The AZEK Company(AZEK) - 2024 Q4 - Annual Results

Financial Performance - Consolidated net sales for fiscal year 2024 increased by 5% year-over-year to $1.44 billion, with residential segment net sales growing 12% to $1.37 billion[3] - Net income for fiscal year 2024 rose 146% to $153 million, with a net profit margin expansion of 600 basis points to 10.6%[3] - Adjusted EBITDA for fiscal year 2024 increased by 34% to $379 million, with an adjusted EBITDA margin expansion of 560 basis points to 26.3%[3] - The company generated $224 million in cash from operating activities and $147 million in free cash flow for fiscal year 2024[3] - Net income for the three months ended September 30, 2024, was $28,363, down 27.8% from $39,231 in the same period of 2023[52] - Adjusted Net Income for the year ended September 30, 2024, was $176,929,000, compared to $106,139,000 in 2023, reflecting a 66.4% increase[66] - The company reported a net income of $153,379 thousand for the year ended September 30, 2024[76] Future Projections - For fiscal year 2025, consolidated net sales are expected to be between $1.51 billion and $1.54 billion, representing a growth of approximately 5% to 7% year-over-year[4] - The residential segment is projected to achieve net sales between $1.439 billion and $1.466 billion in fiscal year 2025, indicating a growth of approximately 5% to 7% year-over-year[30] - The company expects adjusted EBITDA for fiscal year 2025 to be in the range of $400 million to $415 million, representing a year-over-year increase of 5% to 9%[31] - For the first quarter of fiscal year 2025, consolidated net sales are anticipated to be between $260 million and $266 million, reflecting an 8% to 11% year-over-year growth[32] - The company anticipates driving above-market growth in fiscal year 2025 and achieving double-digit growth over the long term[33] Cash Flow and Assets - As of September 30, 2024, total assets decreased to $2,167.7 million from $2,343.9 million as of September 30, 2023, reflecting a decline of approximately 7.4%[49] - Current assets decreased to $471.4 million from $561.3 million, a reduction of about 16.0% year-over-year[49] - Total liabilities decreased to $810.8 million from $933.6 million, representing a decline of approximately 13.1%[49] - The company reported a net cash position of $164.0 million in cash and cash equivalents, down from $278.3 million[49] - Net cash provided by operating activities for the year ended September 30, 2024, was $224,479, a decrease from $362,542 in 2023[54] - Net cash used in financing activities for the year ended September 30, 2024, was $(387,907), compared to $(116,541) in the previous year[54] - Cash and cash equivalents at the end of the period were $164,025, a decrease from $278,314 at the beginning of the period[54] Segment Performance - Net sales for the three months ended September 30, 2024, were $348,227, a decrease of 10.5% from $388,812 in the same period of 2023[52] - Gross profit for the three months ended September 30, 2024, was $129,746, down from $145,293, representing a decline of 10.7%[52] - Operating income for the three months ended September 30, 2024, was $51,133, compared to $60,371 in the prior year, reflecting a decrease of 15.3%[52] - Segment Adjusted EBITDA for the Residential segment for the three months ended September 30, 2024, was $85,943, a decrease of 7.3% from $92,706 in the prior year[57] Adjusted Metrics - Adjusted EBITDA for the year ended September 30, 2024, reached $379,341,000, up 33.6% from $283,838,000 in 2023[62] - Adjusted Gross Profit for Q3 2024 was $133,702,000, down 10.7% from $149,736,000 in Q3 2023[64] - Adjusted SG&A expenses for Q3 2024 were $65,539,000, a decrease from $70,517,000 in Q3 2023[72] - Adjusted Diluted EPS for Q3 2024 was $0.29, down from $0.33 in Q3 2023[68] - Total adjustments for Q3 2024 amounted to $63,391,000, representing 18.2% of total revenue[62] Sustainability and Operations - The AZEK Company is committed to increasing the use of recycled materials in its products, which are made from up to 85% recycled content[38] - The company has been recognized as one of America's Climate Leaders by USA Today, highlighting its commitment to sustainability[38] - AZEK's manufacturing and recycling facilities are located across multiple states, including Ohio, Pennsylvania, and Texas, enhancing its operational capacity[38] Stock and Financing Activities - AZEK repurchased approximately 1.4 million shares of its Class A common stock for a total of $67.5 million during the quarter[26] - Net cash used in financing activities for the three months ended September 30, 2024, was $(220,846) thousand, compared to $(58,475) thousand in the same period of 2023[75] - Purchases of property, plant, and equipment for the year ended September 30, 2024, were $(77,147) thousand, down from $(88,545) thousand in 2023[75] Interest and Debt - Interest expense for Q3 2024 was $15,800,000, increasing from $8,812,000 in Q3 2023[62] - Net debt as of September 30, 2024, was $365,110 thousand, calculated from gross debt of $529,135 thousand minus cash and cash equivalents of $164,025 thousand[76]