The AZEK Company Inc., manufacturer of outdoor living products, announced Thursday financial results for the first quarter ended December 31, 2021 of its fiscal year 2022.
“We begin fiscal 2022 in a position of strength with incremental capacity coming online leading to meaningfully improved service levels for our customers,” Jesse Singh, AZEK’s Chief Executive Officer, said. “In combination with an innovative and differentiated product portfolio, we are pursuing opportunities that expand our channel, geographic footprint, and customer relationships. Our successful Early Buy performance coupled with our strategic initiatives give us confidence for the full year.”
“We continue to see strong momentum in our business and our leading indicators point to ongoing market expansion. During the quarter, we continued to invest in our strategic initiatives and completed two acquisitions.
“In December, we acquired StruXure Outdoor, a designer and manufacturer of high quality and innovative aluminum pergolas and cabanas. StruXure’s products are a natural complement to our TimberTech portfolio, drive wood conversion, and are already being installed together by contractors across North America. We are excited to add a business like StruXure, which we believe can grow at or above our Residential segment growth rates.
“In November, we acquired a regional recycler with strengths in material sourcing, processing, logistics and scrap management. This acquisition complements our existing recycling efforts and will help to advance our goal of recycling one billion pounds of waste and scrap annually by the end of 2026. We are excited to welcome these two teams to the AZEK family,” continued Singh.
Results
Net sales for the three months ended December 31, 2021 increased by $47.4 million, or 22.3%, to $259.7 million, compared to $212.3 million for the three months ended December 31, 2020. The increase was attributable to higher sales growth in both residential and commercial segments.
Net sales for the three months ended December 31, 2021 increased for our Residential segment by 19.1% and increased for our Commercial segment by 44.8%, in each case as compared to the prior year period.
Net income for the three months ended December 31, 2021 increased by $6.6 million to $16.7 million, or $0.11 per share, compared to $10.1 million, or $0.07 per share, for the three months ended December 31, 2020. This was primarily due to higher sales and gross profit in both our Residential and Commercial segments.
Net margin expanded to 6.4% for the three months ended December 31, 2021, as compared to net margin of 4.8% for the three months ended December 31, 2020.
Outlook
“We have started the year strong, with a successful ‘Early Buy’ period, the launch of several new products and increased capacity that has led to improved service levels across our business,” said Singh. “We continue to see a strong market and material conversion momentum within both Decking and Exteriors. Our TimberTech line of decking has the most natural looking, highest-performance products on the market, and we expect to sustain our broad-based growth.”
For the second quarter fiscal 2022, AZEK expects consolidated net sales to grow in the range of 24% to 27% year over year, inclusive of the StruXure acquisition. From an Adjusted EBITDA perspective, AZEK expects to deliver growth in the range of 17% to 20% year over year, inclusive of startup costs and the impact from acquisitions.
