Condensed Financial Information of Registrant (Parent Company Only)

6 Months Ended

Mar. 31, 2023

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Condensed Financial Information of Registrant (Parent Company Only)

18. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY)

The AZEK Company Inc. (parent company only)

Balance Sheets

(In thousands of U.S. dollars, except for share and per share amounts)

	March 31, 2023			September 30, 2022
ASSETS:
Non-current assets:
Investments in subsidiaries	$	1,435,073		$	1,444,443
Total non-current assets		1,435,073			1,444,443
Total assets	$	1,435,073		$	1,444,443
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Total liabilities	$	—		$	—
Stockholders’ equity:
Preferred stock, $0.001 par value; 1,000,000 shares authorized and no shares    issued or outstanding at March 31, 2023 and September 30, 2022,    respectively		—			—
Class A common stock, $0.001 par value; 1,100,000,000 shares authorized,    155,303,433 shares issued at March 31, 2023 and 155,157,220 shares    issued at September 30, 2022		155			155
Class B common stock, $0.001 par value; 100,000,000 shares authorized,    100 shares issued and outstanding at March 31, 2023 and at September 30,    2022, respectively		—			—
Additional paid‑in capital		1,641,321			1,630,378
Accumulated deficit		(122,565	)		(113,002	)
Accumulated other comprehensive income (loss)		(3,262	)		—
Treasury stock, at cost, 4,469,330 and 4,116,570 shares at March 31, 2023    and September 30, 2022, respectively		(80,576	)		(73,088	)
Total stockholders’ equity		1,435,073			1,444,443
Total liabilities and stockholders’ equity	$	1,435,073		$	1,444,443

	Three Months Ended March 31,				Six Months Ended March 31,
	2023		2022		2023			2022
Net income (loss) of subsidiaries	$	16,273	$	35,818	$	(9,563	)	$	52,525
Net income (loss) of subsidiaries	$	16,273	$	35,818	$	(9,563	)	$	52,525
Comprehensive income (loss)	$	14,807	$	35,818	$	(12,825	)	$	52,525

The AZEK Company Inc. did not have any cash as of March 31, 2023 or September 30, 2022. Accordingly a Condensed Statement of Cash Flows has not been presented.

Basis of Presentation

The parent company financial statements should be read in conjunction with the Company’s Consolidated Financial Statements and the accompanying notes thereto. For purposes of this condensed financial information, the Company’s wholly owned and majority owned subsidiaries are recorded based upon its proportionate share of the subsidiaries’ net assets (similar to presenting them on the equity method).

Since the restricted net assets of The AZEK Company Inc. and its subsidiaries exceed 25% of the consolidated net assets of the Company and its subsidiaries, the accompanying condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X. This information should be read in conjunction with the accompanying Condensed Consolidated Financial Statements.

Dividends from Subsidiaries

There were $7.5 million in cash dividends paid to The AZEK Company Inc. from the Company’s consolidated subsidiaries during the three and six months ended March 31, 2023 and $0.0 million in cash dividends paid to The AZEK Company Inc. from the

Company’s consolidated subsidiaries during the three and six months ended March 31, 2022. The $7.5 million cash dividends were used to fund share repurchases on the open market.

Restricted Payments

CPG International LLC is party to the Revolving Credit Facility and the 2022 Term Loan Agreement. The obligations under the Revolving Credit Facility and 2022 Term Loan Agreement are secured by substantially all of the present and future assets of the borrowers and guarantors, including equity interests of their domestic subsidiaries, subject to certain exceptions.

The obligations under the Revolving Credit Facility and 2022 Term Loan Agreement are guaranteed by the Company and its wholly owned domestic subsidiaries other than certain immaterial subsidiaries and other excluded subsidiaries. CPG International LLC is not permitted to make certain payments unless those payments are consistent with exceptions set forth in the agreements. These payments include repurchase of equity interests, fees associated with a public offering, income taxes due in other applicable payments. Further, the payments are only permitted if certain conditions are met related to availability and fixed charge coverage as defined in the Revolving Credit Facility and described in Note 8.