Azek Investor Presentation Deck
NON-GAAP RECONCILIATIONS
ADJUSTED NET INCOME RECONCILIATION
Fiscal year ending September 30
($ in millions)
Net Income (Loss)
Amortization
Share-based compensation costs
Asset impairment costs(²)
Business transformation costs(³)
Capital structure transaction costs)
Acquisition costs(³)
Non-recurring initial public offering
and secondary offering costs)
Other costs
Tax impact of adjustments)
Tax Act remeasurement (9)
Adjusted Net Income
year ending September 30
$
Other costs
Tax impact of adjustments
Tax Act remeasurement
Adjusted Diluted EPS(¹0)
Net Income (Loss) per common share $
Amortization
Share-based compensation costs
Asset impairment costs
Business transformation costs
Capital structure transaction costs
Acquisition costs
Non-recurring initial public offering
and secondary offering costs
20 17
FY
(67.4)
47.6
1.5
$
48.8
8.6
0.3
20.3
(35.5)
20 17
FY
$
(0.62)
0.44
0.01
0.45
0.08
0.00
20 18
FY
0.19
(0.33)
1.7
(16.4)
(22.5)
$ 24.2 $ 39.2 $
6.7
51.4
$
3.1
0.22 $
0.9
5.8
0.4
7.4
0.8
ADJUSTED DILUTED EPS RECONCILIATION
Twelve M onths Ended,
20 19
FY
20 18
FY
0.06
0.47
0.03
0.01
0.05
$
0.07
0.01
0.02
(0.15)
(0.21)
0.36
$
(20.2)
60.2
3.7
$
16.6
THE AZEK
COMPANY
4.1
9.1
(6.8)
(20.0)
46.7 $
Twelve M onths Ended,
20 19
FY
(0.19)
0.56
0.04
0.15
$
0.04
0.08
(0.06)
(0.19)
$
20 20
FY
0.43 $
(122.2)
55.1
120.5
0.6
37.6
1.6
8.6
4.2
(33.3)
72.6
20 20
FY
(1.00)
0.45
0.99
0.31
0.01
0.07
0.03
(0.27)
0.59
$
2021
LTM Q3
$
(9.7)
51.2
117.2
$
0.2
0.1
0.1
4.5
5.1
(21.4)
147.3
20 20
YTD Q3
(0.51)
0.37
0.18
0.33
0.01
0.06
0.03
(0.22)
N ine M onths Ended June 30,
20 21
YTD Q 3
N ine M onths Ended June 30,
2021
YTD Q3
0.25
$
$
20 20
YTD Q3
$
(57.9)
41.6
20.2
0.4
37.5
1.5
6.7
3.0
(24.8)
0.35
0.23
0.11
28.3 $ 10 2.8
0.02
0.03
(0.08)
$
0.66
54.6
37.7
16.9
2.6
3.9
(12.9)
Notes:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Effective as of September 30, 2020, we revised the definition of Adjusted Net Income to remove depreciation expense from the calculation. The prior
periods have been recast to reflect the change.
Asset impairment costs reflect tangible and intangible asset impairment costs of $0.9 million and $48.8 million in fiscal 2018 and 2017. The tangible
asset impairment costs for fiscal 2017 include the write off of $1.1 million of inventory relating to certain products determined not to be commercially
viable.
Business transformation costs reflect consulting and other costs related to the transformation of the senior management team of $0.4 million in the
nine months ended June 30, 2020. Business transformation costs reflect consulting costs related to repositioning of our brands of $4.3 million and $2.0
million in fiscal 2019 and 2017, respectively, compensation costs related to the transformation of the senior management team of $0.6 million, $2.3
million, $0.2 million and $4.3 million in fiscal 2020, 2019, 2018 and 2017, respectively, costs related to the relocation of our corporate headquarters of
$2.0 million in fiscal 2019, startup costs of our new recycling facility of $5.3 million in fiscal 2019, and other integration-related costs of $2.7 million,
$5.6 million and $2.3 million in fiscal 2019, 2018 and 2017, respectively. Business transformation costs reflect compensation costs related to the
transformation of the senior management team of $0.2 million for the twelve months ended June 30, 2021
Capital structure transaction costs include loss on extinguishment of debt of $1.9 million for the 2021 Senior Notes and $35.7 million for the 2025
Senior Notes for fiscal 2020, and debt related issuance costs of $0.4 million and $0.3 million for fiscal 2018 and 2017, respectively.
Acquisition costs reflect costs directly related to completed acquisitions $0.9 million for the nine months ended June 30, 2020. Acquisition costs reflect
costs directly related to completed acquisitions of $0.9 million, $4.1 million, $4.9 million and $0.1 million for fiscal 2020, 2019, 2018 and the twelve
months ended June 30, 2021, respectively, and inventory step-up adjustments related to recording the inventory of acquired businesses at fair value
on the date of acquisition $0.6 million, $0.7 million and $2.4 million for the nine months ended June 30, 2020, fiscal 2020 and 2018, respectively.
Initial public offering costs includes $1.4 million and $2.6 million in fees related to the Secondary offering of our Class A common stock for fiscal 2020
and the twelve months ended June 30, 2021, respectively.
Other costs include costs for legal expense of $1.8 million and $0.4 million for the nine months ended June 30, 2021 and June 30, 2020, respectively,
and costs related to an incentive plan and other ancillary expenses associated with the initial public offering of $2.1 million and $2.2 million for the
nine months ended June 30, 2021 and June 30, 2020, respectively. Other costs reflect costs for legal expenses of $0.9 million, $0.9 million, $1.5 million
and $5.2 million in fiscal 2020, 2019, 2018 and 2017, respectively, reduction in workforce costs of $0.4 million for fiscal 2020, income from an
insurance recovery of legal loss of $7.7 million for fiscal 2019, and costs related to an incentive plan associated with the initial public offering of $2.9
million for fiscal 2020, settlement costs of $15.0 million in fiscal 2017, respectively, and other miscellaneous adjustments of $0.2 million and $0.1
million in fiscal 2018 and 2017, respectively. Other costs for the twelve months ended June 30, 2021 reflect costs for legal expenses of $2.3 million and
costs related to an incentive plan and other ancillary expenses associated with the initial public offering of $2.8 million.
Tax impact of adjustments is based on applying a combined U.S. federal and state statutory tax rate of 24.5% for both nine months ended June 30,
2020 and 2021. Tax impact of adjustments is based on applying a combined U.S. federal and state statutory tax rate of 24.5%, 24%, 24% and 38% for
fiscal 2020, 2019, 2018 and 2017, respectively, except that a tax rate of 0% was applied to the adjustments for certain non-deductible share-based
compensation costs and for goodwill impairment in fiscal 2017 as those items did not give rise to income tax deductions.
Tax Act remeasurement is one-time tax benefit of $22.5 million as a result of the remeasurement of certain deferred taxes due to the enactment of
the Tax Act.
Weighted average common shares outstanding used in computing diluted net income (loss) per common share of 156,658,640 and 113,635,347 for
the nine months ended June 30, 2021 and 2020, respectively. Weighted average common shares outstanding used in computing diluted net income
(loss) per common share is 122,128,515 shares for fiscal 2020, and 108,162,741 shares for fiscal 2019, 2018 and 2017.
Source: Company financials. Numbers may not sum due to rounding.
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