CSW Industrials (CSWI -4.28%) reported its fiscal 2025 fourth-quarter earnings on May 22, 2025, delivering record results. For the period, which ended March 31, revenue rose by 9% to $231 million, adjusted EBITDA reached $60 million, and adjusted earnings per share (EPS) hit $2.24.
Also, following the close of the quarter, the company completed its $313.5 million acquisition of Aspen Manufacturing and expanded its revolving credit facility to $700 million.
Accelerated Multiyear Value Creation and Outperformance
Over the nine and a half years since its 2015 spin-off from Capital Southwest, CSWI has achieved a compound annual growth rate of 14.1% on revenue, and 16% on adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), far outpacing the growth of the markets it serves. Total shareholder returns since the company’s October 2015 public listing have exceeded 1,000%.
“Our revenue compound annual growth rate, or CAGR, since the spin-off in October of 2015 is 14.1%. Our adjusted EBITDA CAGR over the same period is 16%. In less than 10 years, we have grown our market cap over 1,000%, and total shareholder return is also over 1,000%.”
— Joseph Armes, Chairman, Chief Executive Officer, and President
CSWI’s sustained double-digit percentage growth, operating leverage, and shareholder value creation highlight its durable operating advantages.
Strategic Capital Deployment and Expanded Acquisition Capacity
CSWI fully repaid its revolving credit facility in September 2024 using proceeds from a $347 million equity raise, enabling interest income and strengthening balance sheet liquidity before closing Aspen. After the acquisition and the end of fiscal 2025, the revolving credit facility was renewed and upsized to $700 million to maintain future M&A flexibility. The company signaled a robust acquisition pipeline, with a disciplined focus favoring U.S.-based manufacturing targets given current global volatility.
“I would also like to highlight that subsequent to the end of fiscal 2025, the company renewed, extended, and upsized our revolving credit facility to $700 million earlier this month. The renewal of our revolver provides us with access to additional capital, allowing us to be nimble and opportunistic on growth opportunities.”
— James Perry, Executive Vice President and Chief Financial Officer
This proactive capital management enables CSWI to capitalize quickly on larger, accretive transactions, sustaining its inorganic growth engine and agility in dynamic market conditions.
Contractor Solutions Segment as Growth and Margin Engine Amid Tariff, Integration Challenges
The contractor solutions segment accounted for 71% of consolidated revenue, delivering 17.5% revenue growth (8% organic), with an adjusted EBITDA margin of 33.7%, despite integration costs from acquisitions and pressures from inbound tariffs and freight expenses. The integration of Aspen’s 24% EBITDA margin business (on $125 million trailing-12-month sales) is forecast to dilute segment margins to a percentage in the low 30s in fiscal 2026, but management is leveraging broad-based pricing actions and U.S. sourcing to mitigate margin compression from tariffs.
“We expect contractor solutions’ overall adjusted EBITDA margin for the full fiscal year 2026 to be in the low 30s versus the recent margins closer to the mid-30s as we layer in our acquisitions and the expected impact of tariffs. We anticipate an overall cost of goods sold impact from increased tariffs in FY2026. We will update you each quarter as warranted on this highly fluid situation. We have taken broad-based action on pricing for our contractor solutions products to offset the new tariffs. Our approach, as always, is to prioritize protecting margin dollars, and we know that this approach can result in some margin compression.”
— James Perry, Executive Vice President and Chief Financial Officer
The segment’s ability to sustain robust organic growth and protect EBITDA dollars — despite evolving cost headwinds and complex integration –underscores the resiliency and pricing power embedded in CSWI’s core business model.
Looking Ahead
Management expects revenue and adjusted EBITDA growth for each segment in fiscal 2026, and consolidated EPS growth, though at a slower pace than revenue and EBITDA, as well as stronger operating cash flow compared to fiscal 2025. Aspen’s revenue contribution is projected to grow by high-single-digit to low-double-digit percentages off the $125 million it was over the trailing 12 months, with a 24% EBITDA margin and more pronounced seasonal weighting in the first half of fiscal 2026. CSWI anticipates paying down its Aspen-related revolver borrowings by the end of fiscal 2026 if no additional large acquisitions occur, and expects a full-year tax rate of 26%.
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