CSW Contractor Solutions Organic Growth Reaccelerates

The Tip Desk · November 1, 2026 · 4 min read

Record revenue of $361.4 million and Contractor Solutions organic growth of 13% marked a second-quarter acceleration after a 6% organic gain in the first quarter.

CSW Industrials (CSW) reported fiscal 2027 second-quarter revenue of $361.4 million, a record that rose 30.5% from a year earlier, as organic growth in its largest segment picked up after a slower first quarter.

The diversified industrial company said total growth of $84.5 million included $56.3 million, or 20.3%, from acquisitions completed over the last twelve months and $28.2 million, or 10.2%, of organic revenue. Organic growth in the first quarter had been $14.0 million, or 5.3%. Contractor Solutions organic revenue rose 12.9%, or $26.8 million, after 6% organic growth in the prior quarter and 2.6% two quarters earlier. Specialized Reliability Solutions organic revenue grew 12.7%. Engineered Building Solutions revenue declined.

Contractor Solutions, the largest of three reportable segments, generated $285.8 million of revenue, up 37.1% from a year earlier. Inorganic growth of 24.2%, or $50.5 million, came from the MARS Parts acquisition. Segment operating income was $69.7 million, or $70.5 million adjusted, compared with $53.4 million, or $54.9 million adjusted, a year earlier. Operating income margin was 24.4%, or 24.7% adjusted, versus 25.6%, or 26.3% adjusted, a year earlier. The company said the profit increase reflected MARS Parts, organic volume growth, and pricing, partially offset by raw-material inflation and higher ocean and domestic freight. Segment adjusted EBITDA was $88.9 million, or 31.1% of revenue, compared with $67.6 million, or 32.4% of revenue, a year earlier.

Specialized Reliability Solutions revenue was a record $49.5 million, up 27.6%, with organic growth of $4.9 million, or 12.7%, and inorganic growth of $5.8 million, or 14.9%. The company said revenue increased in all end markets served. Segment operating income was $8.9 million, or $9.3 million adjusted, up 82.3% from $5.1 million. Operating income margin was 18.0%, or 18.8% adjusted, versus 13.1% a year earlier. Adjusted EBITDA was a record $10.6 million, or 21.5% of revenue, compared with $6.4 million, or 16.5% of revenue, a year earlier.

Engineered Building Solutions revenue fell 11.1% to $28.4 million, which the company attributed to the Greco Plan to sell Greco U.S. and exit Greco Canada, partially offset by growth in continuing businesses. Excluding Greco, segment revenue was $22.7 million, up 2.4%. Segment operating income was $3.4 million, or 12.0% of revenue, or $3.5 million and 12.4% of revenue adjusted, versus $4.8 million, or 15.1% of revenue, a year earlier. Adjusted EBITDA was $3.6 million, or 12.8% of revenue, compared with $5.2 million, or 16.4% of revenue, a year earlier.

Consolidated gross margin contracted 100 basis points to 42.0%, or 90 basis points to 42.1% as adjusted, from 43.0% a year earlier, reversing a first-quarter year-over-year expansion. The company said the adjusted decrease was primarily increased ocean and domestic freight expense and rising raw-material costs. Gross profit was $151.9 million, or $152.3 million adjusted, up 27.5%, or 27.8% adjusted, from $119.2 million. Operating expenses were $76.4 million, or $75.6 million adjusted. Operating income was $75.5 million, or $76.8 million adjusted, compared with $56.8 million, or $58.5 million adjusted, a year earlier. Adjusted operating income margin was 21.2%, versus 21.1% adjusted a year earlier.

Net income attributable to CSW was $47.3 million, up 16.4% from $40.7 million. Diluted EPS was $2.90, up 20.3% from $2.41. Adjusted EPS was a record $3.66, up 23.6% from $2.96. Adjusted EBITDA increased 32.6% to a record $96.7 million from $72.9 million a year earlier. Adjusted EBITDA margin expanded 50 basis points to 26.8%, versus 26.3% a year earlier. Interest expense, net of interest income, was $12.5 million, compared with $1.3 million a year earlier, which the company said resulted from Term Loan A and higher revolver borrowings tied to acquisitions and share repurchases.

Cash flows from operations were a record $95.4 million, up 54.4% from $61.8 million a year earlier. Free cash flow was $91.9 million, compared with $58.7 million. Net debt was $734 million after a $91 million paydown in the quarter, reducing net leverage to 2.10x from 2.37x at the end of the first quarter. The company ended the quarter with $766.5 million outstanding on the revolving line of credit and Term Loan A. Following quarter-end, it announced a $0.30 a share regular quarterly cash dividend, its thirty-first consecutive quarterly dividend, payable November 13, 2026.