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Yahoo
15 hours ago
- Business
- Yahoo
The AZEK Company Stockholders Approve Transaction with James Hardie
CHICAGO, June 27, 2025--(BUSINESS WIRE)--The AZEK Company Inc. (NYSE: AZEK) ("AZEK" or the "Company"), the industry-leading manufacturer of beautiful, low-maintenance and environmentally sustainable outdoor living products, including TimberTech® Decking and Railing, AZEK® and Versatex® Trim and StruXure® pergolas, today announced that its stockholders have voted to approve all proposals related to the Company's proposed transaction with James Hardie Industries plc ("James Hardie") at its Special Meeting of Stockholders. As previously announced, under the terms of the merger agreement and subject to the completion of the transaction, AZEK stockholders will receive $26.45 in cash and 1.0340 ordinary shares of James Hardie to be listed on the New York Stock Exchange for each share of AZEK common stock owned. "We thank our stockholders for their overwhelming support of this transaction," said Jesse Singh, CEO of The AZEK Company. "This is a transformative moment for our company and our people. By combining with James Hardie, we are bringing together two purpose-driven teams with complementary capabilities, united by a commitment to innovation, sustainability, and long-term value creation. Most importantly, this combination enhances our ability to deliver more value to our customers—through expanded offerings, greater innovation, and the continued best-in-class service they expect from our brands—while unlocking new avenues for growth." The transaction is expected to close on or about July 1, 2025, subject to the satisfaction or waiver of the closing conditions set forth in the merger agreement. Approximately 99.96% of the votes cast at the Special Meeting voted in favor of the proposal to adopt the merger agreement, representing approximately 75.78% of AZEK's total outstanding shares of common stock. The final vote results, as certified by the inspector of elections, will be filed on a Form 8-K filed with the U.S. Securities and Exchange Commission. ABOUT THE AZEK® COMPANY The AZEK Company Inc. (NYSE: AZEK) is the industry-leading designer and manufacturer of beautiful, low maintenance and environmentally sustainable outdoor living products, including TimberTech® Decking and Railing, Versatex® and AZEK® Trim, and StruXure® pergolas. Consistently awarded and recognized as the market leader in innovation, quality, aesthetics and sustainability, our products are made from up to 85% recycled material and primarily replace wood on the outside of homes, providing a long-lasting, eco-friendly, and stylish solution to consumers. Leveraging the talents of its approximately 2,000 employees and the strength of relationships across its value chain, The AZEK Company is committed to accelerating the use of recycled material in the manufacturing of its innovative products, keeping hundreds of millions of pounds of waste and scrap out of landfills each year, and revolutionizing the industry to create a more sustainable future. The AZEK Company has recently been named one of America's Most Responsible Companies by Newsweek, a Top Workplace by the Chicago Tribune and U.S. News and World Report, one of Barron's 100 Most Sustainable U.S. Companies, one of TIME's World's Best Companies in Sustainable Growth for 2025, and celebrated in Fast Company's 2024 Brands That Matter list, where TimberTech was highlighted as a benchmark brand. Headquartered in Chicago, Illinois, the company operates manufacturing and recycling facilities in Ohio, Pennsylvania, Idaho, Georgia, Nevada, New Jersey, Michigan, Minnesota and Texas. For additional information, please visit Cautionary Disclosure Regarding Forward-Looking Statements Statements in this communication that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, which statements involve inherent risks and uncertainties and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include statements about: the proposed transaction between AZEK and James Hardie (the "Transaction"), including estimated synergies, and the expected timing of completion of the Transaction; the Company's future performance or expectations; and the Company's plans, objectives or goals. Words such as "believe," "anticipate," "plan," "expect," "intend," "target," "estimate," "project," "predict," "trend," "forecast," "guideline," "aim," "objective," "will," "should," "could," "likely," "continue," "may," "objective," "outlook" and similar expressions may identify forward-looking statements but are not the exclusive means of identifying such statements. Investors are cautioned not to place undue reliance on forward looking statements. Forward-looking statements of AZEK and James Hardie, respectively, are based on the current expectations, estimates and assumptions of AZEK and James Hardie, respectively, and, because forward-looking statements address future results, events and conditions, they, by their very nature, involve inherent risks and uncertainties, many of which are unforeseeable and beyond the control of AZEK or James Hardie. Such known and unknown risks, uncertainties and other factors may cause actual results, performance or other achievements to differ materially from the anticipated results, performance or achievements expressed, projected or implied by forward-looking statements. These factors include risks and uncertainties relating to the Transaction, including, but not limited to, the possibility that conditions to closing are not satisfied on a timely basis or at all; the possible occurrence of events that may give rise to a right of either or both of AZEK and James Hardie to terminate the merger agreement providing for the Transaction; possible negative effects of the announcement or the consummation of the Transaction on the market price of James Hardie's and/or AZEK's shares and/or on their respective businesses, financial conditions, results of operations and financial performance; the impact of the additional indebtedness the Company would incur in connection with the Transaction; risks relating to the value of the James Hardie shares to be issued in the Transaction and the contemplated listing arrangements for James Hardie shares and depositary interests following the Transaction; risks relating to significant transaction costs and/or unknown liabilities; the possibility that the anticipated synergies and other benefits from the Transaction cannot be realized in full or at all or may take longer to realize than expected; risks associated with contracts containing consent and/or other provisions that may be triggered by the Transaction; risks associated with Transaction-related litigation; the possibility that costs or difficulties related to the integration of AZEK's and James Hardie's businesses will be greater than expected; the risk that the Transaction and its announcement could have an adverse effect on the parties' relationships with its and their employees and other business partners, including suppliers and customers; the potential for the Transaction to divert the time and attention of management from ongoing business operations; the potential for contractual restrictions under the merger agreement providing for the Transaction to adversely affect the parties' ability to pursue other business opportunities or strategic transactions; the risk of other Transaction related disruptions to the businesses, including business plans and operations, of AZEK and James Hardie; and the possibility that, as a result of the Transaction or otherwise, James Hardie could lose its foreign private issuer status and be required to bear the costs and expenses related to full compliance with rules and regulations that apply to U.S. domestic issuers. There can be no assurance that the Transaction will in fact be consummated in the manner described or at all. These factors are not necessarily all of the factors that could cause AZEK's, James Hardie's or the combined company's actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, could also harm AZEK's, James Hardie's or the combined company's results. The foregoing discussion of risks and uncertainties is not exhaustive; other risks and uncertainties may cause actual results to differ materially from those referenced in any forward looking statements. All forward-looking statements attributable to AZEK, James Hardie or the combined company, or persons acting on AZEK's or James Hardie's behalf, are expressly qualified in their entirety by the cautionary statements set forth above. Forward looking statements in this communication speak only as of the date of this communication and are statements of then current expectations concerning future results, events and conditions. Neither AZEK nor James Hardie assumes any obligation to update any forward looking statements or information except as required by law. If AZEK or James Hardie updates one or more forward-looking statements, no inference should be drawn that AZEK or James Hardie will make additional updates with respect to those or other forward-looking statements. Further information regarding AZEK, James Hardie and factors that could affect the forward-looking statements contained herein can be found in AZEK's Annual Report on Form 10-K for the fiscal year ended September 30, 2024, and in its other documents filed or furnished with the U.S. Securities and Exchange Commission ("SEC"), and in James Hardie's Annual Report on Form 20-F for the fiscal year ended March 31, 2025, and in its other documents filed or furnished with the SEC. View source version on Contacts Investor Relations Contact: Eric Robinson312-809-1093ir@ Media Contact: Amanda Cimaglia312-809-1093media@ Jim Golden / Tali EpsteinCollected Strategiesazek-cs@
Business Wire
15 hours ago
- Business
- Business Wire
The AZEK Company Stockholders Approve Transaction with James Hardie
CHICAGO--(BUSINESS WIRE)--The AZEK Company Inc. (NYSE: AZEK) ('AZEK' or the 'Company'), the industry-leading manufacturer of beautiful, low-maintenance and environmentally sustainable outdoor living products, including TimberTech® Decking and Railing, AZEK® and Versatex® Trim and StruXure® pergolas, today announced that its stockholders have voted to approve all proposals related to the Company's proposed transaction with James Hardie Industries plc ('James Hardie') at its Special Meeting of Stockholders. As previously announced, under the terms of the merger agreement and subject to the completion of the transaction, AZEK stockholders will receive $26.45 in cash and 1.0340 ordinary shares of James Hardie to be listed on the New York Stock Exchange for each share of AZEK common stock owned. 'We thank our stockholders for their overwhelming support of this transaction,' said Jesse Singh, CEO of The AZEK Company. 'This is a transformative moment for our company and our people. By combining with James Hardie, we are bringing together two purpose-driven teams with complementary capabilities, united by a commitment to innovation, sustainability, and long-term value creation. Most importantly, this combination enhances our ability to deliver more value to our customers—through expanded offerings, greater innovation, and the continued best-in-class service they expect from our brands—while unlocking new avenues for growth.' The transaction is expected to close on or about July 1, 2025, subject to the satisfaction or waiver of the closing conditions set forth in the merger agreement. Approximately 99.96% of the votes cast at the Special Meeting voted in favor of the proposal to adopt the merger agreement, representing approximately 75.78% of AZEK's total outstanding shares of common stock. The final vote results, as certified by the inspector of elections, will be filed on a Form 8-K filed with the U.S. Securities and Exchange Commission. ABOUT THE AZEK® COMPANY The AZEK Company Inc. (NYSE: AZEK) is the industry-leading designer and manufacturer of beautiful, low maintenance and environmentally sustainable outdoor living products, including TimberTech® Decking and Railing, Versatex® and AZEK® Trim, and StruXure® pergolas. Consistently awarded and recognized as the market leader in innovation, quality, aesthetics and sustainability, our products are made from up to 85% recycled material and primarily replace wood on the outside of homes, providing a long-lasting, eco-friendly, and stylish solution to consumers. Leveraging the talents of its approximately 2,000 employees and the strength of relationships across its value chain, The AZEK Company is committed to accelerating the use of recycled material in the manufacturing of its innovative products, keeping hundreds of millions of pounds of waste and scrap out of landfills each year, and revolutionizing the industry to create a more sustainable future. The AZEK Company has recently been named one of America's Most Responsible Companies by Newsweek, a Top Workplace by the Chicago Tribune and U.S. News and World Report, one of Barron's 100 Most Sustainable U.S. Companies, one of TIME's World's Best Companies in Sustainable Growth for 2025, and celebrated in Fast Company's 2024 Brands That Matter list, where TimberTech was highlighted as a benchmark brand. Headquartered in Chicago, Illinois, the company operates manufacturing and recycling facilities in Ohio, Pennsylvania, Idaho, Georgia, Nevada, New Jersey, Michigan, Minnesota and Texas. For additional information, please visit Cautionary Disclosure Regarding Forward-Looking Statements Statements in this communication that are not historical facts are 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, which statements involve inherent risks and uncertainties and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include statements about: the proposed transaction between AZEK and James Hardie (the 'Transaction'), including estimated synergies, and the expected timing of completion of the Transaction; the Company's future performance or expectations; and the Company's plans, objectives or goals. Words such as 'believe,' 'anticipate,' 'plan,' 'expect,' 'intend,' 'target,' 'estimate,' 'project,' 'predict,' 'trend,' 'forecast,' 'guideline,' 'aim,' 'objective,' 'will,' 'should,' 'could,' 'likely,' 'continue,' 'may,' 'objective,' 'outlook' and similar expressions may identify forward-looking statements but are not the exclusive means of identifying such statements. Investors are cautioned not to place undue reliance on forward looking statements. Forward-looking statements of AZEK and James Hardie, respectively, are based on the current expectations, estimates and assumptions of AZEK and James Hardie, respectively, and, because forward-looking statements address future results, events and conditions, they, by their very nature, involve inherent risks and uncertainties, many of which are unforeseeable and beyond the control of AZEK or James Hardie. Such known and unknown risks, uncertainties and other factors may cause actual results, performance or other achievements to differ materially from the anticipated results, performance or achievements expressed, projected or implied by forward-looking statements. These factors include risks and uncertainties relating to the Transaction, including, but not limited to, the possibility that conditions to closing are not satisfied on a timely basis or at all; the possible occurrence of events that may give rise to a right of either or both of AZEK and James Hardie to terminate the merger agreement providing for the Transaction; possible negative effects of the announcement or the consummation of the Transaction on the market price of James Hardie's and/or AZEK's shares and/or on their respective businesses, financial conditions, results of operations and financial performance; the impact of the additional indebtedness the Company would incur in connection with the Transaction; risks relating to the value of the James Hardie shares to be issued in the Transaction and the contemplated listing arrangements for James Hardie shares and depositary interests following the Transaction; risks relating to significant transaction costs and/or unknown liabilities; the possibility that the anticipated synergies and other benefits from the Transaction cannot be realized in full or at all or may take longer to realize than expected; risks associated with contracts containing consent and/or other provisions that may be triggered by the Transaction; risks associated with Transaction-related litigation; the possibility that costs or difficulties related to the integration of AZEK's and James Hardie's businesses will be greater than expected; the risk that the Transaction and its announcement could have an adverse effect on the parties' relationships with its and their employees and other business partners, including suppliers and customers; the potential for the Transaction to divert the time and attention of management from ongoing business operations; the potential for contractual restrictions under the merger agreement providing for the Transaction to adversely affect the parties' ability to pursue other business opportunities or strategic transactions; the risk of other Transaction related disruptions to the businesses, including business plans and operations, of AZEK and James Hardie; and the possibility that, as a result of the Transaction or otherwise, James Hardie could lose its foreign private issuer status and be required to bear the costs and expenses related to full compliance with rules and regulations that apply to U.S. domestic issuers. There can be no assurance that the Transaction will in fact be consummated in the manner described or at all. These factors are not necessarily all of the factors that could cause AZEK's, James Hardie's or the combined company's actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, could also harm AZEK's, James Hardie's or the combined company's results. The foregoing discussion of risks and uncertainties is not exhaustive; other risks and uncertainties may cause actual results to differ materially from those referenced in any forward looking statements. All forward-looking statements attributable to AZEK, James Hardie or the combined company, or persons acting on AZEK's or James Hardie's behalf, are expressly qualified in their entirety by the cautionary statements set forth above. Forward looking statements in this communication speak only as of the date of this communication and are statements of then current expectations concerning future results, events and conditions. Neither AZEK nor James Hardie assumes any obligation to update any forward looking statements or information except as required by law. If AZEK or James Hardie updates one or more forward-looking statements, no inference should be drawn that AZEK or James Hardie will make additional updates with respect to those or other forward-looking statements. Further information regarding AZEK, James Hardie and factors that could affect the forward-looking statements contained herein can be found in AZEK's Annual Report on Form 10-K for the fiscal year ended September 30, 2024, and in its other documents filed or furnished with the U.S. Securities and Exchange Commission ('SEC'), and in James Hardie's Annual Report on Form 20-F for the fiscal year ended March 31, 2025, and in its other documents filed or furnished with the SEC.
Business Wire
06-05-2025
- Business
- Business Wire
The AZEK Company Announces Second Quarter Fiscal 2025 Results; Reaffirms Fiscal Year 2025 Net Sales and Adjusted EBITDA Outlook
CHICAGO--(BUSINESS WIRE)--The AZEK Company Inc. (NYSE: AZEK) ('AZEK' or the 'Company'), the industry-leading manufacturer of beautiful, low-maintenance and environmentally sustainable outdoor living products, including TimberTech ® Decking and Railing, Versatex ® and AZEK ® Trim and StruXure ® pergolas, today announced financial results for its fiscal second quarter ended March 31, 2025. CEO COMMENTS 'The AZEK team delivered another strong quarter, executing well in a dynamic market and once again outperforming the broader repair and remodel sector,' said Jesse Singh, CEO of The AZEK Company. 'Our Residential business delivered 9% growth year-over-year, driven by positive mid-single-digit Residential sell-through growth along with continued expansion of our channel presence and new product launches. Our disciplined approach to cost savings initiatives enabled us to expand our net profit margin by 10 basis points year-over-year to 12.0% and Adjusted EBITDA margin by 40 basis points year-over-year to 27.5%, even as we invested in marketing, new production and recycling capabilities. Our focus on driving growth through material conversion, product innovation, improving the consumer journey, brand and channel expansion is enabling our success and market outperformance. Combined with our disciplined cost initiatives and operational excellence, this underpins our ability to deliver strong results and margin expansion, and further demonstrates the resiliency of our business model, product categories and the strength of our team,' continued Mr. Singh. 'Our 2024 and 2025 new product launches, including TimberTech Harvest+ decking, Reliance Rail and Fulton Rail continue to gain traction and are driving expanded shelf space and incremental channel opportunities. The breadth of our product range and attractiveness of our premium solutions continue to be a key differentiator for our customers. We continue to see consistent contractor backlogs and dealer engagement,' said Mr. Singh. 'We are known for our innovation and sustainability leadership, and this quarter, AZEK was named to Barron's 100 Most Sustainable U.S. Companies list for the first time. TimberTech's new Aluminum Deck Framing earned Sustainable Product of the Year honors from Green Builder Media, and AZEK was also named a Positive Luxury Award winner — all powerful third-party validations of our momentum and leadership,' stated Mr. Singh. 'We are reaffirming our full-year fiscal 2025 guidance for net sales and Adjusted EBITDA growth, reflecting continued confidence in our ability to deliver above-market performance through AZEK-specific initiatives. Looking ahead, the proposed merger with James Hardie represents an exciting opportunity to accelerate our shared vision for product innovation, provide our contractors and customers with expanded solutions, benefit from significant synergies across our combined portfolios, accelerate our growth and create long-term value for all stakeholders,' continued Mr. Singh. SECOND QUARTER FISCAL 2025 CONSOLIDATED RESULTS Net sales for the three months ended March 31, 2025 increased by $33.8 million, or 8%, to $452.2 million from $418.4 million for the three months ended March 31, 2024. The increase was primarily due to higher sales volume in our Residential segment attributable to strong consumer demand, new products and new stocking locations. Net sales for the three months ended March 31, 2025 increased for our Residential segment by $34.5 million, or 9%, and decreased for our Commercial segment by $0.7 million, or 4%, respectively, as compared to the prior year period. The decrease in our Commercial segment was primarily due to the weaker demand in our Scranton Products business. Gross profit increased by $10.6 million to $167.7 million for the three months ended March 31, 2025, compared to $157.1 million for the three months ended March 31, 2024. Gross profit margin declined by 40 basis points to 37.1% for the three months ended March 31, 2025 compared to 37.5% for the three months ended March 31, 2024. Adjusted Gross Profit increased by $10.1 million to $170.9 million for the three months ended March 31, 2025, compared to $160.9 million for the three months ended March 31, 2024. Adjusted Gross Profit Margin declined by 60 basis points to 37.8% for the three months ended March 31, 2025 compared to 38.4% for the three months ended March 31, 2024. Net income increased by $4.5 million to $54.3 million, or $0.37 per share, for the three months ended March 31, 2025, compared to $49.8 million, or $0.34 per share, for the three months ended March 31, 2024. Net profit margin expanded 10 basis points to 12.0% for the three months ended March 31, 2025, as compared to net profit margin of 11.9% for the three months ended March 31, 2024. Adjusted Net Income, increased by $7.3 million to $65.6 million, or Adjusted Diluted EPS of $0.45 per share, for the three months ended March 31, 2025, compared to Adjusted Net Income of $58.3 million, or Adjusted Diluted EPS of $0.39 per share, for the three months ended March 31, 2024. Adjusted EBITDA increased by $11.1 million to $124.4 million for the three months ended March 31, 2025, compared to Adjusted EBITDA of $113.3 million for the three months ended March 31, 2024. Adjusted EBITDA Margin expanded 40 basis points to 27.5% from 27.1% for the prior year period. BALANCE SHEET, CASH FLOW and LIQUIDITY As of March 31, 2025, AZEK had cash and cash equivalents of $146.7 million and approximately $372.7 million available for future borrowings under its Revolving Credit Facility. Total gross debt, including finance leases, as of March 31, 2025, was $538.4 million. Net Cash Provided by Operating Activities for the three months ended March 31, 2025, increased by $61.9 million year-over-year to $47.1 million. Purchases of property, plant and equipment increased by $27.2 million year-over-year to $46.4 million, including the approximately $25 million purchase of one of AZEK's manufacturing sites in Pennsylvania. AZEK also acquired a regional recycling facility as part of its strategy to expand its recycling network and capabilities. Free Cash Flow for the three months ended March 31, 2025, improved by $34.7 million year-over-year to $0.7 million. OUTLOOK "We continue to drive substantial opportunities to accelerate material conversion and shift customer preferences towards AZEK's low-maintenance, durable products throughout 2025 and beyond. Channel inventory levels ended the quarter conservatively below historical averages, positioning us well as we move into the second half of fiscal 2025," stated Jesse Singh, CEO of The AZEK Company. "We are reaffirming our full-year guidance and remain confident in our ability to achieve above-market growth and margin expansion. AZEK's unique model is expected to remain resilient in a challenging macroeconomic environment. With positive momentum from our new product offerings, strong execution of our strategic initiatives, and a proven track record of outperforming in any market condition, we are well-positioned to deliver strong results in 2025 and drive long-term value creation," added Mr. Singh. For the full-year fiscal 2025, AZEK expects consolidated net sales in the range of $1.52 to $1.55 billion, representing an increase of approximately 5% to 8% year over year. Adjusted EBITDA is expected to be in the range of $403 to $418 million, representing an increase of 6% to 10% year over year. Adjusted EBITDA Margin is expected to be in the range of 26.5% to 27.0%. Capital expenditures for fiscal year 2025 are now expected to be in the range of $110 to $120 million, an increase from $85 to $95 million reflecting the acquisition of one of AZEK's manufacturing sites in Pennsylvania in the second quarter. AZEK expects Residential segment net sales in the range of $1.452 to $1.479 billion, representing approximately 6% to 8% year-over-year growth, and Segment Adjusted EBITDA in the range of $392 to $405 million, representing approximately 7% to 11% year-over-year growth. Residential segment Adjusted EBITDA Margin is expected to be in the range of 27.0% to 27.4%. AZEK expects the Commercial segment's Scranton Products business to deliver net sales in the range of $68 to $71 million, and Segment Adjusted EBITDA in the range of $11 to $13 million. The Scranton Products business has experienced some material input cost pressure that is expected to be offset in the second half of fiscal year 2025. Commercial segment Adjusted EBITDA Margin is expected to be in the range of 16.0% to 18.0%. While AZEK has recently experienced mid single-digit to double-digit Residential sell-through growth, we acknowledge that there is uncertainty in the broader economy. For the second half of fiscal 2025, AZEK expects net sales growth of 0% to 4% year-over-year on a consolidated basis and 0% to 5% year-over-year in the Residential segment which considers Residential sell-through growth scenarios in the low to mid-single-digits range year-over-year. Adjusted EBITDA is expected to grow 1% to 8% year-over-year on a consolidated basis, and Adjusted EBITDA Margin is expected to be in the range of 27.2% to 28.0%. 'Over the last 7 years through fiscal year 2024, we have delivered a 15% compound annual growth rate in our Residential segment, and looking ahead, we are incredibly excited about AZEK's future. The success and resilience of our business model, combined with our relentless focus on innovation, sustainability, and execution, continue to position us to deliver double-digit growth and sustained margin expansion over the long term,' concluded Mr. Singh. MERGER AGREEMENT WITH JAMES HARDIE As previously announced, AZEK entered into a merger agreement with James Hardie Industries plc on March 23, 2025. The transaction is currently anticipated to close in the second half of calendar year 2025 and is subject to customary closing conditions, including regulatory approvals and AZEK shareholder approval. CONFERENCE CALL AND WEBSITE INFORMATION AZEK will hold a conference call to discuss the results today, Tuesday, May 6, 2025, at 4:00 p.m. (CT). To access the live conference call, please register for the call in advance by visiting Registration will also be available during the call. After registering, a confirmation e-mail will be sent including dial-in details and unique conference call codes for entry. To ensure you are connected for the full call please register at least 10 minutes before the start of the call. Interested investors and other parties can also listen to a webcast of the live conference call by logging onto the Investor Relations section of the AZEK's website at AZEK uses its investor relations website at as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. For those unable to listen to the live conference call, a replay will be available approximately two hours after the call through the archived webcast on the AZEK website or by dialing (800) 770-2030 or (609) 800-9909. The conference ID for the replay is 10840. The replay will be available until 11:59 p.m. (CT) on May 13, 2025. In addition, an earnings presentation will be posted and available on the AZEK investor relations website prior to the conference call. ABOUT THE AZEK ® COMPANY The AZEK Company Inc. (NYSE: AZEK) is the industry-leading designer and manufacturer of beautiful, low maintenance and environmentally sustainable outdoor living products, including TimberTech® Decking and Railing, Versatex® and AZEK® Trim, and StruXure® pergolas. Consistently awarded and recognized as the market leader in innovation, quality, aesthetics and sustainability, our products are made from up to 85% recycled material and primarily replace wood on the outside of homes, providing a long-lasting, eco-friendly, and stylish solution to consumers. Leveraging the talents of its approximately 2,000 employees and the strength of relationships across its value chain, The AZEK Company is committed to accelerating the use of recycled material in the manufacturing of its innovative products, keeping hundreds of millions of pounds of waste and scrap out of landfills each year, and revolutionizing the industry to create a more sustainable future. The AZEK Company has recently been named one of America's Most Responsible Companies by Newsweek, a Top Workplace by the Chicago Tribune and U.S. News and World Report, one of Barron's 100 Most Sustainable U.S. Companies, one of TIME's World's Best Companies in Sustainable Growth for 2025, and celebrated in Fast Company's 2024 Brands That Matter list, where TimberTech was highlighted as a benchmark brand. Headquartered in Chicago, Illinois, the company operates manufacturing and recycling facilities in Ohio, Pennsylvania, Idaho, Georgia, Nevada, New Jersey, Michigan, Minnesota and Texas. For additional information, please visit SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This earnings release contains forward-looking statements within the meaning of applicable securities laws. All statements other than statements of historical facts, including statements regarding future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "could," "would," "expect," "objective," "plan," "potential," "seek," "grow," "target," "if," or the negative of these terms and similar expressions. Projected financial information and performance, including our guidance and outlook as well as statements about our future growth and margin expansion goals and factors, assumptions and variables underlying these projections and goals, are forward-looking statements. Other forward-looking statements may include, without limitation, statements with respect to our ability to meet the future targets and goals we establish, including our sustainability-related targets and the ultimate impact of our actions on our business as well as the expected benefits to the environment, our employees, and our communities; statements regarding our proposed merger with James Hardie and any future impact thereof, including anticipated benefits, estimated synergies and expected timing of completion of the merger; statements about our future expansion plans, capital investments, capacity targets and other future strategic initiatives; statements about any stock repurchase plans; statements about potential new products and product innovation; statements regarding the potential impact of global events; statements about future pricing for our products or our raw materials and our ability to offset increases to our raw material costs and other inflationary pressures; statements about the markets in which we operate and the economy more generally, including inflation and interest rates, supply and demand balance, growth of our various markets and growth in the use of engineered products as well as our ability to share in such growth; statements about our production levels; and all other statements with respect to our expectations, beliefs, plans, strategies, objectives, prospects, assumptions or future events or performance contained in this earnings release are forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in our Annual Reports on Form 10-K and Form 10-K/A, Quarterly Reports on Form 10-Q and in our other filings with the U.S. Securities and Exchange Commission, and including risks related to the proposed merger with James Hardie Industries plc., the fluctuation of the market value of the merger consideration, risks related to combining our businesses, including expenses related to the merger and integration of the combined company, and risks that the proposed merger may not occur. Moreover, new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially and adversely from those contained in any forward-looking statements we may make. You should read this earnings release with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect and should not place undue reliance on forward-looking statements. These statements are based on information available to us as of the date of this earnings release. While we believe that such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. We disclaim any intention and undertake no obligation to update or revise any of our forward-looking statements after the date of this release, except as required by law. NON-GAAP FINANCIAL MEASURES To supplement our earnings release and consolidated financial statements prepared and presented in accordance with generally accepted accounting principles in the United States, or ('GAAP'), we use certain non-GAAP financial measures, as described within this earnings release, to provide investors with additional useful information about our financial performance, to enhance the overall understanding of our past performance and future prospects and to allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP financial measures to assist investors in seeing our financial performance and liquidity from management's view and because we believe they provide an additional tool for investors to use in comparing our core financial performance and liquidity over multiple periods with other companies in our industry. Adjusted Gross Profit: Defined as gross profit before amortization, acquisition costs and certain other costs. Adjusted Gross Profit Margin is equal to Adjusted Gross Profit divided by net sales. Adjusted Net Income: Defined as net income (loss) before amortization, share-based compensation costs, acquisition and divestiture costs, initial public offering and secondary offering costs and certain other items of expense and income. Adjusted Diluted EPS: Defined as Adjusted Net Income divided by weighted average common shares outstanding – diluted, to reflect the conversion or exercise, as applicable, of all outstanding shares of restricted stock awards, restricted stock units and options to purchase shares of our common stock. Adjusted EBITDA: Defined as net income (loss) before interest expense, net, income tax (benefit) expense and depreciation and amortization and by adding to or subtracting therefrom items of expense and income as described above. Adjusted EBITDA Margin is equal to Adjusted EBITDA divided by net sales. Adjusted SG&A: Defined as selling, general and administrative expenses before amortization, share-based compensation costs, acquisition and divestiture costs and certain other costs. Net Leverage: Equal to gross debt less cash and cash equivalents, divided by trailing twelve month Adjusted EBITDA. Free Cash Flow: Defined as net cash provided by (used in) operating activities less purchases of property, plant and equipment. These non-GAAP financial measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Non-GAAP financial measures may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. See the accompanying earnings tables for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures. Segment Adjusted EBITDA Depending on certain circumstances, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin may be calculated differently, from time to time, than our Adjusted EBITDA and Adjusted EBITDA Margin, which are further discussed under the heading 'Non-GAAP Financial Measures.' Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin represent measures of segment profit reported to our chief operating decision maker for the purpose of making decisions about allocating resources to a segment and assessing its performance. For more information regarding how Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin are determined, see the section titled 'Management's Discussion and Analysis of Financial Condition and Results of Operations—Segment Results of Operations' set forth in Part II, Item 7 of our Annual Report on Form 10-K for fiscal 2024 and our Consolidated Financial Statements and related notes included therein. The AZEK Company Inc. Consolidated Statements of Comprehensive Income (In thousands of U.S. dollars, except for share and per share amounts) Three Months Ended March 31, Six Months Ended March 31, in thousands 2025 2024 2025 2024 Net sales $ 452,231 $ 418,408 $ 737,660 $ 658,852 Cost of sales 284,538 261,335 466,416 411,129 Gross profit 167,693 157,073 271,244 247,723 Selling, general and administrative expenses 88,267 83,198 163,154 160,444 Loss (gain) on disposal of property, plant and equipment 32 (87 ) 1,446 2,098 Operating income 79,394 73,962 106,644 85,181 Other income and expenses: Interest expense, net 7,353 8,680 15,016 16,590 Loss (gain) on sale of business — 215 — (38,300 ) Total other (income) and expenses 7,353 8,895 15,016 (21,710 ) Income before income taxes 72,041 65,067 91,628 106,891 Income tax expense 17,756 15,309 19,219 31,985 Net income $ 54,285 $ 49,758 $ 72,409 $ 74,906 Other comprehensive income (loss): Unrealized gain (loss) due to change in fair value of derivatives, net of tax $ 114 $ 1,908 $ 1,230 $ (1,187 ) Total other comprehensive income (loss) 114 1,908 1,230 (1,187 ) Comprehensive income $ 54,399 $ 51,666 $ 73,639 $ 73,719 Net income per common share: Basic $ 0.38 $ 0.34 $ 0.50 $ 0.51 Diluted 0.37 0.34 0.50 0.51 Weighted-average common shares outstanding: Basic 143,845,665 145,710,663 143,599,531 146,516,971 Diluted 145,538,217 147,738,277 145,495,733 148,231,866 Expand The AZEK Company Inc. Consolidated Statements of Cash Flows (In thousands of U.S. dollars) Six Months Ended March 31, 2025 2024 Operating activities: Net income $ 72,409 $ 74,906 Adjustments to reconcile net income to net cash flows provided by (used in) operating activities: Depreciation 49,198 44,105 Amortization of intangibles 17,290 20,036 Non-cash interest expense 812 824 Non-cash lease expense 29 (84 ) Deferred income tax benefit (2,767 ) (9,717 ) Non-cash compensation expense 9,606 14,686 Loss on disposition of property, plant and equipment 1,446 2,098 Gain on sale of business — (38,300 ) Changes in certain assets and liabilities: Trade receivables (86,089 ) (80,829 ) Inventories 1,500 (39,771 ) Prepaid expenses and other currents assets (19,562 ) (9,334 ) Accounts payable 6,264 (1,866 ) Accrued expenses and interest 9,252 (6,283 ) Other assets and liabilities 1,231 (1,565 ) Net cash provided by (used in) operating activities 60,619 (31,094 ) Investing activities: Purchases of property, plant and equipment (67,997 ) (36,879 ) Proceeds from disposition of fixed assets 285 263 Divestiture, net of cash disposed — 131,783 Acquisitions, net of cash acquired (18,150 ) — Net cash provided by (used in) investing activities (85,862 ) 95,167 Financing activities: Payments on 2024 Term Loan Facility (1,100 ) — Payments on Term Loan Agreement — (3,000 ) Principal payments of finance lease obligations (1,704 ) (1,421 ) Exercise of vested stock options 19,572 18,628 Cash paid for shares withheld for taxes (5,424 ) (4,201 ) Purchases of treasury stock — (124,994 ) Excise taxes for share repurchase (3,407 ) — Net cash provided by (used in) financing activities 7,937 (114,988 ) Net decrease in cash and cash equivalents (17,306 ) (50,915 ) Cash and cash equivalents – Beginning of period 164,025 278,314 Cash and cash equivalents – End of period $ 146,719 $ 227,399 Supplemental cash flow disclosure: Cash paid for interest, net of amounts capitalized $ 17,480 $ 23,455 Cash paid for income taxes, net 36,538 47,020 Supplemental non-cash investing and financing disclosure: Capital expenditures in accounts payable at end of period $ 7,633 $ 4,704 Right-of-use operating and finance lease assets obtained in exchange for lease liabilities 31,860 2,654 Expand Segment Results from Operations Residential Segment The following table summarizes certain financial information relating to the Residential segment results that have been derived from our unaudited Consolidated Financial Statements for the three and six months ended March 31, 2025 and 2024. Commercial Segment The following table summarizes certain financial information relating to the Commercial segment results that have been derived from our unaudited Consolidated Financial Statements for the three and six months ended March 31, 2025 and 2024. Adjusted EBITDA and Adjusted EBITDA Margin Reconciliation Three Months Ended March 31, Six Months Ended March 31, (U.S. dollars in thousands) 2025 2024 2025 2024 Net Income $ 54,285 $ 49,758 $ 72,409 $ 74,906 Interest expense, net 7,353 8,680 15,016 16,590 Depreciation and amortization 33,433 32,204 66,488 64,141 Income tax expense 17,756 15,309 19,219 31,985 Stock-based compensation costs 4,716 6,299 9,606 14,767 Acquisition and divestiture costs (1) 463 156 612 648 Loss (gain) on sale of business (2) — 215 — (38,300 ) Other costs (3) 6,367 662 6,891 3,430 Total adjustments 70,088 63,525 117,832 93,261 Adjusted EBITDA $ 124,373 $ 113,283 $ 190,241 $ 168,167 Three Months Ended March 31, Six Months Ended March 31, 2025 2024 2025 2024 Net Profit Margin 12.0 % 11.9 % 9.8 % 11.4 % Interest expense, net 1.6 % 2.1 % 2.0 % 2.5 % Depreciation and amortization 7.5 % 7.6 % 9.1 % 9.7 % Income tax expense 3.9 % 3.7 % 2.6 % 4.9 % Stock-based compensation costs 1.0 % 1.5 % 1.3 % 2.2 % Acquisition and divestiture costs 0.1 % — % 0.1 % 0.1 % Loss (gain) on sale of business — % 0.1 % — % (5.8 )% Other costs 1.4 % 0.2 % 0.9 % 0.5 % Total adjustments 15.5 % 15.2 % 16.0 % 14.1 % Adjusted EBITDA Margin 27.5 % 27.1 % 25.8 % 25.5 % Expand ________________________________________ (1) Acquisition and divestiture costs reflect costs related to acquisitions of $0.4 million and $0.5 million in the three and six months ended March 31, 2025, respectively, and $0.1 million in the three and six months ended March 31, 2024, inventory step-up adjustments related to recording inventory of acquired businesses at fair value on the date of acquisition of $0.1 million in the three and six months ended March 31, 2025, and costs related to divestitures of $0.1 million and $0.5 million in the three and six months ended March 31, 2024, respectively. (2) Loss (gain) on sale of business relates to the sale of the Vycom business. (3) Other costs include costs related to the proposed merger with James Hardie of $5.0 million in the three and six months ended March 31, 2025, the restatement of the Company's consolidated financial statements and condensed consolidated interim financial information for each of the quarters within fiscal years ended September 30, 2023 and 2022, and for the fiscal quarter ended December 31, 2023 (the 'Restatement') of $0.1 million and $0.3 million in the three and six months ended March 31, 2025, respectively, reduction in workforce costs of $0.6 million in the three and six months ended March 31, 2025, and $0.3 million in the six months ended March 31, 2024, costs for legal expenses of $0.1 million and $0.2 million in the three and six months ended March 31, 2025, respectively, and $0.3 million in the three and six months ended March 31, 2024, costs related to the removal of dispensable equipment resulting from a modification of the Company's manufacturing process of $2.4 million in the six months ended March 31, 2024, and other costs of $0.6 million and $0.8 million for the three and six months ended March 31, 2025, respectively, and $0.4 million for the three and six months ended March 31, 2024. Expand Adjusted Gross Profit Reconciliation Three Months Ended March 31, Six Months Ended March 31, (U.S. dollars in thousands) 2025 2024 2025 2024 Gross Profit $ 167,693 $ 157,073 $ 271,244 $ 247,723 Amortization 3,054 3,792 6,186 7,661 Acquisition costs (1) 120 — 120 — Other costs (2) 73 — 73 — Adjusted Gross Profit $ 170,940 $ 160,865 $ 277,623 $ 255,384 Three Months Ended March 31, Six Months Ended March 31, 2025 2024 2025 2024 Gross Margin 37.1 % 37.5 % 36.8 % 37.6 % Amortization 0.7 % 0.9 % 0.8 % 1.2 % Acquisition costs 0.0 % 0.0 % 0.0 % 0.0 % Other costs 0.0 % 0.0 % 0.0 % 0.0 % Adjusted Gross Profit Margin 37.8 % 38.4 % 37.6 % 38.8 % Expand ________________________________________ (1) Acquisition costs include inventory step-up adjustments related to recording inventory of acquired businesses at fair value on the date of acquisition in the three and six months ended March 31, 2025. (2) Other costs include costs related to reduction in workforce in the three and six months ended March 31, 2025. Expand Adjusted Net Income and Adjusted Diluted EPS Reconciliation Three Months Ended March 31, Six Months Ended March 31, (U.S. dollars in thousands, except per share amounts) 2025 2024 2025 2024 Net Income $ 54,285 $ 49,758 $ 72,409 $ 74,906 Amortization 8,567 9,872 17,290 20,036 Stock-based compensation costs (1) — 787 90 3,712 Acquisition and divestiture costs (2) 463 156 612 648 Loss (gain) on sale of business (3) — 215 — (38,300 ) Other costs (4) 6,367 662 6,891 3,430 Tax impact of adjustments (5) (4,080 ) (3,130 ) (6,594 ) 8,920 Adjusted Net Income $ 65,602 $ 58,320 $ 90,698 $ 73,352 Three Months Ended March 31, Six Months Ended March 31, 2025 2024 2025 2024 Net Income per common share - diluted $ 0.37 $ 0.34 $ 0.50 $ 0.51 Amortization 0.07 0.06 0.12 0.13 Stock-based compensation costs — 0.01 — 0.03 Acquisition and divestiture costs — — — — Loss (gain) on sale of business — — — (0.26 ) Other costs 0.04 — 0.05 0.02 Tax impact of adjustments (0.03 ) (0.02 ) (0.05 ) 0.06 Adjusted Diluted EPS (6) $ 0.45 $ 0.39 $ 0.62 $ 0.49 Expand ________________________________________ (1) Stock-based compensation costs reflect expenses related to our initial public offering. Expenses related to our recurring awards granted each fiscal year are excluded from the Adjusted Net Income reconciliation. (2) Acquisition and divestiture costs reflect costs related to acquisitions of $0.4 million and $0.5 million in the three and six months ended March 31, 2025, respectively, and $0.1 million in the three and six months ended March 31, 2024, inventory step-up adjustments related to recording inventory of acquired businesses at fair value on the date of acquisition of $0.1 million in the three and six months ended March 31, 2025, and costs related to divestitures of $0.1 million and $0.5 million in the three and six months ended March 31, 2024, respectively. (3) Loss (gain) on sale of business relates to the sale of the Vycom business. (4) Other costs include costs related to the proposed merger with James Hardie of $5.0 million in the three and six months ended March 31, 2025, the Restatement of $0.1 million and $0.3 million in the three and six months ended March 31, 2025, respectively, reduction in workforce costs of $0.6 million in the three and six months ended March 31, 2025, and $0.3 million in the six months ended March 31, 2024, costs for legal expenses of $0.1 million and $0.2 million in the three and six months ended March 31, 2025, respectively, and $0.3 million in the three and six months ended March 31, 2024, costs related to the removal of dispensable equipment resulting from a modification of the Company's manufacturing process of $2.4 million in the six months ended March 31, 2024, and other costs of $0.6 million and $0.8 million for the three and six months ended March 31, 2025, respectively, and $0.4 million for the three and six months ended March 31, 2024. (5) Tax impact of adjustments, except for loss (gain) on sale of business, are based on applying a combined U.S. federal and state statutory tax rate of 26.5% for the three and six months ended March 31, 2025 and 2024, respectively. Tax impact of adjustment for loss (gain) on sale of business is based on applying a combined U.S. federal and state statutory tax rate of 42.1% for the three and six months ended March 31, 2024, respectively. (6) Weighted average common shares outstanding used in computing diluted net income per common share of 145,538,217 and 147,738,277 for the three months ended March 31, 2025 and 2024, respectively, and 145,495,733 and 148,231,866 for the six months ended March 31, 2025 and 2024, respectively. Expand Adjusted SG&A Reconciliation ________________________________________ (1) Acquisition and divestiture costs reflect costs related to acquisitions of $0.3 million and $0.5 million in the three and six months ended March 31, 2025, respectively, and $0.1 million in the three and six months ended March 31, 2024, and costs related to divestitures of $0.1 million and $0.5 million in the three and six months ended March 31, 2024, respectively. (2) Other costs include costs related to the proposed merger with James Hardie of $5.0 million in the three and six months ended March 31, 2025, the Restatement of $0.1 million and $0.3 million in the three and six months ended March 31, 2025, respectively, reduction in workforce costs of $0.5 million in the three and six months ended March 31, 2025, and $0.3 million in the six months ended March 31, 2024, costs for legal expenses of $0.1 million and $0.2 million in the three and six months ended March 31, 2025, respectively, and $0.3 million in the three and six months ended March 31, 2024, costs related to the removal of dispensable equipment resulting from a modification of the Company's manufacturing process of $2.4 million in the six months ended March 31, 2024, and other costs of $0.6 million and $0.8 million for the three and six months ended March 31, 2025, respectively, and $0.4 million for the three and six months ended March 31, 2024. Expand Free Cash Flow Reconciliation Three Months Ended March 31, Six Months Ended March 31, (U.S. dollars in thousands) 2025 2024 2025 2024 Net cash provided by (used in) operating activities $ 47,054 $ (14,806 ) $ 60,619 $ (31,094 ) Less: Purchases of property, plant and equipment (46,401 ) (19,198 ) (67,997 ) (36,879 ) Free Cash Flow $ 653 $ (34,004 ) $ (7,378 ) $ (67,973 ) Net cash provided by (used in) investing activities $ (53,520 ) $ (20,363 ) $ (85,862 ) $ 95,167 Net cash provided by (used in) financing activities $ 5,051 $ (12,191 ) $ 7,937 $ (114,988 ) Expand Net Leverage Reconciliation Twelve Months Ended March 31, (In thousands) 2025 Net income $ 150,882 Interest expense, net 38,679 Depreciation and amortization 131,389 Income tax expense 43,379 Stock-based compensation costs 20,674 Acquisition and divestiture costs 1,248 Loss on sale of business 612 Other costs 14,552 Total adjustments 250,533 Adjusted EBITDA $ 401,415 Long-term debt — less current portion $ 427,970 Current portion 4,400 Unamortized deferred financing fees 2,846 Unamortized original issue discount 3,684 Finance leases 99,492 Gross debt $ 538,392 Cash and cash equivalents (146,719 ) Net debt $ 391,673 Net leverage 1.0x Expand OUTLOOK We have not reconciled either of Adjusted EBITDA or Adjusted EBITDA Margin guidance to its most comparable GAAP measure as a result of the uncertainty regarding and the potential variability of, reconciling items such as the costs of acquisitions, which are a core part of our ongoing business strategy, and other costs. Such reconciling items that impact Adjusted EBITDA and Adjusted EBITDA Margin have not occurred, are outside of our control or cannot be reasonably predicted. Accordingly, a reconciliation of each of Adjusted EBITDA and Adjusted EBITDA Margin to its most comparable GAAP measure is not available without unreasonable effort. However, it is important to note that material changes to these reconciling items could have a significant effect on our Adjusted EBITDA and Adjusted EBITDA Margin guidance and future GAAP results. Source: The AZEK Company Inc.
