- Earnings call transcript Q2 2023

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Operator

Good morning, and welcome to the CSW Industrials Inc. Fiscal Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Adrianne Griffin. Please go ahead.

Adrianne Griffin

Maura. you, Thank and second everyone, the Industrials CSW Good earnings welcome call. XXXX quarter fiscal morning, to

Joining are: Perry, President of and me Officer, Financial CSW Executive today Chief Industrials; Joseph Armes, and James Officer. Executive President Chief Vice Chairman, and

the information Form is www.cswindustrials.com. earnings opening release. the being This earnings are on call and which included of portion and prior the to is We issued Investor presentation, on our XX-Q replay our available release in accessing market's the today, website webcast at

During expectations are the statements. uncertainties. any on various identified during report factors this will our as statements. differ make this We in statements other with These as in update release forward-looking call and today Form now materially on the earnings Armes. call, not we over made the well and will to forward-looking and annual because do duty filings are to SEC. and Joe based discussed comments XX-K of Actual call risks subject current results I turn could any that our factors assumptions to undertake risk the

Joseph Armes

Adrianne. you, call. fiscal conference second Good joining thank morning, quarter for Thank you our and

our EPS. top growth increase fiscal quarter XX% XX% growth, efforts second record year-over-year we Comparing quarter results performance, and per Our line XX% growth in drive reported our revenue fiscal first share. half to growth, demonstrate earnings expand and EBITDA and record successful margins fiscal second

the disciplined macroeconomic on statement continued These generate customer to focus growth income well, team growth, operating margin income perform this growth, and keen our excellence, the to capital gross as EPS. operational of metrics on revenue through clearly a outpaced our uncertainty, growth gross demonstrate ability to combining service. continues trend margin sales allocation leverage exceptionally backdrop outpaced Against incremental and

Due are to driven our to prior $XX actions In the periods. growth organic of pricing nature the fiscal current in the we the and X the bring million, quarter, products. segments able all price to realize by market, year products primarily that we positive of contributed revenue current high-value numerous to of

Our created in upon periods, in that products we story commercial differentiated and our this building end on the founded positions leading is serve. of quarter momentum markets one prior highly

end second fiscal Falcon previously and product to AC Cover the acquired quarter, acquisition our we During acquisitions Stainless. the quarter of The of the offerings And announced we closed GUARD. consummated cash lines Guard which into of end, our sold a markets. we our expand subsequent bolt-on on Through through million facility. at $XX.X profitable deployed and was capital funded borrowings hand plumbing EBITDA, X.Xx of HVAC/R and credit under acquisitions, these valuation existing

a the end reminder, HVAC/R acquisition, December, GRD market. offerings which into in Shoemaker closed sold we our our expanded As

in reported During be beginning existing with acquisition contributed will These acquisitions in complementary million in was on completed the fiscal our quarter, results acquisitions our Shoemaker, our the categories end product focus our highly acquisitions accretive included of reflect our GUARD nature $XX markets. and AC all Cover Contractor this quarter. which collectively segment. Solutions in of and second Guard the revenue, The Falcon

In quarters freight chain freight year, the the improved reviewing delays and fiscal providing supply recovery. signs first of material X of early costs sequentially, and

improved, this and has supplier is delivery yet of critical diversified on-time recovery sourcing persistence not components. the While have known, meaningfully for we proactively

demand to inventory continuously products team ensure meet we evaluates our investments. Our while optimizing product levels at for the working customer leadership can and capital that category

to a transition I'll segments. our now of discussion

including optimizing or Solutions in of to XX% million. and segment acquired and The transitioned existing our swiftly sales of products selling distribution Cover a and The leveraging Falcon million, of Guard, were GUARD organic these increase, integration $XX centers, network, our Contractor our million reported have AC $XXX strength sales products lies relocated team. Our this acquisition growth $XX products. of high-value segment to distribution

Our adding that customers upon is to we've honed that consistent predicated our a multiple transactions, success process in growth value goals. through acquisitions with integrating reflects our accretive

We that the recent supported actions served, we acquisitions. markets growth to exceeds consider to by price expect deliver end continue -- to and expect

grow, Engineered professionalize Our Solutions revenue commercial $XX multiyear reporting on to X% focus and team, increase Building introduce geographies of of an initiatives segment new continued to due to million, our high-growth products.

categories. in this our jobs as high, quarter, an the be in latest consecutive educational high-quality multifamily The and third all-time construction a subcategories. primary supportive reached continue residential, with market of health. indicators to construction awarded FMI continued for outlooks demonstrates overall show to commercial For growth segment's Several we leading institutional, signs backlog data

XX have XX billings row. in a for AIA remained positive, months above and

We flattening and geographies, modest and defined but that goals some declines exceeds are broad categories of construction to has mindful team industry. maintain in rising the our performance interest actionable rates,

to Specialized increased, high-teens utilization capacity of Our quarter improved segment million and as was record Reliability margin, to material expectations, moderated. a exceed mid $XX for EBITDA segment operational the quarter cost revenue. Solutions delivering consecutive second fourth consecutive continues inflation practices in This

to as strength We in growth these a albeit at expect continued this results. compared exceptional moderating segment, rate

markets their turn our provide, consumable HVAC/R of of to serve, or either used product in fundamental our James, to and and maintenance, and value the necessities the Specific we of Important model. call the are we of reliability, that homeowners replacement nature acknowledge to I business products resiliency nondiscretionary, portfolio the to for and attributes diversification include our are over Before the extend plumbing, assets. I the sell like repair and we lifespan and products critical of the end the performance would end businesses. applications, often largest our and markets,

strengthened to opportunity past growth, leadership years, profitable the supply chain, focused successfully remained commitments our our on customers manage We've to our team confirmed the embraced through and our X and uncertainty. employees. Over our

I'd time, outlook. conclude look at James and the our with to the like closer call to Now results, for then a turn remarks the over at this strategic I'll prepared

James Perry

everyone. morning, good and Joe, you, Thank

fiscal driven by from during period, year contributions the XXXX and a compared our price revenue consolidated million, to second increase acquisitions. $XXX prior was as quarter Our XX%

primarily benefit incurred the actions gross profit COVID TRUaire in million sales the from the current $XX earnings to quarter. in due year recur. prior second period, million, margin quarter of Gross that price in not did out to profit prior any in year period to not that Consolidated profit reported cumulative growth, compared $X.X our fiscal incremental growth. call was did XX% the XX% of Vietnam expenses XX% resulting in with the note representing to fiscal improved we I'll adjustments the

year or sales net $XX period. growth, outpaced XX% as in the year XX% improved margin in which driven $XX Reported increased million compared Consolidated to million compared EBITDA quarter, to by EBITDA attributable prior XX% CSWI to in year $X.XX prior share to second the Consolidated income per as fiscal incremental to period. the $XX prior expenses. million quarter compared or the $X.XX was diluted to

consolidated with million revenue $XX growth of for comprised accounted inorganic acquisitions. prior of GUARD year million and to our revenue segment $XXX million or Solutions revenue million $XX growth growth XX% of total $XX AC and organic Shoemaker, Cover quarter, XX% Guard the and of Contractor Our delivered as compared the from of

as and specified acquisitions, to support to compared this products building XX% $XX needed as through of Segment a which period in of end to the slight to segment, from growth $XX Due of inflationary organically implemented a resulted plumbing added recover prior by growth growth, compared driven prior to pricing in million of continued continue and as pressure XX% second and by created million we quarter. markets. partially revenue the period net the offset revenue both compared growth revenue volumes our year or decrease margin EBITDA last in unit or benefit HVAC/R bit the of the year. architecturally was infrastructure environment. year from was Strong initiatives, Organic cumulative the margins the recently people have to process

be half declining improving levels In unit dynamics headwinds, the full residential Despite the we and support our construction second actions that could year fiscal by prior desired will impacted strong year, pricing inventory potential cost of fiscal and these distributors' margins. trends. perceive volumes

compared $X EBITDA million, a Our and period. Solutions margin remain to XX% year the $X million, XX% in margin Bidding booking trends to Engineered segment strong. prior Building a improved

XX% and to half. by compared first fiscal half approximately as respectively, our XX%, fact, year's first In bookings fiscal and last backlog increased

end our was for X. ratio book-to-bill trailing to X As the the of X.XX quarters quarter, of fiscal second the

consecutive the As we the year, over Joe quality are mentioned legacy of remaining of in EBITDA record we the XXXX, September third in ended prior slower projects quarter backlog early completed. fiscal fiscal improved backlog back this revenue his the segment. In expect segment the backlog and lower-margin profitability. opening with moderate remarks, period this we of expect in half to result pressure, growth our slightly margin year year current as segment In

continued in another end $X very achieved or growth segment initiatives, from benefits in our million organic strong pricing market and XXXX the prior improvements the due and respectively, million energy period. margin Our EBITDA second XX% quarter Specialized Solutions especially demand, Segment compared were revenue and operations Reliability to and XX% to EBITDA impressive of of in quarter fiscal million the XX%, year in $X and $X execution. market

venture growth, we For prior towards pricing and continued revenue impacts the due increases, shift mix modestly initiatives the as ramp lower year freight albeit strong cost as at in timing lower and previously of year Shell the period, volumes and a margins joint Whitmore material remainder of and expect to pace compared the this to fiscal implemented up. the

addition year. the Whitmore With as the to post of we our Rockwall, fiscal facility exit position the a in growth in to compelling joint Shell equipment complete this rate venture, of ongoing we a Texas support are

in our first million operating we half, to of sheet first year million million quarter in of our of and second first was XXXX quarter. compared to reported $XX fiscal $XX fiscal million in period. balance Transitioning $XX of our quarter compared flow year in as and flows, operations second from $XX million cash fiscal million prior strength in $XX fiscal with to fiscal the the the the of cash half Of cash the cash $XX the current ended generated the flow

flow liquidity strong that working meaningful quarter metrics By prudent deliver flow toward support to XXXX end fiscal this our the and our conversion commitment free affirmed historic reflect our strategic of expect generation, progress cash management On capital sufficient year, first to call, norms. objectives. we we to fiscal cash

with levels. fiscal in our And to As with quarter of the the improvement our investment working our revolver, Joe evaluate inventory a supply by we $X compared on ended the end appropriate fiscal to this team prior decrease end. We the the capital, chain. fiscal opening year, quarter second expect use his as to remarks, $XXX decline mentioned inventory million million outstanding corresponding of million in $XXX continues leadership

to able quarter, Guard the we're second reminder, the with operating reduce As and borrowed fiscal acquired amount. during the flow GUARD we cash Cover a AC and intra-quarter generation,

ratio leverage borrowing X.Xx, quarter of the approximately Our and improvement end preceding as from to the an as increased due X.Xx the was decreased of current quarter EBITDA amount.

third the our was was well Xx. stated Falcon in forma within quarter, closed acquisition, for Pro the below range which leverage X.Xx, of to Xx fiscal our ratio

enhances to that Our allocation flexibility strong shareholder capital balance sheet value. provide continues for

our As by repurchases broad committed part to share intrinsic model. opportunistic strategy, of our we capital guided value allocation remain

price we current over XXXX the During first XXX,XXX our authorization. $XXX repurchased under $XX.X of share for fiscal shares purchase half, repurchase million an million aggregate

on Our tax second fiscal the for quarter a effective GAAP XX.X% was basis. rate

the tax year. expect full to continue We a fiscal for rate XX% 'XX

which, fiscal growth. to level, growth when all across EBITDA operating to strong leverage, remainder X EPS with of result strong XXXX, segments meaningful As revenue to we in have the we coupled and the and year-over-year at continue expect consolidated will look

benefit to freight in expect costs. material raw our and from stability We continued

businesses earnings seasonality. quarter, As remain year, we look our fiscal to this expect expect of of at lowest as remaining though the variability we historically across we less our between acquired produced to the GRD the we as quarters cadence have not do third due seasonally quarter quarters much demonstrating

With now Joe back turn for the closing that, to call remarks. I'll

Joseph Armes

of growth in James. record In XXXX, the $XXX growth and growth EPS. you, XX% XX%. this drove EBITDA Operating representing In delivered on Thank half of of million, we fiscal XX% first leverage revenue half in and approximately XX% of we first full for a light growth our rate now strength of margin recent acquisitions, of XX% an revenue year-over-year EBITDA the of approximately including the fiscal with our growth year. expect

maintain will for that we discipline as pricing assess options. will well cost further as reductions opportunities operating to committed and remain profitability, our potential We

to began and I new warranted are monitoring the current environment, replacement to approach we our the that is position reviewing costs maintaining This across the and company. in ensure disciplined hires quarter, our all

margins We driving and are conversion. flow cash expanding

We sheet. disciplined are confident the near-term opportunities in are our balance our enabled which capital long-term strength of for and by allocation,

here results, to of face utilize sustainable -- and financial delivered plans, have remainder uncertainty. for consistently we same economic and we approach enhancing respect in have will pipeline With even in working to that capital acquisition value next on past, delever committed acquisitions X our remain currently outstanding We the shareholder growth the By the focused months the sit We we are and we on close by as XXXX expect doing consistent beyond. efficiency we XX our operational the not and of of debt this, we few acquisitions repayment have expect to we excellence. thus, to months in in do through the completed integrating EBITDA. and today, that the growing any last and

our organizational have Chief development. to year-to-date experience month, pursue. we who There long-term matters. how to me of joined of we this the choice. and outstanding we newly building our Danielle personally colleagues CSWI's often, no to welcomed being employee-centric and be this demonstrates culture value. shareholder Earlier good Danielle track continue succeed at other will and team creation growth results capital your say demonstrated a But recognizes Officer our is commitment is employer global delivering our Garde, will stewards we an she leadership realized option. these must, distinctive teams a and in this My affirms of created goal succeed. role The and CSWI, intention CSWI, extensive Danielle of dedicated brings that of executive we hear People Achieving record role. to at

company. who to collectively our for well X% as continued approximately stock colleagues at as interest shareholders close our As through of of of plan company own my our always, here our employee thanking like CSWI, and of all I'd in ownership all by your support

take we're With to now questions. that, operator, ready

Operator

Instructions] is [Operator from from question first Jon CJS Tanwanteng The Securities.

Jon Tanwanteng

areas your you're talk little strength weakness. of where about where and My continuing bit of markets and each areas could demand of see you're a starting is, first one in more you see maybe end to to

a your contracted Maybe is mentioned -- truly that Just is reductions You more there Or is color helpful. little on it in inventory based that Solutions be management? business. sell-through? would inventory

James Perry

Yes, Jon. with in as let I'll question. but Joe the well, start I'll

we're where Looking Obviously, Contractor to a see good across you demand. segments, entering continue Solutions, seasonality lighter. of are at we our little things kind look bit the

So bit the normal months, seeing of destocking we see out there. a next little that of would couple it's that. We're

supply is everybody confident think about more I feeling the chain.

talk in of hear We're the So about same distributors we bit see mode. and a little destocking.

We ourselves. confidence the getting chain, more of are a little supply We in little feel here destocking a with quickly. Obviously, things more better see about bit that.

working management. As well. Joe carrying higher cost as always prudent interest mentioned, we have But higher a there's with capital rates,

that. watching to So of that and an important goods intense carefully. we've got on we're us Higher is cost carrying meaningful, so focus

stock. on in we come do in of So the in weeks inventory months anticipate bit kind seeing a on down terms days hand coming we of call what

to stock to frame, as get obviously, that Now kind busy up. you back time need the going March of into you're season,

plan So we have carefully. to really

on for be they our we're East water. a of in few the get from in be to things takes to to to already It Some need March Far selling is months the sell. to over going where what facilities

So it's but lot with a a spent moving our of we've target, time teams.

dynamics, be product take telling team the product, need back what from, what at And fact, where of They're yesterday, doing as inventory. ordered. easy understanding we just or doing customers one that just inventory good going Contractor down up. our and are it to say, a managing talking all it look them, analysis. number In job the product-by-product good a comes business might bring product are It's to were team. that let's Solutions it's is with we job a about But by big demand

big orders, We door they ago one had the some that days in back got example, it and product got of for a shipment almost out few a immediately. right

happen can you're that products. So on when waiting

managing we're carefully. So that

a want sale. always margins said, we've to As especially we miss have, we the don't segment, that with in that

but don't to we much. So you need we carry that extra carry more as a little inventory, have confidence

demand, continue In to good demand. we terms see of

we little construction new coming mentioned, is As obviously, bit. a down residential

indirect that, our it us. other across not on that an impact segments goes watch when has installation units. we sell new do We're parent Kind maintenance. obviously, selling So into the in more the looking of we a But than briefly. you

doing inventory comes continue want segments, from with We're well. other each where down the segments job I inventory to other to I point and domestic inventory and The of to most sourcing. work kind good capital out, of a told management all the leaders other. as we are business and But can. Joe working And have going

sense of little So that. better a you have

that that on shipping not reliant as You're time overseas the and takes.

In terms to Jon. see Reliability very in strong sector see energy Specialized we we continue good this really continue board, industrial to The well. segment. rail demand do Solutions, the The to the across demand of there, continues

So Mark's our terms of pricing customers of team continue is those a of and things, leadership right that the under and right meeting reacting the and on products focusing terms kind very do to on hard well job. working in demand good in

Commercial Engineered are, hold. on rates interest putting with has where put Building Construction you they slowed -- imagine some on would projects are some, down Solutions, are

be bookings a So very strong, and while geographic. continued I'll some very it's to [Sunbelt] areas. see little be The bit pocket of say biddings starting that to in weakness you're of strong. continues have to

You'll have other as quite strong. pockets aren't that

haven't our a Joe I'll because We backlog, everything the will Joe those say yes. talked And answer of are ground? But And levels. this, out we projects a as the specifically record said question, I've mentioned, let for however is asked the if in I -- I while. and and is

in those you at very quarters little take possibly Jon, ground. back that could high-quality I don't are little that done. we Joe, around what see Timing a a few those before projects. good, shift but of backlog, that as projects to revenue through. we're it's projects important So a while. are It's of just we a risk our things know, lot while That come there to missed. getting the come through. of booked the could bit, the are But those through projects And have a terms in in flows out end of

Joseph Armes

change backlog James I very very business describing EPS, months job for did thing our which has now, still X a of a level, and no there. other in on say time our and March products, is we segments. maintained work to have would good only months, remains at we on more or Contractor is maybe the consistent that Solutions a has frame. than backlog And similar their normal, SRS but But The been had they've a some that shortages have larger is backlog than last the But down bit products. some. a in little really X able focus all in in want inventory X so we backlog healthy,

inventory, as for the said, inventory a HVAC we'll levels and bit sale levels high get to by season those a rightsizing miss of When inventory us, the the March again, both basis the we've customer get satisfaction, James right sized. because be on going we're subtraction for that's the in don't to to restocking, slower focused key got sure a into and season addition season time of it's to an and key the right on right little working we that so diligently, begins if right inventory making the highly March, very

Jon Tanwanteng

uncertainty question little Or much given just are my How XX% is a bit. EBITDA expectations? of maybe lot season. there in that seeing how others, see you you of in XX% maybe mentioned to into when dovetails areas, going the cushion restocking especially some in quarter Joe, loaded confident those next some that slowing of kind That you margins. growth, March the is the end a you're more since be than

Joseph Armes

quarter. about But to concerned That's were in started Yes. feel about orders from we against are an Traditionally, good last we for month the important big That's Jon. those where increase we that, a always It's increase an year. where from we March. and and the it's orders. execute us, get

we're sober those so pretty about things. And

their -- We with we've for X And We lot feel feel We months. we've segments, really spent we like so We completed those X and do for visibility next just I months. the numbers. all got got businesses business think the good a about good our teams those good a time. next real midyear X handle have of a reviews. on

And about good expectations. so those we feel

Jon Tanwanteng

underlying a that The you then out there expenses interest -- maybe Or Was just just in a intra-quarter any base you increasing? bit or were And the housekeeping drawdown? question. call the was little expense one Number there higher. didn't number quarter that two, M&A And one. because bigger back rate completely at was

James Perry

you out. basis jump glad Yes, obviously, rates I'm had and pointed that XX yesterday interest rising you expense, another of points.

that see You'll again.

in we be to are on continue AC Cover and quarter-over-quarter, we're We Guard up with we rate So to a acquisition but I was factor quarter, sure made quarter. our a variable in down of rates because the GUARD were early want those the in little revolver. the

kind of we that higher the So debt at for down that paid rate. took interest for whole that quarter we that

that's And the think borrowed up run a after consider that last is. you saw bit it So what acquisition end. you need quarter this Falcon the we little more, going right for quarter, and rates rate to I

number to little interest a higher little leverage going see higher a you you're as a gave we bit, up rate, debt, So so a little

see have opportunity remarks, a when first as we can However, now, do to little offset Timing bit. will delevering it, right dictate Joe's we in we that. the said we

Some didn't expense. of affect growth, that's that EBITDA interest

debt to coming we some of not that the that Some sure. months, intend happens, when but in is pay down

and I going. interest rates up up think expectation. reasonable interest our expense is So going a

to don't enough wasn't the adjustments AC Falcon if M&A Cover during quarter. did to the in we we which when about we not $X.XX on Jon, about really try done It expenses to. on $XXX,XXX, the quarter the acquisition we had big to the had We $X.XX, like Guard, earnings Cover terms about we call need work date TRUaire. was It Guard, is that for we did didn't costs, In adjust of out. yes, do

model you So helps bit. little hopefully, that a

Operator

The next Julio from is question from Sidoti. Romero

Julio Romero

SRS end the the are different On markets trending? segment,

James Perry

Yes.

seeing we're very board. energy think market end The remains market positive I That's to important strong. very demand the us. across

the With prices where are, for counts the where important that's a with market they are, they very and rig us. oil

do we rail to good, industrial look as think important for and continue at I that's shipments and be an well, to markets the continue us. markets market

I think if Joe, good look you across we're the seeing demand. board,

we few executive mentioned, with with group in overseas too. mid-year Joe hours the of had a their week, and us a and As had reviews this fact, lot that last optimism. for really that has had That room and team this we big in really year conference saw that's a well, and team, going week,

a demand, we're is So global us big for market that and very but domestically, driver important. seeing energy

Julio Romero

And CS that guys segment, seeing? can on volume are you the guys about the trends you talk

Joseph Armes

I'm ask sorry, again, Stefan?

Julio Romero

volume talk you about trends the CS on segment? Can

Joseph Armes

year, the terms like It slowdown In just But bit quarter-over-quarter. this [hair] potentially. of we volume had demand. That strong quarter, last was trends, indicate quarter, a a of hot would said we're just summer. a a really last you down pretty

home. still were There at COVID. working were folks You a of lot still through

have that You this year. of less

so So volumes down percentages. ever low quarter, are single-digit again slightly this

So we about still good that. feel

this the was in general volume growth which the being that initiatives. We've of beginning last at obviously initiatives, several year-over-year had pricing the acquisitions, quarter. pricing last the we helps one So and had

so basis, tough down to tailwind pricing comps so on from have Again, last hung a volumes So some you had ever in speak, pretty slightly. you're same-store there. there sales against so the year But of working well.

Julio Romero

you Now recent what Falcon, on the to guys within segment, AC rationale Guard, them? Cover your attracted acquisitions CS talk and you and can strategic GUARD about the behind

Joseph Armes

priority that say markets have plumbing solutions, and said M&A. broadly, been end Well, our has highest we Stefan, let HVAC me Contractor for

these the those Falcon I us. to for and but consistent others and themes, connoted decade. for which growth customer, conversations. gross weren't And in started about Really, margins be others opportunity those Institutionally the here, acquisition -- literally acquisition pursuing it's should been And opportunities and James arose. so with we've a value

able we of acquire through lot we a broader put like to so that products distribution, and distribution. are can And our provide the

is And pretty so opportunity us accretive the for significant.

that products our oftentimes from And last bring you get move saw. a attractive And valuations, is Acquisition very attractive these so high-quality recipe dramatic and great I'll then in to us, distribution very that very thing valuations the were benefit we're multiples deals fashion, broader us. to customers is would as consummated. but say pleased these value for for don't significant

Julio Romero

give businesses? you could please revenue X organic trends like those historical us So for

James Perry

acquisitions, good distribution only past growth. accelerating to is about, through Joe as being is the nice they've able our think was Not put they've what the had had in we products But growth important, channel, talked really their a see they opportunity for they us because got distribution, acquisitions. to opportunity really had bit we've able do. organic what regional growth very here regional, were to some given a little nationwide, some the nice but And those from

Operator

Jon from next Securities. Tanwanteng is follow-up CJS a question The from

Jon Tanwanteng

the unintended compare the on going a is SRS guess, SPR is forward, peak percentage wanted And second, is where forever. then there. today? from what how And just or that down of first you keep OPEC cutting business, prior production, trough revenue drill levels the there a to But to that energy I within all? releasing bit it of expectation I as can't assuming does

of that us what think forward. business Just like looks help going

Joseph Armes

on really ago whole has get is think not say that demand math to that it few but anywhere fewer a the that it is would changed. know Yes, is I close you've certainly, lows. used Jon, rigs multiple the certainly, may both proxy like stronger. domestically years, a we don't now, been -- I'll count, there. But defer of meaningful James, But was great a which kind providing points and never seen to get rig data even There's and internationally, here where from we've don't the and and being say increase to. I I I could market end would wells used think we for strong, those

And on very doesn't other that our always sync so, positive with markets. end we're It business. move in

is this time, moving in sync. At it

increased talked swing the for profitability. the absorption. that said. markets increased market as overall from and And important we've makes volumes the uptrend, the our than end here about, in are contributing as others. JV a volumes difference But on is also our -- business of And the nicely the an are James higher for of And that's Shell cost of so bit fixed part us. a overhead Energy the that's really all that little

And matters there. volume really so

in so we that see results to continue market, for And strength all as reasons. those outstanding out see continued we business expect of to energy of the

Jon Tanwanteng

the year revenue of a from Could you expected out on or break half X in EBITDA basis? this contribution the acquisitions the second

James Perry

Yes. that now. We're not providing

through we inorganic we'll quarter, each As you the go give growth.

$XX think in you second been part of -- since that, it quarter, us we was revenue. obviously which of a has have Shoemaker was mid-December. million last said the I with

Cover contribution. the GUARD in said, came AC they was a bit. I so acquisitions, early but And then to These as $XX million added it were little of quarter, In smaller on in and the see Guard you're going side. total

growth, back to You're be see can what able contribution. go inorganic immediate and accretion the through going you'll quarter, as give to we'll you see going to and and is. we each look But you're see revenue that

and that. March enter remind we'll inorganic the we of you won't February, anymore, quarter, January, be Shoemaker As

but of along, that. go we're sense to So of that as prepared get good a you'll forma give pro a not we

first Joe's strength margin XX% to year. revenue that. growth say, to kind guidance, will and the EBITDA the the I The year XX% half of to But so the of contribute in for of the and speak, acquisitions for and comment raise

us tells obviously to these are very are in acquisitions accretive, and contribute full growth that you context. So fiscal year positive for that

Jon Tanwanteng

on and just supply chain a inflation and And question shipments.

quarter close or well, with you freight forward? gap as seeing X, or just and supply you down miss inputs? cost going any to number did that one, Just whether are expecting you And improving, it's are the coming in that shipments other components

James Perry

Yes. I'd things materials question, come Good the Jon. raw say a and not dramatically. down little, those have

As to the that's on the time earlier, question that important with most has water, and us down. I come especially, mentioned what's

weeks You before. were XX

longer, the it's going case. Coast, But The always quickly. to XX% on East and from depending that's is little things getting Houston be the a Now little or West more we X% you're obviously to anywhere as going things ship you're ports which to. a to Coast

the dramatically. freight I'm saw in decline seen a a for container sure We plus freight you've while. rates XX,XXX rates

I parts. mid low Now then Houston into coming from a kind you you further that obviously, and Shanghai the to as single and of the and Beach Coast. digits. to states, And kind as the Long is published bit West higher the things in Beach the or around China you're rate, get other other seeing ports, to in What Vietnam mentioned you're little of earlier, thousands we're see Long

though, a see It's we know to X-month for tees we've into a it going at not is X then it's time the and the time even that several revenue. a to when something flow months a is boat UC. dollars, a it's but product. you in our water, thousand if this published on your few investment in that about So cost reminder X blended before, rate question time the -- rate, talked we depending on straight I X, through important, months to up Jon, turn or on our the community What's because not X, lag months, great the say, you put the maybe warehouse

coming rates those in the last So months. couple of down dramatically

about of down point, tailwind fourth costs to us of here quarter into our see while freight EBITDA quarter, kind You're from seeing it in coming a XX% which, start coming that and headline going when we again, see to this but down, flow through this margin that you because that now takes week. to rates gave fiscal end Joe's CNBC confidence

Operator

over That remarks. the I closing last like to would the question. for any back [indiscernible] conference turn was to

Joseph Armes

for Maura. call soon. everyone, you, forward Take Thank care. joining conference Thank talking to you Great. again our to look for today. us We you,

Operator

now has attending today's Thank concluded. for presentation. conference you The

You now disconnect. may

CSW Industrials (CSWI) 3 Nov 222023 Q2 Earnings call transcript