2024 Q2 - Quarterly Report

Tableofcontents UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION WASHINGTON,DC20549 FORM10-Q xQUARTERLYREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934 ForthequarterlyperiodendedMarch31,2024OR oTRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934 Forthetransitionperiodfromto CommissionFileNumber:001-39322 TheAZEKCompanyInc. (Exactnameofregistrantasspecifiedinitscharter) Delaware90-1017663 (Stateorotherjurisdictionofincorporationororganization) (I.R.S.EmployerIdentificationNo.) 1330WFultonStreet,Suite350,Chicago,Illinois60607 (Addressofprincipalexecutiveoffices)(ZipCode) Registrant’stelephonenumber,includingareacode:(877)275-2935SecuritiesregisteredpursuanttoSection12(b)oftheAct: Nameofeachexchange TitleofeachclassTradingSymbolonwhichregistered ClassACommonStock,parvalue$0.001pershare AZEKTheNewYorkStockExchange Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.YesxNoo IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedpursuanttoRule405ofRegulationS-T(§232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles).YesxNoo Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,smallerreportingcompany,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany,”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct. Largeacceleratedfiler x Acceleratedfiler o Non-acceleratedfiler o Smallerreportingcompany o Emerginggrowthcompany o Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.o Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct).YesoNox AsofMay31,2024,theregistranthad145,518,785sharesofClassACommonStock,$0.001parvaluepershare,andnosharesofClassBCommonStock,$0.001parvaluepershare,outstanding. Page PARTI. FinancialInformation 3 Item1. FinancialStatements(Unaudited) 3 CondensedConsolidatedBalanceSheets 3 CondensedConsolidatedStatementsofComprehensiveIncome(Loss) 4 CondensedConsolidatedStatementsofStockholders’Equity 5 CondensedConsolidatedStatementsofCashFlows 6 NotestoUnauditedCondensedConsolidatedFinancialStatements 7 Item2. Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations 29 Item3. QuantitativeandQualitativeDisclosuresAboutMarketRisk 44 Item4. ControlsandProcedures 45 PARTII. OtherInformation 46 Item1. LegalProceedings 46 Item1A. RiskFactors 46 Item2. UnregisteredSalesofEquitySecuritiesandUseofProceeds 46 Item3. DefaultsUponSeniorSecurities 46 Item4. MineSafetyDisclosures 46 Item5. OtherInformation 47 Item6. Exhibits 48 Signatures 49 2 PARTIFINANCIALINFORMATION Item1.FinancialStatements(Unaudited) TheAZEKCompanyInc. CondensedConsolidatedBalanceSheets (InthousandsofU.S.dollars,exceptforshareandpershareamounts)(Unaudited) inthousands 2024 2023 (AsRestated) ASSETS: Currentassets: Cashandcashequivalents $227,399 $278,314 Tradereceivables,netofallowances 134,378 57,660 Inventories 213,706 195,600 Prepaidexpenses 12,986 13,595 Othercurrentassets 23,562 16,123 Totalcurrentassets 612,031 561,292 Property,plantandequipment-net 456,699 501,023 Goodwill 967,816 994,271 Intangibleassets-net 173,732 199,497 Otherassets 85,234 87,793 Totalassets $2,295,512 $2,343,876 LIABILITIESANDSTOCKHOLDERS'EQUITY: Currentliabilities: Accountspayable $52,727 $56,015 Accruedrebates 46,391 60,974 Currentportionoflong-termdebtobligations 6,000 6,000 Accruedexpensesandotherliabilities 74,857 66,727 Totalcurrentliabilities 179,975 189,716 Deferredincometaxes 49,408 59,509 Long-termdebt—lesscurrentportion 577,957 580,265 Othernon-currentliabilities 101,241 104,073 Totalliabilities 908,581 933,563 Commitmentsandcontingencies(SeeNote17) March31,September30, Stockholders'equity: Preferredstock,$0.001parvalue;1,000,000sharesauthorizedandnosharesissuedoroutstandingatMarch31,2024andSeptember30,2023,respectively — — ClassAcommonstock,$0.001parvalue;1,100,000,000sharesauthorized,157,010,677sharesissuedatMarch31,2024and155,967,736sharesissuedat September30,2023,respectively 157156 ClassBcommonstock,$0.001parvalue;100,000,000sharesauthorized,0and10sharesissuedandoutstandingatMarch31,2024andatSeptember30,2023,respectively 0 — — Additionalpaid‑incapital 1,688,604 1,662,322 Retainedearnings(accumulateddeficit) 10,529 (64,377) Accumulatedothercomprehensiveincome(loss) Treasurystock,atcost,11,520,848and8,268,423sharesatMarch31,2024and 691 (313,050) 1,878 (189,666) September30,2023,respectively Totalstockholders'equity 1,386,931 1,410,