James Hardie Industries plc
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
JHX$27.85-2.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001159152-26-000051
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001159152-26-000055
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 137 current paragraphs.
72 unchanged; 25 reworded; 38 added; 20 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (38)
Current report
Net sales increased 24% due to higher net sales in all of our reportable segments, as further described below.
Current report
Gross margin increased 6.6 percentage points primarily driven by a $47.9 million inventory step-up adjustment related to recording the acquired inventory of AZEK at fair value in the second quarter of fiscal year 2026 which did not repeat in the current corresponding period. This was partially offset by higher intangible asset amortization following the finalization of the purchase price allocation related to the AZEK acquisition. Intangible asset amortization expense was $16.0 million in the second quarter of fiscal year 2027 compared to $12.4 million in the prior corresponding period.
Current report
Selling, general and administrative expenses (“SG&A”)increased 21% and as a percentage of sales decreased 0.4 percentage points. As a percentage of sales, this decrease was primarily due to lower discretionary marketing spend and lower labor costs, partially offset by higher stock compensation expense and higher amortization of intangible assets resulting from the AZEK acquisition. Higher stock compensation expense in the second quarter of fiscal year 2027 was mainly due to timing of grants and a larger stock price decrease in the prior corresponding period. Amortization from the AZEK acquisition was $61.5 million in the second quarter of fiscal year 2027 compared with $36.3 million in the prior corresponding period.
Current report
Acquisition and divestiture related expenses decreased 88% primarily due to lower professional service fees and labor costs, including severance and retention costs and expenses associated with the accelerated vesting of certain stock awards in connection with the AZEK acquisition. Acquisition related expenses were $9.7 million and $128.9 million in the second quarter of fiscal years 2027 and 2026, respectively, and include costs associated with the AZEK acquisition and ongoing integration activities. The second quarter of fiscal year 2027 also included $5.2 million of divestiture related expenses associated with the divestiture of our European operations and closure of our European fiber cement business.
Current report
Interest, net decreased 18% primarily due to lower interest expense following the repayment of our $400.0 million senior unsecured notes in June 2026 and the repayment of our €400.0 million senior unsecured notes in December 2025.
Current report
Other income, netincreased due to a $19.4 million non-cash gain on the foreign currency forward contracts entered into to hedge our exposure to fluctuations in exchange rates associated with the anticipated Euro-denominated proceeds from the sale of our Fermacell business.
Current report
Net income from continuing operations was $149.8 million compared to a net loss from continuing operations of $64.3 million in the prior corresponding period, primarily due to higher operating income, partially offset by higher income tax expense.
Current report
Gross margin increased 3.6 percentage points primarily driven by the absence of an inventory step-up adjustment in the current period as mentioned above. This was partially offset by an additional three months of amortization expense in the current year. The amortization of intangible assets resulting from the AZEK acquisition was $32.0 million for the six months ended September 30, 2026, compared to $12.4 million in the prior corresponding period.
Current report
Selling, general and administrative expenses (“SG&A”)increased 53% driven by an additional three months of AZEK SG&A expenses in the current year. As a percentage of sales, SG&A expenses increased 1.2 percentage points primarily due to higher intangible asset amortization following the finalization of the purchase price allocation related to the AZEK acquisition as discussed above. Intangible asset amortization expense was $123.1 million for the six months ended September 30, 2026, compared to $36.3 million in the prior corresponding period. This increase was partially offset by lower labor and discretionary marketing spend as a percentage of sales.
Current report
Acquisition and divestiture related expenses decreased 80% primarily due to lower professional service fees and labor costs, including severance, retention and stock-based compensation costs associated with the AZEK acquisition. These costs include divestiture related expenses of $9.3 million for the six months ended September 30, 2026, related to our European operations divestiture and closure of our European fiber cement business. Acquisition related expenses of $22.2 million and $158.3 million for the six months ended September 30, 2026 and 2025, respectively, include costs associated with the AZEK acquisition and ongoing integration.
Current report
Income tax expense increased $91.5 million, while the effective tax rate decreased from 154.3% for the six months ended September 30, 2025 to 34.3% in the current corresponding period. The increase in tax expense reflects higher income before income taxes compared to the six months ended September 30, 2025, while the lower effective tax rate was primarily driven by geographical mix of earnings and discrete items.
Current report
Net income from continuing operations increased due to higher operating income and higher other income, net, partially offset by higher interest and income tax expense.
Current report
Net sales increased 15%, primarily due to higher exterior product volumes, as customers inventory levels normalized compared to the prior year, and higher price primarily resulting from our annual price increase. Total exterior volumes grew in nearly every region, even as new construction remained soft across many of the Company’s markets, most notably in the South Central region. This was partially offset by interior product volume decline.
Current report
Gross margin increased 5.4 percentage points driven by higher price/mix and an $11.2 million inventory step-up adjustment related to recording the acquired inventory of AZEK at fair value in the second quarter of fiscal year 2026 which did not repeat in the current period. In addition, gross margin increased due to improved plant performance and favorable raw material costs, partially offset by higher freight costs.
Current report
SG&A expenses increased 6%, and as a percentage of sales decreased 0.9 percentage points. SG&A as a percentage of sales decreased primarily driven by lower discretionary marketing spend and lower labor costs, partially offset by higher intangible asset amortization expense following the finalization of the purchase price allocation related to the AZEK acquisition. Intangible asset amortization expense was $15.7 million for the second quarter of fiscal year 2027, compared to $9.2 million in the prior corresponding period.
Current report
Acquisition and divestiture related expenses increased 24% driven by a $1.7 million inventory write-off associated with the divestiture of our European operations, partially offset by a $0.8 million decrease in acquisition related costs associated with the AZEK acquisition and ongoing integration.
Current report
Operating income margin increased 6.7 percentage points to 26.4% primarily driven by higher gross margin and lower SG&A expenses as a percentage of sales.
Current report
Gross margin increased 3.6 percentage points partially driven by the absence of an inventory step-up adjustment in the current year as mentioned above. Gross margin also increased due to a higher sales price, improved plant performance and favorable raw material costs. This was partially offset by higher freight costs and an additional three months of amortization expense in the current year. The amortization of intangible assets resulting from the AZEK acquisition was $5.8 million for the six months ended September 30, 2026, compared to $1.6 million in the prior corresponding period.
Current report
SG&A expenses increased 20%, driven by an additional three months of AZEK expenses in the current year. As a percentage of sales, SG&A expenses decreased 0.3 percentage points. This decrease was primarily driven by lower discretionary marketing spend, as well as lower labor and professional fees, partially offset by higher intangible asset amortization following the finalization of the purchase price allocation related to the AZEK acquisition as discussed above. Intangible asset amortization expense was $31.3 million for the six months ended September 30, 2026, compared to $9.2 million in the prior corresponding period.
Current report
Operating income margin increased 3.5 percentage points to 25.7% primarily driven by higher gross margin.
Current report
Net sales increased 51% primarily driven by higher volumes from expanded distribution, including our initial load-in at Boise Cascade, and our annual price increase.
Current report
Gross margin increased 13.9 percentage points primarily driven by a $36.7 million inventory step-up adjustment related to recording the acquired inventory of AZEK at fair value in fiscal year 2026 which did not recur in the current period.
Current report
SG&A expenses increased 34%, and as a percentage of sales decreased 2.9 percentage points. SG&A as a percentage of sales decreased primarily due to lower discretionary marketing spend and lower labor costs, partially offset by higher intangible asset amortization expense following the finalization of the purchase price allocation related to the AZEK acquisition. Intangible asset amortization expense was $45.8 million for the quarter ended September 30, 2026, compared to $27.1 million in the prior corresponding period.
Current report
Operating margin improved 17.3 percentage points to 12.6 % primarily due to higher gross margin and lower SG&A expenses as a percentage of sales.
Current report
Net sales increased 171% primarily driven by the AZEK acquisition on July 1, 2025, which contributed net sales of $305.1 million in the first quarter of fiscal year 2027, and higher volumes and price in the current quarter as described above.
Current report
Gross margin increased 12.2 percentage points primarily driven by a $36.7 million inventory step-up adjustment as noted above, partially offset by an additional three months of amortization expense in the current year. The amortization of intangible assets resulting from the AZEK acquisition was $26.2 million for the six months ended September 30, 2026 compared to $10.8 million in the prior corresponding period.
Current report
SG&A expenses increased 175%, driven by an additional three months of expenses in the current year. As a percentage of sales, SG&A expenses increased 0.4 percentage points primarily due to higher intangible asset amortization following the finalization of the purchase price allocation related to the AZEK acquisition as discussed above. Intangible asset amortization expense was $91.8 million for the six months ended September 30, 2026, compared to $27.1 million in the prior corresponding period. This increase was partially offset by lower discretionary marketing spend and lower labor costs as a percentage of sales.
Current report
R&D expenses increased 112% primarily due to an additional three months of expenses associated with AZEK business in the current year.
Current report
Operating margin improved 11.2 percentage points to 6.5% primarily due to higher gross margin, partially offset by higher SG&A, R&D and restructuring expenses as a percentage of sales.
Current report
SG&A expenses increased 8%, due to unfavorable exchange rates as SG&A expenses remained flat in Australian dollars. As a percentage of sales, SG&A expenses decreased 1.4 percentage points primarily due to recording a lease exit cost in the second quarter of fiscal year 2026 which did not recur in the current corresponding period.
Current report
Operating income margin increased 2.4 percentage points to 31.0% primarily due to lower SG&A expenses as a percentage of sales and higher gross margin.
Current report
Net sales increased 23%, driven by higher fiber cement volumes of 9% and favorable exchange rates, as net sales in Australian dollars increased 13%. The increase in volumes was primarily attributable to strong underlying demand for our products and category share gains.
Current report
SG&A expenses increased 20%, partially due to unfavorable exchange rates as SG&A expenses increased 10% in Australian dollars. As a percentage of sales, SG&A expenses decreased 0.3 percentage points primarily due to the lease exit cost in the second quarter of fiscal year 2026 discussed above and lower labor costs. This was partially offset by higher marketing and professional fees.
Current report
Operating income margin increased 1.0 percentage point to 30.8% primarily due to higher gross margin.
Current report
General corporate costs decreased 59%, driven by lower acquisition related expenses of $118.4 million, primarily due to lower professional service fees and labor costs, including severance, retention and stock-based compensation costs associated with the AZEK acquisition. This decrease was partially offset by higher stock-based compensation costs and divestiture related costs incurred in the current quarter of $3.5 million. Higher stock compensation expense in the second quarter of fiscal year 2027 was mainly due to timing of grants and a larger stock price decrease in the prior corresponding period.
Current report
General corporate costs decreased 47%, driven by a $138.6 million decrease in acquisition related expenses, driven by the factors discussed in the quarter-over-quarter discussion above, partially offset by higher stock-based compensation costs and divestiture related costs incurred in the current year of $7.6 million. Higher stock compensation expense was mainly due to timing of grants and an increase in stock price for the six months ended September 30, 2026 compared to a decrease in stock price in the prior corresponding period.
Current report
The following Free Cash Flow Reconciliation includes discontinued operations.
Current report
During the first half of calendar year 2027 we expect to receive approximately $980.0 million (as of the date of the announcement), of cash proceeds related to the sale of our Fermacell business, subject to customary adjustments for net debt and working capital as of closing. Management expects these proceeds to further enhance the Company's liquidity position and expects to apply approximately $600.0 million of the proceeds toward debt repayment, with the remainder available for general corporate purposes, including share repurchases and working capital needs.
Removed paragraphs (20)
Previous report
•Europe segment - Includes fiber gypsum products and cement bonded boards manufactured in Europe, and fiber cement products manufactured in the United States. These products are sold in Europe, primarily Germany, Great Britain and Switzerland.
Previous report
Gross margin decreased 0.2 percentage points primarily driven by the amortization of certain intangible assets resulting from the AZEK acquisition of $16.0 million, which was partially offset by higher gross margin in our Siding & Trim and Australia & New Zealand segments.
Previous report
Selling, general and administrative expenses (“SG&A”)increased 89% and as a percentage of sales increased 2.7 percentage points. As a percentage of sales, this increase was primarily due to the amortization of certain intangible assets resulting from the AZEK acquisition of $61.6 million, partially offset by lower labor costs and professional fees.
Previous report
Acquisition related expenses decreased 44% primarily due to lower professional service fees, partially offset by higher travel expenses. Costs associated with the AZEK acquisition are included in this line.
Previous report
Gross margin increased 1.4 percentage points primarily due to a higher average net sales price and favorable raw material costs, partially offset by higher freight costs. In addition, gross margin was unfavorably impacted by the amortization of certain intangible assets resulting from the AZEK acquisition of $2.9 million.
Previous report
SG&A expenses increased 39%, and as a percentage of sales, SG&A expenses increased 0.5 percentage points. This increase was primarily driven by the amortization of certain intangible assets resulting from the AZEK acquisition of $15.6 million, partially offset by lower marketing, labor costs and professional fees as a percentage of sales.
Previous report
Operating income margin remained relatively flat at 25.0% based on factors described above.
Previous report
Net sales of $305.1 million were 5% lower than AZEK's net sales for the comparable period prior to the acquisition, driven by lower volumes.
Previous report
Gross margin of 31.8% includes the amortization of certain intangible assets resulting from the AZEK acquisition of $13.1 million.
Previous report
SG&A expenses of $92.1 million includes the amortization of certain intangible assets resulting from the AZEK acquisition of $46.0 million.
Previous report
Operating loss of $3.3 million includes the amortization of certain intangible assets resulting from the AZEK acquisition of $59.1 million.
Previous report
SG&A expenses increased 35% primarily due to unfavorable exchange rates and higher marketing, labor costs and professional fees. In Australian dollars, SG&A expenses increased 21%. As a percentage of sales, SG&A expenses increased 0.8 percentage points.
Previous report
Operating income margin decreased 0.6 percentage points to 30.5% primarily due to higher SG&A and R&D expenses as a percentage of sales, partially offset by higher gross margin.
Previous report
Europe Segment
Previous report
Operating results for the Europe segment were as follows:
Previous report
Net sales increased 15% due to a 7% increase in volume, primarily driven by higher fiber gypsum volume, higher average net sales price and favorable exchange rates. Net sales in Euros increased 12%. Higher average net sales price was primarily driven by favorable exchange rates and our May/June 2026 and January 2026 price increases.
Previous report
Gross margin remained flat at 32.3% as higher average net sales price and lower energy, paper and gypsum costs were offset by higher freight.
Previous report
SG&A expenses increased 4%, primarily driven by higher labor costs, partially offset by lower marketing expenses. As a percentage of sales, SG&A expenses decreased 1.9 percentage points.
Previous report
Operating income margin increased 1.8 percentage points to 12.9% primarily driven by lower SG&A expenses as a percentage of sales, while gross margin remained flat.
Previous report
General corporate costs decreased 19%, driven by lower acquisition related expenses of $16.1 million, primarily due to lower professional service fees associated with the AZEK acquisition. In addition, the decrease was also due to the allocation of $7.3 million of R&D costs to our segments beginning July 1, 2025. These decreases were partially offset by AZEK expenses related to stock compensation and employee costs. Legacy Corporate costs were relatively flat compared to the first quarter of fiscal year 2026.
Reworded paragraphs (25)
Previous wording
•statements regarding the Company’s plans, objectives or goals, including those relating to strategies, initiatives, competition, acquisitions, dispositions and/or its products;
Current wording
•statements regarding the Company’s plans, objectives or goals, including those relating to strategies, initiatives, competition, acquisitions, dispositions, including the planned disposition of the European segment and/or its products;
Previous wording
Forward-looking statements are based on the Company’s current expectations, estimates and assumptions. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our expectations. These risks and uncertainties include, but are not limited to, those described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026, filed with the Securities and Exchange Commission (“SEC”) on May 19, 2026.
Current wording
Forward-looking statements are based on the Company’s current expectations, estimates and assumptions. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our expectations. These risks and uncertainties include, but are not limited to, those described in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026, filed with the Securities and Exchange Commission (“SEC”) on May 19, 2026, and other reports we file with the SEC and the ASX from time to time.
Previous wording
James Hardie Industries plc is a leading provider of exterior home and outdoor living solutions, serving the new home construction, repair and remodel and outdoor living markets. Our current primary geographic markets include the United States of America (“US,” “USA” or the “United States”), Australia and Europe. On July 1, 2025, we completed the acquisition of The AZEK Company Inc. (“AZEK”), an industry-leading designer and manufacturer of low maintenance and environmentally sustainable outdoor living products, which has manufacturing and recycling facilities in the United States.
Current wording
James Hardie Industries plc is a leading provider of exterior home and outdoor living solutions, serving the new home construction, repair and remodel and outdoor living markets. Our current primary geographic markets include the United States of America (“US,” “USA” or the “United States”) and Australia. On July 1, 2025, we completed the acquisition of The AZEK Company Inc. (“AZEK”), an industry-leading designer and manufacturer of low maintenance and environmentally sustainable outdoor living products, which has manufacturing and recycling facilities in the United States. In August 2026, the Company announced the strategic divestiture of its European operations which is expected to close in the first half of calendar 2027, and the intended closure of its European fiber cement business. As a result, the Europe segment is excluded from the Company’s segment results and presented within discontinued operations. Prior-period segment information has been recast to exclude the discontinued operations. Refer to Note 3, “Discontinued Operations”, to the unaudited Condensed Consolidated Financial Statements included in Part 1, Item 1 of this Form 10-Q for further information.
Previous wording
As of June 30, 2026, the Company has four reportable segments:
Current wording
As of September 30, 2026, the Company has three reportable segments:
Previous wording
•Deck, Rail & Accessories segment - Manufactures decking, railing, cladding, pergolas, cabanas and related accessories in the United States. These products are sold in the United States and Canada.
Current wording
•Deck, Rail & Accessories segment - Manufactures decking, railing, cladding, pergolas, cabanas and related accessories in the United States. These products are primarily sold in the United States and Canada.
Previous wording
Income tax expense increased 96%, while the effective tax rate increased 3.5 percentage points. The increase in tax expense reflects higher income before income taxes compared to fiscal year 2026, while the higher effective tax rate was primarily driven by discrete items.
Current wording
Income tax expense increased $66.5 million and the effective tax rate was 34.1% compared to (20.9)% in the prior corresponding period. The increase in tax expense reflects higher income before income taxes compared to the second quarter of fiscal year 2026, while the higher effective tax rate was primarily driven by geographical mix of earnings and discrete items.
Previous wording
Net sales increased 64% primarily driven by the AZEK acquisition on July 1, 2025, which contributed net sales of $397.1 million, as well as higher net sales in our Siding & Trim, Australia & New Zealand and Europe segments.
Current wording
Net sales increased 43% due to higher net sales in all of our reportable segments, as well as the AZEK acquisition on July 1, 2025, which contributed net sales of $397.1 million in the first quarter of fiscal year 2027.
Previous wording
Restructuring expenses increased 100%, due to fixed asset impairments, lease exit and employee costs related to the closure of a recycling plant in Oregon. These same costs were not incurred in the prior period.
Current wording
Restructuring expenses increased 100%, primarily due to costs incurred in the first quarter of fiscal year 2027 for fixed asset impairments, lease exit and employee costs related to the closure of a recycling plant in Oregon. These same costs were not incurred in the prior corresponding period.
Previous wording
Interest, net increased 63%, primarily driven by a higher principal balance outstanding related to our senior secured credit facilities and senior secured notes. This was partially offset by pre-close financing and interest costs of $34.9 million incurred in the prior year.
Current wording
Interest, net increased 9%, primarily due to higher interest expense associated with our senior secured credit facilities and senior secured notes, which were outstanding for the full six-month period compared to only a portion of the prior-year period. This was partially offset by pre-close financing and interest costs of $34.9 million incurred in the prior year.
Previous wording
Net income increased 67% due to higher operating income and lower other expense as the first quarter of fiscal year 2026 included an $11.6 million non-cash loss on our interest rate swap. This was partially offset by higher interest and income tax expense.
Current wording
Other income, netincreased 305%, due to the $19.4 million non-cash gain in the current year on the foreign currency forward contracts as noted above. In addition, the first quarter of fiscal year 2026 included an $11.6 million non-cash loss on our interest rate swap.
Previous wording
Net sales increased 34%, driven by higher sales in both the North America fiber cement and AZEK businesses. AZEK, which was acquired on July 1, 2025, contributed sales of $92.0 million during the first quarter of fiscal year 2027. North America fiber cement sales increased 20% primarily due to higher volume of 13% as customers inventory levels normalized compared to customer inventory management in prior year and higher average net sales price primarily resulting from our annual price increase.
Current wording
Net sales increased 24%, driven by higher sales in both the North America fiber cement and AZEK Exteriors businesses. AZEK, which was acquired on July 1, 2025, contributed sales of $92.0 million during the first quarter of fiscal year 2027. North America fiber cement sales increased 17% primarily due to higher exterior product volumes, as customers inventory levels normalized compared to the prior corresponding period and higher sales price primarily resulting from our annual price increase. In addition, sales increased due to continued market recovery in the Southeast and Northeast.
Previous wording
Research and development expenses (“R&D”) expenses increased $7.2 million primarily due to the allocation of $6.1 million of R&D expenses which were not allocated to our segments prior to the second quarter of fiscal year 2026.
Current wording
Research and development expenses (“R&D”) expenses increased $5.9 million primarily due to the allocation of R&D expenses which were not allocated to our segments prior to the second quarter of fiscal year 2026.
Previous wording
Acquisition related expenses increased $3.3 million due to higher travel and professional service fees related to the AZEK acquisition integration.
Current wording
Acquisition and divestiture related expenses increased 88% due to an inventory write-off of $1.7 million related to our European divestiture as mentioned above. In addition, acquisition related expenses from the AZEK acquisition integration increased $2.5 million due to higher travel and professional service fees, partially offset by lower labor costs.
Previous wording
Net sales increased 26%, driven by higher volumes of 11% and favorable exchange rates, as net sales in Australian dollars increased 14%. The increase in volumes was primarily attributable to customers pre-buying our products in anticipation of future fuel price increases.
Current wording
Net sales increased 21%, driven by higher fiber cement volumes of 7% and favorable exchange rates, as net sales in Australian dollars increased 12%. The increase in volumes was primarily attributable to strong underlying demand for our products and category share gains.
Previous wording
Gross margin increased 0.8 percentage points primarily due to a higher average net sales price due to favorable exchange rates, partially offset by higher freight costs.
Current wording
Gross margin increased 0.8 percentage points primarily due to a higher sales price due to favorable exchange rates, partially offset by higher freight costs.
Previous wording
R&D expenses increased $1.0 million due to the allocation of certain R&D expenses which were previously unallocated to our segments prior to the second quarter of fiscal year 2026.
Current wording
R&D expenses increased $1.0 million, primarily due to the allocation of certain R&D expenses which were previously unallocated to our segments prior to the second quarter of fiscal year 2026.
Previous wording
We define Adjusted Net Income as net income before legacy items such as asbestos related expenses and adjustments, and AICF interest income and significant non-recurring items, such as restructuring gain or expenses, acquisition and pre-close financing related costs, inventory fair value adjustment, amortization of intangible assets resulting from AZEK acquisition, as well as share-based compensation expense and adjustments to tax expenses.
Current wording
We define Adjusted Net Income as net income from continuing operations before legacy items such as asbestos related expenses and adjustments, and AICF interest income and significant non-recurring items, such as restructuring gain or expenses, acquisition and divestiture related expenses, pre-close financing costs, non-cash gain on foreign currency forward contracts, inventory fair value adjustment, amortization of intangible assets resulting from AZEK acquisition, as well as share-based compensation expense and adjustments to tax expenses.
Previous wording
We define Adjusted EBITDA as net income before interest, net, other expense (income), net, income tax expense and depreciation and amortization, and items such as asbestos related expenses and adjustments, share-based compensation expense, and significant non-recurring items, such as restructuring gain and expenses, acquisition related expenses and inventory fair value adjustment. Adjusted EBITDA Margin is equal to Adjusted EBITDA divided by net sales.
Current wording
We define Adjusted EBITDA as net income from continuing operations before interest, net, other expense (income), net, income tax expense and depreciation and amortization, and items such as asbestos related expenses and adjustments, share-based compensation expense, and significant non-recurring items, such as restructuring gain and expenses, acquisition and divestiture related expenses, and inventory fair value adjustment. Adjusted EBITDA Margin is equal to Adjusted EBITDA divided by net sales.
Previous wording
We believe Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA and Adjusted EBITDA Margin are useful to investors because they help identify underlying trends in our business that could otherwise be masked by certain expenses that can vary from company to company depending on, among other things, its financing, capital structure and the method by which its assets were acquired, and can also vary significantly from period to period. For example, management excludes share-based compensation expense because the amount recognized in any period is impacted by factors such as grant timing, valuation assumptions, and vesting schedules, which may vary from period to period and may not directly reflect the ongoing operating performance of the business. We believe these adjustments are helpful to investors in assessing our net income performance in a way that is similar to the way management assesses our performance. Additionally, Adjusted EBITDA and Adjusted EBITDA margin are common measures of operating performance in our industry, and we believe they facilitate operating comparisons. Our management also uses Adjusted EBITDA and Adjusted EBITDA Margin in conjunction with other GAAP financial measures for planning purposes, including as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance.
Current wording
We believe Adjusted Net Income, Adjusted Diluted EPS, Adjusted EBITDA and Adjusted EBITDA Margin are useful to investors because they help identify underlying trends in our business that could otherwise be masked by certain expenses that can vary from company to company depending on, among other things, its financing, capital structure and the method by which its assets were acquired, and can also vary significantly from period to period. For example, management began excluding share-based compensation expense in the first quarter of our 2027 fiscal year because the amount recognized in any period is impacted by factors such as grant timing, valuation assumptions, and vesting schedules, which may vary from period to period and may not directly reflect the ongoing operating performance of the business. We believe these adjustments are helpful to investors in assessing our net income performance in a way that is similar to the way management assesses our performance. Additionally, Adjusted EBITDA and Adjusted EBITDA Margin are common measures of operating performance in our industry, and we believe they facilitate operating comparisons. Our management also uses Adjusted EBITDA and Adjusted EBITDA Margin in conjunction with other GAAP financial measures for planning purposes, including as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance.
Previous wording
Our primary cash needs are to fund working capital, capital expenditures, debt service and acquisitions we may undertake. As of June 30, 2026, we had cash and cash equivalents on hand of $289.9 million and $843.2 million available under our Revolving Facility.
Current wording
Our primary cash needs are to fund working capital, capital expenditures, debt service and acquisitions we may undertake. As of September 30, 2026, we had cash and cash equivalents on hand of $323.1 million and $993.2 million available under our Revolving Facility.
Previous wording
Our gross debt balance decreased from $4,567.2 million at March 31, 2026 to $4,306.3 million at June 30, 2026, primarily due to the redemption of our $400 million senior unsecured notes due 2028, partially offset by a $150.0 million draw on our Revolving Facility. Readers are referred to Note 7, “Debt” to the unaudited Condensed Consolidated Financial Statements included in Part 1, Item 1 of this Form 10-Q for further information on our debt obligations.
Current wording
Our gross debt balance decreased from $4,567.2 million at March 31, 2026 to $4,045.3 million at September 30, 2026, primarily due to the redemption of our $400 million senior unsecured notes due 2028, and the $100 million payment on our Term A-1 Facility due 2028. Readers are referred to Note 8, “Debt” to the unaudited Condensed Consolidated Financial Statements included in Part 1, Item 1 of this Form 10-Q for further information on our debt obligations.
Previous wording
The $137.1 million increase in cash provided by operating activities is primarily driven by higher operating income generated by increased net sales. This increase was partially offset by lower cash provided by working capital, principally reflecting less favorable changes in accounts receivable and accounts payable.
Current wording
The $439.4 million increase in cash provided by operating activities is primarily driven by higher operating income generated by increased net sales. This increase also benefited from higher cash provided by working capital, principally reflecting favorable changes in inventories as both the Siding & Trim and Deck Rail & Accessories segments had lower inventories in the current year, compared to higher inventories in the Siding & Trim segment in the prior year.
Previous wording
The $1.7 million decrease in cash used in investing activities is primarily due to lower purchases of plant property and equipment, offset by the net purchase of restricted investments for Asbestos.
Current wording
The $3,948.7 million decrease in cash used in investing activities is primarily due to the cash consideration for the AZEK acquisition (net of cash acquired) of $3,919.8 million in the prior year, as well as lower purchases of plant property and equipment, partially offset by the net purchase of restricted investments for Asbestos.
Previous wording
The $1,664.2 million decrease in cash (used in) provided by financing activities is primarily due to the repayment of $790.9 million of debt in the current year, as well as the issuance of the 2031 and 2032 Notes of $1,700.0 million to finance the cash portion of the AZEK acquisition in the prior year. This was partially offset by proceeds from the Revolving Facility in the current year and debt paydowns in the prior year.
Current wording
The $4,361.9 million decrease in cash (used in) provided by financing activities is primarily due to the prior year issuance of $1,700.0 million of 2031 and 2032 Notes and $2,500.0 million of Term Loans to finance the cash portion of the AZEK acquisition. In addition, net repayments were $521.9 million in the current year compared to $301.6 million in the prior year.
Previous wording
During fiscal year 2027, we will contribute A$128.2 million to AICF, excluding interest, in quarterly installments. The first payment of A$32.1 million was made on July 1, 2026. Readers are referred to Note 1, “Organization and Significant Accounting Policies” and Note 8,“Asbestos” to the unaudited Condensed Consolidated Financial Statements included in Part 1, Item 1 of this Form 10-Q for further information on asbestos.
Current wording
During fiscal year 2027, we will contribute A$128.2 million to AICF, excluding interest, in quarterly installments. The first two payments made on July 1, 2026 and October 1, 2026 totaled A$64.1 million. Readers are referred to Note 1, “Organization and Significant Accounting Policies” and Note 9,
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Gross margin increased 0.8 percentage points primarily due to a higher sales price due to favorable exchange rates, manufacturing efficiencies and lower input costs, partially offset by higher freight costs.
Current report — wording carried from elsewhere
“Asbestos” to the unaudited Condensed Consolidated Financial Statements included in Part 1, Item 1 of this Form 10-Q for further information on asbestos.