Fri, Jun 14, 12:07 PM (85 days ago)
The AZEK Company Inc.'s quarterly report for the period ending March 31, 2024, highlights several key financial metrics and performance indicators: 1. **Revenue and Profit**: Net sales increased by 10.8% year-over-year to $418.4 million, driven by strong performance in the Residential segment, which saw a 17.7% increase in sales. The Commercial segment experienced a decline of 55.4% due to the sale of the Vycom business. Gross profit rose by 41.7% to $157.1 million, with a gross margin improvement to 37.5%. 2. **Expenses**: Selling, general, and administrative expenses increased by 12.1% to $83.2 million. Interest expense decreased by 19.4% to $8.7 million due to interest income and lower capitalized interest. 3. **Net Income**: The company reported a significant increase in net income to $49.8 million, up from $18.2 million in the same period last year, reflecting improved operating performance and cost management. 4. **Cash Flow**: Operating activities used $31.1 million in cash, a significant decline from the $64.1 million provided in the previous year, primarily due to increased inventory and receivables. Investing activities generated $95.2 million, largely from the sale of the Vycom business. Financing activities used $115.0 million, mainly for share repurchases and debt payments. 5. **Liquidity**: The company had $227.4 million in cash and equivalents and $147.8 million available under its revolving credit facility, indicating solid liquidity to support operations and strategic initiatives. 6. **Future Outlook**: AZEK is focusing on its core Residential segment and leveraging proceeds from the Vycom sale to fund capital allocation priorities. The company is also addressing material weaknesses in internal controls identified in prior periods. Overall, AZEK demonstrated strong revenue growth and profitability improvements, supported by strategic divestitures and effective cost management. However, cash flow from operations declined, necessitating careful liquidity management moving forward.