Key Highlights

  • Revenue rose 31% to USD 361.4 million, topping the consensus estimate of USD 351.0 million, with organic growth of 10.2%.
  • Adjusted EPS of USD 3.66 beat the consensus estimate of USD 3.63, while GAAP diluted EPS was USD 2.90.
  • Adjusted EBITDA reached a record USD 97 million, and its Margin widened 50 basis points to 26.8%.
  • Operating cash flow of a record USD 95 million funded USD 91 million of Debt paydown, lowering Leverage to 2.1x.

CSW Industrials, Inc. (NYSE:CSW) reported fiscal second quarter 2027 Revenue of USD 361.4 million, up from USD 277.0 million a year earlier and above the consensus estimate of USD 351.0 million. Adjusted Earnings Per Share of USD 3.66 rose 24% and compared with a consensus estimate of USD 3.63. GAAP Diluted Earnings per Share were USD 2.90 against USD 2.41, and Net Income attributable to the company was USD 47.3 million.

Recent acquisitions supplied much of the growth, and consolidated organic revenue climbed 10.2%. Chairman, Chief Executive Officer and President Joseph Armes said the first half set records for revenue, adjusted EBITDA, adjusted EPS and cash flow, and described the quarter as following a more typical seasonal pattern despite macroeconomic uncertainty.

Segment Results and the Interest Burden

Contractor Solutions revenue was USD 286 million, up more than 37%, with acquisitions adding USD 51 million and organic growth contributing USD 26.8 million, or 13%. Segment adjusted EBITDA was USD 89 million at a 31% margin versus 32% a year earlier, as freight and raw material costs outran pricing. Specialized Reliability Solutions revenue rose 28% to USD 50 million, and its adjusted EBITDA margin widened 490 basis points to 21.5%. Engineered Building Solutions, excluding the Greco businesses, had revenue of USD 22.7 million, up 2.4%, with a 19% margin.

Adjusted gross margin was 42.1% against 43.0%, reflecting higher ocean and domestic freight and raw materials costs, with pricing offsetting most of the dollar increases. Operating Income rose to USD 75.5 million from USD 56.8 million, yet net interest expense jumped to USD 12.5 million from USD 1.3 million after Acquisition borrowing, which is why EPS growth of 24% trailed EBITDA growth of 33%.

Pricing, Tax and Fiscal 2027 Commentary

The chief financial officer said a mid single digit price increase was announced this week for Contractor Solutions, effective later this calendar year, and that Specialized Reliability Solutions has announced four increases during fiscal 2027. Management projects year over year organic revenue and EBITDA growth in each segment excluding Greco, along with significant growth in adjusted EBITDA, adjusted EPS and free cash flow.

Guidance items include fiscal 2027 interest expense of about USD 49 million, intangible amortization of about USD 61 million, a GAAP tax rate of 22% to 23% and an adjusted tax rate of 25% to 26%. Debt outstanding under the revolver and Term Loan A was USD 767 million, and the spread on both instruments dropped 25 basis points to SOFR plus 175 basis points. The company repurchased USD 5.8 million of stock at an average price of USD 298 and paid USD 4.9 million in dividends.

Cost, Integration and Portfolio Markers

Several dated and numeric items stand out for the coming quarters. The Contractor Solutions price increase takes effect later this calendar year, and management noted a timing gap between cost increases and pricing. MARS synergies reached about USD 15 million, up from the original USD 10 million target, and the Business becomes organic at its one year anniversary.

Other markers include the planned sale of Greco U.S., held for sale since March 31, 2026, and the exit of Greco Canada. Engineered Building Solutions carried a trailing four quarter book to bill ratio of 1.05. Net debt to EBITDA of 2.1x sits within the 1x to 3x target range, and adjusted gross margin of 42.1% is the margin management tied to freight and raw materials costs.