Cover Page
Cover Page - shares | 3 Months Ended | |
Dec. 31, 2023 | Jan. 31, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Document Period End Date | Dec. 31, 2023 | |
Current Fiscal Year End Date | --09-30 | |
Entity Registrant Name | AZEK Co Inc. | |
Entity Central Index Key | 0001782754 | |
Entity File Number | 001-39322 | |
Entity Tax Identification Number | 90-1017663 | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Emerging Growth Company | false | |
Entity Address, Address Line One | 1330 W Fulton Street, Suite 350 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60607 | |
City Area Code | 877 | |
Local Phone Number | 275-2935 | |
Title of 12(b) Security | Class A Common Stock, par value $0.001 per share | |
Trading Symbol | AZEK | |
Security Exchange Name | NYSE | |
Common Class A [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 145,826,079 | |
Common Class B [Member] | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 0 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 274,759 | $ 278,314 |
Trade receivables, net of allowances | 32,398 | 57,660 |
Inventories | 261,562 | 221,101 |
Prepaid expenses | 16,528 | 13,595 |
Other current assets | 8,131 | 12,300 |
Total current assets | 593,378 | 582,970 |
Property, plant and equipment - net | 456,504 | 501,023 |
Goodwill | 967,816 | 994,271 |
Intangible assets - net | 183,604 | 199,497 |
Other assets | 87,426 | 87,793 |
Total assets | 2,288,728 | 2,365,554 |
Current liabilities: | ||
Accounts payable | 43,119 | 56,015 |
Accrued rebates | 67,925 | 60,974 |
Accrued interest | 368 | 260 |
Current portion of long-term debt obligations | 6,000 | 6,000 |
Accrued expenses and other liabilities | 80,999 | 71,994 |
Total current liabilities | 198,411 | 195,243 |
Deferred income taxes | 47,117 | 56,330 |
Long-term debt—less current portion | 579,111 | 580,265 |
Other non-current liabilities | 104,784 | 104,073 |
Total liabilities | 929,423 | 935,911 |
Commitments and contingencies (See Note 17) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 1,000,000 shares authorized and no shares issued or outstanding at December 31, 2023 and September 30, 2023, respectively | ||
Additional paid‑in capital | 1,650,160 | 1,662,322 |
Accumulated deficit | (19,328) | (45,047) |
Accumulated other comprehensive income (loss) | (1,217) | 1,878 |
Treasury stock, at cost, XX,XXX,XXX and 8,268,423 shares at December 31, 2023 and September 30, 2023, respectively | (270,466) | (189,666) |
Total stockholders' equity | 1,359,305 | 1,429,643 |
Total liabilities and stockholders' equity | 2,288,728 | 2,365,554 |
Common Class A [Member] | ||
Stockholders' equity: | ||
Common stock | $ 156 | $ 156 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Sep. 30, 2023 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares issued | 156,341,203 | 155,967,736 |
Treasury stock, shares | 10,560,030 | 8,268,423 |
Common Class A [Member] | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,100,000,000 | 1,100,000,000 |
Common stock, shares issued | 156,341,203 | 155,967,736 |
Common Class B [Member] | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 0 | 100 |
Common stock, shares outstanding | 0 | 100 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net sales | $ 240,444 | $ 216,259 |
Cost of sales | 149,011 | 168,680 |
Gross profit | 91,433 | 47,579 |
Selling, general and administrative expenses | 77,246 | 73,444 |
Loss on disposal of property, plant and equipment | 2,185 | |
Operating income (loss) | 12,002 | (25,865) |
Other income and expenses: | ||
Interest expense, net | 7,910 | 9,299 |
Gain on sale of business | (38,515) | |
Total other income and expenses | (30,605) | 9,299 |
Income (loss) before income taxes | 42,607 | 35,164 |
Income tax expense (benefit) | 16,888 | (9,328) |
Net income (loss) | 25,719 | (25,836) |
Other comprehensive income (loss): | ||
Unrealized loss due to change in fair value of derivatives, net of tax | (3,095) | (1,796) |
Total other comprehensive income (loss) | (3,095) | (1,796) |
Comprehensive income (loss) | $ 22,624 | $ (27,632) |
Net income (loss) per common share: | ||
Basic | $ 0.17 | $ (0.17) |
Diluted | $ 0.17 | $ (0.17) |
Weighted-average common shares outstanding: | ||
Basic | 147,297,662 | 150,877,635 |
Diluted | 148,876,282 | 150,877,635 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Class A [Member] | Common Class B [Member] | Common Stock [Member] Common Class A [Member] | Common Stock [Member] Common Class B [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Beginning balance at Sep. 30, 2022 | $ 1,444,443 | $ 155 | $ (73,088) | $ 1,630,378 | $ (113,002) | ||||
Beginning balance (in shares) at Sep. 30, 2022 | 155,157,220 | 100 | 4,116,570 | ||||||
Net Income (Loss) | (25,836) | (25,836) | |||||||
Other comprehensive income (loss) | (1,796) | $ (1,796) | |||||||
Stock-based compensation | 3,909 | 3,909 | |||||||
Cancellation of restricted stock awards (in shares) | (14,663) | ||||||||
Issuance of common stock under employee stock plan, net of shares withheld for taxes | (460) | (460) | |||||||
Issuance of common stock under employee stock plan, net of shares withheld for taxes (in shares) | 54,308 | ||||||||
Treasury stock purchases | (7,488) | $ (7,488) | |||||||
Treasury stock purchases (in shares) | 352,760 | ||||||||
Ending balance at Dec. 31, 2022 | 1,412,772 | $ 155 | $ (80,576) | 1,633,827 | (138,838) | (1,796) | |||
Ending balance (in shares) at Dec. 31, 2022 | 155,196,865 | 100 | 4,469,330 | ||||||
Beginning balance at Sep. 30, 2023 | $ 1,429,643 | $ 156 | $ (189,666) | 1,662,322 | (45,047) | 1,878 | |||
Beginning balance (in shares) at Sep. 30, 2023 | 155,967,736 | 155,967,736 | 100 | 155,967,736 | 100 | 8,268,423 | |||
Net Income (Loss) | $ 25,719 | 25,719 | |||||||
Other comprehensive income (loss) | (3,095) | (3,095) | |||||||
Stock-based compensation | 8,422 | 8,422 | |||||||
Exercise of vested stock options | 3,238 | 3,238 | |||||||
Exercise of vested stock options (in shares) | 136,885 | ||||||||
Issuance of common stock under employee stock plan, net of shares withheld for taxes | (3,822) | (3,822) | |||||||
Issuance of common stock under employee stock plan, net of shares withheld for taxes (in shares) | 236,482 | ||||||||
Conversion of Class B common stock into Class A common stock (in shares) | 100 | (100) | |||||||
Treasury stock purchases | (100,800) | $ (80,800) | (20,000) | ||||||
Treasury stock purchases (in shares) | 2,291,607 | ||||||||
Ending balance at Dec. 31, 2023 | $ 1,359,305 | $ 156 | $ (270,466) | $ 1,650,160 | $ (19,328) | $ (1,217) | |||
Ending balance (in shares) at Dec. 31, 2023 | 156,341,203 | 156,341,203 | 0 | 156,341,203 | 0 | 10,560,030 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | |
Operating activities: | |||
Net Income (Loss) | $ 25,719 | $ (25,836) | |
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities: | |||
Depreciation | 21,773 | 22,002 | |
Amortization of intangibles | 10,164 | 11,837 | |
Non-cash interest expense | 412 | 412 | |
Non-cash lease expense | (48) | (56) | |
Deferred income tax (benefit) provision | (8,192) | 1,504 | |
Non-cash compensation expense | 8,422 | 5,801 | |
Fair value adjustment for contingent consideration | 400 | ||
Loss on disposition of property, plant and equipment | 2,185 | 1,003 | |
Gain on sale of business | (38,515) | ||
Changes in certain assets and liabilities: | |||
Trade receivables | 21,151 | 21,869 | |
Inventories | (62,127) | (20,978) | |
Prepaid expenses and other currents assets | (2,031) | (16,711) | |
Accounts payable | (9,319) | 13,029 | |
Accrued expenses and interest | 15,448 | (7,831) | |
Other assets and liabilities | (1,330) | (36) | |
Net cash provided by (used in) operating activities | (16,288) | 6,409 | |
Investing activities: | |||
Purchases of property, plant and equipment | (17,681) | (30,328) | |
Proceeds from disposition of fixed assets | 122 | 65 | |
Divestiture, net of cash disposed | 133,089 | ||
Net cash provided by (used in) investing activities | 115,530 | (30,263) | |
Financing activities: | |||
Payments on Term Loan Agreement | (1,500) | (1,500) | |
Repayments of finance lease obligations | (713) | (650) | |
Exercise of vested stock options | 3,238 | ||
Cash paid for shares withheld for taxes | (3,822) | (460) | |
Purchases of treasury stock | (100,000) | (7,488) | |
Net cash used in financing activities | (102,797) | (10,098) | |
Net decrease in cash and cash equivalents | (3,555) | 33,952 | |
Cash and cash equivalents – Beginning of period | 278,314 | 120,817 | $ 120,817 |
Cash and cash equivalents – End of period | 274,759 | 86,865 | $ 278,314 |
Supplemental cash flow disclosure: | |||
Cash paid for interest, net of amounts capitalized | 7,349 | 13,020 | |
Cash paid for income taxes, net | 1,351 | 112 | |
Supplemental non-cash investing and financing disclosure: | |||
Capital expenditures in accounts payable at end of period | 2,603 | 16,275 | |
Right-of-use operating and finance lease assets obtained in exchange for lease liabilities | $ 2,460 | $ 1,968 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 25,719 | $ (25,836) |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Organization The AZEK Company Inc. (the “Company”, “we”, “us” or “our”) is a Delaware corporation that holds all of the limited liability company interests in The AZEK Group LLC (f/k/a CPG International LLC), the entity which directly and indirectly holds all of the equity interests in the operating subsidiaries and which changed its name from CPG International LLC to The AZEK Group LLC on August 1, 2023. The Company is an industry-leading designer and manufacturer of beautiful, low-maintenance and environmentally sustainable building products for residential, commercial and industrial markets. The Company’s products include decking, railing, trim, porch, moulding, pergolas, outdoor furniture, bathroom and locker systems, and, prior to the Company’s divestiture of its Vycom business, also included extruded plastic sheet products and other non-fabricated products for special applications in industrial markets. The Company operates in various locations throughout the United States. The Company’s residential products are primarily branded under the brand names AZEK ® , TimberTech ® , VERSATEX ® , ULTRALOX ® , StruXure ® and INTEX ® , while the commercial products are branded under brand names including Scranton Products ® , Aria Partitions ® , Eclipse Partitions ® , Hiny Hiders ® partitions, Tufftec Lockers ® and Duralife Lockers ® . b. Summary of Significant Accounting Policies Basis of Presentation The Company operates on a fiscal year ending September 30. The accompanying unaudited Condensed Consolidated Financial Statements and notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position, its results of operations and cash flows for the interim periods presented. The results of operations for the three months ended December 31, 2023 and the cash flows for the three months ended December 31, 2023 are not necessarily indicative of the results to be expected for the full fiscal year or any other period. The Company’s financial condition and results of operations are affected by a number of factors, including, but not limited to, the cost to manufacture and distribute products, cost of raw materials, inflation, consumer spending and preferences, interest rates, the impact of any supply chain disruptions, economic conditions, and/or any adverse effects from geopolitical conflicts, global health pandemics and other factors beyond the Company’s control. Management cannot predict the degree to, or the period over, which the Company may be affected by such factors. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s 2023 Form 10-K. The Condensed Consolidated Balance Sheet as of September 30, 2023 was derived from the audited financial statements at that date. There have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2023 Form 10-K, except as noted below. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. These reclassifications had no impact on net income, stockholder’s equity or cash flows as previously reported. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Significant estimates include revenue recognition, reserves for excess inventory, inventory obsolescence, inventory valuation, product warranties, customer rebates, stock-based compensation, litigation, income taxes, contingent consideration, goodwill and intangible asset valuation and accounting for long-lived assets. Management’s estimates and assumptions are evaluated on an ongoing basis and are based on historical experience, current conditions and available information. Actual results may differ from estimated amounts. Estimates are revised as additional information becomes available. Accounting Policies Refer to the Company’s 2023 Form 10-K for a discussion of the Company’s accounting policies, as updated below and for recently adopted accounting standards. Research and Development Costs Research and development costs primarily relate to new product development, product claims support and manufacturing process improvements. Such costs are expensed as incurred and are included in “Selling, general and administrative expenses” within the Condensed Consolidated Statements of Comprehensive Income (Loss). Total research and development expenses were $ 3.1 million and $ 2.1 million , respectively, for the three months ended December 31, 2023 and 2022 . Recently Adopted Accounting Pronouncements None. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280) : Improvements to Reportable Segment Disclosures . This standard requires all public entities that are subject to segment reporting requirements to disclose additional information, including significant segment expenses and other segment items on an annual and interim basis. It also requires the disclosure of the title and the position of the chief operating decision maker and how the reported measures are used for making business decisions. This standard is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company intends to adopt the updated standard during the fiscal year beginning October 1, 2024. The Company is currently evaluating the impact the adoption of this standard will have on its disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This standard expands the disclosure requirements primarily on the rate reconciliation and income tax paid. For public entities, this standard is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The Company intends to adopt the updated standard during the fiscal year beginning October 1, 2025. The Company is currently evaluating the impact the adoption of this standard will have on its disclosures. |
Revenue
Revenue | 3 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 2. REVENUE The Company recognizes revenues when control of the promised goods is transferred to the Company’s customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods, at a point in time, when shipping occurs. The Company also engages in customer rebates, which are recorded in “Net sales” in the Condensed Consolidated Statements of Comprehensive Income (Loss) and in “Accrued rebates” and “Trade receivables” in the Condensed Consolidated Balance Sheets. The Company recorded accrued rebates of $ 67.9 million and $ 54.6 million as of December 31, 2023 and 2022, respectively, and contra trade receivables of $ 4.5 million and $ 6.5 million as of December 31, 2023 and 2022 , respectively. The rebate activity was as follows (in thousands): Three Months Ended December 31, 2023 2022 Beginning balance $ 66,958 $ 56,542 Rebate expense 22,239 15,716 Rebate payments ( 16,804 ) ( 11,192 ) Ending balance $ 72,393 $ 61,066 The Company records deferred revenue when cash payments are received or due in advance of the Company’s performance. |
Divestiture
Divestiture | 3 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Divestiture | 3. DIVESTITURE On November 1, 2023 , the Company completed the sale of its Vycom business within the Commercial segment for net proceeds of approximately $ 133.1 million. The divestiture allows the Company to focus on the highest value portions of its business and provides additional cash to finance its capital allocation priorities. The gain on sale of $ 38.5 million was recognized in "Gain on sale of business" within the Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended December 31, 2023. The Company did not report the sale in discontinued operations as it was not a strategic shift that would have a major effect on the Company's operations and financial results. See Note 12 for more information on the Commercial segment. |
Inventories
Inventories | 3 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. INVENTORIES Inventories are valued at the lower of cost or net realizable value, and are reduced for slow-moving and obsolete inventory. The inventories cost is recorded at standard cost, which approximates actual cost, on a first-in first-out (“FIFO”) basis. Inventories consisted of the following (in thousands): in thousands December 31, September 30, Raw materials $ 60,918 $ 67,330 Work in process 31,742 37,038 Finished goods 168,902 116,733 Total inventories $ 261,562 $ 221,101 |
Property, Plant and Equipment -
Property, Plant and Equipment - Net | 3 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment - Net | 5. PROPERTY, PLANT AND EQUIPMENT—NET Property, plant and equipment – net consisted of the following (in thousands): December 31, September 30, Land $ 3,209 $ 4,829 Buildings and improvements 103,824 129,031 Manufacturing equipment 595,551 624,754 Computer equipment 32,561 32,300 Furniture and fixtures 6,614 7,290 Vehicles 1,163 1,105 Total property and equipment 742,922 799,309 Construction in progress 79,314 94,422 822,236 893,731 Accumulated depreciation ( 365,732 ) ( 392,708 ) Total property and equipment – net $ 456,504 $ 501,023 Depreciation expense was approximately $ 20.5 million and $ 20.8 million in the three months ended December 31, 2023 and 2022, respectively. During the three months ended December 31, 2023 and 2022, $ 1.1 million and $ 1.3 million of interest was capitalized, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets - Net | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets - Net | 6. GOODWILL AND INTANGIBLE ASSETS—NET Goodwill Goodwill consisted of the following (in thousands): Residential Commercial Total Goodwill before impairment as of September 30, 2023 $ 953,882 $ 72,589 $ 1,026,471 Accumulated impairment losses as of September 30, 2023 — ( 32,200 ) ( 32,200 ) Goodwill, net as of September 30, 2023 $ 953,882 $ 40,389 $ 994,271 Divestiture Goodwill disposal before impairment — ( 58,655 ) ( 58,655 ) Accumulated impairment losses — 32,200 32,200 Goodwill, net disposal — ( 26,455 ) ( 26,455 ) Goodwill before impairment as of December 31, 2023 $ 953,882 $ 13,934 $ 967,816 Accumulated impairment losses as of December 31, 2023 — — — Goodwill, net as of December 31, 2023 $ 953,882 $ 13,934 $ 967,816 Intangible assets, net The Company did no t have any indefinite lived intangible assets other than goodwill as of December 31, 2023 and September 30, 2023 . Finite-lived intangible assets consisted of the following (in thousands): December 31, 2023 Lives in Gross Accumulated Net Proprietary knowledge 10 — 15 $ 300,400 $ ( 257,358 ) $ 43,042 Trademarks 5 — 20 217,640 ( 158,382 ) 59,258 Customer relationships 12 — 19 156,452 ( 77,558 ) 78,894 Patents 9 — 10 8,500 ( 6,138 ) 2,362 Other intangibles 3 — 15 4,076 ( 4,028 ) 48 Total intangible assets $ 687,068 $ ( 503,464 ) $ 183,604 September 30, 2023 Lives in Gross Accumulated Net Propriety knowledge 10 — 15 $ 300,400 $ ( 253,608 ) $ 46,792 Trademarks 5 — 20 230,240 ( 164,759 ) 65,481 Customer relationships 12 — 19 176,852 ( 92,268 ) 84,584 Patents 9 — 10 8,500 ( 5,913 ) 2,587 Other intangible assets 3 — 15 4,076 ( 4,023 ) 53 Total intangible assets $ 720,068 $ ( 520,571 ) $ 199,497 Amortization expense was $ 10.2 million and $ 11.8 million in the three months ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the remaining weighted-average amortization period for acquired intangible assets was 11.1 years. |
Composition of Certain Balance
Composition of Certain Balance Sheet Accounts | 3 Months Ended |
Dec. 31, 2023 | |
Composition Of Certain Balance Sheet Accounts Disclosure [Abstract] | |
Composition of Certain Balance Sheet Accounts | 7. COMPOSITION OF CERTAIN BALANCE SHEET ACCOUNTS Allowance for Doubtful Accounts Allowance for doubtful accounts consisted of the following (in thousands): Three Months Ended December 31, 2023 2022 Beginning balance $ 1,773 $ 1,397 Provision ( 433 ) 277 Divestiture ( 32 ) — Ending balance $ 1,308 $ 1,674 Accrued Expenses and Other Liabilities Accrued expenses consisted of the following (in thousands): December 31, 2023 September 30, 2023 Taxes $ 28,168 $ 6,959 Employee related liabilities 20,673 34,313 Marketing 4,799 3,868 Lease liability - operating 4,559 4,180 Customer deposits 3,771 4,152 Warranty 2,927 2,739 Lease liability - finance 2,829 2,777 Freight 1,833 1,242 Utilities 1,802 2,141 Professional fees 1,706 2,073 Construction in progress 1,530 2,863 Commissions 873 991 Other 5,529 3,696 Total accrued expenses and other current liabilities $ 80,999 $ 71,994 |
Debt
Debt | 3 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 8. DEBT Debt consisted of the following (in thousands): December 31, 2023 September 30, 2023 Term Loan due April 28, 2029 — SOFR + 2.50 % + 0.1 % ( 7.96 % at December 31, 2023 and 7.92 % at September 30, 2023) $ 592,500 $ 594,000 Revolving Credit Facility through March 31, 2026 - SOFR + 0.1 % — — Total 592,500 594,000 Less unamortized deferred financing costs ( 3,818 ) ( 3,996 ) Less unamortized original issue discount ( 3,571 ) ( 3,739 ) Less current portion ( 6,000 ) ( 6,000 ) Long-term debt—less current portion and unamortized $ 579,111 $ 580,265 Term Loan Agreement The Term Loan Agreement is a first lien term loan and will mature on April 28, 2029 , subject to acceleration or prepayment. The Term Loan Agreement will amortize in equal quarterly installments of 0.25 % of the aggregate principal amount of the loans outstanding, subject to reduction for certain prepayments. The loans thereunder bear an interest rate equal to (i) in the case of alternative base rate, or ABR, borrowings, the highest of (a) the Federal Funds Rate plus 0.50 %, (b) the Prime Rate as in effect on such day and (c) the one-month Term Secured Overnight Financing Rate ("SOFR") plus 1.00 % per annum, provided that in no event will the alternative base rate be less than 1.50 % per annum, plus an applicable margin of 1.50 % and (ii) in the case of SOFR borrowings, the Term SOFR rate for the applicable interest period, in each case, plus an applicable margin of 2.50 %. As of December 31, 2023 and September 30, 2023 , The AZEK Group LLC had $ 592.5 million and $ 594.0 million outstanding under the Term Loan Agreement. The obligations under the Term Loan Agreement are secured by a first priority security interest in the membership interests of The AZEK Group LLC owned by the Company, the equity interests of The AZEK Group LLC’s domestic subsidiaries, other than certain immaterial subsidiaries and other excluded subsidiaries, and all remaining assets not constituting Revolver Priority Collateral (as defined below and subject to certain exceptions) of the Company, The AZEK Group LLC and the subsidiaries of The AZEK Group LLC that are guarantors under the Term Loan Agreement (the “Term Loan Priority Collateral”), and a second priority security interest in the Revolver Priority Collateral. The obligations under the Term Loan Agreement are guaranteed by the Company and the wholly owned domestic subsidiaries of The AZEK Group LLC other than certain immaterial subsidiaries and other excluded subsidiaries. Loans under the Term Loan Agreement may be voluntarily prepaid in whole, or in part, in each case without premium or penalty, subject to certain customary conditions. The Term Loan Agreement also requires mandatory prepayments of loans under the Term Loan Agreement from the proceeds of certain debt issuances and certain asset dispositions (subject to certain reinvestment rights) and, commencing with the fiscal year ending September 30, 2023, a percentage of excess cash flow (subject to step-downs upon The AZEK Group LLC achieving certain leverage ratios and other reductions in connection with other debt prepayments). The Term Loan Agreement contains affirmative covenants, negative covenants and events of default, which are broadly consistent with those in the Revolving Credit Facility (with certain differences consistent with the differences between a revolving loan and term loan) and that are customary for facilities of this type. The Term Loan Agreement does not have any financial maintenance covenants. The Term Loan Agreement also includes customary events of default, including the occurrence of a change of control. As of December 31, 2023 and September 30, 2023 , unamortized deferred financing fees related to the Term Loan Agreement were $ 3.8 million and $ 4.0 million, respectively. Revolving Credit Facility The AZEK Group LLC has also entered into a revolving credit facility, as amended and restated from time to time (the “Revolving Credit Facility”), with certain of our direct and indirect subsidiaries and certain lenders party thereto. The Revolving Credit Facility provides for maximum aggregate borrowings of up to $ 150.0 million, subject to an asset-based borrowing base. The borrowing base is limited to a set percentage of eligible accounts receivable and inventory, less reserves that may be established by the administrative agent and the collateral agent in the exercise of their reasonable credit judgment. The AZEK Group LLC had no outstanding borrowings under the Revolving Credit Facility as of December 31, 2023 and September 30, 2023 , respectively. In addition, The AZEK Group LLC had $ 2.2 million and $ 2.8 million of outstanding letters of credit held against the Revolving Credit Facility as of December 31, 2023 and September 30, 2023 , respectively. The AZEK Group LLC had approximately $ 147.8 million available under the borrowing base for future borrowings as of December 31, 2023 . The AZEK Group LLC also has the option to increase the commitments under the Revolving Credit Facility by up to $ 100.0 million, subject to certain conditions. On January 26, 2023, The AZEK Group LLC amended the Revolving Credit Facility, replacing all LIBOR-based provisions with provisions reflecting SOFR, including, without limitation, the use of a new Adjusted Term SOFR benchmark rate equal to Term SOFR (as defined in the Revolving Credit Agreement) plus 0.10 %. As of December 31, 2023 , outstanding revolving loans under the Revolving Credit Facility bore interest at a rate which equaled, at the Company's option, either (i) for ABR borrowings, the highest of (a) the Federal Funds Rate plus 50 basis points , (b) the prime rate and (c) the Adjusted Term SOFR as of such date for a deposit in U.S. dollars with a maturity of one month plus 100 basis points, plus, in each case, a spread of 25 to 75 basis points , based on average historical availability , or (ii) for SOFR borrowings, the Adjusted Term SOFR plus a spread of 125 to 175 basis points , based on average historical availability . The maturity date for the Revolving Credit Facility is the earlier of March 31, 2026 and the date that is 91 days prior to the maturity of the Term Loan Agreement or any permitted refinancing thereof. Deferred financing costs, net of accumulated amortization, related to the Revolving Credit Facility at December 31, 2023 and September 30, 2023 were $ 0.6 million and $ 0.7 million, respectively. A “commitment fee” accrues on any unused portion of the commitments under the Revolving Credit Facility during the preceding three calendar month period. If the average daily used percentage is greater than 50%, the commitment fee equals 25 basis points, and if the average daily used percentage is less than or equal to 50%, the commitment fee equals 37.5 basis points. The commitment fees were $ 0.1 million and $ 0.1 million for the three months ended December 31, 2023 and 2022, respectively. The obligations under the Revolving Credit Facility are guaranteed by the Company and its wholly owned domestic subsidiaries other than certain immaterial subsidiaries and other excluded subsidiaries. The obligations under the Revolving Credit Facility are secured by a first priority security interest in substantially all of the accounts receivable, inventory, deposit accounts, securities accounts and cash assets of the Company, The AZEK Group LLC and the subsidiaries of The AZEK Group LLC that are guarantors under the Revolving Credit Facility, and the proceeds thereof (subject to certain exceptions) (the “Revolver Priority Collateral”), plus a second priority security interest in all of the Term Loan Priority Collateral. The Revolving Credit Facility may be voluntarily prepaid in whole, or in part, in each case without premium or penalty. The AZEK Group LLC is also required to make mandatory prepayments (i) when aggregate borrowings exceed commitments or the applicable borrowing base and (ii) during “cash dominion,” which occurs if (a) the availability under the Revolving Credit Facility is less than the greater of (i) $12.5 million and (ii) 10% of the lesser of (x) $150.0 million and (y) the borrowing base, for five consecutive business days or (b) certain events of default have occurred and are continuing. The Revolving Credit Facility contains affirmative covenants that are customary for financings of this type, including allowing the Revolver Administrative Agent to perform periodic field exams and appraisals to evaluate the borrowing base. The Revolving Credit Facility contains various negative covenants, including limitations on, subject to certain exceptions, the incurrence of indebtedness, the incurrence of liens, dispositions, investments, acquisitions, restricted payments, transactions with affiliates, as well as other negative covenants customary for financings of this type. The Revolving Credit Facility also includes a financial maintenance covenant, applicable only when the excess availability is less than the greater of (i) 10% of the lesser of the aggregate commitments under the Revolving Credit Facility and the borrowing base, and (ii) $12.5 million. In such circumstances, The AZEK Group LLC would be required to maintain a minimum fixed charge coverage ratio (as defined in the Revolving Credit Facility) for the trailing four quarters equal to at least 1.0 to 1.0 ; subject to The AZEK Group LLC’s ability to make an equity cure (no more than twice in any four quarter period and up to five times over the life of the facility). As of December 31, 2023, The AZEK Group LLC was in compliance with the financial and nonfinancial covenants imposed by the Revolving Credit Facility. The Revolving Credit Facility also includes customary events of default, including the occurrence of a change of control. Interest expense consisted of the following (in thousands): Three Months Ended December 31, 2023 2022 Interest expense: Term Loan Agreement $ 11,358 $ 8,916 Revolving Credit Facility 150 151 Other 1,123 1,109 Amortization - Deferred financing costs Term Loan Agreement 179 179 Revolving Credit Facility 66 66 Amortization - Original issue discount Term Loan Agreement 167 167 Capitalized interest ( 1,079 ) ( 1,289 ) Interest expense 11,964 9,299 Interest income ( 4,054 ) — Interest expense, net $ 7,910 $ 9,299 See Note 11 for the fair value of the Company’s debt as of December 31, 2023 and September 30, 2023 . |
Product Warranties
Product Warranties | 3 Months Ended |
Dec. 31, 2023 | |
Product Warranties Disclosures [Abstract] | |
Product Warranties | 9. PRODUCT WARRANTIES The Company provides product assurance warranties of various lengths ranging from 5 years to lifetime for limited coverage for a variety of material and workmanship defects based on standard terms and conditions between the Company and its customers. Warranty coverage depends on the product involved. The warranty reserve activity consisted of the following (in thousands): Three Months Ended December 31, 2023 2022 Beginning balance $ 16,195 $ 15,023 Adjustments to reserve ( 542 ) ( 172 ) Warranty claims payment ( 624 ) ( 313 ) Ending balance 15,029 14,538 Current portion of accrued warranty ( 2,927 ) ( 2,492 ) Accrued warranty – less current portion $ 12,102 $ 12,046 |
Leases
Leases | 3 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | 10. LEASES The Company leases vehicles, machinery, manufacturing facilities, office space, land, and equipment under both operating and finance leases. The Company determines if an arrangement is a lease at inception. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. As of December 31, 2023 and September 30, 2023, amounts associated with leases are included in Other assets, Accrued expense and other liabilities and Other non-current liabilities in the Company’s Condensed Consolidated Balance Sheet. For leases with initial terms greater than 12 months, the Company considers these right-of-use, or ROU, assets and records the related asset and obligation at the present value of lease payments over the term. For leases with initial terms equal to or less than 12 months, the Company does not consider them as right-of-use assets and instead considers them short-term lease costs that are recognized on a straight-line basis over the lease term. The Company’s leases may include escalation clauses, renewal options and/or termination options that are factored into the determination of lease term and lease payments when it is reasonably certain the option will be exercised. Renewal options range from 1 year to 20 years. Lease assets and lease liabilities as of December 31, 2023 and September 30, 2023 were as follows (in thousands): Leases Classification on Balance Sheet December 31, 2023 September 30, 2023 Assets ROU operating lease assets Other assets $ 16,068 $ 15,423 ROU finance lease assets Other assets 70,554 71,529 Total lease assets $ 86,622 $ 86,952 Liabilities Current Operating Accrued expenses and other liabilities $ 4,559 $ 4,180 Finance Accrued expenses and other liabilities 2,829 2,777 Non-Current Operating Other non-current liabilities 13,916 13,699 Finance Other non-current liabilities 75,276 75,718 Total lease liabilities $ 96,580 $ 96,374 The components of lease expense for the three months ended December 31, 2023 and 2022 were as follows: Three Months Ended December 31, (in thousands) 2023 2022 Operating lease expense $ 1,478 $ 1,501 Finance lease amortization of assets 1,301 1,248 Finance lease interest on lease liabilities 1,107 1,092 Short term 86 103 Sublease income ( 28 ) ( 71 ) Total lease expense $ 3,944 $ 3,873 The tables below present supplemental information related to leases as of December 31, 2023 and September 30, 2023: Weighted-average remaining lease term (years) December 31, 2023 September 30, 2023 Operating leases 6.4 6.8 Finance leases 25.3 25.4 Weighted-average discount rate Operating leases 4.7 % 4.4 % Finance leases 5.8 % 5.8 % The following table summarizes the maturities of lease liabilities at December 31, 2023: (in thousands) Operating Leases Finance Leases Total 2024 $ 4,045 $ 5,358 $ 9,403 2025 4,719 7,105 11,824 2026 2,844 6,942 9,786 2027 2,105 6,480 8,585 2028 1,841 5,278 7,119 Thereafter 6,071 117,012 123,083 Total lease payments 21,625 148,175 169,800 Less: interest ( 3,150 ) ( 70,070 ) ( 73,220 ) Present value of lease liability $ 18,475 $ 78,105 $ 96,580 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 11. FAIR VALUE OF FINANCIAL INSTRUMENTS FASB Accounting Standards Codification (“ASC”) requirements for Fair Value Measurements and Disclosures establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels. Level 1 inputs, the highest priority, are quoted prices in active markets for identical assets or liabilities. Level 2 inputs reflect other than quoted prices included in Level 1 that are either observable directly or through corroboration with observable market data. Level 3 inputs are unobservable inputs, due to little or no market activity for the asset or liability, such as internally-developed valuation models. We do not have any assets or liabilities measured at fair value on a recurring basis that are Level 3. Derivative Instruments The Company’s objective in using interest rate derivative instruments is to hedge against interest rate volatility associated with its senior secured credit facilities by converting a portion of its floating rate debt to fixed rate debt. In November 2022, the Company entered into two interest rate swap agreements with Barclays Bank PLC to manage interest rate risk related to Term Loan. Each agreement has a notional amount of $ 150 million and will expire on October 31, 2025 . One agreement swaps variable interest at a rate based on SOFR with a fixed rate of 4.39 % and the second with a fixed rate of 4.48 %. At the inceptions of the swap agreements and as of December 31, 2023, both swaps were designated and qualified as cash flow hedges in accordance with ASC 815. The gain (loss) is recorded in Accumulated other comprehensive income (loss) and then reclassified into Interest expense in the same period in which the hedged transaction affects earnings. As of December 31, 2023 , the Company expects to reclass approximately $ 0.6 million ($ 0.4 million after-tax) as a reduction to interest expense in the next 12 months. The following table provides the fair values of the interest rate derivative instruments as well as their classification on the Balance Sheet as of December 31, 2023 and September 30, 2023 (in thousands): Fair Value as of Fair Value Hierarchy Balance Sheet Location December 31, 2023 September 30, 2023 Assets Interest rate swaps Level 2 Other current assets $ 677 $ 2,558 Liabilities Interest rate swaps Level 2 Other non-current liabilities $ 2,300 $ 65 The Company estimates the fair value of interest rate swaps using a valuation model based on observable market data, such as yield curves. Both swaps are classified as Level 2 measurement in the fair value hierarchy. The following table summarizes the effects of the interest rate derivative instruments on Accumulated other comprehensive income (loss) for the three months ended December 31, 2023 and 2022 (in thousands): Before-tax Amount Income Tax Expense Net of Tax Amount Balance - September 30, 2023 $ 2,493 $ 615 $ 1,878 Amount of loss recognized in other comprehensive income (loss) ( 3,437 ) ( 840 ) ( 2,596 ) Amount of gain reclassified from accumulated other comprehensive income (loss) into net income (loss) ( 678 ) ( 180 ) ( 499 ) Balance - December 31, 2023 $ ( 1,622 ) $ ( 405 ) $ ( 1,217 ) Before-tax Amount Income Tax Expense Net of Tax Amount Balance - September 30, 2022 $ — $ — $ — Amount of loss recognized in other comprehensive income (loss) ( 2,544 ) ( 674 ) ( 1,870 ) Amount of loss reclassified from accumulated other comprehensive income (loss) into net income (loss) 101 27 74 Balance - December 31, 2022 $ ( 2,443 ) $ ( 647 ) $ ( 1,796 ) Other Financial Instruments The carrying values and the estimated fair values of the debt financial instruments (Level 2 measurements) consisted of the following (in thousands): December 31, 2023 September 30, 2023 Carrying Estimated Carrying Estimated Term Loan due April 28, 2029 $ 592,500 $ 596,944 $ 594,000 $ 595,485 Financial instruments remeasure at fair value on a recurring basis – During the year ended September 30, 2022, the Company entered into an arrangement for a contingent payment to the former owner and employee of StruXure. The contingent payment is based on achievement of a minimum EBITDA amount and a multiple of EBITDA, for EBITDA exceeding a higher threshold for calendar year 2022. Based on the formula, the potential contingent payout can range from zero to $ 13.9 million. At the date of acquisition, the fair value was estimated to be $ 9.5 million. As of March 31, 2023, the fair value was increased to $ 12.7 million based on the actual EBITDA amount for StruXure. Compensation expense of $ 9.5 million was recognized for the year ended September 30, 2022 and $ 3.2 million was recognized for the year ended September 30, 2023. The Company paid $ 12.7 million as settlement of the contingent liability in April, 2023. In connection with the acquisition of INTEX on August 1, 2022 , the Company entered into a contingent consideration arrangement with the former owner of INTEX. The contingent consideration is based on achievement of a minimum gross profit amount for calendar year 2022. Based on the formula, the potential contingent consideration can range from zero to $ 6.2 million. At the date of the acquisition, the fair value was estimated to be $ 5.8 million. As of December 31, 2022, the fair value was increased to $ 6.2 million. Contingent payment of $ 5.8 million was included in the acquisition purchase price at the date of acquisition and the change in fair value of $ 0.4 million was recognized in selling, general and administrative expense for the year ended September 30, 2023. The Company paid $ 6.2 million as settlement of this contingent liability in fiscal year 2023. |
Segments
Segments | 3 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segments | 12. SEGMENTS Operating segments for the Company are determined based on information used by the chief operating decision maker (“CODM”) in deciding how to evaluate performance and allocate resources to each of the segments. The CODM reviews Adjusted EBITDA and Adjusted EBITDA Margin as the key segment measures of performance. Adjusted EBITDA is defined as segment operating income (loss) plus depreciation and amortization, adjusted by adding thereto or subtracting therefrom stock-based compensation costs, business transformation costs, acquisition costs, capital structure transaction costs, and certain other costs. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by net sales. The Company has two reportable segments, Residential and Commercial. The reportable segments were determined primarily based on products and end markets as follows: Residential—The Residential segment manufactures and distributes decking, rail, pergolas, outdoor structures, exterior trim, siding and accessories through a national network of dealers and distributors and multiple home improvement retailers providing extensive geographic coverage and enabling the Company to effectively serve contractors. Regional recyclers provides full-service recycled PVC material processing, sourcing, logistical support, and scrap management programs that are utilized in our finished goods manufacturing processes. This segment is impacted by trends in and the strength of home repair and remodel activity. Commercial—The Commercial segment manufactures, fabricates and distributes lockers and bathroom partitions. This segment is impacted by trends in and the strength of the repair and remodel sector. This segment also previously included the Company’s Vycom business, which manufactured resin-based extruded sheeting products for a variety of commercial and industrial applications. The Company sold the Vycom business on November 1, 2023. See Note 3 for additional information on the divestiture. The segment data below includes data for Residential and Commercial for the three months ended December 31, 2023 and 2022 (in thousands). Three Months Ended 2023 2022 Net sales to customers Residential $ 223,000 $ 179,484 Commercial 17,444 36,775 Total $ 240,444 $ 216,259 Adjusted EBITDA Residential (1) $ 52,762 $ 9,946 Commercial 2,905 5,154 Total Adjusted EBITDA for reporting segments $ 55,667 $ 15,100 Adjustments to Income before income tax provision Depreciation and amortization ( 31,937 ) ( 33,840 ) Stock-based compensation costs ( 8,468 ) ( 3,957 ) Acquisition and divestiture costs (2) ( 492 ) ( 2,954 ) Gain on sale of business (3) 38,515 — Other costs (4) ( 2,768 ) ( 214 ) Interest expense, net ( 7,910 ) ( 9,299 ) Income (loss) before income tax provision $ 42,607 $ ( 35,164 ) (1) Effective as of December 31, 2023, Residential segment Adjusted EBITDA includes all corporate expenses, such as selling, general and administrative costs related to our corporate offices, including payroll and other professional fees. The prior period has been recast to reflect the change. (2) Acquisition and divestiture costs reflect costs related to divestiture of $ 0.5 million for both the three months ended December 31, 2023 and 2022, respectively, and costs directly related to completed acquisitions of $ 2.4 million in the three months ended December 31, 2022. (3) Gain on sale of business relates to the sale of the Vycom business. (4) Other costs reflect costs related to the removal of dispensable equipment resulting from a modification of our manufacturing process of $ 2.4 million in the three months ended December 31, 2023, reduction in workforce costs of $ 0.3 million in the three months ended December 31, 2023, and costs for legal expenses of $ 0.1 million and $ 0.2 million in the three months ended December 31, 2023 and 2022, respectively. |
Capital Stock
Capital Stock | 3 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock | 13. CAPITAL STOCK Share Repurchase Program On May 5, 2022, the Board of Directors authorized the Company to repurchase up to $ 400 million of the Company’s Class A common stock (the “Share Repurchase Program”). The Share Repurchase Program allows the Company to repurchase its shares opportunistically from time to time. Purchases may be effected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, accelerated share repurchases or tender offers, some of which may be effected through Rule 10b5-1 plans, or a combination of the foregoing. The timing of repurchases will depend upon several factors, including market and business conditions, and repurchases may be discontinued at any time. On December 4, 2023, the Company entered into a $ 100 million accelerated share repurchase agreement, or the “ASR” with Goldman Sachs & Co. LLC, or “Goldman Sachs”. Goldman Sachs delivered 2,291,607 initial shares to the Company on December 6, 2023, based on the closing price of the Company’s Class A common stock of $ 34.91 on December 4, 2023. The total value of the initial shares represents 80 % of the $ 100 million ASR. The final settlement will be based on the volume-weighted average price of the Company's Class A common stock over the repurchase period, subject to certain adjustments. The Company expects to settle the ASR in the second quarter of fiscal year 2024. During the three months ended December 31, 2022, the Company repurchased 352,760 shares of its Class A common stock on the open market at an average price of $ 21.23 per share, totaling an approximately $ 7.5 million reacquisition cost. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”), that includes, among other provisions, a one percent excise tax on net repurchases of stock after December 31, 2022. For the three months ended December 31, 2023, the Company recognized $ 0.8 million excise tax as reacquisition cost of share repurchases. As of December 31, 2023 , the Company had approximately $ 101.1 million available for repurchases under the Share Repurchase Program. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 14. STOCK-BASED COMPENSATION The Company grants stock-based awards to attract, retain and motivate key employees and directors. The 2020 Omnibus Incentive Compensation Plan (“2020 Plan”), provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, and performance-based or other equity-related awards to the Company’s employees and directors. The maximum aggregate number of shares that may be issued under the 2020 Plan is 15,852,319 shares with 2,219,224 shares remaining in the reserve. The total aggregate number of shares may be adjusted as determined by the Board of Directors. On December 11, 2023, the Compensation Committee of the Board of Directors authorized certain changes to a former employee’s stock-based awards which were effective in connection with his retirement. These changes allow certain awards to continue to vest in due course following retirement and extend the exercisability of certain outstanding and exercisable stock options to the end of the contractual term of the options. This resulted in a Type III Modification (improbable to probable) as defined in accounting guidance, accounted for as a cancellation of the original award and an issuance of a new grant, as well as, a Type I Modification (probable to probable), accounted for as an exchange of the original award for a new grant under the revised terms. The modifications resulted in $ 1.9 million of stock-based compensation expense in the three months ended December 31, 2023. Stock-based compensation expense for the three months ended December 31, 2023 and 2022 was $ 8.5 million and $ 4.0 million , respectively, recognized in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Comprehensive Income (Loss). Total income tax benefit for the three months ended December 31, 2023 and 2022 was $ 1.7 million and $ 0.8 million, respectively. As of December 31, 2023 , the Company had not yet recognized compensation cost on unvested stock-based awards of $ 36.6 million, with a weighted average remaining recognition period of 2.0 years. The Company uses the Black Scholes pricing model to estimate the fair value of its service-based awards as of the grant date. Under the terms of the 2020 Plan, all stock options will expire if not exercised within ten years of the grant date. The following table sets forth the significant assumptions used for the calculation of stock-based compensation expense for the three months ended December 31, 2023 and 2022: December 15, December 12, Risk-free interest rate 3.93 % 3.77 % Expected volatility 40.00 % 40.00 % Expected term (in years) 6.00 6.00 Expected dividend yield 0.00 % 0.00 % Stock Options The following table summarizes the performance-based stock option activity for the three months ended December 31, 2023: Number Weighted Weighted Aggregate (in years) (in thousands) Outstanding at October 1, 2023 1,114,261 $ 23.00 Granted — — Exercised ( 60,261 ) 23.00 Cancelled/Forfeited — — Outstanding at December 31, 2023 1,054,000 23.00 6.4 16,074 Vested and exercisable at December 31, 2023 1,054,000 $ 23.00 6.4 16,074 The following table summarizes the service-based stock option activity for the three months ended December 31, 2023: Number Weighted Weighted Aggregate (in years) (in thousands) Outstanding at October 1, 2023 3,361,707 $ 25.43 Granted 138,731 38.15 Exercised ( 76,624 ) 24.17 Cancelled/Forfeited — — Outstanding at December 31, 2023 3,423,814 25.97 7.0 43,493 Vested and exercisable at December 31, 2023 2,475,222 $ 24.78 6.7 33,921 Restricted Stock Awards A summary of the service-based restricted stock awards activity during the three months ended December 31, 2023 was as follows: Number Weighted Outstanding and unvested at October 1, 2023 82,481 $ 23.00 Granted — — Vested ( 6,845 ) 23.00 Forfeited — — Outstanding and unvested at December 31, 2023 75,636 $ 23.00 Performance Restricted Stock Units Performance restricted stock units were granted to officers and certain employees of the Company and represent the right to earn shares of Company common stock based on the achievement of company-wide non-GAAP performance conditions, including cumulative net sales, average return on net tangible assets and cumulative EBITDA during the three-year performance period. Compensation cost is amortized into expense over the performance period, which is generally three years, and is based on the probability of meeting performance targets. The fair value of each performance share award is based on the closing stock price on the date of grant. A summary of the performance-based restricted stock unit awards activity for the three months ended December 31, 2023 presented at target was as follows: Number Weighted Outstanding and unvested at October 1, 2023 508,622 $ 26.72 Granted 215,462 38.15 Vested ( 123,821 ) 34.82 Forfeited ( 3,308 ) 28.01 Outstanding and unvested at December 31, 2023 596,955 $ 28.91 Restricted Stock Units A summary of the service-based restricted stock unit awards activity for the three months ended December 31, 2023 was as follows: Number Weighted Outstanding and unvested at October 1, 2023 786,096 $ 25.42 Granted 204,796 38.12 Vested ( 224,591 ) 28.14 Forfeited ( 2,102 ) 24.85 Outstanding and unvested at December 31, 2023 764,199 $ 28.01 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 15. EARNINGS PER SHARE The Company computes earnings per common share (“EPS”) under the two-class method which requires the allocation of all distributed and undistributed earnings attributable to the Company to common stock and other participating securities based on their respective rights to receive distributions of earnings or losses. The Company’s Class A common stock and Class B common stock equally share in distributed and undistributed earnings, and, therefore, no allocation to participating securities or dilutive securities is performed. Basic EPS attributable to common stockholders is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding. Diluted EPS is calculated by adjusting weighted average shares outstanding for the dilutive effect of potential common shares, determined using the treasury-stock method. For purposes of the diluted EPS calculation, restricted stock awards, restricted stock units and options to purchase shares of common stock are considered to be potential common shares. The following table sets forth the computation of the Company’s basic and diluted EPS attributable to common stockholders (in thousands, except share and per share amounts): Three Months Ended December 31, 2023 2022 Numerator: Net income (loss) $ 25,719 $ ( 25,836 ) Net income (loss) attributable to $ 25,719 $ ( 25,836 ) Denominator: Weighted-average shares of common stock Basic 147,297,662 150,877,635 Diluted 148,876,282 150,877,635 Net income (loss) per share attributable Net income (loss) per common share - basic $ 0.17 $ ( 0.17 ) Net income (loss) per common share - diluted $ 0.17 $ ( 0.17 ) The following table includes the number of shares that may be dilutive common shares in the future, and were not included in the computation of diluted net income per share because the effect was anti-dilutive: Three Months Ended December 31, 2023 2022 Stock Options 547,890 5,010,161 Restricted Stock Units 108,736 531,462 |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 16. INCOME TAXES The Company calculates the interim tax provision in accordance with the provisions of ASC 740-270, Income Taxes; Interim Reporting , specifically ASC-740-270-25-2. For interim periods, the Company estimates the annual effective income tax rate and applies the estimated rate to the year-to-date income or loss before income taxes. The effective income tax rates for the three months ended December 31, 2023 and 2022 were 39.6 % and 26.5 % , respectively. The increase in the effective income tax rate for the three months ended December 31, 2023, as compared to the three months ended December 31, 2022, was primarily driven by the tax effects related to the sale of the Vycom business. |
Commitments And Contingencies
Commitments And Contingencies | 3 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | 17. COMMITMENTS AND CONTINGENCIES Legal Proceedings During the year ended September 30, 2019, the Company was made aware of a worker’s compensation case that became reasonably possible to give rise to a liability. Discovery has been completed, and the Company filed motions for summary judgment in April 2023. On November 8, 2023, the court granted the Company's motions for summary judgment seeking to dismiss Scranton Products Inc. and The AZEK Company Inc. but denied the Company's motions for summary judgment seeking to dismiss The AZEK Group LLC and Vycom Corp. A trial date has been set for May 2024. In the normal course of the Company’s business, it is at times subject to various other legal actions, in some cases for which the relief or damages sought may be substantial. Although the Company is not able to predict the outcome of legal actions to which it may be subject, after reviewing all pending and threatened actions with counsel and based on information currently available, management believes that the outcome of such actions, individually or in the aggregate, will not have a material adverse effect on the Company’s results of operations or financial position. However, it is possible that the ultimate resolution of such matters, if unfavorable, may be material to the Company’s results of operations in a particular future period as the time and amount of any resolution of such actions and its relationship to the future results of operations are not currently known. The Company accrues for losses when they are probable of occurrence and such losses are reasonably estimable. Legal costs expected to be incurred are accounted for as they are incurred. |
Condensed Financial Information
Condensed Financial Information of Registrant (Parent Company Only) | 3 Months Ended |
Dec. 31, 2023 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Information of Registrant (Parent Company Only) | 18. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) The AZEK Company Inc. (parent company only) Balance Sheets (In thousands of U.S. dollars, except for share and per share amounts) December 31, September 30, ASSETS: Non-current assets: Investments in subsidiaries $ 1,359,305 $ 1,429,643 Total non-current assets 1,359,305 1,429,643 Total assets $ 1,359,305 $ 1,429,643 LIABILITIES AND STOCKHOLDERS’ EQUITY: Total liabilities $ — $ — Stockholders’ equity: Preferred stock, $ 0.001 par value; 1,000,000 shares authorized and no shares — — Class A common stock, $ 0.001 par value; 1,100,000,000 shares authorized, 156,341,203 and 155,967,736 shares issued at December 31, 2023 and 156 156 Class B common stock, $ 0.001 par value; 100,000,000 shares authorized, 0 shares and 100 shares issued and outstanding at December 31, 2023 and — — Additional paid‑in capital 1,650,160 1,662,322 Accumulated deficit ( 19,328 ) ( 45,047 ) Accumulated other comprehensive income (loss) ( 1,217 ) 1,878 Treasury stock, at cost, 10,560,030 and 8,268,423 shares at December 31, ( 270,466 ) ( 189,666 ) Total stockholders’ equity 1,359,305 1,429,643 Total liabilities and stockholders’ equity $ 1,359,305 $ 1,429,643 Three Months Ended December 31, 2023 2022 Net income (loss) of subsidiaries $ 25,719 $ ( 25,836 ) Net income (loss) of subsidiaries $ 25,719 $ ( 25,836 ) Comprehensive income (loss) $ 22,624 $ ( 27,632 ) The AZEK Company Inc. did not have any cash as of December 31, 2023 or September 30, 2023. Accordingly a Condensed Statement of Cash Flows has not been presented. Basis of Presentation The parent company financial statements should be read in conjunction with the Company’s Consolidated Financial Statements and the accompanying notes thereto. For purposes of this condensed financial information, the Company’s wholly owned and majority owned subsidiaries are recorded based upon its proportionate share of the subsidiaries’ net assets (similar to presenting them on the equity method). Since the restricted net assets of The AZEK Company Inc. and its subsidiaries exceed 25 % of the consolidated net assets of the Company and its subsidiaries, the accompanying condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X. This information should be read in conjunction with the accompanying Condensed Consolidated Financial Statements. Dividends from Subsidiaries There were $ 100.0 million and $ 7.5 million in cash dividends paid to The AZEK Company Inc. from the Company’s consolidated subsidiaries during the three months ended December 31, 2023 and 2022 , respectively. Cash dividends of $ 100.0 million were used to fund the ASR during the three months ended December 31, 2023 and $ 7.5 million in cash dividends were used to fund share repurchases on the open market during the three months ended December 31, 2022. Restricted Payments The AZEK Group LLC is party to the Revolving Credit Facility and the Term Loan Agreement. The obligations under the Revolving Credit Facility and Term Loan Agreement are secured by substantially all of the present and future assets of the borrowers and guarantors, including equity interests of their domestic subsidiaries, subject to certain exceptions. The obligations under the Revolving Credit Facility and Term Loan Agreement are guaranteed by the Company and its wholly owned domestic subsidiaries other than certain immaterial subsidiaries and other excluded subsidiaries. The AZEK Group LLC is not permitted to make certain payments unless those payments are consistent with exceptions set forth in the agreements. These payments include repurchase of equity interests, fees associated with a public offering, income taxes due in other applicable payments. Further, the payments are only permitted if certain conditions are met related to availability and fixed charge coverage as defined in the Revolving Credit Facility and described in Note 8. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company operates on a fiscal year ending September 30. The accompanying unaudited Condensed Consolidated Financial Statements and notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position, its results of operations and cash flows for the interim periods presented. The results of operations for the three months ended December 31, 2023 and the cash flows for the three months ended December 31, 2023 are not necessarily indicative of the results to be expected for the full fiscal year or any other period. The Company’s financial condition and results of operations are affected by a number of factors, including, but not limited to, the cost to manufacture and distribute products, cost of raw materials, inflation, consumer spending and preferences, interest rates, the impact of any supply chain disruptions, economic conditions, and/or any adverse effects from geopolitical conflicts, global health pandemics and other factors beyond the Company’s control. Management cannot predict the degree to, or the period over, which the Company may be affected by such factors. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s 2023 Form 10-K. The Condensed Consolidated Balance Sheet as of September 30, 2023 was derived from the audited financial statements at that date. There have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2023 Form 10-K, except as noted below. Certain reclassifications have been made to prior year financial statements to conform to classifications used in the current year. These reclassifications had no impact on net income, stockholder’s equity or cash flows as previously reported. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Significant estimates include revenue recognition, reserves for excess inventory, inventory obsolescence, inventory valuation, product warranties, customer rebates, stock-based compensation, litigation, income taxes, contingent consideration, goodwill and intangible asset valuation and accounting for long-lived assets. Management’s estimates and assumptions are evaluated on an ongoing basis and are based on historical experience, current conditions and available information. Actual results may differ from estimated amounts. Estimates are revised as additional information becomes available. |
Accounting Policies | Accounting Policies Refer to the Company’s 2023 Form 10-K for a discussion of the Company’s accounting policies, as updated below and for recently adopted accounting standards. |
Research and Development Costs | Research and Development Costs Research and development costs primarily relate to new product development, product claims support and manufacturing process improvements. Such costs are expensed as incurred and are included in “Selling, general and administrative expenses” within the Condensed Consolidated Statements of Comprehensive Income (Loss). Total research and development expenses were $ 3.1 million and $ 2.1 million , respectively, for the three months ended December 31, 2023 and 2022 . |
Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements None. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, Segment Reporting (Topic 280) : Improvements to Reportable Segment Disclosures . This standard requires all public entities that are subject to segment reporting requirements to disclose additional information, including significant segment expenses and other segment items on an annual and interim basis. It also requires the disclosure of the title and the position of the chief operating decision maker and how the reported measures are used for making business decisions. This standard is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company intends to adopt the updated standard during the fiscal year beginning October 1, 2024. The Company is currently evaluating the impact the adoption of this standard will have on its disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This standard expands the disclosure requirements primarily on the rate reconciliation and income tax paid. For public entities, this standard is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The Company intends to adopt the updated standard during the fiscal year beginning October 1, 2025. The Company is currently evaluating the impact the adoption of this standard will have on its disclosures. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Rebate Activity | The rebate activity was as follows (in thousands): Three Months Ended December 31, 2023 2022 Beginning balance $ 66,958 $ 56,542 Rebate expense 22,239 15,716 Rebate payments ( 16,804 ) ( 11,192 ) Ending balance $ 72,393 $ 61,066 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): in thousands December 31, September 30, Raw materials $ 60,918 $ 67,330 Work in process 31,742 37,038 Finished goods 168,902 116,733 Total inventories $ 261,562 $ 221,101 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Net (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment - Net | Property, plant and equipment – net consisted of the following (in thousands): December 31, September 30, Land $ 3,209 $ 4,829 Buildings and improvements 103,824 129,031 Manufacturing equipment 595,551 624,754 Computer equipment 32,561 32,300 Furniture and fixtures 6,614 7,290 Vehicles 1,163 1,105 Total property and equipment 742,922 799,309 Construction in progress 79,314 94,422 822,236 893,731 Accumulated depreciation ( 365,732 ) ( 392,708 ) Total property and equipment – net $ 456,504 $ 501,023 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Net (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | Goodwill consisted of the following (in thousands): Residential Commercial Total Goodwill before impairment as of September 30, 2023 $ 953,882 $ 72,589 $ 1,026,471 Accumulated impairment losses as of September 30, 2023 — ( 32,200 ) ( 32,200 ) Goodwill, net as of September 30, 2023 $ 953,882 $ 40,389 $ 994,271 Divestiture Goodwill disposal before impairment — ( 58,655 ) ( 58,655 ) Accumulated impairment losses — 32,200 32,200 Goodwill, net disposal — ( 26,455 ) ( 26,455 ) Goodwill before impairment as of December 31, 2023 $ 953,882 $ 13,934 $ 967,816 Accumulated impairment losses as of December 31, 2023 — — — Goodwill, net as of December 31, 2023 $ 953,882 $ 13,934 $ 967,816 |
Summary of Finite-lived Intangible Assets | Finite-lived intangible assets consisted of the following (in thousands): December 31, 2023 Lives in Gross Accumulated Net Proprietary knowledge 10 — 15 $ 300,400 $ ( 257,358 ) $ 43,042 Trademarks 5 — 20 217,640 ( 158,382 ) 59,258 Customer relationships 12 — 19 156,452 ( 77,558 ) 78,894 Patents 9 — 10 8,500 ( 6,138 ) 2,362 Other intangibles 3 — 15 4,076 ( 4,028 ) 48 Total intangible assets $ 687,068 $ ( 503,464 ) $ 183,604 September 30, 2023 Lives in Gross Accumulated Net Propriety knowledge 10 — 15 $ 300,400 $ ( 253,608 ) $ 46,792 Trademarks 5 — 20 230,240 ( 164,759 ) 65,481 Customer relationships 12 — 19 176,852 ( 92,268 ) 84,584 Patents 9 — 10 8,500 ( 5,913 ) 2,587 Other intangible assets 3 — 15 4,076 ( 4,023 ) 53 Total intangible assets $ 720,068 $ ( 520,571 ) $ 199,497 |
Composition of Certain Balanc_2
Composition of Certain Balance Sheet Accounts (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Composition Of Certain Balance Sheet Accounts Disclosure [Abstract] | |
Summary of Allowance for Doubtful Accounts | Allowance for doubtful accounts consisted of the following (in thousands): Three Months Ended December 31, 2023 2022 Beginning balance $ 1,773 $ 1,397 Provision ( 433 ) 277 Divestiture ( 32 ) — Ending balance $ 1,308 $ 1,674 |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses consisted of the following (in thousands): December 31, 2023 September 30, 2023 Taxes $ 28,168 $ 6,959 Employee related liabilities 20,673 34,313 Marketing 4,799 3,868 Lease liability - operating 4,559 4,180 Customer deposits 3,771 4,152 Warranty 2,927 2,739 Lease liability - finance 2,829 2,777 Freight 1,833 1,242 Utilities 1,802 2,141 Professional fees 1,706 2,073 Construction in progress 1,530 2,863 Commissions 873 991 Other 5,529 3,696 Total accrued expenses and other current liabilities $ 80,999 $ 71,994 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt | Debt consisted of the following (in thousands): December 31, 2023 September 30, 2023 Term Loan due April 28, 2029 — SOFR + 2.50 % + 0.1 % ( 7.96 % at December 31, 2023 and 7.92 % at September 30, 2023) $ 592,500 $ 594,000 Revolving Credit Facility through March 31, 2026 - SOFR + 0.1 % — — Total 592,500 594,000 Less unamortized deferred financing costs ( 3,818 ) ( 3,996 ) Less unamortized original issue discount ( 3,571 ) ( 3,739 ) Less current portion ( 6,000 ) ( 6,000 ) Long-term debt—less current portion and unamortized $ 579,111 $ 580,265 |
Summary of Interest Expense | Interest expense consisted of the following (in thousands): Three Months Ended December 31, 2023 2022 Interest expense: Term Loan Agreement $ 11,358 $ 8,916 Revolving Credit Facility 150 151 Other 1,123 1,109 Amortization - Deferred financing costs Term Loan Agreement 179 179 Revolving Credit Facility 66 66 Amortization - Original issue discount Term Loan Agreement 167 167 Capitalized interest ( 1,079 ) ( 1,289 ) Interest expense 11,964 9,299 Interest income ( 4,054 ) — Interest expense, net $ 7,910 $ 9,299 |
Product Warranties (Tables)
Product Warranties (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Product Warranties Disclosures [Abstract] | |
Summary of Warranty Reserve Activity | Warranty coverage depends on the product involved. The warranty reserve activity consisted of the following (in thousands): Three Months Ended December 31, 2023 2022 Beginning balance $ 16,195 $ 15,023 Adjustments to reserve ( 542 ) ( 172 ) Warranty claims payment ( 624 ) ( 313 ) Ending balance 15,029 14,538 Current portion of accrued warranty ( 2,927 ) ( 2,492 ) Accrued warranty – less current portion $ 12,102 $ 12,046 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Summary of Lease Assets and Lease Liabilities | Lease assets and lease liabilities as of December 31, 2023 and September 30, 2023 were as follows (in thousands): Leases Classification on Balance Sheet December 31, 2023 September 30, 2023 Assets ROU operating lease assets Other assets $ 16,068 $ 15,423 ROU finance lease assets Other assets 70,554 71,529 Total lease assets $ 86,622 $ 86,952 Liabilities Current Operating Accrued expenses and other liabilities $ 4,559 $ 4,180 Finance Accrued expenses and other liabilities 2,829 2,777 Non-Current Operating Other non-current liabilities 13,916 13,699 Finance Other non-current liabilities 75,276 75,718 Total lease liabilities $ 96,580 $ 96,374 |
Components of Lease Expense | The components of lease expense for the three months ended December 31, 2023 and 2022 were as follows: Three Months Ended December 31, (in thousands) 2023 2022 Operating lease expense $ 1,478 $ 1,501 Finance lease amortization of assets 1,301 1,248 Finance lease interest on lease liabilities 1,107 1,092 Short term 86 103 Sublease income ( 28 ) ( 71 ) Total lease expense $ 3,944 $ 3,873 |
Supplemental Information Related to Leases | The tables below present supplemental information related to leases as of December 31, 2023 and September 30, 2023: Weighted-average remaining lease term (years) December 31, 2023 September 30, 2023 Operating leases 6.4 6.8 Finance leases 25.3 25.4 Weighted-average discount rate Operating leases 4.7 % 4.4 % Finance leases 5.8 % 5.8 % |
Summary of Maturities of Lease Liabilities | The following table summarizes the maturities of lease liabilities at December 31, 2023: (in thousands) Operating Leases Finance Leases Total 2024 $ 4,045 $ 5,358 $ 9,403 2025 4,719 7,105 11,824 2026 2,844 6,942 9,786 2027 2,105 6,480 8,585 2028 1,841 5,278 7,119 Thereafter 6,071 117,012 123,083 Total lease payments 21,625 148,175 169,800 Less: interest ( 3,150 ) ( 70,070 ) ( 73,220 ) Present value of lease liability $ 18,475 $ 78,105 $ 96,580 |
Fair Value Of Financial Instr_2
Fair Value Of Financial Instruments (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Values of Interest Rate Derivative Instruments as well as Classification on Balance Sheet | The following table provides the fair values of the interest rate derivative instruments as well as their classification on the Balance Sheet as of December 31, 2023 and September 30, 2023 (in thousands): Fair Value as of Fair Value Hierarchy Balance Sheet Location December 31, 2023 September 30, 2023 Assets Interest rate swaps Level 2 Other current assets $ 677 $ 2,558 Liabilities Interest rate swaps Level 2 Other non-current liabilities $ 2,300 $ 65 |
Summary of Effects of Interest Rate Derivative Instruments | The following table summarizes the effects of the interest rate derivative instruments on Accumulated other comprehensive income (loss) for the three months ended December 31, 2023 and 2022 (in thousands): Before-tax Amount Income Tax Expense Net of Tax Amount Balance - September 30, 2023 $ 2,493 $ 615 $ 1,878 Amount of loss recognized in other comprehensive income (loss) ( 3,437 ) ( 840 ) ( 2,596 ) Amount of gain reclassified from accumulated other comprehensive income (loss) into net income (loss) ( 678 ) ( 180 ) ( 499 ) Balance - December 31, 2023 $ ( 1,622 ) $ ( 405 ) $ ( 1,217 ) Before-tax Amount Income Tax Expense Net of Tax Amount Balance - September 30, 2022 $ — $ — $ — Amount of loss recognized in other comprehensive income (loss) ( 2,544 ) ( 674 ) ( 1,870 ) Amount of loss reclassified from accumulated other comprehensive income (loss) into net income (loss) 101 27 74 Balance - December 31, 2022 $ ( 2,443 ) $ ( 647 ) $ ( 1,796 ) |
Summary of Carrying Values and the Estimated Fair Values of the Debt Financial Instruments | The carrying values and the estimated fair values of the debt financial instruments (Level 2 measurements) consisted of the following (in thousands): December 31, 2023 September 30, 2023 Carrying Estimated Carrying Estimated Term Loan due April 28, 2029 $ 592,500 $ 596,944 $ 594,000 $ 595,485 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Summary of Residential and Commercial Segment Reporting Information | The segment data below includes data for Residential and Commercial for the three months ended December 31, 2023 and 2022 (in thousands). Three Months Ended 2023 2022 Net sales to customers Residential $ 223,000 $ 179,484 Commercial 17,444 36,775 Total $ 240,444 $ 216,259 Adjusted EBITDA Residential (1) $ 52,762 $ 9,946 Commercial 2,905 5,154 Total Adjusted EBITDA for reporting segments $ 55,667 $ 15,100 Adjustments to Income before income tax provision Depreciation and amortization ( 31,937 ) ( 33,840 ) Stock-based compensation costs ( 8,468 ) ( 3,957 ) Acquisition and divestiture costs (2) ( 492 ) ( 2,954 ) Gain on sale of business (3) 38,515 — Other costs (4) ( 2,768 ) ( 214 ) Interest expense, net ( 7,910 ) ( 9,299 ) Income (loss) before income tax provision $ 42,607 $ ( 35,164 ) (1) Effective as of December 31, 2023, Residential segment Adjusted EBITDA includes all corporate expenses, such as selling, general and administrative costs related to our corporate offices, including payroll and other professional fees. The prior period has been recast to reflect the change. (2) Acquisition and divestiture costs reflect costs related to divestiture of $ 0.5 million for both the three months ended December 31, 2023 and 2022, respectively, and costs directly related to completed acquisitions of $ 2.4 million in the three months ended December 31, 2022. (3) Gain on sale of business relates to the sale of the Vycom business. (4) Other costs reflect costs related to the removal of dispensable equipment resulting from a modification of our manufacturing process of $ 2.4 million in the three months ended December 31, 2023, reduction in workforce costs of $ 0.3 million in the three months ended December 31, 2023, and costs for legal expenses of $ 0.1 million and $ 0.2 million in the three months ended December 31, 2023 and 2022, respectively. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Share-Based Payment Award Valuation Assumptions | The following table sets forth the significant assumptions used for the calculation of stock-based compensation expense for the three months ended December 31, 2023 and 2022: December 15, December 12, Risk-free interest rate 3.93 % 3.77 % Expected volatility 40.00 % 40.00 % Expected term (in years) 6.00 6.00 Expected dividend yield 0.00 % 0.00 % |
Performance Shares [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Share-Based Compensation Stock Options Activity | The following table summarizes the performance-based stock option activity for the three months ended December 31, 2023: Number Weighted Weighted Aggregate (in years) (in thousands) Outstanding at October 1, 2023 1,114,261 $ 23.00 Granted — — Exercised ( 60,261 ) 23.00 Cancelled/Forfeited — — Outstanding at December 31, 2023 1,054,000 23.00 6.4 16,074 Vested and exercisable at December 31, 2023 1,054,000 $ 23.00 6.4 16,074 |
Service Based Stock Option Activity [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Share-Based Compensation Stock Options Activity | The following table summarizes the service-based stock option activity for the three months ended December 31, 2023: Number Weighted Weighted Aggregate (in years) (in thousands) Outstanding at October 1, 2023 3,361,707 $ 25.43 Granted 138,731 38.15 Exercised ( 76,624 ) 24.17 Cancelled/Forfeited — — Outstanding at December 31, 2023 3,423,814 25.97 7.0 43,493 Vested and exercisable at December 31, 2023 2,475,222 $ 24.78 6.7 33,921 |
Service Based Restricted Stock [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Non-Vested Restricted Stock Activity | A summary of the service-based restricted stock awards activity during the three months ended December 31, 2023 was as follows: Number Weighted Outstanding and unvested at October 1, 2023 82,481 $ 23.00 Granted — — Vested ( 6,845 ) 23.00 Forfeited — — Outstanding and unvested at December 31, 2023 75,636 $ 23.00 |
Schedule of Unvested Restricted Stock Units | A summary of the service-based restricted stock unit awards activity for the three months ended December 31, 2023 was as follows: Number Weighted Outstanding and unvested at October 1, 2023 786,096 $ 25.42 Granted 204,796 38.12 Vested ( 224,591 ) 28.14 Forfeited ( 2,102 ) 24.85 Outstanding and unvested at December 31, 2023 764,199 $ 28.01 |
Performance Based Restricted Stock [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Non-Vested Restricted Stock Activity | A summary of the performance-based restricted stock unit awards activity for the three months ended December 31, 2023 presented at target was as follows: Number Weighted Outstanding and unvested at October 1, 2023 508,622 $ 26.72 Granted 215,462 38.15 Vested ( 123,821 ) 34.82 Forfeited ( 3,308 ) 28.01 Outstanding and unvested at December 31, 2023 596,955 $ 28.91 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic And Diluted Earnings Per Share | The following table sets forth the computation of the Company’s basic and diluted EPS attributable to common stockholders (in thousands, except share and per share amounts): Three Months Ended December 31, 2023 2022 Numerator: Net income (loss) $ 25,719 $ ( 25,836 ) Net income (loss) attributable to $ 25,719 $ ( 25,836 ) Denominator: Weighted-average shares of common stock Basic 147,297,662 150,877,635 Diluted 148,876,282 150,877,635 Net income (loss) per share attributable Net income (loss) per common share - basic $ 0.17 $ ( 0.17 ) Net income (loss) per common share - diluted $ 0.17 $ ( 0.17 ) |
Summary of Antidilutive Securities Excluded From Computation of Earnings Per Share | The following table includes the number of shares that may be dilutive common shares in the future, and were not included in the computation of diluted net income per share because the effect was anti-dilutive: Three Months Ended December 31, 2023 2022 Stock Options 547,890 5,010,161 Restricted Stock Units 108,736 531,462 |
Condensed Financial Informati_2
Condensed Financial Information of Registrant (Parent Company Only) (Tables) - Parent Company [Member] | 3 Months Ended |
Dec. 31, 2023 | |
Schedule of Balance Sheets | The AZEK Company Inc. (parent company only) Balance Sheets (In thousands of U.S. dollars, except for share and per share amounts) December 31, September 30, ASSETS: Non-current assets: Investments in subsidiaries $ 1,359,305 $ 1,429,643 Total non-current assets 1,359,305 1,429,643 Total assets $ 1,359,305 $ 1,429,643 LIABILITIES AND STOCKHOLDERS’ EQUITY: Total liabilities $ — $ — Stockholders’ equity: Preferred stock, $ 0.001 par value; 1,000,000 shares authorized and no shares — — Class A common stock, $ 0.001 par value; 1,100,000,000 shares authorized, 156,341,203 and 155,967,736 shares issued at December 31, 2023 and 156 156 Class B common stock, $ 0.001 par value; 100,000,000 shares authorized, 0 shares and 100 shares issued and outstanding at December 31, 2023 and — — Additional paid‑in capital 1,650,160 1,662,322 Accumulated deficit ( 19,328 ) ( 45,047 ) Accumulated other comprehensive income (loss) ( 1,217 ) 1,878 Treasury stock, at cost, 10,560,030 and 8,268,423 shares at December 31, ( 270,466 ) ( 189,666 ) Total stockholders’ equity 1,359,305 1,429,643 Total liabilities and stockholders’ equity $ 1,359,305 $ 1,429,643 |
Schedule of Statements of Comprehensive Income (Loss) | Three Months Ended December 31, 2023 2022 Net income (loss) of subsidiaries $ 25,719 $ ( 25,836 ) Net income (loss) of subsidiaries $ 25,719 $ ( 25,836 ) Comprehensive income (loss) $ 22,624 $ ( 27,632 ) |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | ||
Research and development expenses | $ 3.1 | $ 2.1 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue from Contract with Customer [Abstract] | |||
Accrued rebates | $ 67,925 | $ 60,974 | $ 54,600 |
Contra trade receivable | $ 4,500 | $ 6,500 |
Revenue - Summary of Rebate Act
Revenue - Summary of Rebate Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Beginning balance | $ 66,958 | $ 56,542 |
Rebate expense | 22,239 | 15,716 |
Rebate payments | (16,804) | (11,192) |
Ending balance | $ 72,393 | $ 61,066 |
Divestiture - Additional Inform
Divestiture - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 01, 2023 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | ||
Gain on sale of business | $ 38,515 | |
Vycom Business [Member] | ||
Business Acquisition [Line Items] | ||
Sales transaction closing date | Nov. 01, 2023 | |
Net proceeds from sale of business | $ 133,100 | |
Gain on sale of business | $ 38,500 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 60,918 | $ 67,330 |
Work in process | 31,742 | 37,038 |
Finished goods | 168,902 | 116,733 |
Total inventories | $ 261,562 | $ 221,101 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Net - Summary of Property, Plant and Equipment - Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Property, Plant and Equipment [Abstract] | ||
Land | $ 3,209 | $ 4,829 |
Buildings and improvements | 103,824 | 129,031 |
Manufacturing equipment | 595,551 | 624,754 |
Computer equipment | 32,561 | 32,300 |
Furniture and fixtures | 6,614 | 7,290 |
Vehicles | 1,163 | 1,105 |
Property Plant and Equipment Excluding Construction in Progress Gross | 742,922 | 799,309 |
Construction in progress | 79,314 | 94,422 |
Property and Equipment, Gross | 822,236 | 893,731 |
Accumulated depreciation | (365,732) | (392,708) |
Total property and equipment – net | $ 456,504 | $ 501,023 |
Property, Plant and Equipment_4
Property, Plant and Equipment - Net - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 20.5 | $ 20.8 |
Interest Capitalized | $ 1.1 | $ 1.3 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Net - Summary of Changes in Carrying Amount of Goodwill (Detail) $ in Thousands | 3 Months Ended |
Dec. 31, 2023 USD ($) | |
Goodwill [Line Items] | |
Goodwill before impairment, beginning balance | $ 1,026,471 |
Accumulated impairment losses, beginning balance | (32,200) |
Goodwill net, beginning balance | 994,271 |
Divestiture - Goodwill disposal before impairment | (58,655) |
Divestiture - Accumulated impairment losses | 32,200 |
Divestiture - Goodwill, net disposal | (26,455) |
Goodwill before impairment, ending balance | 967,816 |
Goodwill net, ending balance | 967,816 |
Residential [Member] | |
Goodwill [Line Items] | |
Goodwill before impairment, beginning balance | 953,882 |
Goodwill net, beginning balance | 953,882 |
Goodwill before impairment, ending balance | 953,882 |
Goodwill net, ending balance | 953,882 |
Commercial [Member] | |
Goodwill [Line Items] | |
Goodwill before impairment, beginning balance | 72,589 |
Accumulated impairment losses, beginning balance | (32,200) |
Goodwill net, beginning balance | 40,389 |
Divestiture - Goodwill disposal before impairment | (58,655) |
Divestiture - Accumulated impairment losses | 32,200 |
Divestiture - Goodwill, net disposal | (26,455) |
Goodwill before impairment, ending balance | 13,934 |
Goodwill net, ending balance | $ 13,934 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Net - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Indefinite lived intangible assets other than goodwill | $ 0 | $ 0 | |
Amortization expense | $ 10,164,000 | $ 11,837,000 | |
Remaining weighted-average amortization period for acquired intangible assets | 11 years 1 month 6 days |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Net - Summary of Finite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 687,068 | $ 720,068 |
Accumulated Amortization | (503,464) | (520,571) |
Net Carrying Value | 183,604 | 199,497 |
Proprietary Knowledge [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 300,400 | |
Accumulated Amortization | (257,358) | |
Net Carrying Value | 43,042 | |
Propriety Knowledge [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 300,400 | |
Accumulated Amortization | (253,608) | |
Net Carrying Value | 46,792 | |
Trademarks [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 217,640 | 230,240 |
Accumulated Amortization | (158,382) | (164,759) |
Net Carrying Value | 59,258 | 65,481 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 156,452 | 176,852 |
Accumulated Amortization | (77,558) | (92,268) |
Net Carrying Value | 78,894 | 84,584 |
Patents [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 8,500 | 8,500 |
Accumulated Amortization | (6,138) | (5,913) |
Net Carrying Value | 2,362 | 2,587 |
Other Intangibles [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 4,076 | 4,076 |
Accumulated Amortization | (4,028) | (4,023) |
Net Carrying Value | $ 48 | $ 53 |
Minimum [Member] | Proprietary Knowledge [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 10 years | |
Minimum [Member] | Propriety Knowledge [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 10 years | |
Minimum [Member] | Trademarks [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 5 years | 5 years |
Minimum [Member] | Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 12 years | 12 years |
Minimum [Member] | Patents [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 9 years | 9 years |
Minimum [Member] | Other Intangibles [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 3 years | 3 years |
Maximum [Member] | Proprietary Knowledge [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 15 years | |
Maximum [Member] | Propriety Knowledge [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 15 years | |
Maximum [Member] | Trademarks [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 20 years | 20 years |
Maximum [Member] | Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 19 years | 19 years |
Maximum [Member] | Patents [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 10 years | 10 years |
Maximum [Member] | Other Intangibles [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired finite lived intangible asset useful life | 15 years | 15 years |
Composition of Certain Balanc_3
Composition of Certain Balance Sheet Accounts - Summary of Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Allowance for Credit Loss [Abstract] | ||
Beginning balance | $ 1,773 | $ 1,397 |
Provision | (433) | 277 |
Divestiture | (32) | |
Ending balance | $ 1,308 | $ 1,674 |
Composition of Certain Balanc_4
Composition of Certain Balance Sheet Accounts - Summary of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Employee related liabilities | $ 20,673 | $ 34,313 |
Taxes | 28,168 | 6,959 |
Lease liability - operating | 4,559 | 4,180 |
Customer deposits | 3,771 | 4,152 |
Marketing | 4,799 | 3,868 |
Lease liability - finance | $ 2,829 | $ 2,777 |
Finance Lease Liability Current Statement Of Financial Position [Extensible List] | Total accrued expenses and other current liabilities | Total accrued expenses and other current liabilities |
Warranty | $ 2,927 | $ 2,739 |
Freight | 1,833 | 1,242 |
Utilities | 1,802 | 2,141 |
Commissions | 873 | 991 |
Professional fees | 1,706 | 2,073 |
Construction in progress | 1,530 | 2,863 |
Other | 5,529 | 3,696 |
Total accrued expenses and other current liabilities | $ 80,999 | $ 71,994 |
Debt - Summary of Long-Term Deb
Debt - Summary of Long-Term Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 592,500 | $ 594,000 |
Less unamortized deferred financing costs | (3,818) | (3,996) |
Less unamortized original issue discount | (3,571) | (3,739) |
Less current portion | (6,000) | (6,000) |
Long-term debt—less current portion and unamortized deferred financing costs | 579,111 | 580,265 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | 592,500 | 594,000 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Less unamortized deferred financing costs | $ (600) | $ (700) |
Debt - Summary of Long-Term D_2
Debt - Summary of Long-Term Debt (Detail) (Parenthetical) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Sep. 30, 2023 | |
Term Loan Agreement | ||
Debt Instrument [Line Items] | ||
Debt instrument maturity date | Apr. 28, 2029 | |
Debt instrument, description of variable rate basis | SOFR + 2.50% + 0.1 | SOFR + 2.50% + 0.1 |
Debt instrument, basis spread on variable rate | 2.50% | 2.50% |
Debt instrument rate | 7.96% | 7.92% |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument maturity date | Mar. 31, 2026 | |
Debt instrument, description of variable rate basis | SOFR + 0.1% | SOFR + 0.1% |
Debt instrument, basis spread on variable rate | 0.10% | 0.10% |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jan. 26, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | Sep. 30, 2023 | |
Debt Instrument [Line Items] | |||||
Long-term Debt, Gross | $ 592,500,000 | $ 594,000,000 | |||
Deferred financing cost | $ 3,818,000 | $ 3,996,000 | |||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument maturity date | Mar. 31, 2026 | ||||
Debt instrument, basis spread on variable rate | 0.10% | 0.10% | |||
Deferred financing cost | $ 600,000 | $ 700,000 | |||
Aggregate maximum borrowing capacity | 150,000,000 | ||||
Outstanding letters of credit | 2,200,000 | $ 2,800,000 | |||
Available borrowing capacity | $ 100,000,000 | ||||
Debt instrument interest rate description | (i) for ABR borrowings, the highest of (a) the Federal Funds Rate plus 50 basis points, (b) the prime rate and (c) the Adjusted Term SOFR as of such date for a deposit in U.S. dollars with a maturity of one month plus 100 basis points, plus, in each case, a spread of 25 to 75 basis points, based on average historical availability, or (ii) for SOFR borrowings, the Adjusted Term SOFR plus a spread of 125 to 175 basis points, based on average historical availability. | ||||
Debt instrument, description of variable rate basis | SOFR + 0.1% | SOFR + 0.1% | |||
Line of credit facility, commitment fee description | If the average daily used percentage is greater than 50%, the commitment fee equals 25 basis points, and if the average daily used percentage is less than or equal to 50%, the commitment fee equals 37.5 basis points. | ||||
Line of credit facility, commitment fee amount | $ 100,000 | $ 100,000 | |||
Debt instrument, covenant description | (i) 10% of the lesser of the aggregate commitments under the Revolving Credit Facility and the borrowing base, and (ii) $12.5 million. | ||||
Revolving Credit Facility [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument maturity date | Mar. 31, 2026 | ||||
Revolving Credit Facility [Member] | The AZEK Group LLC | |||||
Debt Instrument [Line Items] | |||||
Outstanding letters of credit | $ 0 | $ 0 | |||
Available borrowing capacity | $ 147,800,000 | ||||
Debt instrument, covenant description | The AZEK Group LLC is also required to make mandatory prepayments (i) when aggregate borrowings exceed commitments or the applicable borrowing base and (ii) during “cash dominion,” which occurs if (a) the availability under the Revolving Credit Facility is less than the greater of (i) $12.5 million and (ii) 10% of the lesser of (x) $150.0 million and (y) the borrowing base, for five consecutive business days or (b) certain events of default have occurred and are continuing. | ||||
Revolving Credit Facility [Member] | The AZEK Group LLC | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Maximum fixed charge coverage ratio | 100 | ||||
Revolving Credit Facility [Member] | The AZEK Group LLC | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Minimum fixed charge coverage ratio | 100 | ||||
Revolving Credit Facility [Member] | Abr Borrowings | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate description | (i) for ABR borrowings, the highest of (a) the Federal Funds Rate plus 50 basis points, (b) the prime rate and (c) the Adjusted Term SOFR as of such date for a deposit in U.S. dollars with a maturity of one month plus 100 basis points, plus, in each case, a spread of 25 to 75 basis points, based on average historical availability | ||||
Revolving Credit Facility [Member] | SOFR Borrowings [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument interest rate description | for SOFR borrowings, the Adjusted Term SOFR plus a spread of 125 to 175 basis points, based on average historical availability | ||||
Federal Funds Rate | Revolving Credit Facility [Member] | Abr Borrowings | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, description of variable rate basis | Federal Funds Rate plus 50 basis points | ||||
Team SOFR | Revolving Credit Facility [Member] | The AZEK Group LLC | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.10% | ||||
Team SOFR | Revolving Credit Facility [Member] | Abr Borrowings | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, description of variable rate basis | Adjusted Term SOFR as of such date for a deposit in U.S. dollars with a maturity of one month plus 100 basis points, plus, in each case, a spread of 25 to 75 basis points | ||||
Team SOFR | Revolving Credit Facility [Member] | SOFR Borrowings [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, description of variable rate basis | Term SOFR plus a spread of 125 to 175 basis points | ||||
Prime Rate [Member] | Revolving Credit Facility [Member] | Abr Borrowings | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, description of variable rate basis | prime rate | ||||
Term Loan Agreement | |||||
Debt Instrument [Line Items] | |||||
Long-term Debt, Gross | $ 592,500,000 | $ 594,000,000 | |||
Debt instrument maturity date | Apr. 28, 2029 | ||||
Percentage of principal amount to be repaid by way of instalments | 0.25% | ||||
Debt instrument, basis spread on variable rate | 2.50% | 2.50% | |||
Deferred financing cost | $ 3,800,000 | $ 4,000,000 | |||
Debt instrument, description of variable rate basis | SOFR + 2.50% + 0.1 | SOFR + 2.50% + 0.1 | |||
Term Loan Agreement | Federal Funds Rate | Abr Borrowings | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 0.50% | ||||
Term Loan Agreement | Team SOFR | Abr Borrowings | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1% | ||||
Applicable margin rate | 1.50% | ||||
Term Loan Agreement | Team SOFR | SOFR Borrowings [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin rate | 2.50% | ||||
Term Loan Agreement | Alternative Base Rate | Abr Borrowings | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, basis spread on variable rate | 1.50% |
Debt - Summary of Interest Expe
Debt - Summary of Interest Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Interest expense | ||
Other | $ 1,123 | $ 1,109 |
Amortization - Original issue discount | ||
Capitalized interest | (1,079) | (1,289) |
Interest expense | 11,964 | 9,299 |
Interest income | (4,054) | |
Interest expense, net | 7,910 | 9,299 |
Term Loan Agreement | ||
Interest expense | ||
Interest Expense, debt | 11,358 | 8,916 |
Amortization - Debt issue costs | ||
Amortization - Deferred financing costs | 179 | 179 |
Amortization - Original issue discount | ||
Term Loan OID | 167 | 167 |
Revolving Credit Facility [Member] | ||
Interest expense | ||
Interest Expense, debt | 150 | 151 |
Amortization - Debt issue costs | ||
Amortization - Deferred financing costs | $ 66 | $ 66 |
Product Warranties - Additional
Product Warranties - Additional Information (Detail) | 3 Months Ended |
Dec. 31, 2023 | |
Product Warranties Disclosures [Abstract] | |
Assurance of product | The Company provides product assurance warranties of various lengths ranging from 5 years to lifetime for limited coverage for a variety of material and workmanship defects based on standard terms and conditions between the Company and its customers. |
Product Warranties - Summary of
Product Warranties - Summary of Warranty Reserve Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Product Warranties Disclosures [Abstract] | ||
Beginning balance | $ 16,195 | $ 15,023 |
Adjustments to reserve | (542) | (172) |
Warranty claims payment | (624) | (313) |
Ending balance | 15,029 | 14,538 |
Current portion of accrued warranty | (2,927) | (2,492) |
Accrued warranty – less current portion | $ 12,102 | $ 12,046 |
Leases - Additional Information
Leases - Additional Information (Detail) | 3 Months Ended |
Dec. 31, 2023 | |
Minimum [Member] | |
Lessee Lease Description [Line Items] | |
Renewal options range | 1 year |
Maximum [Member] | |
Lessee Lease Description [Line Items] | |
Renewal options range | 20 years |
Leases - Summary of Lease Asset
Leases - Summary of Lease Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Assets | ||
ROU operating lease assets | $ 16,068 | $ 15,423 |
Operating Lease Right Of Use Asset Statement Of Financial Position Extensible List | Other assets | Other assets |
ROU finance lease assets | $ 70,554 | $ 71,529 |
Finance Lease Right Of Use Asset Statement Of Financial Position Extensible List | Other assets | Other assets |
Total lease assets | $ 86,622 | $ 86,952 |
Current liabilities | ||
Operating | $ 4,559 | $ 4,180 |
Operating Lease Liability Current Statement Of Financial Position Extensible List | Accrued expenses and other liabilities | Accrued expenses and other liabilities |
Finance | $ 2,829 | $ 2,777 |
Finance Lease Liability Current Statement Of Financial Position Extensible List | Accrued expenses and other liabilities | Accrued expenses and other liabilities |
Non-Current liabilities | ||
Operating | $ 13,916 | $ 13,699 |
Operating Lease Liability Noncurrent Statement Of Financial Position Extensible List | Other non-current liabilities | Other non-current liabilities |
Finance | $ 75,276 | $ 75,718 |
Finance Lease Liability Noncurrent Statement Of Financial Position Extensible List | Other non-current liabilities | Other non-current liabilities |
Total lease liabilities | $ 96,580 | $ 96,374 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease expense | $ 1,478 | $ 1,501 |
Finance lease amortization of assets | 1,301 | 1,248 |
Finance lease interest on lease liabilities | 1,107 | 1,092 |
Short term | 86 | 103 |
Sublease income | (28) | (71) |
Total lease expense | $ 3,944 | $ 3,873 |
Leases - Supplemental Informati
Leases - Supplemental Information related to Leases (Detail) | Dec. 31, 2023 | Sep. 30, 2023 |
Weighted-average remaining lease term (years) | ||
Operating leases | 6 years 4 months 24 days | 6 years 9 months 18 days |
Finance leases | 25 years 3 months 18 days | 25 years 4 months 24 days |
Weighted-average discount rate | ||
Operating leases | 4.70% | 4.40% |
Finance leases | 5.80% | 5.80% |
Leases - Summary of Maturities
Leases - Summary of Maturities of Lease Liabilities (Detail) $ in Thousands | Dec. 31, 2023 USD ($) |
Operating Leases | |
2024 | $ 4,045 |
2025 | 4,719 |
2026 | 2,844 |
2027 | 2,105 |
2028 | 1,841 |
Thereafter | 6,071 |
Total lease payments | 21,625 |
Less: interest | (3,150) |
Present value of lease liability | 18,475 |
Finance Leases | |
2024 | 5,358 |
2025 | 7,105 |
2026 | 6,942 |
2027 | 6,480 |
2028 | 5,278 |
Thereafter | 117,012 |
Total lease payments | 148,175 |
Less: interest | (70,070) |
Present value of lease liability | 78,105 |
Total | |
2024 | 9,403 |
2025 | 11,824 |
2026 | 9,786 |
2027 | 8,585 |
2028 | 7,119 |
Thereafter | 123,083 |
Total lease payments | 169,800 |
Less: interest | (73,220) |
Present value of lease liability | $ 96,580 |
Fair Value Of Financial Instr_3
Fair Value Of Financial Instruments - Additional Information (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Aug. 01, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Apr. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Nov. 30, 2022 USD ($) Agreement | Dec. 29, 2021 USD ($) | |
Fair Value Of Financial Instruments [Line Items] | |||||||||
Fair value adjustment for contingent consideration | $ 400 | ||||||||
StruXure Outdoor, LLC [Member] | |||||||||
Fair Value Of Financial Instruments [Line Items] | |||||||||
Contingent payment arrangements, range of outcomes, value, low | $ 0 | ||||||||
Contingent payment arrangements, range of outcomes, value, high | $ 13,900 | ||||||||
Contingent consideration | $ 12,700 | $ 9,500 | |||||||
Contingent liability | $ 12,700 | ||||||||
Contingent payment compensation expense | $ 3,200 | $ 9,500 | |||||||
INTEX Millwork Solutions, LLC | |||||||||
Fair Value Of Financial Instruments [Line Items] | |||||||||
Contingent payment arrangements, range of outcomes, value, low | $ 0 | ||||||||
Contingent payment arrangements, range of outcomes, value, high | 6,200 | ||||||||
Contingent consideration | $ 5,800 | $ 6,200 | |||||||
Contingent liability | 6,200 | ||||||||
Date of acquisition | Aug. 01, 2022 | ||||||||
INTEX Millwork Solutions, LLC | Selling, General and Administrative Expense [Member] | |||||||||
Fair Value Of Financial Instruments [Line Items] | |||||||||
Fair value adjustment for contingent consideration | $ 400 | ||||||||
Derivatives [Member] | |||||||||
Fair Value Of Financial Instruments [Line Items] | |||||||||
Number of interest rate swap agreements | Agreement | 2 | ||||||||
Derivative, notional amount | $ 150,000 | ||||||||
Derivative, maturity date | Oct. 31, 2025 | ||||||||
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months, before tax | $ 600 | ||||||||
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months, after tax | $ 400 | ||||||||
Derivatives [Member] | Interest Rate Swap 2 [Member] | |||||||||
Fair Value Of Financial Instruments [Line Items] | |||||||||
Derivative, fixed interest rate | 4.39% | ||||||||
Derivatives [Member] | Interest Rate Swap 1 [Member] | |||||||||
Fair Value Of Financial Instruments [Line Items] | |||||||||
Derivative, fixed interest rate | 4.48% |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Summary of Fair Values of Interest Rate Derivative Instruments as well as Classification on the Balance Sheet (Detail) - Fair Value, Inputs, Level 2 [Member] - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Interest rate swaps | $ 677 | $ 2,558 |
Interest rate swaps | $ 2,300 | $ 65 |
Fair Value Of Financial Instr_5
Fair Value Of Financial Instruments - Summary of Effects of Interest Rate Derivative Instruments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Effect Of Cash Flow Hedge Accounting On AOCI [Line Items] | ||
Balance, Before-tax amount | $ 2,493 | |
Balance, Income tax expense | 615 | |
Balance, Net of tax amount | 1,878 | |
Amount of loss recognized in other comprehensive income (loss), Before-tax amount | (3,437) | $ (2,544) |
Amount of loss recognized in other comprehensive income (loss), Income tax expense | (840) | (674) |
Amount of loss recognized in other comprehensive income (loss), Net of tax amount | (2,596) | (1,870) |
Amount of gain reclassified from accumulated other comprehensive income (loss) into net income (loss), Before-tax amount | (678) | 101 |
Amount of gain reclassified from accumulated other comprehensive income (loss) into net income (loss), Income tax expense | (180) | 27 |
Amount of gain reclassified from accumulated other comprehensive income (loss) into net income (loss), Net of tax amount | (499) | 74 |
Balance, Before-tax amount | (1,622) | (2,443) |
Balance, Income tax expense | (405) | (647) |
Balance, Net of tax amount | $ (1,217) | $ (1,796) |
Fair Value Of Financial Instr_6
Fair Value Of Financial Instruments - Summary of Carrying Values and the Estimated Fair Values of the Debt Financial Instruments (Detail) - Term Loan due April 28, 2029 [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Sep. 30, 2023 | |
Schedule of carrying values and the estimated fair values of the debt financial instruments [Line Items] | ||
Debt instrument maturity date | Apr. 28, 2029 | |
Carrying Value [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Schedule of carrying values and the estimated fair values of the debt financial instruments [Line Items] | ||
Loans payable | $ 592,500 | $ 594,000 |
Estimated Fair Value [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Schedule of carrying values and the estimated fair values of the debt financial instruments [Line Items] | ||
Loans payable | $ 596,944 | $ 595,485 |
Segments - Additional Informati
Segments - Additional Information (Detail) | 3 Months Ended |
Dec. 31, 2023 Segment | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 2 |
Segments - Summary of Residenti
Segments - Summary of Residential and Commercial Segment Reporting Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net sales to customers | $ 240,444 | $ 216,259 |
Adjusted EBITDA | ||
Total Adjusted EBITDA for reporting segments | 55,667 | 15,100 |
Adjustments to Income before income tax provision | ||
Depreciation and amortization | (31,937) | (33,840) |
Stock-based compensation costs | (8,468) | (3,957) |
Acquisition and divestiture costs | (492) | (2,954) |
Gain on sale of business | 38,515 | |
Other costs | (2,768) | (214) |
Interest expense, net | (7,910) | (9,299) |
Income (loss) before income tax provision | 42,607 | 35,164 |
Residential [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales to customers | 223,000 | 179,484 |
Adjusted EBITDA | ||
Total Adjusted EBITDA for reporting segments | 52,762 | 9,946 |
Commercial [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales to customers | 17,444 | 36,775 |
Adjusted EBITDA | ||
Total Adjusted EBITDA for reporting segments | $ 2,905 | $ 5,154 |
Segments - Summary of Residen_2
Segments - Summary of Residential and Commercial Segment Reporting Information (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Business Transformation Costs [Line Items] | ||
Divestiture costs | $ 0.5 | $ 0.5 |
Business acquisition acquisition costs completed acquisitions | 2.4 | |
Costs Of Reduction In Workforce | 0.3 | |
Legal expenses | 0.1 | $ 0.2 |
Costs for process improvement | $ 2.4 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Detail) - USD ($) | 3 Months Ended | ||||
Dec. 06, 2023 | Dec. 04, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | May 05, 2022 | |
Class Of Stock [Line Items] | |||||
Number of shares available for repurchase | $ 101,100,000 | ||||
Common Class A [Member] | |||||
Class Of Stock [Line Items] | |||||
Excise tax as reacquisition cost of share repurchases | $ 800,000 | ||||
Common Class A [Member] | Open Market [Member] | |||||
Class Of Stock [Line Items] | |||||
Average price per share | $ 21.23 | ||||
Share repurchase program, share repurchased value | $ 7,500,000 | ||||
Stock repurchase program, shares repurchased | 352,760 | ||||
Common Class A [Member] | Maximum [Member] | |||||
Class Of Stock [Line Items] | |||||
Stock repurchase program, authorized amount | $ 400,000,000 | ||||
Goldman Sachs [Member] | Common Class A [Member] | Accelerated Share Repurchase Agreement [Member] | |||||
Class Of Stock [Line Items] | |||||
Share repurchase program, share repurchased value | $ 100,000,000 | ||||
Stock repurchase program, shares repurchased | 2,291,607 | ||||
Share repurchase program, price per share | $ 34.91 | ||||
Stock repurchase program, percentage of initial shares on total shares | 80% |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based compensation expenses | $ 1,900 | |
Stock based compensation expenses | 8,468 | $ 3,957 |
Income tax benefit stock based compensation expenses | 1,700 | 800 |
Unvested stock compensation not recognised | $ 36,600 | |
Unvested stock awards weighted average remaining period of recognition | 2 years | |
Selling, General and Administrative Expense [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock based compensation expenses | $ 8,500 | $ 4,000 |
2020 Omnibus Incentive Compensation Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Maximum number of shares authorised under share based compensation plan | 15,852,319 | |
Common stock shares reserved for future issuance | 2,219,224 | |
Stock based compensation period of expiry of stock options | 10 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Share-Based Payment Award Valuation Assumptions (Detail) | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Risk-free interest rate | 3.93% | 3.77% |
Expected volatility | 40% | 40% |
Expected term (in years) | 6 years | 6 years |
Expected dividend yield | 0% | 0% |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock Option Activities (Detail) $ / shares in Units, $ in Thousands | 3 Months Ended |
Dec. 31, 2023 USD ($) $ / shares shares | |
Performance Shares [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Option, Outstanding | shares | 1,114,261 |
Number of Option, Granted | shares | 0 |
Number of Option, Exercised | shares | (60,261) |
Number of Option, Outstanding | shares | 1,054,000 |
Number of Option, Vested and exercisable | shares | 1,054,000 |
Weighted Average Exercise Price Per Share, Outstanding | $ / shares | $ 23 |
Weighted Average Exercise Price Per Share, Granted | $ / shares | 0 |
Weighted Average Exercise Price Per Share, Exercised | $ / shares | 23 |
Weighted Average Exercise Price Per Share, Outstanding | $ / shares | 23 |
Weighted Average Exercise Price Per Share, Vested and exercisable | $ / shares | $ 23 |
Weighted Average Remaining Contract Term, Outstanding | 6 years 4 months 24 days |
Weighted Average Remaining Contract Term, Vested and exercisable | 6 years 4 months 24 days |
Weighted Average Intrinsic Value, Outstanding | $ | $ 16,074 |
Weighted Average Intrinsic Value, Vested and exercisable | $ | $ 16,074 |
Service Based Stock Option Activity [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Option, Outstanding | shares | 3,361,707 |
Number of Option, Granted | shares | 138,731 |
Number of Option, Exercised | shares | (76,624) |
Number of Option, Outstanding | shares | 3,423,814 |
Number of Option, Vested and exercisable | shares | 2,475,222 |
Weighted Average Exercise Price Per Share, Outstanding | $ / shares | $ 25.43 |
Weighted Average Exercise Price Per Share, Granted | $ / shares | 38.15 |
Weighted Average Exercise Price Per Share, Exercised | $ / shares | 24.17 |
Weighted Average Exercise Price Per Share, Outstanding | $ / shares | 25.97 |
Weighted Average Exercise Price Per Share, Vested and exercisable | $ / shares | $ 24.78 |
Weighted Average Remaining Contract Term, Outstanding | 7 years |
Weighted Average Remaining Contract Term, Vested and exercisable | 6 years 8 months 12 days |
Weighted Average Intrinsic Value, Outstanding | $ | $ 43,493 |
Weighted Average Intrinsic Value, Vested and exercisable | $ | $ 33,921 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Stock Awards Activity Other Than Options (Detail) | 3 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Service Based Restricted Stock Awards [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares, Outstanding and unvested | shares | 82,481 |
Number of Shares, Vested | shares | (6,845) |
Number of Shares, Outstanding and unvested | shares | 75,636 |
Weighted Average Grant Date Fair Value, Outstanding and unvested | $ 23 |
Weighted Average Grant Date Fair Value, Granted | 0 |
Weighted Average Grant Date Fair Value, Vested | 23 |
Weighted Average Grant Date Fair Value, Forfeited | 0 |
Weighted Average Grant Date Fair Value, Outstanding and unvested | $ 23 |
Performance Based Restricted Stock [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares, Outstanding and unvested | shares | 508,622 |
Number of Shares, Granted | shares | 215,462 |
Number of Shares, Vested | shares | (123,821) |
Number of Shares, Forfeited | shares | (3,308) |
Number of Shares, Outstanding and unvested | shares | 596,955 |
Weighted Average Grant Date Fair Value, Outstanding and unvested | $ 26.72 |
Weighted Average Grant Date Fair Value, Granted | 38.15 |
Weighted Average Grant Date Fair Value, Vested | 34.82 |
Weighted Average Grant Date Fair Value, Forfeited | 28.01 |
Weighted Average Grant Date Fair Value, Outstanding and unvested | $ 28.91 |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Restricted Stock Unit Awards Activity (Detail) - Service Based Restricted Stock Units [Member] | 3 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of Shares, Outstanding and unvested | shares | 786,096 |
Number of Shares, Granted | shares | 204,796 |
Number of Shares, Vested | shares | (224,591) |
Number of Shares, Forfeited | shares | (2,102) |
Number of Shares, Outstanding and unvested | shares | 764,199 |
Weighted Average Grant Date Fair Value, Outstanding and unvested | $ / shares | $ 25.42 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 38.12 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 28.14 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 24.85 |
Weighted Average Grant Date Fair Value, Outstanding and unvested | $ / shares | $ 28.01 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||
Net Income (Loss) | $ 25,719 | $ (25,836) |
Net income (loss) attributable to common stockholders - basic | 25,719 | (25,836) |
Net income (loss) attributable to common stockholders - diluted | $ 25,719 | $ (25,836) |
Denominator: | ||
Basic | 147,297,662 | 150,877,635 |
Diluted | 148,876,282 | 150,877,635 |
Basic | $ 0.17 | $ (0.17) |
Diluted | $ 0.17 | $ (0.17) |
Earnings Per Share - Summary _2
Earnings Per Share - Summary of Antidilutive Securities Excluded From Computation of Earnings Per Share (Detail) - shares | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Employee Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 547,890 | 5,010,161 |
Restricted Stock Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 108,736 | 531,462 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax reconciliation percentage | 39.60% | 26.50% |
Condensed Financial Informati_3
Condensed Financial Information of Registrant (Parent Company Only) - Schedule of Balance Sheets (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Non-current assets: | ||||
Total assets | $ 2,288,728 | $ 2,365,554 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||
Total liabilities | 929,423 | 935,911 | ||
Stockholders' equity: | ||||
Preferred stock, $0.001 par value; 1,000,000 shares authorized and no shares issued or outstanding at December 31, 2023 and September 30, 2023, respectively | ||||
Additional paid‑in capital | 1,650,160 | 1,662,322 | ||
Accumulated deficit | (19,328) | (45,047) | ||
Accumulated other comprehensive income (loss) | (1,217) | 1,878 | $ (1,796) | |
Treasury stock, at cost, 10,560,030 and 8,268,423 shares at December 31, 2023 and September 30, 2023, respectively | 270,466 | 189,666 | ||
Total stockholders' equity | 1,359,305 | 1,429,643 | $ 1,412,772 | $ 1,444,443 |
Total liabilities and stockholders' equity | 2,288,728 | 2,365,554 | ||
Parent Company [Member] | ||||
Non-current assets: | ||||
Investments in subsidiaries | 1,359,305 | 1,429,643 | ||
Total non-current assets | 1,359,305 | 1,429,643 | ||
Total assets | 1,359,305 | 1,429,643 | ||
Stockholders' equity: | ||||
Preferred stock, $0.001 par value; 1,000,000 shares authorized and no shares issued or outstanding at December 31, 2023 and September 30, 2023, respectively | ||||
Additional paid‑in capital | 1,650,160 | 1,662,322 | ||
Accumulated deficit | (19,328) | (45,047) | ||
Accumulated other comprehensive income (loss) | (1,217) | 1,878 | ||
Treasury stock, at cost, 10,560,030 and 8,268,423 shares at December 31, 2023 and September 30, 2023, respectively | (270,466) | (189,666) | ||
Total stockholders' equity | 1,359,305 | 1,429,643 | ||
Total liabilities and stockholders' equity | 1,359,305 | 1,429,643 | ||
Common Class A [Member] | ||||
Stockholders' equity: | ||||
Common stock value | 156 | 156 | ||
Common Class A [Member] | Parent Company [Member] | ||||
Stockholders' equity: | ||||
Common stock value | $ 156 | $ 156 |
Condensed Financial Informati_4
Condensed Financial Information of Registrant (Parent Company Only) - Schedule of Balance Sheets (Parenthetical) (Detail) - $ / shares | Dec. 31, 2023 | Sep. 30, 2023 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares issued | 156,341,203 | 155,967,736 |
Treasury stock, shares | 10,560,030 | 8,268,423 |
Common Class A [Member] | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,100,000,000 | 1,100,000,000 |
Common stock, shares issued | 156,341,203 | 155,967,736 |
Common Class B [Member] | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 0 | 100 |
Common stock, shares outstanding | 0 | 100 |
Parent Company [Member] | ||
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock, shares | 10,560,030 | 8,268,423 |
Parent Company [Member] | Common Class A [Member] | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,100,000,000 | 1,100,000,000 |
Parent Company [Member] | Common Class B [Member] | ||
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 0 | 100 |
Common stock, shares outstanding | 0 | 100 |
Condensed Financial Informati_5
Condensed Financial Information of Registrant (Parent Company Only) - Schedule of Statements of Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Condensed Statement of Income Captions [Line Items] | ||
Comprehensive income (loss) | $ 22,624 | $ (27,632) |
Parent Company [Member] | ||
Condensed Statement of Income Captions [Line Items] | ||
Net income (loss) of subsidiaries | 25,719 | (25,836) |
Comprehensive income (loss) | $ 22,624 | $ (27,632) |
Condensed Financial Informati_6
Condensed Financial Information of Registrant (Parent Company Only) - Additional Information (Detail) - Parent Company [Member] - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Condensed Statement of Income Captions [Line Items] | ||
Minimum threshold percentage of restricted net assets | 25% | |
Cash dividends paid | $ 100 | $ 7.5 |