CSW Industrials

Building Lasting Value 
Through Consistency
ANNUAL REPORT


Driving Sustainable Growth  
and Long-term Shareholder  
Value, With a Focus on  
Disciplined Capital Allocation
CSW Industrials is a diversified industrial growth company with industry-leading  
operations in three segments: Contractor Solutions, Specialized Reliability Solutions,  
and Engineered Building Solutions.
CSWI provides niche, value-added products with two essential commonalities:  
performance and reliability. The primary end markets we serve with our well-known  
brands include: HVAC/R, plumbing, general industrial, architecturally-specified  
building products, energy, mining, and rail.
Maintain  
Our Strong  
Balance Sheet
Allocate  
Capital  
Efficiently
Invest 
in Organic 
Growth
Disciplined 
Acquisition 
Strategy
Maximize Channels 
to Market and 
Increase Market Share

FY 2024 PERFORMANCE
REVENUES
$793m
+4.6%
ADJUSTED EBITDA
$200m
+14.9%
ADJUSTED EPS
$7.01
+13.1%
OPERATING CASH FLOW
$164m
+35.2%
REVENUE*
(in millions)
2024
2023
2022
$792.8
$757.9
$626.4
ADJUSTED EBITDA*
(in millions)
OPERATING CASH FLOW*
(in millions)
2024
2023
2022
$200.0
$174.1
$133.3
2024
2023
2022
$164.3
$121.5
$69.1
TOTAL SHAREHOLDER RETURN 
%
CSWI
Russell 2000
Custom Peer Group
*Continuing Operations Only
0
20
40
60
80
100
2021
2022
2023
2024
13.0%
73.8%
-20
-4.3%

Dear CSWI Stakeholders,
CULTURE, SAFETY,  
AND SUCCESS
From our inception, we have aspired 
to create a distinctive, employee-
focused culture. We are driven by the 
convictions that our employees are 
worthy of our care and that a strong 
culture forms the foundation for 
sustainable success. As we continued 
to demonstrate in fiscal 2024, we 
remain committed to recruiting 
and retaining great talent, offering 
rewarding careers with the opportunity 
for a secure and dignified retirement, 
and recognizing and developing team 
members who excel. Our employees 
drive our success daily because 
their interests are aligned with our 
shareholders through profit sharing 
and employee ownership.
Markers of our culture and the success 
it breeds can be found across our 
organization. Last year, we were 
honored to be added to the Forbes list 
of America’s Best Small Companies, 
and we would have been pleased to 
repeat that recognition in fiscal 2024.  
However, based on our strong growth 
and increase in shareholder value, 
we became eligible for, and were 
honored to be added to, Forbes’ list 
of America’s Most Successful Mid-Cap 
Companies in fiscal 2024. Additionally, 
CSWI was certified as a Great Place 
to Work® for the second consecutive 
year, and our Employee Wellness 
Program received Cigna’s Gold Healthy 
Workforce designation – Cigna’s 
highest honor – for the fourth year in 
a row. These recognitions are a result 
of, and a testament to, our focus on 
the CSWI core values of accountability, 
citizenship, teamwork, respect, 
integrity, stewardship, and excellence. 
External recognition of our culture 
and success is certainly welcome, but 
it means little without first ensuring 
that we are taking good care of our 
employees. As our most important 
asset, our team members benefit 
from our focus on, and investments 
in, employee safety and wellness. I 
am perhaps most pleased to share 
that fiscal 2024 was CSWI’s safest 
year on record. We achieved a Total 
Recordable Incident Rate (“TRIR”) of 
Fiscal 2024 marked our ninth year as an independent, publicly 
traded company. This journey has been marked by significant 
growth, consistent outperformance of the markets we serve, 
and substantial increases in shareholder value. Our collective 
efforts to build a great company and enduring value have 
propelled us to new heights, and I am delighted to share the 
highlights of our most recent successes with you.
0.9 for calendar 2023, a significant 
improvement over 2022 and our fourth 
consecutive year of improvement. 
We continue to make a zero-incident 
workplace the goal for all CSWI 
locations, and we will not waver in our 
commitment to achieving it. 
RECORD RESULTS
In fiscal 2024, we delivered record 
results across the board, highlighted 
by organic and inorganic growth, 
expanded margins, and robust cash 
flow. While certain key end markets 
were challenged throughout the 
year, we continued to outperform the 
markets we serve and delivered our 
seventh consecutive year of increases 
in revenue and earnings before interest, 
taxes, depreciation, and amortization 
(“EBITDA”). Moreover, we again 
executed on all elements of our capital 
allocation strategy, efficiently allocating 
capital according to a rigorous, 
risk-adjusted returns analysis. This 
ultimately resulted in record growth in 
shareholder value.

JOSEPH B. ARMES
Chairman, CEO and President
Fiscal 2024 revenue reached a record 
$793 million, representing 5% growth 
over the prior year. Approximately 
two-thirds of that growth came 
organically, with each of our three 
reporting segments contributing to that 
growth, and the remainder came from 
acquisitions. Operating leverage on 
our revenue grew EBITDA by 15% to 
$200 million. Our diversified business 
model, disciplined capital allocation, 
and commitment to operational 
excellence continued to serve us well 
and drove impressive profitability and 
margin expansion.
During fiscal 2024, we generated 
a record $164 million in cash flow 
from operations, a 35% increase 
over last year’s impressive results. 
The combination of our ability to 
deliver strong operating cash and 
the low capital needs of our business 
fuels our capital allocation strategy, 
allowing us to invest in growth and 
enhance shareholder value. Even while 
continuing to identify and acquire 
complementary businesses, we 
decreased the outstanding debt on our 
revolving credit facility by $87 million, 
further enhancing the strength of our 
balance sheet.
We also returned more than $22 
million of cash to our shareholders 
through our share repurchase program 
and dividends. After fiscal year end, 
our Board approved a 10.5% increase 
in our quarterly cash dividend,  
to $0.21 per share, marking our twenty-
first consecutive regular quarterly 
cash dividend and also signaling our 
continued confidence in our financial 
health. 
LOOKING FORWARD
Entering fiscal 2025, we look forward 
to building on the success of the past 
nine years and extending our track 
record of attractive and sustainable 
growth in revenue, EBITDA, and 
earnings per share. 
We also expect to continue 
consummating strategic acquisitions  
to complement our organic growth,  
a strategy in which we have invested 
more than $600 million since fiscal 2016.
The resilience of our teams, the end 
markets we serve, and the enduring 
value of our products allow CSWI 
the opportunity to grow through 
cycles in the overall market. Our 
guiding objectives, which include 
treating team members well, serving 
customers effectively, managing 
supply chains responsibly, and 
positioning CSWI for sustainable, 
long-term growth and profitability, 
continue to be a compelling formula.  
Driving sustainable growth and long-
term shareholder value will always be 
our primary focus and the lens through 
which we view the future of CSWI. 
Since going public in 2015 and through 
mid-June 2024, we have delivered 
over 770% total shareholder return, 
and we look forward to enhancing the 
quality and value of our company in 
fiscal 2025.
On behalf of my colleagues and  
fellow shareholders at CSW Industrials, 
I thank you for your continued support.
Very sincerely yours,
Driving sustainable growth and long-term shareholder 
value will always be our primary focus and the lens 
through which we view the future of CSWI.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 2024
OR
☐
TRANS
R
ITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
.
Commission file number 001-37454
CSW INDUSTRIALS, INC.
(Exact name of registrant as specified in its charter)
Delaware
47-2266942
(state or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
5420 Lyndon B. Johnson Freeway, Suite 500, Dallas, Texas
75240
(Address of principal executive offi
f ces)
(zip code)
(214) 884-3777
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol (s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
CSWI
Nasdaq Stock Market LLC
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defin
f ed in Rule 405 of the Securities Act.
Yes ☐
No ☒
Indicate by check mark if the registrant is not required to file
f
reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐
No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for
f
such shorter period that the registrant was required to file
f
such reports) and (2) has been subj
u ect to such filing requirements for
f
the past 90 days.
Yes ☒
No ☐
Indicate by check mark whether the registrant has submitted electronically every I
r
nteractive Data File required to be submitted pursuant to Rul
R e 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
f
such shorter period that the registrant was required to submit such
files).
Yes ☒
No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2 of the Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
(Do not check if smaller
reporting company)
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
f
complying with any new or
revised fin
f ancial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has file
f
d a report on and attestation to its management's assessment of the effe
f ctiveness of its internal control over
financial reporting under Section 404(b) of the Sarba
r
nes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting fir
f m that prepared or issued its audit
report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by
any of the registrant’s executive officers dur
d
ing the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rul
R e 12b-2 of the Exchange Act).
Yes ☐
No ☒
The aggregate market value of the registrant’s common stock held by non-affi
f liates, based on the last sale price for
f
the common stock as reported by the Nasdaq
Global Select Market on September 30, 2023, the last business day of our most recently completed second fiscal quarter was appr
a
oximately $2,686.9 million.
As of May 20, 2024, the latest practicable date, 15,527,723 shares of the registrant’s common stock, par value $0.01 per share, were issued and outstanding.
DOCUMENTS INCORPORAT
R
ED BY REFERENCE
Certain infor
f
mation contained in the definitive proxy statement for
f
the registrant’s Annual Meeting of Stockholders is incorporated by reference into Part III
hereof.f

TABLE OF CONTENTS
PART I
ITEM 1:
Business
1
ITEM 1A: Risk Factors
10
ITEM 1B: Unresolved Staff C
f
omments
22
ITEM 1C: Cybersecurity
22
ITEM 2:
Properties
23
ITEM 3:
Legal Proceedings
23
ITEM 4:
Mine Safety Disclosures
24
PART II
ITEM 5:
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
25
ITEM 6:
[Reserved]
26
ITEM 7:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
27
ITEM 7A: Quantitative and Qualitative Disclosures About Market Risk
41
ITEM 8:
Financial Statements and Suppl
u
ementary Data
42
ITEM 9:
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
79
ITEM 9A: Controls and Procedures
79
ITEM 9B: Other Information
81
ITEM 9C: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
81
PART III
ITEM 10:
Directors, Executive Officers and Corpor
r
ate Governance
81
ITEM 11:
Executive Compensation
81
ITEM 12:
Security Ownership of Certain Benefic
f ial Owners and Management and Related Stockholder Matters
81
ITEM 13:
Certain Relationships and Related Transactions, and Director Independence
81
ITEM 14:
Principal Accounting Fees and Services
81
PART IV
ITEM 15:
Exhibits, Financial Statement Schedul
d es
82
SIGNATURES
85

PART I
Unless otherwise specified, or the context otherwise requires, the refer
f ences in this Annual Report on Form 10-K for
f
the
fiscal year ended March 31, 2024 (“Annual Report”) to “our company,” “we,” “us,” “our” or “CSWI” refer
f
to CSW Industrials,
Inc. together with our wholly-owned subs
u
idiaries.
ITEM 1: BUSINESS
General
CSWI is a diversified industrial growth company with a strategic focus on providing niche, value-added products in the end
markets we serve.
We operate in three business segments: Contractor Solutions, Specialized Reliability Solutions and
Engineered Building Solutions.
Our products include mechanical products for heating, ventilation, air conditioning and
refrigeration ("HVAC/R"), plumbing products, grilles, registers and diffu
f
sers ("GRD"), building safet
f y solutions and high-
performance specialty lubr
u
icants and sealants. End markets that we serve include HVAC/R, architectur
t
ally-specified building
products, plumbing, general indus
d
trial, energy, rail transportation and mining. Our manufac
f
turing operations are concentrated
in the United States (“U.S.”), Vietnam and Canada, and we have distribution operations in the U.S., Australia, Canada and the
United Kingdom (“U.K.”). Our products are sold directly to end-users or through designated channels in over 100 countries
around the world, primarily including the U.S., Canada, the U.K. and Australia.
Drawing on our innovative and proven technologies, we seek to deliver solutions primarily to our contractors that place a
premium on superior performance and reliabi
a lity. We believe our brands are well known in the specific
f
end markets we serve
and have a reputation for
f
high quality. We rely on both organic growth and inorganic growth through acquisitions to provide an
increasingly broad portfol
f io of performance optimizing solutions that meet our customers’ ever-changing needs. We have a
successful
f
record of making attractive and synergistic acquisitions that suppor
u
t expansion of our broad portfol
f io of solutions,
and we remain foc
f
used on identifying additional acquisition opportunities in our core end markets.
Through our operating companies, we have a well-establ
a ished legacy of providing high quality produc
d
ts accompanied by
dependabl
a e service and attention to customer satisfaction. We also have a long history o
r
f innovation, through which we have
developed a robust line of products to solve our customers' specific
f
challenges. These products are distributed through an
extensive wholesale distribution network serving the HVAC/R, architectur
t
ally-specified buildings products, plumbing, general
industrial, energy, rail transportation and mining end markets. Our desire to develop solutions for our contractors, combined
with the diffe
f rentiated natur
t
e of our niche product offer
f ings, drives loyalty to our brands.
CSWI is a Delaware corpor
r
ation and was incorpo
r
rated in 2014 in anticipation of CSWI's separation from Capi
a tal
Southwest Corpor
r
ation ("Capital Southwest"). Our well-establ
a ished operating companies provide a collective history that spans
more than a century. The separation was executed on September 30, 2015 through a pro-rata share distribution of all the then
outstanding shares of common stock of CSWI to the holders of common stock of Capital Southwest (the "Share Distribution").
Since the separation, CSWI has been an independent, publicly-traded company, listed on the Nasdaq Global Select Market.
Business Segments
Our business is organized into three reportabl
a e segments: Contractor Solutions, Specialized Reliability Solutions and
Engineered Building Solutions.
The table below provides an overview of these business segments. For fin
f ancial information regarding our segments, see
Note 20 to our consolidated financial statements included in Item 8 Financial Statements and Suppl
u
ementary Data ("Item 8") of
this Annual Report.
1

Business Segment
Key End Use Markets
Contractor Solutions
•
HVAC/R
•
Plumbing
•
General Industrial
•
Architectur
t
ally-Specified Building Produc
d
ts
Specialized Reliability Solutions
•
Energy
•
General Industrial
•
Mining
•
Rail Transportation
Engineered Building Solutions
•
Architectur
t
ally-Specified Building Produc
d
ts
Contra
t
ctor
t
Solutio
t ns
Our Contractor Solutions segment manufact
f
ur
t
es effi
f ciency and performance enhancing products predominantly for
f
residential and commercial HVAC/R and plumbing appl
a
ications, which are designed primarily for the profes
f
sional trades. It
provides an innovative line of installation and service products designed to create efficiency and expediency for the profes
f
sional
trades. Our Contractor Solutions segment is strategically positioned to grow in each market served by leveraging our sales
channels and distribution networks. HVAC/R contractors ask for our products by name, and profes
f
sional plumbers have been
using our industry-
r
leading solutions for generations. We manufact
f
ur
t
e the majo
a rity of our mechanical and chemical produc
d
ts in-
house, and we also strategically engage third-party manufac
f
turers for outsourced products and act as a master distributor for
other products. We ensure the quality of in-house and outsourced manufact
f
ur
t
ed products through our stringent quality control
review procedur
d
es backed by our "RectorSeal to the Rescue" commitment around quality, warranty and differentiated support.
Our key product types and brand names are shown below in alphabe
a
tical order:
Product Types
Brand Names
•
condensate pads, pans and pumps
• AquaGuard®
•
condensate switches and traps
• Aspen® Pumps*
•
drain waste and vent systems mechanical products
• Clean Check®
•
duc
d
tless mini-split systems installation suppor
u
t tools and accessories
• Cover GuardTM
•
electrical protection for
f
HVAC/R
• DesolvTM
•
grilles, registers, diffusers and vents
• Dust Free®
•
installation supplies for
f
HVAC/R
• EZ Trap®
a
•
line set covers
• Falcon Stainless®
•
maintenance chemicals for
f
HVAC/R
• Fortress®
•
refri
f gerant caps
• Goliath®
•
solvents, cements and thread sealants
• G-O-N®
•
wire pulling head tools
• Guardian Drain Lock®
• HubsettTM
• Kickstart®
• Leak Freeze®
• No. 5®
• Novent®
• PRO-FitTM
• RectorSeal®
• Safe-
f T-Switch®
• Shoemaker Manufac
f
turing®
• Slimduc
d
t®
• SureSeal®
• TRU-BLUTM
• TRUaire®
*We are the exclusive US provider of this brand
2

New Product Development – Customer experience is a core competency in our Contractor Solutions segment. We gather
"voice of the customer" market research through organized foc
f
us groups and online surveys, as well as through less formal
channels. Ideas for new products or enhancements to existing products are also generated by our relationships with end-users,
independent sales representatives, distributors and our internal sales and marketing team.
We also actively monitor the
competitive landscape
a
and develop new products and modify existing products in our research and development (“R&D”) labs
a
co-located with our manufac
f
turing sites in Royse City, Texas; Fall River, Massachusetts; Houston, Texas; Dong Nai, Vietnam;
and Cle Elum, Washington.
Competition – Our competition in the Contractor Solutions segment is varied.
Competitors range from small
entrepreneurial companies with a single product, to large multinational original equipment manufac
f
turers (“OEMs”). In the
products serving the HVAC/R end market category,
r
we compete with DiversiTech, DuraVent, Intermatic, Little Giant, NSI
Industries, Nu-Calgon, RGF and others.
In the products serving the plumbing end market category,
r
we compete with
BrassCraft, IPS, J.R. Smith, Mainline, Oatey and others. Most of our products are sold through distribution channels, and we
compete in this space by leveraging the breadth of our product lines, customer service and pricing.
Customersr – Our primary c
r
ustomers are wholesalers and distributors in the HVAC/R and plumbing end markets. Some of
these are single location distributors, while the majo
a rity are regional or national distributors with up t
u
o hundreds of locations.
Our products are generally sold domestically; however, a small portion is sold internationally through similar channels. A small
number of OEMs purchase these products directly.
Seasonalityt – A significant portion of our products are sold into the HVAC/R market, which is seasonal by natur
t
e. While
products are sold throughout the year, revenues tend to peak dur
d
ing the spring and summer months.
Specialized Reliabili
i ty
i
Solutions
Our Specialized Reliability Solutions segment provides products for increasing the reliability, efficiency, performance and
lifespan of industrial assets. Through our commercial team and supply chain partners, our Specialized Reliabi
a lity Solutions
segment delivers products that solve equipment maintenance challenges and protect assets in the most demanding environments
and extreme conditions.
Our customers depend on their mission-critical equipment, and thus they depend on our trus
r
ted
specialty lubricants, compounds, sealants, desiccant breather fil
f tration products, and lubr
u
ication management systems.
Our
Specialized Reliabi
a lity Solutions segment manufac
f
tures and suppl
u
ies highly specialized consumables that impart or enhance
properties such as lubricity, anti-seize qualities, fri
f ction, sealing and heat control. Our high performance products are typically
used in harsh operating conditions, including extreme heat and pressure and chemical exposure, where commodity products
would fai
f l.
These products help minimize maintenance downtime, protect and extend the working life of large capital
equipment such as cranes, rail transportation systems, mining equipment, oil rigs and rotating and grinding equipment fou
f
nd in
various industrial segments such as steel mills, canning and bottling, mining and cement. These products enhance, repair or
condition the internal working systems of industrial systems and are critical to ensuring safe,
f
effi
f cient and effe
f ctive long-term
operational integrity.
3

Our key product types and brand names are shown below in alphabe
a
tical order:
Product Types
Brand Names
• anti-seize products
• AccuTrack®
• compounds, lubricants and sealants
• Air Sentry®
r
• contamination control
• BioRail®
• desiccant breather filtration products
• Deacon®
• industrial maintenance and repairs
• Envirolube
u
® XE Extreme
• lubricant management systems
• Extreme®
• operations solutions
• Gearmate® 1000 ICT
• rail fri
f ction modifiers
• Jet-Lube
u
®
• sealants
• Kopr-Kote®
• Matrix®
• NCS-30® ECFTM
• OilSafe®
• RailArmor®
• Rocket Wrap®
a
• Run-
R
N-Seal® ECFTM
• TOR Armor®
• Whitmore®
New Product Development – We develop relationships with end-users and channel partners to understand a multitude of
operating conditions where technical innovation or enhancement is needed. For example, these relationships have generated
innovation in the areas of modifyi
f ng existing lubrication products to operate in arctic conditions or modifying an existing
product for
f
use in an appl
a
ication where saltwater may be present. The development team is located in Rockwall, Texas and
actively targets additional end markets for
f
product use and penetration.
Competition – In general, our products demand premium valuation, as compared to commodity products, and competitors
tend to be varied and include global, regional and local companies that may be large or small. We compete primarily on the
basis of product diffe
f rentiation, supe
u
rior performance and quality and customer-centric service.
When compared to many
commodity consumables, the product sales cycle is often long, typically resulting in quantifie
f d, verified and repeat product
performance being the key driver of buying decisions, rather than price. As these products protect and enhance the operation of
large capital equipment, qualification is based on the proof of value in appl
a
ication, resulting in a high changeover risk barrier.
Typical competitors include Exxon-Mobil, Fuchs, Kleube
u
r, Shell and South Coast Products.
Customersr – Specialized Reliability Solutions produc
d
ts are primarily sold through value-added distribution partners, as
well as maintenance and repair operations or catalog channels. Our Specialized Reliabi
a lity Solutions organization provides
both market-specific
f
and product line specific training to both the distribution partners and potential end-users. Our specialists
ofte
f n visit end-users with distribution partners to advise on critical application issues, which enhances our ability to both “pull”
demand from the end-user and “push” demand to distributor partners.
Specialized Reliabi
a lity Solutions customers include
petrochemical facilities, industrial manufact
f
ur
t
ers, construc
r
tion companies, utilities, plant maintenance customers, building
contractors and rail and mining operators, among others.
Engine
i
ered Buildi
l ng
i
Solutions
Our Engineered Building Solutions segment provides primarily code-driven, life s
f
afet
f y products that are engineered to
provide aesthetically-pleasing solutions for the construc
r
tion, refurbishment and modernization of commercial, institut
t ional and
multi-family residential buildings.
Our Engineered Building Solutions segment is a market leader in providing architects,
contractors and other construc
r
tion profes
f
sionals with unique solutions that meet code requirements and suppor
u
t life s
f
afet
f y,
while adding functionality, performance, and aesthetically-pleasing designs. The safety and sustainability of our engineered
building products enables them to be easily incorporated into the Leadership in Energy and Environmental Design (“LEED”)
building market.
4

Our key product types and brand names are shown below in alphabe
a
tical order:
Product Types
Brand Names
• architectur
t
al railings and metals
• Balco® Expansion Joint Systems
• fir
f e and smoke protection solutions
• BlazeSealTM
• fir
f e stopping solutions
• Greco® Architectur
t
al Railings & Metals
• pre-engineered and custom architectur
t
al building components
• IllumiTreadTM
• Metacaulk®
• Metafle
f xProTM
• Smoke Guard® Elevator Protection
• Smoke Guard® Large Curtain Solutions
• Smoke Guard® Perimeter Protection
New Product Developm
o
ent – Strategic investment in new product innovation, technical advancement, and customer-driven
product development enhances demand for our products and enriches our relationships with end-users. Development teams are
located in Boise, Idaho; Hudson, Florida; Wichita, Kansas and Windsor, Ontario, Canada.
Competition – Our products generally demand premium valuation. We compete primarily on the basis of competitive lead
times, supe
u
rior custom specific
f ation standards and customer-centric service, which we believe are the key drivers of our
customers' buying decisions. In the fire and smoke protection solutions category,
r
we compete with McKeon, US Smoke &
Fire, Won Door and others, typically based on product quality, knowledge of building codes and customer service. In the
architectur
t
ally-specified building component, we compete primarily with Construc
r
tion Specialties, Emseal and InPro on the
basis of product quality, price and driving architectur
t
al specific
f ations.
Customersr – Fire and smoke protection products are sold through internal sales and installation teams, as well as local
building products distributors that also perform installations and service. Architectur
t
ally-specified building components and
fire stopping solutions are primarily sold through independent sales representatives and building product distributors to general
contractors or subcontractors. Engineered Building Solutions' end use customers include multi-family residential buildings,
educ
d
ational faci
f
lities and institutions, warehouses, construc
r
tion companies, plant maintenance companies, building contractors
and repair service companies, among others.
Our Competitive Strengths
As discussed in this section, we believe we have a variety of competitive strengths.
Broad Portfo
t lio of Industry L
r
eading Products and Solutions
In our targeted end markets, we have industry-
r
leading positions among our broad portfol
f io of products. We believe our
products and solutions are diffe
f rentiated fro
f
m those of our competitors by supe
u
rior performance, quality and total value
delivered to customers. For example, RectorSeal's No. 5® pipe thread sealant is widely regarded as an industry s
r
tandard for
thread sealants for HVAC/R, plumbing and electrical appl
a
ications. Additionally, we believe Whitmore's Kopr-Kote® anti-seize
lubr
u
icant is recognized as the anti-seize compound of choice for use in oil and gas drilling operations, where it is requested by
name.
Organi
r
c Revenue Growth Platfo
t rm and Optimizing Perfo
r rmance
We focus on developing our presence in end markets with strong growth trends, continuously evaluating the potential uses
of existing products to broaden end market penetration.
We historically have a loyal customer base that recognizes the
performance results and quality of our products and solutions. Further, our customer base is diverse. For the year ended March
31, 2024, no single customer represented 10% or more of our net revenues.
These fact
f
ors have enabl
a ed us to generate strong organic revenue growth performance, while remaining foc
f
used on strong
profita
f
bi
a lity through optimizing our manufact
f
ur
t
ing processes. This effo
f
rt is suppor
u
ted by a culture of continuous improvement,
which looks to refine processes in all of our manufac
f
turing facilities to reduc
d
e manufact
f
ur
t
ing costs, increase production
capacity and improve product quality. Additionally, we ofte
f n evaluate strategic investments to drive transfor
f
mational changes
in our manufact
f
ur
t
ing processes. For example, in all of our reportabl
a e segments, we have taken actions to consolidate our
5

manufac
f
turing footpr
t
int and distribution centers in order to optimize capacity, improve effi
f ciency and leverage technologies
while enhancing product quality.
Diverse Sales and Dist
i ri
t bution Channe
C
ls
Many of our products are sold through full-service distribution networks where product knowledge and customer
satisfac
f
tion are key success fac
f
tors. We primarily market through an international network of both internal and third-party sales
representatives that call on our wholesale distributors, contractors and direct customers. The strong, long-term relationships we
have developed with our wholesale distribution partners and exclusive dealers position us to successful
f ly introduce organically
developed products and acquired products. In addition, our extensive distribution network allows us to reach and serve niche
end markets that provide organic growth opportunities and a source of opportunities for our acquisition strategy.
Inorgani
r
c Growth I
t
nv
I
estment with P
t
roven Tra
T
ck Record
We believe our experience in identifying, completing and integrating acquisitions is one of our core competitive strengths,
as evidenced by our portfol
f io of more than 10 acquisitions completed since the inception of the Company. Historically, we
have pursued product-line acquisitions with relatively low integration risk that have the potential to benefit
f
from our extensive
distribution network and manufac
f
turing effi
f ciencies. More recently, we began targeting commercially-proven products and
solutions that are attractive in our existing end markets where we can drive revenue growth, improved profitabi
a lity and
increased cash flo
f w.
In the four
f
th quarter of fiscal year ended March 31, 2024, we acquired Dust Free, LP., based in Royse City, Texas, which
offe
f rs an extensive line of patented products for residential and commercial indoor air quality and HVAC/R applications. In the
third quarter of fiscal year ended March 31, 2023, we acquired Falcon Stainless, Inc ("Falcon"), based in Temecula, California,
which offers produc
d
ts that enhance water flow delivery. In the second quarter of fiscal year ended March 31, 2023, we acquired
the assets of Cover Guard, Inc. (“CG”) and AC Guard, Inc. ("ACG"), based in Orlando, Florida, which offer lineset covers and
HVAC/R condenser protection cages. In the third quarter of the fis
f cal year ended March 31, 2022, we acquired Shoemaker
Manufac
f
turing ("Shoemaker") based in Cle Elum, Washington, which offer
f s high-quality customizable GRDs for commercial
and residential markets, and expands CSWI’s HVAC/R product offering and regional exposure in the northwest U.S.
We
invested more than $140.0 million for the multiple acquisitions made in fiscal 2022, 2023 and 2024.
Culture of P
o
roduct Enhanc
E
ement and Customer-Cen
C
tric Solutions
Our highly-trained and specialized personnel work closely with our customers, industry e
r
xperts and research partners to
continuously improve our existing products to meet evolving customer and end market requirements. We focus on product
enhancements and product line extensions that are designed to meet the specific
f
application needs of the professional trades.
Customer-centric solutions underpin our strong industrial brands and reputation for
f
high quality products, in tur
t
n l
r
eading us to
realize improved customer retention and loyalty. Further, our ability to meet the needs of high-value, niche end markets with
customized solutions that leverage our existing products has enabl
a ed us to differentiate ourselves from larger competitors that
may not be as willing or able to respond quickly to evolving customer demands.
Through the height of the COVID-19 pandemic, we worked closely with our customers to provide them with the products
and services they needed to continue conducting their operations. This included ensuring that our suppl
u
y chains were secure,
that we maintained an adequate level of inventory t
r
o meet our customers' needs and that we remained able to operate our
facilities at the levels required to meet customer demand.
Our Growth Strategy
We are foc
f
used on creating long-term stockholder value by increasing our revenue, profitabi
a lity and cash flow. Identifyi
f ng
strategic end markets yielding sustainable growth, expanding market share through our new product development and targeted
acquisitions are all components of our strategy.
We Leverage Existing Customer Relationships
i
and Products and Solutions
We expect to drive revenue growth by leveraging our reputation for
f
providing high quality products to our broad customer
base. Our team of sales representatives, engineers and other technical personnel continues to proactively collaborate with our
distributors and contractors to enhance and adapt existing products and solutions to meet evolving customer needs. In addition,
we seek to leverage our existing customer base to cross-sell our products and solutions across our three business segments,
thereby driving organic growth.
6

We Innovate New
N
Products to Accelerate Organi
r
c Growtht
The collabor
a
ative relationships and open fee
f
dback channels we have with our distributors and end-users allow us to add
value not only through enhancing and adapting existing products and solutions, but also through effi
f ciently developing new
products and solutions to meet existing and fut
f ur
t
e customer needs. Our team of R&D, sales and marketing personnel work
together to identify product opportunities and methodically pursue development of innovative new products.
Through the
development of new products and solutions to both address new markets and complement our product portfol
f io in markets we
currently serve, we create increased opportunities to drive organic growth.
We Invest in Focused Acquisi
i tions that Leverage our Dist
i ri
t bution Channe
C
ls
While we are focused on new product development, improving our existing products and penetrating new markets with
these products, we expect to continue to identify and execute acquisitions that will broaden our portfol
f io of products and offer
f
attractive risk-adjusted retur
t
ns. We primarily focus on commercially-proven products and solutions that would benefit
f
from a
broader distribution network and are attractive to customers in our targeted end markets. Once acquired, we strive to utilize our
extensive distribution networks to increase revenue by selling those products and solutions to our diversifie
f d customer base.
Raw Materials and Suppliers
We rely on suppl
u
iers and commodity markets to secure components and raw materials such as base oils, copper fla
f kes,
steel, aluminum, polyvinyl chloride and tetra-hydrofur
f
an. We acquire raw materials and components fro
f
m numerous sources,
and we do not depend on a single source of suppl
u
y for
f
any significant amount of raw materials and components. Utilizing our
suppl
u
y chain management experience and expertise, honed through successful
f
management of suppl
u
y chain challenges caused
by the COVID-19 pandemic, we continue to take proactive steps to limit the impact of current and anticipated suppl
u
y chain
challenges.
We also work closely with our suppl
u
iers to ensure availabi
a lity of products and implement other cost-saving
initiatives, and we invest in our operations and supply chain to mitigate risk with a foc
f
us on the diversification of critical
components.
Intellectual Property
We own and maintain a substantial portfol
f io of trademarks and patents relating to the names, designs and config
f urations of
our products. We consider our trademarks and patents to be valuable assets. In addition, our pool of proprietary information,
consisting of know-how and trade secrets related to the design, manufac
f
ture and operation of our products, is considered
particularly valuable. Accordingly, we take proactive measures to protect proprietary information. In aggregate, we own the
rights to the produc
d
ts that we manufac
f
ture and sell and are not materially encumbered by licensing or fra
f nchise agreements.
Our trademarks can typically be renewed indefinitely as long as they remain in use, whereas our patents generally expire 10 to
20 years fro
f
m the dates they were fil
f ed. Our patents expire from time to time, but we do not believe that the expiration of any
individual patent will have a material adverse impact on our business, financial condition or results of operations.
Export Regulations
We are subject to export control regulations in countries from which we export products and services. These controls may
apply by virtue of the country in which the products are located or by virtue
t
of the origin of the content contained in the
products. The level of control generally depends on the natur
t
e of the goods and services in question. Where controls appl
a
y, we
typically need an export license or authorization (either on a per-product or per-transaction basis) or the transaction must
qualify for a license exception or the equivalent. In certain cases corresponding reporting requirements may apply. See Note
20 to our consolidated financial statements included in Item 8 of this Annual Report for
f
financial and other infor
f
mation
regarding our operations on a geographical basis.
Human Capital Management
We believe that our employees are our most valuable assets and that our skilled, engaged workfor
f
ce provides us with a
competitive advantage. As part of our commitment to our employees, we provide a safe w
f
ork environment, ongoing training
and professional development, competitive compensation and a generous health and retirement benefit
f s package that includes
an employee stock ownership plan ("ESOP"), a defin
f ed contribution plan ("401(k)"), paid time off and health and wellness care.
7

As of March 31, 2024, we employed appr
a
oximately 2,600 individuals globally. Regionally, approximately 1,300 of our
employees are in North America, approximately 1,300 are in Asia Pacific
f , and approximately 10 are in Europe, the Middle East
and Africa.
Our workforce is made up o
u
f appr
a
oximately 460 salaried employees and 2,100 hourly employees.
Of these
employees, app
a
roximately 1.7% of our U.S. workforce is represented by unions. We also have an employee organization in
Vietnam.
We believe that relations with our employees throughout our operations are generally positive, including those
employees represented by unions or employee organizations.
No unionized fac
f
ility accounted for more than 10% of our
consolidated revenues for
f
the fis
f cal year ended March 31, 2024.
We assess employee engagement through targeted surveys, which provide feedba
d
ck on a variety of subj
u ects including
safety, communications, diversity and inclusion, performance management, development opportunities, respect and recognition
and management support. The survey results are reviewed by our senior leadership team and shared with our managers and
employees who collabor
a
ate to act on identifie
f d areas of improvement to implement measures of success. About 75% of our
employees participated in our fiscal 2024 survey, which was conducted through Great Place To Work®. Employee fee
f
dback
from the survey indicated our overall employee engagement score remains high and in February 2
r
024, we received the Great
Place To Work® Certific
f ation™marking the second consecutive year that we have received the award. While we continuously
work to build on our Company's strong cultur
t
e, our scores indicate that we are continuing to raise the bar to increase pride,
optimism and engagement across the Company and strive to create the best employee experience.
As a result of maintaining a consistent focus on our employee-centric culture, the retention rate (excluding retirements) for
our high performance talent in the fis
f cal year ended March 31, 2024 was 94%, representing a 3% improvement from prior fis
f cal
year. Our company-wide (all employees) voluntary r
r
etention rate (excluding retirements) was 83%, which reflects the same
retention rate fro
f
m the prior fis
f cal year.
Workpl
k ace Hea
H
lth a
t
nd Safet
f yt
We are committed to creating and maintaining a safe,
f
healthy working environment, and we have developed a health and
safety program that focuses on implementing policies and training programs to ensure that all employees understand this
commitment. We maintain a global Environmental, Health & Safet
f y policy that is appl
a
icable to all our employees, operations
and activities. Our health and safety strategies are consistently reviewed and upda
u
ted as changes occur in our business, and
employees are empowered to identify and report safet
f y concerns and take corrective actions. Our commitment to these health
and safet
f y practices was evidenced in how we responded to and managed through the COVID-19 pandemic. Safety awareness
and employee engagement programs have been implemented at the Company’s fac
f
ilities and have generated meaningful
f
reductions in workpl
k ace safet
f y incidents. In particular, we have continued to foc
f
us on the health and safety practices at our
Vietnam fac
f
ility since the acquisition in December 2020 through training and equipment upgr
u
ades. For the calendar year ended
December 31, 2023, our total recordable incident rate ("TRIR") for employees was a historically low rate of 0.9, which included
the TRIR performance of recently-acquired companies. For the fir
f st three months of calendar 2024, our TRIR was 1.1.
Training, Developm
o
ent and Ethi
t cs
Consistent with our belief that our employees are our most valuable assets, developing our people is a critical aspect of our
cultur
t
e. Successful
f
execution of the Company's strategy depends on attracting and retaining highly qualified individuals. We
provide developmental opportunities to help our employees build the skills necessary to reach their career goals, including on-
the-jo
- b training, online learning, profes
f
sional memberships, and leadership and management training. To help our employees
see how their efforts contribute to our Company’s overall success, we utilize a robust performance management process and
provide regular feedba
d
ck to increase engagement and maximize talent development efforts. We have also establ
a ished various
talent development programs for
f
current and fut
f ur
t
e leaders during the critical stages of their careers.
Our core values of accountability, citizenship, teamwork, respect, integrity, stewardship, and excellence form the
foundation for
f
our decentralized, entrepreneurial culture, and our Code of Business Conduct (our "Code") represents our shared
commitment to living out these core values with the highest level of ethical conduct. All our employees across the globe,
including our executive officers, are required to abi
a de by our Code to ensure that our business is conducted in a consistently
legal and ethical manner. Our Code covers many topics, including confli
f cts of interest, anticorrup
r
tion, financial reporting,
confid
f entiality, insider trading, antitrus
r
t and competition law, cybersecurity and information security, appr
a
opriate use of social
media, and respect in the workplace. Every y
r
ear, through online and in-person training, our employees receive training on all
topics addressed in our Code, and they are required to certify that they will comply with our Code.
8

Compensation and Benefi
e ts
We strive to suppor
u
t both the short-term and long-term well-being of our employees. This commitment extends to the
communities in which our employees live, where we are positive, active corpor
r
ate citizens. A key element of employee well-
being is providing compensation and benefit
f s for
f
our employees that are competitive and equitabl
a e based on local markets. Our
compensation program includes market-aligned salary g
r
rades, an annual incentive compensation program for the majo
a rity of
our employees, referral and rewards incentive programs availabl
a e to employees based on job function, premium pay for
employees working extended hours and a long-term incentive plan ("LTIP") for
f
select employees. We analyze our
compensation and benefit
f s program annually, and make changes as necessary, to ensure we remain competitive. We believe
maintaining competitive pay and benefits for our employees is important to promote professional excellence and career
progression.
As part of our comprehensive total rewards program, our employees are eligible to participate in Company-subs
u
idized
medical, dental, vision, life, short-term and long-term disabi
a lity insurance plans.
We provide employees with a paid
suppl
u
emental life a
f
nd accident insurance plan and we offe
f r employees the opportunity to contribute to a Flexible Spending
Account and a Health Savings Account. Our wellness plan offe
f rs a range of programs foc
f
used on improving health awareness
and well-being.
Helping our employees stay healthy and safe is a priority, and our quarterly wellness challenges engage
employees and often incorporate community-outreach efforts and special events. In calendar year 2024, Cigna recognized our
wellness program with their Gold-level Healthy Workforce Designation marking the third consecutive year that we have
received Cigna’s highest honor.
Our retirement savings program includes a 401(k) plan and an Employee Stock Ownership Plan ("ESOP"). Our 401(k)
plan has a 91% participation rate, which is significantly higher than the recognized industry b
r
enchmark of approximately 63%
according to Principal's manufac
f
turing benchmark.
Current and for
f
mer domestic employees who have participated in our
ESOP collectively own appr
a
oximately 3% of the company.
We believe this ESOP strongly aligns the interests of our
employees with those of our stockholders.
We maintain a culture that engages and rewards the performance of key leaders that is suppor
u
ted through LTIP, an equity
compensation plan through which employees receive equity awards in the for
f
m of restricted common stock and performance
shares.
More than 100 employees received one or both of these forms of equity awards in fiscal 2024.
Our equity
compensation plans are designed to promote long-term performance, as well as to create long-term employee retention,
continuity of leadership and an ownership cultur
t
e whereby management and employees think and act as shareholders of the
Company.
We believe that the compensation, benefits, and other components of our total rewards program provided to our employees
give us a competitive edge and diffe
f rentiate us in a challenging labor
a
market. We seek to recruit and retain high performing
talent and provide safe, secure and dignified retirements for our employees.
Diversity and Inclusion
We are committed to promoting equal employment opportunities in all our operations, which begins with the employee
recrui
r ting process and continues through our employees' relationship with the Company.
We also believe that a trul
r y
innovative workfor
f
ce needs to be diverse and must leverage the skills and perspectives of a broad range of backgrounds and
experiences. It is our policy, specific
f ally noted in our Code, that we do not tolerate discrimination for any reason, including
without limitation race, color, religion, marital status, gender, gender identity, veteran status, sexual orientation, disabi
a lity or
perceived disability, whether or not such discrimination violates law.
It is also our policy to ful
f ly comply with all laws
prohibiting discrimination and promoting opportunity and advancement in employment. This policy extends to all aspects of
employment including recrui
r tment, hiring, compensation, benefits, promotion, transfer
f , layoff,
f
recall, reduc
d
tion in for
f
ce,
termination, retirement, placement, training and all other privileges, terms and conditions of employment. It is our goal to
create a positive and dynamic workplace where diversity and inclusion principles govern and all employees can flo
f urish. Our
Board of Directors, senior leadership and human resources team are fully aligned in their commitment to promoting the above
policies to ensure we remain an employer of choice.
Government Regulations
Our operations are subject to an array of for
f
eign, federal, state and local regulatory r
r
equirements including, but not limited
to trade, labor
a
and environmental, health and safet
f y matters. Management believes that our business is operated in material
compliance with all such regulations.
To date, the cost of such compliance has not had a material impact on our capi
a tal
expenditures, earnings or competitive position or that of our operating subsidiaries.
While we have implemented policies,
9

practices and procedur
d
es to prevent and mitigate risks, violations may occur in the fut
f ur
t
e as a result of human error, equipment
failure or other causes. Further, we cannot predict the nature, scope or effe
f ct of future environmental legislation or regulatory
r
requirements that could be imposed, or how existing or future laws or regulations will be administered or interpreted.
Available Infor
f
mation
We file annual, quarterly and current reports, proxy statements and other information with the U.S. Securities and
Exchange Commission (“SEC”). Our SEC filings are available to the public at the SEC’s website (www.sec.gov). We also
make these fil
f ings availabl
a e fre
f e of charge on our website (www.cswindustrials.com) as soon as reasonabl
a y practicable afte
f r we
electronically fil
f e those documents with the SEC.
Also availabl
a e on our website are our Corporate Governance Guidelines and Code of Business Conduct, as well as the
charters for the Audit, Compensation & Talent Development, and Nominating & Corporate Governance Committees of our
Board of Directors and other important governance documents. All of the for
f
egoing may be obtained through our website
noted above and are availabl
a e in print without charge to stockholders who request them. The information on or accessible
through our website is not incorporated by reference into, or otherwise made part of, this Annual Report or any other document
we file with or furnish to the SEC.
ITEM 1A: RISK FACTORS
Consider carefully the following risk fac
f
tors, which we believe are the principal risks that we fac
f
e and of which we are
currently aware, and the other infor
f
mation in this Annual Report, including our consolidated financial statements and related
notes to those fin
f ancial statements. It is possible that additional risks and uncertainties not presently known to us, or that we
currently deem immaterial, may also impair our business operations.
Market, Economic and Geopolitical Risks
Adve
d
rse changes in g
i
lo
g bal economic condit
d io
t ns, p
s
articularly i
l
n t
i
he
t
U.S., could materially
l
adverse
r
ly affe
f ct our fin
f
ancial
positio
t n, results o
t
f o
o
pe
o
rations and cash flow
l
s.
Our served industries and key end markets are affe
f cted by changes in economic conditions outside our control, which can
affe
f ct our business in many ways. Any adverse occurrence, including among others, industry s
r
lowdown, recession, public
health crises, political instability, costly or constraining government policies, laws and regulations, armed hostilities (including
confli
f cts in the Middle East and Ukraine), terrorism, excessive inflation (including the current high inflationary environment),
interest rates, tax rates, unemployment rates, high labor costs, labor
a
distur
t
ba
r
nces, prolonged disrupt
u ions in one or more of our
customers' production schedules, supply chain disrupt
r
ions (including those caused by industry c
r
apacity constraints, labor
a
shortages, raw material availabi
a lity and transportation and logistics delays and constraints), business disrupt
u ions due to
cybersecurity incidents and other economic factors have in the past and could in the future materially adversely affect our
business, financial condition, and operating results and that of our customers and third-party suppliers.
Additionally, adverse changes in economic conditions in the United States and worldwide may reduce the demand for some
of our products, adversely impact our ability to predict and meet any fut
f ur
t
e changes in the demand for our products and impair
the abi
a lity of those with whom we do business to satisfy their obligations to us. Reduc
d
ed demand may cause us and our
competitors to compete on the basis of price, which would have a negative impact on our revenues and profit
f ability. In turn, this
could cause us to not be able to satisfy t
f
he financial and other covenants to which we are subject under our existing
indebtedness.
Reduced demand may also hinder our growth plans and otherwise delay or impede execution of our long-term strategic plan
and capital allocation strategy. If there is deterioration in the general economy or in the industries we serve, our business, results
of operations and fin
f ancial condition could be materially adversely affected.
The ind
i
ustries in w
i
hich we operate are highl
g
y c
l
ompe
m
titiv
i
e, and many o
n
f o
o
ur products a
t
re in high
i
ly competit
t iv
t e marke
r
ts. We
W
may l
a
os
l
e marke
r
t share to producers of othe
t
r products t
t
ha
t
t dir
d ectly c
l
ompe
m
te with
i
or that can be substitu
t
ted for
f
our products.
t
The industries in which we operate are highly competitive, and we face significant competition fro
f
m both large domestic
and international competitors and fro
f
m smaller regional competitors. Our competitors may improve their competitive position
in our served markets by successful
f ly introducing new or subs
u
titute products, improving their manufac
f
turing processes or
expanding their capacity or manufac
f
turing facilities. Further, some of our competitors benefit
f
from advantageous cost positions
,
p
10

that could make it increasingly diffi
f cult for us to compete in markets for
f
less-differentiated appl
a
ications. If we are unabl
a e to
keep pace with our competitors’ products and manufac
f
turing process innovations or cost position, our financial condition and
results of operations could be materially adversely affected.
Certai
t n e
i
nd markets t
t
ha
t
t we serve are cyc
c
lical, which can cause signi
g
fi
i cant fluctuatio
t ns in our results
l
of operations and
cash flow
l
s.
The cyclical natur
t
e of the suppl
u
y and demand balance of certain end markets that we serve, including HVAC/R, general
industrial, construc
r
tion, energy, rail transportation and mining, poses risks to us that are beyond our control and can affec
f
t our
operating results. These markets are highly competitive; are driven to a large extent by end-use markets; are affe
f cted by
distributor stocking behaviors; and may experience overcapacity, all of which may affe
f ct demand for and pricing of our
products and result in volatile operating results and cash flo
f ws over our business cycle. Our operations and earnings may also
be significantly affe
f cted by changes in oil, gas and petrochemical prices and drilling activities, which depend on local, regional
and global events or conditions that affe
f ct suppl
u
y and demand for the relevant commodity. Product demand may not be
sufficient to utilize current or future capa
a
city. Excess industry c
r
apacity may continue to depress our volumes and margins on
some products. Our operating results, accordingly, may be volatile as a result of excess industry c
r
apacity, as well as from
f
rising
energy and raw materials costs.
Growth of our business will depe
e
nd in part on marke
r
t awareness of our ind
i
ustrial brands,
d
and any failure to d
t
ev
d
elop,
l
maintain, protect or enhance our industri
t al brands would h
l
urt our abilit
i
y t
t
o r
t
etai
t n o
i
r attra
t
ct custom
t
ers.
r
We believe that building and maintaining market awareness, brand recognition and goodwill is critical to our success. This
will depend largely on our ability to continue to provide high-quality products, and we may not be able to do so effe
f ctively. Our
effo
f
rts in developing our industrial brands may be affected by the marketing effo
f
rts of our competitors and our reliance on our
independent dealers, distributors and strategic partners to promote our industrial brands effe
f ctively. If we are unabl
a e to cost-
effe
f ctively maintain and increase positive awareness of our industrial brands, our businesses, results of operations and fin
f ancial
condition could be harmed.
Clim
l
ate c
t
hange could have an adverse
r
effe
f ct on our business.
While we seek to mitigate our business risks associated with climate change, we recognize that there are inherent climate-
related risks wherever business is conducted, and climate change could create physical and fin
f ancial risk to our business.
Physical risks fro
f
m climate change could, among other things, include an increase in extreme weather events (such as flo
f ods,
droughts, tornadoes or hurricanes), limitations on availabi
a lity of water and reliable energy, and the health and well-being of
individuals in communities where we conduct business. Such events have the potential to disrupt
r
our business, our third-party
suppl
u
iers or the businesses of our customers, which in tur
t
n could have an adverse effect on our financial condition and results of
operations.
Clim
l
ate c
t
hange regulat
l io
t ns may i
a
mp
i
act our abili
i ty
i
to operate at a profi
o t a
i
nd harm our ope
o
rating
i
margins.
Increased global foc
f
us on climate change may result in the imposition of new or additional regulations or requirements
applicable to, and increased fin
f ancial and transition risks for, our business and the industries in which we operate. A number of
government authorities and agencies have introduced, or are contemplating, regulatory c
r
hanges to address climate change,
including the regulation and disclosure of greenhouse gas emissions. For example, on March 6, 2024, the SEC adopted final
rules to enhance and standardize climate-related disclosures by requiring registrants to disclose certain climate-related
information in registration statements and periodic reports. On March 21, 2024, the Judicial Panel on Multidistrict Litigation
issued an order consolidating the petitions for review in the U.S. Court of Appeals for
f
the Eighth Circuit; and, on April 4, 2024,
the SEC issued an order that the climate-related disclosure rul
r es were stayed pending the completion of judicial review of the
consolidated Eighth Circuit petitions. If the rules become effective and are not overtur
t
ned, we will be required to provide the
enhanced climate-related disclosures. The outcome of new legislation or regulation in the U.S. and other jurisdictions in which
we operate may result in fee
f
s or restrictions on certain activities or materials and new or additional requirements, including
directives to fund energy effi
f ciency activities or renewabl
a e energy use and to disclose infor
f
mation regarding our greenhouse gas
emissions performance, renewable energy usage and effi
f ciency, waste generation and recycling rates, climate-related risks,
opportunities and oversight and related strategies and initiatives across our global operations. The cost of compliance with
stringent climate change regulations could adversely affect our ability to compete with companies in locations that are not
subj
u ect to stringent climate change regulations. Existing and future climate change-driven environmental and social regulations
may negatively impact our business, customers, or suppl
u
iers, in terms of availabi
a lity and cost of natural resources and raw
materials, product demand, or manufac
f
turing. Despite our effo
f
rts to timely comply with climate change initiatives, implement
11

measures to improve our operations and execute on our related strategies and initiatives, any actual or perceived fai
f lure to
comply with new or additional requirements or meet stakeholder expectations with respect to the impacts of our operations on
the environment and related strategies and initiatives may result in adverse publicity and increased litigation risk, which could
adversely impact our business, financial condition, results of operation and cash flo
f w.
Business, Operations and Human Capital Risks
Our attem
t
pt
m s t
t
o a
t
ddress evolving customer needs require tha
t
t we continua
i
lly e
l
nhance our products.
t
Our effo
e
rts t
t
o e
t
nhance
our products m
t
ay not be commercially viable a
l
nd failure to d
t
ev
d
elop
l
commercially
l
successful
f
products o
t
r keep p
e
ace with o
t
ur
competito
t
rs could h
l
arm o
r
ur busine
i
ss and results
l
of operations.
A fai
f lure to develop commercially successful products or product enhancements or to identify product extensions could
materially adversely affect our financial results. If our attempts to develop or enhance products are unsuccessful
f , we may be
unabl
a e to recover our development costs, which could have an adverse effect on our business and results of operations. In
addition, our inability to enhance or develop products that can meet the evolving needs of our customers could cause our
products to lag behind those of new or existing competitors, could reduc
d
e demand for
f
our products and may have a material
adverse effect on our business and results of operations.
Our int
i
er
t
national sales and manufa
u
cturing ope
o
rations, includin
d
g our use of t
o
hi
t
rd
i
-p
d
arty manufac
f
turers for certain productst
that we sell, involve inhe
i
rent risk
i
s t
k
ha
t
t could result in harm to our business.
We have worldwide sales and manufac
f
turing operations in North America, Europe, the Middle East, Australia and Asia,
including Vietnam. We also use third parties to manufac
f
ture certain of our products, most of which are located in jurisdictions
outside the United States, including China. Foreign sales and manufac
f
turing are subject to a number of risks, including political
and economic uncertainty, social unrest, sudden changes in laws and regulations (including those enacted in response to
pandemics and those that may be related to climate change or otherwise), abi
a lity to enforce existing or fut
f ur
t
e contracts, labor
a
shortages and work stoppages, natural disasters, currency exchange rate fluctuations, transportation delays or loss or damage to
products in transit, expropriation, nationalization, business disrupt
u ions due to cybersecurity incidents, compliance with for
f
eign
laws and changes in domestic and foreign governmental policies, including the imposition of new or increased tariffs
f
and dut
d ies
on exported and imported products.
To the extent that we rely on independent third parties to perform sales and manufac
f
turing functions, we do not directly
control their activity, including product delivery s
r
chedul
d es and quality assurance, which may result in product shortages or
quality assurance problems that could delay shipments of products, increase manufac
f
turing, assembly, testing or other costs, or
tarnishing the value of our brand or relationships with our customers. If a third party sales representative or manufac
f
turer
experiences capacity constraints or fin
f ancial difficulties, suffers damage to its fac
f
ilities, experiences power outages, natur
t
al
disasters, labor
a
shortages or labor strikes, or any other disrupt
r
ion, we may not be able to obtain alternative resources in a timely
manner or on commercially acceptabl
a e terms. Any of these fac
f
tors could negatively affec
f
t our business, results of operations
and fin
f ancial condition.
Loss of key s
e
uppl
p ie
l rs, the ina
i
bilit
i
y t
t
o s
t
ecure raw materials o
l
n a timely basis, t
s
he
t
poten
t
tial impacts of global
l
infl
n at
l io
t n, or our
inabili
i ty
i
to pass commodity
i
price inc
i
reases on to custom
t
ers c
r
ould have an adverse
r
effe
f ct on our business.
Materials used in our manufac
f
turing operations are generally availabl
a e on the open market fro
f
m multiple sources. However,
some of the raw materials we use are only available from a limited number of sources. Accordingly, any disrupt
u ions to a critical
suppl
u
iers' operations or the availability of key produc
d
t inputs could have a material adverse effect on our business and results of
operations. Macroeconomic conditions have caused suppl
u
y chains for
f
many companies to be interrupt
u ed, slowed or temporarily
rendered inoperabl
a e. In addition, suppl
u
y chain shortages have negatively impacted, and could continue to negatively impact, our
manufac
f
turing costs and logistics costs and, in turn, our gross margins. We may also be required to pay higher prices for
f
raw
materials due
d
to inflationary trends regardless of suppl
u
y.
In addition, inflation can also result in higher interest rates. In response to increasing infla
f tion, the U.S. Federal Reserve
began to raise interest rates in March 2022, has done so multiple times since then, and has kept open the possibility of further
increases. We expect inflationary pressures to impact customer behavior dur
d
ing calendar year 2024. With inflation, the cost of
capi
a tal has increased, and the purchasing power of our and our end-users’ cash resources has declined. Current or futur
t
e efforts
by the government to manage inflationary pressures or stimulate the economy may result in unintended economic
consequences, which could have a direct and indirect adverse impact on our business and results of operations.
,
p
p
12

While we believe many challenges are temporary a
r
nd can be managed in the near-term, our business and results of
operations could be materially adversely affected by prolonged or increasing supply chain disrupt
r
ions. Availabi
a lity and cost of
raw materials could be affected by a number of fac
f
tors, including the cost of reliabl
a e energy; commodity prices; infla
f tion; tariffsf
and dut
d ies on imported materials; for
f
eign currency exchange rates; and phases of the general business cycle and global demand.
We may be unabl
a e to pass along price increases to our customers, which could have a material adverse effect on our business
and results of operations.
We rely on indepe
e
nden
d
t dis
d tributor
t
s a
r
s a channel to m
t
arke
r
t for
f
many of our products.
t
Terminatio
t n of a
o
substantia
t l number
of our dis
d tributor
t
relationships or an inc
i
rease in a
i
dist
i ri
t butor's s
'
ales
l
of our compe
m
tito
i rs’ products c
t
ould have a mater
t
ial
adverse
r
effe
f ct on our business, fina
i
ncial conditi
i on, results
l
of operations or cash flo
f ws.
We depend on the services of domestic and international independent distributors to sell our products and, in many cases,
provide service and afte
f rmarket support to end-users of our produc
d
ts. Rather than serving as passive conduits for delivery o
r
f
products, our distributors play a significant role in determining which of our products are available for purchase either by end-
users or by contractors to service end-users. While the use of distributors expands the reach and customer base for
f
our produc
d
ts,
the maintenance and administration of distributor relationships is costly and time-consuming. The loss of a subs
u
tantial number
of our distributors for
f
any reason could have a material adverse effect on our business, financial condition, results of operations
or cash flows. In certain international jurisdictions, distributors are confer
f red certain legal rights that could limit our ability to
modify or terminate distribution relationships.
Many of the distributors with whom we transact business also offer competitors’ produc
d
ts and services to our customers.
An increase in the distributors’ sales of our competitors’ products to our customers, or a decrease in the number of our produc
d
ts
the distributor makes availabl
a e for
f
purchase, could have a material adverse effect on our business, financial condition, results of
operations or cash flows.
Our ins
i
urance polic
l ies may not cover, o
r
r ful
f
ly
l
cover, us agains
i
t natural disa
i
ster
t
s,
r
global
l
confli
f cts o
t
r environmental
t
risk
i
.k
We currently have insurance policies for
f
certain business risks, which include property damage, business interrupt
u ion,
operational and product liabi
a lity, transit, directors’ and offi
f cers’ liabi
a lity, cybersecurity, industrial accidents and other risks
customary i
r
n the industries in which we operate. However, we may become subj
u ect to liabi
a lity (including in relation to
pollution, occupa
u
tional illnesses, inju
n ry resulting fro
f
m tampering, product contamination or degeneration or other hazards)
against which we have not insured or cannot fully insure.
For example, hurricanes may affe
f ct our facilities or the fai
f lure of our information systems as a result of breakdown,
malicious attacks, unauthorized access, viruses or other factors could severely impair several aspects of operations, including,
but not limited to, logistics, revenues, customer service and administration. In addition, in the event that a product liabi
a lity or
third-party liabi
a lity claim is brought against us, we may be required to recall our products in certain jurisdictions if they fail to
meet relevant quality or safety standards, and we cannot guarantee that we will be successful
f
in making an insurance claim
under our policies or that the claimed proceeds will be suffi
f cient to compensate the actual damages suffe
f red.
Should we suffe
f r a majo
a r uninsured loss, a product liabi
a lity judgment against us or a product recall, future earnings could be
materially adversely affected. We could be required to increase our debt or divert resources fro
f
m other investments in our
business to discharge product related claims. In addition, adverse publicity in relation to our products could have a significant
effe
f ct on future revenues, and insurance may not continue to be availabl
a e at economically acceptable premiums. As a result, our
insurance coverage may not cover the full scope and extent of claims against us or losses that we incur.
Cybersecurity
i
breaches and other disru
i
pt
u io
t ns to our inf
i
or
f
ma
r
tion technology
o
system
t
s could compromise
i
our inf
i
or
f
ma
r
tion,
disru
i
pt
u
our ope
o
rations, and expos
e
e us to l
t
ia
l bili
i ty
i , w
y
hich may a
a
dverse
r
ly impac
m
t our operations.
In the ordinary c
r
ourse of our business, we store sensitive data, including our proprietary b
r
usiness infor
f
mation and that of
our customers, suppl
u
iers and business partners, and personally identifiable information of our employees in our information
technology systems, including in our data centers and on our networks. The secure processing, maintenance and transmission of
this data is critical to our operations. Some of these systems are maintained or operated by third-party contractors, including
cloud-based systems. Despite our effo
f
rts to secure our information systems from cyber-security attacks or breaches, our
information technology systems may be vulnerabl
a e to attacks by hackers or breached or disrupt
u ed due to employee error,
malfea
f
sance or other disrupt
r
ions. If these technologies, systems, products or services are damaged, cease to function properly,
are compromised due to employee or third-party contractor error, user error, malfea
f
sance, system errors, or other
vulnerabi
a lities, or are subject to cybersecurity attacks, such as those involving denial of service attacks, unauthorized access,
malicious software, or other intrus
r
ions, including by criminals, nation states or insiders, our business may be adversely
13

impacted. The impacts of any such circumstances could include production downtimes, operational delays, and other impacts
on our operations and abi
a lity to provide products and services to our customers; compromise of confid
f ential, proprietary or
otherwise protected information, including personal infor
f
mation and customer confid
f ential data; destruc
r
tion, corrupt
u ion, or theftf
of data or intellectua
t
l property; manipulation, disrupt
r
ion, or improper use of these technologies, systems, products or services;
financial losses fro
f
m fra
f udulent transactions, remedial actions, loss of business or potential liabi
a lity; adverse media coverage;
and legal claims or legal proceedings, including regulatory i
r
nvestigations, actions and fin
f es; and damage to our reputation.
There has been a rise in the number of cyberattacks targeting confid
f ential business infor
f
mation generally and in the
manufac
f
turing industry s
r
pecifically. Moreover, there has been a rise in the number of cyberattacks that depend on human error
or manipulation, including phishing attacks or schemes that use social engineering to gain access to systems or perpetuate wire
transfer
f
or other fra
f uds.
These trends increase the likelihood of such events occurring as well as the costs associated with protecting against such
attacks. Although such attempts have been made to attack our information technology systems, no material harm has resulted.
Any such attack, breach or disrupt
r
ion could compromise our information technology systems and the infor
f
mation stored in
them could be accessed, publicly disclosed, lost or stolen and our business operations could be disrupt
u ed. Additionally, any
significant disrup
r
tion or slowdown of our systems could cause customers to cancel orders or cause standard business processes
to become ineffi
f cient or ineffective, which could adversely affec
f
t our financial position, results of operations or cash flows.
Any such access, disclosure or other loss of infor
f
mation or business disrupt
u ion could result in legal claims or proceedings,
liability under laws that protect the privacy of personal infor
f
mation, and damage to our reputation, which could adversely
impact our operations.
The domestic and international regulatory e
r
nvironment related to information security, collection and privacy is
increasingly rigorous and complex, with new and rapidly changing requirements appl
a
icable to our business, which often require
changes to our business practices. Compliance with these new requirements, including the European Union’s General Data
Protection Regulation, the Califor
f
nia Privacy Rights Act, and other international and domestic regulations, are costly and will
result in additional costs in our effo
f
rts to continue to comply.
Our relat
l io
t nships
i
with
i
our employe
o
es could d
l
et
d er
t
iorate, w
e
hich could a
l
dverse
r
ly affe
f ct our ope
o
rations.
As a manufac
f
turing company, we rely on a positive relationship with our employees to produce our products and maintain
our manufac
f
turing processes and productivity. As of March 31, 2024, we had appr
a
oximately 2,600 full-time employees, of
which 15 were subject to collective bargaining agreements in the United States, and approximately 1,300 of which are located
in Vietnam. If our workers were to engage in a strike, work stoppage or other slowdown, our operations could be disrupted, or
we could experience higher labor costs. In addition, if significant portions of our employees were to become unionized, we
could experience significant operating disrupt
r
ions and higher ongoing labor
a
costs, which could adversely affect our business,
financial condition and results of operations.
Loss of key p
e
erso
r
nnel or our inabili
i ty
i
to attr
t act and retain new qualifie
f d perso
r
nnel could hurt our busine
i
ss and inhi
i
bit o
i
ur
abili
i ty
i
to operate and grow successful
f
ly
l .y
Our success in the highly competitive end markets in which we operate will continue to depend to a significant extent on
the experience and expertise of our senior leaders. The loss of any of our key leaders or failure to fill new positions created by
expansion, turnover or retirement could adversely affec
f
t our ability to implement our business strategy. The competition for
talent has become increasingly intense, and we may experience increased employee tur
t
nover due
d
to a tightening labor market,
resulting in skilled labor shortages. The challenge to attract and retain qualified talent in the current competitive labor market
could lead to increased wage inflation or impede our ability to execute certain key strategic initiatives as we respond to labor
a
shortages. Failure to successful
f ly attract and retain an appropriately qualified workforce could materially adversely affect our
business, financial condition, and results of operations.
14

•
we may experience difficulty in identifyi
f ng appropriate acquisition candidates;
•
any acquired business, technology, service or product could under-perform relative to our expectations and the price
that we paid for it, not achieve cost savings or other synergies in accordance with our anticipated timetable or require
us to take an impairment related to the acquired business;
•
we may decide to divest businesses, technologies, services or products for fin
f ancial, strategic or other reasons, which
may require significant financial and managerial resources and may result in unfav
f
orable accounting treatment;
•
we may incur or assume significant debt in connection with our acquisitions, which would increase our leverage and
interest expense, thereby reduc
d
ing funds
f
availabl
a e to us for
f
purpos
r
es such as working capital, capital expenditures,
research and development and other general corporate purpos
r
es;
•
pre-closing and post-closing earnings and charges could adversely impact operating results in any given period, and
the impact may be subs
u
tantially diffe
f rent from period to period;
•
the process of integrating acquired operations may create operating diffi
f culties and may require significant financial
and managerial resources that would otherwise be availabl
a e for
f
existing operations;
•
we could experience difficulty in integrating fin
f ancial and other controls and systems;
•
we may lose key employees or customers of the acquired company;
•
we may assume liabi
a lities that are unknown or for
f
which our indemnific
f ation rights are insufficient, or known or
contingent liabi
a lities may be greater than anticipated; and
•
confor
f
ming the acquired company's standards, process, procedur
d
es and controls, including accounting systems and
controls, with our operations could cause deficiencies related to our internal control over fin
f ancial reporting or
exposure to regulatory s
r
anctions resulting from the acquired company's activities.
We may b
a
e unable t
l
o s
t
uccessful
f
ly
l
execute and realize the
t
expe
x
cted
t
fina
i
ncial benefits
f
from stra
t
tegi
e c ini
i
tia
i
tives.
From time to time, our business has engaged in strategic initiatives, and such activities may occur in the future. These
effo
f
rts have included consolidating manufact
f
ur
t
ing faci
f
lities, rationalizing our manufact
f
ur
t
ing processes, and establishing a joint
ventur
t
e within our Specialized Reliabi
a lity Solutions segment.
While we expect meaningful
f
financial benefits
f
from our strategic initiatives, we may not realize the full benefits expected
within the anticipated time fra
f me. Adverse effec
f
ts from strategy-driven organizational change could interfere with our
realization of anticipated synergies, customer service improvements and cost savings from these strategic initiatives.
Additionally, our ability to fully realize the benefits and implement strategic initiatives may be limited by certain contractua
t
l
commitments. Moreover, we may incur subs
u
tantial expenses in connection with the execution of strategic plans in excess of
what is forecasted. Further, strategic initiatives can be a complex and time-consuming process that can place substantial
demands on management, which could divert attention fro
f
m other business priorities or disrupt
u
our daily operations. Any of
these fai
f lures could materially adversely affect our business, financial condition, results of operations and cash flo
f ws, which
could constrain our liquidity.
Changes in f
i
ut
f
ure business or other market conditi
d
ons could cause business inv
i
estments a
t
nd/o
d r recorded
d
goodwill or othe
t
r
long-t
g er
t
m a
r
ssets to become impai
m
re
i
d, resulting in s
i
ubstan
t
tial losses and write-dow
d
ns that would m
l
ater
t
ially adverse
r
ly affe
f ct
our results
l
of operations and fina
i
ncial conditio
i
n.
From time to time, we acquire businesses, following careful
f
analysis and due
d
diligence procedur
d
es designed to achieve a
desired retur
t
n or strategic objective.
These procedur
d
es ofte
f n involve certain assumptions and judgments in determining
acquisition price.
Afte
f r acquisition, such assumptions and judgments may prove to be inaccurate due to a variety of
circumstances, which could adversely affe
f ct the anticipated returns or which are otherwise not recoverabl
a e as an adjustment to
the purchase price. Additionally, actua
t
l operating results for an acquisition may vary significantly from initial estimates. As of
March 31, 2024, we had goodwill of $247.2 million recorded in our consolidated balance sheet. We evaluate the recoverabi
a lity
of recorded goodwill annually, as well as when we changed reporting units and when events or circumstances indicate the
possibility of impairment. Because of the significance of our goodwill and other intangible assets, a future impairment of these
assets could have a material adverse effect on our results of operations and fin
f ancial condition. For additional infor
f
mation on
Strategic Transactions and Investments Risks
Our acquisi
i ti
i on and int
i
eg
t
ration of busine
i
sses could negat
e
iv
t ely i
l
mp
i
act our fina
i
ncial results
l .
Inorganic growth is an important part of our strategic growth plan, and we also seek to acquire businesses, some of which
may be material, in pursuit of our plans.
Acquiring businesses involves a number of fin
f ancial, accounting, managerial,
operational, legal, compliance and other risks and challenges, including the fol
f lowing, any of which could adversely affec
f
t our
financial statements:
g
15

Development, an international asso iciation of 38 count iries in lcl d
uding the United States, has propos d
ed h
changes to numerous lo g
ng-
standidi g
ng tax p irinciples.
h
These propos lals, ifif fifinaliliz d
ed and adopt d
ed by
by hthe asso iciat d
ed count iries, will
ill lik
lik lely i
y increase tax uncertain yty
and may adversely affect our provision for income taxes
T
.
he effe
f ct of such tax law changes or regulations and interpr
r
etations,
our accounting policies related to goodwill, see our discussion under Note 1 to our consolidated financial statements in Item 8
of this Annual Report.
Financial Risks
Our outst
t an
t
ding
i
indebted
t
ne
d
ss and the
t
restri
t ctiv
t e covenants in the agr
a
eements g
t
overni
r
ng
i
our ind
i
eb
d
tedness lim
l
it our
operating
i
and fin
f
ancial flex
l
ibilit
l y.
t
We are required to make schedul
d ed repayments and, under certain events of default, accelerated repayments on our
outstanding indebtedness, which may require us to dedicate a substantial portion of our cash flows fro
f
m operations to payments
on our indebtedness. Such repayment requirements could reduc
d
e the availabi
a lity of our cash flows to fund
f
working capital
acquisitions, capital expenditures, R&D efforts and other general corporate purpos
r
es, and could generally limit our flexibility in
planning for, or reacting to, changes in our business and industry.
r
In addition, the agreements governing our indebtedness impose certain operating and financial restrictions on us and
somewhat limit management’s discretion in operating our businesses. These agreements limit or restrict our ability, among
other things, to: incur additional debt; pay dividends and make other distributions; make investments and other restricted
payments; create liens; sell assets; and enter into transactions with affi
f liates.
We are also required to comply with leverage and interest coverage financial covenants and deliver to our lenders audited
annual and unaudited quarterly financial statements. Our abi
a lity to comply with these covenants may be affe
f cted by events
beyond our control. Failure to comply with these covenants could result in an event of default that, if not cured or waived, may
have a material adverse effect on our business, financial condition, results of operations and cash flo
f ws. In the event we incur
additional indebtedness, or if interest rates on our indebtedness increase, the risks described above could increase.
Fluctuatio
t ns in currency e
c
xc
e
hange rates
t
may s
a
igni
g
fi
i cantly
t
impac
m
t our results o
t
f o
o
pe
o
rations and may s
a
igni
g
fi
i cantly
t
affe
f ct the
comparabili
i ty
i
of our results
l
between fina
i
ncial periods.
Our operations are conducted in many countries. The results of the operations and the financial position of these
subs
u
idiaries are reported in the relevant foreign currencies and then translated into U.S. dollars at the appl
a
icable exchange rates
for inclusion in our consolidated financial statements. The main currencies to which we are exposed, besides the U.S. dollar, are
primarily the Australian dollar, the British pound, the Canadian dollar and the Vietnamese dong. The exchange rates between
these currencies and the U.S. dollar in recent years have fluctuated significantly and may continue to do so in the fut
f ur
t
e for
f
a
variety of reasons, including general economic conditions and event-driven circumstances. A depreciation of these currencies
against the U.S. dollar will decrease the U.S. dollar equivalent of the amounts derived from these operations reported in our
consolidated financial statements, and an appr
a
eciation of these currencies will result in a corresponding increase in such
amounts.
Because many of our raw material costs are determined with respect to the U.S. dollar rather than these currencies,
depreciation of these currencies may have an adverse effect on our profit
f
margins or our reported results of operations.
Conversely, to the extent that we are required to pay for goods or services in foreign currencies, the appr
a
eciation of such
currencies against the U.S. dollar will tend to negatively impact our results of operations. In addition, currency flu
f ctua
t
tions may
affe
f ct the comparabi
a lity of our results of operations between fin
f ancial periods.
We incur currency transaction risk whenever we enter into either a purchase or sale transaction using a currency other than
the local currency of the transacting entity. Given the volatility of exchange rates, there can be no assurance that we will be abl
a e
to effe
f ctively manage our currency transaction risks, that our hedging activities will be effe
f ctive or that any volatility in
currency exchange rates will not have a material adverse effec
f
t on our financial condition or results of operations.
Changes in e
i
ffe
e
ctiv
t e tax
t
rates or adverse
r
outcomes resultin
t
g fro
f
m exam
e
inatio
t n of o
o
ur income tax r
a
eturns could a
l
dverse
r
ly
affe
f ct our results
l .
We are subject to tax laws and regulations in the United States and multiple for
f
eign jurisdictions. Our future effe
f ctive tax
rates could be adversely affected by changes in tax laws, regulations, accounting principles or interpr
r
etations thereof, as well as
changes in related interpretations and other tax guidance. For example, the Orga iniza ition for Economic Co-opera ition a d
nd
16

as well as any additional tax reform legislation in the U.S., U.K, Canada, Australia, Vietnam or elsewhere, could have a
material adverse effect on our business, financial condition and results of operations.
In addition, we are also subject to
periodic examination of our income tax retur
t
ns by the Internal Revenue Service and other tax authorities. We regularly assess
the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income
taxes. As of March 31, 2024, we had a reserve of $17.0 million relating to uncertain tax positions, and taxing authorities may
disagree with the positions we have taken regarding the tax treatment or characterization of our transactions. Although we
believe that our tax fil
f ing positions are appr
a
opriate, the final determination of tax audits or tax disputes may be diffe
f rent from
what is reflected in our historical income tax provisions and accruals. If future audits find that additional taxes are due
d
, we may
be subj
u ect to incremental tax liabi
a lities, possibly including interest and penalties, which could have a material adverse effec
f
t on
our business, financial condition and results of operations.
We may a
a
cquire
i
various structured fin
f
ancial instru
t
ments f
t
or
f
purposes of hedging
i
or reducing
i
our risks, w
s
hich may b
a
e costlyl
and ine
i
ffe
e
ctiv
t e.
We may seek to hedge against commodity price flu
f ctua
t
tions and credit risk by using structur
t
ed financial instrum
r
ents such
as futures, options, swaps
a
and for
f
ward contracts. Use of struc
r
tured fin
f ancial instruments for
f
hedging purpos
r
es may present
significant risks, including the risk of loss of the amounts invested. Defau
f
lts by the other party to a hedging transaction can
result in losses in the hedging transaction. Hedging activities also involve the risk of an imperfect correlation between the
hedging instrument and the asset being hedged, which could result in losses both on the hedging transaction and on the
instrument being hedged. Use of hedging activities may not prevent significant losses and could increase our losses.
We may i
a
na
i
dvertently
t
fail to maintain effe
f ctiv
t e dis
d clos
l
ure controls a
l
nd procedures and int
i
er
t
nal controls o
l
ver fin
f
ancial
repor
e
ting
i
.g
Effe
f ctive internal controls are necessary for us to provide reliable financial reports, effectively prevent fraud and operate
successful
f ly as a public company. If we cannot provide reliabl
a e fin
f ancial reports or effe
f ctively prevent fraud, our reputation and
operating results could be harmed. If we are unabl
a e to maintain effective disclosure controls and procedures and internal
controls over fin
f ancial reporting, we may not be able to provide reliabl
a e fin
f ancial reports, which in turn could affect our
operating results or cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to
lose confid
f ence in reported fin
f ancial information, which could negatively affect our stock price, limit our ability to access
capi
a tal markets in the fut
f ur
t
e, and require additional costs to improve internal control systems and procedures.
17

Legal and Regulatory Risks
g
g
y
Regu
e
latory and statutory changes appl
a
ic
l able t
l
o u
t
s or our custom
t
ers c
r
ould adverse
r
ly affe
f ct our fin
f
ancial condit
d io
t n and
results of operations.
We and many of our customers are subj
u ect to various national, state and local laws, rul
r es and regulations. Changes in any of
these areas could result in additional compliance costs, seizures, confis
f cations, recalls or monetary fines, any of which could
prevent or inhibit the development, distribution and sale of our products.
In addition, we benefit fro
f
m certain regulations, including building code regulations, which require the use of products that
we and other manufac
f
turers sell. For example, certain environmental regulations may encourage the use of more
environmentally friendly products, such as some of the lubr
u
icants and greases that we manufact
f
ur
t
e. If these regulations were to
change, demand for
f
our products could be reduc
d
ed and our results of operations could be adversely affected.
Compliance with e
t
xt
e en
t
sive enviro
i
nmental, health
l
and safet
f y l
t
aw
l
s could require mater
t
ial expe
e
nditu
d
res, changes in o
i
ur
operations or site
i
remediatio
t n.
Our operations and properties are subj
u ect to regulation under environmental laws, which can impose substantial sanctions
for violations. We must confor
f
m our operations to applicable regulatory r
r
equirements and adapt to changes in such
requirements in all jurisdictions in which we operate. Certain materials we use in the manufact
f
ur
t
e of our products can represent
potentially significant health and safety concerns. We use hazardous subs
u
tances and generate hazardous wastes in certain of our
manufact
f
ur
t
ing operations. Consequently, our operations are subject to extensive environmental, health and safet
f y laws and
regulations at the international, national, state and local level in multiple jurisdictions. These laws and regulations govern,
among other things, air emissions, wastewater discharges, solid and hazardous waste management, site remediation programs
and chemical use and management. Many of these laws and regulations have become more stringent over time, and the costs of
compliance with these requirements may increase, including costs associated with any necessary capital investments. In
addition, our produc
d
tion facilities require operating permits that are subject to renewal and, in some circumstances, revocation.
The necessary permits may not be issued or continue in effe
f ct, and renewals of any issued permits may contain significant new
requirements or restrictions.
Compliance with environmental laws and regulations generally increases the costs of transportation and storage of raw
materials and finished products, as well as the costs of storage and disposal of wastes. We may incur substantial costs, including
fines, damages, criminal or civil sanctions and remediation costs, or experience interrupt
u ions in our operations for violations
arising under environmental laws, regulations or permit requirements.
We are subje
b ct to the U.S
U
. F
S
or
F
eign
i
Corrupt
u
Practices Act and othe
t
r anti-
t corrupt
u io
t n law
l
s, as well as othe
t
r law
l
s governing
i
our ope
o
rations. If w
I
e fai
f l t
i
o c
t
ompl
m y w
l
ith these law
l
s, we could b
l
e subje
b ct to civil o
i
r crimin
i
al penalties, othe
t
r remedia
d l
measures, a
s
nd legal
e
expe
x
nses, w
s
hich could a
l
dverse
r
ly affe
f ct our business, fina
i
ncial conditio
i
n and results of operations.
Our operations are subject to anti-corrupt
u ion laws, including the U.S. Foreign Corrupt
u
Practices Act (“FCPA”), and other
anti-corrupt
u ion laws that appl
a
y in countries where we do business. The FCPA and these other laws generally prohibit us and our
employees and intermediaries fro
f
m bribing, being bribed or making other prohibited payments to government offi
f cials or other
persons to obtain or retain business or gain some other business advantage. We conduct business in a number of jurisdictions
that pose a high risk of potential FCPA violations, and we participate in relationships with third parties whose actions could
potentially subj
u ect us to liabi
a lity under the FCPA or other anti-corrupt
u ion laws. In addition, we cannot predict the nature, scope
or effe
f ct of future regulatory r
r
equirements to which our international operations might be subj
u ect or the manner in which
existing laws might be administered or interpreted.
We are also subject to other laws and regulations governing our international operations, including regulations administered
by the U.S. Department of Commerce’s Bureau of Industry a
r
nd Security, the U.S. Department of Treasury’
r
s Office of Foreign
Asset Control and various non-U.S. government entities, including applicable export control regulations, economic sanctions on
countries and persons, customs requirements, currency exchange regulations and transfer pricing regulations (collectively,
“Trade Control Laws”).
We have and maintain a compliance program with policies, procedur
d
es and employee training to help ensure compliance
with applicable anti-corrupt
u ion laws and the Trade Control Laws. However, despite our compliance programs, there is no
assurance that we will be completely effective in ensuring our compliance with all appl
a
icable anti-corrupt
u ion laws, including
the FCPA or other legal requirements, or Trade Control Laws. If we are not in compliance with the FCPA and other anti-
corrupt
u ion laws or Trade Control Laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions and
18

remedial measures, and legal expenses, which could have an adverse impact on our business, financial condition, results of
operations and liquidity.
Likewise, any investigation of any potential violations of the FCPA, other anti-corrupt
u ion laws or Trade Control Laws by
the U.S. or for
f
eign authorities could also have an adverse impact on our reputation, business, financial condition and results of
operations.
Our permi
r
ts
i , l
s ic
l enses, regi
e st
i ra
t
tions or authorizatio
t ns and tho
t
se of our customers or dist
i ri
t butors may b
a
e modifi
i ed, s
d
uspe
s
nded
d
,d
terminated
t
or revoked befor
f
e the
t
ir expi
x ra
i
tion or we and/or
/
they may b
a
e unable t
l
o r
t
enew them upon their e
i
xpi
e
ra
i
tion. We m
W
ay
bear liabili
i ty
i
for fai
f lu
i
re to obtai
t n,
i
maintain or comply with
i
required authorizatio
t ns.
We are required to obtain and maintain, and may be required to obtain and maintain in the fut
f ur
t
e, various permits, licenses,
registrations and authorizations for the ownership or operation of our business, including the manufac
f
turing, distribution, sale
and marketing of our products and importing of raw materials. These permits, licenses, registrations and authorizations could be
modified, suspended, terminated or revoked or we may be unabl
a e to renew them upon their expiration for various reasons,
including for non-compliance. These permits, licenses, registrations and authorizations can be diffi
f cult, costly and time
consuming to obtain and could contain conditions that limit our operations. Our failure to obtain, maintain and comply with
necessary permits, licenses, registrations or authorizations for the conduct of our business could result in fin
f es or penalties,
which may be significant. Additionally, any such failure could restrict or otherwise prohibit certain aspects of our operations,
which could have a material adverse effect on our business, financial condition and results of operations.
Many of our customers and distributors require similar permits, licenses, registrations and authorizations to operate. If a
significant customer, distributor or group thereof were to lose an important permit, license, registration or authorization, forcing
them to cease or reduc
d
e their business, our revenues could decrease, which would have a material adverse effect on our
business, financial condition and results of operations.
Industri
t al manufac
f
turing
i
is inherently
t
hazardou
d
s, which could result in accidents t
t
ha
t
t dis
d rupt
u
our ope
o
rations or expos
e
e us
to sign
i
ific
f ant los
l
ses or lia
l bili
i tie
i
s.
Hazards associated with our manufac
f
turing processes and the related storage and transportation of raw materials, products
and wastes exist in our operations and the operations of other occupants with whom we share manufac
f
turing sites. These
hazards could lead to an interrupt
u ion or suspension of operations and have an adverse effect on the productivity and profitabi
a lity
of a particular manufac
f
turing facility or on us as a whole. These potential risks include, but are not necessarily limited to, spills
and other discharges or releases of toxic or hazardous subs
u
tances or gases, pipeline and storage tank leaks and rupt
u ur
t
es,
explosions and fir
f es and mechanical fai
f lure. These hazards may result in personal injury a
r
nd loss of life, damage to property
and contamination of the environment, which may result in a suspension of operations and the imposition of civil or criminal
penalties, including governmental fines, expenses for remediation and claims brought by governmental entities or third parties.
The loss or shutdown of operations over an extended period at any of our majo
a r operating facilities could have a material
adverse effect on our financial condition and results of operations. Our property, business interrupt
u ion and casualty insurance
may not fully insure us against all potential hazards incidental to our business.
Regu
e
lation of our employe
o
es’ expos
e
ure to c
t
ertain chemicals o
l
r other hazardou
d
s products c
t
ould require mater
t
ial
expe
x
ndit
d ures or changes in o
i
ur operations.
Certain chemicals and other raw materials that we use in the manufac
f
ture of our products may have adverse health effe
f cts.
The Occupational Safet
f y and Health Administration limits the permissible employee exposure to some of those materials.
Future studi
t
es on the health effects of certain chemicals and materials may result in additional or new regulations that further
restrict or prohibit the use of, a
f
nd exposure to, certain chemicals and materials. Additional regulation of certain chemicals and
materials could require us to change our operations, and these changes could affect the quality of our products and materially
increase our costs.
We may b
a
e unable t
l
o p
t
rotect our tra
t
demarks,
k
trade secrets,
t
othe
t
r int
i
el
t le
l ctual prope
o
rty a
t
nd proprietary info
n
rmatio
t n, which
could h
l
arm o
r
ur competit
t iv
t e positio
t n.
Our abi
a lity to protect and preserve our trademarks, trade secrets and other intellectua
t
l property and proprietary information
relating to our business is an important factor to our success. However, we may be unabl
a e to prevent third parties from using
our intellectual property and other proprietary information without our authorization or fro
f
m independently developing
intellectual property and other proprietary information that is similar to ours, particularly in those countries where the laws do
not protect our proprietary rights to the same degree as in the U.S. In addition, because certain of our products are manufac
f
tured
19

•
our business strategy;
•
changes in local political, economic, social and labor
a
conditions;
•
potential disrupt
u ions from wars and military conflic
f
ts, including geopolitical uncertainty due to the conflic
f
ts in the
Middle East and Ukraine;
by third parties, we have necessarily shared some of our intellectual property with those third parties. There can be no guarantee
that those third parties, some of whom are located in jurisdictions where intellectua
t
l property risks may be more pronounced,
will comply with contractua
t
l and other legal commitments to preserve and protect our intellectual property.
The use of our intellectual property and other proprietary information by others could reduc
d
e or eliminate any competitive
advantage we have developed, potentially causing us to lose sales or otherwise harm our business. If it becomes necessary for
us to litigate to protect these rights, any proceedings could be burdensome and costly, and we may not prevail.
Our intellectua
t
l property may not provide us with any competitive advantage and may be challenged by third parties.
Moreover, our competitors may already hold or in the future may hold intellectua
t
l property rights in the U.S. or abroad that, if
enforced or issued, could possibly prevail over our rights or otherwise limit our ability to manufac
f
ture or sell one or more of our
products in the U.S. or internationally. Despite our effo
f
rts, we may be sued for
f
infringing on the intellectua
t
l property rights of
others. This litigation is costly and, even if we prevail, the costs of such litigation could adversely affect our financial condition.
Adequate remedies may not be availabl
a e in the event of unauthorized use or disclosure of our trade secrets and
manufac
f
turing expertise. The loss of employees who have specialized knowledge and expertise could harm our competitive
position and cause our revenues and operating results to decline as a result of increased competition. In addition, others may
obtain knowledge of our trade secrets through independent development or other access by legal means.
Adve
d
rse developm
o
ents affe
f ctin
t
g the
t
fina
i
ncial services ind
i
ustry,
r
includin
d
g events o
t
r concerns inv
i
olvi
l ng
i
liqu
i
idit
d y,
t
defa
e
ults
l
or
non-pe
-
rfor
f
ma
r
nce by f
b
in
f
ancial instit
t utio
t ns or transactio
t nal counter
t
par
r
ties, c
s
ould adverse
r
ly affe
f ct our business, fina
i
ncial
condit
d io
t n or results
l
of operations.
Events involving limited liquidity, defau
f
lts, non-performance or other adverse developments that affe
f ct financial
institut
t ions, transactional counterpa
r
rties or other companies in the financial services industry o
r
r the financial services industry
r
generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the fut
f ur
t
e
lead to market-wide liquidity problems. Although we assess our banking and customer relationships as we believe necessary or
appropriate, our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our
current and proje
o cted future business operations could be significantly impaired by factors that affect us, the financial services
industry,
r
or the economy in general. These factors could include, among others, events such as liquidity constraints or fai
f lures,
the abi
a lity to perform obligations under various types of fin
f ancial, credit or liquidity agreements or arrangements, disrup
r
tions or
instability in the fin
f ancial services industry o
r
r fin
f ancial markets, or concerns or negative expectations about the prospects for
companies in the financial services industry.
r
In addition, investor concerns regarding the U.S. or international fin
f ancial systems could result in less fav
f
orable
commercial financing terms, including higher interest rates or costs and more restrictive fin
f ancial and operating covenants, or
systemic limitations on access to credit and liquidity sources, thereby making it more diffi
f cult for us to acquire financing on
acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources could, among other
risks, adversely impact our ability to meet our operating expenses, fin
f ancial obligations, or ful
f fill our other obligations. Any of
these impacts, or any other impacts resulting from the factors described above or other related or similar fac
f
tors not described
above, could have material adverse impacts on our liquidity and our business, financial condition, or results of operations.
Forward-Looking Statements
This Annual Report contains forward-looking statements within the meaning of the Private Securities Litigation Refor
f
m
Act of 1995.
These statements refle
f ct the current views of our senior management with respect to fut
f ur
t
e events and our
financial performance.
These statements include forward-looking statements with respect to our business and industry i
r
n
general. Statements that include the words “may,” “expects,” “plans,” “anticipates,” “estimates,” “believes,” “potential,”
“proje
o cts,” “forecasts,” “intends,” or the negative thereof or other comparabl
a e terminology and similar statements of a fut
f ur
t
e or
forward-looking nature identify forward-looking statements for purpos
r
es of the fed
f
eral securities laws or otherwise.
Forward-looking statements include, but are not limited to, statements that relate to, or statements that are subj
u ect to risks,
contingencies or uncertainties that relate to:
20

•
fut
f ur
t
e levels of revenues, operating margins, income fro
f
m operations, net income or earnings per share;
•
the ability to respond to anticipated inflationary pressure, including reductions on consumer discretionary income and
our ability to pass along rising costs through increased selling prices;
•
anticipated levels of demand for our products and services;
•
the actua
t
l impact to supply, production levels and costs from global supply chain logistics and transportation
challenges;
•
fut
f ur
t
e levels of research and development, capital, environmental or maintenance expenditures;
•
our beliefs regarding the timing and effe
f cts on our business of health and safet
f y, tax, environmental or other
legislation, rules and regulations;
•
the success or timing of completion of ongoing or anticipated capital, restructur
t
ing or maintenance projects;
•
expectations regarding the acquisition or divestiture of assets and businesses;
•
our ability to obtain appr
a
opriate insurance and indemnities;
•
the potential effects of judicial or other proceedings, including tax audits, on our business, financial condition, results
of operations and cash flo
f ws;
•
the anticipated effects of actions of third parties such as competitors, or fed
f
eral, for
f
eign, state or local regulatory
r
authorities, or plaintiffs
f
in litigation;
•
the expected impact of accounting pronouncements; and
•
the other fact
f
ors listed above
a
under “Risk Factors.”
Although we believe that the expectations reflected in the forward-looking statements are reasonabl
a e based on our current
knowledge of our business and operations, we cannot guarantee future results, levels of activity, performance or achievements.
The for
f
egoing factors should not be construe
r
d as exhaustive. If one or more of these or other risks or uncertainties materialize,
or if our underlying assumptions prove to be incorrect, actua
t
l results may diffe
f r materially from what we anticipate. Any
forward-looking statements you read in this Annual Report refle
f ct our views as of the date of this Annual Report with respect to
future events and are subj
u ect to these and other risks, uncertainties and assumptions relating to our operations, results of
operations, growth strategy and liquidity. You should not place undue reliance on these forward-looking statements and you
should careful
f ly consider all of the factors identifie
f d in this Annual Report that could cause actua
t
l results to differ. We assume
no obligation to upda
u
te or revise these for
f
ward-looking statements, except as required by law.
21

ITEM 1B: UNRESOLVED STAFF COMMENTS
Not appl
a
icable.
ITEM 1C: CYBERSECURITY
Cybersecurity Risk Management and Strategy
Securing our business infor
f
mation, customer and employee data, and IT systems is an important part of our Enterprise Risk
Management program.
To identify a
f
nd manage the material risks of cybersecurity threats to our business, operations and
control environments, we have established an infor
f
mation security framework, with a foc
f
us on cybersecurity incident
prevention and mitigation, to help safeguard the confid
f entiality, integrity, and access of our information assets and to ensure
regulatory,
r
contractua
t
l, and operational compliance.
Our cybersecurity program is integrated into our Enterprise Risk
Management program and is managed by a dedicated cybersecurity team that is responsible for leading enterprise-wide
cybersecurity strategy, policy, standards, architecture, and processes. The program is aligned with industry s
r
tandards and best
practices, such as the National Institute of Standards and Technology Cybersecurity Framework. As part of our cybersecurity
process, we engage external experts and consultants to assess our cybersecurity program effe
f ctiveness and compliance with
applicable practices and standards.
The Company mitigates risks from cybersecurity incidents using a multifac
f
eted approach that includes, but is not limited
to: establishing infor
f
mation security policies, implementing infor
f
mation protection processes and technologies, assessing
cybersecurity risk and vulnerabi
a lity, implementing cybersecurity training, monitoring our information technology assets,
applications and users, and managing vendors and service providers for third-party risk management. The Company is currently
in material compliance with relevant information privacy and cybersecurity governmental standards with which it is required to
comply.
The Company has not experienced a material cybersecurity incident dur
d
ing the year ended March 31, 2024. For more
information on how material cybersecurity incidents may impact our business, see Part I, Item 1A. "Risk Factors" of this Form
10-K.
Cybersecurity Governance
The Company’s head of Infor
f
mation Technology, in coordination with the Company’s Chief Financial Officer, General
Counsel, Corpor
r
ate Controller and other internal stakeholders, is responsible for leading the team responsible for assessing,
identifyi
f ng, and managing cybersecurity risks, including implementation of our cybersecurity risk management program. Our
head of Information Technology has extensive experience in cybersecurity risk management and, along with the cybersecurity
risk management team, has subj
u ect matter expertise in varied topics including data integrity, IT risk, enterprise architectur
t
e,
third-party risk, threat intelligence, incident response, and regulatory c
r
ompliance. Our Board of Directors oversees
cybersecurity risk and strategy, and the Audit Committee of the Board of Directors oversees infor
f
mation security compliance as
part of its broader compliance oversight mandate. Together, this ensures that the Board of Directors has a comprehensive view
of the Company’s cybersecurity risk profile and fra
f mework.
Senior offi
f cers of the Company regularly receive briefin
f gs on cybersecurity matters, who in tur
t
n regularly report to the
Board of Directors and its committees on such matters. The Board of Directors receives cybersecurity updates fro
f
m senior
management, including our head of Information Technology, at least twice per year, and the Audit Committee receives
quarterly reports on any notable incidents or control issues that may have occurred dur
d
ing the quarter.
The Company’s Chief Executive Officer and other senior officers are responsible for the ongoing assessment and
management of the risks the Company faces.
These enterpr
r
ise risks (including cybersecurity risks) are formally assessed
annually by management as part of the Company's robust Enterpr
r
ise Risk Management program. At least annually, the Board
of Directors – as a whole and through its committees – oversees the Company’s risk profile and management’s policies and
processes for
f
assessing and managing risk.
22

Location
Use
Segment
Square
Footage
Owned/Leased
Boise, Idaho
Manufac
f
turing, Offi
f ce and R&D
Engineered Building
Solutions
42,000
Leased
Cle Elum, Washington
Distribution Center,
Manufac
f
turing, Offi
f ce, R&D
and Warehouse
Contractor Solutions
180,000
Leased
Dong Nai, Vietnam
Manufac
f
turing and Office
Contractor Solutions
634,000
Owned
Fall River, Massachusetts
Manufac
f
turing, Offi
f ce and R&D
Contractor Solutions
140,200
Leased
Greenwood, Indiana
Distribution Center & Offi
f ce
Contractor Solutions
54,000
Leased
Houston, Texas
Manufac
f
turing, Offi
f ce, R&D
and Warehouse
Contractor Solutions
253,900
Owned
Houston, Texas
Distribution Center & Offi
f ce
Contractor Solutions
150,000
Leased
Hudson, Florida
Manufac
f
turing, Offi
f ce and R&D
Engineered Building
Solutions
40,000
Leased
Jacksonville, Florida
Distribution Center & Offi
f ce
Contractor Solutions
217,000
Leased
North East, Maryland
Distribution Center & Offi
f ce
Contractor Solutions
150,000
Leased
Rockwall, Texas
Manufac
f
turing, Offi
f ce, R&D
and Warehouse
Specialized
Reliability Solutions
227,600
Owned
Royse City, Texas
Manufac
f
turing, Offi
f ce and
Warehouse
Contractor Solutions
94,500
Leased
Tejo
e n Ranch, Califor
f
nia (a)
Distribution Center & Offi
f ce
Contractor Solutions
241,000
Leased
Terrell, Texas
Distribution
Specialized
Reliability Solutions
101,000
Leased
Santa Fe Springs, Califor
f
nia (b)
Distribution Center & Offi
f ce
Contractor Solutions
240,000
Leased
Wichita, Kansas
Manufac
f
turing and Office
Engineered Building
Solutions
75,000
Leased
Windsor, Ontario, Canada
Manufac
f
turing, Offi
f ce and R&D
Engineered Building
Solutions
42,000
Leased
(a) Lease starts in May 2024
(b) Lease ends in August 2024
We believe that our facilities are adequate for our current operations. We may endeavor to selectively reduc
d
e or expand
our existing lease commitments as circumstances warrant. See Note 9 to our consolidated financial statements included in
Item 8 of this Annual Report for
f
additional infor
f
mation regarding our lease obligations.
ITEM 3: LEGAL PROCEEDINGS
We may, from time to time, be involved in litigation arising out of our operations in the normal course of business or
otherwise. Furthermore, third parties may try t
r
o seek to impose liabi
a lity on us in connection with the activities of our operating
companies. We are not currently a party to any legal proceedings that, individually or in the aggregate, are expected to have a
material effe
f ct on our business, financial condition, results of operations or financial statements, taken as a whole.
ITEM 2: PROPERTIES
Properties
Our principal executive offices are located at 5420 Lyndon B. Johnson Freeway, Suite 500, Dallas, Texas 75240. Our
headquarters is a leased facility. The current lease term expires August 31, 2026, but may be renewed.
We consider the many manufac
f
turing and R&D facilities, distribution centers, warehouses, offices and other properties that
we own or lease to be in good condition and generally suitabl
a e for
f
the purpos
r
es for which they are used. The fol
f lowing tabl
a e
presents our principal physical locations by segment and excludes fac
f
ilities classified as discontinued operations.
23

ITEM 4: MINE SAFETY DISCLOSURES
Not appl
a
icable.
24

Period
Total Number of
Shares
Purchased
Average Price
Paid per Share
Total Number of Shares
Purchased as Part of
Publ
u icly Announced
Program (a)
Maximum Number of
Shares (or
Approximate Dollar
Value) That May Yet
Be Purchased Under
the Program
(in millions)
January 1 - 31
7,511
(a) (b) $
209.22
7,483
$
92.6
Februa
r
ry 1 - 29
6,565
(a)
225.90
6,565
91.1
March 1 - 31
6,740
(a)
233.40
6,740
89.5
20,816
20,788
(a) On December 16, 2022, we announced that our Board of Directors authorized a new program to repurchase up t
u
o $100.0 million of
our common stock, which replaced a previously announced $100.0 million program. Under the current program, shares may be
repurchased from time to time in the open market or in privately negotiated transactions. Our Board of Directors has establ
a ished an
expiration date of December 31, 2024, for completion of the new repurchase program; however, the program may be limited or
terminated at any time at our discretion without notice. As of March 31, 2024, 53,133 shares were repurchased for an aggregate
amount of $10.5 million under the current $100.0 million program.
(b) Includes 28 shares tendered by employees to satisfy m
f
inimum tax withholding amounts related to the vesting of equity awards.
PART II
ITEM 5: MARKET FOR REGISTRANT
R
’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common shares are listed on the Nasdaq Global Select Market under the symbol "CSWI."
Holders
As of May 20, 2024, there were 314 holders of record of our common stock. The number of holders of record is based
upon the actua
t
l numbers of holders registered at such date and does not include holders of shares in “street name” or persons,
partnerships, associates, corpor
r
ations or other entities in security position listings maintained by depositories.
Issuer Purchases of Equity Securities
Note 12 to our consolidated financial statements included in Item 8 of this Annual Report includes a discussion of our
share repurchase program.
The following table represents the number of shares repurchased during the quarter ended
March 31, 2024.
25

Aaon, Inc
CTS Corporation
Methode Electronics, Inc.
Armstrong Industries, Inc
Futurefuel Corp.
Mueller Water Products
Astec Industries, Inc.
Gorman-Rupp
R
Co.
Standex International
Barnes Group
Innospec Inc.
Tredegar Corp.
r
Columbus McKinnon Corp
LSB Industries, Inc
This graph is fur
f
nished and not filed with the SEC. Notwithstanding anything to the contrary set for
f
th in any of our
previous filings made under the Securities Act of 1933 or the Exchange Act that incorpor
r
ate fut
f ur
t
e filin
f
gs made by us under
those statutes, the stock performance graph below is not to be incorporated by reference in any prior filin
f
gs, nor shall it be
incorporated by reference into any future filings made by us under those statutes.
CSWI
Russell 2000
Custom Peer Group
03/29/19
03/31/20
03/31/21
03/31/22
03/31/23
3/28/2024
$—
$100
$200
$300
$400
$500
ITEM 6: [Reserved]
Stock Performance Chart
The fol
f lowing graph compares the cumulative total shareholder retur
t
n on our common stock fro
f
m April 1, 2019 through
March 31, 2024 compared with the Rus
R
sell 2000 Index, of which CSWI is a component, and a composite custom peer group,
which was selected on an industry b
r
asis and is periodically reviewed and upda
u
ted (if necessary) to ensure it provides reasonabl
a e
comparability based on products offe
f red and end markets served by CSWI. The graph assumes that $100 was invested at the
market close on April 1, 2019 and that all dividends were reinvested. The stock price performance of the fol
f lowing graph is not
necessarily indicative of future stock price performance. The custom peer group consists of the fol
f lowing:
26

ITEM 7: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERAT
R
IONS
The fol
f lowing discussion and analysis is provided to increase the understanding of, a
f
nd should be read in conjunction with,
the accompanying consolidated financial statements and notes.
See “Item 1A. Risk Factors” and the “Forward-Looking
Statements” included in this Annual Report for
f
a discussion of the risks, uncertainties and assumptions associated with these
statements. Unless otherwise noted, all amounts discussed herein are consolidated.
EXECUTIVE OVERVIEW
Our Com
C
pan
m
y
n
We are a diversifie
f d industrial growth company with a strategic focus on providing niche, value-added products in the end
markets we serve.
We operate in three business segments: Contractor Solutions, Specialized Reliability Solutions and
Engineered Building Solutions.
Our products include mechanical products for heating, ventilation, air conditioning and
refrigeration ("HVAC/R"), plumbing products, grilles, registers and diffu
f
sers ("GRD"), building safet
f y solutions and high-
performance specialty lubr
u
icants and sealants. End markets that we serve include HVAC/R, architectur
t
ally-specified building
products, plumbing, general indus
d
trial, energy, rail transportation and mining. Our manufac
f
turing operations are concentrated
in the United States (“U.S.”), Vietnam and Canada, and we have distribution operations in the U.S., Australia, Canada and the
United Kingdom (“U.K.”). Our products are sold directly to end-users or through designated channels in over 100 countries
around the world, primarily including the U.S., Canada, the U.K. and Australia.
Drawing on our innovative and proven technologies, we seek to deliver solutions primarily to contractors that place a
premium on superior performance and reliabi
a lity. We believe our brands are well known in the specific
f
end markets we serve
and have a reputation for
f
high quality. We rely on both organic growth and inorganic growth through acquisitions to provide an
increasingly broad portfol
f io of performance optimizing solutions that meet our customers’ ever-changing needs. We have a
successful
f
record of making attractive, synergistic acquisitions in suppor
u
t of this objective, and we remain foc
f
used on
identifyi
f ng additional acquisition opportunities in our core end markets.
Many of our products are used to protect the capital assets of our customers that are expensive to repair or replace and are
critical to their operations. We have a source of recurring revenue from the maintenance, repair and overhaul and consumable
nature of many of our products. We also provide some custom engineered products that strengthen and enhance our customer
relationships. The reputation of our product portfol
f io is built on more than 100 well-respected brand names, such as AC
Guard®, Air Sentry®, Balco®, Cover GuardTM, Deacon®, Dust Free®, Falcon Stainless®, Greco®, Jet-Lube
u
®, Kopr-Kote®,
Leak Freeze®, Metacaulk®, No. 5®, OilSafe®, RectorSeal®, Safe-T-Switch®, Shoemaker Manufac
f
turing®, Smoke Guard®,
TRUa
R
ire® and Whitmore®.
Busine
i
ss Developm
o
ents
On Februa
r
ry 6, 2024, we acquired 100% of the outstanding equity of Dust Free, LP ("Dust Free"), based in Royse City,
Texas, for an aggregate purchase price of $34.7 million (including $0.6 million cash acquired), comprised of cash consideration
of $27.9 million and contingent consideration initially measured at $6.8 million based on Dust Free meeting defin
f ed operational
and fin
f ancial targets over a period of six years. The cash consideration was funded with cash on hand and borrowings under
our existing Revolving Credit Facility (as defin
f ed in Note 8). The Dust Free products offe
f r residential and commercial indoor
air quality and HVAC/R applications and supplement our Contractor Solutions segment's existing product portfol
f io. Dust Free
activity has been included in our Contractor Solutions segment since the acquisition date.
On October 4, 2022, we acquired 100% of the outstanding equity of Falcon Stainless, Inc ("Falcon"), based in Temecula,
California, for
f
an aggregate purchase price of $37.1 million (including $1.0 million cash acquired), comprised of cash
consideration of $34.6 million and an additional payment of $2.5 million that was paid one-year fro
f
m the acquisition date based
on certain business conditions being met. The cash consideration was funded with cash on hand and borrowings under our
existing Revolving Credit Facility (as defin
f ed in Note 8). The Falcon products are well known among the professional trades
for supplying enhanced water flo
f w delivery a
r
nd increased customer satisfaction and suppl
u
ement our Contractor Solutions
segment's existing product portfol
f io. Falcon activity has been included in our Contractor Solutions segment since the
acquisition date.
On July 8, 2022, we acquired the assets of Cover Guard, Inc. (“CG”) and AC Guard, Inc. ("ACG"), based in Orlando,
Florida, for an aggregate purchase price of $18.4 million, comprised of cash consideration of $18.0 million and additional
27

contingent consideration initially measured at $0.4 million based on CG and ACG meeting defin
f ed financial targets over a
period of five years.
In conjunction with the acquisition, we agreed to pay an additional $3.7 million, comprised of cash
consideration of $1.5 million and 5-year annuity payments (value of $2.2 million) to a third party to secure the related
intellectual property.
The CG and ACG products further expand Contractor Solutions’ offe
f ring of leading HVAC/R
accessories, including lineset covers and HVAC/R condenser protection cages.
Through these diffe
f rentiated products, our
Contractor Solutions segment expects to achieve incremental duc
d
tless and duc
d
ted HVAC/R market penetration. CG and ACG
activity has been included in our Contractor Solutions segment since the acquisition date.
On December 15, 2021, we acquired 100% of the outstanding equity of Shoemaker Manufac
f
turing, LLC (“Shoemaker”),
based in Cle Elum, Washington, for an aggregate purchase price of $43.6 million, including working capital and closing cash
adju
d stments and expected contingent consideration.
Shoemaker offers high-quality customizabl
a e GRD for commercial and
residential markets, and expands CSWI’s HVAC/R produc
d
t offer
f ing and regional exposure in the northwest U.S. The aggregate
purchase price was comprised of cash consideration of $38.6 million, 25,483 shares of the Company's common stock valued at
$3.0 million at transaction close and additional contingent consideration of up t
u
o $2.0 million based on Shoemaker meeting a
defined fin
f ancial target during the quarter ended March 31, 2022, which was achieved. Shoemaker activity has been included
in our Contractor Solutions segment since the acquisition date.
On April 1, 2021, Whitmore Manufac
f
turing, LLC (“Whitmore”), a wholly-owned subs
u
idiary of CSWI, completed the
formation of a joint venture with Pennzoil-Quaker State Company dba SOPUS products (“Shell”), a wholly-owned subs
u
idiary
of Shell Oil Company that comprises Shell’s U.S. lubricants business. The for
f
mation was consummated through a transaction
in which Whitmore sold to Shell a 50% interest in a wholly-owned subs
u
idiary (containing certain existing operating assets) in
exchange for consideration of $13.4 million fro
f
m Shell in the for
f
m of cash ($5.3 million) and intangible assets ($8.1 million).
The Whitmore JV has been consolidated into the operations of the Company and its activity has been included in our
Specialized Reliabi
a lity Solutions segment since the for
f
mation date.
Our Mar
M
ke
r
ts
HVAC
V
/R
C
The HVAC/R market is our largest market served and it represented appr
a
oximately 54% and 55% of our net revenues in
the years ended March 31, 2024 and 2023, respectively. We provide an extensive array of products for installation, repair and
maintenance of HVAC/R systems that includes condensate switches, pans and pumps, GRD, refri
f gerant caps
a
, line set covers
and other chemical and mechanical products. The industry i
r
s driven by replacement and repair of existing HVAC/R systems, as
well as new construction proje
o cts.
New HVAC/R systems are heavily influenced by macro trends, while replacement and
repair of existing HVAC/R systems are dependent on weather and age of unit. The HVAC/R market tends to be seasonal with
the peak sales season beginning in March and continuing through August. Construc
r
tion and repair is typically performed by
contractors, and we utilize our global distribution network to drive sales of our brands to such contractors.
Architecturally-
l Specifi
i ed Buildi
l ng Products
Architecturally-specifie
f d building products represented appr
a
oximately 19% and 18% of our net revenues in the years ended
March 31, 2024 and 2023, respectively.
We manufac
f
ture and sell products such as engineered railings, smoke and fir
f e
protection systems, expansion joints and stair edge nosings for end use customers including multi-family residential buildings,
educ
d
ational fac
f
ilities or institut
t ions, warehouses, construc
r
tion companies, plant maintenance customers, building contractors
and repair service companies. Sales of these products are driven by architectur
t
al specific
f ations and safet
f y and building codes.
The sales process is typically long as these can be multi-year construc
r
tion proje
o cts. The construc
r
tion market, both commercial
and multi-family, is a key driver for
f
sales of architectur
t
ally-specified building products.
Plumbing
The plumbing market represented approximately 8% and 7% of our net revenues in the years ended March 31, 2024 and
2023, respectively. We provide many products to the plumbing industry i
r
ncluding thread sealants, solvent cements, fire-
stopping products, condensate switches and trap guards, water and gas connectors, as well as other mechanical produc
d
ts, such
as drain traps
a
. Installation is typically performed by contractors, and we utilize our global distribution network to drive sales of
our products to contractors.
28

General Indus
I
trial
The general industrial end market represented appr
a
oximately 7% and 6% of our net revenues in the years ended March 31,
2024 and 2023, respectively. We provide produc
d
ts focused on asset protection and reliability, including lubr
u
icants, desiccant
breathers and fluid management products. The general industrial market includes the manufact
f
ur
t
e of chemicals, steel, cement,
food and beverage, pulp and pape
a
r and a wide variety of other processed materials. We serve this market primarily through a
network of distributors.
Energy
r
The energy market represented approximately 6% and 7% of our net revenues in the years ended March 31, 2024 and
2023, respectively. We provide market-leading lubr
u
icants and anti-seize compounds, as well as greases, for
f
use in oilfie
f ld
drilling activity and maintenance of oilfield drilling and valve related equipment.
We sell our products primarily through
distributors that are strategically situa
t
ted near the major oil and gas producing areas across the globe. The outlook for the
energy industry i
r
s heavily dependent on the global demand expectations from developed and emerging economies, as well as
oil price and local government policies relative to oil exploration, drilling, storage and transportation.
Mining
The mining market represented approximately 4% and 4% of our net revenues in the years ended March 31, 2024 and
2023, respectively. Across the globe, we provide market-leading lubr
u
icants to open gears used in large mining excavation
equipment, primarily through direct sales agents, as well as a network of strategic distributors. The North American mining
industry i
r
s heavily weighted toward coal production and has experienced headwinds due to continued decline in domestic coal
demand, partially mitigated by the seabor
a
ne coal export market. Globally, coal demand has been robust, and foc
f
used effort
f
s in
coal markets outside of the U.S., coupled with enhanced focus on markets such as iron, gold, diamonds and uranium in
Southeast Asia, South America, and Africa have delivered growth that has generally offse
f
t the weakness in North American
coal demand. Outside of coal, the mining market tends to move with global industrial output
t
as basic industrial metals such as
copper, tin, aluminum, and zinc, which are critical inputs to many industrial products.
Rail Transpor
s
tation
The rail transportation market represented appr
a
oximately 2% and 3% of our net revenues in each of the years ended
March 31, 2024 and 2023.
We provide an array of products into the rail transportation industry,
r
including lubr
u
icants and
lubr
u
icating devices for rail transportation lines, which increase efficiency, reduc
d
e noise and extend the life of rail transportation
equipment such as rails and wheels. We leverage our technical expertise to build relationships with key decision makers to
ensure our products meet required specifications. We sell our products primarily through a direct sales force, as well as through
distribution partners. End markets for rail transportation include Class 1 Rail as the primary end market in North America and
Transit Rail as the primary e
r
nd market in all other geographies.
Cyclical product classes such as far
f m products and
petrochemical products can impact volumes in Class 1 Rail. While coal transport is diminishing demand for Class 1 Rail in
North America, global investment in Transit Rail systems is expected to more than offs
f et this decline.
Our Outlo
t ok
In fiscal 2025, we maintain our optimism in key end markets and our ability to outpe
t
rform. We expect revenue and profit
growth in each of our three operating segments with strong generation of operating cash flows for
f
the ful
f l year. We offe
f r
innovative and high-value products that our customers prefer, and we remain foc
f
used on the products and subcategories that are
growing fas
f
ter than the overall industry.
r
We believe we have the strategy and the team to deliver strong performance in fiscal
2025.
We expect to maintain a strong balance sheet in fiscal year 2025, which provides us with access to capital through our cash
on hand, internally-generated cash flow and availability under our Revolving Credit Facility. Our capi
a tal allocation strategy
continues to guide our investing decisions, with a priority to direct capi
a tal to the highest risk adju
d sted return opportunities,
within the categories of organic growth, strategic acquisitions and the return of cash to shareholders through our share
repurchase and dividend programs. With the strength of our financial position, we will continue to invest in financially and
strategically attractive expanded product offerings, key elements of our long-term strategy of targeting long-term profit
f able
growth. We will continue to invest our capi
a tal in maintaining our facilities and in continuous improvement initiatives. We
recognize the importance of, and remain committed to, continuing to drive organic growth, as well as investing additional
capi
a tal in opportunities with attractive risk-adju
d sted returns, driving increased penetration in the end markets we serve. We
29

Year Ended March 31,
(amounts in thousands)
2024
2023
2022
Revenues, net
$
792,840
$
757,904
$
626,435
Net revenues for
f
the year ended March 31, 2024 increased $34.9 million, or 4.6%, as compared with the year ended March
31, 2023. Excluding the impact of the acquisitions, organic sales increased $23.9 million, or 3.1%, fro
f
m the prior year driven
primarily by increased unit volumes and pricing initiatives. Inorganic revenue increased $11.0 million, or 1.5%, due
d
to the
acquisitions of CG, ACG, Falcon and Dust Free.
Net revenue increased in the architectur
t
ally-specified building products,
HVAC/R, plumbing, general industrial, mining and energy end markets and decreased in the rail transportation end market.
Net revenues for
f
the year ended March 31, 2023 increased $131.5 million, or 21.0%, as compared with the year ended
March 31, 2022. Excluding the impact of the acquisitions, organic sales increased $95.6 million, or 15.3%, fro
f
m the prior year
due to pricing initiatives. The increase was partially due to the acquisitions of Shoemaker, CG, ACG and Falcon ($35.9 million
or 5.7%). Net revenue increased in all end markets including HVAC/R, architectur
t
ally-specified building products, energy,
mining, general industrial, rail transportation and plumbing.
Net revenues into the Americas, Europe, Middle East and Afri
f ca ("EMEA") and the Asia Pacific regions for the year ended
March 31, 2024, 2023 and 2022 are presented below. The presentation of net revenues by geographic region is based on the
location of the customer.
For additional infor
f
mation regarding net revenues by geographic region, see Note 20 to our
consolidated financial statements included in Item 8 of this Annual Report.
Year Ended March 31,
2024
2023
2022
Americas
94%
94%
94%
EMEA
4%
4%
3%
Asia Pacific Regions
2%
2%
3%
Gross Profit
o
and Gross Profi
o t Mar
M
gi
r n
Year Ended March 31,
(amounts in thousands, except percentages)
2024
2023
2022
Gross profit
$
350,745
$
318,214
$
255,962
Gross profit margin
44.2 %
42.0 %
40.9 %
Gross profit for
f
the year ended March 31, 2024 increased $32.5 million, or 10.2%, as compared with the year ended March
31, 2023.
The increase was primarily a result of a reduction in ocean and domestic freight expense, pricing initiatives,
increased unit volumes and the acquisitions of CG, ACG, Falcon and Dust Free. Gross profit margin for
f
the year ended
remain disciplined in our approach to acquisitions, particularly as it relates to our assessment of valuation, prospective
synergies, diligence, cultur
t
al fit and ease of integration, especially in light of economic conditions.
RESULTS OF OPERATIONS
The fol
f lowing discussion provides an analysis of our consolidated results of operations and results for each of our
segments.
The operations of Dust Free have been included in our consolidated results of operations and in the operating results of our
Contractor Solutions segment since the February 6
r
, 2024 date of acquisition. The operations of Falcon have been included in
our consolidated results of operations and in the operating results of our Contractor Solutions segment since the October 4,
2022 date of acquisition. The operations of CG and ACG have been included in our consolidated results of operations and in
the operating results of our Contractor Solutions segment since the July 8, 2022 date of acquisition.
The operations of
Shoemaker have been included in our consolidated results of operations and in the operating results of our Contractor Solutions
segment since the December 15, 2021 date of acquisition. All acquisitions are described in Note 2 to our consolidated financial
statements included in Item 8 of this Annual Report.
Net Revenues
30

Year Ended March 31,
(amounts in thousands, except percentages)
2024
2023
2022
Operating expenses
$
191,627
$
179,148
$
158,582
Operating expenses as a % of revenues
24.2 %
23.6 %
25.3 %
Selling, general and administrative expenses for the year ended March 31, 2024 increased $12.5 million, or 7.0%, as
compared with the year ended March 31, 2023.
The increase is primarily due to increased expenses related to employee
compensation, a trademark impairment and travel, along with increased depreciation and amortization and added expenses
related to the inclusion of Dust Free in the current year. The increase in operating expenses as a percentage of sales was
primarily attributable to sales increasing by a lower percentage than the increase in operating expenses.
Selling, general and administrative expenses for the year ended March 31, 2023 increased $20.6 million, or 13.0%, as
compared with the year ended March 31, 2022. The increase was primarily due to added expenses related to the inclusion of
Shoemaker in the current year, increases related to employee compensation expenses, third-party sales commissions, marketing
and travel expenses to support revenue growth, increased profes
f
sional fees
f
primarily related to support business growth and
recent acquisitions, along with increased depreciation and amortization. The decrease in operating expenses as a percentage of
sales was primarily attributable to sales increasing by a greater percentage than the increase in operating expenses.
Operating Inc
I
ome
Year Ended March 31,
(amounts in thousands, except percentages)
2024
2023
2022
Operating income
$
159,118
$
139,066
$
97,380
Operating margin
20.1 %
18.3 %
15.5 %
Operating income for
f
the year ended March 31, 2024 increased by $20.1 million, or 14.4%, as compared with the year
ended March 31, 2023. The increase was a result of the $32.5 million increase in gross profit,
f
partially offs
f et by the $12.5
million increase in selling, general and administrative expense as discussed above
a
.
Operating income for
f
the year ended March 31, 2023 increased by $41.7 million, or 42.8%, as compared with the year
ended March 31, 2022. The increase was a result of the $62.3 million increase in gross profit,
f
partially offs
f et by the $20.6
million increase in selling, general and administrative expense as discussed above
a
.
Othe
t
r income and expe
x
nse
Interest expense, net for
f
the year ended March 31, 2024 decreased $0.5 million, or 3.6%, to $12.7 million, as compared
with the year ended March 31, 2023, due to reduced borrowing under our Revolving Credit Facility (described in Note 8 to our
consolidated financial statements included in Item 8 of this Annual Report) as a result of strong operating cash flo
f ws generated
during the current year and the benefit fro
f
m our current $100 million interest rate swap,
a
partially offs
f et by higher interest rates.
Interest expense, net for
f
the year ended March 31, 2023 increased $7.7 million, or 142.2%, to $13.2 million, as compared
with the year ended March 31, 2022, due to higher interest rates and increased borrowing during the year under our Revolving
Credit Facility primarily in connection with the acquisitions of Shoemaker, CG, ACG and Falcon.
March 31, 2024 of 44.2% increased fro
f
m 42.0% for the year ended March 31, 2023. The increase was primarily due
d
to pricing
initiatives and reduc
d
ed ocean and domestic fre
f ight expenses as compared to the prior year period.
Gross profit for
f
the year ended March 31, 2023 increased $62.3 million, or 24.3%, as compared with the year ended March
31, 2022. The increase was primarily a result of pricing initiatives, the acquisitions of Shoemaker, CG, ACG and Falcon, along
with the prior year $3.9 million TRUaire purchase accounting effect and non-recurring $1.7 million of under-abs
a
orpt
r ion costs
resulting from reduc
d
ed production levels and incremental compensation expenses incurred at the TRUaire Vietnam fac
f
ility
during the prior year to maintain TRUaire Vietnam's operations in accordance with COVID-19 restrictions that did not recur.
("TRUa
R
ire Vietnam COVID Impact"). Gross profit
f
margin for the year ended March 31, 2023 of 42.0% increased from
f
40.9%
for the year ended March 31, 2022, was due
d
to the above
a
-mentioned TRUaire-related expenses incurred in the prior year period
that did not recur and pricing initiatives.
Selling, General and Admi
d
nist
i ra
t
tive Expe
x
nse
31

Other expense, net increased by $6.0 million for
f
the year ended March 31, 2024 to expense of $5.9 million as compared
with the year ended March 31, 2023.
The increase was primarily due
d
to the non-cash $8.5 million release of tax
indemnific
f ation assets related to the TRUa
R
ire and Falcon acquisitions, as discussed in Note 15 to our consolidated financial
statements included in Item 8 of this Annual Report, which was partially offs
f et by a gain of $1.4 million recognized fro
f
m the
sale of a property previously held for investment and for
f
eign currency exchange gains.
Other expense, net decreased by $0.5 million for
f
the year ended March 31, 2023 to income of less than $0.1 million as
compared with the year ended March 31, 2022. The decrease was primarily due
d
to foreign currency exchange changes.
Provision for
f
Income Taxe
a
s and Effe
f ctive Tax
T
Rate
The effective tax rates for
f
the years ended March 31, 2024, 2023 and 2022 were 27.0%, 23.3% and 26.4%, respectively.
As compared with the statutory rate for the year ended March 31, 2024, the provision for income taxes was primarily impacted
by state tax expense (net of fed
f
eral benefits), which increased the provision by $6.4 million and effe
f ctive rate by 4.5%; impact
of the tax indemnific
f ation asset release, which increased the provision by $1.8 million and the effective tax rate by 1.3%;
executive compensation limitation, which increased the provision by $1.2 million and the effective tax rate by 0.9%; impact of
repatriation of foreign earnings, which increased the provision by $0.5 million and the effective rate by 0.3%. This was partially
offs
f et by IRC section 250 deductions, which decreased the provision by $1.1 million and the effective tax rate by 0.7%.
As compared with the statutory rate for the year ended March 31, 2023, the provision for income taxes was primarily
impacted by the state tax expense, which increased the provision by $2.9 million and the effective rate by 2.3%, executive
compensation limitation, which increased the provision by $1.6 million and the effective rate by 1.2%; impact of GILTI
inclusions, which increased the provision by $1.1 million and the effe
f ctive tax rate by 0.9%; impact of repatriation of for
f
eign
earnings, which increased the provision by $0.9 million and the effective rate by 0.7% and the additional non-deductible
expenses. which increased the provision by $0.6 million and the effe
f ctive rate by 0.4%. This was offs
f et by IRC section 250
deductions, which decreased the provision by $1.6 million and the effective tax rate by 1.3%; for
f
eign tax credits, which
decreased the provision by $0.6 million and the effe
f ctive tax rate by 0.5%.
During the year ended March 31, 2024, we released a reserve of $1.5 million including accrue
r
d interest of $0.2 million and
accrue
r
d penalty of $0.2 million, as a result of the laps
a
e of statute for the 2019 period. We also recorded additional uncertain tax
positions reserve of $1.7 million, including accrue
r
d interest of $1.2 million and accrued penalty of $0.5 million on historical tax
positions. We also recorded an additional $0.2 million reserve and a corresponding tax indemnific
f ation asset through purchase
accounting in connection with the Falcon acquisition dur
d
ing the measurement period.
During the year ended March 31, 2023, we released a reserve of $1.6 million primarily as a result of the conclusion of
TRUa
R
ire's Vietnam's audit for
f
the tax periods from January 1, 2019 to March 31, 2022 (discussed below), including accrue
r
d
interest of $0.4 million and accrue
r
d penalties of $0.5 million. We also recorded total tax reserves of $2.8 million, including
accrue
r
d interest and penalty of $0.1 million and $0.2 million, respectively, through purchase accounting in connection with the
Falcon Stainless acquisition.
For the year ended March 31, 2023, we recorded an additional tax reserve of less than
$0.1 million, accrue
r
d interest of $0.7 million and accrue
r
d penalty of $0.6 million.
In connection with the Falcon acquisition that closed in October 2022, the Company recognized a UTP of $3.0 million
related to pre-acquisition tax periods. In addition, in accordance with the tax indemnific
f ation included in the Falcon acquisition
agreement, the sellers provided a contractua
t
l indemnification to the Company for up t
u
o $4.5 million related to UTPs taken in
pre-acquisition years, and we recognized an initial tax indemnific
f ation asset of $3.0 million through purchase accounting,
which will increase as additional interest and penalties on UTPs are accrue
r
d. This tax indemnific
f ation asset will either be settled
or expire upon the closure of the tax statut
t es for the pre-acquisition periods. During the three months ended December 31,
2023, as a result of the statut
t e expiration of the 2019 federal tax return, $1.0 million UTP was released.
The related
$1.0 million tax indemnific
f ation asset expired concurrently and was recognized as non-cash other expense on the statement of
income, which is not deductible for
f
income tax purpos
r
es.
As of March 31, 2024, the UTP reserve and offs
f etting
indemnific
f ation asset related to Falcon's pre-acquisition period were $2.4 million. The Falcon UTP reserves and offsetting
indemnific
f ation asset will either be settled or expire upon the closure of the tax statut
t es for the pre-acquisition period.
In connection with the TRUa
R
ire acquisition closed in December 2020, the Company recognized a UTP of $17.3 million
related to pre-acquisition tax periods. In addition, in accordance with the tax indemnific
f ation included in the purchase
agreement, the sellers provided a contractua
t
l indemnific
f ation to the Company for
f
up to $12.5 million related to UTPs taken in
pre-acquisition years, and we recognized a tax indemnific
f ation asset of $12.5 million. This tax indemnific
f ation asset expired in
32

Year Ended March 31,
(amounts in thousands, except percentages)
2024
2023
2022
Revenues, net
$
536,494
$
513,776
$
416,487
Operating income
142,037
126,204
96,115
Operating margin
26.5 %
24.6 %
23.1 %
Net revenues for
f
the year ended March 31, 2024 increased $22.7 million, or 4.4%, as compared with the year ended March
31, 2023. Excluding the impact of acquisitions, organic sales increased by $11.7 million, or 2.3%, due
d
primarily to pricing
initiatives and an increase in unit volumes. The remainder of the increase was due to the acquisitions of CG, ACG, Falcon, and
Dust Free ($11.0 million or 2.1%). Net revenue increased in all end markets served.
Net revenues for
f
the year ended March 31, 2023 increased $97.3 million, or 23.4%, as compared with the year ended
March 31, 2022. Excluding the impact of acquisitions, organic sales increased by $61.4 million, or 14.8%, due
d
primarily to
pricing initiatives, partially offs
f et by a slight decrease in unit volumes.
The remainder of the increase was due to the
acquisitions of Shoemaker, CG, ACG and Falcon ($35.9 million or 8.6%).
Net revenue increased in the HVAC/R,
architectur
t
ally-specified building products and plumbing end markets and decreased in the general industrial end market.
Operating income for
f
the year ended March 31, 2024 increased $15.8 million, or 12.5%, as compared with the year ended
March 31, 2023. The increase was primarily due to a reduc
d
tion in ocean and domestic freight expenses, increased net revenue,
and the inclusion of the CG, ACG, Falcon and Dust Free acquisitions, partially offs
f et by increased operating expenses including
employee compensation and a trademark impairment. Operating margin of 26.5% for the year ended March 31, 2024 increased
as compared to 24.6% for the year ended March 31, 2023.
This increase was due to gross margin improvement driven
primarily by the aforementioned reduc
d
tion in ocean and domestic fre
f ight expenses, combined with the positive effec
f
t of pricing
initiatives.
Operating income for
f
the year ended March 31, 2023 increased $30.1 million, or 31.3%, as compared with the year ended
March 31, 2022.
The increase was primarily due to the increased net revenue and the inclusion of recent acquisitions of
Shoemaker, CG, ACG and Falcon, as well as the $3.9 million TRUaire purchase accounting effect and $1.7 million TRUaire
Vietnam COVID Impact incurred in the prior year period that did not recur. Operating margin of 24.6% for the year ended
March 31, 2023 increased as compared to 23.1% for the year ended March 31, 2022. This increase was primarily due to the
December 2023. During the three months ended March 31, 2021, as a result of the audit closure of a pre-acquisition tax period
for TRUaire, $5.0 million of the tax indemnific
f ation asset was released along with the relevant UTP of $5.3 million. During the
three months ended December 31, 2022, TRUa
R
ire's Vietnam entity concluded its audit for
f
the tax periods from January 1, 2019
to March 31, 2022 and received an audit closing letter from the tax authority. As a result, $1.5 million of the UTP accrua
r
l
(including penalties and interests accrued post-acquisition) was released and recorded as an income tax benefit
f
for the three
months ended December 31, 2022. During the three months ended December 31, 2023, the remaining $7.5 million tax
indemnific
f ation asset expired and was recognized as non-cash other expense on the statement of income, which is not
deductible for
f
income tax purpos
r
es. As of March 31, 2024, the UTP accrua
r
l related to TRUa
R
ire's pre-acquisition tax periods
was $14.3 million and is expected to be released in the fut
f ur
t
e as the statut
t es on the open tax years expire.
The Company expects $3.3 million of existing reserves for UTPs to either be settled or expire within the next 12 months as
the statutes of limitations expire. Our federal income tax returns remain subject to examination for the years ended March 31,
2023, 2022 and 2021. Our income tax returns for
f
TRUa
R
ire's pre-acquisition periods including calendar years 2018, 2019 and
2020 remain subj
u ect to examinations.
Our income tax retur
t
ns in certain state income tax jurisdictions remain subj
u ect to
examination for
f
various periods for the period ended September 30, 2015 and subsequent years.
Business Segments
We conduct our operations through three business segments based on the type of product and how we manage the
businesses. We evaluate segment performance and allocate resources based on each segment’s operating income. The key
operating results for
f
our three business segments are discussed below.
Contra
t
ctor
t
Solutions Segm
e
ent Results
l
Our Contractor Solutions segment manufactur
t
es effi
f ciency and performance enhancing products predominantly for
f
residential and commercial HVAC/R and plumbing appl
a
ications, which are designed primarily for the profes
f
sional trades.
33

Year Ended March 31,
(amounts in thousands, except percentages)
2024
2023
2022
Revenues, net
$
149,614
$
147,445
$
116,042
Operating income
22,266
20,176
9,007
Operating margin
14.9 %
13.7 %
7.8 %
Net revenues for
f
the year ended March 31, 2024 increased $2.2 million, or 1.5%, as compared with the year ended March
31, 2023. The increase was primarily due to pricing initiatives. Net revenue increased in the general industrial, mining, and
energy end markets and decreased in the rail transportation end market.
Net revenues for
f
the year ended March 31, 2023 increased $31.4 million, or 27.1%, as compared with the year ended
March 31, 2022. The increase was primarily due to increased unit volumes and pricing initiatives. Net revenue increased in all
end markets including energy, mining, general industrial and rail transportation.
Operating income for
f
the year ended March 31, 2024 increased $2.1 million, or 10.4%, as compared with the year ended
March 31, 2023. The increase was primarily due to the increased net revenue, combined with a slight decrease in operating
expenses. Operating margin of 14.9% for the year ended March 31, 2024 increased as compared to 13.7% for the year ended
March 31, 2023. This increase was primarily due to an improvement in gross margin driven by pricing initiatives and reduced
operating expenses.
Operating income for
f
the year ended March 31, 2023 increased $11.2 million, or 124.0%, as compared with the year ended
March 31, 2022. The increase was primarily due to the increased net revenue, partially offs
f et by increased operating expenses.
Operating margin of 13.7% for the year ended March 31, 2023 increased as compared to 7.8% for the year ended March 31,
2022. This increase was primarily due to gross margin improvement as a result of leverage fro
f
m revenue volume increase,
pricing initiatives, as well as reduc
d
ed growth in operating expense as a percentage of revenue.
Engine
i
ered Buildi
l ng
i
Solutions Seg
S
me
g
nt Resultst
The Engineered Building Solutions segment provides primarily code-driven products focused on life s
f
afet
f y that are
engineered to provide aesthetically-pleasing solutions for the construc
r
tion, refurbishment and modernization of commercial,
institutional, and multi-family residential buildings.
Year Ended March 31,
(amounts in thousands, except percentages)
2024
2023
2022
Revenues, net
$
114,741
$
103,969
$
97,296
Operating income
18,704
12,889
11,101
Operating margin
16.3 %
12.4 %
11.4 %
Net revenues for
f
the year ended March 31, 2024 increased $10.8 million, or 10.4%, as compared with the year ended
March 31, 2023.
The increase was driven by increased volumes as a result of the continued conversion of strong project
bookings into revenue and pricing initiatives.
Net revenues for
f
the year ended March 31, 2023 increased $6.7 million, or 6.9%, as compared with the year ended March
31, 2022. The increase was primarily due to sustained commercial activity, retention of market share and pricing initiatives.
Operating income for
f
the year ended March 31, 2024 increased $5.8 million, or 45.1%, as compared with the year ended
March 31, 2023. The increase was driven by increased net revenue and a positive impact from pricing initiatives, as well as a
$1.2 million gain recognized fro
f
m the sale of a property previously used in operations. Operating margin of 16.3% for the year
above-mentioned TRUaire-related expenses incurred in the prior year period that did not recur combined with the positive
effe
f ct of pricing initiatives.
Specialized Reliabili
i ty
i
Solutions Seg
S
me
g
nt Resultst
The Specialized Reliability Solutions segment provides long-establ
a ished products for increasing the reliability,
performance and lifes
f
pan of industrial assets and solving equipment maintenance challenges.
34

Year Ended March 31,
(amounts in thousands)
2024
2023
2022
Net cash provided by operating activities
$
164,332
$
121,453
$
69,089
Net cash used in investing activities
(45,454)
(72,166)
(51,456)
Net cash used in fin
f ancing activities
(114,073)
(46,840)
(13,039)
Our cash balance at March 31, 2024 was $22.2 million, as compared with $18.5 million at March 31, 2023.
For the year ended March 31, 2024, our cash provided by operating activities was $164.3 million, as compared with
$121.5 million and $69.1 million for
f
the years ended March 31, 2023 and 2022, respectively.
•
Working capi
a tal provided cash for
f
the year ended March 31, 2024 due to higher accounts payable and other current
liabi
a lities ($12.3 million), lower inventories ($10.4 million), lower prepaid expenses and other current assets ($4.6
million) and lower other assets ($1.1 million), partially offs
f et by higher accounts receivabl
a e ($17.9 million).
•
Working capi
a tal used cash for
f
the year ended March 31, 2023 due to higher inventories ($11.4 million) and lower
accounts payable and other current liabi
a lities ($7.0 million), and higher prepaid expenses and other current assets ($1.3
million), partially offs
f et by lower accounts receivabl
a e ($1.1 million).
•
Working capi
a tal used cash for
f
the year ended March 31, 2022 due to higher inventory (
r
$49.4 million) and higher
accounts receivabl
a e ($26.7 million), partially offse
f
t by higher accounts payable and other current liabi
a lities ($28.0
million) and lower prepaid expenses and other assets ($3.5 million).
Cash flows used in investing activities dur
d
ing the year ended March 31, 2024 were $45.5 million as compared with $72.2
million and $51.5 million for
f
the years ended March 31, 2023 and 2022, respectively.
•
Capital expenditures dur
d
ing the years ended March 31, 2024, 2023 and 2022 were $16.6 million, $14.0 million and
$15.7 million, respectively.
Our capital expenditures have been focused on capacity expansion, continuous
ended March 31, 2024 increased as compared to 12.4% for the year ended March 31, 2023. This increase was primarily due to
gross margin improvement resulting fro
f
m pricing initiatives and the aforementioned gain fro
f
m property sale, along with
reduced operating expense as a percentage of revenue.
Operating income for
f
the year ended March 31, 2023 increased $1.8 million, or 16.1%, as compared with the year ended
March 31, 2022. The increase was due to the increased net revenue and management of operating expenses. Operating margin
of 12.4% for the year ended March 31, 2023 increased as compared to 11.4% for the year ended March 31, 2022. This increase
was primarily due to effe
f ctive management of operating expenses, partially offs
f et by the shift in sales to lower margin projects.
For additional infor
f
mation on segments, see Note 20 to our consolidated financial statements included in Item 8 of this
Annual Report.
LIQUIDITY AND CAPITAL RESOURCES
General
Existing cash on hand, cash generated by operations and borrowings availabl
a e under our Revolving Credit Facility
("Revolver Borrowings") are our primary s
r
ources of short-term liquidity. Our ability to consistently generate strong cash flo
f w
from our operations is one of our most significant financial strengths; it enabl
a es us to invest in our people and our brands, make
capi
a tal investments and strategic acquisitions, provide a cash dividend program, and from time-to-time, repurchase shares of
our common stock.
Additionally, we use our Revolver Borrowings to suppor
u
t our working capital requirements, capi
a tal
expenditures and strategic acquisitions. We seek to maintain adequate liquidity to meet working capital requirements, fund
capi
a tal expenditures, make scheduled principal and interest payments on debt and meet our contingent consideration
obligations. Absent deterioration of market conditions, we believe that cash flows fro
f
m operating and fin
f ancing activities,
primarily Revolver Borrowings, will provide adequate resources to satisfy our working capital, schedul
d ed principal and interest
payments on debt, anticipated dividend payments, periodic share repurchases, contingent consideration obligations and
anticipated capital expenditure requirements for
f
both our short-term and long-term capi
a tal needs.
Cash Flow Analysis
35

improvement and automation, safety enhancements, enterpr
r
ise resource planning systems and new product
introductions.
•
During the year ended March 31, 2024, we acquired Dust Free for
f
an aggregate purchase price of $34.7 million
comprised of $27.4 million in cash consideration (net of cash received). Additionally, $2.4 million cash was paid for
immaterial product line acquisitions and a deferred payment of $2.5 million was remitted to the Falcon sellers due
d
to
the performance obligation being met.
•
During the year ended March 31, 2023, we acquired Falcon for
f
an aggregate purchase price of $37.1 million,
comprised of $33.6 million in cash consideration (net of cash received), the assets of CG and ACG and the related
intellectua
t
l property for
f
$19.7 million in cash consideration and additional $0.3 million annuity payments, and other
acquisitions for $2.7 million in cash consideration. Additionally, a contingent payment of $2.0 million was remitted to
the Shoemaker sellers due to the performance obligation set forth in the acquisition agreement being met as part of the
Shoemaker acquisition.
•
During the year ended March 31, 2022, we acquired Shoemaker for an aggregate purchase price of $43.6 million,
including $37.4 million in cash consideration (net of cash received).
Additionally, we received proceeds of $1.4
million as a result of the fin
f al working capital true
r
-up a
u
djustment related to the TRUa
R
ire acquisition.
Cash flows used in fin
f ancing activities dur
d
ing the years ended March 31, 2024, 2023 and 2022 were $114.1 million, $46.8
million and $13.0 million, respectively. Cash outflows resulted fro
f
m:
•
Net borrowings (payments) from our Revolving Credit Facility and the Whitmore Term Loan (as discussed in Note 8
to our consolidated financial statements included in Item 8 of this Annual Report) of $(87.0) million, $0.2 million and
$10.4 million dur
d
ing the years ended March 31, 2024, 2023 and 2022, respectively.
•
Payments of $0.0 million, $0.7 million and $2.3 million of underwriting discounts and fees in connection with
amending our Revolving Credit Facility dur
d
ing the years ended March 31, 2024, 2023 and 2022, respectively, as
discussed in Note 8 to our consolidated financial statements included in Item 8 of this Annual Report.
•
Proceeds fro
f
m the redeemable noncontrolling interest shareholder for
f
its investment in the consolidated Whitmore JV
of $0.0 million, $3.0 million and $6.3 million dur
d
ing the years ended March 31, 2024, 2023 and 2022, respectively, as
discussed in Note 3 to our consolidated financial statements included in Item 8 of this Annual Report.
•
Repurchases of shares under our share repurchase programs (as discussed in Note 12 to our consolidated financial
statements included in Item 8 of this Annual Report) of $10.5 million, $35.7 million and $14.4 million dur
d
ing the years
ended March 31, 2024, 2023 and 2022, respectively.
•
Dividend payments of $11.8 million, $10.6 million and $9.5 million were paid dur
d
ing the years ended March 31, 2024,
2023 and 2022, respectively.
We believe that availabl
a e cash and cash equivalents, cash flo
f ws generated through operations and cash availabl
a e under our
Revolving Credit Facility will be suffi
f cient to meet our liquidity needs, including capital expenditures, for at least the next 12
months.
Acquisitions
We regularly evaluate acquisition opportunities of various sizes.
The cost and terms of any fin
f ancing to be raised in
conjunction with any acquisition, including our ability to raise capital, is a critical consideration in any such evaluation. During
the year ended March 31, 2024, we acquired 100% of the outstanding equity of Dust Free, based in Royse City, Texas, for
f
an
aggregate purchase price of $34.7 million. During the year ended March 31, 2023, we acquired 100% of the outstanding equity
of Falcon, based in Temecula, Califor
f
nia, for an aggregate purchase price of $37.1 million and the assets of CG and ACG and
related intellectua
t
l properties, based in Orlando, Florida, for an aggregate purchase price of $22.1 million. During the year
ended March 31, 2022, we acquired 100% of the outstanding equity of Shoemaker for
f
an aggregate purchase price of $43.6
million.
These acquisitions were funded through a combination of cash on hand, borrowings under our Revolving Credit
Facility and stock consideration. See Note 2 to our consolidated financial statements included in Item 8 of this Annual Report
for a discussion of our acquisitions.
36

Debt
Our long-term debt obligation consists of the Revolver Borrowings with a matur
t
ity date in fis
f cal 2027. As of March 31,
2024, we had $166.0 million in outstanding Revolver Borrowings, which resulted in a borrowing capa
a
city of $334.0 million.
See Note 8 to our consolidated financial statements included in Item 8 of this Annual Report for
f
a discussion of our
indebtedness.
Dividends
Total dividends of $11.9 million were paid dur
d
ing the year ended March 31, 2024. On April 12, 2024, we declared a
quarterly dividend and announced an increase of our quarterly dividend rate to $0.21 per share, paid on May 10, 2024 to
shareholders of record as of April 26, 2024. We currently expect to continue to pay a regular quarterly dividend to shareholders
in the fut
f ur
t
e, but such payments are subj
u ect to appr
a
oval of our Board of Directors and are dependent upon our financial
conditions, results of operations, capital requirements, and other factors, including those set forth under Item 1A. "Risk Factors"
of this Annual Report. See Note 12 to our consolidated financial statements included in Item 8 of this Annual Report for
f
a
discussion of dividends.
Share Repurchase Program
On October 30, 2020, our Board of Directors approved a repurchase program authorizing the repurchase of up t
u
o
$100.0 million of our common stock, which replaced a prior $75.0 million repurchase program. On December 16, 2022, we
announced that our Board of Directors authorized a new $100.0 million share repurchase program, which replaced the
previously announced $100.0 million program. Under the current $100.0 million repurchase program, 53,133 shares were
repurchased during the year ended March 31, 2024 for $10.5 million and no shares were repurchased during the year ended
March 31, 2023. Under the prior $100.0 million repurchase program, 336,347 shares were repurchased during the year ended
March 31, 2023 for $35.7 million. A total of 462,462 shares had been repurchased for an aggregate amount of $50.1 million
under the prior $100.0 million program. As of March 31, 2024, a total of 53,133 shares had been repurchased for an aggregate
amount of $10.5 million under the current $100.0 million program. Our Board of Directors has established an expiration of
December 31, 2024 for the current $100.0 million repurchase program and we currently expect to continue to repurchase shares
in the near fut
f ur
t
e, but such repurchases are dependent upon our financial condition, results of operations, capital requirements,
and other factors, including those set forth under Item 1A. Risk Factors of this Annual Report. See Note 12 to our consolidated
financial statements included in Item 8 of this Annual Report for
f
a discussion of our share repurchase program.
Capital Expenditures
During the year ended March 31, 2024, we invested $16.6 million in capital expenditures related to continuous
improvement and automation, safety, capacity expansion, enterprise resource planning systems and new product introductions.
We plan to continue investing in capital expenditures in the future to improve manufac
f
turing productivity, enhance operational
safety, upgr
u
ade infor
f
mation technology infrastructur
t
e and security and implement advanced technologies for our existing
facilities.
Contractual Obligations
Our contractua
t
l obligations as of March 31, 2024 primarily included purchase obligations and operating lease
commitments. Purchase obligations include agreements to purchase goods or services that are enfor
f
ceable, legally binding and
specify a
f
ll significant terms, including: fixed or minimum quantities to be purchased; fix
f ed, minimum or variabl
a e price
provisions; and the appr
a
oximate timing of the transaction.
Purchase obligations exclude agreements that are cancellable
without penalty.
We expect to incur $62.3 million in purchase obligations over the next 12 months.
For operating lease
commitments, see Note 9 to our consolidated financial statements included in Item 8 of this Annual Report.
CRITICAL ACCOUNTING ESTIMATES
The process of preparing fin
f ancial statements in confor
f
mity with U.S. GAAP requires the use of estimates and assumptions
to determine reported amounts of certain assets, liabi
a lities, revenues and expenses and the disclosure of related contingent assets
and liabi
a lities.
These estimates and assumptions are based upon information available at the time of the estimates or
assumptions, including our historical experience, where relevant. The most significant estimates made by management include:
timing and amount of revenue recognition; realization of the deferred taxes and measurement of tax reserves; and valuation of
goodwill and indefinite-lived intangible assets, both at the time of initial acquisition, as well as part of recurring impairment
37

(ii) performance obligations have been identifie
f d, (iii) the price to the customer has been determined, (iv) the price to the
customer has been allocated to the performance obligations, and (v) performance obligations are satisfied, which are more ful
f ly
described below.
(i) We identify a
f
contract with a customer when a sales agreement indicates approval and commitment of the parties;
identifie
f s the rights of the parties; identifie
f s the payment terms; has commercial substance; and it is probable that we
will collect the consideration to which we will be entitled in exchange for the goods or services that will be transfer
f red
to the customer. In most instances, our contract with a customer is the customer's purchase order.
For certain
customers, we may also enter into a sales agreement that outlines a framework of terms and conditions that apply to all
future purchase orders for
f
that customer. In these situations, our contract with the customer is both the sales agreement
and the specific
f
customer purchase order. Because our contract with a customer is typically for a single transaction or
customer purchase order, the duration of the contract is one year or less. As a result, we have elected to apply certain
practical expedients and, as permitted by the Financial Accounting Standards Board, omit certain disclosures of
remaining performance obligations for contracts that have an initial term of one year or less.
(ii) We identify p
f
erformance obligations in a contract for each promised good or service that is separately identifia
f bl
a e fro
f
m
other promises in the contract and for
f
which the customer can benefit fro
f
m the good or service either on its own or
together with other resources that are readily availabl
a e to the customer. Goods and services provided to our customers
that are deemed immaterial are included with other performance obligations.
(iii) We determine the transaction price as the amount of consideration we expect to be entitled to in exchange for ful
f filling
the performance obligations, including the effects of any variable consideration.
(iv) For any contracts that have more than one performance obligation, we allocate the transaction price to each
performance obligation in an amount that depicts the amount of consideration to which we expect to be entitled in
exchange for satisfying each performance obligation. We have excluded disclosure of the transaction price allocated
to remaining performance obligations if the performance obligation is part of a contract that has an original expected
duration of one year or less as the majority of our contracts are short-term in nature with a term of one year or less.
(v) We recognize revenue when, or as, we satisfy t
f
he performance obligation in a contract by transfer
f ring control of a
promised good or service to the customer.
We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both
imposed on and concurrent with a specific revenue-producing transaction and collected from a customer. As such, we present
revenue net of sales and other similar taxes. Shipping and handling costs associated with outbound
t
freight afte
f r control over a
product has transfer
f red to a customer are accounted for as a fulfillme
f
nt cost and are included in cost of revenues. Costs to
obtain a contract, which include sales commissions recorded in selling, general and administrative expense, are expensed when
incurred as the amortization period is one year or less. We do not have customer contracts that include significant financing
components.
Defe
e rred Taxe
T
s and Tax R
a
eserves
Deferred tax assets and liabi
a lities are determined based on temporary d
r
iffe
f rences between the fin
f ancial statement carrying
amounts and the tax basis of assets and liabi
a lities, appl
a
ying enacted tax rates expected to be in effe
f ct for the year in which the
differences are expected to reverse. The effect on deferred tax assets and liabi
a lities of a change in tax rates is recognized in
income in the period that includes the enactment date.
Based on the evaluation of availabl
a e evidence, both positive and
negative, we recognize future tax benefits
f
, such as net operating loss carryforwards and tax credit carryforwards, to the extent
analyses, as appl
a
icable. The significant estimates are reviewed at least annually, if not quarterly, by management. Because of
the uncertainty of factors surrounding the estimates, assumptions and judgments used in the preparation of our financial
statements, actua
t
l results may diffe
f r fro
f
m the estimates, and the difference may be material.
Our critical accounting policies are those policies that are both most important to our financial condition and results of
operations and require the most diffi
f cult, subjective or complex judgments on the part of management in their application, ofte
f n
as a result of the need to make estimates about
a
the effect of matters that are inherently uncertain. We believe that the fol
f lowing
represent our critical accounting policies.
For a summary o
r
f all of our significant accounting policies, see Note 1 to our
consolidated financial statements included in Item 8 of this Annual Report. Management has discussed our critical accounting
estimates and policies with the Audit Committee of our Board of Directors.
Revenue Recogn
o
itio
t n
We recognize revenues to depict the transfer
f
of control of promised goods or services to our customers in an amount that
reflects the consideration to which we expect to be entitled in exchange for those goods or services. Refer
f
to Note 19 for
further discussion. We recognize revenue when all of the following criteria have been met: (i) a contract with a customer exists,
38

that these benefit
f s are more likely than not to be realized. We base our judgment of the recoverabi
a lity of our deferred tax assets
primarily on historical earnings, our estimate of current and expected future earnings using historical and projected fut
f ur
t
e
operating results, and prudent and fea
f
sible tax planning strategies.
The amount of income taxes we pay is subj
u ect to ongoing audits by federal, state and foreign tax authorities, which may
result in proposed assessments.
Significant judgment is required in determining income tax provisions and evaluating tax
positions. We establish reserves for open tax years for
f
uncertain tax positions that may be subject to challenge by various
taxing authorities. The consolidated tax provision and related accrua
r
ls include the impact of such reasonabl
a y estimable losses
and related interest and penalties as deemed appropriate. Tax benefits recognized in the financial statements from
f
uncertain tax
positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate
settlement.
During the year ended March 31, 2024, we released a reserve of $1.5 million including accrue
r
d interest of $0.2 million and
accrue
r
d penalty of $0.2 million, as a result of the laps
a
e of statute for the 2019 period. We also recorded additional uncertain tax
position reserve of $1.7 million, including accrue
r
d interest of $1.2 million and accrue
r
d penalty of $0.5 million on historical tax
positions. We also recorded an additional $0.2 million uncertain tax position reserve and a corresponding tax indemnific
f ation
asset through purchase accounting in connection with the Falcon acquisition dur
d
ing the measurement period.
During the year ended March 31, 2023, we released a reserve of $1.6 million primarily as a result of the conclusion of
TRUa
R
ire's Vietnam's audit for
f
the tax periods from January 1, 2019 to March 31, 2022 (discussed below), including accrue
r
d
interest of $0.4 million and accrue
r
d penalties of $0.5 million. We also recorded total tax reserves of $2.8 million, including
accrue
r
d interest and penalty of $0.1 million and $0.2 million, respectively, through purchase accounting in connection with the
Falcon Stainless acquisition.
For the year ended March 31, 2023, we recorded an additional tax reserve of less than
$0.1 million, accrue
r
d interest of $0.7 million and accrue
r
d penalty of $0.6 million.
The Company expects $3.3 million of existing reserves for UTPs to either be settled or expire within the next 12 months as
the statutes of limitations expire. Our federal income tax returns remain subject to examination for the years ended March 31,
2023, 2022 and 2021. Our income tax returns for
f
TRUa
R
ire's pre-acquisition periods including calendar years 2018, 2019 and
2020 remain subj
u ect to examinations.
Our income tax retur
t
ns in certain state income tax jurisdictions remain subj
u ect to
examination for
f
various periods for the period ended September 30, 2015 and subsequent years.
While we believe we have adequately provided for
f
any reasonabl
a y for
f
eseeable outcome related to these matters, our future
results may include favorable or unfav
f
orable adju
d stments to our estimated tax liabi
a lities. To the extent that the expected tax
outcome of these matters changes, such changes in estimate will impact the income tax provision in the period in which such
determination is made.
Goodwill and Ind
I
ef
d in
f
ite-
t Li
-
ved Intangible Assets
The initial recording of goodwill and intangible assets requires subjective judgements concerning estimates of the fair value
of the acquired assets.
We test the value of goodwill for
f
impairment as of January 31 each year or whenever events or
circumstances indicate such asset may be impaired.
The test for
f
goodwill impairment involves significant judgement in estimating projections of fair value generated through
future performance of each of the reporting units. The identification of our reporting units began at the operating segment level
and considered whether components one level below the operating segment levels should be identifie
f d as reporting units for
purpos
r
e of testing goodwill for
f
impairment based on certain conditions. These conditions included, among other fac
f
tors, (i) the
extent to which a component represents a business and (ii) the aggregation of economically similar components within the
operating segments. Other factors that were considered in determining whether the aggregation of components was appropriate
included the similarity of the natur
t
e of the products and services, the natur
t
e of the production processes, the methods of
distribution and the types of industries served.
Accounting Standards Codification ("ASC") 350 allows an optional qualitative assessment, prior to a quantitative
assessment test, to determine whether it is more likely than not that the fai
f r value of a reporting unit exceeds its carrying
amount. We bypassed the qualitative assessment and proceeded directly to the quantitative test. If the carrying value of a
reporting unit exceeds its fai
f r value, the goodwill of that reporting unit is impaired and an impairment loss is recorded equal to
the excess of the carrying value over its fair value. We estimate the fai
f r value of our reporting units based on an income
approach, whereby we calculate the fair value of a reporting unit based on the present value of estimated future cash flows. A
discounted cash flow analysis requires us to make various judgmental assumptions about future sales, operating margins,
growth rates and discount rates, which are based on our budgets, business plans, economic projections, anticipated future cash
39

flows and market participants. Our quantitative test performed as of January 31, 2024 indicated that no goodwill impairment
loss should be recognized for
f
the year ended March 31, 2024. There was no impairment loss recognized for
f
the years ended
March 31, 2023 and 2022, respectively.
We have indefinite-lived intangible assets in the for
f
m of trademarks. We test these intangible assets for impairment at least
annually as of January 31 or whenever events or circumstances indicate that the carrying amount may not be recoverabl
a e.
Significant assumptions used in the impairment test include the discount rate, royalty rate, fut
f ur
t
e sales projections and terminal
value growth rate. These inputs are considered non-recurring level three inputs within the fair value hierarchy. An impairment
loss would be recognized when estimated future cash flows are less than their carrying amount. We recorded a $1.5 million
impairment for the year ended March 31, 2024 relating to a trademark, and no impairment for
f
the fis
f cal years March 31, 2023
and 2022.
ACCOUNTING DEVELOPMENTS
We have presented the information about
a
accounting pronouncements not yet implemented in Note 1 to our consolidated
financial statements included in Item 8 of this Annual Report.
40

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk from changes in interest rates and for
f
eign currency exchange rates, which may adversely
affe
f ct our consolidated financial position and results of operations. We seek to minimize these risks through regular operating
and fin
f ancing activities, and when deemed appropriate, through the use of interest rate swaps. It is our policy to enter into
interest rate swaps only to the extent considered necessary to meet our risk management objectives. We do not purchase, hold
or sell derivative financial instrum
r
ents for trading or speculative purpos
r
es.
Variable R
l
ate I
t
nd
I
eb
d
tedness
We are subject to interest rate risk on our variable rate indebtedness. Fluctuations in interest rates have a direct effe
f ct on
the interest expense associated with our outstanding indebtedness.
We manage, or hedge, interest rate risks related to our
borrowings by means of interest rate swap a
a
greements. As discussed in Note 10, the Whitmore Term Loan interest rate swap
a
was terminated on January 9, 2023. On Februa
r
ry 7, 2023, we entered into an interest rate swap t
a
o hedge our exposure to
variability in cash flo
f ws from interest payments on the first $100.0 million borrowing under our Revolving Credit Facility
(defin
f ed in Note 8). At March 31, 2024, we had $66.0 million in unhedged variabl
a e rate indebtedness with an average interest
rate of 6.68%. Starting in April 2024, each quarter point change in interest rates would result in a change of approximately $0.2
million in our interest expense on an annual basis, inclusive of the interest rate swap.
a
We may also be exposed to credit risk in derivative contracts we may use. Credit risk is the fai
f lure of the counterpa
r
rty to
perform under the terms of the derivative contract. If the fair value of a derivative contract is positive, the counterpa
r
rty will
owe us, which creates credit risk for us. If the fai
f r value of a derivative contract is negative, we will owe the counterpa
r
rty and,
therefor
f
e, do not have credit risk.
We have sought to minimize the credit risk in derivative instrum
r
ents by entering into
transactions with high-quality counterpa
r
rties.
Foreign C
g
ur
C
rency E
c
xc
E
hange Rate R
t
isk
We conduct a portion of our operations outside of the U.S. in currencies other than the U.S. dollar.
Our non-U.S.
operations are conducted primarily in their local currencies, which are also their func
f
tional currencies, and include the
Australian dollar, British pound, Canadian dollar and Vietnamese dong. Foreign currency exposures arise fro
f
m translation of
foreign-denominated assets and liabi
a lities into U.S. dollars and fro
f
m transactions denominated in a currency other than a non-
U.S. operation’s func
f
tional currency.
We realized net (losses) gains associated with foreign currency translation of $(1.9)
million, $(3.8) million and a loss of less than $0.1 million for
f
the years ended March 31, 2024, 2023 or 2022, respectively,
which are included in accumulated other comprehensive income (loss). We recognized for
f
eign currency transaction net gains
(losses) of $0.3 million, $0.4 million and $(0.2) million for
f
the years ended March 31, 2024, 2023 or 2022, respectively, which
are included in other income (expense), net on our consolidated statements of operations.
Based on a sensitivity analysis as of March 31, 2024, a 10% change in the for
f
eign currency exchange rates for
f
the year
ended March 31, 2024 would have impacted our income by approximately 5%. This calculation assumes that all currencies
change in the same direction and proportion relative to the U.S. dollar and that there are no indirect effe
f cts, such as changes in
non-U.S. dollar sales volumes or prices.
41

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
CSW Industrials, Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of CSW Industrials Inc. (a Delaware corporation) and
subs
u
idiaries (the “Company”) as of March 31, 2024 and 2023, the related consolidated statements of operations, comprehensive
income, equity, and cash flo
f ws for each of the three years in the period ended March 31, 2024, and the related notes
(collectively refer
f red to as the “fin
f ancial statements”). In our opinion, the fin
f ancial statements present fai
f rly, in all material
respects, the fin
f ancial position of the Company as of March 31, 2024 and 2023, and the results of its operations and its cash
flows for
f
each of the three years in the period ended March 31, 2024, in confor
f
mity with accounting principles generally
accepted in the United States of America.
We also have audited, in accordance with the standards of the Publ
u ic Company Accounting Oversight Board (United States)
(“PCAOB”), the Company’s internal control over fin
f ancial reporting as of March 31, 2024, based on criteria established in the
2013 Internal Contro
t
l—In
—
tegr
e
ated Framework
r
issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”), and our report dated May 23, 2024 expressed an unqualifie
f d opinion.
Basis for
f
opinion
These fin
f ancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting fir
f m registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. fed
f
eral securities laws and the appl
a
icable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonabl
a e assurance about
a
whether the financial statements are free of material misstatement, whether due
d
to
error or fra
f ud. Our audits included performing procedur
d
es to assess the risks of material misstatement of the financial
statements, whether due to error or fra
f ud, and performing procedures that respond to those risks. Such procedur
d
es included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the fin
f ancial statements. We believe that our audits provide a reasonabl
a e basis for our opinion.
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that
was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subj
u ective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the fin
f ancial statements, taken as a whole, and
we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Valuation of C
o
us
C
tomer Lists Intangible Asset – Dust Free, LP
As described fur
f
ther in note 2 to the fin
f ancial statements, on February 6
r
, 2024, the Company completed the acquisition of Dust
Free LP, for
f
an aggregate purchase price of $34.7 million. The Company’s accounting for
f
the acquisition required the
estimation of the fair value of assets acquired and liabilities assumed, which included a customer lists intangible asset of $20.1
million. The estimated fair value of the customer lists intangible asset was determined using the excess earnings method. We
identifie
f d the estimation of the fair value of the customer lists intangible asset in management’s purchase price allocation as a
critical audit matter.
The principal consideration for
f
our determination that the valuation of the customer lists intangible asset is a critical audit
matter is the significant estimation uncertainty involved in determining fai
f r value. The significant assumptions include the
expected revenues growth rates, gross profit
f
margins, EBITDA margins, and the discount rate. These assumptions required a
high degree of auditor judgment, subj
u ectivity, and effo
f
rt in performing procedur
d
es and evaluating management’s significant
assumptions and involved the use of valuation specialists.
42

Our audit procedur
d
es related to the valuation of the customer lists intangible asset included the following, among others.
•
We tested the effe
f ctiveness of internal controls over management’s valuation of the customer lists intangible asset.
•
We evaluated the methodologies and tested the significant assumptions used by the company by involving valuation
specialists to evaluate the appr
a
opriateness of the methodology and the significant assumptions in the fai
f r value
estimate by comparing the discount rate to relevant observabl
a e market data.
•
We tested the underlying data by comparing the estimated fut
f ur
t
e revenues, gross profit margins, and EBITDA margins
to historical operating results, as well as tested the completeness and accuracy of the underlying data used in the excess
earnings method valuation.
•
We also evaluated corroborative and contrary evidence when evaluating the estimated fut
f ur
t
e revenues growth rates,
gross profit margins, EBITDA margins, and discount rate assumptions.
/s/ GRANT
A
THORNT
R
ON LLP
We have served as the Company’s auditor since 2015.
Dallas, Texas
May 23, 2024
43

CSW INDUSTRIALS, INC.
CONSOLIDATED BALANCE SHEETS
March 31,
(Amounts in thousands, except per share amounts)
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
22,156
$
18,455
Accounts receivabl
a e, net
142,665
122,753
Inventories, net
150,749
161,569
Prepaid expenses and other current assets
15,840
20,279
Total current assets
331,410
323,056
Property, plant and equipment, net
92,811
88,235
Goodwill
247,191
242,740
Intangible assets, net
318,819
318,903
Other assets
53,095
70,519
Total assets
$
1,043,326
$
1,043,453
LIABILITIES AND EQUITY
Current liabi
a lities:
Accounts payable
$
48,387
$
40,651
Accrue
r
d and other current liabilities
67,449
67,388
Total current liabilities
115,836
108,039
Long-term debt
166,000
253,000
Retirement benefit
f s payable
1,114
1,158
Other long-term liabilities
125,298
137,117
Total liabi
a lities
408,248
499,314
Commitments and contingencies (Note 17)
Redeemable noncontrolling interest
19,355
18,464
Equity:
Common shares, $0.01 par value
164
163
Shares authorized – 50,000
Shares issued – 16,466 and 16,378, respectively
Prefer
f red shares, $0.01 par value
—
—
Shares authorized (10,000) and issued (0)
Additional paid-in capital
137,253
123,336
Treasury s
r
hares, at cost (952 and 902 shares, respectively)
(95,643)
(82,734)
Retained earnings
583,075
493,319
Accumulated other comprehensive loss
(9,126)
(8,409)
Total equity
615,723
525,675
Total liabi
a lities and equity
$
1,043,326
$
1,043,453
See accompanying notes to consolidated financial statements.
44

CSW INDUSTRIALS, INC.
CONSOLIDATED STATEMENTS OF OPERAT
R
IONS
Year Ended March 31,
(Amounts in thousands, except per share amounts)
2024
2023
2022
Revenues, net
$
792,840
$
757,904
$
626,435
Cost of revenues
(442,095)
(439,690)
(370,473)
Gross profit
350,745
318,214
255,962
Selling, general and administrative expenses
(191,627)
(179,148)
(158,582)
Operating income
159,118
139,066
97,380
Interest expense, net
(12,723)
(13,197)
(5,449)
Other income (expense), net
(5,915)
42
(466)
Income before income taxes
140,480
125,911
91,465
Provision for income taxes
(37,941)
(29,337)
(24,146)
Net income
102,539
96,574
67,319
Income attributable to redeemable noncontrolling interest
(891)
(139)
(934)
Net income attributable to CSW Industrials, Inc.
$
101,648
$
96,435
$
66,385
Basic earnings per common share:
$
6.54
$
6.22
$
4.21
Diluted earnings per common share:
$
6.52
$
6.20
$
4.20
Weighted average number of shares outstanding:
Basic
15,533
15,509
15,755
Diluted
15,581
15,546
15,807
45

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year Ended March 31,
(Amounts in thousands)
2024
2023
2022
Net income
$
102,539
$
96,574
$
67,319
Other comprehensive income (loss):
Foreign currency translation adju
d stments
(1,947)
(3,752)
(44)
Cash flow hedging activity, net of taxes of $(326), $(41) and $(142),
respectively
1,225
156
533
Pension and other postretirement effects, net of taxes of $(1), $(67)
and $(138), respectively
5
261
433
Other comprehensive income (loss)
(717)
(3,335)
922
Comprehensive income
$
101,822
$
93,239
$
68,241
Less: Comprehensive income attributable to redeemable noncontrolling
i
(891)
(139)
(934)
Comprehensive income attributable to CSW Industrials, Inc.
$
100,930
$
93,100
$
67,307
See accompanying notes to consolidated financial statements.
46

CSW INDUSTRIALS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(Amounts in thousands)
Common
Stock
Treasury
Shares
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total Equity
Balance at March 31, 2021
$
161
$
(34,075) $
104,690
$
350,669
$
(5,996) $
415,449
Share-based compensation
—
—
8,450
—
—
8,450
Stock activity under stock plans
1
(4,884)
—
—
—
(4,883)
Reissuance of treasury shares
—
6,938
(289)
—
—
6,649
Repurchase of common shares
—
(14,427)
—
—
—
(14,427)
Net income
—
—
—
66,385
—
66,385
Dividends
—
—
73
(9,532)
—
(9,459)
Other comprehensive income,
net of tax
—
—
—
—
922
922
Balance at March 31, 2022
$
162
$
(46,448) $
112,924
$
407,522
$
(5,074) $
469,086
Share-based compensation
—
—
9,752
—
—
9,752
Stock activity under stock plans
1
(3,417)
—
—
—
(3,416)
Reissuance of treasury shares
—
2,786
578
—
—
3,364
Repurchase of common shares
—
(35,655)
—
—
—
(35,655)
Net income
—
—
—
96,435
—
96,435
Dividends
—
—
82
(10,638)
—
(10,556)
Other comprehensive income,
net of tax
—
—
—
—
(3,335)
(3,335)
Balance at March 31, 2023
$
163
$
(82,734) $
123,336
$
493,319
$
(8,409) $
525,675
Share-based compensation
—
—
11,537
—
—
11,537
Stock activity under stock plans
1
(4,966)
—
—
—
(4,965)
Reissuance of treasury shares
—
2,526
2,293
—
—
4,819
Repurchase of common shares
—
(10,469)
—
—
—
(10,469)
Net income
—
—
—
101,648
—
101,648
Dividends
—
—
87
(11,892)
—
(11,805)
Other comprehensive income,
net of tax
—
—
—
—
(717)
(717)
Balance at March 31, 2024
$
164
$
(95,643) $
137,253
$
583,075
$
(9,126) $
615,723
See accompanying notes to consolidated financial statements.
47

CSW INDUSTRIALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended March 31,
(Amounts in thousands)
2024
2023
2022
Cash flows fro
f
m operating activities:
Net income
$
102,539
$
96,574
$
67,319
Adju
d stments to reconcile net income to net cash provided by operating activities:
Depreciation
13,961
12,838
11,572
Amortization of intangible and other assets
23,688
22,716
25,314
Provision for inventory r
r
eserves
4,229
1,522
1,553
Provision for credit losses
814
2,013
1,498
Share-based and other executive compensation
11,537
9,751
8,450
Net gain on disposals of property, plant and equipment
(2,677)
104
(85)
Net pension benefit
67
150
31
Impairment of assets
1,600
156
—
Net defer
f red taxes
(2,497)
(6,011)
(3,261)
Changes in operating assets and liabi
a lities:
Accounts receivabl
a e
(17,897)
1,105
(26,729)
Inventories
10,364
(11,422)
(49,403)
Prepaid expenses and other current assets
4,608
(1,282)
3,479
Other assets
1,146
458
626
Accounts payable and other current liabilities
12,293
(7,000)
27,983
Retirement benefits
f
payabl
a e and other liabi
a lities
557
(219)
742
Net cash provided by operating activities
164,332
121,453
69,089
Cash flows fro
f
m investing activities:
Capi
a tal expenditures
(16,575)
(13,951)
(15,653)
Proceeds fro
f
m sale of assets held for investment
1,665
—
—
Proceeds fro
f
m sale of assets
2,185
120
139
Cash paid for acquisitions
(32,729)
(58,335)
(35,942)
Net cash used in investing activities
(45,454)
(72,166)
(51,456)
Cash flows fro
f
m fin
f ancing activities:
Borrowings on lines of credit
112,319
143,177
94,000
Repayments of lines of credit
(199,319)
(142,952)
(83,561)
Payments of deferred loan costs
—
(710)
(2,328)
Purchase of treasury
r shares
(15,268)
(39,072)
(19,311)
Proceeds fro
f
m stock option activity
—
272
1,327
Proceeds fro
f
m acquisition of redeemable noncontrolling interest shareholder
—
3,000
6,293
Dividends paid to shareholders
(11,805)
(10,555)
(9,459)
Net cash used in fin
f ancing activities
(114,073)
(46,840)
(13,039)
Effe
f ct of exchange rate changes on cash and equivalents
(1,104)
(611)
1,937
Net change in cash and cash equivalents
3,701
1,836
6,531
Cash and cash equivalents, beginning of period
18,455
16,619
10,088
Cash and cash equivalents, end of period
$
22,156
$
18,455
$
16,619
Suppl
u
emental non-cash disclosure:
Cash paid during the year for interest
$
12,254
$
12,502
$
4,955
Cash paid during the year for income taxes
39,295
41,476
20,485
See accompanying notes to consolidated financial statements.
48

1. ORGANIZATION AND OPERAT
R
IONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CSWI is a diversified industrial growth company with a strategic focus on providing niche, value-added products in the end
markets we serve.
We operate in three business segments: Contractor Solutions, Specialized Reliabi
a lity Solutions and
Engineered Building Solutions.
Our products include mechanical products for heating, ventilation, air conditioning and
refrigeration ("HVAC/R"), plumbing products, grilles, registers and diffusers ("GRD"), building safet
f y solutions and high-
performance specialty lubr
u
icants and sealants. End markets that we serve include HVAC/R, architectur
t
ally-specified building
products, general industrial, plumbing, energy, rail transportation and mining.
Drawing on our innovative and proven
technologies, we seek to deliver solutions to our profes
f
sional customers that require supe
u
rior performance and reliabi
a lity. The
reputation of our product portfol
f io is built on more than 100 well-respected brand names, such as AC Guard®, Air Sentry®
r
,
Balco®, Cover GuardTM, Deacon®, Dust Free®, Falcon Stainless®, Greco®, Jet-Lube
u
®, Kopr-Kote®, Leak Freeze®,
Metacaulk®, No. 5®, OilSafe®
f
, RectorSeal®, Safe-T-Switch®, Shoemaker Manufact
f
ur
t
ing®, Smoke Guard®, TRUaire® and
Whitmore®.
Basis o
i
f P
o
resentation – The consolidated financial position, results of operations and cash flo
f ws included in this Annual
Report on Form 10-K for
f
the fis
f cal year ended March 31, 2024 (“Annual Report”) include all revenues, costs, assets and
liabi
a lities directly attributable to CSWI and have been prepared in accordance with United States (“U.S.”) generally accepted
accounting principles (“GAAP”). The consolidated financial statements are for us and our consolidated subs
u
idiaries, each of
which is a wholly-owned subs
u
idiary, except our 50% investment in a variabl
a e interest entity for which we have determined that
we are the primary beneficiary a
r
nd therefor
f
e have consolidated into our financial statements. All significant intercompany
transactions have been eliminated in consolidation.
Variable Int
I erest Ent
E ities - We evaluate whether an entity is a variabl
a e interest entity (“VIE”) and determine if the primary
beneficiary s
r
tatus is appr
a
opriate on a quarterly basis. We consolidate a VIE for which we are the primary beneficiary.
r
When
assessing the determination of the primary beneficiary,
r
we consider all relevant fact
f
s and circumstances, including: the power to
direct the activities of the VIE that most significantly impact the VIE’s economic performance, the obligation to abs
a
orb t
r
he
expected losses and/or the right to receive the expected returns of the VIE. Through this evaluation, we determined that the
Whitmore JV is a VIE and the Company is the primary b
r
enefic
f iary of this VIE, primarily due to Whitmore having the power to
direct the manufac
f
turing activities, which are considered the most significant activities for
f
the Whitmore JV.
Use of E
o
st
E imates – The process of preparing financial statements in confor
f
mity with U.S. GAAP requires us to make
estimates and assumptions that affe
f ct reported amounts of certain assets, liabi
a lities, revenues and expenses. We believe our
estimates and assumptions are reasonabl
a e; however, actua
t
l results may diffe
f r materially from such estimates.
The most
significant estimates and assumptions are used in determining:
•
Timing and amount of revenue recognition;
•
Defer
f red taxes and tax reserves; and
•
Valuation of goodwill and indefinite-lived intangible assets.
Cash and Cash Equivalents –
t
We consider all highly liquid instrum
r
ents purchased with original maturities of three months
or less and money market accounts to be cash equivalents. We maintain our cash and cash equivalents at fin
f ancial institutions
for which the combined account balances in individual institut
t ions may exceed insurance coverage and, as a result, there is a
concentration of credit risk related to amounts on deposit in excess of insurance coverage. We had deposits in domestic banks
of $12.6 million and $10.1 million at March 31, 2024 and 2023, respectively, and balances of $9.5 million and $8.4 million
were held in foreign banks at March 31, 2024 and 2023, respectively.
Accounts R
t
eceivable, Allowance for
f
Credit Losses and Credit Risk
i
– Trade accounts receivabl
a es are recorded at the
invoiced amounts and do not bear interest. We record an allowance for
f
credit losses on trade receivabl
a es that, when deduc
d
ted
from the gross trade receivabl
a es balance, presents the net amount expected to be collected. We estimate the allowance based on
an aging schedul
d e and according to historical losses as determined from our billings and collections history.
r
This may be
adju
d sted afte
f r consideration of customer-specific fact
f
ors such as fin
f ancial difficulties, liquidity issues or insolvency, as well as
both current and for
f
ecasted macroeconomic conditions as of the reporting date. We adju
d st the allowance and recognize credit
losses in the income statement each period. Trade receivables are written off against the allowance in the period when the
receivabl
a e is deemed to be uncollectible. Subsequent recoveries of amounts previously written off are refle
f cted as a reduc
d
tion
to periodic credit losses in the income statement. Our allowance for expected credit losses for
f
trade receivabl
a es as of March 31,
2024 was $0.9 million, compared to $1.4 million as of March 31, 2023.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
49

Credit risks are mitigated by the diversity of our customer base across many diffe
f rent industries and by performing
creditworthiness analyses on our customers.
Additionally, we mitigate credit risk through letters of credit and advance
payments received fro
f
m our customers. We do not believe that we have any significant concentrations of credit risk.
Inventories and Related Reserves – Inventories are stated at the lower of cost or net realizable value and include raw
materials, suppl
u
ies, direct labor
a
and manufact
f
ur
t
ing overhead.
Inventories are accounted for using a standard costing
methodology, which appr
a
oximates cost on a first-in, fir
f st-out (“FIFO”) basis.
Reserves are provided for
f
slow-moving or excess and obsolete inventory b
r
ased on the diffe
f rence between the cost of the
inventory a
r
nd its net realizable value and by reviewing quantities on hand in comparison with historical and expected future
usage. In estimating the reserve for
f
excess or slow-moving inventory,
r
management considers fact
f
ors such as product aging,
current and fut
f ur
t
e customer demand and market conditions.
Property,
t
Plant and Equipm
i
ent – Property, plant and equipment are stated at cost and depreciated using the straight-line
method over the estimated useful lives of the individual assets. When property, plant and equipment are retired or otherwise
disposed of, t
f
he related cost and accumulated depreciation are removed fro
f
m the accounts, and the resulting gain or loss is
included in income fro
f
m operations for the period. Generally, the estimated useful lives of assets are:
Land improvements
5
to
40 years
Buildings and improvements
7
to
40 years
Plant, offi
f ce and lab equipment
5
to
10 years
We review property, plant and equipment for
f
impairment whenever events or changes in circumstances indicate the
carrying amount of an asset may not be recoverabl
a e.
Repairs and maintenance costs are expensed as incurred, and significant improvements that either extend the useful life o
f
r
increase the capacity or efficiency of property and equipment are capitalized and depreciated.
Valuation of G
o
oodwill and Intangible Assets –
t
The value of goodwill is tested for
f
impairment at least annually as of
January 31 or whenever events or circumstances indicate such assets may be impaired. The identific
f ation of our reporting units
began at the operating segment level and considered whether components one level below the operating segment levels should
be identifie
f d as reporting units for purpos
r
e of testing goodwill for
f
impairment based on certain conditions. These conditions
included, among other fac
f
tors, (i) the extent to which a component represents a business and (ii) the aggregation of
economically similar components within the operating segments. Other factors that were considered in determining whether the
aggregation of components was appropriate included the similarity of the natur
t
e of the products and services, the nature of the
production processes, the methods of distribution and the types of industries served.
Accounting Standards Codification ("ASC") 350 allows an optional qualitative assessment, prior to a quantitative
assessment test, to determine whether it is more likely than not that the fai
f r value of a reporting unit exceeds its carrying
amount. We bypassed the qualitative assessment and proceeded directly to the quantitative test. If the carrying value of a
reporting unit exceeds it fair value, the goodwill of that reporting unit is impaired and an impairment loss is recorded equal to
the excess of the carrying value over its fair value. We estimate the fair value of our reporting units based on an income
approach, whereby we calculate the fai
f r value of a reporting unit base on the present value of estimated fut
f ur
t
e cash flo
f ws. A
discounted cash flo
f w analysis requires us to make various judgmental assumptions about future sales, operating margins,
growth rates and discount rates, which are based on our budgets, business plans, economic projections, anticipated future cash
flows and market participants and are considered non-recurring Level III inputs within the fai
f r value hierarchy. No goodwill
impairment loss was recognized as a result of the impairment tests for the years ended March 31, 2024, 2023 or 2022.
We have intangible assets consisting of patents, trademarks, customer lists and non-compete agreements. Defin
f ite-lived
intangible assets are assessed for
f
impairment whenever events or changes in circumstances indicate the carrying amount may
not be recoverabl
a e. In addition, we have other trademarks that are considered to have indefinite lives. We test indefinite-lived
intangible assets for impairment at least annually as of January 31 or whenever events or circumstances indicate that the
carrying amount may not be recoverabl
a e. Significant assumptions used in the impairment test include the discount rate, royalty
rate, fut
f ur
t
e sales projections and terminal value growth rate. These inputs are considered non-recurring Level III inputs within
the fai
f r value hierarchy. An impairment loss would be recognized when estimated fut
f ur
t
e cash flo
f ws are less than their carrying
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
50

amount. We recorded a $1.5 million impairment of a trademark for
f
the year ended March 31, 2024, and no impairment for
f
the
fiscal years ended March 31, 2023 and 2022.
Property H
t
el
H d f
l
or
f
Investme
t
nt – One of our operating subs
u
idiaries holds and manages a non-operating property, which is
valued at lower of cost or market and will be disposed of as opportunities arise to maximize value.
Defe
e rred Loan Costst – Defer
f red loan costs related to our credit facility, which are reported in other assets and consist of
fees and other expenses associated with debt financing, are amortized over the term of the associated debt using the effe
f ctive
interest method.
Fair Values of Financial Ins
I
truments – Our financial instrum
r
ents are presented at fair value in our consolidated balance
sheets, with the exception of our long-term debt, as discussed in Note 8. Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liabi
a lity in an orderly transaction between market participants at the measurement
date. Where availabl
a e, fair value is based on observabl
a e market prices or parameters or derived fro
f
m such prices or parameters.
Where observabl
a e prices or inputs are not availabl
a e, valuation models may be appl
a
ied.
Assets and liabi
a lities recorded at fair value in our consolidated balance sheets are categorized based upon
u
the level of
judgment associated with the inputs used to measure their fai
f r values. Hierarchical levels, as defin
f ed by Accounting Standards
Codification (“ASC”) 820, “Fair Value Measurements and Disclosures,” are directly related to the amount of subj
u ectivity
associated with the inputs to fai
f r valuation of these assets and liabi
a lities. An asset or a liabi
a lity’s categorization within the fair
value hierarchy is based on the lowest level of significant input to its valuation. Hierarchical levels are as fol
f lows:
Level I – Inputs are unadjusted, quoted prices in active markets for
f
identical assets or liabi
a lities at the measurement date.
Level II – Inputs (other than quoted prices included in Level I) are either directly or indirectly observabl
a e for
f
the asset or
liabi
a lity through correlation with market data at the measurement date and for
f
the dur
d
ation of the instrument’s
anticipated life.
Level III – Inputs refle
f ct management’s best estimate of what market participants would use in pricing the asset or liabi
a lity
at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in
the inputs to the model.
Recurring fair value measurements include redeemable noncontrolling interest, investments in derivative instrum
r
ents and
contingent consideration liabi
a lity.
The redemption value of the redeemable noncontrolling interest is estimated using a
discounted cash flo
f w analysis, which requires management judgment with respect to future revenue, operating margins, growth
rates and discount rates and is classified as Level III under the fair value hierarchy.
The fai
f r value measurements of our
derivative instrum
r
ents are determined using models that maximize the use of the observabl
a e market inputs including interest
rate curves, and are classified as Level II under the fair value hierarchy. The fai
f r value of the contingent consideration liabi
a lity
is determined using either a scenario-based analysis on for
f
ecasted fut
f ur
t
e results or an option pricing model simulation that
determines an average proje
o cted payment value across numerous iterations. The contingent consideration liabi
a lity is initially
recorded at fair value on the acquisition date and is remeasured quarterly based on the then assessed fai
f r value, with any change
in the fai
f r value recorded in Other income (expense), net in the Consolidated Statements of Operations. The change in the fai
f r
value of the contingent consideration can result from changes in fut
f ur
t
e operations, for
f
ecasted revenue and in assumed discount
rates. The fai
f r value measurement is based on significant inputs that are not observabl
a e in the market and is classified as Level
III under the fair value hierarchy. As of March 31, 2024 and 2023, the contingent consideration liabi
a lity reported in the balance
sheets was $7.2 million and $0.6 million, respectively.
The redemption value of the redeemable noncontrolling interest is included in Note 3. The fair values of our derivative
instruments are included in Note 10. The fai
f r value of our contingent consideration is included in Note 13.
Leases – We determine if a contract is or contains a lease at inception by evaluating whether the contract conveys the right
to control the use of an identifie
f d asset.
Right-of-Use (“ROU”) assets and lease liabi
a lities are initially recognized at the
commencement date based on the present value of remaining lease payments over the lease term calculated using our
incremental borrowing rate, unless the implicit rate is readily determinable. ROU assets represent the right to use an underlying
asset for
f
the lease term, including any upf
u
ro
f
nt lease payments made and excluding lease incentives. Lease liabi
a lities represent
the obligation to make fut
f ur
t
e lease payments throughout the lease term. As most of our operating leases do not provide an
implicit rate, we appl
a
y our incremental borrowing rate to determine the present value of remaining lease payments.
Our
incremental borrowing rate is determined based on infor
f
mation availabl
a e at the commencement date of the lease. The lease term
includes renewal periods when we are reasonabl
a y certain to exercise the option to renew. The ROU asset is amortized over the
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
51

expected lease term. Lease and non-lease components, when present on our leases, are accounted for separately. Leases with
an initial term of 12 months or less are excluded fro
f
m recognition in the balance sheet, and the expense for
f
these short-term
leases and for
f
operating leases is recognized on a straight-line basis over the lease term. We have certain lease contracts with
terms and conditions that provide for variabi
a lity in the payment amount based on changes in fact
f
s or circumstances occurring
afte
f r the commencement date. These variabl
a e lease payments are recognized in our consolidated income statements as the
obligation is incurred. As of March 31, 2024, we did not have material leases that imposed significant restrictions or covenants,
material related party leases or sale-leaseback arrangements.
Derivative Ins
I
truments and Hedge Accounting – We do not use derivative instrum
r
ents for trading or speculative purpos
r
es.
We enter into interest rate swap a
a
greements for the purpos
r
e of hedging our cash flo
f w exposure to flo
f ating interest rates on
certain portions of our debt. All derivative instrum
r
ents are recognized on the balance sheet at their fai
f r values. Changes in the
fair value of a designated interest rate swap a
a
re recorded in other comprehensive loss until earnings are affected by the
underlying hedged item. Any ineffective portion of the gain or loss is immediately recognized in earnings. Upon settlement,
realized gains and losses are recognized in interest expense in the consolidated statements of operations.
We discontinue hedge accounting when (1) we deem the hedge to be ineffe
f ctive and determine that the designation of the
derivative as a hedging instrument is no longer appr
a
opriate; (2) the derivative matur
t
es, terminates or is sold; or (3) occurrence
of the contracted or committed transaction is no longer probabl
a e or will not occur in the originally expected period. When
hedge accounting is discontinued and the derivative remains outstanding, we carry the derivative at its estimated fai
f r value on
the balance sheet, recognizing changes in the fair value in current period earnings. If a cash flo
f w hedge becomes ineffect
f
ive,
any defer
f red gains or losses remain in accumulated other comprehensive loss until the underlying hedged item is recognized. If
it becomes probabl
a e that a hedged forecasted transaction will not occur, deferred gains or losses on the hedging instrument are
recognized in earnings immediately.
We are exposed to risk from credit-related losses resulting fro
f
m nonperformance by counterpa
r
rties to our financial
instruments. We perform credit evaluations of our counterpa
r
rties under interest rate swap a
a
greements and expect all
counterpa
r
rties to meet their obligations.
If necessary, we adjust the values of our derivative contracts for
f
our or our
counterpa
r
rties’ credit risk.
Pension Obligations – Determination of pension benefit obligations is based on estimates made by management in
consultation with independent actua
t
ries. Inherent in these valuations are assumptions including discount rates, expected rates
of return on plan assets, retirement rates, mortality rates and rates of compensation increase and other fact
f
ors, all of which are
reviewed annually and upda
u
ted if necessary. Current market conditions, including changes in rates of return, interest rates and
medical inflation rates, are considered in selecting these assumptions. Actua
t
rial gains and losses and prior service costs are
recognized in accumulated other comprehensive loss as they arise, and we amortize these costs into net pension expense over
the remaining expected service period. We used a measurement date of March 31 for all periods presented.
Redeemable Nonc
N
ontro
t
lling Int
I erests - Noncontrolling interests with redemption featur
t
es that are not solely within our
control are considered redeemable noncontrolling interests.
Our redeemable noncontrolling interest relates to Shell's 50%
equity interest in the Whitmore JV and is classified in temporary e
r
quity that is reported between liabi
a lities and shareholders'
equity on our Consolidated Balance Sheets initially at its formation-date fair value. We adju
d st the redeemable noncontrolling
interest each reporting period for the net income or loss attributable to the noncontrolling interest.
We also make a
measurement period adjustment, if any, to adju
d st the redeemabl
a e noncontrolling interest to the higher of the redemption value or
carrying value each reporting period. These adjustments are recognized through retained earnings and are not reflected in net
income or net income attributable to CSWI. The redemption value of the redeemable noncontrolling interest is estimated using
a discounted cash flow analysis, which requires management judgment with respect to future revenue, operating margins,
growth rates and discount rates. Net income or loss attributable to the redeemable noncontrolling interests are presented as a
separate line on the consolidated statements of operations which is necessary to identify t
f
he income or loss specifically
attributable to CSWI.
The financial results and position of the redeemable noncontrolling interest acquired through the
formation of the Whitmore JV are included in their entirety in our consolidated statements of operations and consolidated
balance sheets beginning with the fir
f st quarter of fiscal 2022.
When calculating earnings per share attributable to CSWI, we adjust net income attributable to CSWI for the excess
portion of the measurement period adjustment to the extent the redemption value exceeds both the carrying value and the fair
value of the redeemable noncontrolling interest on a cumulative basis. Refer
f
to Note 3 for
f
further infor
f
mation regarding the
redeemable noncontrolling interest.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
52

Revenue Recognition – We recognize revenues to depict the transfer
f
of control of promised goods or services to our
customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services.
Refer to Note 19 for
f
further discussion. We recognize revenue when all of the following criteria have been met: (i) a contract
with a customer exists, (ii) performance obligations have been identifie
f d, (iii) the price to the customer has been determined,
(iv) the price to the customer has been allocated to the performance obligations, and (v) performance obligations are satisfied,
which are more fully described below.
(i) We identify a
f
contract with a customer when a sales agreement indicates approval and commitment of the parties;
identifie
f s the rights of the parties; identifie
f s the payment terms; has commercial substance; and it is probable that we
will collect the consideration to which we will be entitled in exchange for the goods or services that will be transfer
f red
to the customer. In most instances, our contract with a customer is the customer's purchase order.
For certain
customers, we may also enter into a sales agreement that outlines a framework of terms and conditions that apply to all
future purchase orders for
f
that customer. In these situations, our contract with the customer is both the sales agreement
and the specific
f
customer purchase order. Because our contract with a customer is typically for a single transaction or
customer purchase order, the duration of the contract is one year or less. As a result, we have elected to apply certain
practical expedients and, as permitted by the Financial Accounting Standards Board ("FASB"), omit certain
disclosures of remaining performance obligations for contracts that have an initial term of one year or less.
(ii) We identify p
f
erformance obligations in a contract for each promised good or service that is separately identifia
f bl
a e fro
f
m
other promises in the contract and for
f
which the customer can benefit fro
f
m the good or service either on its own or
together with other resources that are readily availabl
a e to the customer. Goods and services provided to our customers
that are deemed immaterial are included with other performance obligations.
(iii) We determine the transaction price as the amount of consideration we expect to be entitled to in exchange for ful
f filling
the performance obligations, including the effects of any variable consideration.
(iv) For any contracts that have more than one performance obligation, we allocate the transaction price to each
performance obligation in an amount that depicts the amount of consideration to which we expect to be entitled in
exchange for satisfying each performance obligation. We have excluded disclosure of the transaction price allocated
to remaining performance obligations if the performance obligation is part of a contract that has an original expected
duration of one year or less as the majority of our contracts are short-term in nature with a term of one year or less.
(v) We recognize revenue when, or as, we satisfy t
f
he performance obligation in a contract by transfer
f ring control of a
promised good or service to the customer.
We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both
imposed on and concurrent with a specific revenue-producing transaction and collected from a customer. As such, we present
revenue net of sales and other similar taxes. Shipping and handling costs associated with outbound
t
freight afte
f r control over a
product has transfer
f red to a customer are accounted for as a fulfillme
f
nt cost and are included in cost of revenues. Costs to
obtain a contract, which include sales commissions recorded in selling, general and administrative expense, are generally
expensed when incurred as the amortization period is one year or less.
We do not have customer contracts that include
significant fin
f ancing components.
Research and Development ("R&D") – R&D costs are expensed as incurred. Costs incurred for
f
R&D primarily include
salaries and benefit
f s and consumable suppl
u
ies, as well as rent, professional fees
f
, utilities and the depreciation of property and
equipment used in R&D activities. R&D costs included in selling, general and administrative expense were $5.9 million, $4.8
million and $4.8 million for
f
the years ended March 31, 2024, 2023 and 2022, respectively.
Share-based Compensation – Share-based compensation is measured at the grant-date fai
f r value. The exercise price of
stock option awards and the fai
f r value of restricted share awards are set at the closing price of our common stock on the Nasdaq
Global Select Market on the date of grant, which is the date such grants are authorized by our Board of Directors. The fair
value of performance-based restricted share awards is determined using a Monte Carlo simulation model incorpo
r
rating all
possible outcomes against the Rus
R
sell 2000 Index. The fai
f r value of share-based payment arrangements is amortized on a
straight-line basis to compensation expense over the period in which the restrictions laps
a
e based on the expected number of
shares that will vest.
Share-based compensation expense, net of estimated for
f
feitures, is included in selling, general and
administrative expenses. The forfeiture rate is estimated upon grant and is adju
d sted when actua
t
l for
f
feitures occur. Upon the
vesting of granted shares, the participants may elect to cover tax withholdings by selling back a portion of vested shares to the
Company. In such cases, we repurchase the shares from the participant to satisfy the minimum tax withholding requirements
on their behalf and report such share repurchase as a financing cash outflow in the consolidated statement of cash flo
f ws. To
cover the exercise of options and vesting of restricted shares, we generally issue new shares from our authorized but unissued
share pool, although we may instead issue treasury s
r
hares in certain circumstances.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
53

Income Taxe
a
s, Defe
e rred Tax
T
es and Tax V
a
al
V uation Allowances – We appl
a
y the liabi
a lity method in accounting and reporting
for income taxes. Under the liability approach, defer
f red tax assets and liabi
a lities are determined based upon
u
the diffe
f rence
between the fin
f ancial statement carrying amounts and the tax basis of assets and liabi
a lities that will result in taxabl
a e or
deductible amounts in the future based on enacted tax rates expected to be in effe
f ct when these diffe
f rences are expected to
reverse. The effect on deferred tax assets and liabi
a lities resulting fro
f
m a change in tax rates is recognized in the period that
includes the enactment date. The deferred income tax assets are adjusted by a valuation allowance, if necessary, to recognize
future tax benefit
f s only to the extent, based on availabl
a e evidence, that it is more likely than not to be realized. This analysis is
performed on a jurisdictional basis and refle
f cts our ability to utilize these deferred tax assets through a review of past, current
and estimated future taxabl
a e income in addition to the establ
a ishment of viabl
a e tax strategies that will result in the utilization of
the defer
f red assets.
We recognize income tax related interest and penalties, if any, as a component of income tax expense.
Unremitted Earnings – During the fiscal quarter ended March 31, 2023, we lifte
f d our assertion that the earnings of Greco
Canada are indefinitely invested outside of the U.S. As of fis
f cal year ended March 31, 2024, we assert that all of our foreign
earnings of the U.K., Australian, Vietnam and Canadian subsidiaries will be remitted to the U.S. through distributions. A
provision was made for
f
taxes that may become payabl
a e upon
u
distribution of earnings from our foreign subsidiaries. Defer
f red
income tax has not been recognized on any remaining basis diffe
f rence that is permanently invested outside the United States.
Uncertain Tax P
a
ositions – We establ
a ish income tax liabilities to remove some or all of the income tax benefit
f
of any of our
income tax positions based upon
u
one of the fol
f lowing: (1) the tax position is not “more likely than not” to be sustained, (2) the
tax position is “more likely than not” to be sustained, but for a lesser amount or (3) the tax position is “more likely than not” to
be sustained, but not in the fin
f ancial period in which the tax position was originally taken. The amount of income taxes we pay
is subj
u ect to ongoing audits by federal, state, and for
f
eign taxing authorities, which often result in proposed assessments. We
establ
a ish reserves for
f
open tax years for
f
uncertain tax positions that may be subject to challenge by various taxing authorities.
The consolidated tax provision and related accrua
r
ls include the impact of such reasonabl
a y estimabl
a e losses and related interest
and penalties as deemed appropriate.
We recognize the tax benefit fro
f
m an uncertain tax position only if it is more likely than not that the tax position will be
sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and
presumes that each uncertain tax position will be examined by the relevant taxing authority that has ful
f l knowledge of all
relevant information. The tax benefits recognized in the fin
f ancial statements from such a position are measured based on the
largest benefit
f
that has a greater than 50% likelihood of being realized upon ultimate settlement.
Earnings Per Shar
S
e – We use the two-class method of calculating earnings per share, which determines earnings per share
for each class of common stock and participating security as if all earnings of the period had been distributed. If the holders of
restricted stock awards are entitled to vote and receive dividends during the restriction period, unvested shares of restricted
stock qualify a
f
s participating securities and, accordingly, are included in the basic computation of earnings per share. Our
unvested restricted shares participate on an equal basis with common shares; therefor
f
e, there is no diffe
f rence in undistributed
earnings allocated to each participating security. Accordingly, the presentation in Note 11 is prepared on a combined basis and
is presented as earnings per common share. Diluted earnings per share is based on the weighted average number of shares as
determined for basic earnings per share plus shares potentially issuable in connection with stock options and restricted stock
awards not entitled to vote and receive dividends during the restriction period.
Foreign C
g
ur
C
rency T
c
ra
T
nslation – Assets and liabi
a lities of our foreign subsidiaries are translated to U.S. dollars at exchange
rates prevailing at the balance sheet date, while income and expenses are translated at average rates for
f
each month. Translation
gains and losses are reported as a component of accumulated other comprehensive loss.
Transactional currency gains and
losses arising from transactions in currencies other than our sites’ functional currencies are included in our consolidated
statements of operations.
Transaction and translation gains and losses arising from intercompany balances are reported as a component of
accumulated other comprehensive loss when the underlying transaction stems from a long-term equity investment or from debt
designated as not due in the for
f
eseeable future.
Otherwise, we recognize transaction gains and losses arising from
intercompany transactions as a component of income.
Segm
e
ents - We conduct our operations through three business segments based on how we manage the business. Our Chief
Executive Officer views our business, assesses performance and allocates resources using fin
f ancial information generated and
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
54

reported at the reportabl
a e segment level. We evaluate segment performance and allocate resources based on each reportabl
a e
segment's operating income. Our reportabl
a e segments are as follows:
1. Contra
t
ctor Solutions, which manufac
f
tures efficiency and performance enhancing products predominantly for
f
residential and commercial HVAC/R and plumbing appl
a
ications, which are designed primarily for the professional
trades. This segment is comprised primarily of our RectorSeal and Shoemaker operating companies.
2. Specialized Reliability Solutions, which provides products for increasing the reliability, performance and lifes
f
pan
of industrial assets and solving equipment maintenance challenges. This segment is comprised primarily of our
Whitmore operating company and the Whitmore JV.
3. Engineered Buildi
l ng Solutions, which provides primarily code-driven products focused on life s
f
afet
f y that are
engineered to provide aesthetically-pleasing solutions for the construc
r
tion, refurbishment and modernization of
commercial, institut
t ional, and multi-family residential buildings. This segment is comprised of our Balco, Greco
and Smoke Guard operating companies.
Intersegment sales and transfer
f s are recorded at cost plus a profit margin, with the revenues and related margin on such
sales eliminated in consolidation. We do not allocate share-based compensation expense, interest expense or interest income to
our segments.
Our corporate headquarters does not constitute a separate segment.
The Eliminations and Other segment
information is included to reconcile segment data to the consolidated financial statements and includes assets and expenses
primarily related to corpor
r
ate fun
f
ctions and excess non-operating properties.
Accounting Developments
Pronouncements not yet impl
m emented
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportabl
a e
Segment Disclosures, which provides upda
u
tes to qualitative and quantitative reportabl
a e segment disclosure requirements,
including enhanced disclosures about
a
significant segment expenses and increased interim disclosure requirements, among
others. ASU 2023-07 is effe
f ctive for
f
fiscal years beginning afte
f r December 15, 2023, and interim periods within fiscal years
beginning afte
f r December 15, 2024. Early adoption is permitted, and the amendments should be appl
a
ied retrospectively. This
ASU will be effe
f ctive for
f
our Form 10-K for
f
fiscal 2025 and our Form 10-Q for
f
the fir
f st quarter of fiscal 2026. We are
currently evaluating the impact this ASU may have on our financial statement disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures,
which provides qualitative and quantitative upda
u
tes to the rate reconciliation and income taxes paid disclosures, among others,
in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of
information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. ASU 2023-09 is effe
f ctive for
f
fiscal years beginning afte
f r December 15, 2024, with early adoption permitted. This ASU should be appl
a
ied prospectively;
however, retrospective application is also permitted. This ASU will be effe
f ctive for
f
our Form 10-K for
f
fiscal 2026. We are
currently evaluating the impact this ASU may have on our financial statement disclosures.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
55

2. ACQUISITIONS
Dust Free, LP
On Februa
r
ry 6, 2024, we acquired 100% of the outstanding equity of Dust Free, LP ("Dust Free"), based in Royse City,
Texas, for an aggregate purchase price of $34.7 million (including $0.6 million cash acquired), comprised of cash consideration
of $27.9 million and contingent considerations initially measured at $6.8 million based on Dust Free meeting defin
f ed
operational and financial targets over a period of 6 years.
The cash consideration was funded with cash on hand and
borrowings under our existing Revolving Credit Facility (as defined in Note 8). The Dust Free products offe
f r residential and
commercial indoor air quality and HVAC/R applications and supplement our Contractor Solutions segment's existing product
portfol
f io. As of the acquisition date, the estimated fair value of the contingent consideration was classified as a long-term
liabi
a lity of $6.8 million, of which $2.1 million was determined using an option pricing model simulation that determines an
average proje
o cted payment value across numerous iterations and $4.7 million was determined using a scenario-based analysis
on forecasted fut
f ur
t
e results.
During the year ended March 31, 2024, we incurred $0.7 million in transaction expenses in
connection with the Dust Free acquisition, which were included in selling, general and administrative expenses in the
Consolidated Statement of Operations under the Contractor Solution segment.
The Dust Free acquisition was accounted for as a business combination under FASB Accounting Standards Codification
Topic 805, Business Combinations ("Topic 805"). The excess of the purchase price over the preliminary f
r
ai
f r value of the
identifia
f bl
a e assets acquired was $4.0 million allocated to goodwill, which represents the value expected to be obtained fro
f
m
owning products that are complementary to our existing plumbing offe
f rings and provide a meaningful
f
value proposition to our
customers. The preliminary a
r
llocation of the fair value of the net assets acquired comprises customer lists ($20.1 million),
trademark ($1.6 million), accounts receivabl
a e ($2.9 million), cash ($0.6 million), inventory (
r
$3.9 million), other current asset
($0.4 million) and equipment ($3.6 million), net of current liabi
a lities (2.3 million). Customer lists are being amortized over 15
years and the defin
f ite-life trademark ($0.6 million) is being amortized over 2 years while the indefinite-life t
f
rademark
($1.0 million) and goodwill are not being amortized. The Company's evaluation of the facts and circumstances availabl
a e as of
Februa
r
ry 6, 2024, to assign fair values to assets acquired is ongoing. We expect to finalize the purchase price allocation as soon
as practicable, but no later than one year from the acquisition date.
Goodwill and all intangible assets are deduc
d
tible and
amortized over 15 years for
f
income tax purpos
r
es. Dust Free activity has been included in our Contractor Solutions segment
since the acquisition date. No pro for
f
ma information has been provided due
d
to immateriality.
Falcon Stainless, Inc.
On October 4, 2022, we acquired 100% of the outstanding equity of Falcon Stainless, Inc ("Falcon"), based in Temecula,
Califor
f
nia, for an aggregate purchase price of $37.1 million (including $1.0 million cash acquired), comprised of cash
consideration of $34.6 million and an additional payment of $2.5 million due
d
one year from the acquisition date assuming
certain business conditions are met, which they were. The cash consideration was funded with cash on hand and borrowings
under our existing Revolving Credit Facility (as defin
f ed in Note 8). Falcon's products are well known among the professional
trades for supplying enhanced water flo
f w delivery a
r
nd suppl
u
ement our Contractor Solutions segment's existing product
portfol
f io.
The Falcon acquisition was accounted for as a business combination under FASB Accounting Standards Codification
Topic 805, Business Combinations ("Topic 805"). The excess of the purchase price over the fair value of the identifiable assets
acquired was $17.5 million allocated to goodwill, which represents the value expected to be obtained fro
f
m owning products that
are complementary to our existing plumbing offer
f ings and provide a meaningful
f
value proposition to our customers.
The
allocation of the fair value of the net assets acquired comprises customer lists ($17.7 million), trademark ($4.7 million),
accounts receivabl
a e ($1.4 million), cash ($1.0 million), inventory (
r
$0.7 million), other current asset ($0.1 million) and other
assets ($3.0 million), net of current liabi
a lities (0.7 million) and other liabi
a lities ($8.4 million).
Customer lists are being
amortized over 15 years, while the trademark and goodwill are not being amortized. The Company completed the analysis of
the assets acquired, liabi
a lities assumed and the related allocation dur
d
ing the three months ended December 31, 2023. Goodwill
and all intangible assets are not deductible for income tax purpos
r
es.
Falcon activity has been included in our Contractor
Solutions segment since the acquisition date.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
56

Cover Guard, Inc. and AC Guard, Inc.
On July 8, 2022, we acquired the assets of Cover Guard, Inc. (“CG”) and AC Guard, Inc. ("ACG"), based in Orlando,
Florida, for an aggregate purchase price of $18.4 million, comprised of cash consideration of $18.0 million and additional
contingent consideration initially measured at $0.4 million based on CG and ACG meeting defin
f ed financial targets over a
period of 5 years.
In conjunction with the acquisition, we agreed to pay an additional $3.7 million, comprised of cash
consideration of $1.5 million and 5-year annuity payments (value of $2.2 million) to a third party to secure the related
intellectua
t
l property. The total cash consideration at closing of $19.5 million was funded with cash on hand and borrowings
under our existing Revolving Credit Facility (as defin
f ed in Note 8). CG and ACG product lines further expand Contractor
Solutions’ offering of leading HVAC/R accessories, including lineset covers and HVAC/R condenser protection cages.
Through these diffe
f rentiated products, our Contractor Solutions segment expects to achieve incremental duc
d
tless and duc
d
ted
HVAC/R market penetration. As of the acquisition date, the estimated fai
f r value of the contingent consideration was classified
as a long-term liability of $0.4 million and was determined using an option pricing model simulation that determines an average
projected payment value across numerous iterations.
The CG and ACG acquisition was accounted for as a business combination under Topic 805. The excess of the purchase
price over fai
f r value of the identifia
f bl
a e assets acquired was $1.8 million allocated to goodwill, which represents the value
expected to be obtained fro
f
m owning products that are complementary to our existing HVAC/R and plumbing offer
f ings and
provide a meaningful
f
value proposition to our customers. The allocation of the fair value of the net assets acquired included
customer lists ($9.8 million), patent ($1.8 million), trademarks ($0.7 million), inventory (
r
$3.1 million), accounts receivabl
a e
($0.9 million) and equipment ($0.3 million).
Customer lists and patents are being amortized over 15 years and 10 years,
respectively, while trademarks and goodwill are not being amortized.
The Company completed the analysis of the assets
acquired, liabi
a lities assumed and the related allocation dur
d
ing the three months ended September 30, 2023. Goodwill and all
intangible assets are deduc
d
tible and amortized over 15 years for income tax purpos
r
es. CG and ACG activity has been included
in our Contractor Solutions segment since the acquisition date.
The additional $3.7 million we agreed to pay a third party was accounted for as an acquisition of intellectua
t
l property and
is amortized over 15 years.
Shoemaker Manufac
f
turing, LLC
On December 15, 2021, we acquired 100% of outstanding equity of Shoemaker Manufact
f
ur
t
ing, LLC (“Shoemaker”), based
in Cle Elum, Washington, for an aggregate purchase price of $43.6 million, including working capital and closing cash
adju
d stments and expected contingent consideration.
Shoemaker offers high-quality customizable GRD for
f
commercial and
residential markets, and expands CSWI’s HVAC/R produc
d
t offer
f ing and regional exposure in the northwest U.S. The aggregate
purchase price was comprised of cash consideration of $38.6 million (including $1.2 million cash acquired), 25,483 shares of
the Company's common stock valued at $3.0 million at transaction close and additional contingent consideration of up t
u
o
$2.0 million based on Shoemaker meeting a defined fin
f ancial target during the quarter ended March 31, 2022, which was
achieved. The cash consideration was funded with cash on hand and borrowings under our existing Revolving Credit Facility.
The 25,483 shares of common stock delivered to the sellers as consideration were issued from treasury s
r
hares.
As of the
acquisition date, the estimated fair value of the contingent consideration obligation was classified as a current liabi
a lity of
$2.0 million and was determined using a scenario-based analysis on forecasted fut
f ur
t
e results. In May 2022, the ful
f l earn-out
amount of $2.0 million was remitted to the sellers as the performance obligation had been met. During the year ended March
31, 2022, we incurred $0.7 million in transaction expenses in connection with the Shoemaker acquisition, which were included
in selling, general and administrative expenses in the Consolidated Statement of Operations under the Contractor Solution
segment.
The Shoemaker acquisition was accounted for as a business combination under Topic 805. The excess of the purchase
price over the fair value of the identifia
f bl
a e assets acquired was $8.1 million allocated to goodwill, which represents the value
expected to be obtained fro
f
m owning a more extensive GRD product portfol
f io for the HVAC/R market and increased regional
exposure to the northwest U.S.
The allocation of the fai
f r value of the net assets acquired included customer lists
($23.0 million), trademarks ($6.5 million), noncompete agreements ($0.7 million), backlog ($0.3 million), inventory
r
($3.6 million), accounts receivabl
a e ($1.7 million), cash ($1.2 million), equipment ($1.4 million) and prepaid expenses
($0.2 million), net of current liabilities ($3.1 million). Customer lists, noncompete agreements and backlog are being amortized
over 15 years, 5 years and 1 month, respectively, while trademarks and goodwill are not being amortized.
The Company
completed the analysis of tangible assets, intangible assets, liabi
a lities assumed and the related allocation dur
d
ing the three months
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
57

ended December 31, 2022.
Goodwill and all intangible assets are deduc
d
tible and amortized over 15 years for
f
income tax
purpos
r
es. Shoemaker activity has been included in our Contractor Solutions segment since the acquisition date.
3.
CONSOLIDATION OF VARIABLE INTEREST ENTITY AND REDEEMABLE NONCONTROLLING
INTEREST
Whitmore Joi
J nt Venture
On April 1, 2021, Whitmore Manufact
f
ur
t
ing, LLC (“Whitmore”), a wholly-owned subs
u
idiary of CSWI, completed the
formation of a joint venture (the "Whitmore JV") with Pennzoil-Quaker State Company dba SOPUS Products (“Shell”), a
wholly-owned subs
u
idiary of Shell Oil Company that comprises Shell’s U.S. lubricants business.
The for
f
mation was
consummated through a transaction in which Whitmore sold to Shell a 50% interest in a wholly-owned subs
u
idiary (containing
certain existing operating assets) in exchange for consideration of $13.4 million fro
f
m Shell in the for
f
m of cash ($5.3 million)
and intangible assets ($8.1 million).
The Whitmore JV has been consolidated into the operations of the Company and its
activity has been included in our Specialized Reliability Solutions segment since the for
f
mation date.
The Whitmore JV is deemed to be a VIE as the equity investors at risk, as a group, lack the characteristics of a controlling
financial interest. The major factor that led to the conclusion that the Company is the primary beneficiary o
r
f this VIE is that
Whitmore has the power to direct the manufac
f
turing activities, which are considered the most significant activities for
f
the
Whitmore JV. Whitmore JV's total net assets are presented below (in thousands):
March 31,
2024
2023
Cash
$
5,909 $
7,519
Accounts receivabl
a e, net
8,094
7,376
Inventories, net
3,851
2,971
Prepaid expenses and other current assets
138
115
Property, plant and equipment, net
14,241
11,923
Intangible assets, net
5,669
6,478
Other assets
315
137
Total assets
$
38,217 $
36,519
Accounts payable
$
6,004 $
6,274
Accrue
r
d and other current liabi
a lities
1,463
1,417
Other long-term liabilities
206
66
Total liabi
a lities
$
7,673 $
7,757
For the year ended March 31, 2024, 2023 and 2022, the Whitmore JV generated net income of $1.8 million, $0.3 million
and $1.9 million, respectively.
The Whitmore JV's LLC Agreement contains a put option that gives either member the right to sell its 50% equity interest
in the Whitmore JV to the other member at a dollar amount equivalent to 90% of the initiating member's equity interest
determined based on the fair market value of the Whitmore JV's net assets. This put option can be exercised, at either member's
discretion, by providing written notice to the other member dur
d
ing the month of July 2024 and every two years afterwards.
This redeemable noncontrolling interest is recorded at the higher of the redemption value or carrying value each reporting
period. Changes in redeemabl
a e noncontrolling interest for
f
the year ended March 31, 2024 were as follows (in thousands):
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
58

March 31,
2024
2023
Balance at beginning of the year
$
18,464 $
15,325
Net income attributable to redeemable noncontrolling interest
891
139
Contributions from noncontrolling interest
—
3,000
Balance at end of the year
$
19,355 $
18,464
4. GOODWILL AND INTANGIBLE ASSETS
During the three months ended June 30, 2021, we revised our segment struc
r
ture creating three reportabl
a e segments:
Contractor Solutions, Specialized Reliabi
a lity Solutions and Engineered Building Solutions.
As part of our segment
realignment, we changed our reporting units and reallocated existing goodwill to each of the new reportabl
a e segments and
associated reporting units, based on management's estimate of the relative fai
f r value of each reporting unit. The result of this
reallocation of goodwill has been recast, by reportable segment, as of March 31, 2021.
The changes in the carrying amount of goodwill for
f
the years ended March 31, 2024 and 2023 were as follows (in
thousands):
Contractor
Solutions
Specialized
Reliability
Solutions
Engineered
Building
Solutions
Total
Balance at April 1, 2022
$
190,152
$
9,499
$
25,007
$
224,658
Falcon acquisition
17,417
—
—
17,417
CG and ACG acquisitions
1,686
—
—
1,686
Shoemaker acquisition
6
—
—
6
Currency translation
(101)
(221)
(705)
(1,027)
Balance at March 31, 2023
$
209,160
$
9,278
$
24,302
$
242,740
Dust Free acquisition
3,951
—
—
3,951
Falcon acquisition
85
—
—
85
CG and ACG acquisitions
107
—
—
107
Other acquisitions
261
—
—
261
Currency translation
(20)
80
(13)
47
Balance at March 31, 2024
$
213,544
$
9,358
$
24,289
$
247,191
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
59

The fol
f lowing tabl
a e provides infor
f
mation about
a
our intangible assets for the years ended March 31, 2024 and 2023 (in
thousands, except years):
March 31, 2024
March 31, 2023
Wtd Avg Life
(Years)
Gross
Amount
Accumulated
Amortization
Gross
Amount
Accumulated
Amortization
Finite-lived intangible assets:
Patents
11
$
15,084
$
(9,306)
$
13,608
$
(8,546)
Customer lists and amortized trademarks
14
346,136
(103,407)
324,472
(81,901)
Non-compete agreements
6
1,000
(453)
950
(272)
Other
10
6,275
(2,649)
6,377
(2,235)
$
368,495
$
(115,815)
$
345,407
$
(92,954)
Trade names and trademarks not being
amortized (a):
$
66,139
$
—
$
66,450
$
—
(
)
(
)
(
)
(
)
(a) In the fiscal quarter ended March 31, 2024, we recorded a $1.5 million impairment relating to a trademark, included in
selling, general and administrative expenses, for
f
our Contractor Solutions segment.
Amortization expense for
f
the years ended March 31, 2024, 2023 and 2022 was $22.9 million, $22.1 million and $24.8
million (including the amortization of inventory p
r
urchase accounting adjustment of $3.9 million) respectively. The fol
f lowing
tabl
a e presents the estimated fut
f ur
t
e amortization of fin
f ite-lived intangible assets for the next five fiscal years ending March 31
(in thousands):
2025
$
23,412
2026
23,015
2027
21,937
2028
21,537
2029
21,460
Thereafte
f r
141,319
Total
$
252,680
5. SHARE-BASED COMPENSATION
We maintain the shareholder-appr
a
oved 2015 Equity and Incentive Compensation Plan (the “2015 Plan”), which provides
for the issuance of up to 1,230,000 shares of CSWI common stock through the grant of stock options, stock appreciation rights,
restricted shares, restricted stock units, performance shares, performance units or other share-based awards, to employees,
offi
f cers and non-employee directors. As of March 31, 2024, 336,032 shares were availabl
a e for
f
issuance under the 2015 Plan.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
60

We recorded share-based compensation expense, net of estimated for
f
feitures, for restricted stock as follows for the years
ended March 31, 2024, 2023 and 2022 (in thousands):
Year Ended March 31,
2024
2023
2022
Share-based compensation expense
$
11,537
$
9,751
$
8,450
Related income tax benefit (a)
(2,885)
(2,438)
(2,197)
Net share-based compensation expense
$
8,652
$
7,313
$
6,253
(a) Income tax benefit is estimated using the statutory rate
Stock option activity, which represents outstanding CSWI awards held by CSWI employees resulting fro
f
m the conversion
of Capi
a tal Southwest stock options held by former Capi
a tal Southwest employees, was as follows:
Number of
Shares
Weighted
Average
Exercise Price
Remaining
Contractual
Life (Years)
Aggregate
Intrinsic
Value (in
Millions)
Outstanding and Exercisable at April 1, 2022
10,800
$
25.23
Exercised
(10,800)
25.23
Outstanding and Exercisable at March 31, 2023
—
—
0.0
$
—
Exercised
—
—
Outstanding and Exercisable at March 31, 2024
—
$
—
0.0
$
—
No options were granted or vested dur
d
ing the years ended March 31, 2024, 2023 and 2022, and all stock options were
vested and recognized prior to the year ended March 31, 2019. The intrinsic value of options exercised dur
d
ing the years ended
March 31, 2024, 2023 and 2022 was $0.0 million, $1.2 million and $5.8 million, respectively.
Cash received for
f
options
exercised dur
d
ing the years ended March 31, 2024, 2023 and 2022 was $0.0 million, $0.3 million and $1.3 million, respectively,
and the tax benefit
f
received was $0.0 million, $0.3 million and $1.4 million, respectively. As of March 31, 2024, there were no
outstanding stock options.
Restricted stock activity was as follows:
Year Ended March 31, 2024
Number of
Shares
Weighted
Average
Grant Date
Fair Value
Outstanding at April 1, 2023
232,051
$
138.14
Granted
90,510
185.62
Vested
(95,995)
89.51
Canceled
(5,003)
142.09
Outstanding at March 31, 2024
221,563
$
166.62
During the restriction period, the holders of restricted shares are entitled to vote and receive dividends. Unvested restricted
shares outstanding as of March 31, 2024 and 2023 included 96,945 and 99,463 shares (at target), respectively, with
performance-based vesting provisions, having vesting ranges fro
f
m 0-200% based on predefined performance targets with
market conditions.
Performance-based awards accrue
r
dividend equivalents, which are settled upon
u
(and to the extent of)
vesting of the underlying award, and do not have the right to vote until vested. Performance-based awards are earned upon
u
the
achievement of objective performance targets and are payable in common shares. Compensation expense is calculated based on
the fai
f r market value as determined by a Monte Carlo simulation and is recognized over a 36-month cliff v
f
esting period. We
granted 29,120 and 21,087 awards with performance-based vesting provisions during the years ended March 31, 2024 and
2023, respectively, with a vesting range of 0-200%.
At March 31, 2024, we had unrecognized compensation cost related to unvested restricted shares of $19.6 million, which
will be amortized into net income over the remaining weighted average vesting period of 2.16 years. The total fair value of
restricted shares vested during the years ended March 31, 2024 and 2023 was $14.9 million and $10.2 million, respectively.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
61

6. INVENTORY
R
Inventories are stated at the lower of cost or net realizable value and include raw materials, supplies, direct labor
a
and
manufact
f
ur
t
ing overhead. Inventories are accounted for using a standard costing methodology, which appr
a
oximates cost on a
first-in, fir
f st-out (“FIFO”) basis.
The Inventories, net capt
a ion in the Consolidated Balance Sheet is comprised of the following components:
March 31,
2024
2023
Raw materials and supplies
$
44,866
$
48,300
Work in process
5,194
5,250
Finished goods
109,695
113,104
Total inventories
159,755
166,654
Less: Obsolescence reserve
(9,006)
(5,085)
Inventories, net
$
150,749
$
161,569
7. DETAILS OF CERTAIN CONSOLIDATED BALANCE SHEET CAPTIONS
Accounts r
t
eceivable, net consists of the fol
f lowing (in thousands):
March 31,
2024
2023
Accounts receivabl
a e trade
$
138,475
$
121,164
Other receivabl
a es
5,098
2,954
143,573
124,118
Less: Allowance for
f
credit losses
(908)
(1,365)
Accounts receivabl
a e, net
$
142,665
$
122,753
Prepaid exp
e
enses and othe
t
r current assets consists of the fol
f lowing (in thousands):
March 31,
2024
2023
Prepaid expenses
$
10,947
$
9,485
Short-term tax indemnific
f ation assets
810
7,500
Income taxes receivabl
a e
1,955
1,344
Current derivative asset
1,186
877
Other current assets
942
1,073
$
15,840
$
20,279
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
62

Property,
t
plant and equipm
i
ent, net, consist of the following (in thousands):
March 31,
2024
2023
Land and improvements
$
3,162
$
3,226
Buildings and improvements
54,411
52,975
Plant, offi
f ce and laboratory e
r
quipment
127,344
112,271
Construc
r
tion in progress
11,409
12,466
196,326
180,938
Less: Accumulated depreciation
(103,515)
(92,703)
Property, plant and equipment, net
$
92,811
$
88,235
Depreciation of property, plant and equipment was $13.9 million, $12.9 million and $11.6 million for
f
the years ended
March 31, 2024, 2023 and 2022, respectively. Of these amounts, cost of revenues includes $9.1 million, $8.4 million and $8.3
million, respectively.
Othe
t
r assets consist of the following (in thousands):
March 31,
2024
2023
Right-of-use lease assets
$
44,491
$
59,815
Long-term tax indemnific
f ation assets
1,621
2,849
Deferred fin
f ancing fees
1,595
2,363
Rent receivabl
a e
1,998
2,028
Property held for
f
investment
418
418
Deferred income taxes
359
462
Other
2,613
2,584
Other assets
$
53,095
$
70,519
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
63

Accrued and othe
t
r current liabilities consist of the following (in thousands):
March 31,
2024
2023
Compensation and related benefits
f
$
29,175
$
27,096
Rebates and marketing agreements
15,910
16,158
Income tax payable
2,166
403
Operating lease liabi
a lities
9,443
9,784
Acquisition defer
f red payments
167
3,427
Non-income taxes liabi
a lities
1,381
1,802
Billings in excess of costs
548
637
Other accrue
r
d expenses
8,659
8,081
Accrue
r
d and other current liabi
a lities
$
67,449
$
67,388
Othe
t
r long-term liabilities consists of the fol
f lowing (in thousands):
March 31,
2024
2023
Deferred income taxes
$
59,967
$
62,144
Operating lease liabi
a lities
39,922
55,590
Tax Reserve
16,954
16,509
Derivative liabi
a lity
—
1,021
Acquisition defer
f red payments
8,455
1,853
Other long-term liabilities
$
125,298
$
137,117
8. LONG-TERM DEBT AND COMMITMENTS
Debt consists of the fol
f lowing (in thousands):
March 31,
2024
2023
Revolving Credit Facility, interest rate of 6.68% and 6.21% (a), respectively
$
166,000
$
253,000
Less: Current portion
—
—
Long-term debt
$
166,000
$
253,000
(a) Represents the unhedged interest rate effective on March 31, 2024, and 2023, respectively.
Revolving Cre
C
dit F
i
ac
F
ility
i
Agreement
On December 11, 2015, we entered into a five-year $250.0 million Revolving Credit Facility agreement, with an additional
$50.0 million accordion featur
t
e, with JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto.
The agreement was amended on September 15, 2017 to allow for
f
multi-currency borrowing with a $125.0 million subl
u imit and
to extend the matur
t
ity date to September 15, 2022. On December 1, 2020, the Company entered into an amendment to the
Revolving Credit Facility (the "First Credit Agreement") to utilize the accordion feat
f
ur
t
e, thus increasing the commitment from
$250.0 million to $300.0 million, and hence eliminating the availabl
a e incremental commitment by a corresponding amount. On
March 10, 2021, the Revolving Credit Facility was amended to faci
f
litate the for
f
mation and future operation of the joint venture
discussed in Note 3.
On May 18, 2021, we entered into a Second Amended and Restated Credit Agreement (the “Second Credit Agreement”),
which replaced the First Credit Agreement and provided for
f
a $400.0 million revolving credit facility that contained a
$25.0 million sublimit for
f
the issuance of letters of credit and a $10.0 million sublimit for swingline loans, with an additional
$150.0 million accordion featur
t
e. The Second Credit Agreement is schedul
d ed to mature on May 18, 2026. The Company
incurred a total of $2.3 million in underwriting fees
f
, which are being amortized over the life o
f
f the Second Credit Agreement.
Borrowings under the Second Credit Agreement bore interest at either base rate plus between 0.25% to 1.5% or one-month
LIBOR plus between 1.25% to 2.5%, based on the Company’s leverage ratio calculated on a quarterly basis. The base rate is
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
64

described in the Second Credit Agreement as the highest of (i) the Federal funds
f
effe
f ctive rate plus 0.50%, (ii) the prime rate
quoted by The Wall Street Journal, and (iii) the one-month LIBOR rate plus 1.00%. We pay a commitment fee between 0.15%
to 0.4% based on the Company's leverage ratio for the unutilized portion of this faci
f
lity. Interest and commitment fee
f
s are
payabl
a e monthly and quarterly, respectively, and the outstanding principal balance is due at the matur
t
ity date. The Second
Credit Agreement is secured by a fir
f st priority lien on all tangible and intangible assets and stock issued by the Company and its
domestic subs
u
idiaries, subject to specified exceptions, and 65% of the voting equity interests in its first-tier for
f
eign subs
u
idiaries.
On December 15, 2022, the Company entered into an Incremental Assumption Agreement No. 1 and Amendment No. 2 to
the Second Credit Agreement (the “Second Amendment”) to utilize a portion of the accordion feat
f
ur
t
e, thus increasing the
commitment from $400.0 million to $500.0 million, and concurrently reduced the availabl
a e incremental accordion by a
corresponding amount (the term "Revolving Credit Facility" as used throughout this document refer
f s to the First Credit
Agreement, the Second Credit Agreement and the Second Amendment, as applicable). The Second Amendment also replaced
the LIBOR Rate with individualized metrics based on the specific denomination of borrowings, including a metric based on
Term SOFR (as defin
f ed in the Second Credit Agreement) for borrowings denominated in U.S. Dollars. The Company incurred
a total of $0.7 million in underwriting fees
f
, which are being amortized over the remaining term of the Revolving Credit Facility.
During the year ended March 31, 2024, we borrowed $112.3 million and repaid $199.3 million under the Revolving Credit
Facility. As of March 31, 2024 and 2023, we had $166.0 million and $253.0 million, respectively, in our outstanding balance,
which resulted in borrowing capa
a
city under the Revolving Credit Facility of $334.0 million and $247.0 million, respectively.
The fin
f ancial covenants contained in the Revolving Credit Facility require the maintenance of a maximum leverage ratio of
3.00 to 1.00, subj
u ect to a temporary i
r
ncrease to 3.75 to 1.00 for 18 months following the consummation of permitted
acquisitions with consideration in excess of certain threshold amounts set forth in the Revolving Credit Facility. The Revolving
Credit Facility Agreement also requires the maintenance of a minimum fix
f ed charge coverage ratio of 1.25 to 1.00, the
calculations and terms of which are defined in the Revolving Credit Facility Agreement.
Covenant compliance is tested
quarterly, and we were in compliance with all covenants as of March 31, 2024.
Interest payments on the fir
f st $100.0 million under the Revolving Credit Facility are hedged under an interest rate swap
a
agreement as described in Note 10.
Whitmore Term Loan
Prior to January 20, 2023, Whitmore Manufact
f
ur
t
ing, LLC (one of our wholly-owned operating subsidiaries) maintained a
secured term loan related to the warehouse, corporate office building and remodel of the existing manufact
f
ur
t
ing and R&D
facility. The term loan required a payment of $140,000 each quarter. Borrowings under the term loan bore interest at a variable
annual rate equal to one-month LIBOR plus 2.0%.
On January 20, 2023, the Whitmore Term Loan was paid off using
borrowings under our existing Revolving Credit Facility discussed above. As of March 31, 2024 and 2023, there were no
outstanding principal amounts under the Whitmore Term Loan.
Interest payments under the Whitmore Term Loan were hedged under an interest rate swap a
a
greement until January 9,
2023, when the interest rate swap a
a
greement was terminated.
Future Mini
i
mu
i
m Debt Pay
P
mentst
Future minimum debt payments are as fol
f lows for years ending March 31 (in thousands):
2025
$
—
2026
—
2027
166,000
2028
—
2029
—
Thereafte
f r
—
Total
$
166,000
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
65

9. LEASES
We have operating leases for manufact
f
ur
t
ing faci
f
lities, offi
f ces, warehouses, vehicles and certain equipment. Our leases have
remaining lease terms of 1 year to 24 years, some of which include escalation clauses and/or options to extend or terminate the
leases. We do not currently have any fin
f ancing lease arrangements.
(in thousands)
March 31,
2024
March 31,
2023
Components of Operating Lease Expenses
Operating lease expense
$
10,375
$
10,793
Short-term lease expense
694
815
Total operating lease expense (a)
$
11,069
$
11,608
(a) Included in cost of revenues and selling, general and administrative expense
(in thousands)
March 31,
2024
March 31,
2023
Operating Lease Assets and Liabilities
Right-of-use lease assets (a)
$
44,491
$
59,815
Short-term lease liabi
a lities
$
9,443
$
9,784
Long-term lease liabi
a lities
39,922
55,590
Total operating lease liabi
a lities (b)
$
49,365
$
65,374
(a) Included in other assets
(b) Included in accrue
r
d and other current liabi
a lities and other long-term liabi
a lities, as applicable
(in thousands)
March 31,
2024
March 31,
2023
Supplemental Cash Flow
Cash paid for amounts included in the measurement of operating lease liabi
a lities (a)
$
11,523
$
11,058
Right-of-use assets obtained in exchange for new operating lease obligations
4,789
2,526
Decrease in right-of-use assets and operating lease liabi
a lities due
d
to lease remeasurement
15,371
—
(a) Included in our condensed consolidated statement of cash flo
f ws, operating activities in accounts payable and other current liabi
a lities
Other Infor
f
mation for
f
Operating Leases
Weighted average remaining lease term (in years)
6.8
7.0
Weighted average discount rate (percent)
3.4 %
2.3 %
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
66

Maturities of operating lease liabilities were as follows (in thousands):
Year Ending March 31,
2025
$
10,779
2026
9,021
2027
8,615
2028
7,170
2029
5,888
Thereafte
f r
13,780
Total lease liabi
a lities
$
55,253
Less: Imputed interest
(5,888)
Present value of lease liabi
a lities
$
49,365
10. DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING
We enter into interest rate swap a
a
greements to hedge exposure to flo
f ating interest rates on certain portions of our debt. All
interest rate swaps are highly effective.
Prior to January 9, 2023, we had an interest rate swap t
a
o hedge our exposure to variabi
a lity in cash flo
f ws from interest
payments on our Whitmore Term Loan. On January 9, 2023, the interest rate swap w
a
as terminated and resulted in a cash
receipt of $0.2 million.
On Februa
r
ry 7, 2023, we entered into an interest rate swap t
a
o hedge our exposure to variabi
a lity in cash flo
f ws from interest
payments on the fir
f st $100.0 million borrowing under our Revolving Credit Facility. This interest rate swap f
a
ix
f es the one-
month SOFR rate at 3.85% for the first $100.0 million borrowing under our Revolving Credit Facility, and will expire May 18,
2026. As of March 31, 2024, we had $100.0 million of notional amount in outstanding designated interest rate swaps
a
with third
parties.
The fai
f r value of interest rate swaps designated as hedging instruments are summarized below (in thousands):
March 31,
2024
2023
Current derivative asset
$
1,186
$
877
Non-current derivative assets
221
—
Non-current derivative liabi
a lities
—
1,021
The impact of changes in the fair value of interest rate swaps
a
is included in Note 18.
Current and non-current derivative assets are reported in our consolidated balance sheets in prepaid expenses and other
current assets and other assets, respectively.
Current and non-current derivative liabi
a lities are reported in our consolidated
balance sheets in accrue
r
d and other current liabi
a lities and other long-term liabi
a lities, respectively.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
67

11. EARNINGS PER SHARE
The fol
f lowing tabl
a e sets for
f
th the reconciliation of the numerator and the denominator of basic and diluted earnings per
share for
f
the years ended March 31, 2024, 2023 and 2022:
March 31,
(amounts in thousands, except per share data)
2024
2023
2022
Net income
$
102,539
$
96,574
$
67,319
Income attributable to redeemable noncontrolling interest
(891)
(139)
(934)
Net income attributable to CSW Industrials, Inc.
$
101,648
$
96,435
$
66,385
Weighted average shares:
Common stock
15,427
15,401
15,646
Participating securities
106
108
109
Denominator for basic earnings per common share
15,533
15,509
15,755
Potentially dilutive securities
48
37
52
Denominator for diluted earnings per common share
15,581
15,546
15,807
Basic earnings per common share:
$
6.54
$
6.22
$
4.21
Diluted earnings per common share:
$
6.52
$
6.20
$
4.20
12. SHAREHOLDERS' EQUITY
Share Repurchase Programs
On November 7, 2018, we announced that our Board of Directors authorized a program to repurchase up t
u
o $75.0 million
of our common stock over a two-year time period. On October 30, 2020, we announced that our Board of Directors authorized
a new program to repurchase up t
u
o $100.0 million of our common stock, which replaced the previously announced
$75.0 million program. On December 16, 2022, we announced that our Board of Directors authorized a new $100.0 million
share repurchase program, which replaced the previously announced $100.0 million program. Under the current repurchase
program, shares may be repurchased from time to time in the open market or in privately negotiated transactions. Repurchases
will be made at our discretion, based on ongoing assessments of the capital needs of the business, the market price of our
common stock and general market conditions. Our Board of Directors has establ
a ished an expiration of December 31, 2024 for
completion of the new repurchase program; however, the program may be limited or terminated at any time at our discretion
without notice.
Under the current $100.0 million repurchase program, 53,133 shares were repurchased during the year ended March 31,
2024 for $10.5 million and no shares were repurchased during the year ended March 31, 2023. Under the prior $100.0 million
repurchase program, no shares were repurchased during the year ended March 31, 2024 and 336,347 shares were repurchased
during the year ended March 31, 2023 for $35.7 million. A total of 462,462 shares had been repurchased for an aggregate
amount of $50.1 million under the prior $100.0 million program. As of March 31, 2024, a total of 53,133 shares were
repurchased for an aggregate amount of $10.5 million under the current $100.0 million program.
Dividends
On April 4, 2019, we announced we had commenced a dividend program and that our Board of Directors approved a
regular quarterly dividend of $0.135 per share. On April 15, 2021, we announced a quarterly dividend increase to $0.15 per
share. On April 14, 2022, we announced a quarterly dividend increase to $0.17 per share. On April 14, 2023, we announced a
quarterly dividend increase to $0.19 per share. On April 12, 2024, we announced a quarterly dividend increase to $0.21 per
share, which dividend was paid on May 10, 2024 to shareholders of record as of April 26, 2024. Any fut
f ur
t
e dividends at the
existing $0.21 per share quarterly rate or otherwise will be reviewed individually and declared by our Board of Directors in its
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
68

discretion. Total dividends of $11.9 million and $10.6 million were paid during the years ended March 31, 2024 and 2023,
respectively.
13. FAIR VALUE MEASUREMENTS
The fai
f r value of interest rate swaps discussed in Note 10 are determined using Level II inputs. The carrying value of our
debt, included in Note 8, appr
a
oximates fai
f r value as it bears interest at flo
f ating rates. The carrying amounts of other financial
instruments (i.e., cash and cash equivalents, accounts receivabl
a e, net, accounts payable) appr
a
oximated their fair values at March
31, 2024 and 2023 due to their short-term nature.
The redeemable noncontrolling interest is recorded at the higher of the redemption value or carrying value each reporting
period. The redemption value of the redeemable noncontrolling interest is estimated using a discounted cash flo
f w analysis,
which requires management judgment with respect to fut
f ur
t
e revenue, operating margins, growth rates and discount rates and is
classified as Level III under the fair value hierarchy.
The redemption value of the redeemable noncontrolling interest is
discussed in Note 3.
The fai
f r value of the contingent consideration liabi
a lity is determined using either a scenario-based analysis on forecasted
future results or an option pricing model simulation that determines an average proje
o cted payment value across numerous
iterations. The contingent consideration liabi
a lity is recorded at fair value on the acquisition date and is remeasured quarterly
based on the then assessed fai
f r value. The increases or decreases in the fai
f r value of the contingent consideration can result
from changes in fut
f ur
t
e operations, for
f
ecasted revenue and in assumed discount rates. The fai
f r value measurement is based on
significant inputs that are not observable in the market and is classified as Level III under the fair value hierarchy. As of March
31, 2024 and 2023, the contingent consideration liabi
a lity reported in the balance sheets was $7.2 million and $0.6 million,
respectively.
14. RETIREMENT PLANS
We had a frozen qualifie
f d defin
f ed benefit pension plan (the “Qualifie
f d Plan”) that covered certain of our U.S. employees.
In September 2019, the Qualifie
f d Plan was terminated and resulted in an overall termination charge of $7.0 million.
We maintain a fro
f
zen unfunde
f
d retirement restoration plan (the “Restoration Plan”) that is a non-qualifie
f d plan providing
for the payment to participating employees, upon
u
retirement, of the diffe
f rence between the maximum annual payment
permissible under the Qualifie
f d Plan pursuant to fed
f
eral limitations and the amount that would otherwise have been payabl
a e
under the Qualifie
f d Plan. The Restoration Plan was closed to new participants on January 1, 2015 and was amended to fre
f eze
benefit accrua
r
ls and to modify certain ancillary benefits effe
f ctive as of September 30, 2015. As of March 31, 2024 and 2023,
the Restoration Plan reported liabi
a lities of $1.2 million and $1.3 million, respectively.
We had a registered defined benefit
f
pension plan (the "Canadian Plan") that covered all of our employees based at our
facility in Alberta, Canada. The plan was amended to fre
f eze benefit
f
accrua
r
ls effe
f ctive as of January 31, 2022. In January 2023,
the Canadian Plan was terminated and resulted in an overall termination charge of $0.5 million ($0.4 million, net of tax)
recorded in other (expense) income, net, due
d
primarily to the recognition of expenses that were previously included in
accumulated other comprehensive loss and the recognition of additional costs associated with the annuity purchase contract.
The plans described above
a
(collectively, the "Plans") are presented in aggregate as the impact of the Restoration Plan and
Canadian Plan to our consolidated financial position and results of operations is not material.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
69

The fol
f lowing are assumptions related to the Plans:
March 31,
2024
2023
2022
Assumptions used to determine benefit
f
obligations:
Discount rate
5.5 %
5.4 %
4.0 %
Assumptions used to determine net pension expense:
Discount rate
5.4 %
4.0 %
3.3 %
The summary of the changes in the Restoration Plan's pension obligations:
March 31,
(in thousands)
2024
2023
Benefit obligation at beginning of year
$
1,261
$
1,447
Interest cost
65
56
Actuarial gain
(3)
(136)
Benefits paid
(106)
(106)
Benefit obligation at end of year
$
1,217
$
1,261
Accumulated benefit
f
obligation
$
1,217
$
1,261
The fol
f lowing summarizes amounts recognized in the balance sheets for
f
the Restoration Plan:
March 31,
(in thousands)
2024
2023
Current liabi
a lities
$
(103)
$
(103)
Noncurrent liabi
a lities
(1,114)
(1,158)
Unfunded status
$
(1,217)
$
(1,261)
Net pension expense for
f
the Plans was:
Year Ended March 31,
(in thousands)
2024
2023
2022
Service cost – benefits earned during the year
$
—
$
—
$
43
Interest cost on projected benefit obligation
65
56
138
Expected return on assets
—
—
(120)
Net amortization and deferral
2
42
69
Pension plan termination (a)
—
453
—
Curtailment impact
—
—
(30)
Net pension expense
$
67
$
551
$
100
(a) Refle
f cts impact of the termination of the Canadian Plan.
No estimated prior service costs or net loss for
f
the Plans will be amortized from accumulated other comprehensive loss into
pension expense in the year ended March 31, 2024.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
70

The fol
f lowing tabl
a e summarizes the expected cash benefit payments for
f
the Restoration Plan for
f
fiscal years ending March
31 (in millions):
2025
$
0.1
2026
0.1
2027
0.1
2028
0.1
2029
0.1
Thereafte
f r
0.5
Defined Contribution Plan
Effe
f ctive October 1, 2015, we began to sponsor a defin
f ed contribution plan covering subs
u
tantially all of our U.S.
employees. Employees may contribute to this plan, and these contributions are matched 100% by us up to 6.0% of eligible
earnings. We also contribute an additional percentage of eligible earnings to employees regardless of their level of participation
in the plan, which is discretionary and varies based on profit
f ability. We made total contributions to the plan of $6.3 million and
$5.7 million dur
d
ing the years ended March 31, 2024 and 2023, respectively.
Employee Stock Ownership Plan
We sponsor a qualifie
f d, non-leveraged employee stock ownership plan (“ESOP”) in which domestic employees are eligible
to participate fol
f lowing the completion of one year of service. The ESOP provides annual discretionary contributions of up to
the maximum amount that is deductible under the Internal Revenue Code.
Contributions to the ESOP are invested in our
common stock. A participant’s interest in contributions to the ESOP ful
f ly vests after three years of credited service or upon
retirement, permanent disability (each, as defin
f ed in the plan document) or death.
We recorded total contributions to the ESOP of $4.8 million, $3.1 million and $2.3 million dur
d
ing the years ended March
31, 2024, 2023 and 2022, respectively, based on performance in the prior year. During the year ended March 31, 2024, $4.4
million was recorded to expense based on performance in the year ended March 31, 2024 and is expected to be contributed to
the ESOP dur
d
ing the year ending March 31, 2025.
The ESOP held 497,835 and 537,293 shares of CSWI common stock as of March 31, 2024 and 2023, respectively.
15. INCOME TAXES
In August 2022, the Infla
f tion Reduc
d
tion Act of 2022 (“IRA”
R
) was signed into law. Among other things, the IRA i
R
mposes a
fifteen percent corpor
r
ate alternative minimum tax (the “Corpo
r
rate AMT”) for
f
tax years beginning afte
f r December 31, 2022 and
levies a one percent excise tax on net share repurchases afte
f r December 31, 2022. The excise tax on the share repurchase
portion of the IRA d
R
id not have an impact on our results of operations or financial position for
f
the year ended March 31, 2023
or March 31, 2024. We do not expect the Corpora
r
te AMT, excise tax or other provisions of the IRA to have a material impact
on our consolidated financial statements.
Income before income taxes was comprised of the following (in thousands):
Year Ended March 31,
2024
2023
2022
U.S. Federal
$
127,647
$
118,181
$
87,607
Foreign
12,833
7,730
3,858
Income before income taxes
$
140,480
$
125,911
$
91,465
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
71

Income tax expense consists of the fol
f lowing (in thousands):
For the year ended:
Current
Defer
f
red
Total
March 31, 2024
U.S. Federal
$
28,832
$
(2,560)
$
26,272
State and local
8,057
(10)
8,047
Foreign
3,444
178
3,622
Provision for income taxes
$
40,333
$
(2,392)
$
37,941
March 31, 2023
U.S. Federal
$
27,920
$
(3,549)
$
24,371
State and local
6,135
(2,471)
3,664
Foreign
1,482
(180)
1,302
Provision for income taxes
$
35,537
$
(6,200)
$
29,337
March 31, 2022
U.S. Federal
$
20,139
$
(1,578)
$
18,561
State and local
5,271
761
6,032
Foreign
638
(1,085)
(447)
Provision for income taxes
$
26,048
$
(1,902)
$
24,146
Income tax expense diffe
f red fro
f
m the amounts computed by applying the U.S. fed
f
eral statut
t ory i
r
ncome tax rate of 21.0%
to income before income taxes as a result of the following (in thousands):
Year Ended March 31,
2024
2023
2022
Computed tax expense at statutory rate
$
29,501
$
26,441
$
19,206
Increase (reduction) in income taxes resulting fro
f
m:
State and local income taxes, net of fed
f
eral benefits
6,358
2,895
4,765
Tax indemnific
f ation asset release
1,789
—
—
Nondeductible executive compensation
1,196
1,555
992
Repatriation tax, net of tax credit
491
904
170
Uncertain tax positions
278
(224)
759
Other permanent differences
215
557
(143)
Global intangible low-taxed income ("GILTI") inclusion
207
1,123
580
IRC section 250 deductions
(1,050)
(1,626)
(1,102)
Vesting of stock-based compensation
(417)
(408)
(1,916)
Foreign tax credits
(207)
(604)
(450)
Valuation allowance
(132)
(96)
379
Effe
f ct of rates diffe
f rent than statut
t ory
r
(120)
(114)
91
Other, net
(168)
(1,066)
815
Provision for income taxes
$
37,941
$
29,337
$
24,146
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
72

The effective tax rates for
f
the years ended March 31, 2024, 2023 and 2022 were 27.0%, 23.3% and 26.4%, respectively.
As compared with the statutory rate for the year ended March 31, 2024, the provision for income taxes was primarily impacted
by state tax expense (net of fed
f
eral benefits), which increased the provision by $6.4 million and effe
f ctive rate by 4.5%; impact
of the tax indemnific
f ation asset release, which increased the provision by $1.8 million and the effective tax rate by 1.3%;
executive compensation limitation, which increased the provision by $1.2 million and the effective tax rate by 0.9%; impact of
repatriation of for
f
eign earnings, which increased the provision by $0.5 million and the effective rate by 0.3%. This was partially
offs
f et by IRC section 250 deductions, which decreased the provision by $1.1 million and the effective tax rate by 0.7%.
As compared with the statutory rate for the year ended March 31, 2023, the provision for income taxes was primarily
impacted by the state tax expense, which increased the provision by $2.9 million and the effective rate by 2.3%, executive
compensation limitation, which increased the provision by $1.6 million and the effective rate by 1.2%; impact of GILTI
inclusions, which increased the provision by $1.1 million and the effective tax rate by 0.9%; impact of repatriation of for
f
eign
earnings, which increased the provision by $0.9 million and the effective rate by 0.7% and the additional non-deductible
expenses. which increased the provision by $0.6 million and the effective rate by 0.4%. This was offs
f et by IRC section 250
deductions, which decreased the provision by $1.6 million and the effective tax rate by 1.3%; for
f
eign tax credits, which
decreased the provision by $0.6 million and the effective tax rate by 0.5%.
The tax effe
f cts of temporary d
r
iffe
f rences that give rise to significant portions of the defer
f red tax assets and defer
f red tax
liabi
a lities at March 31, 2024 and 2023 are presented below (in thousands):
March 31,
2024
2023
Deferred tax assets:
Operating lease liabi
a lities
$
11,852
$
15,684
Accrue
r
d compensation
6,777
6,636
Inventory r
r
eserves
3,877
3,422
Capi
a talized R&D
1,446
968
Transaction Costs
1,141
828
Accrue
r
d expenses
773
1,580
Pension and other employee benefit
f s
384
452
Foreign tax credit carry-forward
292
284
Net operating loss carryforwards
—
144
Other, net
641
747
Deferred tax assets
27,183
30,745
Valuation allowance
(216)
(428)
Deferred tax assets, net of valuation allowance
26,967
30,317
Deferred tax liabi
a lities:
Goodwill and intangible assets
(64,534)
(66,432)
Operating lease right-of-use assets
(10,609)
(14,337)
Property, plant and equipment
(7,725)
(7,299)
Repatriation reserve
(1,911)
(1,784)
Other, net
(1,796)
(2,148)
Deferred tax liabilities
(86,575)
(92,000)
Net defer
f red tax liabilities
$
(59,608)
$
(61,683)
As of March 31, 2024, we had immaterial valuation allowance related to foreign tax credits. During the year ended
March 31, 2024, we utilized the remaining net operating loss carryforward and released the related valuation allowance. As of
March 31, 2023, we had immaterial valuation allowance related to operating loss carryforward and foreign tax credits.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
73

A provision was made for
f
taxes that may become payabl
a e upon
u
distribution of earnings from our foreign subsidiaries.
Deferred income tax has not been recognized on any remaining basis diffe
f rence that is permanently invested outside the United
States.
A reconciliation of the beginning and ending amount of unrecognized tax benefits
f
(excluding interest and penalties) is as
follows (in thousands):
March 31,
2024
2023
Balance at beginning of year
$
11,784
$
9,934
Increases related to prior year tax positions
173
—
Decreases related to prior year tax positions
(31)
—
Decreases related to lapses of statute of limitations
(1,049)
(690)
Increases related to current year tax positions
—
2,540
Balance at end of year
$
10,877
$
11,784
During the year ended March 31, 2024, we released a reserve of $1.5 million including accrue
r
d interest of $0.2 million and
accrue
r
d penalty of $0.2 million, as a result of the laps
a
e of statute for the 2019 period. We also recorded additional uncertain tax
positions reserve of $1.7 million, including accrue
r
d interest of $1.2 million and accrue
r
d penalty of $0.5 million on historical tax
positions. We also recorded an additional $0.2 million reserve and a corresponding tax indemnific
f ation asset through purchase
accounting in connection with the Falcon acquisition dur
d
ing the measurement period.
During the year ended March 31, 2023, we released a reserve of $1.6 million primarily as a result of the conclusion of
TRUa
R
ire's Vietnam's audit for
f
the tax periods from January 1, 2019 to March 31, 2022 (discussed below), including accrue
r
d
interest of $0.4 million and accrue
r
d penalties of $0.5 million. We also recorded total tax reserves of $2.8 million, including
accrue
r
d interest and penalty of $0.1 million and $0.2 million, respectively, through purchase accounting in connection with the
Falcon Stainless acquisition.
For the year ended March 31, 2023, we recorded an additional tax reserve of less than
$0.1 million, accrue
r
d interest of $0.7 million and accrue
r
d penalty of $0.6 million.
In connection with the Falcon acquisition that closed in October 2022, the Company recognized a UTP of $3.0 million
related to pre-acquisition tax periods. In addition, in accordance with the tax indemnific
f ation included in the Falcon acquisition
agreement, the sellers provided a contractua
t
l indemnification to the Company for up t
u
o $4.5 million related to UTPs taken in
pre-acquisition years, and we recognized an initial tax indemnific
f ation asset of $3.0 million through purchase accounting,
which will increase as additional interest and penalties on UTPs are accrue
r
d. This tax indemnific
f ation asset will either be settled
or expire upon the closure of the tax statut
t es for the pre-acquisition periods. During the three months ended December 31,
2023, as a result of the statut
t e expiration of the 2019 federal tax return, $1.0 million UTP was released.
The related
$1.0 million tax indemnific
f ation asset expired concurrently and was recognized as non-cash other expense on the statement of
income, which is not deductible for income tax purpos
r
es.
As of March 31, 2024, the UTP reserve and offs
f etting
indemnific
f ation asset related to Falcon's pre-acquisition period were $2.4 million. The Falcon UTP reserves and offse
f
tting
indemnific
f ation asset will either be settled or expire upon the closure of the tax statut
t es for the pre-acquisition period.
In connection with the TRUa
R
ire acquisition closed in December 2020, the Company recognized a UTP of $17.3 million
related to pre-acquisition tax periods. In addition, in accordance with the tax indemnific
f ation included in the purchase
agreement, the sellers provided a contractua
t
l indemnification to the Company for
f
up to $12.5 million related to UTPs taken in
pre-acquisition years, and we recognized a tax indemnific
f ation asset of $12.5 million. This tax indemnific
f ation asset expired in
December 2023. During the three months ended March 31, 2021, as a result of the audit closure of a pre-acquisition tax period
for TRUaire, $5.0 million of the tax indemnific
f ation asset was released along with the relevant UTP of $5.3 million. During the
three months ended December 31, 2022, TRUa
R
ire's Vietnam entity concluded its audit for
f
the tax periods from January 1, 2019
to March 31, 2022 and received an audit closing letter fro
f
m the tax authority. As a result, $1.5 million of the UTP accrua
r
l
(including penalties and interests accrue
r
d post-acquisition) was released and recorded as an income tax benefit
f
for the three
months ended December 31, 2022. During the three months ended December 31, 2023, the remaining $7.5 million tax
indemnific
f ation asset expired and was recognized as non-cash other expense on the statement of income, which is not
deductible for income tax purpo
r
ses. As of March 31, 2024, the UTP accrua
r
l related to TRUa
R
ire's pre-acquisition tax periods
was $14.3 million and is expected to be released in the fut
f ur
t
e as the statut
t es on the open tax years expire.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
74

The Company expects $3.3 million of existing reserves for
f
UTPs to either be settled or expire within the next 12 months as
the statutes of limitations expire. Our federal income tax returns remain subject to examination for
f
the years ended March 31,
2023, 2022 and 2021. Our income tax returns for
f
TRUa
R
ire's pre-acquisition periods including calendar years 2018, 2019 and
2020 remain subj
u ect to examinations.
Our income tax retur
t
ns in certain state income tax jurisdictions remain subj
u ect to
examination for
f
various periods for the period ended September 30, 2015 and subsequent years.
16. RELATED PARTY TRANSACTIONS
We had no related party transactions in the three years ended March 31, 2024, 2023 and 2022.
17. CONTINGENCIES
From time to time, we are involved in various claims and legal actions which arise in the ordinary c
r
ourse of business.
There are not any matters pending that we currently believe are reasonabl
a y possible of having a material impact on our
business, consolidated financial position, results of operations or cash flo
f ws.
18. OTHER COMPREHENSIVE INCOME (LOSS)
The fol
f lowing tabl
a e provides an analysis of the changes in accumulated other comprehensive loss (in thousands).
rch 31,
2024
2023
Currency translation adjustments:
Balance at beginning of period
$
(8,190)
$
(4,438)
Foreign currency translation adju
d stments
(1,947)
(3,752)
Balance at end of period
$
(10,137)
$
(8,190)
Interest rate swaps:
Balance at beginning of period
$
(114)
$
(270)
Unrealized gain, net of taxes of $(639) and $(60), respectively (a)
2,404
225
Reclassification of losses (gains) included in interest expense, net of taxes of $313
and $18, respectively
(1,179)
(69)
Other comprehensive income
1,225
156
Balance at end of period
$
1,111
$
(114)
Defined benefit
f
plans:
Balance at beginning of period
$
(105)
$
(366)
Amortization of net loss, net of taxes of $(1) and $(9), respectively (b)
2
33
Net gain arising during the year, net of taxes of $(1) and $(24), respectively (b)
3
92
Pension termination, net of taxes of $0 and $(34), respectively
—
127
Currency translation impact
—
9
Other comprehensive income
5
261
Balance at end of period
$
(100)
$
(105)
(a)
Unrealized gains are reclassified to earnings as underlying cash interest payments are made. We expect to recognize a gain of $0.9
million, net of defer
f red taxes, over the next twelve months related to a designated cash flo
f w hedge based on its fair value as of
March 31, 2024.
(b)
Amortization of actua
t
rial losses out of accumulated other comprehensive loss are included in the computation of net periodic
pension expense. See Note 14 for
f
additional infor
f
mation.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
75

19. REVENUE RECOGNITION
We conduct our operations in three reportabl
a e segments: Contractor Solutions, Specialized Reliabi
a lity Solutions and
Engineered Building Solutions. With the adoption of ASC Topic 606, we have concluded that the disaggregation of revenues
that would be most useful in understanding the natur
t
e, timing and extent of revenue recognition is the breakout of build-to-
order and book-and-ship, as defin
f ed below:
Build-t
d o-order products are architectur
t
ally-specified building products generally sold into the construc
r
tion industry.
r
Revenue generated fro
f
m sales of products under build-to-order transactions are currently reflected in the results of our
Engineered Building Solutions segment. Occasionally, our built-to-order business lines enter into arrangements for
f
the
delivery o
r
f a customer-specified product and the provision of installation services. These orders are generally
negotiated as a package and are commonly subject to retainage by the customer, which means the final 10% of the
transaction price, when appl
a
icable, is not collectible until the overall construc
r
tion proje
o ct into which our produc
d
ts are
incorporated is complete. The lead times for
f
transfer
f
to the customer can be up to 12 weeks. Revenue for goods is
recognized at a point in time, but installation services are recognized over time as those services are performed.
Installation services represented appr
a
oximately 2% of total consolidated revenue for the year ended March 31, 2024.
Book-a
k
nd-ship products are sold across all of our end markets. Revenue generated fro
f
m sales of products under book-
and-ship transactions have historically been presented in the Contractor Solutions, Engineered Building Solutions and
Specialized Reliability Solutions segments. These sales are typically priced on a product-by-product basis using price
lists provided to our customers. The lead times for transfer to the customer is usually one week or less as these items
are generally built to stock. Revenue for products sold under these arrangements is recognized at a point in time.
Disaggregation of revenues reconciled to our reportabl
a e segments is as fol
f lows (in thousands):
Year Ended March 31, 2024
Contractor
Solutions
Specialized
Reliability
Solutions
Engineered
Building Solutions
Total
Build-to-order
$
—
$
—
$
99,760
$
99,760
Book-and-ship
528,641
149,458
14,981
693,080
Net revenues
$
528,641
$
149,458
$
114,741
$
792,840
Year Ended March 31, 2023
Contractor
Solutions
Specialized
Reliability
Solutions
Engineered
Building Solutions
Total
Build-to-order
$
—
$
—
$
89,964
$
89,964
Book-and-ship
506,634
147,301
14,005
667,940
Net revenues
$
506,634
$
147,301
$
103,969
$
757,904
Year Ended March 31, 2022
Contractor
Solutions
Specialized
Reliability
Solutions
Engineered
Building Solutions
Total
Build-to-order
$
—
$
—
$
88,690
$
88,690
Book-and-ship
413,207
115,932
8,606
537,745
Net revenues
$
413,207
$
115,932
$
97,296
$
626,435
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
76

Contract liabilities, which are included in accrue
r
d and other current liabi
a lities in our consolidated balance sheets were as
follows (in thousands):
Balance at April 1, 2023
$
637
Revenue recognized
(607)
New contracts and revenue added to existing contracts
518
Balance at March 31, 2024
$
548
20. SEGMENTS
As described in Note 1, we conduct our operations through three reportabl
a e segments:
•
Contractor Solutions
•
Specialized Reliability Solutions and
•
Engineered Building Solutions
The fol
f lowing is a summary of the fin
f ancial information of our reporting segments reconciled to the amounts reported in
the consolidated financial statements (in thousands).
Year Ended March 31, 2024
(in thousands)
Contractor
Solutions
Specialized
Reliability
Solutions
Engineered
Building
Solutions
Subtotal -
Reportable
Segments
Eliminations
and Other
Total
Revenues, net to external
customers
$
528,641
$
149,458
$
114,741
$
792,840
$
—
$
792,840
Intersegment revenue
7,853
155
—
8,008
(8,008)
—
Operating income
142,037
22,266
18,704
183,007
(23,889)
159,118
Depreciation and
amortization
30,231
6,074
1,812
38,117
173
38,290
In the fis
f cal quarter ended March 31, 2024, we recorded a $1.5 million impairment relating to a trademark, included in
selling, general and administrative expenses, for
f
our Contractor Solutions segment.
Year Ended March 31, 2023
(in thousands)
Contractor
Solutions
Specialized
Reliability
Solutions
Engineered
Building
Solutions
Subtotal -
Reportable
Segments
Eliminations
and Other
Total
Revenues, net to external
customers
$
506,634
$
147,301
$
103,969
$
757,904
$
—
$
757,904
Intersegment revenue
7,142
145
—
7,287
(7,287)
—
Operating income
126,204
20,176
12,889
159,269
(20,203)
139,066
Depreciation and
amortization
26,951
6,035
1,771
34,757
200
34,957
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
77

Year Ended March 31, 2022
(in thousands)
Contractor
Solutions
Specialized
Reliability
Solutions
Engineered
Building
Solutions
Subtotal -
Reportable
Segments
Eliminations
and Other
Total
Revenues, net to external
customers
$
413,207
$
115,932
$
97,296
$
626,435
$
—
$
626,435
Intersegment revenue
3,280
110
—
3,390
(3,390)
—
Operating income
96,115
9,007
11,101
116,223
(18,843)
97,380
Depreciation and
amortization
27,879
6,016
2,063
35,958
450
36,408
TOTAL ASSETS
(Amounts in thousands)
Contractor
Solutions
Specialized
Reliability
Solutions
Engineered
Building
Solutions
Subtotal -
Reportable
Segments
Eliminations
and Other
Total
March 31, 2024
$
806,261
$
139,968
$
81,256
$
1,027,485
$
15,841
$
1,043,326
March 31, 2023
823,750
136,248
71,429
1,031,427
12,026
1,043,453
March 31, 2022
782,267
126,380
74,397
983,044
12,316
995,360
Geographic infor
f
mation – We attribute revenues to diffe
f rent geographic areas based on the destination of the produc
d
t or
service delivery.
r
Long-lived assets are classified based on the geographic area in which the assets are located and exclude
deferred taxes. No individual country, except for
f
the U.S., accounted for more than 10% of consolidated net revenues or total
long-lived assets.
Revenues and long-lived assets by geographic area are as follows (in thousands, except percent data):
Year Ended March 31,
2024
2023
2022
U.S.
$
703,282
88.7 % $
678,126
89.5 % $
559,296
89.3 %
Non-U.S. (a)
89,558
11.3 %
79,778
10.5 %
67,139
10.7 %
Revenues, net
$
792,840
100.0 % $
757,904
100.0 % $
626,435
100.0 %
(a) No individual country within this group represents 10% or more of consolidated totals for any period presented.
Year Ended March 31,
2024
2023
2022
U.S.
$
672,887
94.5 % $
679,731
94.4 % $
651,477
93.7 %
Non-U.S.
39,030
5.5 %
40,665
5.6 %
43,736
6.3 %
Long-lived assets (a)
$
711,917
100.0 % $
720,396
100.0 % $
695,213
100.0 %
(a) Long-lived assets consist primarily of property, plant and equipment, intangible assets, goodwill and other assets.
Majo
a r customer infor
f
mation – We have a large number of customers across our locations and we do not have sales to any
individual customer that represented 10% or more of consolidated net revenues for
f
any of the fiscal years presented.
CSW INDUSTRIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
78

ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defin
f ed in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the
"Exchange Act")) are designed to ensure that the information, which we are required to disclose in the reports that we file or
subm
u
it under the Exchange Act, is recorded, processed, summarized and reported within the time periods specifie
f d in the
United States Securities and Exchange Commission's rul
r es and for
f
ms, and that such information is accumulated and
communicated to our management, including our Principal Executive Officer and Principal Financial Offi
f cer, as appropriate to
allow timely decisions regarding required disclosure.
In connection with the preparation of this Annual Report on Form 10-K for
f
the year ended March 31, 2024, our
management, under the supe
u
rvision and with the participation of our Principal Executive Offi
f cer and our Principal Financial
Offi
f cer, carried out an evaluation of the effe
f ctiveness of the design and operation of our disclosure controls and procedures as
of March 31, 2024 as required by Rul
R e 13a-15(b) under the Exchange Act. Based on this evaluation, our Principal Executive
Offi
f cer and Principal Financial Offi
f cer concluded that our disclosure controls and procedures were effe
f ctive at the reasonabl
a e
assurance level as of March 31, 2024.
Management’s Report on Internal Control Over Financial Reporting
Our management, under the supe
u
rvision and with the participation of our Principal Executive Offi
f cer and Principal
Financial Officer, is responsible for establishing and maintaining adequate internal control over fin
f ancial reporting, as such
term is defined in Rul
R es 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over fin
f ancial reporting is a process
designed to provide reasonabl
a e assurance regarding the reliabi
a lity of financial reporting and the preparation of fin
f ancial
statements for external purpos
r
es in accordance with accounting principles generally accepted in the United States ("U.S.
GAAP").
Internal control over fin
f ancial reporting includes policies and procedur
d
es that: (1) pertain to the maintenance of
records that, in reasonabl
a e detail, accurately and fai
f rly refle
f ct the transactions and dispositions of our assets; (2) provide
reasonabl
a e assurance that transactions are recorded as necessary to permit preparation of fin
f ancial statements in accordance
with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our
management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effe
f ct on the fin
f ancial statements.
The design of any system of control is based upon certain assumptions about the likelihood of future events, and there can
be no assurance that any design will succeed in achieving its stated objectives under all future events, no matter how remote, or
that the degree of compliance with the policies or procedures may not deteriorate.
Under the supe
u
rvision and with the participation of our Principal Executive Offi
f cer and Principal Financial Offi
f cer, our
management conducted an assessment of our internal control over fin
f ancial reporting as of March 31, 2024, based on the
criteria establ
a ished in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of
the Treadway Commission. Based on this assessment, our management has concluded that as of March 31, 2024, our internal
control over fin
f ancial reporting was effective based on those criteria.
The effectiveness of our internal control over fin
f ancial reporting as of March 31, 2024, has been audited by Grant Thornton
LLP, our independent registered public accounting fir
f m, as stated in their report, which is included herein.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over fin
f ancial reporting during the quarter ended March 31, 2024 that have
materially affe
f cted, or are reasonabl
a y likely to materially affect, our internal control over fin
f ancial reporting.
79

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
CSW Industrials, Inc.
Opinion on internal control over fin
f
ancial reporting
We have audited the internal control over fin
f ancial reporting of CSW Industrials, Inc. (a Delaware corpor
r
ation) and subsidiaries
(the “Company”) as of March 31, 2024, based on criteria established in the 2013 Internal Contro
t
l—In
—
tegr
e
ated Framework
r
issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company
maintained, in all material respects, effective internal control over fin
f ancial reporting as of March 31, 2024, based on criteria
establ
a ished in the 2013 Internal Contro
t
l—In
—
tegr
e
ated Framework
r issued by COSO.
We also have audited, in accordance with the standards of the Publ
u ic Company Accounting Oversight Board (United States)
(“PCAOB”), the consolidated financial statements of the Company as of and for the year ended March 31, 2024, and our report
dated May 23, 2024 expressed an unqualified opinion on those fin
f ancial statements.
Basis for
f
opinion
The Company’s management is responsible for maintaining effe
f ctive internal control over fin
f ancial reporting and for
f
its
assessment of the effe
f ctiveness of internal control over fin
f ancial reporting, included in the accompanying Management’s Report
on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over fin
f ancial reporting based on our audit. We are a public accounting fir
f m registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonabl
a e assurance about
a
whether effective internal control over fin
f ancial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over fin
f ancial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effe
f ctiveness of internal control based on the
assessed risk, and performing such other procedur
d
es as we considered necessary in the circumstances. We believe that our audit
provides a reasonabl
a e basis for our opinion.
Definition and limitations of internal control over fin
f
ancial reporting
A company’s internal control over fin
f ancial reporting is a process designed to provide reasonabl
a e assurance regarding the
reliabi
a lity of financial reporting and the preparation of fin
f ancial statements for external purpos
r
es in accordance with generally
accepted accounting principles. A company’s internal control over fin
f ancial reporting includes those policies and procedur
d
es
that (1) pertain to the maintenance of records that, in reasonabl
a e detail, accurately and fai
f rly refle
f ct the transactions and
dispositions of the assets of the company; (2) provide reasonabl
a e assurance that transactions are recorded as necessary to permit
preparation of fin
f ancial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effe
f ct on the fin
f ancial statements.
Because of its inherent limitations, internal control over fin
f ancial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to fut
f ur
t
e periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT
A
THORNT
R
ON LLP
Dallas, Texas
May 23, 2024
80

ITEM 9B: OTHER INFORMATION
Securities Trading Plans of Directors and Executive Officers
On November 17, 2023, Joseph B. Armes, Chairman, Chief Executive Officer and President of the Company, entered into
an amended Rul
R e 10b5-1 trading arrangement (as defin
f ed in Item 408 of Regulation S-K promulgated under the Exchange Act),
the terms of which mirror his prior Rul
R e 10b5-1 trading agreement that terminated in December 2023. The amended trading
arrangement is intended to satisfy the affirmative defen
f
se in Rule 10b5-1(c) of the Exchange Act. Under the amended trading
agreement, Mr. Armes may sell in the open market at prevailing prices on specifie
f d dates (subject to minimum price thresholds)
an aggregate of up t
u
o 12,000 shares of the Company’s common stock. The shares are intended to be sold on a monthly basis in
equal installments, to the extent practicable. Any sales under the trading arrangement will be made during the period beginning
Februa
r
ry 20, 2024 until the Plan terminates in January 2025.
ITEM 9C: DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
PART III
ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORAT
R
E GOVERNANCE
The infor
f
mation required by this item is incorpor
r
ated by reference to our Proxy Statement for
f
the 2024 Annual Meeting of
Stockholders to be filed with the SEC within 120 days afte
f r the fiscal year ended March 31, 2024.
Insider Trading Policies
The Company has adopted an Insider Trading Policy which governs the purchase, sales, and/or other dispositions of our
securities by directors, offi
f cers, and employees, which we believe is reasonabl
a y designed to promote compliance with insider
trading laws, rules and regulations, and any listing standards appl
a
icable to the registrant. Our Insider Trading Policy is attached
hereto as Exhibit 19.1 and incorpor
r
ated herein by reference.
ITEM 11: EXECUTIVE COMPENSATION
The infor
f
mation required by this item is incorpor
r
ated by reference to our Proxy Statement for
f
the 2024 Annual Meeting of
Stockholders to be filed with the SEC within 120 days afte
f r the fiscal year ended March 31, 2024.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The infor
f
mation required by this item is incorpor
r
ated by reference to our Proxy Statement for
f
the 2024 Annual Meeting of
Stockholders to be filed with the SEC within 120 days afte
f r the fiscal year ended March 31, 2024.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The infor
f
mation required by this item is incorpor
r
ated by reference to our Proxy Statement for
f
the 2024 Annual Meeting of
Stockholders to be filed with the SEC within 120 days afte
f r the fiscal year ended March 31, 2024.
ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES
The infor
f
mation required by this item is incorpor
r
ated by reference to our Proxy Statement for
f
the 2024 Annual Meeting of
Stockholders to be filed with the SEC within 120 days afte
f r the fiscal year ended March 31, 2024.
81

The fol
f lowing documents are file
f
d as a part of this Annual Report on Form 10-K:
42
44
45
46
47
48
(1)
Consolidat
d ed Financial Sta
S tementst
Report of Independent Registered Publ
u ic Accounting Firm (PCAOB ID Number 248)
CSW Industrials, Inc. Consolidated Financial Statements:
Consolidated Balance Sheets at March 31, 2024 and 2023
For each of the three years in the period ended March 31, 2024:
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income
Consolidated Statements of Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
49
(2)
Financial Sta
S tement Schedules
None.
(3)
Exhibits
PART IV
ITEM 15: EXHIBITS, FINANCIAL STATEMENT SCHEDULES
82

Exhibit Index
3.1
Third Amended and Restated Certific
f ate of Incorpor
r
ation of the Company (incorporated by reference to Exhibit 3.1
to the Company’s Current Report on Form 8-K, file
f
d on August 15, 2018)
3.2
Amended and Restated Bylaws of the Company, adopted and effective August 14, 2018 (incorpor
r
ated by reference
to Exhibit 3.2 to the Company’s Current Report on Form 8-K, file
f
d on August 15, 2018)
4.1
Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (incorpor
r
ated by
reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K, filed on May 20, 2020)
10.1
Second Amended and Restated Credit Facility Agreement, dated May 18, 2021, by and among CSW Industrials
Holdings, LLC, CSW Industrials, Inc., the other Loan Parties party thereto, the other lenders party thereto, and
JPMorgan Chase Bank, N.A., individually and in its capacity as the Administrative Agent (incorpor
r
ated by reference
to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q, filed on August 4, 2021)
10.2
Incremental Assumption Agreement No. 1 and Amendment No. 2 to the Second Credit Agreement, by and among
the Company, the Borrower, the other loan parties party thereto, JPMorgan Chase Bank, N.A., as administrative
agent, collateral agent, swingline lender and issuing bank, and each other lender and issuing bank party thereto
(incorpor
r
ated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, file
f
d on December 20,
2022).
10.3
Form of Director and Officer Indemnific
f ation Agreement (incorporated by reference to Exhibit 10.5 to Amendment
No. 3 to the Company’s Registration Statement on Form 10, filed on August 28, 2015)
10.4
Amended and Restated CSW Industrials, Inc. 2015 Equity and Incentive Compensation Plan (incorporated by
reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, file
f
d on December 12, 2016) +
10.5
Employment agreement by and between CSW Industrials, Inc. and Joseph Armes, dated October 1, 2015
(incorpor
r
ated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed on February 1
r
6,
2016) +
10.6
Form of Employee Time Vested Restricted Share Award Agreement (incorporated by reference to Exhibit 10.1 to
the Company's Quarterly Report on Form 10-Q, filed on February 8
r
, 2018)+
10.7
Form of Employee Time Vested Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2
to the Company's Quarterly Report on Form 10-Q, filed on February 8
r
, 2018)+
10.8
Form of Employee Performance Share Award Form of Employee Performance Share Award Agreement
(incorpor
r
ated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q, filed on August 8,
2019) +
10.9
Form of Non-Employee Director Time Vested Restricted Share Award Agreement (incorporated by reference to
Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q, filed on February 8
r
, 2018)+
10.10
Form of Non-Qualifie
f d Stock Option Right Award Agreement (executive compensation plan – replacement award
agreement) (incorpo
r
rated by refer
f ence to Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q, filed on
Februa
r
ry 16, 2016) +
10.11
CSW Indus
d
trials, Inc. Executive Change in Control and Severance Benefit
f
Plan (incorpor
r
ated by reference to
Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 12, 2016) +
19.1*
Insider Trading Policy
21.1*
List of subs
u
idiaries of the Company
23.1*
Consent of Grant Thornton LLP
31.1*
Certific
f ation of Principal Executive Offic
f er pursuant to Exchange Act Rul
R es 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarba
r
nes-Oxley Act of 2002
31.2*
Certific
f ation of Principal Financial Officer pursuant to Exchange Act Rul
R es 13a-14(a) and 15d-14(a), as adopted
pursuant to Section 302 of the Sarba
r
nes-Oxley Act of 2002
32.1**
Certific
f ation of Principal Executive Offic
f er pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarba
r
nes-Oxley Act of 2002
32.2**
Certific
f ation of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarba
r
nes- Oxley Act of 2002
97.1*
Dodd-Frank Clawback Policy
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Labe
a
l Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
EXHIBIT
NUMBER
DESCRIPTION
83

*
Filed herewith
** Furnished herewith
+
Management contracts and compensatory plans required to be file
f
d as exhibits to this Annual Report on Form 10-K.
84

Date: May 23, 2024
CSW INDUSTRIALS, INC.
By:
/s/ Joseph B. Armes
Joseph B. Armes
Chairman and Chief Executive Offi
f cer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the fol
f lowing
persons on behalf of the registrant and in the capacities and on the dates indicated:
Name
Title
Date
/s/ Joseph B. Armes
Chief Executive Offi
f cer
May 23, 2024
Joseph B. Armes
(Principal Executive Offi
f cer)
/s/ James E. Perry
Chief Financial Offi
f cer
May 23, 2024
James E. Perry
(Principal Financial and Accounting Officer)
/s/ Michael R. Gambrell
Director
May 23, 2024
Michael R. Gambrell
/s/ Bobby Griffi
f n
Director
May 23, 2024
Bobby Griffi
f n
/s/ Terry L. Johnston
Director
May 23, 2024
Terry L. Johnston
/s/ Linda A. Livingstone
Director
May 23, 2024
Linda A. Livingstone, Ph.D.
/s/ Anne B. Motsenbocker
Director
May 23, 2024
Anne B. Motsenbocker
/s/ Robert M. Swartz
Director
May 23, 2024
Robert M. Swartz
/s/ J. Kent Sweezey
Director
May 23, 2024
J. Kent Sweezey
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto dul
d y authorized:
85

[THIS PAGE INTENTIONALLY L
L
EFT BLANK]

CSW Industrials Directors and Officers
BOARD OF DIRECTORS
JOSEPH B. ARMES
Chairman, Chief Executive 
Officer and President
MICHAEL R. GAMBRELL
Former Executive Vice 
President of Dow Chemical
BOBBY GRIFFIN
Chief Diversity, Equity and 
Inclusion Officer, 
Rockwell Automation
TERRY L. JOHNSTON
Former Executive Vice 
President and COO of 
Lennox International, Inc. 
Commercial Segment
LINDA A. LIVINGSTONE, PH.D.
President of Baylor University
ANNE B. MOTSENBOCKER
Former Managing Director, 
J. P. Morgan Chase
ROBERT M. SWARTZ
Former Executive Vice 
President and Chief 
Operating Officer of 
Glazer’s Inc.
J. KENT SWEEZY
Founding Partner of 
Turnbridge Capital, LLC
CORPORATE INFORMATION
TRANSFER AGENT
Equiniti Trust Company, LLC (“EQ”)
P.O. Box 500 
Newark, NJ 07101
T (800) 937-5449
helpAST@equiniti.com
equiniti.com/us/ast-access/individuals/
STOCK LISTING
NASDAQ Symbol: CSWI
INDEPENDENT PUBLIC
ACCOUNTANTS
Grant Thornton LLP
Dallas, Texas
ANNUAL MEETING
August 15, 2024
CONTACT INFORMATION
CSW Industrials, Inc.
5420 Lyndon B. Johnson
Freeway, Suite 500
Dallas, Texas 75240
T (214) 884-3777
F (214) 279-7101
www.cswindustrials.com
EXECUTIVE OFFICERS
JOSEPH B. ARMES
Chairman, Chief 
Executive Officer and 
President
JAMES E. PERRY
Executive Vice 
President, Chief 
Financial Officer
DONAL J. SULLIVAN
Executive Vice 
President, Chief 
Strategy Officer
LUKE E. ALVERSON
Senior Vice President, 
General Counsel and 
Secretary
DANIELLE R. GARDE
Senior Vice President, 
Chief People Officer
DARRON K. ASH
Chief Executive Officer, 
Sammons Enterprises, Inc.
JEFF A. UNDERWOOD
Senior Vice President, 
General Manager 
Contractor Solutions

5420 Lyndon B. Johnson Freeway
Suite 500
Dallas, Texas 75240
cswindustrials.com