Cover
Cover - shares | 9 Months Ended | |
Dec. 31, 2022 | Jan. 30, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2022 | |
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 $0.01 per share | |
Trading Symbol | CSWI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,474,925 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001624794 | |
Current Fiscal Year End Date | --03-31 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Income Statement [Abstract] | ||||||
Revenues, net | $ 171,093 | $ 136,286 | [1] | $ 562,219 | $ 453,136 | [1] |
Cost of revenues | (105,295) | (84,943) | [1] | (329,349) | (269,516) | [1] |
Gross profit | 65,798 | 51,343 | [1] | 232,870 | 183,620 | [1] |
Selling, general and administrative expenses | (42,686) | (37,894) | [1] | (133,568) | (115,177) | [1] |
Operating income | 23,112 | 13,449 | [1] | 99,302 | 68,443 | [1] |
Interest expense, net | (4,200) | (1,184) | [1] | (9,090) | (4,151) | [1] |
Other expense, net | (737) | (127) | [1] | (529) | (432) | [1] |
Income before income taxes | 18,175 | 12,138 | [1] | 89,683 | 63,860 | [1] |
Provision for income taxes | (2,676) | (2,388) | [1] | (20,232) | (15,066) | [1] |
Net income | 15,499 | 9,750 | [2] | 69,451 | 48,794 | [2],[3] |
Less: Loss (income) attributable to redeemable noncontrolling interest | 100 | (444) | [1] | (79) | (855) | [1] |
Net income attributable to CSW Industrials, Inc. | $ 15,599 | $ 9,306 | [4] | $ 69,372 | $ 47,939 | [1] |
Net income per share attributable to CSW Industrials, Inc. | ||||||
Basic (in USD per share) | $ 1.01 | $ 0.59 | [1] | $ 4.47 | $ 3.04 | [1] |
Diluted (in USD per share) | $ 1.01 | $ 0.59 | [1] | $ 4.46 | $ 3.03 | [1] |
Weighted average number of shares outstanding: | ||||||
Basic (in shares) | 15,476 | 15,794 | [1] | 15,520 | 15,752 | [1] |
Diluted (in shares) | 15,512 | 15,844 | [1] | 15,554 | 15,809 | [1] |
[1]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K.[2]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K.[3]*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K[4]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | [1] | Dec. 31, 2022 | Dec. 31, 2021 | [1] | |
Statement of Comprehensive Income [Abstract] | ||||||
Net income | $ 15,499 | $ 9,750 | $ 69,451 | $ 48,794 | [2] | |
Other comprehensive income (loss): | ||||||
Foreign currency translation adjustments | 1,606 | (71) | (4,076) | (113) | ||
Cash flow hedging activity, net of taxes of $10, $(25), $(152) and $(19), respectively | (39) | 93 | 570 | 71 | ||
Pension and other postretirement effects, net of taxes of $(35), $14, $(39) and $5, respectively | 133 | (52) | 146 | (20) | ||
Other comprehensive gain (loss) | 1,700 | (30) | (3,360) | (62) | ||
Comprehensive income | 17,199 | 9,720 | 66,091 | 48,732 | ||
Less: Comprehensive loss (income) attributable to redeemable noncontrolling interest | 100 | (444) | (79) | (855) | ||
Comprehensive income attributable to CSW Industrials, Inc. | $ 17,299 | $ 9,276 | $ 66,012 | $ 47,877 | ||
[1]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K.[2]*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Cash flow hedging activity, taxes | $ 10 | $ (152) | $ (25) | $ (19) |
Pension and other postretirement effect, taxes | $ (35) | $ (39) | $ 14 | $ 5 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 14,721 | $ 16,619 |
Accounts receivable, net of allowance for expected credit losses of $1,273 and $1,177, respectively | 103,213 | 122,804 |
Inventories, net | 177,909 | 150,114 |
Prepaid expenses and other current assets | 26,494 | 10,610 |
Total current assets | 322,337 | 300,147 |
Property, plant and equipment, net of accumulated depreciation of $89,078 and $80,393, respectively | 85,814 | 87,032 |
Goodwill | 243,452 | 224,658 |
Intangible assets, net | 322,268 | 300,837 |
Other assets | 73,801 | 82,686 |
Total assets | 1,047,672 | 995,360 |
Current liabilities: | ||
Accounts payable | 42,031 | 47,836 |
Accrued and other current liabilities | 66,784 | 69,005 |
Current portion of long-term debt | 561 | 561 |
Total current liabilities | 109,376 | 117,402 |
Long-term debt | 275,973 | 252,214 |
Retirement benefits payable | 1,307 | 1,027 |
Other long-term liabilities | 144,844 | 140,306 |
Total liabilities | 531,500 | 510,949 |
Commitments and contingencies (See Note 14) | ||
Redeemable noncontrolling interest | 17,404 | 15,325 |
Equity: | ||
Common shares | 163 | 162 |
Preferred shares | 0 | 0 |
Additional paid-in capital | 120,860 | 112,924 |
Treasury shares, at cost (902 and 576 shares, respectively) | (82,729) | (46,448) |
Retained earnings | 468,908 | 407,522 |
Accumulated other comprehensive loss | (8,434) | (5,074) |
Total equity | 498,768 | 469,086 |
Total liabilities, redeemable noncontrolling interest and equity | $ 1,047,672 | $ 995,360 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for expected credit losses | $ 1,273 | $ 1,177 |
Property, plant and equipment, accumulated depreciation | $ 89,078 | $ 80,393 |
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) | 16,376,000 | 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, at cost (in shares) | 902,000 | 576,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) - 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, 2021 | $ 415,450 | [1] | $ 161 | $ (34,075) | $ 104,690 | $ 350,670 | [1] | $ (5,996) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Share-based compensation | 1,888 | [1] | 1,888 | ||||||
Stock activity under stock plans | (3,169) | [1] | (3,168) | (1) | |||||
Reissuance of treasury shares | 2,311 | [1] | 1,375 | 936 | |||||
Net income | [1] | 20,461 | 20,461 | ||||||
Dividends | (2,358) | [1] | 19 | (2,377) | [1] | ||||
Other comprehensive income, net of tax | 387 | [1] | 387 | ||||||
Balance at end of period at Jun. 30, 2021 | 434,970 | [1] | 161 | (35,868) | 107,532 | 368,754 | [1] | (5,609) | |
Balance at beginning of period at Mar. 31, 2021 | 415,450 | [1] | 161 | (34,075) | 104,690 | 350,670 | [1] | (5,996) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | [2] | 47,939 | |||||||
Other comprehensive income, net of tax | [3] | (62) | |||||||
Balance at end of period at Dec. 31, 2021 | 463,758 | [1] | 162 | (32,604) | 110,791 | 391,467 | [1] | (6,058) | |
Balance at beginning of period at Jun. 30, 2021 | 434,970 | [1] | 161 | (35,868) | 107,532 | 368,754 | [1] | (5,609) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Share-based compensation | 2,049 | [1] | 2,049 | ||||||
Stock activity under stock plans | (13) | [1] | (13) | ||||||
Reissuance of treasury shares | 574 | [1] | 1,568 | (994) | |||||
Net income | [1] | 18,171 | 18,171 | ||||||
Dividends | (2,360) | [1] | 18 | (2,378) | [1] | ||||
Other comprehensive income, net of tax | (419) | [1] | (419) | ||||||
Balance at end of period at Sep. 30, 2021 | 452,972 | [1] | 161 | (34,313) | 108,605 | 384,547 | [1] | (6,028) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Share-based compensation | 2,287 | [1] | 2,287 | ||||||
Stock activity under stock plans | (1,697) | [1] | 1 | (1,698) | |||||
Reissuance of treasury shares | 3,765 | [1] | 3,884 | (119) | |||||
Repurchase of common shares | (477) | (477) | |||||||
Net income | [1] | 9,306 | 9,306 | ||||||
Dividends | (2,368) | [1] | 18 | (2,386) | [1] | ||||
Other comprehensive income, net of tax | (30) | [3] | (30) | ||||||
Balance at end of period at Dec. 31, 2021 | 463,758 | [1] | 162 | (32,604) | 110,791 | 391,467 | [1] | (6,058) | |
Balance at beginning 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 | 2,284 | 2,284 | |||||||
Stock activity under stock plans | (2,002) | (2,002) | |||||||
Reissuance of treasury shares | 3,091 | 2,016 | 1,075 | ||||||
Repurchase of common shares | (30,491) | (30,491) | |||||||
Net income | 29,443 | 29,443 | |||||||
Dividends | (2,669) | 22 | (2,691) | ||||||
Other comprehensive income, net of tax | (2,022) | (2,022) | |||||||
Balance at end of period at Jun. 30, 2022 | 466,720 | 162 | (76,925) | 116,305 | 434,274 | (7,096) | |||
Balance at beginning of period at Mar. 31, 2022 | 469,086 | 162 | (46,448) | 112,924 | 407,522 | (5,074) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 69,372 | ||||||||
Other comprehensive income, net of tax | (3,360) | ||||||||
Balance at end of period at Dec. 31, 2022 | 498,768 | 163 | (82,729) | 120,860 | 468,908 | (8,434) | |||
Balance at beginning of period at Jun. 30, 2022 | 466,720 | 162 | (76,925) | 116,305 | 434,274 | (7,096) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Share-based compensation | 2,447 | 2,447 | |||||||
Stock activity under stock plans | (11) | (11) | |||||||
Reissuance of treasury shares | 273 | 770 | (497) | ||||||
Repurchase of common shares | (5,064) | (5,064) | |||||||
Net income | 24,331 | 24,331 | |||||||
Dividends | (2,625) | 18 | (2,643) | ||||||
Other comprehensive income, net of tax | (3,038) | (3,038) | |||||||
Balance at end of period at Sep. 30, 2022 | 483,033 | 162 | (81,230) | 118,273 | 455,962 | (10,134) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Share-based compensation | 2,566 | 2,566 | |||||||
Stock activity under stock plans | (1,398) | 1 | (1,399) | ||||||
Repurchase of common shares | (100) | (100) | |||||||
Net income | 15,599 | 15,599 | |||||||
Dividends | (2,632) | 21 | (2,653) | ||||||
Other comprehensive income, net of tax | 1,700 | 1,700 | |||||||
Balance at end of period at Dec. 31, 2022 | $ 498,768 | $ 163 | $ (82,729) | $ 120,860 | $ 468,908 | $ (8,434) | |||
[1]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K.[2]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K.[3]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Cash flows from operating activities: | |||
Net income | $ 69,451 | $ 48,794 | [1],[2] |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 9,463 | 8,731 | [1] |
Amortization of intangible and other assets | 16,842 | 19,765 | [1] |
Provision for inventory reserves | 1,878 | 1,608 | [1] |
Provision for doubtful accounts | 1,613 | 1,146 | [1] |
Share-based and other executive compensation | 7,296 | 6,223 | [1] |
Net loss (gain) on disposals of property, plant and equipment | 48 | (9) | [1] |
Net pension benefit | 141 | 269 | [1] |
Impairment of assets | 156 | 0 | |
Net deferred taxes | (1,094) | 1,757 | [1] |
Changes in operating assets and liabilities: | |||
Accounts receivable | 21,963 | 5,621 | [1] |
Inventories | (28,270) | (33,268) | [1] |
Prepaid expenses and other current assets | (8,343) | (4,827) | [1] |
Other assets | 185 | 378 | [1] |
Accounts payable and other current liabilities | (7,348) | 12,032 | [1] |
Retirement benefits payable and other liabilities | 91 | 1,252 | [1] |
Net cash provided by operating activities | 84,072 | 69,472 | [1] |
Cash flows from investing activities: | |||
Capital expenditures | (8,268) | (8,356) | [1] |
Proceeds from sale of assets | 70 | 21 | [1] |
Cash paid for acquisitions | (55,524) | (36,427) | [1] |
Net cash used in investing activities | (63,722) | (44,762) | [1] |
Cash flows from financing activities: | |||
Borrowings on line of credit | 122,777 | 52,513 | [1] |
Repayments of line of credit and term loan | (99,018) | (63,934) | [1] |
Payments of deferred loan costs | (662) | (2,327) | [1] |
Purchase of treasury shares | (39,064) | (5,356) | [1] |
Proceeds from stock option activity | 272 | 1,326 | [1] |
Proceeds from acquisition of redeemable noncontrolling interest shareholder | 2,000 | 6,293 | [1] |
Dividends | (7,924) | (7,084) | [1] |
Net cash used in financing activities | (21,619) | (18,569) | [1] |
Effect of exchange rate changes on cash and equivalents | (629) | (45) | [1] |
Net change in cash and cash equivalents | (1,898) | 6,096 | [1] |
Cash and cash equivalents, beginning of period | 16,619 | 10,088 | [1] |
Cash and cash equivalents, end of period | $ 14,721 | $ 16,184 | [1] |
[1]*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K[2]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
ORGANIZATION AND OPERATIONS AND
ORGANIZATION AND OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES | 9 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES | ORGANIZATION AND OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES CSW Industrials, Inc. (“CSWI,” “we,” “our” or “us”) is a diversified industrial growth company with a strategic focus on providing niche, value-added products in the end markets we serve. Our products include mechanical products for heating, ventilation, air conditioning and refrigeration ("HVAC/R"), plumbing products, grilles, registers and diffusers ("GRD"), building safety solutions and high-performance specialty lubricants and sealants. End markets that we serve include HVAC/R, architecturally-specified building products, plumbing, energy, rail, mining and general industrial. Our manufacturing operations are concentrated in the United States (“U.S.”), Canada and Vietnam, and we have distribution operations in the U.S., Australia, Canada and the United Kingdom (“U.K.”). Our products are sold directly to end users or through designated channels in over 100 countries around the world, primarily including Australia, Canada, the U.K. and the U.S. Many of our products are used to protect the capital assets of our customers that are expensive to repair or replace and are critical to their operations. We have a source of recurring revenue from the maintenance, repair, overhaul and consumable nature of many of our products. We also provide some custom engineered products that strengthen and enhance our customer relationships. The reputation of our product portfolio is built on more than 100 well-respected brand names, such as RectorSeal No. 5®, Kopr-Kote®, KATS Coatings®, Safe-T-Switch®, Air Sentry®, Big Red®, Cover Guard TM , AC Guard TM , Deacon®, Leak Freeze®, Falcon Stainless, Inc.®, Greco®, TRUaire® and Shoemaker Manufacturing®. During the three and nine months of our prior fiscal year ended December 31, 2021, the COVID-19 pandemic had direct and indirect impacts on our operations including reduced production activities at our Vietnam operations, material and freight cost inflation, supply chain disruptions and freight delays, driven by numerous factors including government actions, labor supply shortages and recovering demand. In addition, COVID-19 and its indirect effects also contributed to increased demand in certain parts of our business, including the HVAC/R end market. During the three and nine months of our current fiscal year ended December 31, 2022, 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. 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, including, but not limited to, potential subsequent waves of COVID-19 infection or potential new variants, the effectiveness and adoption of COVID-19 vaccines and therapeutics, its impact on our employees, customers and suppliers, the broader implications of the macro-economic recovery on our business, and the extent to which normal economic and operating conditions are impacted. Therefore, 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 impacts. 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. Additionally, during the quarter ended December 31, 2022, 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 condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2022 (“Quarterly 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 condensed 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 ("VIE") 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. The condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of CSWI’s financial position as of December 31, 2022, and the results of operations for the three and nine months periods ended December 31, 2022 and 2021. All adjustments are of a normal, recurring nature. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in CSWI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (the “Annual Report”). Accounting Policies We have consistently applied the accounting policies described in our Annual Report in preparing these condensed consolidated financial statements. 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 August 16, 2022, The Inflation Reduction Act of 2022 ("IRA") was signed into law effective in taxable years beginning after December 31, 2022. The bill was meant to address the high inflation rate in the U.S. through various climate, energy, healthcare, and other incentives. These incentives are meant to be paid for by the tax provisions included in the IRA, such as a new fifteen percent corporate minimum tax, a one percent new excise tax on stock buybacks, additional IRS funding to improve taxpayer compliance, and others. At this time, none of the IRA tax provisions are expected to have a material impact to the Company's fiscal 2023 tax provision. The Company will continue to monitor for updates to the Company's business along with guidance issued with respect to the IRA to determine whether any adjustments are needed to the Company's tax provision in future periods. 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 9, 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 7, the Company’s Second Amendment includes a transition clause in the event LIBOR is discontinued, as such, we do not expect the transition of LIBOR to 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. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS 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 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 $2.0 million based on Shoemaker meeting a defined financial target during the quarter ended March 31, 2022. The cash consideration was funded with cash on hand and borrowings under our existing Revolving Credit Facility (as defined in note 7). 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 contingent consideration amount of $2.0 million was remitted to the sellers due to the performance obligation being met. The Shoemaker 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 $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 the assets acquired and liabilities assumed and the related allocation during the three months ended December 31, 2022. Goodwill and all intangible assets, including customer lists, trademarks, noncompete agreements and backlog 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 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 footnote 7). CG and ACG product lines further expand Contractor Solutions’ offering of leading HVAC/R accessories. 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 end use 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 patent 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, including customer lists, trademarks and patent 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. 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 footnote 7). Falcon products are well-known among the professional trades for supplying enhanced water flow delivery and increased customer satisfaction and supplement our Contractor Solutions segment's existing product portfolio. The Falcon 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 $18.2 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 end use 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 ($9.1 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. |
CONSOLIDATION OF VARIABLE INTER
CONSOLIDATION OF VARIABLE INTEREST ENTITIES AND REDEEMABLE NONCONTROLLING INTEREST | 9 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
CONSOLIDATION OF VARIABLE INTEREST ENTITIES 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 the 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 most significant activities due to its ability to direct the manufacturing decisions of the Whitmore JV. Whitmore JV's total net assets are presented below (in thousands): December 31, 2022 Cash $ 4,128 Accounts receivable, net 6,783 Inventories, net 2,990 Prepaid expenses and other current assets 202 Property, plant and equipment, net 10,638 Intangible assets, net 6,681 Other assets 76 Total assets $ 31,498 Accounts payable $ 2,980 Accrued and other current liabilities 1,798 Other long-term liabilities 5 Total liabilities $ 4,783 During the three and nine months ended December 31, 2022, the Whitmore JV generated net (loss) income of $(0.2) million and $0.2 million, respectively. 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 nine-month period ended December 31, 2022 were as follows (in thousands): Balance at March 31, 2022 $ 15,325 Net income attributable to redeemable noncontrolling interest 79 Contributions from noncontrolling interest 2,000 Balance at December 31, 2022 $ 17,404 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories consist of the following (in thousands): December 31, 2022 March 31, 2022 Raw materials and supplies $ 51,303 $ 46,136 Work in process 4,935 7,471 Finished goods 126,921 100,792 Total inventories 183,159 154,399 Less: Obsolescence reserve (5,250) (4,285) Inventories, net $ 177,909 $ 150,114 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The changes in the carrying amount of goodwill as of December 31, 2022 and March 31, 2022 were as follows (in thousands): Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Balance at March 31, 2022 $ 190,152 $ 25,007 $ 9,499 $ 224,658 Falcon acquisition 18,196 — — 18,196 CG and ACG acquisitions 1,686 — — 1,686 Shoemaker acquisition 6 — — 6 Currency translation (82) (728) (284) (1,094) Balance at December 31, 2022 $ 209,958 $ 24,279 $ 9,215 $ 243,452 The following table provides information about our intangible assets (in thousands, except years): December 31, 2022 March 31, 2022 Weighted Avg Life (Years) Ending Gross Amount Accumulated Amortization Ending Gross Amount Accumulated Amortization Finite-lived intangible assets: Patents 11 $ 11,223 $ (8,384) $ 9,417 $ (8,065) Customer lists and amortized trademarks 14 324,395 (76,463) 297,909 (61,368) Non-compete agreements 5 800 (230) 939 (258) Other 8 8,543 (4,064) 5,123 (3,957) $ 344,961 $ (89,141) $ 313,388 $ (73,648) Trade names and trademarks not being amortized: $ 66,448 $ — $ 61,097 $ — Amortization expenses for the three and nine months ended December 31, 2022 were $5.8 million and $16.4 million, respectively. Amortization expenses for the three and nine months ended December 31, 2021 were $5.2 million and $19.4 million (including the amortization of inventory purchase accounting adjustment of $3.9 million), respectively. The following table shows the estimated future amortization for intangible assets, as of December 31, 2022, for the remainder of the current fiscal year and the next four fiscal years ending March 31 (in thousands): 2023 $ 5,800 2024 20,662 2025 19,927 2026 19,321 2027 18,553 Thereafter 171,557 Total $ 255,820 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Refer to Note 6 to our consolidated financial statements included in our Annual Report for a description of the 2015 Equity and Incentive Compensation Plan (the "2015 Plan"). As of December 31, 2022, 421,174 shares were available for issuance under the 2015 Plan. We recorded share-based compensation expense as follows for the three and nine months ended December 31, 2022 and 2021 (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Share-based compensation expense $ 2,566 $ 2,287 $ 7,296 $ 6,223 Related income tax benefit (640) (549) (1,823) (1,494) Net share-based compensation expense $ 1,926 $ 1,738 $ 5,473 $ 4,729 Stock option activity was as follows: Nine Months Ended December 31, 2022 Number of Shares Weighted Average Price Remaining Contractual Life (Years) Aggregate Intrinsic Value (in Millions) Outstanding at April 1, 2022 10,800 $ 25.23 Exercised (10,800) 25.23 Outstanding at December 31, 2022 — $ — 0 $ — Exercisable at December 31, 2022 — $ — 0 $ — All compensation costs related to stock options were recognized prior to April 1, 2019. Restricted share activity was as follows: Nine Months Ended December 31, 2022 Number of Shares Weighted Average Grant Date Fair Value Outstanding at April 1, 2022: 228,331 $ 126.02 Granted 96,189 131.21 Vested (86,547) 85.68 Canceled (4,582) 109.91 Outstanding at December 31, 2022 233,391 $ 138.11 During the three months ended June 30, 2021, Joe Armes, the Company's Chairman, Chief Executive Officer and President, was awarded a series of long-term incentive awards with the purpose of retaining his service over a long-term period 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 December 31, 2022 and 2021 included 99,474 and 102,306 shares (at target), respectively, with performance-based vesting provisions, and a vesting range of 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 no awards with performance-based vesting provisions during the three months ended December 31, 2022 and 2021. We granted 21,087 and 47,845 awards with performance-based vesting provisions during the nine months ended December 31, 2022 and 2021, respectively, with a vesting range of 0%-200%. At December 31, 2022, we had unrecognized compensation cost related to unvested restricted shares of $21.9 million, which will be amortized into net income over the remaining weighted average vesting period of approximately 2.8 years. The total fair value of restricted shares granted during the three months ended December 31, 2022 and 2021 was $5.4 million and $4.6 million, respectively. The total fair value of restricted shares granted during the nine months ended December 31, 2022 and 2021 was $9.4 million and $27.7 million, respectively. The total fair value of restricted shares vested during the three months ended December 31, 2022 and 2021 was $4.7 million and $5.9 million, respectively. The total fair value of restricted shares vested during the nine months ended December 31, 2022 and 2021 was $10.1 million and $14.1 million, respectively. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Debt consists of the following (in thousands): December 31, 2022 March 31, 2022 Revolving Credit Facility, interest rate of 5.92% and 1.95% (a) $ 267,180 $ 243,000 Whitmore Term Loan, interest rate of 6.39% and 2.45% (a) (b) 9,354 9,775 Total debt 276,534 252,775 Less: Current portion (561) (561) Long-term debt $ 275,973 $ 252,214 (a) Represents the interest rate effective on December 31, 2022, and March 31, 2022, respectively. (b) Represents the unhedged interest rate according to the Whitmore Term Loan agreement. Revolving Credit Facility As discussed in Note 9 to our consolidated financial statements included in our Annual Report, prior to May 2021, we maintained a five-year, $300.0 million revolving credit facility agreement (the "First Credit Agreement"), which was scheduled to mature on September 15, 2022. Borrowings in the U.S. under this facility bore interest at a rate of prime plus between 0.25% to 1.5% or LIBOR plus between 1.25% to 2.5% based on our quarterly leverage ratio. We also paid a commitment fee between 0.15% to 0.4% for the unutilized portion of this facility. 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 million revolving credit facility that contains a $25 million sublimit for the issuance of letters of credit and a $10 million sublimit for swingline loans, with an additional $150 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 at least quarterly 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. Dol lars. The Company incurred a total of $0.7 million in underwriting fees, which are being amortized over the remaining term of the Second Credit Agreement. During the nine months ended December 31, 2022, we borrowed $122.8 million and repaid $98.6 million under the Revolving Credit Facility. As of December 31, 2022 and March 31, 2022, we had $267.2 million and $243.0 million, respectively, in our outstanding balance, which resulted in borrowing capacity under the Revolving Credit Facility of $232.8 million and $157.0 million, respectively. The financial covenants contained in the Second Credit Agreement 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 Second Credit Agreement. The Second Credit 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 Second Credit Agreement. Covenant compliance is tested quarterly, and we were in compliance with all covenants as of December 31, 2022. Whitmore Term Loan In July 2014, Whitmore secured a term loan (the "Whitmore Term Loan") related to a warehouse and corporate office building and the remodel of an existing manufacturing and research and development facility. The Whitmore Term Loan matures on July 31, 2029 and requires payments of $140,000 each quarter. Borrowings under this term loan bear interest at a rate of one month LIBOR plus 2.0%. As of December 31, 2022 and March 31, 2022, Whitmore Manufacturing had $9.4 million and $9.8 million, respectively, in principal amount outstanding under the Whitmore Term Loan. As described in Note 9, 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. On January 20, 2023, the Whitmore Term Loan was paid off using borrowings under our existing Revolving Credit Facility discussed above. |
LEASES
LEASES | 9 Months Ended |
Dec. 31, 2022 | |
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, s ome of which include escalation clauses and/or options to extend or terminate the leases. We do not currently have any financing lease arrangements. Three Months Ended December 31, Nine Months Ended December 31, (in thousands) 2022 2021 2022 2021 Components of Operating Lease Expenses Operating lease expense (a) $ 2,727 $ 2,472 $ 8,002 $ 7,302 Short-term lease expense 227 73 635 231 Total operating lease expense $ 2,954 $ 2,545 $ 8,637 $ 7,533 (a) Included in cost of revenues and selling, general and administrative expense (in thousands) December 31, 2022 March 31, 2022 Operating Lease Assets and Liabilities Right-of-use assets, net (b) $ 61,801 $ 67,076 Short-term lease liabilities (c) $ 9,764 $ 9,269 Long-term lease liabilities (c) 57,671 63,275 Total operating lease liabilities $ 67,435 $ 72,544 (b) Included in other assets (c) Included in accrued and other current liabilities and other long-term liabilities Nine Months Ended December 31, (in thousands) 2022 2021 Supplemental Cash Flow Cash paid for amounts included in the measurement of operating lease liabilities (a) $ 8,184 $ 7,205 Right-of-use assets obtained in exchange for new operating lease obligations 2,348 7,280 (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) 7.25 8.30 Weighted average discount rate 2.3 % 2.3 % Maturities of operating lease liabilities were as follows (in thousands): Year Ending March 31, 2023 (excluding the nine months ended December 31, 2022) $ 2,853 2024 11,071 2025 10,859 2026 10,510 2027 10,280 Thereafter 27,774 Total lease liabilities 73,347 Less: Imputed interest (5,912) Present value of lease liabilities $ 67,435 |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING | 9 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING | DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING As of December 31, 2022, we had an interest rate swap agreement to hedge exposure to variable interest rates on the Whitmore Term Loan, as discussed in Note 7. As of December 31, 2022 and March 31, 2022, we had $9.4 million and $9.8 million, respectively, of notional amount outstanding designated as an interest rate swap with third parties. The interest rate swap was highly effective. As of December 31, 2022, the derivative assets were reported in current derivative assets as the interest rate swap was terminated on January 9, 2023, which resulted a cash receipt of $0.2 million. The fair value of the interest rate swap designated as a hedging instrument is summarized below (in thousands): December 31, 2022 March 31, 2022 Current derivative asset $ 379 $ — Current derivative liabilities — 109 Non-current derivative liabilities — 233 The impact of changes in fair value of the interest rate swap is included in Note 16. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Dec. 31, 2022 | |
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 three and nine months ended December 31, 2022 and 2021 (amounts in thousands, except per share data): Three Months Ended Nine Months Ended 2022 2021* 2022 2021* Net income $ 15,499 $ 9,750 $ 69,451 $ 48,794 Less: Net loss (income) attributable to redeemable noncontrolling interest 100 (444) (79) (855) Net income attributable to CSW Industrials, Inc. shareholders $ 15,599 $ 9,306 $ 69,372 $ 47,939 Weighted average shares: Common stock 15,364 15,690 15,413 15,641 Participating securities 112 104 107 111 Denominator for basic earnings per common share 15,476 15,794 15,520 15,752 Potentially dilutive securities 36 49 34 57 Denominator for diluted earnings per common share 15,512 15,844 15,554 15,809 Net income per share attributable to CSW Industrials, Inc. shareholders: Basic $ 1.01 $ 0.59 $ 4.47 $ 3.04 Diluted $ 1.01 $ 0.59 $ 4.46 $ 3.03 *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 9 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Share Repurchase Program 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 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 prior 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 date of December 31, 2024, for completion of the current repurchase program; however, the program may be limited or terminated at any time at our discretion without notice. Through December 31, 2022, no shares have been repurchased under the current $100.0 million repurchase program. Under the prior $100.0 million repurchase program, 866 shares were repurchased during the three months ended December 31, 2022 for $0.1 million, and 4,175 shares were repurchased during the three months ended December 31, 2021 for $0.5 million. Under the prior $100.0 million repurchase program, 336,347 shares were repurchased during the nine months ended December 31, 2022 for $35.7 million, and 4,175 shares were repurchased during the nine months ended December 31, 2021 for $0.5 million. As of December 31, 2022, a total of 462,462 shares had been repurchased for an aggregate amount of $50.1 million under the prior $100.0 million program with no shares repurchased under the current $100.0 million program. Dividends On April 4, 2019, we commenced a quarterly dividend program at an inaugural rate of $0.135 per share. On April 15, 2021, we announced a quarterly dividend increase to $0.15 per share. On April 14, 2022, we announced another quarterly dividend increase to $0.17 per share. Total dividends of $2.6 million and $2.4 million were paid during the three months ended December 31, 2022 and 2021, respectively. Total dividends of $7.9 million and $7.1 million were paid during the nine months ended December 31, 2022 and 2021, respectively. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The fair value of the interest rate swap contract (as discussed in Note 9) is determined using Level 2 inputs. The carrying value of our debt (discussed in Note 7) approximates fair value as it bears interest at variable rates. The carrying amounts of other financial instruments (i.e., cash and cash equivalents, accounts receivable, net, accounts payable) approximate their fair values at December 31, 2022 and March 31, 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 | 9 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
RETIREMENT PLANS | RETIREMENT PLANS Refer to Note 15 to our consolidated financial statements included in our Annual Report for a description of our retirement and postretirement benefits. The following tables set forth the combined net pension benefit recognized in our condensed consolidated financial statements for all plans (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Service and other costs $ 15 $ 12 $ 45 $ 36 Interest cost on projected benefit obligation 36 34 107 101 Expected return on assets (11) (28) (34) (84) Amortization of net actuarial loss 11 18 32 53 Pension plan termination 453 $ — $ 453 $ — Net pension benefit $ 504 $ 36 $ 603 $ 106 The components of net periodic cost for retirement and postretirement benefits, other than service and other costs, are included in other expense, net in our condensed consolidated statements of income. |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIESFrom time to time, we are involved in various claims and legal actions that arise in the ordinary course of business. There are no matters pending, whether individually or in the aggregate, that we currently believe have a reasonable possibility of having a material impact to our business, consolidated financial position, results of operations or cash flows. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the three months ended December 31, 2022, we earned $18.2 million from operations before taxes and provided for income taxes of $2.7 million, resulting in an effective tax rate of 14.7%. For the nine months ended December 31, 2022, we earned $89.7 million from operations before taxes and provided for income taxes of $20.2 million, resulting in an effective tax rate of 22.6%. The provision for income taxes differed from the statutory rate for the three and nine months ended December 31, 2022 primarily due to a net decrease in the reserves for uncertain tax positions ("UTP"), excess tax deductions related to stock compensation, excess tax deductions related to Foreign-derived intangible income ("FDII") and the impact of US federal provision to return adjustment, partially offset by state income tax, net of federal benefit and executive compensation limitations. 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 seller 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 December 31, 2022, $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. For the three months ended December 31, 2021, we earned $12.1 million from operations before taxes and provided for income taxes of $2.4 million, resulting in an effective tax rate of 19.7%. For the nine months ended December 31, 2021, we earned $63.9 million from operations before taxes and provided for income taxes of $15.1 million, resulting in an effective tax rate of 23.6%. The provision for income taxes differed from the statutory rate for the three and nine months ended December 31, 2021 primarily due to excess tax deductions related to stock compensation, the impact of federal return to provision adjustments and deductions related to FDII, partially offset by state and foreign income taxes, executive compensation limitations, an increase in the reserve for UTP and foreign tax credits. One of our Canadian subsidiaries is currently under audit by the taxing authority for tax periods from March 31, 2017 to March 31, 2020. |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 9 Months Ended |
Dec. 31, 2022 | |
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): Three Months Ended December 31, 2022 2021 Currency translation adjustments: Balance at beginning of period $ (10,120) $ (4,436) Adjustments for foreign currency translation 1,606 (71) Balance at end of period $ (8,514) $ (4,507) Interest rate swaps: Balance at beginning of period $ 339 $ (825) Unrealized gains (losses), net of taxes of $10 and $(10), respectively (a) (39) 37 Reclassification of losses included in interest expense, net, net of taxes of $0 and $(15), respectively — 56 Other comprehensive income (loss) (39) 93 Balance at end of period $ 300 $ (732) Defined benefit plans: Balance at beginning of period $ (353) $ (767) Amortization of net gains (losses), net of taxes of $(35) and $14, respectively (b) 133 (52) Balance at end of period $ (220) $ (819) Nine Months Ended December 31, 2022 2021 Currency translation adjustments: Balance at beginning of period $ (4,438) $ (4,394) Adjustments for foreign currency translation (4,076) (113) Balance at end of period $ (8,514) $ (4,507) Interest rate swaps: Balance at beginning of period $ (270) $ (803) Unrealized gains (losses), net of taxes of $(137) and $27, respectively (a) 516 (100) Reclassification of losses included in interest expense, net, net of taxes of $(14) and $(45), respectively 54 171 Other comprehensive income 570 71 Balance at end of period $ 300 $ (732) Defined benefit plans: Balance at beginning of period $ (366) $ (799) Amortization of net gains (losses), net of taxes of $(39) and $5, respectively (b) 146 (20) Balance at end of period $ (220) $ (819) (a) Unrealized gain (loss) is reclassified to earnings as underlying cash interest payments are made. As discussed in Note 9, the interest rate swap was terminated on January 9, 2023, which resulted a gain of $0.1 million, net of deferred taxes, during the three months ended March 31, 2023. (b) Amortization of actuarial gains (losses) out of accumulated comprehensive loss are included in the computation of net periodic pension expense. See Note 13 for additional information. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 9 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION Refer to Note 20 to our consolidated financial statements included in our Annual Report for a description of our disaggregation of revenues. Disaggregation of revenues reconciled to our reportable segments is as follows (in thousands): Three Months Ended December 31, 2022 Nine Months Ended December 31, 2022 Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Build-to-order $ — $ 21,509 $ — $ 21,509 $ — $ 68,366 $ — $ 68,366 Book-and-ship 110,171 3,110 36,303 149,584 374,377 10,612 108,864 493,853 Net revenues $ 110,171 $ 24,619 $ 36,303 $ 171,093 $ 374,377 $ 78,978 $ 108,864 $ 562,219 Three Months Ended December 31, 2021 Nine Months Ended December 31, 2021 Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Build-to-order $ — $ 21,890 $ — $ 21,890 $ — $ 67,301 $ — $ 67,301 Book-and-ship 81,005 2,015 31,376 114,396 294,538 6,088 85,209 385,835 Net revenues $ 81,005 $ 23,905 $ 31,376 $ 136,286 $ 294,538 $ 73,389 $ 85,209 $ 453,136 Contract liabilities, which are included in accrued and other current liabilities in our condensed consolidated balance sheets were as follows (in thousands): Balance at April 1, 2022: $ 1,026 Revenue recognized during the period (910) New contracts and revenue added to existing contracts during the period 326 Balance at December 31, 2022 $ 442 |
SEGMENTS
SEGMENTS | 9 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENTS | SEGMENTS During the quarter ended June 30, 2021, we revised our segment structure to align with how our chief operating decision maker (who was determined to be our Chief Executive Officer) views our business, assesses performance and allocates resources to our business components. Effective April 1, 2021, following the completion of various strategic transactions including the acquisition of TRUaire and the formation of the Whitmore JV, our business is organized into three reportable segments: • Contractor Solutions • Engineered Building Solutions • 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). Three Months Ended December 31, 2022: (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 110,171 $ 24,619 $ 36,303 $ 171,093 $ — $ 171,093 Intersegment revenue 1,736 — 32 1,768 (1,768) — Operating income 21,829 2,257 3,921 28,007 (4,895) 23,112 Three Months Ended December 31, 2021*: (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 81,005 $ 23,905 $ 31,376 $ 136,286 $ — $ 136,286 Intersegment revenue 1,454 — 8 1,462 (1,462) — Operating income 11,324 3,200 3,384 17,908 (4,459) 13,449 Nine months ended December 31, 2022: (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 374,377 $ 78,978 $ 108,864 $ 562,219 $ — $ 562,219 Intersegment revenue 5,454 — 95 5,549 (5,549) — Operating income 90,416 10,172 13,658 114,246 (14,944) 99,302 Nine months ended December 31, 2021*: (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 294,538 $ 73,389 $ 85,209 $ 453,136 $ — $ 453,136 Intersegment revenue 1,510 — 80 1,590 (1,590) — Operating income 67,589 9,388 5,290 82,267 (13,824) 68,443 *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
ORGANIZATION AND OPERATIONS A_2
ORGANIZATION AND OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2022 (“Quarterly 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 condensed 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 ("VIE") 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. The condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of CSWI’s financial position as of December 31, 2022, and the results of operations for the three and nine months periods ended December 31, 2022 and 2021. All adjustments are of a normal, recurring nature. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in CSWI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2022 (the “Annual Report”). |
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 August 16, 2022, The Inflation Reduction Act of 2022 ("IRA") was signed into law effective in taxable years beginning after December 31, 2022. The bill was meant to address the high inflation rate in the U.S. through various climate, energy, healthcare, and other incentives. These incentives are meant to be paid for by the tax provisions included in the IRA, such as a new fifteen percent corporate minimum tax, a one percent new excise tax on stock buybacks, additional IRS funding to improve taxpayer compliance, and others. At this time, none of the IRA tax provisions are expected to have a material impact to the Company's fiscal 2023 tax provision. The Company will continue to monitor for updates to the Company's business along with guidance issued with respect to the IRA to determine whether any adjustments are needed to the Company's tax provision in future periods. 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 9, 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 7, the Company’s Second Amendment includes a transition clause in the event LIBOR is discontinued, as such, we do not expect the transition of LIBOR to 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. |
CONSOLIDATION OF VARIABLE INT_2
CONSOLIDATION OF VARIABLE INTEREST ENTITIES AND REDEEMABLE NONCONTROLLING INTEREST (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | Whitmore JV's total net assets are presented below (in thousands): December 31, 2022 Cash $ 4,128 Accounts receivable, net 6,783 Inventories, net 2,990 Prepaid expenses and other current assets 202 Property, plant and equipment, net 10,638 Intangible assets, net 6,681 Other assets 76 Total assets $ 31,498 Accounts payable $ 2,980 Accrued and other current liabilities 1,798 Other long-term liabilities 5 Total liabilities $ 4,783 |
Schedule of Changes in Redeemable Noncontrolling Interest | Changes in redeemable noncontrolling interest for the nine-month period ended December 31, 2022 were as follows (in thousands): Balance at March 31, 2022 $ 15,325 Net income attributable to redeemable noncontrolling interest 79 Contributions from noncontrolling interest 2,000 Balance at December 31, 2022 $ 17,404 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following (in thousands): December 31, 2022 March 31, 2022 Raw materials and supplies $ 51,303 $ 46,136 Work in process 4,935 7,471 Finished goods 126,921 100,792 Total inventories 183,159 154,399 Less: Obsolescence reserve (5,250) (4,285) Inventories, net $ 177,909 $ 150,114 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill as of December 31, 2022 and March 31, 2022 were as follows (in thousands): Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Balance at March 31, 2022 $ 190,152 $ 25,007 $ 9,499 $ 224,658 Falcon acquisition 18,196 — — 18,196 CG and ACG acquisitions 1,686 — — 1,686 Shoemaker acquisition 6 — — 6 Currency translation (82) (728) (284) (1,094) Balance at December 31, 2022 $ 209,958 $ 24,279 $ 9,215 $ 243,452 |
Schedule of Intangible Assets | The following table provides information about our intangible assets (in thousands, except years): December 31, 2022 March 31, 2022 Weighted Avg Life (Years) Ending Gross Amount Accumulated Amortization Ending Gross Amount Accumulated Amortization Finite-lived intangible assets: Patents 11 $ 11,223 $ (8,384) $ 9,417 $ (8,065) Customer lists and amortized trademarks 14 324,395 (76,463) 297,909 (61,368) Non-compete agreements 5 800 (230) 939 (258) Other 8 8,543 (4,064) 5,123 (3,957) $ 344,961 $ (89,141) $ 313,388 $ (73,648) Trade names and trademarks not being amortized: $ 66,448 $ — $ 61,097 $ — |
Schedule of Estimated Future Amortization for Intangible Assets | The following table shows the estimated future amortization for intangible assets, as of December 31, 2022, for the remainder of the current fiscal year and the next four fiscal years ending March 31 (in thousands): 2023 $ 5,800 2024 20,662 2025 19,927 2026 19,321 2027 18,553 Thereafter 171,557 Total $ 255,820 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-Based Compensation Expense | We recorded share-based compensation expense as follows for the three and nine months ended December 31, 2022 and 2021 (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Share-based compensation expense $ 2,566 $ 2,287 $ 7,296 $ 6,223 Related income tax benefit (640) (549) (1,823) (1,494) Net share-based compensation expense $ 1,926 $ 1,738 $ 5,473 $ 4,729 |
Schedule of Stock Options Activity | Stock option activity was as follows: Nine Months Ended December 31, 2022 Number of Shares Weighted Average Price Remaining Contractual Life (Years) Aggregate Intrinsic Value (in Millions) Outstanding at April 1, 2022 10,800 $ 25.23 Exercised (10,800) 25.23 Outstanding at December 31, 2022 — $ — 0 $ — Exercisable at December 31, 2022 — $ — 0 $ — |
Schedule of Restricted Share Activity | Restricted share activity was as follows: Nine Months Ended December 31, 2022 Number of Shares Weighted Average Grant Date Fair Value Outstanding at April 1, 2022: 228,331 $ 126.02 Granted 96,189 131.21 Vested (86,547) 85.68 Canceled (4,582) 109.91 Outstanding at December 31, 2022 233,391 $ 138.11 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Debt consists of the following (in thousands): December 31, 2022 March 31, 2022 Revolving Credit Facility, interest rate of 5.92% and 1.95% (a) $ 267,180 $ 243,000 Whitmore Term Loan, interest rate of 6.39% and 2.45% (a) (b) 9,354 9,775 Total debt 276,534 252,775 Less: Current portion (561) (561) Long-term debt $ 275,973 $ 252,214 (a) Represents the interest rate effective on December 31, 2022, and March 31, 2022, respectively. (b) Represents the unhedged interest rate according to the Whitmore Term Loan agreement. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of Components of Operating Lease Expense, Operating Lease Assets and Liabilities, Supplemental Cash Flow, and Other Information | Three Months Ended December 31, Nine Months Ended December 31, (in thousands) 2022 2021 2022 2021 Components of Operating Lease Expenses Operating lease expense (a) $ 2,727 $ 2,472 $ 8,002 $ 7,302 Short-term lease expense 227 73 635 231 Total operating lease expense $ 2,954 $ 2,545 $ 8,637 $ 7,533 (a) Included in cost of revenues and selling, general and administrative expense (in thousands) December 31, 2022 March 31, 2022 Operating Lease Assets and Liabilities Right-of-use assets, net (b) $ 61,801 $ 67,076 Short-term lease liabilities (c) $ 9,764 $ 9,269 Long-term lease liabilities (c) 57,671 63,275 Total operating lease liabilities $ 67,435 $ 72,544 (b) Included in other assets (c) Included in accrued and other current liabilities and other long-term liabilities Nine Months Ended December 31, (in thousands) 2022 2021 Supplemental Cash Flow Cash paid for amounts included in the measurement of operating lease liabilities (a) $ 8,184 $ 7,205 Right-of-use assets obtained in exchange for new operating lease obligations 2,348 7,280 (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) 7.25 8.30 Weighted average discount rate 2.3 % 2.3 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities were as follows (in thousands): Year Ending March 31, 2023 (excluding the nine months ended December 31, 2022) $ 2,853 2024 11,071 2025 10,859 2026 10,510 2027 10,280 Thereafter 27,774 Total lease liabilities 73,347 Less: Imputed interest (5,912) Present value of lease liabilities $ 67,435 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of Derivatives | The fair value of the interest rate swap designated as a hedging instrument is summarized below (in thousands): December 31, 2022 March 31, 2022 Current derivative asset $ 379 $ — Current derivative liabilities — 109 Non-current derivative liabilities — 233 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
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 three and nine months ended December 31, 2022 and 2021 (amounts in thousands, except per share data): Three Months Ended Nine Months Ended 2022 2021* 2022 2021* Net income $ 15,499 $ 9,750 $ 69,451 $ 48,794 Less: Net loss (income) attributable to redeemable noncontrolling interest 100 (444) (79) (855) Net income attributable to CSW Industrials, Inc. shareholders $ 15,599 $ 9,306 $ 69,372 $ 47,939 Weighted average shares: Common stock 15,364 15,690 15,413 15,641 Participating securities 112 104 107 111 Denominator for basic earnings per common share 15,476 15,794 15,520 15,752 Potentially dilutive securities 36 49 34 57 Denominator for diluted earnings per common share 15,512 15,844 15,554 15,809 Net income per share attributable to CSW Industrials, Inc. shareholders: Basic $ 1.01 $ 0.59 $ 4.47 $ 3.04 Diluted $ 1.01 $ 0.59 $ 4.46 $ 3.03 *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
RETIREMENT PLANS (Tables)
RETIREMENT PLANS (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Net Pension Benefit | The following tables set forth the combined net pension benefit recognized in our condensed consolidated financial statements for all plans (in thousands): Three Months Ended Nine Months Ended 2022 2021 2022 2021 Service and other costs $ 15 $ 12 $ 45 $ 36 Interest cost on projected benefit obligation 36 34 107 101 Expected return on assets (11) (28) (34) (84) Amortization of net actuarial loss 11 18 32 53 Pension plan termination 453 $ — $ 453 $ — Net pension benefit $ 504 $ 36 $ 603 $ 106 |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Analysis of Changes in Accumulated Other Comprehensive Loss | The following table provides an analysis of the changes in accumulated other comprehensive loss (in thousands): Three Months Ended December 31, 2022 2021 Currency translation adjustments: Balance at beginning of period $ (10,120) $ (4,436) Adjustments for foreign currency translation 1,606 (71) Balance at end of period $ (8,514) $ (4,507) Interest rate swaps: Balance at beginning of period $ 339 $ (825) Unrealized gains (losses), net of taxes of $10 and $(10), respectively (a) (39) 37 Reclassification of losses included in interest expense, net, net of taxes of $0 and $(15), respectively — 56 Other comprehensive income (loss) (39) 93 Balance at end of period $ 300 $ (732) Defined benefit plans: Balance at beginning of period $ (353) $ (767) Amortization of net gains (losses), net of taxes of $(35) and $14, respectively (b) 133 (52) Balance at end of period $ (220) $ (819) Nine Months Ended December 31, 2022 2021 Currency translation adjustments: Balance at beginning of period $ (4,438) $ (4,394) Adjustments for foreign currency translation (4,076) (113) Balance at end of period $ (8,514) $ (4,507) Interest rate swaps: Balance at beginning of period $ (270) $ (803) Unrealized gains (losses), net of taxes of $(137) and $27, respectively (a) 516 (100) Reclassification of losses included in interest expense, net, net of taxes of $(14) and $(45), respectively 54 171 Other comprehensive income 570 71 Balance at end of period $ 300 $ (732) Defined benefit plans: Balance at beginning of period $ (366) $ (799) Amortization of net gains (losses), net of taxes of $(39) and $5, respectively (b) 146 (20) Balance at end of period $ (220) $ (819) (a) Unrealized gain (loss) is reclassified to earnings as underlying cash interest payments are made. As discussed in Note 9, the interest rate swap was terminated on January 9, 2023, which resulted a gain of $0.1 million, net of deferred taxes, during the three months ended March 31, 2023. (b) Amortization of actuarial gains (losses) out of accumulated comprehensive loss are included in the computation of net periodic pension expense. See Note 13 for additional information. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Disaggregation of revenues reconciled to our reportable segments is as follows (in thousands): Three Months Ended December 31, 2022 Nine Months Ended December 31, 2022 Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Build-to-order $ — $ 21,509 $ — $ 21,509 $ — $ 68,366 $ — $ 68,366 Book-and-ship 110,171 3,110 36,303 149,584 374,377 10,612 108,864 493,853 Net revenues $ 110,171 $ 24,619 $ 36,303 $ 171,093 $ 374,377 $ 78,978 $ 108,864 $ 562,219 Three Months Ended December 31, 2021 Nine Months Ended December 31, 2021 Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Total Build-to-order $ — $ 21,890 $ — $ 21,890 $ — $ 67,301 $ — $ 67,301 Book-and-ship 81,005 2,015 31,376 114,396 294,538 6,088 85,209 385,835 Net revenues $ 81,005 $ 23,905 $ 31,376 $ 136,286 $ 294,538 $ 73,389 $ 85,209 $ 453,136 |
Schedule of Contract Liabilities | Contract liabilities, which are included in accrued and other current liabilities in our condensed consolidated balance sheets were as follows (in thousands): Balance at April 1, 2022: $ 1,026 Revenue recognized during the period (910) New contracts and revenue added to existing contracts during the period 326 Balance at December 31, 2022 $ 442 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of 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). Three Months Ended December 31, 2022: (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 110,171 $ 24,619 $ 36,303 $ 171,093 $ — $ 171,093 Intersegment revenue 1,736 — 32 1,768 (1,768) — Operating income 21,829 2,257 3,921 28,007 (4,895) 23,112 Three Months Ended December 31, 2021*: (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 81,005 $ 23,905 $ 31,376 $ 136,286 $ — $ 136,286 Intersegment revenue 1,454 — 8 1,462 (1,462) — Operating income 11,324 3,200 3,384 17,908 (4,459) 13,449 Nine months ended December 31, 2022: (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 374,377 $ 78,978 $ 108,864 $ 562,219 $ — $ 562,219 Intersegment revenue 5,454 — 95 5,549 (5,549) — Operating income 90,416 10,172 13,658 114,246 (14,944) 99,302 Nine months ended December 31, 2021*: (in thousands) Contractor Solutions Engineered Building Solutions Specialized Reliability Solutions Subtotal - Reportable Segments Eliminations and Other Total Revenues, net to external customers $ 294,538 $ 73,389 $ 85,209 $ 453,136 $ — $ 453,136 Intersegment revenue 1,510 — 80 1,590 (1,590) — Operating income 67,589 9,388 5,290 82,267 (13,824) 68,443 *Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
ORGANIZATION AND OPERATIONS A_3
ORGANIZATION AND OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES - Additional Information (Details) | 9 Months Ended |
Dec. 31, 2022 Brand country | |
Accounting Policies [Abstract] | |
Number of countries | country | 100 |
Highly respected industrial brands (more than) | Brand | 100 |
ACQUISITIONS - Additional Infor
ACQUISITIONS - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||||
Oct. 04, 2022 | Jul. 08, 2022 | Dec. 15, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | [1] | Mar. 31, 2022 | |
Business Acquisition [Line Items] | |||||||
Cash paid for acquisitions | $ 55,524 | $ 36,427 | |||||
Goodwill | $ 243,452 | $ 224,658 | |||||
Intellectual Property | |||||||
Business Acquisition [Line Items] | |||||||
Fair value of the assets acquired, finite-lived | $ 3,700 | ||||||
Assets acquired, amortization period | 15 years | ||||||
Shoemaker Manufacturing | |||||||
Business Acquisition [Line Items] | |||||||
Percent of outstanding equity acquired | 100% | ||||||
Business combination, consideration transferred | $ 43,600 | ||||||
Cash paid for acquisitions | 38,600 | ||||||
Cash acquired from acquisition | $ 1,200 | ||||||
Stock consideration (in shares) | 25,483 | ||||||
Stock consideration, value of common stock | $ 3,000 | ||||||
Contingent consideration (up to) | 2,000 | ||||||
Goodwill | 8,100 | ||||||
Fair value of inventory acquired | 3,600 | ||||||
Fair value of accounts receivable acquired | 1,700 | ||||||
Fair value of cash acquired | 1,200 | ||||||
Fair value of equipment acquired | 1,400 | ||||||
Fair value of prepaid expenses acquired | 200 | ||||||
Fair value of current liabilities acquired | 3,100 | ||||||
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 | ||||||
CG and ACG acquisitions | |||||||
Business Acquisition [Line Items] | |||||||
Business combination, consideration transferred | $ 18,400 | ||||||
Cash paid for acquisitions | 18,000 | ||||||
Contingent consideration (up to) | 400 | ||||||
Goodwill | 1,700 | ||||||
Fair value of inventory acquired | 3,100 | ||||||
Fair value of accounts receivable acquired | 1,000 | ||||||
Fair value of equipment acquired | $ 300 | ||||||
Business combination target period | 5 years | ||||||
Additional consideration | $ 1,500 | ||||||
Liability consideration term | 5 years | ||||||
Annuity value | $ 2,200 | ||||||
Total consideration including additional consideration | 19,500 | ||||||
Noncurrent contingent consideration | 400 | ||||||
CG and ACG acquisitions | Trademarks | |||||||
Business Acquisition [Line Items] | |||||||
Indefinitely lived intangible assets acquired | $ 700 | ||||||
CG and ACG acquisitions | Customer Lists | |||||||
Business Acquisition [Line Items] | |||||||
Assets acquired, amortization period | 15 years | ||||||
Finite lived intangible assets acquired | $ 9,800 | ||||||
CG and ACG acquisitions | Patents | |||||||
Business Acquisition [Line Items] | |||||||
Assets acquired, amortization period | 10 years | ||||||
Finite lived intangible assets acquired | $ 1,800 | ||||||
Falcon Stainless, Inc | |||||||
Business Acquisition [Line Items] | |||||||
Percent of outstanding equity acquired | 100% | ||||||
Business combination, consideration transferred | $ 37,100 | ||||||
Cash paid for acquisitions | 34,600 | ||||||
Cash acquired from acquisition | 1,000 | ||||||
Goodwill | 18,200 | ||||||
Fair value of inventory acquired | 700 | ||||||
Fair value of accounts receivable acquired | 1,400 | ||||||
Fair value of cash acquired | 1,000 | ||||||
Fair value of other current assets acquired | 100 | ||||||
Fair value of current liabilities acquired | $ 500 | ||||||
Liability consideration term | 1 year | ||||||
Annuity value | $ 2,500 | ||||||
Other assets | 2,900 | ||||||
Fair value of other liabilities acquired | 9,100 | ||||||
Falcon Stainless, Inc | Trademarks | |||||||
Business Acquisition [Line Items] | |||||||
Indefinitely lived intangible assets acquired | $ 4,700 | ||||||
Falcon Stainless, Inc | Customer Lists | |||||||
Business Acquisition [Line Items] | |||||||
Assets acquired, amortization period | 15 years | ||||||
Finite lived intangible assets acquired | $ 17,700 | ||||||
[1]*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K |
CONSOLIDATION OF VARIABLE INT_3
CONSOLIDATION OF VARIABLE INTEREST ENTITIES AND REDEEMABLE NONCONTROLLING INTEREST - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||||
Apr. 01, 2021 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | [1] | Sep. 30, 2021 | [1] | Jun. 30, 2021 | [1] | Dec. 31, 2022 | Dec. 31, 2021 | [2] | |
Variable Interest Entity [Line Items] | |||||||||||||
Net (loss)/income | $ 15,599 | $ 24,331 | $ 29,443 | $ 9,306 | $ 18,171 | $ 20,461 | $ 69,372 | $ 47,939 | |||||
Variable Interest Entity | Whitmore JV | Affiliated Entity | |||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||
Interest sold (in percent) | 50% | ||||||||||||
Net (loss)/income | $ (200) | $ 200 | |||||||||||
Initiating member's equity interest | 90% | ||||||||||||
Period of written notice | 3 years | ||||||||||||
Shell | Variable Interest Entity | Whitmore Manufacturing, LLC | Affiliated Entity | |||||||||||||
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 | ||||||||||||
[1]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K.[2]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
CONSOLIDATION OF VARIABLE INT_4
CONSOLIDATION OF VARIABLE INTEREST ENTITIES AND REDEEMABLE NONCONTROLLING INTEREST (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Variable Interest Entity [Line Items] | ||
Cash | $ 14,721 | $ 16,619 |
Inventories, net | 177,909 | 150,114 |
Prepaid expenses and other current assets | 26,494 | 10,610 |
Property, plant and equipment, net | 85,814 | 87,032 |
Total assets | 1,047,672 | 995,360 |
Other long-term liabilities | 144,844 | 140,306 |
Total liabilities | 531,500 | $ 510,949 |
Variable Interest Entity | Whitmore JV | Affiliated Entity | ||
Variable Interest Entity [Line Items] | ||
Cash | 4,128 | |
Accounts receivable, net | 6,783 | |
Inventories, net | 2,990 | |
Prepaid expenses and other current assets | 202 | |
Property, plant and equipment, net | 10,638 | |
Intangible assets, net | 6,681 | |
Other assets | 76 | |
Total assets | 31,498 | |
Accounts payable | 2,980 | |
Accrued and other current liabilities | 1,798 | |
Other long-term liabilities | 5 | |
Total liabilities | $ 4,783 |
CONSOLIDATION OF VARIABLE INT_5
CONSOLIDATION OF VARIABLE INTEREST ENTITIES AND REDEEMABLE NONCONTROLLING INTEREST - Changes In Redeemable Noncontrolling Interest (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2022 USD ($) | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Beginning balance | $ 15,325 |
Ending balance | 17,404 |
Variable Interest Entity | Whitmore Manufacturing, LLC | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Beginning balance | 15,325 |
Net income attributable to redeemable noncontrolling interest | 79 |
Contributions from noncontrolling interest | 2,000 |
Ending balance | $ 17,404 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies | $ 51,303 | $ 46,136 |
Work in process | 4,935 | 7,471 |
Finished goods | 126,921 | 100,792 |
Total inventories | 183,159 | 154,399 |
Less: Obsolescence reserve | (5,250) | (4,285) |
Inventories, net | $ 177,909 | $ 150,114 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Changes in Carrying Amount of Goodwill (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 224,658 |
Currency translation | (1,094) |
Balance at end of period | 243,452 |
Falcon acquisition | |
Goodwill [Roll Forward] | |
Goodwill acquisitions | 18,196 |
CG and ACG acquisitions | |
Goodwill [Roll Forward] | |
Goodwill acquisitions | 1,686 |
Shoemaker acquisition | |
Goodwill [Roll Forward] | |
Shoemaker acquisition | 6 |
Contractor Solutions | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 190,152 |
Currency translation | (82) |
Balance at end of period | 209,958 |
Contractor Solutions | Falcon acquisition | |
Goodwill [Roll Forward] | |
Goodwill acquisitions | 18,196 |
Contractor Solutions | CG and ACG acquisitions | |
Goodwill [Roll Forward] | |
Goodwill acquisitions | 1,686 |
Contractor Solutions | Shoemaker acquisition | |
Goodwill [Roll Forward] | |
Shoemaker acquisition | 6 |
Engineered Building Solutions | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 25,007 |
Currency translation | (728) |
Balance at end of period | 24,279 |
Engineered Building Solutions | Falcon acquisition | |
Goodwill [Roll Forward] | |
Goodwill acquisitions | 0 |
Engineered Building Solutions | CG and ACG acquisitions | |
Goodwill [Roll Forward] | |
Goodwill acquisitions | 0 |
Engineered Building Solutions | Shoemaker acquisition | |
Goodwill [Roll Forward] | |
Shoemaker acquisition | 0 |
Specialized Reliability Solutions | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 9,499 |
Currency translation | (284) |
Balance at end of period | 9,215 |
Specialized Reliability Solutions | Falcon acquisition | |
Goodwill [Roll Forward] | |
Goodwill acquisitions | 0 |
Specialized Reliability Solutions | CG and ACG acquisitions | |
Goodwill [Roll Forward] | |
Goodwill acquisitions | 0 |
Specialized Reliability Solutions | Shoemaker acquisition | |
Goodwill [Roll Forward] | |
Shoemaker acquisition | $ 0 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2022 | Mar. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Ending Gross Amount | $ 344,961 | $ 313,388 |
Accumulated Amortization | (89,141) | (73,648) |
Trademarks and Trade Names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Ending Gross Amount | $ 66,448 | 61,097 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Avg Life (Years) | 11 years | |
Ending Gross Amount | $ 11,223 | 9,417 |
Accumulated Amortization | $ (8,384) | (8,065) |
Customer lists and amortized trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Avg Life (Years) | 14 years | |
Ending Gross Amount | $ 324,395 | 297,909 |
Accumulated Amortization | $ (76,463) | (61,368) |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Avg Life (Years) | 5 years | |
Ending Gross Amount | $ 800 | 939 |
Accumulated Amortization | $ (230) | (258) |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Avg Life (Years) | 8 years | |
Ending Gross Amount | $ 8,543 | 5,123 |
Accumulated Amortization | $ (4,064) | $ (3,957) |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense of intangible assets | $ 5.8 | $ 5.2 | $ 16.4 | $ 19.4 |
Amortization of inventory purchase accounting adjustment | $ 3.9 | $ 3.9 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Future Amortization (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 5,800 |
2024 | 20,662 |
2025 | 19,927 |
2026 | 19,321 |
2027 | 18,553 |
Thereafter | 171,557 |
Total | $ 255,820 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of restricted shares granted | $ 5.4 | $ 4.6 | $ 9.4 | $ 27.7 |
Fair value of restricted shares vested | $ 4.7 | $ 5.9 | $ 10.1 | $ 14.1 |
2015 Plan | Stock Compensation Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for issuance (in shares) | 421,174 | 421,174 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Share-Based Compensation (Details) - Restricted Stock - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 2,566 | $ 2,287 | $ 7,296 | $ 6,223 |
Related income tax benefit | (640) | (549) | (1,823) | (1,494) |
Net share-based compensation expense | $ 1,926 | $ 1,738 | $ 5,473 | $ 4,729 |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock Option Activity (Details) - Stock Options $ / shares in Units, $ in Millions | 9 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Number of Shares | |
Outstanding at beginning of period (in shares) | shares | 10,800 |
Exercised (in shares) | shares | (10,800) |
Outstanding at end of period (in shares) | shares | 0 |
Exercisable at end of period (in shares) | shares | 0 |
Weighted Average Price | |
Weighted Average Price Outstanding at beginning of period (in USD per share) | $ / shares | $ 25.23 |
Weighted Average Price Exercised (in USD per share) | $ / shares | 25.23 |
Weighted Average Price Outstanding at end of period (in USD per share) | $ / shares | 0 |
Weighted Average Price Exercisable at end of period (in USD per share) | $ / shares | $ 0 |
Outstanding Aggregate Intrinsic Value | $ | $ 0 |
Exercisable Aggregate Intrinsic Value | $ | $ 0 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Share Activity (Details) - Restricted Stock | 9 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Number of Shares | |
Outstanding at beginning of period (in shares) | shares | 228,331 |
Granted (in shares) | shares | 96,189 |
Vested (in shares) | shares | (86,547) |
Canceled (in shares) | shares | (4,582) |
Outstanding at end of period (in shares) | shares | 233,391 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (in USD per share) | $ / shares | $ 126.02 |
Granted (in USD per share) | $ / shares | 131.21 |
Vested (in USD per share) | $ / shares | 85.68 |
Canceled (in USD per share) | $ / shares | 109.91 |
Outstanding at end of period (in USD per share) | $ / shares | $ 138.11 |
SHARE-BASED COMPENSATION (Restr
SHARE-BASED COMPENSATION (Restricted Stock Activity) - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | |
Restricted Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted shares granted (in shares) | 96,189 | |||||
Unvested restricted shares outstanding (in shares) | 233,391 | 233,391 | 228,331 | |||
Unrecognized compensation costs related to unvested restricted shares | $ 21.9 | $ 21.9 | ||||
Weighted average vesting period | 2 years 9 months 18 days | |||||
Fair value of restricted shares granted | 5.4 | $ 4.6 | $ 9.4 | $ 27.7 | ||
Fair value of restricted shares vested | $ 4.7 | $ 5.9 | $ 10.1 | $ 14.1 | ||
Restricted Shares | Joe Armes, CEO | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted shares 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) | 99,474 | 102,306 | 99,474 | 102,306 | ||
Restricted Stock Performance Shares | Cliff Vesting | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted shares granted (in shares) | 0 | 0 | 21,087 | 47,845 | ||
Vesting period | 36 months | |||||
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 | Minimum | Cliff Vesting | ||||||
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 | Maximum | Cliff Vesting | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance-based vesting range | 200% | |||||
Restricted Stock Performance Shares | Joe Armes, CEO | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted shares granted (in shares) | 27,559 | |||||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance-based vesting range | 60% | |||||
Restricted Stock Units (RSUs) | Joe Armes, CEO | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted shares granted (in shares) | 19,685 | |||||
Restricted Stock Units (RSUs) | Successor CEO | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Performance-based vesting range | 40% |
LONG-TERM DEBT - Schedule of Lo
LONG-TERM DEBT - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 276,534 | $ 252,775 |
Less: Current portion | (561) | (561) |
Long-term debt | $ 275,973 | $ 252,214 |
Whitmore | Secured Term Loan | ||
Debt Instrument [Line Items] | ||
Interest rate | 6.39% | 2.45% |
Whitmore Term Loan, interest rate of 5.14% and 2.45% | $ 9,354 | $ 9,775 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.92% | 1.95% |
Revolving Credit Facility, interest rate of 4.05% and 1.95% | $ 267,180 | $ 243,000 |
LONG-TERM DEBT (Revolving Credi
LONG-TERM DEBT (Revolving Credit Agreement) - Additional Information (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||||
May 18, 2021 | May 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 15, 2022 | Dec. 14, 2022 | Mar. 31, 2022 | ||
Debt Instrument [Line Items] | ||||||||
Borrowings on line of credit | $ 122,777,000 | $ 52,513,000 | [1] | |||||
Repayments of long-term debt | 99,018,000 | $ 63,934,000 | [1] | |||||
Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum leverage ratio | 3 | |||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Percentage of voting equity interests in first-tier foreign subsidiaries | 0.65 | |||||||
Line of credit outstanding amount | 267,180,000 | $ 243,000,000 | ||||||
Revolving Credit Facility | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, term | 5 years | |||||||
Maximum borrowing capacity | $ 400,000,000 | $ 300,000,000 | $ 500,000,000 | $ 400,000,000 | ||||
Line of credit facility, accordion feature | 150,000,000 | |||||||
Debt discount and issuance costs | $ 2,300,000 | $ 700,000 | ||||||
Borrowings on line of credit | 122,800,000 | |||||||
Repayments of long-term debt | 98,600,000 | |||||||
Line of credit outstanding amount | 267,200,000 | 243,000,000 | ||||||
Line of credit facility, remaining borrowing capacity | $ 232,800,000 | $ 157,000,000 | ||||||
Maximum leverage ratio | 3.75 | |||||||
Minimum fixed charge coverage ratio | 1.25 | |||||||
Revolving Credit Facility | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on interest rate | 1% | |||||||
Revolving Credit Facility | Fed Funds Effective Rate Overnight Index Swap Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on interest rate | 0.50% | |||||||
Revolving Credit Facility | Minimum | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee percentage | 0.15% | |||||||
Revolving Credit Facility | Minimum | Prime Rate | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on interest rate | 0.25% | |||||||
Revolving Credit Facility | Minimum | LIBOR | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on interest rate | 1.25% | |||||||
Revolving Credit Facility | Maximum | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Commitment fee percentage | 0.40% | |||||||
Revolving Credit Facility | Maximum | Prime Rate | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on interest rate | 1.50% | |||||||
Revolving Credit Facility | Maximum | LIBOR | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Spread on interest rate | 2.50% | |||||||
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 | |||||||
[1]*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K |
LONG-TERM DEBT (Whitmore Term L
LONG-TERM DEBT (Whitmore Term Loan) - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | |||
May 18, 2021 | Jul. 31, 2014 | Dec. 31, 2022 | Mar. 31, 2022 | |
LIBOR | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Spread on interest rate | 1% | |||
Whitmore | Secured Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, periodic principal payment | $ 140 | |||
Principal amount outstanding under term loan | $ 9,354 | $ 9,775 | ||
Whitmore | Secured Term Loan | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Spread on interest rate | 2% |
LEASES - Additional Information
LEASES - Additional Information (Details) | Dec. 31, 2022 |
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 | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||||
Operating lease expense | $ 2,727 | $ 2,472 | $ 8,002 | $ 7,302 |
Short-term lease expense | 227 | 73 | 635 | 231 |
Total operating lease expense | $ 2,954 | $ 2,545 | $ 8,637 | $ 7,533 |
LEASES - Operating Lease Assets
LEASES - Operating Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Leases [Abstract] | ||
Right-of-use assets, net | $ 61,801 | $ 67,076 |
Short-term lease liabilities | 9,764 | 9,269 |
Long-term lease liabilities | 57,671 | 63,275 |
Total operating lease liabilities | $ 67,435 | $ 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 | 9 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 8,184 | $ 7,205 |
Right-of-use assets obtained in exchange for new operating lease obligations | $ 2,348 | $ 7,280 |
LEASES - Other Information for
LEASES - Other Information for Operating Leases (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Weighted average remaining lease term (in years) | 7 years 3 months | 8 years 3 months 18 days |
Weighted average discount rate | 2.30% | 2.30% |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Leases [Abstract] | ||
Year Ending March 31, 2023 (excluding the nine months ended December 31, 2022) | $ 2,853 | |
2024 | 11,071 | |
2025 | 10,859 | |
2026 | 10,510 | |
2027 | 10,280 | |
Thereafter | 27,774 | |
Total lease liabilities | 73,347 | |
Less: Imputed interest | (5,912) | |
Present value of lease liabilities | $ 67,435 | $ 72,544 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING - Additional Information (Details) - Interest Rate Swap - USD ($) $ in Millions | Dec. 31, 2022 | Mar. 31, 2022 |
Derivative [Line Items] | ||
Notional amount | $ 9.4 | $ 9.8 |
Cash receipt | $ 0.2 |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING - Fair Value of Derivatives (Details) - Hedging Instrument - Interest Rate Swap - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Derivatives, Fair Value [Line Items] | ||
Current derivative asset | $ 379 | $ 0 |
Current derivative liabilities | 0 | 109 |
Non-current derivative liabilities | $ 0 | $ 233 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | [4] | Jun. 30, 2021 | [4] | Dec. 31, 2022 | Dec. 31, 2021 | |||
Earnings Per Share [Abstract] | ||||||||||||
Net income | $ 15,499 | $ 9,750 | [1] | $ 69,451 | $ 48,794 | [1],[2] | ||||||
Less: Net loss (income) attributable to redeemable noncontrolling interest | 100 | (444) | [3] | (79) | (855) | [3] | ||||||
Net income attributable to CSW Industrials, Inc. | $ 15,599 | $ 24,331 | $ 29,443 | $ 9,306 | [4] | $ 18,171 | $ 20,461 | $ 69,372 | $ 47,939 | [3] | ||
Weighted average shares: | ||||||||||||
Common stock (in shares) | 15,364 | 15,690 | 15,413 | 15,641 | ||||||||
Participating securities (in shares) | 112 | 104 | 107 | 111 | ||||||||
Denominator for basic earnings per common share (in shares) | 15,476 | 15,794 | [3] | 15,520 | 15,752 | [3] | ||||||
Potentially dilutive securities (in shares) | 36 | 49 | 34 | 57 | ||||||||
Denominator for diluted earnings per common share (in shares) | 15,512 | 15,844 | [3] | 15,554 | 15,809 | [3] | ||||||
Net income per share attributable to CSW Industrials, Inc. shareholders: | ||||||||||||
Basic (in USD per share) | $ 1.01 | $ 0.59 | [3] | $ 4.47 | $ 3.04 | [3] | ||||||
Diluted (in USD per share) | $ 1.01 | $ 0.59 | [3] | $ 4.46 | $ 3.03 | [3] | ||||||
[1]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K.[2]*Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K[3]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K.[4]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 26 Months Ended | ||||||||||
Feb. 10, 2023 | Jan. 13, 2023 | Apr. 14, 2022 | Apr. 15, 2021 | Apr. 04, 2019 | Nov. 07, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 16, 2022 | Oct. 30, 2020 | |
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Dividend declared (in USD per share) | $ 0.17 | $ 0.15 | $ 0.135 | ||||||||||
Dividends paid | $ 2,600,000 | $ 2,400,000 | $ 7,900,000 | $ 7,100,000 | |||||||||
Approved quarterly dividend rate (in USD per share) | $ 0.17 | ||||||||||||
Forecast | |||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Dividend cash paid (in USD per share) | $ 0.17 | ||||||||||||
Subsequent Event | |||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Dividend declared (in USD per share) | $ 0.17 | ||||||||||||
2018 Share Repurchase Program | |||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Share repurchase program authorized amount | $ 75,000,000 | ||||||||||||
Share repurchase program term | 2 years | ||||||||||||
Shares repurchased (in shares) | 866 | 4,175 | 336,347 | ||||||||||
Shares repurchased, amount | $ 100,000 | $ 500,000 | $ 35,700,000 | ||||||||||
2020 Share Repurchase Program | |||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Share repurchase program authorized amount | $ 100,000,000 | ||||||||||||
Shares repurchased (in shares) | 462,462 | ||||||||||||
Shares repurchased, amount | $ 50,100,000 | ||||||||||||
2022 Share Repurchase Program | |||||||||||||
Equity, Class of Treasury Stock [Line Items] | |||||||||||||
Share repurchase program authorized amount | $ 100,000,000 | ||||||||||||
Shares repurchased (in shares) | 0 |
RETIREMENT PLANS - Schedule of
RETIREMENT PLANS - Schedule of Net Pension Benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | ||||
Service and other costs | $ 15 | $ 12 | $ 45 | $ 36 |
Interest cost on projected benefit obligation | 36 | 34 | 107 | 101 |
Expected return on assets | (11) | (28) | (34) | (84) |
Amortization of net actuarial loss | 11 | 18 | 32 | 53 |
Pension plan termination | 453 | 0 | 453 | 0 |
Net pension benefit | $ 504 | $ 36 | $ 603 | $ 106 |
RETIREMENT PLANS - Additional I
RETIREMENT PLANS - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Nov. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Pension plan curtailment benefit | $ 453 | $ 0 | $ 453 | $ 0 | |
Canadian Plan | Pension Plan | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Percent of participants that accepted lump sum payment offer | 50% | ||||
Overall termination charge, net of tax | $ 400 | ||||
Canadian Plan | Pension Plan | Qualified Plan | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Aggregate amount of lump sum payments | 700 | ||||
Additional contribution required due to termination | 100 | ||||
Pension plan curtailment benefit | $ 500 |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 15, 2020 USD ($) | Dec. 14, 2020 USD ($) | |||
Income Tax Examination [Line Items] | |||||||||
Income (loss) from continuing operations before income taxes | $ 18,175 | $ 12,138 | [1] | $ 89,683 | $ 63,860 | [1] | |||
Income tax expense (benefit) | $ 2,676 | $ 2,388 | [1] | $ 20,232 | $ 15,066 | [1] | |||
Effective tax rate | 14.70% | 19.70% | 22.60% | 23.60% | |||||
TRUaire acquisition | |||||||||
Income Tax Examination [Line Items] | |||||||||
Tax contingency reserve | $ 17,300 | ||||||||
Tax indemnification asset | $ 7,500 | $ 5,300 | $ 7,500 | $ 12,500 | |||||
Tax indemnification asset released in accordance with purchase agreement | $ 1,500 | $ 5,000 | |||||||
Canada Revenue Agency | March 31, 2017 to March 31, 2020 | |||||||||
Income Tax Examination [Line Items] | |||||||||
Number of subsidiaries under audit | segment | 1 | 1 | |||||||
[1]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
OTHER COMPREHENSIVE INCOME (L_3
OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||||||
Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Balance at beginning of period | $ 498,768 | $ 483,033 | $ 466,720 | $ 469,086 | $ 452,972 | [1] | $ 434,970 | [1] | $ 415,450 | [1] | $ 469,086 | $ 415,450 | [1] |
Other comprehensive income (loss) | 1,700 | (3,038) | (2,022) | (30) | [2] | (419) | [1] | 387 | [1] | (3,360) | (62) | [2] | |
Balance at end of period | 498,768 | 483,033 | 466,720 | 463,758 | [1] | 452,972 | [1] | 434,970 | [1] | 498,768 | 463,758 | [1] | |
Subsequent Event | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Losses on cash flow hedges expected to be reclassified to earnings within next 12 months (less than) | 100 | ||||||||||||
Currency translation adjustments: | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Balance at beginning of period | (8,514) | (10,120) | (4,438) | (4,436) | (4,394) | (4,438) | (4,394) | ||||||
Other comprehensive income (loss) | 1,606 | (71) | (4,076) | (113) | |||||||||
Balance at end of period | (8,514) | (10,120) | (4,507) | (4,436) | (8,514) | (4,507) | |||||||
Interest rate swaps: | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Balance at beginning of period | 300 | 339 | (270) | (825) | (803) | (270) | (803) | ||||||
Other comprehensive income (loss) | (39) | 93 | 570 | 71 | |||||||||
Unrealized gains (losses), net of taxes | (39) | 37 | 516 | (100) | |||||||||
Reclassification, net of tax | 0 | 56 | 54 | 171 | |||||||||
Balance at end of period | 300 | 339 | (732) | (825) | 300 | (732) | |||||||
Interest rate swaps, unrealized gain, tax | 10 | (10) | (137) | 27 | |||||||||
Reclassification from AOCI, current period, tax | 0 | (15) | (14) | (45) | |||||||||
Defined benefit plans: | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Balance at beginning of period | $ (220) | (353) | $ (366) | (767) | $ (799) | (366) | (799) | ||||||
Balance at end of period | (220) | $ (353) | (819) | $ (767) | (220) | (819) | |||||||
Defined benefit plans, amortization of net gains (losses), net of taxes | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Reclassification, net of tax | 133 | (52) | 146 | (20) | |||||||||
Reclassification from AOCI, current period, tax | $ (35) | $ 14 | $ (39) | $ 5 | |||||||||
[1]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K.[2]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | $ 171,093 | $ 136,286 | [1] | $ 562,219 | $ 453,136 | [1] |
Change in Contract Liabilities [Roll Forward] | ||||||
Balance at beginning of period | 1,026 | |||||
Revenue recognized during the period | (910) | |||||
New contracts and revenue added to existing contracts during the period | 326 | |||||
Balance at end of period | 442 | 442 | ||||
Build-to-order | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | 21,509 | 21,890 | 68,366 | 67,301 | ||
Book-and-ship | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | 149,584 | 114,396 | 493,853 | 385,835 | ||
Contractor Solutions | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | 110,171 | 81,005 | 374,377 | 294,538 | ||
Contractor Solutions | Build-to-order | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | 0 | 0 | 0 | 0 | ||
Contractor Solutions | Book-and-ship | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | 110,171 | 81,005 | 374,377 | 294,538 | ||
Engineered Building Solutions | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | 24,619 | 23,905 | 78,978 | 73,389 | ||
Engineered Building Solutions | Build-to-order | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | 21,509 | 21,890 | 68,366 | 67,301 | ||
Engineered Building Solutions | Book-and-ship | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | 3,110 | 2,015 | 10,612 | 6,088 | ||
Specialized Reliability Solutions | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | 36,303 | 31,376 | 108,864 | 85,209 | ||
Specialized Reliability Solutions | Build-to-order | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | 0 | 0 | 0 | 0 | ||
Specialized Reliability Solutions | Book-and-ship | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Net revenues | $ 36,303 | $ 31,376 | $ 108,864 | $ 85,209 | ||
[1]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |
SEGMENTS - Additional Informati
SEGMENTS - Additional Information (Details) | 9 Months Ended |
Dec. 31, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
SEGMENTS (Details)
SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | $ 171,093 | $ 136,286 | [1] | $ 562,219 | $ 453,136 | [1] |
Operating income | 23,112 | 13,449 | [1] | 99,302 | 68,443 | [1] |
Contractor Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 110,171 | 81,005 | 374,377 | 294,538 | ||
Engineered Building Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 24,619 | 23,905 | 78,978 | 73,389 | ||
Specialized Reliability Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 36,303 | 31,376 | 108,864 | 85,209 | ||
Reportable Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 171,093 | 136,286 | 562,219 | 453,136 | ||
Operating income | 28,007 | 17,908 | 114,246 | 82,267 | ||
Reportable Segments | Contractor Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 110,171 | 81,005 | 374,377 | 294,538 | ||
Operating income | 21,829 | 11,324 | 90,416 | 67,589 | ||
Reportable Segments | Engineered Building Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 24,619 | 23,905 | 78,978 | 73,389 | ||
Operating income | 2,257 | 3,200 | 10,172 | 9,388 | ||
Reportable Segments | Specialized Reliability Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 36,303 | 31,376 | 108,864 | 85,209 | ||
Operating income | 3,921 | 3,384 | 13,658 | 5,290 | ||
Intersegment revenue | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 1,768 | 1,462 | 5,549 | 1,590 | ||
Intersegment revenue | Contractor Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 1,736 | 1,454 | 5,454 | 1,510 | ||
Intersegment revenue | Engineered Building Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 0 | 0 | 0 | 0 | ||
Intersegment revenue | Specialized Reliability Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 32 | 8 | 95 | 80 | ||
Eliminations and Other, excluding Intersegment revenue | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | 0 | 0 | 0 | 0 | ||
Eliminations and Other | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues, net | (1,768) | (1,462) | (5,549) | (1,590) | ||
Operating income | $ (4,895) | $ (4,459) | $ (14,944) | $ (13,824) | ||
[1]Prior period has been adjusted to reflect the change in inventory accounting method, as described in the Company's fiscal 2022 Annual Report on Form 10-K. |