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Mar 31, 2023
AZEK Q2 2023 Earnings Report
Delivered fiscal second quarter financial performance ahead of expectations and strong cash conversion, positioning the company well heading into building season.
Key Takeaways
AZEK's Q2 2023 results exceeded expectations, driven by steady residential end market demand and disciplined operational execution. The company is on track with strategic initiatives and remains focused on material conversion away from wood. Working capital improvements led to a $90 million year-over-year increase in net cash from operating activities, and disciplined capital expenditure deployment generated another $30 million improvement.
Consolidated Net Sales reached $377.7 million.
Net Income was reported at $16.3 million, with an Adjusted Net Income of $27.0 million.
EPS stood at $0.11 per share, while Adjusted Diluted EPS was $0.18 per share.
Net cash provided by operating activities improved by $93.7 million year-over-year.
AZEK
AZEK
AZEK Revenue by Segment
Revenue by Segment
Residential Segment Revenue
CapyFin.comCommercial Segment Revenue
CapyFin.com Forward Guidance
AZEK expects to deliver against the financial targets outlined in its fiscal 2023 planning assumptions, with a focus on growth opportunities, margin expansion, and free cash flow generation through working capital initiatives and disciplined capital expenditures.
Positive Outlook
- Residential segment sell-through has trended modestly better than planning assumptions.
- Strong operational focus and initiatives are in place.
- Continued focus on growth opportunities.
- Margin expansion is expected.
- Free cash flow generation through working capital initiatives and a disciplined approach to capital expenditures is prioritized.
Challenges Ahead
- Commercial segment has been more challenged.
- Macro uncertainty remains a concern.
- Cannot predict some elements that are included in reported GAAP results, including the impact of acquisition costs and other costs.
- Material changes to reconciling items could have a significant effect on Adjusted EBITDA guidance and future GAAP results.
- Early in the building season and remain cautious given the macro uncertainty.
Revenue & Expenses
Visualization of income flow from segment revenue to net income