CSW Industrials Reports Record Financial Results in Q3 Fiscal 2026

DALLAS, Jan. 29, 2026 – CSW Industrials, Inc. (NYSE: CSW or the “Company”) today announced its financial results for the fiscal 2026 third quarter, the period ended December 31, 2025, with strong growth in revenue and record performance in several key metrics. The company highlighted significant increases in total revenue and adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA), demonstrating ongoing success in its growth strategies.

Quarterly Performance Highlights

For the third quarter of fiscal 2026, CSW Industrials achieved a record quarterly revenue of $233.0 million, representing an increase of 20.3% compared to the same period a year ago. This growth was driven largely by acquisitions completed over the past twelve months across multiple segments.

Key highlights for the quarter include:

• Total Revenue: Increased by 20.3% to $233.0 million compared with the prior year quarter.
• Earnings Per Diluted Share (EPS): Declined to $0.62, a 61.3% decrease versus last year’s $1.60, influenced by higher interest expenses.
• Adjusted EPS: Excluding nonrecurring expenses and amortization of acquisition-related intangible assets, adjusted EPS was $1.42, down 21.1%.
• Adjusted EBITDA: Increased to a record $44.8 million, up 6.6% compared with the prior year.
• Net Debt: $764.2 million by quarter-end, with a net leverage ratio of 2.3x, within the company’s target credit range.

Fiscal 2026 Year-to-Date Results

CSW Industrials also delivered strong year-to-date results through the first nine months of fiscal 2026. Total revenue rose 19.4% to $773.6 million year-to-date compared with the same period last year. Earnings per share for the period declined to $5.47 from $6.30, while adjusted EPS improved slightly to $7.24 from $7.11. Adjusted EBITDA increased 10.9% to a record $186.5 million.

In addition to operating performance, CSW invested approximately $1.0 billion in acquisitions and $12.1 million in capital expenditures during the year, reflecting a commitment to expanding product offerings and strengthening market presence. Shareholders also received a total of $106.2 million in cash through share repurchases and dividend payments.

Management Commentary

Joseph B. Armes, Chairman, President, and CEO of CSW Industrials, commented on the results, emphasizing the importance of strategic acquisitions and diversified growth. He noted that revenue and adjusted EBITDA records for the quarter and year-to-date reflect the success of the company’s long-term growth plan, including expanding its product portfolio, particularly within HVAC/R and plumbing solutions, and targeted acquisitions that diversified end-market exposure.

According to Armes, CSW Industrials has allocated more than $2.1 billion in capital over the past decade toward strategic acquisitions, including $1.7 billion in acquisition costs and $124 million in capital expenditures. This long-term focus has driven sustainable revenue and profit growth while returning significant value to shareholders through dividends and share repurchases.

Detailed Financial Breakdown

Revenue and Segment Analysis

The company’s strong revenue growth in the third quarter included gains across multiple business segments, though organic revenue faced some headwinds. Total revenue grew by $39.3 million compared to the prior year, including $45.0 million attributed to inorganic growth from acquisitions, partially offset by a $5.7 million decline in organic revenue due to weaker demand in residential HVAC/R markets and reduced distributor inventory.

Gross Profit: CSW reported a third-quarter gross profit of $92.4 million, a 15.4% increase from the previous period. However, gross margin contracted by 170 basis points (bps) to 39.7%, compared to 41.4% in the prior year. This decrease was associated with acquisition-related dilution and inflation in material costs, partially offset by pricing and lower freight costs.

Operating Expenses and Income

Operating expenses for the quarter were $75.1 million, or $66.8 million on an adjusted basis excluding $8.3 million in nonrecurring expenses tied to acquisitions and inventory adjustments. In comparison, last year’s operating expenses were $50.5 million, or $49.7 million adjusted. The increase reflects costs associated with recent acquisitions, including amortization of intangible assets.

Operating income was $17.3 million for the quarter, or $25.7 million adjusted for nonrecurring expenses, compared with $29.6 million, or $30.5 million adjusted, in the year-ago period. The reduction in operating margin resulted from lower gross margins and higher operating costs as the company integrates newly acquired businesses and aligns its distribution strategies.

Interest Expense and Cash Flow

Net interest expense increased to $8.1 million from a net interest income position in the prior year, attributed to borrowings associated with acquisitions and share repurchase activity. Despite this, CSW Industrials reported a higher free cash flow of $22.7 million, compared with $7.8 million in the prior year, driven largely by timing of tax payments and changes in capital spending.

The company’s adjusted EBITDA margin contracted to 19.2% from 21.7% in the previous year due to lower gross margins and higher operating expenses. Nonetheless, adjusted EBITDA reached a new record for the quarter.

Segment-Specific Highlights

Contractor Solutions: The Contractor Solutions segment generated $168.0 million in revenue, a 27.1% increase over the prior year. While inorganic growth from acquisitions boosted performance, organic revenue declined 5.1% due to decreased unit volumes associated with softer housing market activity and lower inventory levels held by distributors.

Specialized Reliability Solutions and Other Segments: Although specific figures for other segments were not detailed in this announcement, the company highlighted overall strength in diversified markets and continued expansion of value-added product offerings.

Looking Forward

CSW Industrials’ third-quarter performance reflects ongoing shifts toward acquisition-driven growth and portfolio expansion. Management remains focused on integrating recent acquisitions, expanding product lines, improving operational efficiency, and delivering long-term value to shareholders.

The company also reaffirmed its commitment to maintaining a strong balance sheet and liquidity position while pursuing strategic investments and returning capital to investors through dividends and share repurchases.

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