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AZEK
🇺🇸 NYSE:AZEK
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Jun 30, 2020

AZEK Q3 2020 Earnings Report

AZEK announced its Q3 2020 financial results, marking its first report as a public company, driven by increasing demand and a strong Q4 outlook, accelerating and increasing capacity investments.

Key Takeaways

AZEK reported a 1.1% increase in net sales to $223.7 million, driven by a 5.5% increase in the Residential segment, offset by a 19.7% decrease in the Commercial segment. The company's net loss was ($52.1) million, impacted by IPO-related and debt extinguishment expenses. Adjusted EBITDA increased by 9.6% to $57.8 million, with Adjusted EBITDA Margin expanding to 25.8%.

Residential segment net sales increased 5.5% year-over-year to $192.6 million, with June net sales increasing over 15% year-over-year.

Deck, Rail & Accessories net sales increased over 9% year-over-year.

Net loss of ($52.1) million, driven by $59.7 million of IPO-related and debt extinguishment expenses; Net Margin of (23.3%).

Adjusted EBITDA increased 9.6% year-over-year to $57.8 million; Adjusted EBITDA Margin expanded 200 basis points to 25.8%.

Total Revenue
$224M
Previous year: $221M
+1.1%
EPS
$0.13
Previous year: $0.0132
+882.6%
Adjusted EBITDA
$57.8M
Previous year: $52.8M
+9.5%
Adjusted EBITDA Margin
25.8%
Previous year: 23.8%
+8.4%
Gross Profit
$75.1M
Previous year: $75.4M
-0.4%
Cash and Equivalents
$215M
Free Cash Flow
$67.2M
Total Assets
$1.93B

AZEK

AZEK

AZEK Revenue by Segment

Forward Guidance

AZEK anticipates net sales growth of 12% to 17% year-over-year and Adjusted EBITDA growth of 14% to 19% year-over-year for the fourth quarter of fiscal year 2020.

Positive Outlook

  • Strong demand within Residential segment end markets.
  • Continued robust demand within the Residential segment across Deck, Rail & Accessories and Exteriors businesses.
  • Accelerated deployment of expansion plans.
  • Expect additional capacity to come online during the fourth quarter as well as the second and third quarters of fiscal year 2021.
  • Completion of the expansion program expected in the first half of fiscal year 2022.

Challenges Ahead

  • Economic uncertainty caused by the pandemic, including high unemployment.
  • Continued weakness in the Commercial segment.
  • Temporary shortages in decking and railing product lines due to strong demand.
  • Uncertainty regarding reconciling items such as the variability in the provision for income taxes.
  • Estimates for warranty and rebate accruals and timing of the gain or loss on disposal of property, plant and equipment.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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