial and residential markets, and expands CSWI’s HVAC/R product offering and regional exposure in the northwest U.S. The aggregate purchase price was comprised of cash consideration of $38.6 million (including $1.2 million cash acquired), 25,483 shares of the Company's common stock valued at $3.0 million at transaction close and additional contingent consideration of up to $2.0 million based on Shoemaker meeting a defined financial target during the quarter ended March 31, 2022, which was achieved. The cash consideration was funded with cash on hand and borrowings under our existing Revolving Credit Facility. The 25,483 shares of common stock delivered to the sellers as consideration were issued from treasury shares. As of the acquisition date, the estimated fair value of the contingent consideration obligation was classified as a current liability of $2.0 million and was determined using a scenario-based analysis on forecasted future results. In May 2022, the full earn-out amount of $2.0 million was remitted to the sellers due to the performance obligation had been met. During the year ended March 31, 2022, we incurred $0.7 million in transaction expenses in connection with the Shoemaker acquisition, which were included in selling, general and administrative expenses in the Consolidated Statement of Operations under the Contractor Solution segment. The Shoemaker acquisition was accounted for as a business combination under Topic 805. The excess of the purchase price over the fair value of the identifiable assets acquired was $8.1 million allocated to goodwill, which represents the value expected to be obtained from owning a more extensive GRD product portfolio for the HVAC/R market and increased regional exposure to the northwest U.S. The preliminary allocation of the fair value of the net assets acquired included customer lists ($23.0 million), trademarks ($6.5 million), noncompete agreements ($0.7 million), backlog ($0.3 million), inventory ($3.6 million), accounts receivable ($1.7 million), cash ($1.2 million), equipment ($1.4 million) and prepaid expenses ($0.2 million), net of current liabilities ($3.1 million). Customer lists, noncompete agreements and backlog are being amortized over 15 years, 5 years and 1 month, respectively, while trademarks and goodwill are not being amortized. The Company completed the analysis of tangible assets, intangible assets, liabilities assumed and the related allocation during the three months ended December 31, 2022. Goodwill and all intangible assets are deductible and amortized over 15 years for income tax purposes. Shoemaker activity has been included in our Contractor Solutions segment since the acquisition date. No proforma information has been provided due to immateriality. T.A. Industries On December 15, 2020, we acquired 100% of the outstanding equity of T.A. Industries, Inc. (“TRUaire”), a leading manufacturer of grilles, registers, and diffusers for the residential and commercial HVAC/R end market, based in Santa Fe Springs, California. The acquisition also included TRUaire’s wholly-owned manufacturing facility based in Vietnam. The acquisition extended the Company’s product offerings to the HVAC market and provided strategic distribution facilities. The contractual consideration paid for TRUaire included cash of $288.0 million (after working capital and closing cash adjustments) and 849,852 shares of the Company’s common stock valued at $97.7 million at transaction close based on the closing market price of the Company's common shares on the acquisition date. The cash consideration was funded through a combination of cash on hand and borrowings under our Revolving Credit Facility. The 849,852 shares of common stock delivered to the sellers as consideration were reissued from treasury shares. Acquisition Consideration (Amounts in thousands, except for shares) Cash (a) $ 287,986 Common stock (849,852 shares) 97,656 Total consideration transferred $ 385,642 (a) Amount includes working capital and closing cash adjustments and includes a $1.0 million to be paid to the sellers as a result of an expected tax refund pursuant to the purchase agreement. The TRUaire acquisition was accounted for as a business combination under Topic 805. Pursuant to Topic 805, the Company allocated the TRUaire purchase price to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, December 15, 2020. The excess of the purchase price over those fair values was recorded to goodwill. The Company completed the analysis of tangible assets, intangible assets, liabilities assumed and the related allocation during the three months ended December 31, 2021. The following table summarizes the Company's estimate of the aggregate fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands). Initial Estimated Fair Value Measurement Period Adjustments Updated Estimated Fair Value Cash $ 1,471 $ — $ 1,471 Accounts Receivable, net 13,467 (17) 13,450 Inventory 46,313 (1,300) 45,013 Short-Term Tax Indemnity Assets 5,000 — 5,000 Other Current Assets 1,285 2,103 3,388 Property, Plant and Equipment 28,832 (4,201) 24,631 Trade Name (indefinite life) 43,500 — 43,500 Customer Lists (useful life of 15 years) 194,000 8,500 202,500 Right-Of-Use Assets 49,040 — 49,040 Long-Term Tax Indemnity Assets 7,500 — 7,500 Other Long-term Assets 2,850 (698) 2,152 Accounts Payable (4,074) — (4,074) Accrued and Other Current Liabilities (3,678) (172) (3,850) Lease Liabilities - Short-Term (4,811) — (4,811) Deferred Tax Liabilities (56,249) (3,784) (60,033) Tax Contingency Reserve (22,511) 5,190 (17,321) Lease Liabilities - Long-Term (45,369) — (45,369) Estimated fair value of net assets acquired 256,566 5,621 262,187 Goodwill 129,169 (5,714) 123,455 Total Purchase Price $ 385,735 $ (93) $ 385,642 Deferred tax liabilities were established to record the deferred tax impact of purchase price accounting adjustments, primarily related to intangibles assets. Tax contingency reserves relate to uncertain tax positions TRUaire took in the periods prior to the acquisition date. In accordance with the tax indemnification included in the purchase agreement of TRUaire, the seller provided contractual indemnification to the Company for up to $12.5 million related to uncertain tax positions taken in prior years. During the three months ended March 31, 2021, TRUaire received an audit closing letter from Internal Revenue Service related to calendar 2017, a pre-acquisition tax year. As a result of this, $5.0 million of the relevant tax indemnification was released in accordance with the purchase agreement. The release of the relevant uncertain tax position accrual of $5.3 million was recorded as an income tax benefit for the three months ended March 31, 2021, and the offsetting indemnification expense of $5.0 million was recorded in other expense on the consolidated statement of operations. As of March 31, 2023, $7.5 million tax indemnification asset remains outstanding and is reported in our condensed consolidated balance sheets in prepaid expenses and other current assets. This tax indemnification asset will either be settled by or expire on December 15, 2023. Goodwill of $123.5 million represents the excess of the purchase price over the fair value of the underlying tangible and intangible assets acquired and liabilities assumed. The acquisition goodwill represents the value expected to be obtained from expanding the Company’s product offerings more broadly across the HVAC end market. The goodwill recorded as part of this acquisition is included in the Contractor Solutions segment. The goodwill associated with the acquisition will not be amortized for financial reporting purposes and will not be deductible for income tax purposes. TRUaire activity has been included in our Contractor Solutions segment since the acquisition date. During the years ended March 31, 2022 and March 31, 2021, the Company incurred and paid $0 and $7.8 million transaction expenses in connection with the TRUaire acquisition. Effective April 1, 2022, TRUaire was fully integrated with RectorSeal, the primary operating company of the Contractor Solutions segment. Pursuant to Topic 805, unaudited supplemental proforma results of operations for the year ended March 31, 2021 as if the acquisition of TRUaire had occurred on April 1, 2019 are presented below (in thousands, except per share amounts): Year Ended March 31, 2021 Revenue, net $ 495,788 Net income 47,648 Net earnings per common share: Diluted $ 3.03 Basic 3.05 These proforma results do not present financial results that would have been realized had the acquisition occurred on April 1, 2019, nor are they intended to be a projection of future results. The unaudited proforma results include certain proforma adjustments to net income that were directly attributable to the acquisition, as if the acquisition had occurred on April 1, 2019, including the following: • Additional depreciation expense of $0.4 million that would have been recognized as a result of the fair value step-up of the property, plant and equipment; • Additional amortization expense of $9.6 million that would have been recognized as a result of the allocation of purchase consideration to customer lists subject to amortization; • Estimated additional interest expense of $3.3 million as a result of incurring additional borrowing; • Income tax effect of the proforma adjustments calculated using a blended statutory income tax rate of 24.5% of $3.2 million. |
CONSOLIDATION OF VARIABLE INTER
CONSOLIDATION OF VARIABLE INTEREST ENTITY AND REDEEMABLE NONCONTROLLING INTEREST | 12 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
CONSOLIDATION OF VARIABLE INTEREST ENTITY AND REDEEMABLE NONCONTROLLING INTEREST | CONSOLIDATION OF VARIABLE INTEREST ENTITY AND REDEEMABLE NONCONTROLLING INTEREST Whitmore Joint Venture On April 1, 2021, Whitmore Manufacturing, LLC (“Whitmore”), a wholly-owned subsidiary of CSWI, completed the formation of a joint venture (the "Whitmore JV") with Pennzoil-Quaker State Company dba SOPUS Products (“Shell”), a wholly-owned subsidiary of Shell Oil Company that comprises Shell’s U.S. lubricants business. The formation was consummated through a transaction in which Whitmore sold to Shell a 50% interest in a wholly-owned subsidiary (containing certain existing operating assets) in exchange for consideration of $13.4 million from Shell in the form of cash ($5.3 million) and intangible assets ($8.1 million). The Whitmore JV has been consolidated into the operations of the Company and its activity has been included in our Specialized Reliability Solutions segment since the formation date. The Whitmore JV is deemed to be a VIE as the equity investors at risk, as a group, lack the characteristics of a controlling financial interest. The major factor that led to the conclusion that the Company is the primary beneficiary of this VIE is that Whitmore has the power to direct the manufacturing activities, which are considered the most significant activities for the Whitmore JV. Whitmore JV's total net assets are presented below (in thousands): March 31, 2023 Cash $ 7,519 Accounts receivable, net 7,376 Inventories, net 2,971 Prepaid expenses and other current assets 115 Property, plant and equipment, net 11,923 Intangible assets, net 6,478 Other assets 137 Total assets $ 36,519 Accounts payable $ 6,274 Accrued and other current liabilities 1,417 Other long-term liabilities 66 Total liabilities $ 7,757 For the year ended March 31, 2023, the Whitmore JV generated net income of $0.3 million. The Whitmore JV's LLC Agreement contains a put option that gives either member the right to sell its 50% equity interest in the Whitmore JV to the other member at a dollar amount equivalent to 90% of the initiating member's equity interest determined based on the fair market value of the Whitmore JV's net assets. This put option can be exercised, at either member's discretion, by providing written notice to the other member after three years from the Whitmore JV's formation, subject to certain timing restrictions. This redeemable noncontrolling interest is recorded at the higher of the redemption value or carrying value each reporting period. Changes in redeemable noncontrolling interest for the year ended March 31, 2023 were as follows (in thousands): Balance at March 31, 2022 $ 15,325 Net income attributable to redeemable noncontrolling interest 139 Contributions from noncontrolling interest 3,000 Balance at March 31, 2023 $ 18,464 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS During the three months ended June 30, 2021, we revised our segment structure creating three reportable segments: Contractor Solutions, Engineered Building Solutions and Specialized Reliability Solutions. As part of our segment realignment, we changed our reporting units and reallocated existing goodwill to each of the new reportable segments and associated reporting units, based on management's estimate of the relative fair value of each reporting unit. The result of this reallocation of goodwill has been recast, by reportable segment, as of March 31, 2021. The changes in the carrying amount of goodwill for the years ended March 31, 2023 and 2022 were as follows (in thousands): Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Balance at April 1, 2021 $ 169,345 $ 22,238 $ 27,212 $ 218,795 Goodwill re-allocation 14,813 2,727 (17,540) — TRUaire acquisition (2,099) — — (2,099) Shoemaker acquisition 8,115 — — 8,115 Currency translation (22) 42 (173) (153) Balance at March 31, 2022 $ 190,152 $ 25,007 $ 9,499 $ 224,658 Falcon acquisition 17,417 — — 17,417 CG and ACG acquisitions 1,686 — — 1,686 Shoemaker acquisition 6 — — 6 Currency translation (101) (705) (221) (1,027) Balance at March 31, 2023 $ 209,160 $ 24,302 $ 9,278 $ 242,740 The following table provides information about our intangible assets for the years ended March 31, 2023 and 2022 (in thousands, except years): March 31, 2023 March 31, 2022 Wtd Avg Life (Years) Ending Gross Amount Accumulated Amortization Ending Gross Amount Accumulated Amortization Finite-lived intangible assets: Patents 11 $ 13,608 $ (8,546) $ 9,417 $ (8,065) Customer lists and amortized trademarks 14 324,472 (81,901) 297,909 (61,368) Non-compete agreements 5 950 (272) 939 (258) Other 11 6,377 (2,235) 5,123 (3,957) $ 345,407 $ (92,954) $ 313,388 $ (73,648) Trade names and trademarks not being amortized: $ 66,450 $ — $ 61,097 $ — Amortization expense for the years ended March 31, 2023, 2022 and 2021 was $22.1 million, $24.8 million (including the amortization of inventory purchase accounting adjustment of $3.9 million) and $10.5 million, respectively. The following table presents the estimated future amortization of finite-lived intangible assets for the next five fiscal years ending March 31 (in thousands): 2024 $ 22,404 2025 21,525 2026 21,158 2027 20,363 2028 19,982 Thereafter 147,021 Total $ 252,453 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION We maintain the shareholder-approved 2015 Equity and Incentive Compensation Plan (the “2015 Plan”), which provides for the issuance of up to 1,230,000 shares of CSWI common stock through the grant of stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares, performance units or other share-based awards, to employees, officers and non-employee directors. As of March 31, 2023, 421,546 shares were available for issuance under the 2015 Plan. We recorded share-based compensation expense for restricted stock as follows for the years ended March 31, 2023, 2022 and 2021 (in thousands): Year Ended March 31, 2023 2022 2021 Share-based compensation expense $ 9,751 $ 8,450 $ 5,085 Related income tax benefit (2,438) (2,197) (1,220) Net share-based compensation expense $ 7,313 $ 6,253 $ 3,865 Stock option activity, which represents outstanding CSWI awards held by CSWI employees resulting from the conversion of Capital Southwest stock options held by former Capital Southwest employees, was as follows: Number of Shares Weighted Average Exercise Price Remaining Contractual Life (Years) Aggregate Intrinsic Value (in Millions) Outstanding and Exercisable at April 1, 2021 63,413 $ 25.23 Exercised (52,613) 25.23 Outstanding and Exercisable at March 31, 2022 10,800 25.23 2.4 $ 1.0 Exercised (10,800) 25.23 Outstanding and Exercisable at March 31, 2023 — $ — 0.0 $ — No options were granted or vested during the years ended March 31, 2023, 2022 and 2021, and all stock options were vested and recognized prior to the year ended March 31, 2021. The intrinsic value of options exercised during the years ended March 31, 2023, 2022 and 2021 was $1.2 million, $5.8 million and $2.5 million, respectively. Cash received for options exercised during the years ended March 31, 2023, 2022 and 2021 was $0.3 million, $1.3 million and $1.3 million, respectively, and the tax benefit received was $0.3 million, $1.4 million and $0.4 million, respectively. As of March 31, 2023, there were no outstanding stock options. Restricted stock activity was as follows: Year Ended March 31, 2023 Number of Shares Weighted Average Grant Date Fair Value Outstanding at April 1, 2022 228,331 $ 126.02 Granted 96,877 130.85 Vested (87,516) 86.01 Canceled (5,641) 112.60 Outstanding at March 31, 2023 232,051 $ 138.14 During the three months ended June 30, 2021, Joe Armes, the Company's Chairman, Chief Executive Officer and President, was awarded special long-term incentive awards with the purpose of retaining him through retirement and promoting successful succession planning and transition practices. Mr. Armes' awards include 31,496 shares of restricted stock (which cliff vest on March 31, 2026), 27,559 performance shares (which vest in equal amounts on each of March 31, 2025, 2026 and 2027, subject to performance criteria being achieved) and 19,685 performance restricted stock units (40% of which vest upon recruiting of a successor CEO and 60% of which vest upon the first employment anniversary of the successor CEO). During the restriction period, the holders of restricted shares are entitled to vote and receive dividends. Unvested restricted shares outstanding as of March 31, 2023 and 2022 included 99,463 and 102,360 shares (at target), respectively, with performance-based vesting provisions, having vesting ranges from 0-200% based on pre-defined performance targets with market conditions. Performance-based awards accrue dividend equivalents, which are settled upon (and to the extent of) vesting of the underlying award, and do not have the right to vote until vested. Performance-based awards are earned upon the achievement of objective performance targets and are payable in common shares. Compensation expense is calculated based on the fair market value as determined by a Monte Carlo simulation and is recognized over a 36-month cliff vesting period. We granted 21,087 and 47,845 awards with performance-based vesting provisions during the years ended March 31, 2023 and 2022, respectively, with a vesting range of 0-200%. At March 31, 2023, we had unrecognized compensation cost related to unvested restricted shares of $19.4 million, which will be amortized into net income over the remaining weighted average vesting period of 2.7 years. The total fair value of restricted shares vested during the years ended March 31, 2023 and 2022 was $10.2 million and $14.2 million, respectively. |
INVENTORY
INVENTORY | 12 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY Inventories are stated at the lower of cost or net realizable value and include raw materials, supplies, direct labor and manufacturing overhead. Inventories are accounted for using a standard costing methodology, which approximates cost on a first-in, first-out (“FIFO”) basis. The Inventories, net caption in the Consolidated Balance Sheet is comprised of the following components: March 31, 2023 2022 Raw materials and supplies $ 48,300 $ 46,136 Work in process 5,250 7,471 Finished goods 113,104 100,792 Total inventories 166,654 154,399 Less: Obsolescence reserve (5,085) (4,285) Inventories, net $ 161,569 $ 150,114 |
DETAILS OF CERTAIN CONSOLIDATED
DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS | 12 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS | DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS Accounts receivable, net consists of the following (in thousands): March 31, 2023 2022 Accounts receivable trade $ 121,164 $ 120,603 Other receivables 2,954 3,378 124,118 123,981 Less: Allowance for doubtful accounts (1,365) (1,177) Accounts receivable, net $ 122,753 $ 122,804 Prepaid expenses and other current assets consists of the following (in thousands): March 31, 2023 2022 Prepaid expenses $ 9,485 $ 8,531 Short-term tax indemnification assets 7,500 — Income taxes receivable 1,344 690 Current derivative asset 877 — Other current assets 1,073 1,389 $ 20,279 $ 10,610 Property, plant and equipment, net , consist of the following (in thousands): March 31, 2023 2022 Land and improvements $ 3,226 $ 3,226 Buildings and improvements 52,975 53,346 Plant, office and laboratory equipment 112,271 99,770 Construction in progress 12,466 11,083 180,938 167,425 Less: Accumulated depreciation (92,703) (80,393) Property, plant and equipment, net $ 88,235 $ 87,032 Depreciation of property, plant and equipment was $12.9 million, $11.6 million and $9.2 million for the years ended March 31, 2023, 2022 and 2021, respectively. Of these amounts, cost of revenues includes $8.4 million, $8.3 million and $7.1 million, respectively. Other assets consist of the following (in thousands): March 31, 2023 2022 Right-of-use lease assets $ 59,815 $ 67,076 Long-term tax indemnification assets 2,849 7,500 Deferred financing fees 2,363 2,271 Rent receivable 2,028 2,073 Property held for investment 418 418 Deferred income taxes 462 304 Other 2,584 3,044 Other assets $ 70,519 $ 82,686 Accrued and other current liabilities consist of the following (in thousands): March 31, 2023 2022 Compensation and related benefits $ 27,096 $ 21,617 Rebates and marketing agreements 16,158 16,340 Operating lease liabilities 9,784 9,269 Acquisition deferred payments 3,427 3,061 Non-income taxes 1,802 1,949 Billings in excess of costs 637 1,026 Income taxes payable 403 4,266 Other accrued expenses 8,081 11,477 Accrued and other current liabilities $ 67,388 $ 69,005 Other long-term liabilities consists of the following (in thousands): March 31, 2023 2022 Deferred income taxes $ 62,144 $ 62,810 Operating lease liabilities 55,590 63,275 Tax Reserve 16,509 13,987 Derivative liability 1,021 234 Acquisition deferred payments 1,853 — Other long-term liabilities $ 137,117 $ 140,306 |
LONG-TERM DEBT AND COMMITMENTS
LONG-TERM DEBT AND COMMITMENTS | 12 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT AND COMMITMENTS | LONG-TERM DEBT AND COMMITMENTS Debt consists of the following (in thousands): March 31, 2023 2022 Revolving Credit Facility, interest rate of 6.21% and 1.95% (a), respectively $ 253,000 $ 243,000 Whitmore term loan, interest rate of 0.00% and 2.45% (a), respectively — 9,775 Total debt 253,000 252,775 Less: Current portion — (561) Long-term debt $ 253,000 $ 252,214 (a) Represents the unhedged interest rate effective on March 31, 2023 , and 2022 , respectively. Revolving Credit Facility Agreement On December 11, 2015, we entered into a five-year $250.0 million Revolving Credit Facility agreement, with an additional $50.0 million accordion feature, with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto. The agreement was amended on September 15, 2017 to allow for multi-currency borrowing with a $125.0 million sublimit and to extend the maturity date to September 15, 2022. On December 1, 2020, the Company entered into an amendment to the Revolving Credit Facility (the "First Credit Agreement") to utilize the accordion feature, thus increasing the commitment from $250.0 million to $300.0 million, and hence eliminating the available incremental commitment by a corresponding amount. On March 10, 2021, the Revolving Credit Facility was amended to facilitate the formation and future operation of the joint venture discussed in Note 3. On May 18, 2021, we entered into a Second Amended and Restated Credit Agreement (the “Second Credit Agreement”), which replaced the First Credit Agreement and provides for a $400.0 million revolving credit facility that contains a $25.0 million sublimit for the issuance of letters of credit and a $10.0 million sublimit for swingline loans, with an additional $150.0 million accordion feature. The Second Credit Agreement is scheduled to mature on May 18, 2026. The Company incurred a total of $2.3 million in underwriting fees, which are being amortized over the life of the Second Credit Agreement. Borrowings under the Second Credit Agreement bear interest at either base rate plus between 0.25% to 1.5% or LIBOR plus between 1.25% to 2.5%, based on the Company’s leverage ratio calculated on a quarterly basis. The base rate is described in the Second Credit Agreement as the highest of (i) the Federal funds effective rate plus 0.50%, (ii) the prime rate quoted by The Wall Street Journal, and (iii) the one-month LIBOR rate plus 1.00%. We pay a commitment fee between 0.15% to 0.4% based on the Company's leverage ratio for the unutilized portion of this facility. Interest and commitment fees are payable monthly and quarterly, respectively, and the outstanding principal balance is due at the maturity date. The Second Credit Agreement is secured by a first priority lien on all tangible and intangible assets and stock issued by the Company and its domestic subsidiaries, subject to specified exceptions, and 65% of the voting equity interests in its first-tier foreign subsidiaries. On December 15, 2022, the Company entered into an Incremental Assumption Agreement No. 1 and Amendment No. 2 to the Second Credit Agreement (the “Second Amendment”) to utilize a portion of the accordion feature, thus increasing the commitment from $400.0 million to $500.0 million, and concurrently reduced the available incremental accordion by a corresponding amount (the term "Revolving Credit Facility" as used throughout this document refers to the First Credit Agreement, the Second Credit Agreement and the Second Amendment, as applicable). The Second Amendment also replaced the LIBOR Rate with individualized metrics based on the specific denomination of borrowings, including a metric based on Term SOFR (as defined in the Second Credit Agreement) for borrowings denominated in U.S. Dollars. The Company incurred a total of $0.7 million in underwriting fees, which are being amortized over the remaining term of the Revolving Credit Facility. During the year ended March 31, 2023, we borrowed $143.2 million and repaid $133.2 million under the Revolving Credit Facility. As of March 31, 2023 and 2022, we had $253.0 million and $243.0 million, respectively, in our outstanding balance, which resulted in borrowing capacity under the Revolving Credit Facility of $247.0 million and $157.0 million, respectively. The financial covenants contained in the Revolving Credit Facility require the maintenance of a maximum leverage ratio of 3.00 to 1.00, subject to a temporary increase to 3.75 to 1.00 for 18 months following the consummation of permitted acquisitions with consideration in excess of certain threshold amounts set forth in the Revolving Credit Facility. The Revolving Credit Facility Agreement also requires the maintenance of a minimum fixed charge coverage ratio of 1.25 to 1.00, the calculations and terms of which are defined in the Revolving Credit Facility Agreement. Covenant compliance is tested quarterly, and we were in compliance with all covenants as of March 31, 2023. Whitmore Term Loan Prior to January 20, 2023, Whitmore Manufacturing, LLC (one of our wholly-owned operating subsidiaries) maintained a secured term loan related to the warehouse, corporate office building and remodel of the existing manufacturing and R&D facility. The term loan required a payment of $140,000 each quarter. Borrowings under the term loan bore interest at a variable annual rate equal to one-month LIBOR plus 2.0%. On January 20, 2023, the Whitmore Term Loan was paid off using borrowings under our existing Revolving Credit Facility discussed above. As of March 31, 2023 and 2022, Whitmore had $0.0 million and $9.8 million, respectively, in outstanding borrowings under the term loan. Interest payments under the Whitmore Term Loan were hedged under an interest rate swap agreement until January 9, 2023, when the interest rate swap agreement was terminated. Future Minimum Debt Payments Future minimum debt payments are as follows for years ending March 31 (in thousands): 2024 $ — 2025 — 2026 — 2027 253,000 2028 — Thereafter — Total $ 253,000 |
LEASES
LEASES | 12 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES We have operating leases for manufacturing facilities, offices, warehouses, vehicles and certain equipment. Our leases have remaining lease terms of 1 year to 25 years, some of which include escalation clauses and/or options to extend or terminate the leases. We do not currently have any financing lease arrangements. (in thousands) March 31, 2023 March 31, 2022 Components of Operating Lease Expenses Operating lease expense $ 10,793 $ 9,893 Short-term lease expense 815 326 Total operating lease expense (a) $ 11,608 $ 10,219 (a) Included in cost of revenues and selling, general and administrative expense (in thousands) March 31, 2023 March 31, 2022 Operating Lease Assets and Liabilities Right-of-use lease assets, net (a) $ 59,815 $ 67,076 Short-term lease liabilities $ 9,784 $ 9,269 Long-term lease liabilities 55,590 63,275 Total operating lease liabilities (b) $ 65,374 $ 72,544 (a) Included in other assets (b) Included in accrued and other current liabilities and other long-term liabilities, as applicable (in thousands) March 31, 2023 March 31, 2022 Supplemental Cash Flow Cash paid for amounts included in the measurement of operating lease liabilities (a) $ 11,058 $ 9,974 Right-of-use assets obtained in exchange for new operating lease obligations 2,526 8,464 (a) Included in our condensed consolidated statement of cash flows, operating activities in accounts payable and other current liabilities Other Information for Operating Leases Weighted average remaining lease term (in years) 7.0 7.9 Weighted average discount rate (percent) 2.3 % 2.2 % Maturities of operating lease liabilities were as follows (in thousands): 2024 $ 11,082 2025 10,903 2026 10,558 2027 10,316 2028 9,037 Thereafter 18,787 Total lease liabilities $ 70,683 Less: Imputed interest (5,309) Present value of lease liabilities $ 65,374 |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING | 12 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING | DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING We enter into interest rate swap agreements to hedge exposure to floating interest rates on certain portions of our debt. All interest rate swaps are highly effective. As of March 31, 2022, we had $9.8 million of notional amount in outstanding designated interest rate swap to hedge our exposure to variability in cash flows from interest payments on our Whitmore Term Loan. On January 9, 2023, the interest rate swap was terminated and resulted a cash receipt of $0.2 million. On February 7, 2023, we entered into an interest rate swap to hedge our exposure to variability in cash flows from interest payments on the first $100.0 million borrowing under our Revolving Credit Facility. This interest rate swap fixes the one-month SOFR rate at 3.85% for the first $100.0 million borrowing under our Revolving Credit Facility, and will expire May 18, 2026. As of March 31, 2023, we had $100.0 million of notional amount in outstanding designated interest rate swaps with third parties. The fair value of interest rate swaps designated as hedging instruments are summarized below (in thousands): March 31, 2023 2022 Current derivative asset $ 877 $ — Current derivative liabilities — 109 Non-current derivative liabilities 1,021 233 The impact of changes in the fair value of interest rate swaps is included in Note 18. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the reconciliation of the numerator and the denominator of basic and diluted earnings per share for the years ended March 31, 2023, 2022 and 2021: March 31, (amounts in thousands, except per share data) 2023 2022 2021 Net income $ 96,574 $ 67,319 $ 40,099 Income attributable to redeemable noncontrolling interest (139) (934) — Net income attributable to CSW Industrials, Inc. $ 96,435 $ 66,385 $ 40,099 Weighted average shares: Common stock 15,401 15,646 14,919 Participating securities 108 109 96 Denominator for basic earnings per common share 15,509 15,755 15,015 Potentially dilutive securities 37 52 111 Denominator for diluted earnings per common share 15,546 15,807 15,126 Basic earnings per common share: $ 6.22 $ 4.21 $ 2.67 Diluted earnings per common share: $ 6.20 $ 4.20 $ 2.65 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Share Repurchase Programs On November 7, 2018, we announced that our Board of Directors authorized a program to repurchase up to $75.0 million of our common stock over a two-year time period. On October 30, 2020, we announced that our Board of Directors authorized a new program to repurchase up to $100.0 million of our common stock, which replaced the previously announced $75.0 million program. On December 16, 2022, we announced that our Board of Directors authorized a new $100.0 million share repurchase program, which replaced the previously announced $100.0 million program. Under the current repurchase program, shares may be repurchased from time to time in the open market or in privately negotiated transactions. Repurchases will be made at our discretion, based on ongoing assessments of the capital needs of the business, the market price of our common stock and general market conditions. Our Board of Directors has established an expiration of December 31, 2024 for completion of the new repurchase program; however, the program may be limited or terminated at any time at our discretion without notice. Through March 31, 2023, no shares have been repurchased under the current $100.0 million repurchase program. Under the prior $100.0 million repurchase program, 336,347 shares were repurchased during the year ended March 31, 2023 for $35.7 million, and 126,115 shares were repurchased during the year ended March 31, 2022 for $14.4 million. A total of 462,462 shares had been repurchased for an aggregate amount of $50.1 million under the prior $100.0 million program. As of March 31, 2023, no shares were repurchased under the current $100.0 million program. Dividends |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The fair value of interest rate swaps discussed in Note 10 are determined using Level II inputs. The carrying value of our debt, included in Note 8, approximates fair value as it bears interest at floating rates. The carrying amounts of other financial instruments (i.e., cash and cash equivalents, accounts receivable, net, accounts payable) approximated their fair values at March 31, 2023 and 2022 due to their short-term nature. The redeemable noncontrolling interest is recorded at the higher of the redemption value or carrying value each reporting period. The redemption value of the redeemable noncontrolling interest is estimated using a discounted cash flow analysis, which requires management judgment with respect to future revenue, operating margins, growth rates and discount rates and is classified as Level III under the fair value hierarchy. The redemption value of the redeemable noncontrolling interest is discussed in Note 3. |
RETIREMENT PLANS
RETIREMENT PLANS | 12 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | RETIREMENT PLANS We had a frozen qualified defined benefit pension plan (the “Qualified Plan”) that covered certain of our U.S. employees. The Qualified Plan was previously closed to employees hired or re-hired on or after January 1, 2015, and it was amended to freeze benefit accruals and to modify certain ancillary benefits effective as of September 30, 2015. In September 2019, the Qualified Plan was terminated and resulted in an overall termination charge of $7.0 million ($5.4 million, net of tax) recorded in other (expense) income, net, due primarily to the recognition of expenses that were previously included in accumulated other comprehensive loss and the recognition of additional costs associated with the annuity purchase contract. After the participant data for the annuity purchase contract was finalized in the quarter ended March 31, 2020, the Qualified Plan had excess funds of $0.5 million, which were distributed into the Defined Contribution Plan discussed below. We maintain a frozen unfunded retirement restoration plan (the “Restoration Plan”) that is a non-qualified plan providing for the payment to participating employees, upon retirement, of the difference between the maximum annual payment permissible under the Qualified Plan pursuant to federal limitations and the amount that would otherwise have been payable under the Qualified Plan. The Restoration Plan was closed to new participants on January 1, 2015 and was amended to freeze benefit accruals and to modify certain ancillary benefits effective as of September 30, 2015. As of March 31, 2023 and 2022, the Restoration Plan reported liabilities of $1.3 million and $1.4 million, respectively. We had a registered defined benefit pension plan (the "Canadian Plan") that covered all of our employees based at our facility in Alberta, Canada. The plan was amended to freeze benefit accruals effective as of January 31, 2022. In January 2023, the Canadian Plan was terminated and resulted in an overall termination charge of $0.5 million ($0.4 million, net of tax) recorded in other (expense) income, net, due primarily to the recognition of expenses that were previously included in accumulated other comprehensive loss and the recognition of additional costs associated with the annuity purchase contract. The plans described above (collectively, the "Plans") are presented in aggregate as the impact of the Restoration Plan and Canadian Plan to our consolidated financial position and results of operations is not material. Net pension (benefit) expense for the Plans was: Year Ended March 31, (in thousands) 2023 2022 2021 Service cost – benefits earned during the year $ — $ 43 $ 40 Interest cost on projected benefit obligation 56 138 144 Expected return on assets — (120) (96) Net amortization and deferral 42 69 74 Pension plan termination (a) 453 — — Curtailment impact — (30) — Net pension expense $ 551 $ 100 $ 162 (a) Reflects impact of the termination of the Canadian Plan. No estimated prior service costs or net loss for the Plans will be amortized from accumulated other comprehensive loss into pension expense in the year ended March 31, 2024. Defined Contribution Plan Effective October 1, 2015, we began to sponsor a defined contribution plan covering substantially all of our U.S. employees. Employees may contribute to this plan, and these contributions are matched 100% by us up to 6.0% of eligible earnings. We also contribute an additional percentage of eligible earnings to employees regardless of their level of participation in the plan, which is discretionary and varies based on profitability. We made total contributions to the plan of $5.7 million and $4.8 million during the years ended March 31, 2023 and 2022, respectively. Employee Stock Ownership Plan We sponsor a qualified, non-leveraged employee stock ownership plan (“ESOP”) in which domestic employees are eligible to participate following the completion of one year of service. The ESOP provides annual discretionary contributions of up to the maximum amount that is deductible under the Internal Revenue Code. Contributions to the ESOP are invested in our common stock. A participant’s interest in contributions to the ESOP fully vests after three years of credited service or upon retirement, permanent disability (each, as defined in the plan document) or death. We recorded total contributions to the ESOP of $3.1 million, $2.3 million and $3.6 million during the years ended March 31, 2023, 2022 and 2021, respectively, based on performance in the prior year. During the year ended March 31, 2023, $5.1 million was recorded to expense based on performance in the year ended March 31, 2023 and is expected to be contributed to the ESOP during the year ending March 31, 2024. The ESOP held 537,293 and 549,863 shares of CSWI common stock as of March 31, 2023 and 2022, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES In August 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. Among other things, the IRA imposes a fifteen percent corporate alternative minimum tax (the “Corporate AMT”) for tax years beginning after December 31, 2022 and levies a one percent excise tax on net share repurchases after December 31, 2022. The excise tax on the share repurchase portion of the IRA did not have an impact on our results of operations or financial position for the year ended March 31, 2023. We do not expect the Corporate AMT, excise tax or other provisions of the IRA to have a material impact on our consolidated financial statements. Income before income taxes was comprised of the following (in thousands): Year Ended March 31, 2023 2022 2021 U.S. Federal $ 118,181 $ 87,607 $ 48,142 Foreign 7,730 3,858 2,726 Income before income taxes $ 125,911 $ 91,465 $ 50,868 Income tax expense consists of the following (in thousands): For the year ended: Current Deferred Total March 31, 2023 U.S. Federal $ 27,920 $ (3,549) $ 24,371 State and local 6,135 (2,471) 3,664 Foreign 1,482 (180) 1,302 Provision for income taxes $ 35,537 $ (6,200) $ 29,337 March 31, 2022 U.S. Federal $ 20,139 $ (1,578) $ 18,561 State and local 5,271 761 6,032 Foreign 638 (1,085) (447) Provision for income taxes $ 26,048 $ (1,902) $ 24,146 March 31, 2021 U.S. Federal $ 6,773 $ (1,211) $ 5,562 State and local 3,561 (500) 3,061 Foreign 1,641 505 2,146 Provision for income taxes $ 11,975 $ (1,206) $ 10,769 Income tax expense differed from the amounts computed by applying the U.S. federal statutory income tax rate of 21.0% to income before income taxes as a result of the following (in thousands): Year Ended March 31, 2023 2022 2021 Computed tax expense at statutory rate $ 26,441 $ 19,206 $ 10,674 Increase (reduction) in income taxes resulting from: State and local income taxes, net of federal benefits 2,895 4,765 2,419 Nondeductible executive compensation 1,555 992 248 Global intangible low-taxed income ("GILTI") inclusion 1,123 580 2,118 Repatriation tax, net of tax credit 904 170 822 Other permanent differences 557 (143) 1,931 IRC section 250 deductions (1,626) (1,102) (1,678) Foreign tax credits (604) (450) (554) Vesting of stock-based compensation (408) (1,916) (741) Uncertain tax positions (224) 759 (4,717) Valuation allowance (96) 379 — Foreign rate differential 67 91 85 Other, net (1,247) 815 162 Provision for income taxes $ 29,337 $ 24,146 $ 10,769 The effective tax rates for the years ended March 31, 2023, 2022 and 2021 were 23.3%, 26.4% and 21.2%, respectively. As compared with the statutory rate for the year ended March 31, 2023, the provision for income taxes was primarily impacted by state tax expense (net of federal benefits), which increased the provision by $2.9 million and effective rate by 2.3%, executive compensation limitation, which increased the provision by $1.6 million and the effective tax rate by 1.2%; impact of GILTI inclusions, which increased the provision by $1.1 million and the effective tax rate by 0.9%; impact of repatriation of foreign earnings, which increased the provision by $0.9 million and the effective rate by 0.7%; and the additional non-deductible expenses, which increased the provision by $0.6 million and the effective tax rate by 0.4%. This was offset by IRC section 250 deductions, which decreased the provision by $1.6 million and the effective tax rate by 1.3%; foreign tax credits, which decreased the provision by $0.6 million and the effective tax rate by 0.5% and tax benefits related to the restricted stock vesting, which decreased the provision by $0.4 million and the effective tax rate by 0.3%. As compared with the statutory rate for the year ended March 31, 2022, the provision for income taxes was primarily impacted by the state tax expense, which increased the provision by $4.8 million and the effective rate by 5.2%, executive compensation limitation, which increased the provision by $1.0 million and the effective rate by 1.1%, and a net increase in uncertain tax positions, which increased the provision by $0.8 million and the effective rate by 0.8%. This was offset by tax benefits related to the restricted stock vesting, which decreased the provision by $1.9 million and the effective rate by 2.1% and IRC section 250 deductions, which decreased the provision by $1.1 million and the effective tax rate by 1.2%. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 2023 and 2022 are presented below (in thousands): March 31, 2023 2022 Deferred tax assets: Operating lease liabilities $ 15,684 $ 17,774 Accrued compensation 6,636 4,826 Inventory reserves 3,422 3,720 Accrued expenses 1,580 1,010 State R&D credit carry-forward 968 75 Transaction Costs 828 714 Pension and other employee benefits 452 412 Foreign tax credit carry-forward 284 379 Net operating loss carryforwards 144 145 Other, net 747 1,492 Deferred tax assets 30,745 30,547 Valuation allowance (428) (524) Deferred tax assets, net of valuation allowance 30,317 30,023 Deferred tax liabilities: Goodwill and intangible assets (66,432) (64,903) Operating lease right-of-use assets (14,337) (16,364) Property, plant and equipment (7,299) (8,242) Repatriation reserve (1,784) (1,034) Other, net (2,148) (1,986) Deferred tax liabilities (92,000) (92,529) Net deferred tax liabilities $ (61,683) $ (62,506) As of both March 31, 2023 and 2022, we had immaterial net operating loss carryforwards, which were fully reserved through valuation allowances. Net operating loss carryforwards will expire in periods beyond the next 5 years. Deferred income tax has not been recognized on the basis difference that is permanently invested outside the United States. This becomes taxable upon a repatriation of assets from the subsidiary or a sale or liquidation of the subsidiary. As of March 31, 2023, we have no basis differences that would result in material unrecognized deferred taxes. A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) is as follows (in thousands): March 31, 2023 2022 Balance at beginning of year $ 9,934 $ 10,212 Decreases related to prior year tax positions (690) (314) Increases related to current year tax positions 2,540 36 Balance at end of year $ 11,784 $ 9,934 During the year ended March 31, 2023, we released a reserve of $1.6 million primarily as a result of the conclusion of TRUaire's Vietnam's audit for the tax periods from January 1, 2019 to March 31, 2022 (discussed below), including accrued interest of $0.4 million and accrued penalties of $0.5 million. We also recorded total tax contingency reserves of $2.8 million, including unrecognized tax benefit of $2.5 million, accrued interest and penalty of $0.1 million and $0.2 million, respectively, through purchase accounting in connection with the Falcon Stainless acquisition. For the year ended March 31, 2023, we recorded an additional net tax contingency reserve of less than $0.1 million, accrued interest of $0.7 million and accrued penalty of $0.6 million. During the year ended March 31, 2022, we released a reserve of $1.4 million, including accrued interest of $0.6 million and accrued penalties of $0.5 million, related to positions taken on tax returns for which the statute had expired. In connection with the Falcon acquisition closed in July 2023, the Company recognized a UTP of $2.8 million related to pre-acquisition tax periods. In addition, in accordance with the tax indemnification included in the purchase agreement, the sellers provided a contractual indemnification to the Company for up to $4.5 million related to UTPs taken in pre-acquisition years, and we recognized a tax indemnification asset of $2.8 million. This tax indemnification asset will either be settled or expire upon the closure of the tax statutes for the pre-acquisition periods. In connection with the TRUaire acquisition closed in December 2020, the Company recognized a UTP of $17.3 million related to pre-acquisition tax periods. In addition, in accordance with the tax indemnification included in the purchase agreement, the sellers provided a contractual indemnification to the Company for up to $12.5 million related to UTPs taken in pre-acquisition years, and we recognized a tax indemnification asset of $12.5 million. This tax indemnification asset will either be settled or expire by December 2023. During the three months ended March 31, 2021, as a result of the audit closure of a pre-acquisition tax period for TRUaire, $5.0 million of the tax indemnification asset was released along with the relevant UTP of $5.3 million. During the three months ended December 31, 2022, TRUaire's Vietnam entity concluded its audit for the tax periods from January 1, 2019 to March 31, 2022 and received an audit closing letter from the tax authority. As a result, $1.5 million of the UTP accrual (including penalties and interests accrued post-acquisition) was released and recorded as an income tax benefit for the three months ended December 31, 2022. As of March 31, 2023, $7.5 million of the tax indemnification asset remains outstanding and is reported in our condensed consolidated balance sheets in prepaid expenses and other current assets. This tax indemnification asset will either be settled or expire by December 15, 2023. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSWe had no related party transactions in the three years ended March 31, 2023, 2022 and 2021. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIESFrom time to time, we are involved in various claims and legal actions which arise in the ordinary course of business. There are not any matters pending that we currently believe are reasonably possible of having a material impact on our business, consolidated financial position, results of operations or cash flows. |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
OTHER COMPREHENSIVE INCOME (LOSS) | OTHER COMPREHENSIVE INCOME (LOSS) The following table provides an analysis of the changes in accumulated other comprehensive loss (in thousands). March 31, 2023 2022 Currency translation adjustments: Balance at beginning of period $ (4,438) $ (4,394) Foreign currency translation adjustments (3,752) (44) Balance at end of period $ (8,190) $ (4,438) Interest rate swaps: Balance at beginning of period $ (270) $ (803) Unrealized gain, net of taxes of $(60) and $(82), respectively (a) 225 309 Reclassification of losses (gains) included in interest expense, net of taxes of $18 and $(60), respectively (69) 224 Other comprehensive income 156 533 Balance at end of period $ (114) $ (270) Defined benefit plans: Balance at beginning of period $ (366) $ (799) Amortization of net prior service benefit, net of taxes of $0 and $1, respectively (b) — (5) Amortization of net loss, net of taxes of $(9) and $(16), respectively (b) 33 59 Net gain arising during the year, net of taxes of $(24) and $(41), respectively ( b) 92 154 Curtailment impact, net of taxes of $0 and $(83), respectively — 311 Pension termination, net of taxes of $(34) and $0, respectively 127 — Currency translation impact 9 (86) Other comprehensive income 261 433 Balance at end of period $ (105) $ (366) (a) Unrealized gains are reclassified to earnings as underlying cash interest payments are made. We expect to recognize a gain of $0.7 million, net of deferred taxes, over the next twelve months related to a designated cash flow hedge based on its fair value as of March 31, 2023. (b) Amortization of prior service costs and actuarial losses out of accumulated other comprehensive loss are included in the computation of net periodic pension expense. See Note 14 for additional information. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION We conduct our operations in three reportable segments: Contractor Solutions, Engineered Building Solutions and Specialized Reliability Solutions. With the adoption of ASC Topic 606, we have concluded that the disaggregation of revenues that would be most useful in understanding the nature, timing and extent of revenue recognition is the breakout of build-to-order and book-and-ship, as defined below: Build-to-order products are architecturally-specified building products generally sold into the construction industry. Revenue generated from sales of products under build-to-order transactions are currently reflected in the results of our Engineered Building Solutions segment. Occasionally, our built-to-order business lines enter into arrangements for the delivery of a customer-specified product and the provision of installation services. These orders are generally negotiated as a package and are commonly subject to retainage by the customer, which means the final 10% of the transaction price, when applicable, is not collectible until the overall construction project into which our products are incorporated is complete. The lead times for transfer to the customer can be up to 12 weeks. Revenue for goods is recognized at a point in time, but installation services are recognized over time as those services are performed. Installation services represented approximately 2% of total consolidated revenue for the year ended March 31, 2023. Book-and-ship products are sold across all of our end markets. Revenue generated from sales of products under book-and-ship transactions have historically been presented in the Contractor Solutions, Engineered Building Solutions and Specialized Reliability Solutions segments. These sales are typically priced on a product-by-product basis using price lists provided to our customers. The lead times for transfer to the customer is usually one week or less as these items are generally built to stock. Revenue for products sold under these arrangements is recognized at a point in time. Disaggregation of revenues reconciled to our reportable segments is as follows (in thousands): Year Ended March 31, 2023 Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Build-to-order $ — $ 89,964 $ — $ 89,964 Book-and-ship 506,634 14,005 147,301 667,940 Net revenues $ 506,634 $ 103,969 $ 147,301 $ 757,904 Year Ended March 31, 2022 Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Build-to-order $ — $ 88,690 $ — $ 88,690 Book-and-ship 413,207 8,606 115,932 537,745 Net revenues $ 413,207 $ 97,296 $ 115,932 $ 626,435 Year Ended March 31, 2021 Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Build-to-order $ — $ 87,057 $ — $ 87,057 Book-and-ship 245,232 8,615 78,301 332,148 Net revenues $ 245,232 $ 95,672 $ 78,301 $ 419,205 Contract liabilities, which are included in accrued and other current liabilities in our consolidated balance sheets were as follows (in thousands): Balance at April 1, 2022 $ 1,026 Revenue recognized (953) New contracts and revenue added to existing contracts 564 Balance at March 31, 2023 $ 637 |
SEGMENTS
SEGMENTS | 12 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTS As described in Note 1, we conduct our operations through three reportable segments: • Contractor Solutions • Engineered Building Solutions and • Specialized Reliability Solutions The following is a summary of the financial information of our reporting segments reconciled to the amounts reported in the consolidated financial statements (in thousands). Year Ended March 31, 2023 (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 506,634 $ 103,969 $ 147,301 $ 757,904 $ — $ 757,904 Intersegment revenue 7,142 — 145 7,287 (7,287) — Operating income 126,204 12,889 20,176 159,269 (20,203) 139,066 Depreciation and amortization 26,951 1,771 6,035 34,757 200 34,957 Year Ended March 31, 2022 (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 413,207 $ 97,296 $ 115,932 $ 626,435 $ — $ 626,435 Intersegment revenue 3,280 — 110 3,390 (3,390) — Operating income 96,115 11,101 9,007 116,223 (18,843) 97,380 Depreciation and amortization 27,879 2,063 6,016 35,958 450 36,408 Year Ended March 31, 2021 (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 245,232 $ 95,672 $ 78,301 $ 419,205 $ — $ 419,205 Intersegment revenue 296 — 64 360 (360) — Operating income 59,007 14,066 581 73,654 (14,434) 59,220 Depreciation and amortization 14,415 2,014 5,744 22,173 545 22,718 TOTAL ASSETS (Amounts in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total March 31, 2023 $ 823,750 $ 71,429 $ 136,248 $ 1,031,427 $ 12,026 $ 1,043,453 March 31, 2022 782,267 74,397 126,380 983,044 12,316 995,360 March 31, 2021 687,508 67,281 111,493 866,282 13,240 879,522 Geographic information – We attribute revenues to different geographic areas based on the destination of the product or service delivery. Long-lived assets are classified based on the geographic area in which the assets are located and exclude deferred taxes. No individual country, except for the U.S., accounted for more than 10% of consolidated net revenues or total long-lived assets. Revenues and long-lived assets by geographic area are as follows (in thousands, except percent data): Year Ended March 31, 2023 2022 2021 U.S. $ 678,126 89.5 % $ 559,296 89.3 % $ 367,169 87.6 % Non-U.S. (a) 79,778 10.5 % 67,139 10.7 % 52,036 12.4 % Revenues, net $ 757,904 100.0 % $ 626,435 100.0 % $ 419,205 100.0 % (a) No individual country within this group represents 10% or more of consolidated totals for any period presented. Year Ended March 31, 2023 2022 2021 U.S. $ 679,731 94.4 % $ 651,477 93.7 % $ 617,258 93.5 % Non-U.S. 40,665 5.6 % 43,736 6.3 % 43,146 6.5 % Long-lived assets (a) $ 720,396 100.0 % $ 695,213 100.0 % $ 660,404 100.0 % (a) Long-lived assets consist primarily of property, plant and equipment, intangible assets, goodwill and other assets. Major customer information – We have a large number of customers across our locations and we do not have sales to any individual customer that represented 10% or more of consolidated net revenues for any of the fiscal years presented. |
ORGANIZATION AND OPERATIONS A_2
ORGANIZATION AND OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation – The consolidated financial position, results of operations and cash flows included in this Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (“Annual Report”) include all revenues, costs, assets and liabilities directly attributable to CSWI and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”). The consolidated financial statements are for us and our consolidated subsidiaries, each of which is a wholly-owned subsidiary, except our 50% investment in a variable interest entity for which we have determined that we are the primary beneficiary and therefore have consolidated into our financial statements. All significant intercompany transactions have been eliminated in consolidation. |
Variable Interest Entities | Variable Interest Entities - We evaluate whether an entity is a variable interest entity (“VIE”) and determine if the primary beneficiary status is appropriate on a quarterly basis. We consolidate a VIE for which we are the primary beneficiary. When assessing the determination of the primary beneficiary, we consider all relevant facts and circumstances, including: the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, the obligation to absorb the expected losses and/or the right to receive the expected returns of the VIE. Through this evaluation, we determined that the Whitmore JV is a VIE and the Company is the primary beneficiary of this VIE, primarily due to Whitmore having the power to direct the manufacturing activities, which are considered the most significant activities for the Whitmore JV. |
Use of Estimates | Use of Estimates – The process of preparing financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect reported amounts of certain assets, liabilities, revenues and expenses. We believe our estimates and assumptions are reasonable; however, actual results may differ materially from such estimates. The most significant estimates and assumptions are used in determining: • Timing and amount of revenue recognition; • Deferred taxes and tax reserves; and • Valuation of goodwill and indefinite-lived intangible assets. |
Cash and Cash Equivalents | Cash and Cash Equivalents – We consider all highly liquid instruments purchased with original maturities of three months or less and money market accounts to be cash equivalents. We maintain our cash and cash equivalents at financial institutions |
Accounts Receivable, Allowance for Doubtful Accounts and Credit Risk | Accounts Receivable, Allowance for Doubtful Accounts and Credit Risk – Trade accounts receivables are recorded at the invoiced amounts and do not bear interest. We record an allowance for credit losses on trade receivables that, when deducted from the gross trade receivables balance, presents the net amount expected to be collected. We estimate the allowance based on an aging schedule and according to historical losses as determined from our billings and collections history. This may be adjusted after consideration of customer-specific factors such as financial difficulties, liquidity issues or insolvency, as well as both current and forecasted macroeconomic conditions as of the reporting date. We adjust the allowance and recognize credit losses in the income statement each period. Trade receivables are written off against the allowance in the period when the receivable is deemed to be uncollectible. Subsequent recoveries of amounts previously written off are reflected as a reduction to periodic credit losses in the income statement. |
Credit Risks | Credit risks are mitigated by the diversity of our customer base across many different industries and by performing creditworthiness analyses on our customers. Additionally, we mitigate credit risk through letters of credit and advance payments received from our customers. We do not believe that we have any significant concentrations of credit risk. |
Inventories and Related Reserves | Inventories and Related Reserves – Inventories are stated at the lower of cost or net realizable value and include raw materials, supplies, direct labor and manufacturing overhead. Inventories are accounted for using a standard costing methodology, which approximates cost on a first-in, first-out (“FIFO”) basis. Reserves are provided for slow-moving or excess and obsolete inventory based on the difference between the cost of the inventory and its net realizable value and by reviewing quantities on hand in comparison with historical and expected future usage. In estimating the reserve for excess or slow-moving inventory, management considers factors such as product aging, current and future customer demand and market conditions. |
Property, Plant and Equipment | Property, Plant and Equipment – Property, plant and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the individual assets. When property, plant and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the accounts, and the resulting gain or loss is included in income from operations for the period. Generally, the estimated useful lives of assets are: Land improvements 5 to 40 years Buildings and improvements 7 to 40 years Plant, office and lab equipment 5 to 10 years We review property, plant and equipment for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. |
Valuation of Goodwill and Intangible Assets | Valuation of Goodwill and Intangible Assets – The value of goodwill is tested for impairment at least annually as of January 31 or whenever events or circumstances indicate such assets may be impaired. The identification of our reporting units began at the operating segment level and considered whether components one level below the operating segment levels should be identified as reporting units for purpose of testing goodwill for impairment based on certain conditions. These conditions included, among other factors, (i) the extent to which a component represents a business and (ii) the aggregation of economically similar components within the operating segments. Other factors that were considered in determining whether the aggregation of components was appropriate included the similarity of the nature of the products and services, the nature of the production processes, the methods of distribution and the types of industries served. Accounting Standards Codification ("ASC") 350 allows an optional qualitative assessment, prior to a quantitative assessment test, to determine whether it is more likely than not that the fair value of a reporting unit exceeds its carrying amount. We bypassed the qualitative assessment and proceeded directly to the quantitative test. If the carrying value of a |
Intangible Assets | We have intangible assets consisting of patents, trademarks, customer lists and non-compete agreements. Definite-lived intangible assets are assessed for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. In addition, we have other trademarks and license agreements that are considered to have indefinite lives. We test indefinite-lived intangible assets for impairment at least annually as of January 31 or whenever events or circumstances indicate that the carrying amount may not be recoverable. Significant assumptions used in the impairment test include the discount rate, royalty rate, future sales projections and terminal value growth rate. These inputs are considered non-recurring Level III inputs within the fair value hierarchy. An impairment loss would be recognized when estimated future cash flows are less than their carrying amount. |
Property Held for Investment | Property Held for Investment – One of our non-operating subsidiaries holds and manages a non-operating property, which is valued at lower of cost or market and will be disposed of as opportunities arise to maximize value. |
Deferred Loan Costs | Deferred Loan Costs – Deferred loan costs related to our credit facility, which are reported in other assets and consist of fees and other expenses associated with debt financing, are amortized over the term of the associated debt using the effective interest method. |
Fair Values of Financial Instruments | Fair Values of Financial Instruments – Our financial instruments are presented at fair value in our consolidated balance sheets, with the exception of our long-term debt, as discussed in Note 8. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models may be applied. Assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Hierarchical levels, as defined by Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities. An asset or a liability’s categorization within the fair value hierarchy is based on the lowest level of significant input to its valuation. Hierarchical levels are as follows: Level I – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level II – Inputs (other than quoted prices included in Level I) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level III – Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. |
Leases | Leases – We determine if a contract is or contains a lease at inception by evaluating whether the contract conveys the right to control the use of an identified asset. Right-of-Use (“ROU”) assets and lease liabilities are initially recognized at the commencement date based on the present value of remaining lease payments over the lease term calculated using our |
Derivative Instruments and Hedge Accounting | Derivative Instruments and Hedge Accounting – We do not use derivative instruments for trading or speculative purposes. We enter into interest rate swap agreements for the purpose of hedging our cash flow exposure to floating interest rates on certain portions of our debt. All derivative instruments are recognized on the balance sheet at their fair values. Changes in the fair value of a designated interest rate swap are recorded in other comprehensive loss until earnings are affected by the underlying hedged item. Any ineffective portion of the gain or loss is immediately recognized in earnings. Upon settlement, realized gains and losses are recognized in interest expense in the consolidated statements of operations. We discontinue hedge accounting when (1) we deem the hedge to be ineffective and determine that the designation of the derivative as a hedging instrument is no longer appropriate; (2) the derivative matures, terminates or is sold; or (3) occurrence of the contracted or committed transaction is no longer probable or will not occur in the originally expected period. When hedge accounting is discontinued and the derivative remains outstanding, we carry the derivative at its estimated fair value on the balance sheet, recognizing changes in the fair value in current period earnings. If a cash flow hedge becomes ineffective, any deferred gains or losses remain in accumulated other comprehensive loss until the underlying hedged item is recognized. If it becomes probable that a hedged forecasted transaction will not occur, deferred gains or losses on the hedging instrument are recognized in earnings immediately. We are exposed to risk from credit-related losses resulting from nonperformance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under forward exchange contracts and interest rate swap agreements and expect all counterparties to meet their obligations. If necessary, we adjust the values of our derivative contracts for our or our counterparties’ credit risk. |
Pension Obligations | Pension Obligations – Determination of pension benefit obligations is based on estimates made by management in consultation with independent actuaries. Inherent in these valuations are assumptions including discount rates, expected rates of return on plan assets, retirement rates, mortality rates and rates of compensation increase and other factors, all of which are reviewed annually and updated if necessary. Current market conditions, including changes in rates of return, interest rates and medical inflation rates, are considered in selecting these assumptions. Actuarial gains and losses and prior service costs are recognized in accumulated other comprehensive loss as they arise, and we amortize these costs into net pension expense over the remaining expected service period. We used a measurement date of March 31 for all periods presented. |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests - Noncontrolling interests with redemption features that are not solely within our control are considered redeemable noncontrolling interests. Our redeemable noncontrolling interest relates to Shell's 50% equity interest in the Whitmore JV and is classified in temporary equity that is reported between liabilities and shareholders' equity on our Consolidated Balance Sheets initially at its formation-date fair value. We adjust the redeemable noncontrolling interest each reporting period for the net income (or loss) attributable to the noncontrolling interest. We also make a measurement period adjustment, if any, to adjust the redeemable noncontrolling interest to the higher of the redemption value or carrying value each reporting period. These adjustments are recognized through retained earnings and are not reflected in net income or net income attributable to CSWI. The redemption value of the redeemable noncontrolling interest is estimated using a discounted cash flow analysis, which requires management judgment with respect to future revenue, operating margins, growth rates and discount rates. Net income (loss) attributable to the redeemable noncontrolling interests are presented as a separate line on the consolidated statements of operations which is necessary to identify those income (loss) specifically attributable to CSWI. The financial results and position of the redeemable noncontrolling interest acquired through the formation of the Whitmore JV are included in their entirety in our consolidated statements of operations and consolidated balance sheets beginning with the first quarter of fiscal 2022. |
Revenue Recognition | Revenue Recognition – We recognize revenues to depict the transfer of control of promised goods or services to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Refer to Note 19 for further discussion. We recognize revenue when all of the following criteria have been met: (i) a contract with a customer exists, (ii) performance obligations have been identified, (iii) the price to the customer has been determined, (iv) the price to the customer has been allocated to the performance obligations, and (v) performance obligations are satisfied, which are more fully described below. (i) We identify a contract with a customer when a sales agreement indicates approval and commitment of the parties; identifies the rights of the parties; identifies the payment terms; has commercial substance; and it is probable that we will collect the consideration to which we will be entitled in exchange for the goods or services that will be transferred to the customer. In most instances, our contract with a customer is the customer's purchase order. For certain customers, we may also enter into a sales agreement that outlines a framework of terms and conditions that apply to all future purchase orders for that customer. In these situations, our contract with the customer is both the sales agreement and the specific customer purchase order. Because our contract with a customer is typically for a single transaction or customer purchase order, the duration of the contract is one year or less. As a result, we have elected to apply certain practical expedients and, as permitted by the Financial Accounting Standards Board ("FASB"), omit certain disclosures of remaining performance obligations for contracts that have an initial term of one year or less. (ii) We identify performance obligations in a contract for each promised good or service that is separately identifiable from other promises in the contract and for which the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer. Goods and services provided to our customers that are deemed immaterial are included with other performance obligations. (iii) We determine the transaction price as the amount of consideration we expect to be entitled to in exchange for fulfilling the performance obligations, including the effects of any variable consideration. (iv) For any contracts that have more than one performance obligation, we allocate the transaction price to each performance obligation in an amount that depicts the amount of consideration to which we expect to be entitled in exchange for satisfying each performance obligation. We have excluded disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less as the majority of our contracts are short-term in nature with a term of one year or less. (v) We recognize revenue when, or as, we satisfy the performance obligation in a contract by transferring control of a promised good or service to the customer. |
Research and Development ("R&D") | Research and Development ("R&D") – R&D costs are expensed as incurred. Costs incurred for R&D primarily include salaries and benefits and consumable supplies, as well as rent, professional fees, utilities and the depreciation of property and equipment used in R&D activities. |
Share-based Compensation | Share-based Compensation – Share-based compensation is measured at the grant-date fair value. The exercise price of stock option awards and the fair value of restricted share awards are set at the closing price of our common stock on the Nasdaq Global Select Market on the date of grant, which is the date such grants are authorized by our Board of Directors. The fair value of performance-based restricted share awards is determined using a Monte Carlo simulation model incorporating all possible outcomes against the Russell 2000 Index. The fair value of share-based payment arrangements is amortized on a straight-line basis to compensation expense over the period in which the restrictions lapse based on the expected number of shares that will vest. To cover the exercise of options and vesting of restricted shares, we generally issue new shares from our authorized but unissued share pool, although we may instead issue treasury shares in certain circumstances. |
Income Taxes, Deferred Taxes, Tax Valuation Allowances and Tax Reserves | Income Taxes, Deferred Taxes, Tax Valuation Allowances and Tax Reserves – We apply the liability method in accounting and reporting for income taxes. Under the liability approach, deferred tax assets and liabilities are determined based upon the difference between the financial statement carrying amounts and the tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax rates expected to be in effect when these differences are expected to reverse. The effect on deferred tax assets and liabilities resulting from a change in tax rates is recognized in the period that includes the enactment date. The deferred income tax assets are adjusted by a valuation allowance, if necessary, to recognize future tax benefits only to the extent, based on available evidence, that it is more likely than not to be realized. This analysis is performed on a jurisdictional basis and reflects our ability to utilize these deferred tax assets through a review of past, current and estimated future taxable income in addition to the establishment of viable tax strategies that will result in the utilization of the deferred assets. We recognize income tax related interest and penalties, if any, as a component of income tax expense. |
Unremitted Earnings | Unremitted Earnings – During the fiscal quarter ended March 31, 2023, we lifted our assertion that the earnings of Greco Canada are indefinitely invested outside of the U.S. During the fiscal quarter ended March 31, 2019, we lifted our assertion that the earnings of our United Kingdom ("U.K.") and Australian subsidiaries were indefinitely invested outside of the U.S. During the fiscal quarter ended September 30, 2020, we lifted our assertion that the earnings of our Jet Lube Canada subsidiary were indefinitely invested outside of the U.S. We assert that the foreign earnings of the U.K., Australian, Vietnam and Canada subsidiaries will be remitted to the U.S. through distributions, and have made provisions for taxes that may become payable upon distribution of earnings accordingly. As of March 31, 2023, we are not indefinitely reinvested outside of the U.S. |
Uncertain Tax Positions | Uncertain Tax Positions – We establish income tax liabilities to remove some or all of the income tax benefit of any of our income tax positions based upon one of the following: (1) the tax position is not “more likely than not” to be sustained, (2) the tax position is “more likely than not” to be sustained, but for a lesser amount or (3) the tax position is “more likely than not” to be sustained, but not in the financial period in which the tax position was originally taken. The amount of income taxes we pay is subject to ongoing audits by federal, state, and foreign taxing authorities, which often result in proposed assessments. We establish reserves for open tax years for uncertain tax positions that may be subject to challenge by various taxing authorities. The consolidated tax provision and related accruals include the impact of such reasonably estimable losses and related interest and penalties as deemed appropriate. |
Earnings Per Share | Earnings Per Share – We use the two-class method of calculating earnings per share, which determines earnings per share for each class of common stock and participating security as if all earnings of the period had been distributed. If the holders of restricted stock awards are entitled to vote and receive dividends during the restriction period, unvested shares of restricted stock qualify as participating securities and, accordingly, are included in the basic computation of earnings per share. Our unvested restricted shares participate on an equal basis with common shares; therefore, there is no difference in undistributed earnings allocated to each participating security. Accordingly, the presentation in Note 11 is prepared on a combined basis and is presented as earnings per common share. Diluted earnings per share is based on the weighted average number of shares as determined for basic earnings per share plus shares potentially issuable in connection with stock options and restricted stock awards not entitled to vote and receive dividends during the restriction period. |
Foreign Currency Translation | Foreign Currency Translation – Assets and liabilities of our foreign subsidiaries are translated to U.S. dollars at exchange rates prevailing at the balance sheet date, while income and expenses are translated at average rates for each month. Translation gains and losses are reported as a component of accumulated other comprehensive loss. Transactional currency gains and losses arising from transactions in currencies other than our sites’ functional currencies are included in our consolidated statements of operations. Transaction and translation gains and losses arising from intercompany balances are reported as a component of accumulated other comprehensive loss when the underlying transaction stems from a long-term equity investment or from debt designated as not due in the foreseeable future. Otherwise, we recognize transaction gains and losses arising from intercompany transactions as a component of income. |
Segments | Segments - We conduct our operations through three business segments based on how we manage the business. Our Chief Executive Officer views our business, assesses performance and allocates resources using financial information generated and reported at the reportable segment level. We evaluate segment performance and allocate resources based on each reportable segment's operating income. Our reportable segments are as follows: 1. Contractor Solutions , which manufactures efficiency and performance enhancing products predominantly for residential and commercial HVAC/R and plumbing applications, which are designed primarily for the professional trades. This segment is comprised primarily of our RectorSeal and Shoemaker operating companies. 2. Engineered Building Solutions , which provides primarily code-driven products focused on life safety that are engineered to provide aesthetically-pleasing solutions for the construction, refurbishment and modernization of commercial, institutional, and multi-family residential buildings. This segment is comprised of our Balco, Greco and Smoke Guard operating companies. 3. Specialized Reliability Solutions , which provides products for increasing the reliability, performance and lifespan of industrial assets and solving equipment maintenance challenges. This segment is comprised primarily of our Whitmore operating company and the Whitmore JV. Intersegment sales and transfers are recorded at cost plus a profit margin, with the revenues and related margin on such sales eliminated in consolidation. We do not allocate share-based compensation expense, interest expense, interest income or other income, net to our segments. Our corporate headquarters does not constitute a separate segment. The Eliminations and Other segment information is included to reconcile segment data to the consolidated financial statements and includes assets and expenses primarily related to corporate functions and excess non-operating properties. |
Accounting Developments | Accounting Developments Pronouncements Implemented In October 2021, the Financial Accounting Standards Board ("FASB") issued an Accounting Standards Update ("ASU") No. 2021-08, "Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." This update improves comparability for both the recognition and measurement of acquired customer revenue contracts at the date of and after a business combination. The amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The Company early adopted the ASU 2021-08 on a prospective basis on April 1, 2022 and did not have a material impact on our condensed consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This update provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as interbank offered rates and London Interbank Offered Rate ("LIBOR"). This ASU includes practical expedients for contract modifications due to reference rate reform. Generally, contract modifications related to reference rate reform may be considered an event that does not require remeasurement or reassessment of a previous accounting determination at the modification date. This ASU is effective for all entities through December 31, 2022. In December 2022, the FASB issued ASU 2022-06 to defer the sunset date of Topic 848 from December 31, 2022 to December 31, 2024. As discussed in Note 8, the Company terminated our interest rate swap agreement in January 2023 and therefore, will not apply the practical expedients and exceptions as required by the ASU. As discussed in Note 8, the Company’s Second Amendment replaced the LIBOR Rate with individualized metrics based on the specific denomination of borrowings, including a metric based on Term SOFR (as defined in the Second Credit Agreement) for borrowings denominated in U.S. Dollars. The transition of LIBOR did not have a material impact on our consolidated financial statements. The adoption of this ASU did not have an impact on our consolidated financial condition and results of operations. |
ORGANIZATION AND OPERATIONS A_3
ORGANIZATION AND OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Property, Plant and Equipment, Net | Generally, the estimated useful lives of assets are: Land improvements 5 to 40 years Buildings and improvements 7 to 40 years Plant, office and lab equipment 5 to 10 years Property, plant and equipment, net , consist of the following (in thousands): March 31, 2023 2022 Land and improvements $ 3,226 $ 3,226 Buildings and improvements 52,975 53,346 Plant, office and laboratory equipment 112,271 99,770 Construction in progress 12,466 11,083 180,938 167,425 Less: Accumulated depreciation (92,703) (80,393) Property, plant and equipment, net $ 88,235 $ 87,032 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Consideration Transferred | Acquisition Consideration (Amounts in thousands, except for shares) Cash (a) $ 287,986 Common stock (849,852 shares) 97,656 Total consideration transferred $ 385,642 (a) Amount includes working capital and closing cash adjustments and includes a $1.0 million to be paid to the sellers as a result of an expected tax refund pursuant to the purchase agreement. |
Schedule of Aggregate Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the Company's estimate of the aggregate fair value of the assets acquired and liabilities assumed at the date of acquisition (in thousands). Initial Estimated Fair Value Measurement Period Adjustments Updated Estimated Fair Value Cash $ 1,471 $ — $ 1,471 Accounts Receivable, net 13,467 (17) 13,450 Inventory 46,313 (1,300) 45,013 Short-Term Tax Indemnity Assets 5,000 — 5,000 Other Current Assets 1,285 2,103 3,388 Property, Plant and Equipment 28,832 (4,201) 24,631 Trade Name (indefinite life) 43,500 — 43,500 Customer Lists (useful life of 15 years) 194,000 8,500 202,500 Right-Of-Use Assets 49,040 — 49,040 Long-Term Tax Indemnity Assets 7,500 — 7,500 Other Long-term Assets 2,850 (698) 2,152 Accounts Payable (4,074) — (4,074) Accrued and Other Current Liabilities (3,678) (172) (3,850) Lease Liabilities - Short-Term (4,811) — (4,811) Deferred Tax Liabilities (56,249) (3,784) (60,033) Tax Contingency Reserve (22,511) 5,190 (17,321) Lease Liabilities - Long-Term (45,369) — (45,369) Estimated fair value of net assets acquired 256,566 5,621 262,187 Goodwill 129,169 (5,714) 123,455 Total Purchase Price $ 385,735 $ (93) $ 385,642 |
Schedule of Unaudited Proforma Financial Information | Pursuant to Topic 805, unaudited supplemental proforma results of operations for the year ended March 31, 2021 as if the acquisition of TRUaire had occurred on April 1, 2019 are presented below (in thousands, except per share amounts): Year Ended March 31, 2021 Revenue, net $ 495,788 Net income 47,648 Net earnings per common share: Diluted $ 3.03 Basic 3.05 |
CONSOLIDATION OF VARIABLE INT_2
CONSOLIDATION OF VARIABLE INTEREST ENTITY AND REDEEMABLE NONCONTROLLING INTEREST (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | Whitmore JV's total net assets are presented below (in thousands): March 31, 2023 Cash $ 7,519 Accounts receivable, net 7,376 Inventories, net 2,971 Prepaid expenses and other current assets 115 Property, plant and equipment, net 11,923 Intangible assets, net 6,478 Other assets 137 Total assets $ 36,519 Accounts payable $ 6,274 Accrued and other current liabilities 1,417 Other long-term liabilities 66 Total liabilities $ 7,757 |
Schedule of Redeemable Noncontrolling Interest | Changes in redeemable noncontrolling interest for the year ended March 31, 2023 were as follows (in thousands): Balance at March 31, 2022 $ 15,325 Net income attributable to redeemable noncontrolling interest 139 Contributions from noncontrolling interest 3,000 Balance at March 31, 2023 $ 18,464 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended March 31, 2023 and 2022 were as follows (in thousands): Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Balance at April 1, 2021 $ 169,345 $ 22,238 $ 27,212 $ 218,795 Goodwill re-allocation 14,813 2,727 (17,540) — TRUaire acquisition (2,099) — — (2,099) Shoemaker acquisition 8,115 — — 8,115 Currency translation (22) 42 (173) (153) Balance at March 31, 2022 $ 190,152 $ 25,007 $ 9,499 $ 224,658 Falcon acquisition 17,417 — — 17,417 CG and ACG acquisitions 1,686 — — 1,686 Shoemaker acquisition 6 — — 6 Currency translation (101) (705) (221) (1,027) Balance at March 31, 2023 $ 209,160 $ 24,302 $ 9,278 $ 242,740 |
Schedule of Intangible Assets | The following table provides information about our intangible assets for the years ended March 31, 2023 and 2022 (in thousands, except years): March 31, 2023 March 31, 2022 Wtd Avg Life (Years) Ending Gross Amount Accumulated Amortization Ending Gross Amount Accumulated Amortization Finite-lived intangible assets: Patents 11 $ 13,608 $ (8,546) $ 9,417 $ (8,065) Customer lists and amortized trademarks 14 324,472 (81,901) 297,909 (61,368) Non-compete agreements 5 950 (272) 939 (258) Other 11 6,377 (2,235) 5,123 (3,957) $ 345,407 $ (92,954) $ 313,388 $ (73,648) Trade names and trademarks not being amortized: $ 66,450 $ — $ 61,097 $ — |
Schedule of Estimated Future Amortization For Intangible Assets | The following table presents the estimated future amortization of finite-lived intangible assets for the next five fiscal years ending March 31 (in thousands): 2024 $ 22,404 2025 21,525 2026 21,158 2027 20,363 2028 19,982 Thereafter 147,021 Total $ 252,453 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-Based Compensation Expense | We recorded share-based compensation expense for restricted stock as follows for the years ended March 31, 2023, 2022 and 2021 (in thousands): Year Ended March 31, 2023 2022 2021 Share-based compensation expense $ 9,751 $ 8,450 $ 5,085 Related income tax benefit (2,438) (2,197) (1,220) Net share-based compensation expense $ 7,313 $ 6,253 $ 3,865 |
Schedule of Stock Options Activity | Stock option activity, which represents outstanding CSWI awards held by CSWI employees resulting from the conversion of Capital Southwest stock options held by former Capital Southwest employees, was as follows: Number of Shares Weighted Average Exercise Price Remaining Contractual Life (Years) Aggregate Intrinsic Value (in Millions) Outstanding and Exercisable at April 1, 2021 63,413 $ 25.23 Exercised (52,613) 25.23 Outstanding and Exercisable at March 31, 2022 10,800 25.23 2.4 $ 1.0 Exercised (10,800) 25.23 Outstanding and Exercisable at March 31, 2023 — $ — 0.0 $ — |
Schedule of Restricted Stock Activity | Restricted stock activity was as follows: Year Ended March 31, 2023 Number of Shares Weighted Average Grant Date Fair Value Outstanding at April 1, 2022 228,331 $ 126.02 Granted 96,877 130.85 Vested (87,516) 86.01 Canceled (5,641) 112.60 Outstanding at March 31, 2023 232,051 $ 138.14 |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | The Inventories, net caption in the Consolidated Balance Sheet is comprised of the following components: March 31, 2023 2022 Raw materials and supplies $ 48,300 $ 46,136 Work in process 5,250 7,471 Finished goods 113,104 100,792 Total inventories 166,654 154,399 Less: Obsolescence reserve (5,085) (4,285) Inventories, net $ 161,569 $ 150,114 |
DETAILS OF CERTAIN CONSOLIDAT_2
DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net consists of the following (in thousands): March 31, 2023 2022 Accounts receivable trade $ 121,164 $ 120,603 Other receivables 2,954 3,378 124,118 123,981 Less: Allowance for doubtful accounts (1,365) (1,177) Accounts receivable, net $ 122,753 $ 122,804 |
Schedule of Prepaid, and Other Assets Disclosure | Prepaid expenses and other current assets consists of the following (in thousands): March 31, 2023 2022 Prepaid expenses $ 9,485 $ 8,531 Short-term tax indemnification assets 7,500 — Income taxes receivable 1,344 690 Current derivative asset 877 — Other current assets 1,073 1,389 $ 20,279 $ 10,610 |
Schedule of Property, Plant and Equipment, Net | Generally, the estimated useful lives of assets are: Land improvements 5 to 40 years Buildings and improvements 7 to 40 years Plant, office and lab equipment 5 to 10 years Property, plant and equipment, net , consist of the following (in thousands): March 31, 2023 2022 Land and improvements $ 3,226 $ 3,226 Buildings and improvements 52,975 53,346 Plant, office and laboratory equipment 112,271 99,770 Construction in progress 12,466 11,083 180,938 167,425 Less: Accumulated depreciation (92,703) (80,393) Property, plant and equipment, net $ 88,235 $ 87,032 |
Schedule of Other Assets | Other assets consist of the following (in thousands): March 31, 2023 2022 Right-of-use lease assets $ 59,815 $ 67,076 Long-term tax indemnification assets 2,849 7,500 Deferred financing fees 2,363 2,271 Rent receivable 2,028 2,073 Property held for investment 418 418 Deferred income taxes 462 304 Other 2,584 3,044 Other assets $ 70,519 $ 82,686 |
Schedule of Accrued and Other Current Liabilities | Accrued and other current liabilities consist of the following (in thousands): March 31, 2023 2022 Compensation and related benefits $ 27,096 $ 21,617 Rebates and marketing agreements 16,158 16,340 Operating lease liabilities 9,784 9,269 Acquisition deferred payments 3,427 3,061 Non-income taxes 1,802 1,949 Billings in excess of costs 637 1,026 Income taxes payable 403 4,266 Other accrued expenses 8,081 11,477 Accrued and other current liabilities $ 67,388 $ 69,005 |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consists of the following (in thousands): March 31, 2023 2022 Deferred income taxes $ 62,144 $ 62,810 Operating lease liabilities 55,590 63,275 Tax Reserve 16,509 13,987 Derivative liability 1,021 234 Acquisition deferred payments 1,853 — Other long-term liabilities $ 137,117 $ 140,306 |
LONG-TERM DEBT AND COMMITMENTS
LONG-TERM DEBT AND COMMITMENTS (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Debt consists of the following (in thousands): March 31, 2023 2022 Revolving Credit Facility, interest rate of 6.21% and 1.95% (a), respectively $ 253,000 $ 243,000 Whitmore term loan, interest rate of 0.00% and 2.45% (a), respectively — 9,775 Total debt 253,000 252,775 Less: Current portion — (561) Long-term debt $ 253,000 $ 252,214 (a) Represents the unhedged interest rate effective on March 31, 2023 , and 2022 , respectively. |
Schedule of Aggregate Maturities of Long-Term Debt | Future minimum debt payments are as follows for years ending March 31 (in thousands): 2024 $ — 2025 — 2026 — 2027 253,000 2028 — Thereafter — Total $ 253,000 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of Components of Operating Lease Expense, Operating Lease Assets and Liabilities, Supplemental Cash Flow, and Other Information | (in thousands) March 31, 2023 March 31, 2022 Components of Operating Lease Expenses Operating lease expense $ 10,793 $ 9,893 Short-term lease expense 815 326 Total operating lease expense (a) $ 11,608 $ 10,219 (a) Included in cost of revenues and selling, general and administrative expense (in thousands) March 31, 2023 March 31, 2022 Operating Lease Assets and Liabilities Right-of-use lease assets, net (a) $ 59,815 $ 67,076 Short-term lease liabilities $ 9,784 $ 9,269 Long-term lease liabilities 55,590 63,275 Total operating lease liabilities (b) $ 65,374 $ 72,544 (a) Included in other assets (b) Included in accrued and other current liabilities and other long-term liabilities, as applicable (in thousands) March 31, 2023 March 31, 2022 Supplemental Cash Flow Cash paid for amounts included in the measurement of operating lease liabilities (a) $ 11,058 $ 9,974 Right-of-use assets obtained in exchange for new operating lease obligations 2,526 8,464 (a) Included in our condensed consolidated statement of cash flows, operating activities in accounts payable and other current liabilities Other Information for Operating Leases Weighted average remaining lease term (in years) 7.0 7.9 Weighted average discount rate (percent) 2.3 % 2.2 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities were as follows (in thousands): 2024 $ 11,082 2025 10,903 2026 10,558 2027 10,316 2028 9,037 Thereafter 18,787 Total lease liabilities $ 70,683 Less: Imputed interest (5,309) Present value of lease liabilities $ 65,374 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Interest Rate Swaps Designated as Hedging Instruments | The fair value of interest rate swaps designated as hedging instruments are summarized below (in thousands): March 31, 2023 2022 Current derivative asset $ 877 $ — Current derivative liabilities — 109 Non-current derivative liabilities 1,021 233 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Earnings Per Share | The following table sets forth the reconciliation of the numerator and the denominator of basic and diluted earnings per share for the years ended March 31, 2023, 2022 and 2021: March 31, (amounts in thousands, except per share data) 2023 2022 2021 Net income $ 96,574 $ 67,319 $ 40,099 Income attributable to redeemable noncontrolling interest (139) (934) — Net income attributable to CSW Industrials, Inc. $ 96,435 $ 66,385 $ 40,099 Weighted average shares: Common stock 15,401 15,646 14,919 Participating securities 108 109 96 Denominator for basic earnings per common share 15,509 15,755 15,015 Potentially dilutive securities 37 52 111 Denominator for diluted earnings per common share 15,546 15,807 15,126 Basic earnings per common share: $ 6.22 $ 4.21 $ 2.67 Diluted earnings per common share: $ 6.20 $ 4.20 $ 2.65 |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Pension Plan | Net pension (benefit) expense for the Plans was: Year Ended March 31, (in thousands) 2023 2022 2021 Service cost – benefits earned during the year $ — $ 43 $ 40 Interest cost on projected benefit obligation 56 138 144 Expected return on assets — (120) (96) Net amortization and deferral 42 69 74 Pension plan termination (a) 453 — — Curtailment impact — (30) — Net pension expense $ 551 $ 100 $ 162 (a) Reflects impact of the termination of the Canadian Plan. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Income Taxes | Income before income taxes was comprised of the following (in thousands): Year Ended March 31, 2023 2022 2021 U.S. Federal $ 118,181 $ 87,607 $ 48,142 Foreign 7,730 3,858 2,726 Income before income taxes $ 125,911 $ 91,465 $ 50,868 |
Schedule of Income Tax Expense | Income tax expense consists of the following (in thousands): For the year ended: Current Deferred Total March 31, 2023 U.S. Federal $ 27,920 $ (3,549) $ 24,371 State and local 6,135 (2,471) 3,664 Foreign 1,482 (180) 1,302 Provision for income taxes $ 35,537 $ (6,200) $ 29,337 March 31, 2022 U.S. Federal $ 20,139 $ (1,578) $ 18,561 State and local 5,271 761 6,032 Foreign 638 (1,085) (447) Provision for income taxes $ 26,048 $ (1,902) $ 24,146 March 31, 2021 U.S. Federal $ 6,773 $ (1,211) $ 5,562 State and local 3,561 (500) 3,061 Foreign 1,641 505 2,146 Provision for income taxes $ 11,975 $ (1,206) $ 10,769 |
Schedule of Income Tax Expense Differed from Amounts Computed by Applying U.S. Federal Statutory Income Tax Rate to Income Before Income Taxes | Income tax expense differed from the amounts computed by applying the U.S. federal statutory income tax rate of 21.0% to income before income taxes as a result of the following (in thousands): Year Ended March 31, 2023 2022 2021 Computed tax expense at statutory rate $ 26,441 $ 19,206 $ 10,674 Increase (reduction) in income taxes resulting from: State and local income taxes, net of federal benefits 2,895 4,765 2,419 Nondeductible executive compensation 1,555 992 248 Global intangible low-taxed income ("GILTI") inclusion 1,123 580 2,118 Repatriation tax, net of tax credit 904 170 822 Other permanent differences 557 (143) 1,931 IRC section 250 deductions (1,626) (1,102) (1,678) Foreign tax credits (604) (450) (554) Vesting of stock-based compensation (408) (1,916) (741) Uncertain tax positions (224) 759 (4,717) Valuation allowance (96) 379 — Foreign rate differential 67 91 85 Other, net (1,247) 815 162 Provision for income taxes $ 29,337 $ 24,146 $ 10,769 |
Schedule of Tax Effects of Temporary Differences That Give Rise to Significant Portions of Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at March 31, 2023 and 2022 are presented below (in thousands): March 31, 2023 2022 Deferred tax assets: Operating lease liabilities $ 15,684 $ 17,774 Accrued compensation 6,636 4,826 Inventory reserves 3,422 3,720 Accrued expenses 1,580 1,010 State R&D credit carry-forward 968 75 Transaction Costs 828 714 Pension and other employee benefits 452 412 Foreign tax credit carry-forward 284 379 Net operating loss carryforwards 144 145 Other, net 747 1,492 Deferred tax assets 30,745 30,547 Valuation allowance (428) (524) Deferred tax assets, net of valuation allowance 30,317 30,023 Deferred tax liabilities: Goodwill and intangible assets (66,432) (64,903) Operating lease right-of-use assets (14,337) (16,364) Property, plant and equipment (7,299) (8,242) Repatriation reserve (1,784) (1,034) Other, net (2,148) (1,986) Deferred tax liabilities (92,000) (92,529) Net deferred tax liabilities $ (61,683) $ (62,506) |
Schedule of Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits (excluding interest and penalties) is as follows (in thousands): March 31, 2023 2022 Balance at beginning of year $ 9,934 $ 10,212 Decreases related to prior year tax positions (690) (314) Increases related to current year tax positions 2,540 36 Balance at end of year $ 11,784 $ 9,934 |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Analysis of Changes in Accumulated Other Comprehensive Income (Loss) | The following table provides an analysis of the changes in accumulated other comprehensive loss (in thousands). March 31, 2023 2022 Currency translation adjustments: Balance at beginning of period $ (4,438) $ (4,394) Foreign currency translation adjustments (3,752) (44) Balance at end of period $ (8,190) $ (4,438) Interest rate swaps: Balance at beginning of period $ (270) $ (803) Unrealized gain, net of taxes of $(60) and $(82), respectively (a) 225 309 Reclassification of losses (gains) included in interest expense, net of taxes of $18 and $(60), respectively (69) 224 Other comprehensive income 156 533 Balance at end of period $ (114) $ (270) Defined benefit plans: Balance at beginning of period $ (366) $ (799) Amortization of net prior service benefit, net of taxes of $0 and $1, respectively (b) — (5) Amortization of net loss, net of taxes of $(9) and $(16), respectively (b) 33 59 Net gain arising during the year, net of taxes of $(24) and $(41), respectively ( b) 92 154 Curtailment impact, net of taxes of $0 and $(83), respectively — 311 Pension termination, net of taxes of $(34) and $0, respectively 127 — Currency translation impact 9 (86) Other comprehensive income 261 433 Balance at end of period $ (105) $ (366) (a) Unrealized gains are reclassified to earnings as underlying cash interest payments are made. We expect to recognize a gain of $0.7 million, net of deferred taxes, over the next twelve months related to a designated cash flow hedge based on its fair value as of March 31, 2023. (b) Amortization of prior service costs and actuarial losses out of accumulated other comprehensive loss are included in the computation of net periodic pension expense. See Note 14 for additional information. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Disaggregation of revenues reconciled to our reportable segments is as follows (in thousands): Year Ended March 31, 2023 Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Build-to-order $ — $ 89,964 $ — $ 89,964 Book-and-ship 506,634 14,005 147,301 667,940 Net revenues $ 506,634 $ 103,969 $ 147,301 $ 757,904 Year Ended March 31, 2022 Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Build-to-order $ — $ 88,690 $ — $ 88,690 Book-and-ship 413,207 8,606 115,932 537,745 Net revenues $ 413,207 $ 97,296 $ 115,932 $ 626,435 Year Ended March 31, 2021 Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Build-to-order $ — $ 87,057 $ — $ 87,057 Book-and-ship 245,232 8,615 78,301 332,148 Net revenues $ 245,232 $ 95,672 $ 78,301 $ 419,205 |
Schedule of Contract Liabilities | Contract liabilities, which are included in accrued and other current liabilities in our consolidated balance sheets were as follows (in thousands): Balance at April 1, 2022 $ 1,026 Revenue recognized (953) New contracts and revenue added to existing contracts 564 Balance at March 31, 2023 $ 637 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 12 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information of Reporting Segments | The following is a summary of the financial information of our reporting segments reconciled to the amounts reported in the consolidated financial statements (in thousands). Year Ended March 31, 2023 (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 506,634 $ 103,969 $ 147,301 $ 757,904 $ — $ 757,904 Intersegment revenue 7,142 — 145 7,287 (7,287) — Operating income 126,204 12,889 20,176 159,269 (20,203) 139,066 Depreciation and amortization 26,951 1,771 6,035 34,757 200 34,957 Year Ended March 31, 2022 (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 413,207 $ 97,296 $ 115,932 $ 626,435 $ — $ 626,435 Intersegment revenue 3,280 — 110 3,390 (3,390) — Operating income 96,115 11,101 9,007 116,223 (18,843) 97,380 Depreciation and amortization 27,879 2,063 6,016 35,958 450 36,408 Year Ended March 31, 2021 (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 245,232 $ 95,672 $ 78,301 $ 419,205 $ — $ 419,205 Intersegment revenue 296 — 64 360 (360) — Operating income 59,007 14,066 581 73,654 (14,434) 59,220 Depreciation and amortization 14,415 2,014 5,744 22,173 545 22,718 TOTAL ASSETS (Amounts in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total March 31, 2023 $ 823,750 $ 71,429 $ 136,248 $ 1,031,427 $ 12,026 $ 1,043,453 March 31, 2022 782,267 74,397 126,380 983,044 12,316 995,360 March 31, 2021 687,508 67,281 111,493 866,282 13,240 879,522 |
Schedule of Revenues and Long-Lived Assets by Geographic Area | Revenues and long-lived assets by geographic area are as follows (in thousands, except percent data): Year Ended March 31, 2023 2022 2021 U.S. $ 678,126 89.5 % $ 559,296 89.3 % $ 367,169 87.6 % Non-U.S. (a) 79,778 10.5 % 67,139 10.7 % 52,036 12.4 % Revenues, net $ 757,904 100.0 % $ 626,435 100.0 % $ 419,205 100.0 % (a) No individual country within this group represents 10% or more of consolidated totals for any period presented. Year Ended March 31, 2023 2022 2021 U.S. $ 679,731 94.4 % $ 651,477 93.7 % $ 617,258 93.5 % Non-U.S. 40,665 5.6 % 43,736 6.3 % 43,146 6.5 % Long-lived assets (a) $ 720,396 100.0 % $ 695,213 100.0 % $ 660,404 100.0 % (a) Long-lived assets consist primarily of property, plant and equipment, intangible assets, goodwill and other assets. |
ORGANIZATION AND OPERATIONS A_4
ORGANIZATION AND OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 12 Months Ended | |||
Apr. 01, 2021 | Mar. 31, 2023 USD ($) segment brand | Mar. 31, 2022 USD ($) | Mar. 31, 2021 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of business segments | segment | 3 | |||
Highly respected industrial brands (more than) | brand | 100 | |||
Allowance for expected credit losses for short-term receivables | $ 1,365,000 | $ 1,177,000 | ||
Goodwill impairment loss | 0 | 0 | $ 0 | |
Variable Interest Entity, Primary Beneficiary | Shell | Affiliated Entity | Whitmore Manufacturing, LLC | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Interest sold (in percent) | 50% | |||
Selling, General and Administrative Expense | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Research and development costs | 4,800,000 | 4,800,000 | $ 4,500,000 | |
Domestic | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deposits in banks | 10,100,000 | 11,300,000 | ||
Foreign | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Deposits in banks | $ 8,400,000 | $ 5,300,000 |
ORGANIZATION AND OPERATIONS A_5
ORGANIZATION AND OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Property, Plant and Equipment (Details) | 12 Months Ended |
Mar. 31, 2023 | |
Minimum | Land improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 5 years |
Minimum | Buildings and improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 7 years |
Minimum | Plant, office and lab equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 5 years |
Maximum | Land improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 40 years |
Maximum | Buildings and improvements | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 40 years |
Maximum | Plant, office and lab equipment | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful life | 10 years |
ACQUISITIONS - Additional Infor
ACQUISITIONS - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Oct. 04, 2022 | Jul. 08, 2022 | Dec. 15, 2021 | Dec. 15, 2020 | Mar. 31, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Business Acquisition [Line Items] | ||||||||
Cash paid for acquisitions | $ 58,335 | $ 35,942 | $ 287,238 | |||||
Goodwill | $ 218,795 | 242,740 | 224,658 | 218,795 | ||||
Acquisition deferred payments | 1,853 | 0 | ||||||
Depreciation | 12,838 | 11,572 | 9,194 | |||||
Income tax expense (benefit) | 29,337 | 24,146 | 10,769 | |||||
Intellectual Property | ||||||||
Business Acquisition [Line Items] | ||||||||
Fair value of the assets acquired, finite-lived | $ 3,700 | |||||||
Assets acquired, amortization period | 15 years | |||||||
Falcon Stainless, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Percent of outstanding equity acquired | 100% | |||||||
Purchase price, amount transferred | $ 37,100 | |||||||
Cash acquired | 1,000 | |||||||
Cash paid for acquisitions | 34,600 | |||||||
Contingent consideration | 2,500 | |||||||
Goodwill | 17,400 | |||||||
Fair value of accounts receivable acquired | 1,400 | |||||||
Cash | 1,000 | |||||||
Fair value of inventory acquired | 700 | |||||||
Fair value of other current asset | 100 | |||||||
Other assets | 2,900 | |||||||
Fair value of current liabilities assumed | 500 | |||||||
Accrued and other current liabilities | 8,300 | |||||||
Falcon Stainless, Inc. | Trademarks | ||||||||
Business Acquisition [Line Items] | ||||||||
Indefinite lived intangible assets acquired | 4,700 | |||||||
Falcon Stainless, Inc. | Customer Lists | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite lived intangible assets acquired | $ 17,700 | |||||||
Assets acquired, amortization period | 15 years | |||||||
CSWICover Guard Inc And A C Guard Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price, amount transferred | $ 18,400 | |||||||
Cash paid for acquisitions | 18,000 | |||||||
Contingent consideration | 400 | |||||||
Goodwill | 1,700 | |||||||
Fair value of accounts receivable acquired | 1,000 | |||||||
Fair value of inventory acquired | $ 3,100 | |||||||
Business combination target period | 5 years | |||||||
Additional consideration | $ 1,500 | |||||||
Liability consideration term | 5 years | |||||||
Tax liabilities to be paid by the company on behalf of the sellers | $ 2,200 | |||||||
Payments to acquire business gross including additional consideration | 19,500 | |||||||
Acquisition deferred payments | 400 | |||||||
Fair value of equipment acquired | 300 | |||||||
CSWICover Guard Inc And A C Guard Inc | Trademarks | ||||||||
Business Acquisition [Line Items] | ||||||||
Indefinite lived intangible assets acquired | 700 | |||||||
CSWICover Guard Inc And A C Guard Inc | Customer Lists | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite lived intangible assets acquired | $ 9,800 | |||||||
Assets acquired, amortization period | 15 years | |||||||
CSWICover Guard Inc And A C Guard Inc | Intellectual Property | ||||||||
Business Acquisition [Line Items] | ||||||||
Fair value of the assets acquired, finite-lived | $ 3,700 | |||||||
CSWICover Guard Inc And A C Guard Inc | Patents | ||||||||
Business Acquisition [Line Items] | ||||||||
Finite lived intangible assets acquired | $ 1,800 | |||||||
Assets acquired, amortization period | 10 years | |||||||
Shoemaker Manufacturing | ||||||||
Business Acquisition [Line Items] | ||||||||
Percent of outstanding equity acquired | 100% | |||||||
Purchase price, amount transferred | $ 43,600 | |||||||
Cash acquired | 1,200 | |||||||
Cash paid for acquisitions | 38,600 | |||||||
Contingent consideration | 2,000 | |||||||
Goodwill | 8,100 | |||||||
Fair value of accounts receivable acquired | 1,700 | |||||||
Cash | 1,200 | |||||||
Fair value of inventory acquired | 3,600 | |||||||
Fair value of current liabilities assumed | 3,100 | |||||||
Fair value of equipment acquired | $ 1,400 | |||||||
Stock consideration (in shares) | 25,483 | |||||||
Stock consideration, value of common stock | $ 3,000 | |||||||
Transaction expenses incurred | 700 | |||||||
Fair value of prepaid expense and other assets | 200 | |||||||
Shoemaker Manufacturing | Trademarks | ||||||||
Business Acquisition [Line Items] | ||||||||
Fair value of the assets acquired, indefinite-lived | 6,500 | |||||||
Shoemaker Manufacturing | Customer Lists | ||||||||
Business Acquisition [Line Items] | ||||||||
Fair value of the assets acquired, finite-lived | $ 23,000 | |||||||
Assets acquired, amortization period | 15 years | |||||||
Shoemaker Manufacturing | Non-compete agreements | ||||||||
Business Acquisition [Line Items] | ||||||||
Fair value of the assets acquired, finite-lived | $ 700 | |||||||
Assets acquired, amortization period | 5 years | |||||||
Shoemaker Manufacturing | Backlog | ||||||||
Business Acquisition [Line Items] | ||||||||
Fair value of the assets acquired, finite-lived | $ 300 | |||||||
Assets acquired, amortization period | 1 month | |||||||
TRUaire acquisition | ||||||||
Business Acquisition [Line Items] | ||||||||
Percent of outstanding equity acquired | 100% | |||||||
Purchase price, amount transferred | $ 385,642 | |||||||
Cash paid for acquisitions | 287,986 | |||||||
Goodwill | 129,169 | 123,455 | ||||||
Finite lived intangible assets acquired | 194,000 | 202,500 | ||||||
Indefinite lived intangible assets acquired | 43,500 | 43,500 | ||||||
Fair value of accounts receivable acquired | 13,467 | 13,450 | ||||||
Cash | 1,471 | 1,471 | ||||||
Fair value of inventory acquired | 46,313 | 45,013 | ||||||
Other assets | 1,285 | 3,388 | ||||||
Accrued and other current liabilities | $ 3,678 | 3,850 | ||||||
Assets acquired, amortization period | 15 years | |||||||
Fair value of equipment acquired | $ 28,832 | 24,631 | ||||||
Stock consideration (in shares) | 849,852 | |||||||
Stock consideration, value of common stock | $ 97,656 | |||||||
Transaction expenses incurred | $ 0 | 7,800 | ||||||
Amount related to uncertain tax positions taken in prior years that the seller has provided contractual indemnification to the Company for | $ 12,500 | $ 7,500 | ||||||
Tax indemnification asset released in accordance with purchase agreement | 5,000 | |||||||
Relevant uncertain tax position accrual released and recorded as income tax benefit | 5,300 | |||||||
Indemnification expense | $ 5,000 | |||||||
Depreciation | 400 | |||||||
Additional interest expense as a result of incurring additional borrowing | $ 3,300 | |||||||
Blended statutory income tax rate | 24.50% | |||||||
Income tax expense (benefit) | $ (3,200) | |||||||
TRUaire acquisition | Customer Lists | ||||||||
Business Acquisition [Line Items] | ||||||||
Additional amortization expense | $ 9,600 |
ACQUISITIONS - Consideration Tr
ACQUISITIONS - Consideration Transferred (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 15, 2021 | Dec. 15, 2020 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Business Acquisition [Line Items] | |||||
Cash | $ 58,335 | $ 35,942 | $ 287,238 | ||
TRUaire acquisition | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 287,986 | ||||
Common stock (849,852 shares) | $ 97,656 | ||||
Stock consideration (in shares) | 849,852 | ||||
Purchase price, amount transferred | $ 385,642 | ||||
Working capital and closing cash adjustments | $ 1,000 |
ACQUISITIONS - Aggregate Fair V
ACQUISITIONS - Aggregate Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 12 Months Ended | 28 Months Ended | ||
Dec. 15, 2020 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Tax Contingency Reserve | $ (100) | |||
Goodwill | $ 224,658 | 242,740 | $ 218,795 | |
Goodwill, Measurement Period Adjustments | 0 | |||
TRUaire acquisition | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 1,471 | 1,471 | ||
Accounts Receivable, net | 13,467 | 13,450 | ||
Measurement period adjustments, accounts receivable, net | (17) | |||
Inventory | 46,313 | 45,013 | ||
Measurement period adjustments, inventory | (1,300) | |||
Short-Term Tax Indemnity Assets | 5,000 | 5,000 | ||
Other Current Assets | 1,285 | 3,388 | ||
Measurement period adjustments, other current assets | 2,103 | |||
Property, Plant and Equipment | 28,832 | 24,631 | ||
Measurement period adjustments, property, plant and equipment | (4,201) | |||
Trade Name (indefinite life) | 43,500 | 43,500 | ||
Customer Lists (useful life of 15 years) | $ 194,000 | 202,500 | ||
Measurement period adjustments, customer lists (useful life of 15 years) | 8,500 | |||
Assets acquired, amortization period | 15 years | |||
Right-Of-Use Assets | $ 49,040 | 49,040 | ||
Long-Term Tax Indemnity Assets | 7,500 | 7,500 | ||
Other Long-term Assets | 2,850 | 2,152 | ||
Measurement Period Adjustments, Other Long-Term Assets | (698) | |||
Accounts Payable | (4,074) | (4,074) | ||
Accrued and Other Current Liabilities | (3,678) | (3,850) | ||
Measurement Period Adjustments, Accrued And Other Current Liabilities | (172) | |||
Lease Liabilities - Short-Term | (4,811) | (4,811) | ||
Deferred Tax Liabilities | (56,249) | (60,033) | ||
Measurement Period Adjustments, Deferred Tax Liabilities | (3,784) | |||
Tax Contingency Reserve | (22,511) | (17,321) | $ (17,300) | |
Measurement Period Adjustments, Tax Contingency Reserve | 5,190 | |||
Lease Liabilities - Long-Term | (45,369) | (45,369) | ||
Estimated fair value of net assets acquired | 256,566 | 262,187 | ||
Measurement Period Adjustments, estimated fair value of net assets acquired | 5,621 | |||
Goodwill | 129,169 | 123,455 | ||
Goodwill, Measurement Period Adjustments | $ (2,099) | (5,714) | ||
Total Purchase Price | $ 385,735 | 385,642 | ||
Measurement Period Adjustments, total purchase price | $ (93) |
ACQUISITIONS - Unaudited Profor
ACQUISITIONS - Unaudited Proforma Financial Information (Details) - TRUaire acquisition $ / shares in Units, $ in Thousands | 12 Months Ended |
Mar. 31, 2021 USD ($) $ / shares | |
Business Acquisition [Line Items] | |
Revenue, net | $ | $ 495,788 |
Net income | $ | $ 47,648 |
Net earnings per common share: | |
Diluted (in dollars per share) | $ / shares | $ 3.03 |
Basic (in dollars per share) | $ / shares | $ 3.05 |
CONSOLIDATION OF VARIABLE INT_3
CONSOLIDATION OF VARIABLE INTEREST ENTITY AND REDEEMABLE NONCONTROLLING INTEREST - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Apr. 01, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Variable Interest Entity [Line Items] | ||||
Net income | $ 96,435 | $ 66,385 | $ 40,099 | |
Variable Interest Entity, Primary Beneficiary | Affiliated Entity | Whitmore JV | ||||
Variable Interest Entity [Line Items] | ||||
Interest sold (in percent) | 50% | |||
Net income | $ 300 | |||
Initiating member's equity interest | 90% | |||
Period of written notice | 3 years | |||
Variable Interest Entity, Primary Beneficiary | Shell | Affiliated Entity | Whitmore Manufacturing, LLC | ||||
Variable Interest Entity [Line Items] | ||||
Interest sold (in percent) | 50% | |||
Consideration received | $ 13,400 | |||
Proceeds from sale of variable interest entity | 5,300 | |||
Intangible assets received on disposal of variable interest entity | $ 8,100 |
CONSOLIDATION OF VARIABLE INT_4
CONSOLIDATION OF VARIABLE INTEREST ENTITY AND REDEEMABLE NONCONTROLLING INTEREST - Variable Interest Entities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 |
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | $ 18,455 | $ 16,619 | |
Inventories, net | 161,569 | 150,114 | |
Prepaid expenses and other current assets | 20,279 | 10,610 | |
Property, plant and equipment, net | 88,235 | 87,032 | |
Intangible assets, net | 318,903 | 300,837 | |
Total assets | 1,043,453 | 995,360 | $ 879,522 |
Other long-term liabilities | 137,117 | 140,306 | |
Total liabilities | 499,314 | $ 510,949 | |
Variable Interest Entity, Primary Beneficiary | Whitmore JV | Affiliated Entity | |||
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | 7,519 | ||
Accounts receivable, net | 7,376 | ||
Inventories, net | 2,971 | ||
Prepaid expenses and other current assets | 115 | ||
Property, plant and equipment, net | 11,923 | ||
Intangible assets, net | 6,478 | ||
Other assets | 137 | ||
Total assets | 36,519 | ||
Accounts payable | 6,274 | ||
Accrued and other current liabilities | 1,417 | ||
Other long-term liabilities | 66 | ||
Total liabilities | $ 7,757 |
CONSOLIDATION OF VARIABLE INT_5
CONSOLIDATION OF VARIABLE INTEREST ENTITY AND REDEEMABLE NONCONTROLLING INTEREST - Redeemable Noncontrolling Interest- (Details) $ in Thousands | 12 Months Ended |
Mar. 31, 2023 USD ($) | |
Redeemable Noncontrolling Interest, Equity [Roll Forward] | |
Beginning balance | $ 15,325 |
Ending balance | 18,464 |
Variable Interest Entity, Primary Beneficiary | |
Redeemable Noncontrolling Interest, Equity [Roll Forward] | |
Beginning balance | 15,325 |
Net income attributable to redeemable noncontrolling interest | 139 |
Contributions from noncontrolling interest | 3,000 |
Ending balance | $ 18,464 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Detail) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 segment | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Mar. 31, 2021 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Number of reportable segments | segment | 3 | |||
Amortization of intangible assets | $ 22.1 | $ 24.8 | $ 10.5 | |
Amortization of inventory purchase accounting adjustment | $ 3.9 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | 28 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | |
Goodwill [Roll Forward] | |||
Beginning balance | $ 224,658 | $ 218,795 | |
Goodwill re-allocation | 0 | ||
Currency translation | (1,027) | (153) | |
Ending balance | 242,740 | 224,658 | $ 242,740 |
TRUaire acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill re-allocation | (2,099) | (5,714) | |
Ending balance | 123,455 | 123,455 | |
Shoemaker acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | 6 | 8,115 | |
Falcon acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | 17,417 | ||
CG and ACG acquisitions | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | 1,686 | ||
Contractor Solutions | |||
Goodwill [Roll Forward] | |||
Beginning balance | 190,152 | 169,345 | |
Goodwill re-allocation | 14,813 | ||
Currency translation | (101) | (22) | |
Ending balance | 209,160 | 190,152 | 209,160 |
Contractor Solutions | TRUaire acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill re-allocation | (2,099) | ||
Contractor Solutions | Shoemaker acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | 6 | 8,115 | |
Contractor Solutions | Falcon acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | 17,417 | ||
Contractor Solutions | CG and ACG acquisitions | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | 1,686 | ||
Engineered Building Solutions | |||
Goodwill [Roll Forward] | |||
Beginning balance | 25,007 | 22,238 | |
Goodwill re-allocation | 2,727 | ||
Currency translation | (705) | 42 | |
Ending balance | 24,302 | 25,007 | 24,302 |
Engineered Building Solutions | TRUaire acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill re-allocation | 0 | ||
Engineered Building Solutions | Shoemaker acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | 0 | 0 | |
Engineered Building Solutions | Falcon acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | 0 | ||
Engineered Building Solutions | CG and ACG acquisitions | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | 0 | ||
Specialized Reliability Solutions | |||
Goodwill [Roll Forward] | |||
Beginning balance | 9,499 | 27,212 | |
Goodwill re-allocation | (17,540) | ||
Currency translation | (221) | (173) | |
Ending balance | 9,278 | 9,499 | $ 9,278 |
Specialized Reliability Solutions | TRUaire acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill re-allocation | 0 | ||
Specialized Reliability Solutions | Shoemaker acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | 0 | $ 0 | |
Specialized Reliability Solutions | Falcon acquisition | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | 0 | ||
Specialized Reliability Solutions | CG and ACG acquisitions | |||
Goodwill [Roll Forward] | |||
Goodwill, acquired | $ 0 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Ending Gross Amount | $ 345,407 | $ 313,388 |
Accumulated Amortization | (92,954) | (73,648) |
Trade names and trademarks not being amortized: | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Ending Gross Amount | $ 66,450 | 61,097 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Wtd Avg Life (Years) | 11 years | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Ending Gross Amount | $ 13,608 | 9,417 |
Accumulated Amortization | $ (8,546) | (8,065) |
Customer lists and amortized trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Wtd Avg Life (Years) | 14 years | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Ending Gross Amount | $ 324,472 | 297,909 |
Accumulated Amortization | $ (81,901) | (61,368) |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Wtd Avg Life (Years) | 5 years | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Ending Gross Amount | $ 950 | 939 |
Accumulated Amortization | $ (272) | (258) |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Wtd Avg Life (Years) | 11 years | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Ending Gross Amount | $ 6,377 | 5,123 |
Accumulated Amortization | $ (2,235) | $ (3,957) |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization of Finite-lived Intangible Assets (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 22,404 |
2025 | 21,525 |
2026 | 21,158 |
2027 | 20,363 |
2028 | 19,982 |
Thereafter | 147,021 |
Total | $ 252,453 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) - Stock Compensation Plan - Equity And Incentive Compensation 2015 Plan - shares | Mar. 31, 2023 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares of common stock granted (in shares) | 1,230,000 | |
Shares available for issuance (in shares) | 421,546 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Share-Based Compensation (Details) - Restricted Stock - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 9,751 | $ 8,450 | $ 5,085 |
Related income tax benefit | (2,438) | (2,197) | (1,220) |
Net share-based compensation expense | $ 7,313 | $ 6,253 | $ 3,865 |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock Option Activity (Details) - Share-based Payment Arrangement, Option - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Number of Shares | ||
Outstanding at beginning of period (in shares) | 10,800 | 63,413 |
Exercised (in shares) | (10,800) | (52,613) |
Outstanding at end of period (in shares) | 10,800 | |
Exercisable at end of period (in shares) | 0 | |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in USD per share) | $ 25.23 | $ 25.23 |
Exercised (in USD per share) | 25.23 | 25.23 |
Outstanding at end of period (in USD per share) | $ 25.23 | |
Exercisable at end of period (in USD per share) | $ 0 | |
Outstanding, remaining contractual life | 2 years 4 months 24 days | |
Exercisable, remaining contractual life | 0 years | |
Outstanding, aggregate intrinsic value | $ 1 | |
Exercisable, aggregate intrinsic value | $ 0 |
SHARE-BASED COMPENSATION - St_2
SHARE-BASED COMPENSATION - Stock Option Activity, Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Cash received for options exercised | $ 272 | $ 1,327 | $ 1,330 |
Share-based Payment Arrangement, Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 0 | 0 | 0 |
Vested (in shares) | 0 | 0 | 0 |
Exercises in period, intrinsic value | $ 1,200 | $ 5,800 | $ 2,500 |
Cash received for options exercised | 300 | 1,300 | 1,300 |
Tax benefit from options exercised | $ 300 | $ 1,400 | $ 400 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock Activity (Details) - Restricted Stock | 12 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Number of Shares | |
Outstanding at beginning of period (in shares) | shares | 228,331 |
Granted (in shares) | shares | 96,877 |
Vested (in shares) | shares | (87,516) |
Canceled (in shares) | shares | (5,641) |
Outstanding at end of period (in shares) | shares | 232,051 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (in USD per share) | $ / shares | $ 126.02 |
Granted (in USD per share) | $ / shares | 130.85 |
Vested (in USD per share) | $ / shares | 86.01 |
Canceled (in USD per share) | $ / shares | 112.60 |
Outstanding at end of period (in USD per share) | $ / shares | $ 138.14 |
SHARE-BASED COMPENSATION - Re_2
SHARE-BASED COMPENSATION - Restricted Stock Activity, Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock/units granted (in shares) | 96,877 | ||
Unvested restricted shares outstanding (in shares) | 232,051 | 228,331 | |
Unrecognized compensation costs related to unvested restricted shares | $ 19.4 | ||
Weighted average vesting period | 2 years 8 months 12 days | ||
Fair value of restricted shares vested | $ 10.2 | $ 14.2 | |
Restricted Stock | Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock/units granted (in shares) | 31,496 | ||
Restricted Stock Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unvested restricted shares outstanding (in shares) | 99,463 | 102,360 | |
Restricted Stock Performance Shares | Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock/units granted (in shares) | 27,559 | ||
Restricted Stock Performance Shares | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance-based vesting range | 0% | ||
Restricted Stock Performance Shares | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance-based vesting range | 200% | ||
Restricted Stock Performance Shares | Cliff Vesting | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock/units granted (in shares) | 21,087 | 47,845 | |
Vesting period | 36 months | ||
Restricted Stock Performance Shares | Cliff Vesting | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance-based vesting range | 0% | ||
Restricted Stock Performance Shares | Cliff Vesting | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance-based vesting range | 200% | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance-based vesting range | 60% | ||
Restricted Stock Units (RSUs) | Chief Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock/units granted (in shares) | 19,685 | ||
Performance-based vesting range | 40% |
INVENTORY - Schedule of Invento
INVENTORY - Schedule of Inventories, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 48,300 | $ 46,136 |
Work in process | 5,250 | 7,471 |
Finished goods | 113,104 | 100,792 |
Total inventories | 166,654 | 154,399 |
Less: Obsolescence reserve | (5,085) | (4,285) |
Inventories, net | $ (161,569) | $ (150,114) |
DETAILS OF CERTAIN CONSOLIDAT_3
DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, gross | $ 124,118 | $ 123,981 |
Less: Allowance for doubtful accounts | (1,365) | (1,177) |
Accounts receivable, net | 122,753 | 122,804 |
Accounts receivable trade | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, gross | 121,164 | 120,603 |
Other receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, gross | $ 2,954 | $ 3,378 |
DETAILS OF CERTAIN CONSOLIDAT_4
DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 9,485 | $ 8,531 |
Short-term tax indemnification assets | 7,500 | 0 |
Income taxes receivable | 1,344 | 690 |
Current derivative asset | 877 | 0 |
Other current assets | 1,073 | 1,389 |
Prepaid expenses and other current assets | $ 20,279 | $ 10,610 |
DETAILS OF CERTAIN CONSOLIDAT_5
DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Land and improvements | $ 3,226 | $ 3,226 | |
Buildings and improvements | 52,975 | 53,346 | |
Plant, office and laboratory equipment | 112,271 | 99,770 | |
Construction in progress | 12,466 | 11,083 | |
Property, plant and equipment, gross | 180,938 | 167,425 | |
Less: Accumulated depreciation | (92,703) | (80,393) | |
Property, plant and equipment, net | 88,235 | 87,032 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | 12,838 | 11,572 | $ 9,194 |
Cost of revenue, depreciation | 8,400 | 8,300 | 7,100 |
Property, Plant and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 12,900 | $ 11,600 | $ 9,200 |
DETAILS OF CERTAIN CONSOLIDAT_6
DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Right-of-use lease assets | $ 59,815 | $ 67,076 |
Long-term tax indemnification assets | 2,849 | 7,500 |
Deferred financing fees | 2,363 | 2,271 |
Rent receivable | 2,028 | 2,073 |
Property held for investment | 418 | 418 |
Deferred income taxes | 462 | 304 |
Other | 2,584 | 3,044 |
Other assets | $ 70,519 | $ 82,686 |
DETAILS OF CERTAIN CONSOLIDAT_7
DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS - Schedule of Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Compensation and related benefits | $ 27,096 | $ 21,617 |
Rebates and marketing agreements | 16,158 | 16,340 |
Operating lease liabilities | 9,784 | 9,269 |
Acquisition deferred payments | 3,427 | 3,061 |
Non-income taxes | 1,802 | 1,949 |
Billings in excess of costs | 637 | 1,026 |
Income taxes payable | 403 | 4,266 |
Other accrued expenses | 8,081 | 11,477 |
Accrued and other current liabilities | $ 67,388 | $ 69,005 |
DETAILS OF CERTAIN CONSOLIDAT_8
DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS - Schedule of Other Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Deferred income taxes | $ 62,144 | $ 62,810 |
Operating lease liabilities | 55,590 | 63,275 |
Tax Reserve | 16,509 | 13,987 |
Derivative liability | 1,021 | 234 |
Acquisition deferred payments | 1,853 | 0 |
Other long-term liabilities | $ 137,117 | $ 140,306 |
LONG-TERM DEBT AND COMMITMENT_2
LONG-TERM DEBT AND COMMITMENTS - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 253,000 | $ 252,775 |
Less: Current portion | 0 | (561) |
Long-term debt | $ 253,000 | $ 252,214 |
Secured Term Loan | Whitmore Manufacturing, LLC | ||
Debt Instrument [Line Items] | ||
Interest rate | 0% | 2.45% |
Outstanding borrowings under term loan | $ 0 | $ 9,775 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.21% | 1.95% |
LONG-TERM DEBT AND COMMITMENT_3
LONG-TERM DEBT AND COMMITMENTS - Revolving Credit Agreement (Details) - USD ($) | 12 Months Ended | ||||||
May 18, 2021 | Dec. 11, 2015 | Mar. 31, 2023 | Dec. 15, 2022 | Mar. 31, 2022 | Dec. 01, 2020 | Sep. 15, 2017 | |
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of voting equity interests in first-tier foreign subsidiaries | 65% | ||||||
Revolving Credit Facility | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument term | 5 years | ||||||
Maximum borrowing capacity | $ 400,000,000 | $ 250,000,000 | $ 500,000,000 | $ 300,000,000 | |||
Accordion feature | 150,000,000 | $ 50,000,000 | |||||
Line of credit facility, maximum borrowing capacity, sublimit | $ 125,000,000 | ||||||
Debt discount and issuance costs | $ 2,300,000 | $ 700,000 | |||||
Proceeds from lines of credit | $ 143,200,000 | ||||||
Repayments of long-term debt | 133,200,000 | ||||||
Revolving credit facility, amount outstanding | 253,000,000 | $ 243,000,000 | |||||
Revolving credit facility, remaining borrowing capacity | $ 247,000,000 | $ 157,000,000 | |||||
Maximum leverage ratio | 3 | ||||||
Maximum leverage ratio, temporary increase | 3.75 | ||||||
Duration of temporary increase for maximum leverage ratio | 18 months | ||||||
Minimum fixed charge coverage ratio | 1.25 | ||||||
Revolving Credit Facility | Line of Credit | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee percentage | 0.15% | ||||||
Revolving Credit Facility | Line of Credit | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee percentage | 0.40% | ||||||
Revolving Credit Facility | Prime Rate | Line of Credit | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Spread on interest rate | 0.25% | ||||||
Revolving Credit Facility | Prime Rate | Line of Credit | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Spread on interest rate | 1.50% | ||||||
Revolving Credit Facility | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Spread on interest rate | 1% | ||||||
Revolving Credit Facility | LIBOR | Line of Credit | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Spread on interest rate | 1.25% | ||||||
Revolving Credit Facility | LIBOR | Line of Credit | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Spread on interest rate | 2.50% | ||||||
Revolving Credit Facility | Federal Funds Effective Rate | |||||||
Debt Instrument [Line Items] | |||||||
Spread on interest rate | 0.50% | ||||||
Letter of Credit | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 25,000,000 | ||||||
Swingline Loans | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 10,000,000 |
LONG-TERM DEBT AND COMMITMENT_4
LONG-TERM DEBT AND COMMITMENTS - Whitmore Term Loan (Details) - Secured Term Loan - Whitmore Manufacturing, LLC - USD ($) $ in Thousands | Jan. 20, 2023 | Mar. 31, 2023 | Mar. 31, 2022 |
Debt Instrument [Line Items] | |||
Debt instrument, periodic principal payment | $ 140 | ||
Outstanding borrowings under term loan | $ 0 | $ 9,775 | |
LIBOR | |||
Debt Instrument [Line Items] | |||
Spread on interest rate | 2% |
LONG-TERM DEBT AND COMMITMENT_5
LONG-TERM DEBT AND COMMITMENTS - Aggregate Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Debt Disclosure [Abstract] | ||
2024 | $ 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 253,000 | |
2028 | 0 | |
Thereafter | 0 | |
Total debt | $ 253,000 | $ 252,775 |
LEASES - Additional Information
LEASES - Additional Information (Details) | Mar. 31, 2023 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 25 years |
LEASES - Components of Operatin
LEASES - Components of Operating Lease Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Operating lease expense | $ 10,793 | $ 9,893 |
Short-term lease expense | 815 | 326 |
Total operating lease expense | $ 11,608 | $ 10,219 |
LEASES - Operating Lease Assets
LEASES - Operating Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Leases [Abstract] | ||
ROU assets, net | $ 59,815 | $ 67,076 |
Short-term lease liabilities | 9,784 | 9,269 |
Long-term lease liabilities | 55,590 | 63,275 |
Total operating lease liabilities | $ 65,374 | $ 72,544 |
Operating lease, right-of-use asset, statement of financial position [Extensible List] | Other assets | Other assets |
Operating lease, liability, current, statement of financial position [Extensible List] | Accrued and other current liabilities | Accrued and other current liabilities |
Operating lease, liability, noncurrent, statement of financial position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 11,058 | $ 9,974 |
Right-of-use assets obtained in exchange for new operating lease obligations | $ 2,526 | $ 8,464 |
LEASES - Other Information for
LEASES - Other Information for Operating Leases (Details) | Mar. 31, 2023 | Mar. 31, 2022 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 7 years | 7 years 10 months 24 days |
Weighted average discount rate (percent) | 2.30% | 2.20% |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Leases [Abstract] | ||
2024 | $ 11,082 | |
2025 | 10,903 | |
2026 | 10,558 | |
2027 | 10,316 | |
2028 | 9,037 | |
Thereafter | 18,787 | |
Total lease liabilities | 70,683 | |
Less: Imputed interest | (5,309) | |
Present value of lease liabilities | $ 65,374 | $ 72,544 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING - Additional Information (Details) - Interest Rate Swap - USD ($) $ in Millions | Jan. 09, 2023 | Mar. 31, 2023 | Feb. 07, 2023 | Mar. 31, 2022 |
Derivative [Line Items] | ||||
Notional amount | $ 100 | $ 9.8 | ||
Derivative, cash received on hedge | $ 0.2 | |||
Amount of hedged item | $ 100 | |||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||
Derivative [Line Items] | ||||
Derivative, fixed interest rate | 3.85% |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING - Fair Value of Derivatives (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Derivatives, Fair Value [Line Items] | ||
Current derivative asset | $ 877 | $ 0 |
Current derivative liabilities | 67,388 | 69,005 |
Non-current derivative liabilities | 137,117 | 140,306 |
Hedging Instrument | Interest Rate Swap | ||
Derivatives, Fair Value [Line Items] | ||
Current derivative asset | 877 | 0 |
Current derivative liabilities | 0 | 109 |
Non-current derivative liabilities | $ 1,021 | $ 233 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |||
Income from continuing operations | $ 96,574 | $ 67,319 | $ 40,099 |
Income attributable to redeemable noncontrolling interest | 139 | 934 | 0 |
Net income attributable to CSW Industrials, Inc. | $ 96,435 | $ 66,385 | $ 40,099 |
Weighted average shares: | |||
Common stock (in shares) | 15,401 | 15,646 | 14,919 |
Participating securities (in shares) | 108 | 109 | 96 |
Denominator for basic earnings per common share (in shares) | 15,509 | 15,755 | 15,015 |
Potentially dilutive securities (in shares) | 37 | 52 | 111 |
Denominator for diluted earnings per common share (in shares) | 15,546 | 15,807 | 15,126 |
Basic earnings per common share: (in USD per share) | $ 6.22 | $ 4.21 | $ 2.67 |
Diluted earnings per common share: (in USD per share) | $ 6.20 | $ 4.20 | $ 2.65 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) | 12 Months Ended | 29 Months Ended | ||||||||||
May 12, 2023 | Apr. 14, 2023 | Apr. 14, 2022 | Apr. 15, 2021 | Apr. 04, 2019 | Nov. 07, 2018 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2023 | Dec. 16, 2022 | Oct. 30, 2020 | |
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Repurchased amount | $ 50,100,000 | |||||||||||
Dividend declared (in USD per share) | $ 0.17 | $ 0.15 | $ 0.135 | |||||||||
Dividends paid | $ 10,555,000 | $ 9,459,000 | $ 8,083,000 | |||||||||
Subsequent Event | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Dividend declared (in USD per share) | $ 0.19 | |||||||||||
Dividends paid (in USD per share) | $ 0.19 | |||||||||||
2018 Share Repurchase Program | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Authorized repurchase amount | $ 75,000,000 | |||||||||||
Repurchase program period in force | 2 years | |||||||||||
2020 Share Repurchase Program | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Authorized repurchase amount | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | ||||||||
Shares repurchased (in shares) | 336,347 | 126,115 | 462,462 | |||||||||
Repurchased amount | $ 35,700,000 | $ 14,400,000 | $ 100,000,000 | |||||||||
2022 Share Repurchase Program | ||||||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||||||
Authorized repurchase amount | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | |||||||||
Shares repurchased (in shares) | 0 | 0 |
RETIREMENT PLANS - Additional I
RETIREMENT PLANS - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jan. 31, 2023 | Sep. 30, 2019 | Mar. 31, 2020 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension plan curtailment benefit | $ 0 | $ (30) | $ 0 | |||
Pension Plan | Canadian Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Overall termination charge, net of tax | $ (400) | |||||
Pension Plan | Qualified Plan | U.S. | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension plan curtailment benefit | $ 7,000 | |||||
Overall termination charge, net of tax | $ 5,400 | |||||
Excess funds distributed to defined contribution plan | $ 500 | |||||
Pension Plan | Qualified Plan | Canadian Plan | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension plan curtailment benefit | $ (500) | |||||
Postemployment Retirement Benefits | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Restoration plan reported liabilities | $ 1,300 | $ 1,400 |
RETIREMENT PLANS - Schedule of
RETIREMENT PLANS - Schedule of Net Pension (Benefit) Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |||
Service cost – benefits earned during the year | $ 0 | $ 43 | $ 40 |
Interest cost on projected benefit obligation | $ 56 | $ 138 | $ 144 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Expected Return (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income (expense), net | Other income (expense), net | Other income (expense), net |
Expected return on assets | $ 0 | $ (120) | $ (96) |
Net amortization and deferral | 42 | 69 | 74 |
Pension plan termination | 453 | 0 | 0 |
Curtailment impact | 0 | (30) | 0 |
Net pension expense | $ 551 | $ 100 | $ 162 |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Settlement Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income (expense), net | Other income (expense), net | Other income (expense), net |
Defined Benefit Plan, Net Periodic Benefit (Cost) Credit, Curtailment Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income (expense), net | Other income (expense), net | Other income (expense), net |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Amortization of Prior Service Cost (Credit), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income (expense), net | Other income (expense), net | Other income (expense), net |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Interest Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other income (expense), net | Other income (expense), net | Other income (expense), net |
RETIREMENT PLANS - Defined Cont
RETIREMENT PLANS - Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Retirement Benefits [Abstract] | ||
Employer matching contribution, percent of match | 100% | |
Employer matching contribution, percent of employees' gross pay | 6% | |
Contributions to defined contribution plan | $ 5.7 | $ 4.8 |
RETIREMENT PLANS - Employee Sto
RETIREMENT PLANS - Employee Stock Ownership Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Award requisite service period | 1 year | ||
Period of credited service after which participant's interest in contributions to ESOP fully vest | 3 years | ||
Contributions to the ESOP | $ 3.1 | $ 2.3 | $ 3.6 |
ESOP expense recorded | $ 5.1 | ||
CSWI | |||
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items] | |||
Shares held in ESOP (in shares) | 537,293 | 549,863 |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. Federal | $ 118,181 | $ 87,607 | $ 48,142 |
Foreign | 7,730 | 3,858 | 2,726 |
Income before income taxes | $ 125,911 | $ 91,465 | $ 50,868 |
INCOME TAXES - Schedule of In_2
INCOME TAXES - Schedule of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Current | |||
U.S. Federal | $ 27,920 | $ 20,139 | $ 6,773 |
State and local | 6,135 | 5,271 | 3,561 |
Foreign | 1,482 | 638 | 1,641 |
Provision for income taxes | 35,537 | 26,048 | 11,975 |
Deferred | |||
U.S. Federal | (3,549) | (1,578) | (1,211) |
State and local | (2,471) | 761 | (500) |
Foreign | (180) | (1,085) | 505 |
Provision for income taxes | (6,200) | (1,902) | (1,206) |
Total | |||
U.S. Federal | 24,371 | 18,561 | 5,562 |
State and local | 3,664 | 6,032 | 3,061 |
Foreign | 1,302 | (447) | 2,146 |
Provision for income taxes | $ 29,337 | $ 24,146 | $ 10,769 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Computed tax expense at statutory rate | $ 26,441 | $ 19,206 | $ 10,674 |
Increase (reduction) in income taxes resulting from: | |||
State and local income taxes, net of federal benefits | 2,895 | 4,765 | 2,419 |
Nondeductible executive compensation | 1,555 | 992 | 248 |
Global intangible low-taxed income ("GILTI") inclusion | 1,123 | 580 | 2,118 |
Repatriation tax, net of tax credit | 904 | 170 | 822 |
Other permanent differences | 557 | (143) | 1,931 |
IRC section 250 deductions | (1,626) | (1,102) | (1,678) |
Foreign tax credits | (604) | (450) | (554) |
Vesting of stock-based compensation | (408) | (1,916) | (741) |
Uncertain tax positions | (224) | 759 | (4,717) |
Valuation allowance | (96) | 379 | 0 |
Foreign rate differential | 67 | 91 | 85 |
Other, net | (1,247) | 815 | 162 |
Provision for income taxes | $ 29,337 | $ 24,146 | $ 10,769 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 39 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Oct. 04, 2022 | Dec. 15, 2020 | |
Business Acquisition [Line Items] | |||||||
Effective tax rate | 23.30% | 26.40% | 21.20% | ||||
Increase in provision due to state tax expense impact (net of federal benefits) | $ 2,895 | $ 4,765 | $ 2,419 | ||||
Increase in effective tax rate due to state tax expense impact (net of federal benefits) | 2.30% | 5.20% | |||||
Nondeductible executive compensation | $ 1,555 | $ 992 | 248 | ||||
Effective income tax rate reconciliation, limitation, effective tax rate | 1.20% | 1.10% | |||||
Global intangible low-taxed income ("GILTI") inclusion | $ 1,123 | $ 580 | 2,118 | ||||
Global intangible low-taxed income ("GILTI") inclusion, percent | 0.90% | ||||||
Repatriation tax, net of tax credit | $ 904 | 170 | 822 | ||||
Effective income tax rate reconciliation, repatriation tax rate differential, percent | 0.70% | ||||||
Increase in provision due to additional non-deductible expenses | $ 557 | (143) | 1,931 | ||||
Increase in effective tax rate due to additional non-deductible expenses | 0.40% | ||||||
IRC section 250 deductions | $ 1,626 | $ 1,102 | 1,678 | ||||
IRC section 250 deductions, percent | 1.30% | 1.20% | |||||
Foreign tax credits, decrease, amount | $ 604 | $ 450 | 554 | ||||
Effective income tax rate reconciliation, tax credit, foreign, decrease, percent | 0.50% | ||||||
Vesting of stock-based compensation, decrease | $ 408 | $ 1,916 | 741 | ||||
Share-based payment arrangement, decrease, percent | 0.30% | 2.10% | |||||
Other, net | $ (1,247) | $ 815 | 162 | ||||
Effective income tax rate reconciliation, other, net, percent | 0.80% | ||||||
Unrecognized tax benefits | $ 10,212 | 11,784 | $ 9,934 | 10,212 | $ 9,934 | ||
Interest accrued | 700 | 600 | 600 | ||||
Penalties accrued | 600 | 500 | 500 | ||||
Tax contingency reserves | 100 | ||||||
Reduction resulting from lapse of applicable statute of limitations | $ 1,400 | ||||||
TRUaire acquisition | |||||||
Business Acquisition [Line Items] | |||||||
Unrecognized tax benefits | 1,600 | ||||||
Interest accrued | 400 | ||||||
Penalties accrued | 500 | ||||||
Tax contingency reserves | 17,300 | 17,321 | $ 17,300 | $ 22,511 | |||
Indemnification assets, range of outcomes, value, high | 12,500 | ||||||
Indemnification assets, amount as of acquisition date | $ 12,500 | ||||||
Indemnification assets, release in period | 5,000 | ||||||
Effective income tax rate reconciliation, tax settlement, amount | $ 5,300 | $ 1,500 | |||||
Indemnification assets, amount outstanding | 7,500 | ||||||
Falcon Stainless, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Unrecognized tax benefits | 2,800 | ||||||
Interest accrued | 100 | ||||||
Penalties accrued | 200 | ||||||
Unrecognized tax benefit related to acquisition | $ 2,500 | ||||||
Indemnification assets, range of outcomes, value, high | $ 4,500 | ||||||
Indemnification assets, amount as of acquisition date | $ 2,800 |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Mar. 31, 2022 |
Deferred tax assets: | ||
Operating lease liabilities | $ 15,684 | $ 17,774 |
Accrued compensation | 6,636 | 4,826 |
Inventory reserves | 3,422 | 3,720 |
Accrued expenses | 1,580 | 1,010 |
State R&D credit carry-forward | 968 | 75 |
Transaction Costs | 828 | 714 |
Pension and other employee benefits | 452 | 412 |
Foreign tax credit carry-forward | 284 | 379 |
Net operating loss carryforwards | 144 | 145 |
Other, net | 747 | 1,492 |
Deferred tax assets | 30,745 | 30,547 |
Valuation allowance | (428) | (524) |
Deferred tax assets, net of valuation allowance | 30,317 | 30,023 |
Deferred tax liabilities: | ||
Goodwill and intangible assets | (66,432) | (64,903) |
Operating lease right-of-use assets | (14,337) | (16,364) |
Property, plant and equipment | (7,299) | (8,242) |
Repatriation reserve | (1,784) | (1,034) |
Other, net | (2,148) | (1,986) |
Deferred tax liabilities | (92,000) | (92,529) |
Net deferred tax liabilities | $ (61,683) | $ (62,506) |
INCOME TAXES - Summary of Recon
INCOME TAXES - Summary of Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at beginning of year | $ 9,934 | $ 10,212 |
Decreases related to prior year tax positions | (690) | (314) |
Increases related to current year tax positions | 2,540 | 36 |
Balance at end of year | $ 11,784 | $ 9,934 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |||
Related party transaction | $ 0 | $ 0 | $ 0 |
OTHER COMPREHENSIVE INCOME (L_3
OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Foreign currency translation adjustments | $ (3,335) | $ 922 | $ 5,450 |
Other comprehensive income | 93,239 | 68,241 | 45,549 |
Expected loss from currency cash flow hedge, next 12 months (less than) | 700 | ||
Currency translation adjustments | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (4,438) | (4,394) | |
Foreign currency translation adjustments | (3,752) | (44) | |
Balance at end of period | (8,190) | (4,438) | (4,394) |
Interest rate swaps | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (270) | (803) | |
Unrealized gain, net of taxes | 225 | 309 | |
Reclassification of losses (gains) included in interest expense, net of taxes | (69) | 224 | |
Other comprehensive income | 156 | 533 | |
Balance at end of period | (114) | (270) | (803) |
Unrealized losses, tax | (60) | (82) | |
Reclassification from AOCI, tax | 18 | (60) | |
Defined benefit plans | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance at beginning of period | (366) | (799) | |
Other comprehensive income | 261 | 433 | |
Balance at end of period | (105) | (366) | $ (799) |
Amortization of net prior service benefit, net of taxes | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification of losses (gains) included in interest expense, net of taxes | 0 | (5) | |
Reclassification from AOCI, tax | 0 | 1 | |
Amortization of net loss, net of taxes | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Reclassification of losses (gains) included in interest expense, net of taxes | 33 | 59 | |
Reclassification from AOCI, tax | (9) | (16) | |
Net gain arising during the year, net of taxes | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Other comprehensive income | 92 | 154 | |
Other comprehensive (loss) income, tax | (24) | (41) | |
Curtailment impact, net of taxes | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Other comprehensive income | 0 | 311 | |
Other comprehensive (loss) income, tax | 0 | (83) | |
Pension Termination | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Other comprehensive income | 127 | 0 | |
Other comprehensive (loss) income, tax | (34) | 0 | |
Currency translation impact | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Other comprehensive income | $ 9 | $ (86) |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | Mar. 31, 2021 USD ($) | |
Disaggregation of Revenue [Line Items] | |||
Number of business segments | segment | 3 | ||
Net revenues | $ 757,904 | $ 626,435 | $ 419,205 |
Change in Contract Liabilities [Roll Forward] | |||
Balance at beginning of period | 1,026 | ||
Revenue recognized | (953) | ||
New contracts and revenue added to existing contracts | 564 | ||
Balance at end of period | 637 | 1,026 | |
Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | 757,904 | 626,435 | 419,205 |
Contractor Solutions | Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | 506,634 | 413,207 | 245,232 |
Engineered Building Solutions | Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | 103,969 | 97,296 | 95,672 |
Specialized Reliability Solutions | Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | $ 147,301 | 115,932 | 78,301 |
Build-to-order | |||
Disaggregation of Revenue [Line Items] | |||
Retainage, percentage of transaction price not collectible until overall construction project is complete | 10% | ||
Build-to-order | Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | $ 89,964 | 88,690 | 87,057 |
Build-to-order | Contractor Solutions | Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | 0 | 0 | 0 |
Build-to-order | Engineered Building Solutions | Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | 89,964 | 88,690 | 87,057 |
Build-to-order | Specialized Reliability Solutions | Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | $ 0 | 0 | 0 |
Installation Services | Total Consolidated Revenue | Product Concentration Risk | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of total consolidated revenue | 2% | ||
Book-and-ship | Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | $ 667,940 | 537,745 | 332,148 |
Book-and-ship | Contractor Solutions | Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | 506,634 | 413,207 | 245,232 |
Book-and-ship | Engineered Building Solutions | Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | 14,005 | 8,606 | 8,615 |
Book-and-ship | Specialized Reliability Solutions | Reportable Segments | |||
Disaggregation of Revenue [Line Items] | |||
Net revenues | $ 147,301 | $ 115,932 | $ 78,301 |
SEGMENTS - Schedule of Financia
SEGMENTS - Schedule of Financial Information of Reporting Segments (Details) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 USD ($) segment | Mar. 31, 2022 USD ($) | Mar. 31, 2021 USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 3 | ||
Segment Reporting Information [Line Items] | |||
Revenues, net | $ 757,904 | $ 626,435 | $ 419,205 |
Operating income | 139,066 | 97,380 | 59,220 |
Depreciation and amortization | 34,957 | 36,408 | 22,718 |
Total assets | 1,043,453 | 995,360 | 879,522 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 757,904 | 626,435 | 419,205 |
Operating income | 159,269 | 116,223 | 73,654 |
Depreciation and amortization | 34,757 | 35,958 | 22,173 |
Total assets | 1,031,427 | 983,044 | 866,282 |
Operating Segments | Contractor Solutions | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 506,634 | 413,207 | 245,232 |
Operating income | 126,204 | 96,115 | 59,007 |
Depreciation and amortization | 26,951 | 27,879 | 14,415 |
Total assets | 823,750 | 782,267 | 687,508 |
Operating Segments | Engineered Building Solutions | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 103,969 | 97,296 | 95,672 |
Operating income | 12,889 | 11,101 | 14,066 |
Depreciation and amortization | 1,771 | 2,063 | 2,014 |
Total assets | 71,429 | 74,397 | 67,281 |
Operating Segments | Specialized Reliability Solutions | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 147,301 | 115,932 | 78,301 |
Operating income | 20,176 | 9,007 | 581 |
Depreciation and amortization | 6,035 | 6,016 | 5,744 |
Total assets | 136,248 | 126,380 | 111,493 |
Intersegment revenue | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 7,287 | 3,390 | 360 |
Intersegment revenue | Contractor Solutions | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 7,142 | 3,280 | 296 |
Intersegment revenue | Engineered Building Solutions | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 0 | 0 | 0 |
Intersegment revenue | Specialized Reliability Solutions | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 145 | 110 | 64 |
Eliminations and Other | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | 0 | 0 | 0 |
Eliminations and Other | |||
Segment Reporting Information [Line Items] | |||
Revenues, net | (7,287) | (3,390) | (360) |
Operating income | (20,203) | (18,843) | (14,434) |
Depreciation and amortization | 200 | 450 | 545 |
Total assets | $ 12,026 | $ 12,316 | $ 13,240 |
SEGMENTS - Schedule of Sales an
SEGMENTS - Schedule of Sales and Long-Lived Assets by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | $ 757,904 | $ 626,435 | $ 419,205 |
Long-lived assets | $ 720,396 | $ 695,213 | $ 660,404 |
Net Revenues | Geographic Concentration Risk | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk, percentage | 100% | 100% | 100% |
Long-lived Assets | Geographic Concentration Risk | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk, percentage | 100% | 100% | 100% |
U.S. | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | $ 678,126 | $ 559,296 | $ 367,169 |
Long-lived assets | $ 679,731 | $ 651,477 | $ 617,258 |
U.S. | Net Revenues | Geographic Concentration Risk | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk, percentage | 89.50% | 89.30% | 87.60% |
U.S. | Long-lived Assets | Geographic Concentration Risk | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk, percentage | 94.40% | 93.70% | 93.50% |
Non-U.S. | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues, net | $ 79,778 | $ 67,139 | $ 52,036 |
Long-lived assets | $ 40,665 | $ 43,736 | $ 43,146 |
Non-U.S. | Net Revenues | Geographic Concentration Risk | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk, percentage | 10.50% | 10.70% | 12.40% |
Non-U.S. | Long-lived Assets | Geographic Concentration Risk | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Concentration risk, percentage | 5.60% | 6.30% | 6.50% |