CSL - Earnings call transcript Q1 2019 | Carlisle Companies Incorporated

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Operator

Good afternoon. My name is Kelly and I will be your conference operator today. At this time, I would like to welcome everyone to the Carlisle Companies First Quarter 2019 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. to of call Investor like Giannakouros, to now President Vice Relations would turn over the Jim I and FP&A. ahead. go please Jim,

Jim Giannakouros

Thank find call. outlook presentation at Discussing Chief XXXX. the discussing Chris results everyone, call the quarter afternoon, today Investor quarter the call updated market and our are quarter you, towards Bob slide President our Roche, to and will Relations first after press Carlisle’s Kelly. first Financial operating CEO; and you Vision www.carlisle.com section. release discuss today, our progress Carlisle’s earnings can Chris financial and results Koch, financial and website XXXX and our Today’s released in will on We begin welcome Bob with conference our closed Officer. performance. our both first earnings Good and

we read our should affect over these results may investment turn XX-Q. statements with the and to I that decision. will filings up note remarks, along the where SEC, of materially prepared uncertainties file and we With will may meantime, we on be XX-K some of call differ the statements an Carlisle due a risk of forward-looking and investment call and refer are carefully, from press reviewing risks may number our our of provided to our in in please release Forms SEC A before an In reports actual factors. to Following call X results that, the that during made Slide our discussion open Those Chris. in making expectations the for this our questions. and certain presentation, with considering the

Christian Koch

pleased Carlisle in and Please of X our turn billion with goals $X and Good had progress revenues, are to we Jim. presentation. income XX% XX% Slide Thanks, the ROIC. excellent XXXX towards first an Vision quarter the afternoon, of everyone. operating

the – Vision continuing improvement first with in focused Carlisle system exceptional we invest the culture; over and a of build organic operating deploying remain success to acquisitions; $X utilizing expenditures, year continue and with organic into ahead X% resolve, first of on driving target of on we We the driving driving CCM leverage; quarter, synergistic end approximately billion as realization to to Vision across demand and As markets. growth maintain our scale to purchases all X% XXXX, In talent; drove building operational remain dividends. share we four see in price the growth, rate, segments. capital we CIT continue and X% disciplined solid our positive continuous pricing

the restructuring our our culture growth, throughout for system a operating COS discipline pricing Carlisle successful improvement our efforts, Petersen is the quarter, income process efficiencies continuous and remains rose realization of past that are driving dividends. to Another our further our more double highlights expected CBF, in of over included the acquisition launch then in operations second the all across segments. savings the products than from core integral business. in revenue efficiencies for and new CCM, indication consecutive an and derived Operating XX% restructured synergies paying

$XXX savings flow cash leaving of annually. savings exceeded with $XX in well of the first quarter to X% quarter, million, X.X% ending million. drove of For X% sales, an the goal our Free position cash COS first within of us

the pursue balance worth balanced of we a $XXX deployment. Our to quarter, repurchases, acquiring and accelerated our remains strong to shares. first planned In approach sheet capital million share we continue

XXXX, the Since of million beginning returned repurchases We $X.X share to also dividends. worth paid of of billion approximately form have dividends. shareholders in we $XX the and

miniaturization acquisition recently, of managing through Aerospace, synergistic Medical our an and Most Fluid envelope of and which particularly acquisitions expansion key announced CIT integrated XXXX on our and pipeline, in Technologies, building acquisition original equipment participate MicroConnex, focus acquisition the technology manufacturers. RedGroup, of medical major Technologies the adds within Combined earlier technologies platforms. the solutions to continue sensor active positioned medical at – MicroConnex developing and with completely CIT. platforms to strategic are delivering We core our we in equipment to at design our platform and more

to to capabilities work aggressively continue our the build fast-growing Technology segment. We out Medical within

billion-plus with With excellent American line acquisitions accelerating quarter, our continues positive Premium the Metals, Metal North architectural with the all integration recent our acquisition growing within early first expansion a expectations. new synergies tracking Sunlast where business metal-related are an CCM close construction into market. of and story, fit be and in Petersen the of Panels, Petersen to our our is the metal in Drexel $X sales

billion, Turning first and $X.X a record XXXX year-over-year X% consecutive sales quarter quarter to our achieved Slide increase over X. XXth growth. of revenues of We

this primarily I As driven mentioned including earlier, X% organic growth, realization. X% was by price

with value of pricing especially implemented the pleased discipline, processes our the capturing true the marketplace. the experience Carlisle We the that are in business have teams and rigor across

and flat operating cost efficiency grew EPS basis the At in in over Our operating to to $X.XX diluted million restructuring year-over-year, costs. restructuring, gains growth growth. year-over-year and margins by price also margins Notably, income rationalization driving $X.XX, includes operating record basis points facility make by the quarter acquisition-related and delivered driving $XX despite XX% to leverage. past also approximately benefits. income quarter CCM first in share the this, revenue quarter $XXX.X CIT, of realization, we accomplished progress XX expand XX.X%, net leverage, activities of continue XX% volume operating delivered from XXX expanding million, year-over-year CFT which points first while maintaining marketplace. price of driven strong

in XXXX resulted progress CBS XX%, continued efforts improvement. at profitability XXXX income reinforcing CBF towards and operating improvement Finally, restructuring of

highlights the continuing to strong this that turn year-over-year, divisional year. XX% the revenues reflecting of grew earlier X% Now demand with of CCM. let’s starting organic Petersen and addition underlying growth CCM over

growing entered to we to backdrop experienced we time. we XXXX. view CCM labor With busiest exited applications projects the tight, its what consistent significant growth as extremely demand CCM’s weather nonresidential of continue the strong demand in in remaining American to sustainable of continue experienced roofing markets. days outstanding volume building across weather strong markets the industry. the as demand, and a results nonresidential CIT solid improved from impacted quarter, is North an as Test Technology in reroofing and We in benefit and aerospace better continued and the platforms. than & in XX%, of first resilience work our the in face and Measurement demonstrates on construction and reflects roof and strong improvement of severe expected the increasing construction construction progress March first new revenue growth season backlog across the which quarter showed our This markets presence Medical

Within remains of most platforms. strong segment, Boeing rates the Aerospace build and Airbus across

of has of MAX recently, grounding CIT Boeing MAX As supplies and production Boeing been subsequent products two global aircraft various X. tragic platform. in XXX to the press the in crashes X Aircraft high-performance this XXX planned fleet interconnect cut has of highlighted the a resulted

We’re monitoring the XXX XXXX – delays currently an approximate percentage to situation Boeing sales year-over-year X point amount closely we’re X% growth. expecting MAX to headwind and production to CIT’s

procedures. organic technologies industry focus populations medical trends given aging for both such the and dynamics, platform growth, minimally CIT inorganic and remains as invasive area towards attractive an of Our

revenue which quarter, We’re strategy. restructuring points to great market and its excited margins organic our in deliver included and greater medical and did which right-size quarters, is year-over-year, efficiencies investment our restructuring sales addition announced traction growth but footprint projects the our April increasing manufacturing primarily during a expansion XX leverage sales about to gained on driven year-over-year, basis MicroConnex the COS we X% in actions. over by quarter. coming anticipate CIT flat X, acquisition growth CFT the from savings past were in

segment markets which XXX quarter breakthrough, first up for is XX%. acquisitions, new fluid and to along on new our for as our the gain global adhesives a unique fourth quarter. At investment-driven driving the Back year-over-year, efficiency XXXX, global engineered, of quarter well that One driven further paint, we in were efficiency on sealants to waste return Refinish COS the the in that by products slightly. increased to the headwinds of by end our to Demand quarter and by from recovery highly received COS, DVX resulted with Oklahoma basis CFT system was to priority efforts North our weaken with coatings, lagged. and key product were – CFT’s the and China. did down operating by launch enhancing improved China, seek around you a excuse income Medina, in difficult R&D reach. markets production in technological gains in sales and growth Much CBS and agriculture primarily automotive Industrial sales across sales to was through remain the This, by to and solutions had characteristics, This and the as products declines Most their leap integration Automotive comparison Increasing General basecoat product growth largely our adjusting this Well-publicized of sales American facility at sales its expanding of coupled may efficiencies we for delivering the spray – charges, reduced Ohio, construction the air resulted in realization such share revenues by market transportation markets. in painter. less markets continued realize tough at comps results in price and focused a quarterly year-over-year. increased, recall, CFT, where me, into user, certain XXXX. and being and customers driven or close XX%, inventory industrial products. driven European partially offset importantly, and remain engineering year-over-year. significant European standard results, Tulsa, gun levels, a efforts X% in gained closure while the and restructuring market sales, price improving Chinese points restructuring the came

operational flow. and to double see stated, review reach XXXX. margins about our CBS over and provide Bob? detail previously now further expect of Bob sheet quarter we and performance As course our first will cash the balance financial digits

Robert Roche

Chris. revenue the Slide bridge X on of Thank Please to you, turn presentation. the

Organic we and the Roofing, and Measurement for overall quarter, sales was X.X% As Acquisitions revenue pleased are in by XX driven growth our quarter performance. headwind. results a quarter our contributed Chris X.X% of point FX mentioned, Aerospace strong Commercial markets. was the basis with & growth in first Test

collectively XXX COS expanded by volume X. were and margin Freight, EPS a bridge. and Turning provided margin labor basis a Slide X, basis were point and were year-over-year costs basis have headwind XXX an we On improvement Slide XX combined restructuring point operating points to rationalization material headwind. headwind. QX our bridge leverage basis pricing Acquisitions Positive the basis costs points point year-over-year. points. XXX raw of basis XX and for up margin benefited XXX on and

of and operations positive continuing previously which $X.XX $X.XX, COS As from volumes $X.XX $X.XX, record freight reported diluted stated, fully contributed first quarter last labor Higher price raw lower year. $X.XX, costs. material, saw added year. compares $X.XX headwind we we count added and $X.XX share added versus the to EPS last in offsetting

Now in XX%, XX well over let’s realization by the foreign CCM extremely was revenues growth CCM, growth Operating turn to margin At basis year. point by detail. price first in cost more net organic increase million of XXX over contributing quarter currency Slide acquisitions the a quarter. executed partially XX.X%, basis a $XX of point and CCM at X.X% translation segment the headwind. last accomplishing to performance offset of review X in X.X%, increased with

off with growing Measurement Aerospace Test capped to review CIT by in Defense quarter. let’s and quarter source growing first results. solid of and a Now turn Space double X & digits. strength a Slide XX% remained to the CIT’s

us, remains within an grew what for year-over-year XX.X%, and COS in our focus from to savings medicals While volumes, line market continues impacted backdrop. sales a product Offsetting of to investment in was drop points operating be our margin quarter benefit – against price line predominantly this higher the product very medical. given restructuring manufacturing rationalization basis CIT’s attractive projects footprint. XX realization, and to exits right-size area

XX.X%. and double up Automotive CFT’s This, revenue organic XXXX was XXX to X.X% quarter COS was X.X% year-over-year, more X.X% Refinish rationalization expanded which Slide and from our up by first integration basis vertical year-over-year. headwind. Turning savings with pricing efforts, facility overall digits our offset was now XX. than points a coupled increased XXXX and efficiencies margins FX and to

in customers On sheet Turning partially line CBF. to line X.X% after expectations, CBF’s Tulsa, revenue inventory $X.X to FX The X.X% consolidation. moderating and levels. completing of and in and was gains operating Slide certain Ohio quarter, select show margin factory operating decline. vehicle income implementation Medina, had also price expectations our our quarter a XX% in given with share organic decline offset growth the with negative Slide XX, balance increase on the off-highway their X.X% XX first during million, in markets adjusting the Oklahoma impact. we our was or metrics. for Successful

ended remains line. cash balance and sheet availability of million billion of our the strong Our quarter $XXX $X under we on revolving and with credit hand

quarter, we repurchased the $XXX During of million opportunistically shares. approximately

Turning Slide XX. now to

negative to with increase Chris. free Our was over that, to free cash call capital positive The the lower in a $XX.X capital $X.X attributable of flow turn a year. last will now cash efficient use more I working And expenditures. million, to earnings, was predominantly cash higher compared million flow and back

Christian Koch

to Thanks, we Slide Bob. turn Please as XXXX updated our outlook. XX, discuss

the a driven that we North year-over-year CCM grow XX%, team’s labor solid to XXXX. as what the and expect to XXX whole, worker projections now revenues now tight double expect to to Petersen, growth the expect nonresidential price contractors, MAX we the view growth be digits of low American a single-digit that discipline, backlog CIT, mid of revenue will market, At construction markets CCM we as despite segment, addition single-digit in be reduced healthy we Carlisle high high By X by range. range. by a increase to volumes For in

increases. XXXX and our We taken MicroConnex & CIT Medical inflation to pricing of and of cost outlook. CIT offset other Measurement. strength a Test The in benefit of core will addition expect point previous our adds continued from Aerospace, growth about in actions to markets

growth, $XX the year-over-year amortization CFT, CBF, team expense to We levels, approximately certain solid approximately million. to revenue we million. expect At price restructuring improvements $XX realization expect continue to single-digit XXXX. of now customers million facilities discipline and and approximately by line gains in At price expect inventory to this charges new growth introductions. with expected in drive we product flat their taken and product taken, $XXX be CIT expected in year consolidation at of adjusting GDP Corporate in to North range, related driven American is the expense actions be is and the continue the be to global efficiency rationalization business. Depreciation to revenue mid operational

currently XXX%. to the expect to For and interest year, $XX our full-year, tax million free we expense of rate Net to to for and about the for we about conversion be $XXX $XXX expenditures XX% million million capital be flow is expect XXXX. above cash expected $XX million

As we of global as XXXX quarter momentum first our continues we to view solid what unfold, outlook. advantage are the generated a and well-positioned to take strong from economic

goals in and However, negative of vigilant impact uncertainties surrounding these U.S.-China traction per now Europe. uncertainties concludes and share of trade expect on Kelly, to our the achieving formal the our of economies, Despite issues by questions. goals, in two and fully This we ready achieved lingering and the continued to Brexit, have remain driving our record negotiations our to aware global Vision comments. XXXX. the – in and the earnings we XXXX remain deliver we’re especially China steadfast unresolved with impact for performance we We commitment XXXX. against these $XX

Operator

first Instructions] of from Bryan from Oppenheimer. question [Operator comes line Our Please Blair go the ahead.

is line open. Your

Bryan Blair

year. Good afternoon, to the guys. Great start

Robert Roche

Thanks, Bryan.

Christian Koch

good Bryan, afternoon. Hey,

Bryan Blair

like certain and update with in price I lot assessment? could there upside talked But to Is was million there. there to about you It $XX costs hoping $XX you another particular. that CCM decent tailwinds of trends parts moving relatively MDI place, before. range start the stable price any million could be in seems

Christian Koch

into the quarter we’re – thought we still Right yet with where to Yes. we’re little track we But be. victory at Bryan, it’s ahead year. a sure year. I kind thought not first we’d bit we quarter the quite and of in I’m now, don’t early what in on call ready the one

and continuing we’re So monitoring.

hopeful to of We’re pieces lot be could that that upside there moving though.

Bryan Blair

CCM, about prospects platforms having over expectations the across Okay, then pipeline on dollars in you you offer so? M&A CIT, most talked the And there may trends that’s we can see Is where of M&A any next flow and CFT. other across or or strategy, fair. year color terms

Christian Koch

Obviously, would as quickly projected CFT very some be, there. we’re to take see technologies finally acquisitions our these and drive get still build we’ve could. nice some to and through being positioned XXXX. And medical activity to excited of Vision platform We think, the revenue I preference we opportunities within out growth as then about be to able CCM on that some

approach disciplined we other be – we’re and to to decisions continue only I give I’d is investment the sure be multiples for still you there able to is of we return think that the yes, Expectations our in to expect. the going So and right things color high are our make shareholders expensive. make type

Bryan Blair

I All color. appreciate right. Thanks. the

Christian Koch

Yes.

Operator

the comes from line BMO. of Please question ahead. from go next Joel Your Tiss

Your line is open.

Joel Tiss

That was quick. [indiscernible] guys.

Christian Koch

ahead. Go

Joel Tiss

thing was of end or that CCM us any rationally you that the at you give help other or Just in XXXX. there? the acting there update one uncertainty for business the Is competitive are little talking landscape around the the about year any can guys there

Christian Koch

Yes.

all a the whole, gets I guess, than that two, and been paid I’d behavior the certain has rational superior better been Carlisle four aggressive. jobs, drive the for part, bit think, to ago. pleasantly three, to the be Obviously, we’re get giving and has I we’ve experience – that there customer we Joel. But to say, there more for years most and continuing service been, we’re delivery as When surprised large think I with expect we competition a price say, reaction.

Joel Tiss

that your and construction bit is That’s drill a like great. a very Friction, is the a down into it’s across Is we could just on, seems customers, construction or there’s second – more ag & And like roofing right, strong were for a mentioned backlog? if little specific then weak. you dichotomy, construction business seems and that of Board? the It got Brake

Christian Koch

I would to specific more agree. Yes, Joel, one us it’s of most our and say, – This is then businesses. that yes, global I as well. regionally

got sales America. we’ve of our outside think about North I XX%

different we within the see different And so sorts regions. all dynamics of

there’s more general I’d So it’s it in we can some that say, But into is breakdown CBS get industry. specific the to there, that later.

Joel Tiss

much. so you Thank Okay.

Operator

ahead. next of Frohnapple line Your go Research. Neil the Please question from Buckingham from comes

Your line is open.

Neil Frohnapple

stem good the of the Hi, you primarily performance, outlook QX outlook than within I for mean, the balance What’s your segment the stronger year higher the for expected? sales increase from the the afternoon. previously full-year? driving CCM or is does

Robert Roche

Yes.

I stronger and that not think expected a we’re healthy and – see we a a carrying seeing QX we call we continuing more our having contractors but was it, reroofing with see backlog. over, than backdrop, continued I’ll healthy completely

Neil Frohnapple

Bob. what Okay. within rate That’s for the in CCM, helpful, growth the And business was then the quarter? just Europe in

Robert Roche

little Europe, a XX%. over bit

Neil Frohnapple

it. the like got guess, just Okay, you from about, get the then XXX segment? last the going offset for increased X% net a acquisition, It CIT revenue one And but X% MAX. to that Could there’s one. from tailwind then outlook I talk sounds you’re the

there? for the outlook on So just this year SatCom an you sales color Thanks. provide if update any more And can versus XXXX?

Robert Roche

Yes. SatCom. I so bunch mean, with start had you there, a I’ll

be ended we We’re we’d there. up as in expected quarter exactly thought where first the

some the of lot There there – our strong the to of the our we obviously the then while MAX acquisition right, a expect decline. we saw we’re for do first declines is, quarter weren’t first coming going them seeing our rest and I year. was And the think, and otherwise, as we number that’s but we’re still expecting have little bit of coming you’re we did higher so than a be take up was what in to the the help us through, quarter, now full-year.

better don’t the bit So hold things for were around it’s we – but up little in expect first to them year. that XX% whole the a quarter, of

Neil Frohnapple

Okay, thanks. I’ll pass it on.

Robert Roche

Thanks.

Operator

from comes the Tim line question Please next Wojs Baird. from ahead. of Your go

Your open. line is

Timothy Wojs

afternoon. good Nice Hey, everybody, job.

Christian Koch

Hey, Tim.

Timothy Wojs

in. cost I’m little Just apart price of pick trying backing to kind bit. a

of cost price said net think the was million $XX you the quarter. kind realization I in

Christian Koch

Okay.

Timothy Wojs

$XX ballpark? to getting kind of million and I’m in price kind raws. the that maybe to rest million $XX Is the of of

Christian Koch

raws costs you’re than think characterizing. and No, better I think, realization to – want I price had you’d we higher

Timothy Wojs

But then kind know But January, quarter And okay. Okay, going think February, and be I if it’s know month if the did if led of the has strongest I how kind not. of kind the And through of that of for kind or by you don’t data. the you April, April? trend into quarter? volumes don’t month? March of you to guys have March Was and helpful just

Christian Koch

exactly. Yes,

the held things just to And we our come look there year you I roof, own it rough soon And and then to trend. in Tim, the and the the if as much. out unfolded, could at be month pretty get January turned then quarter on and pretty think looked February. as think very you strong weather continuing and March I exited people how and turned the a April back they was

Timothy Wojs

entered on there guess, Okay, was how to for great. outlook And QX XXXX we and one I then expectations? And relative – when has just your Accella. last year? performance your changed to at in the the relative all

Christian Koch

think We we job. of a a fourth the team is changes quarter. the great lot Well, in had doing

really we think, wanted the they’ve or met as the what to in for I we well. about we’re have full-year. talked our expected holding and would numbers expectations QX They executed

Timothy Wojs

of the rest welcome Okay, great. your guys. We

Christian Koch

Thanks, Tim.

Robert Roche

Thanks, Tim.

Operator

line Please ahead. go comes the Garik of from next Longbow question Your Shmois Research. from

Your open. line is

Garik Shmois

Hey, thanks and congratulations.

It this like on even with, in somewhere just coming some CCM QX I wondering like of range volumes. it for little X% ahead – seems weather tracking of into was year. you the think some concerns. looking year, that And Just maybe expectation were for bit a the looks of well, growth

geographies or if anything just outperforming? specific demand? I’m So for maybe has CCM in what more And in are the changed wondering categories outlook

Christian Koch

too. weigh this, Yes, Bob in on can

the was basis. contributed, quarter in on surprises, thing think didn’t It X% the little sales Canada range the I thought over X%, volume. first a that’s us Acquisitions something the what but year-over-year first last was Europe seeing good that that delivered was good. about look terms we’re Across as talked we geographies, on. actually in increases, seeing in think I just XX%, Bob have we made – was in I strong. of talked – I better we great line, guess. Price, think a on expected bit we’re volume, that product we planned growth. we’re stronger pretty than about quarter X%, If

really than We difference seen the see much what averages. we haven’t share in industry

So less maybe I reroofing it quarter. we have those the that piece tractable think, the I that was and would trouble again, first a at the was is demand say, of bit a little the be exactly always great can than, thing construction, quarter the XX%, work market new And weather in the The dynamics XX% understanding variable. a always interesting. how how out so weather business and first it’s then, with played

a pretty starting the little way overall the but said, maybe little higher-end I on as of maybe a think would bit So on off million, is I the positive. like Bob start the track, bit I a more right to good year price think much think And we’re Bob. raws we it, $XX the thing, pretty

Robert Roche

which couple And backlogs. didn’t, the And I have little the of last volume the getting growth expected, if for of we up because strong quarter price our strong in don’t Garik, more Yes. we little and quarter fourth more – volume a talked But or quarter in we first because did contractors guidance the been first full-year. you’re we’re a the expecting years and it first have did a was to as we about the then talking that then and great. know little we from on did than and we’re quarter, feedback see really moderate full-year, on little about saw quarter, the maybe a

of we’re thinking. what difference that’s So in the sort

Garik Shmois

thanks. share. I more with you you Is in line the just heard the guess, correctly, Okay, sounds year? answered that of I expectations around your market if growing for you the balance my of are follow-up And market. partially the From it,

Christian Koch

we’re that the – what showed. happy There that price as given between we’re but see I whole, pretty think, growth that’s PVC, Yes, EPDM, obviously we the correct, on the with are right market TPO, there discipline Garik. and with we differences

Garik Shmois

Okay, great.

Operator

Charley from next line go Brady of Please Your comes SunTrust. the ahead. question from

is open. line Your

Charley Brady

guys. afternoon, Good thanks. Hey,

Christian Koch

Good afternoon, Charley.

Charley Brady

wanted full- Hey, what discussed don’t on it’s CCM? year for I the the to a price million on you this. price bit your But I fourth if I I know CCM cost. cost expectation know just drill – is wonder a quarter little $XX and for back

Christian Koch

be talked of So – about think we’re the $XX had remains to and quarter, all today this benefit I with Bob we at higher-end million $XX expected be we’re entered million, being that better would first in the between as going probably is to than the quarter saying that things equal.

Charley Brady

those Great, the a platform? is And of into about cross-selling just with then on can products on the talk CFT you the where that. some business, thanks. kind of progress CCM Obviously, it’s natural fit

Christian Koch

done side do certainly with of and polyurethane waterproofing we market I done lot side, in and the on would foam the in business, sealants and Accella a there’s there’s the that it’s analysis work say, and with adhesives – the Yes, being Exactly. CCM. some the

– had the businesses never issue equipment Now that that been before. in those is CFT

CFT working on are it’s and but at team early. engineers the so the that, And

to to that’s XXXX, XXXX. I to be start We think we’re it and going think somewhere takes going see launch something XX in between unfold a months product. XX to

look started on lot anything done their for, working would And activity, development work least, hit seeing market not cross-selling. a until being probably when XXXX. of so at the the on we say I at we but

Charley Brady

rev on guess comp But had given mean, clearly in that rec. QX little this touched CIT, gotcha. positive better just bit. a helpful. I had you Yes, I And you than tough expected, It’s – you

some bit dig the driving Can the of a you ago. two growth – of exit face just med strong kind year more those You of facing? that the a what’s you’re on of lower-margin had really issues stuff little in into

Christian Koch

for be strong, and month. mean, as can plane XXX content the every every building I as mean, production market continues aerospace very everybody much to I else I Yes. they mean, about planes. of but strong is talks MAX,

really doing So well. that’s

of bit got the some, within we plane. contract a We’re related standards out now to noise getting because standards that team, new revenue talking is versus more building about for per we the the start of door. actually inventory content recognize the rec I’ll are rev when There little it call ship it, you our the when to

some that do call little that quarter, where build with are. backdrop healthy quarters really growth bit to just But first of So the from excess it, moving between because we overall, and I’ll a there. there’s had the a of because

Charley Brady

Great.

and the of more particularly me. you’re to on significant Just headwind there freight freight margins? doing on that labor just kind is relief, or of On – any a are kind still what in, side? from coming seeing one so Is cost, you

Christian Koch

I’m going a to headwind significant it’s say, year-over-year.

it’s kind at seen of labor of improvement availability trucks say, flattened that I wouldn’t think we we’ve still or any high truckers or in great that. of But I out – level.

thing I’d say, And so to with. from tough deal it’s it’s perspective, out. flattened a still cost But a

Charley Brady

Great. state I’m more going to sorry. here, one

the a into the Just you talk of see Can in potential on Airbus? can, Airbus in just coming getting has maybe, you CIT about program number deeper opportunity to XXXX. you you again, wins extent with up

Christian Koch

with get in did started, we That to things structural one Well, build opportunity. needed We’ve EASA and made when I we big it’s recognition. of SatCom again us of we the capacity Airbus. – Award plant. helped that to a structural us Nogales some Year success one mean, that acquisition the the and was of start a We at key constructed more help an nice address first at UK was piece year, their had was certification Supplier that Airbus. one the the that which of last Airbus. capabilities win We the segments and had

spending great a is got. or the technology showing in lot that doing we’ve They’re Airbus. of the They’re a So job. the time product team

hang projects, we’re great on many it. We’re I working and of good once of mean, aerospace But on to while. The know, a progress. tend specified, think – as part tough I the a long for you is, making you’re you to it time. specified to on that’s part that in takes become

good for So it’s very opportunity I a us. think

Airbus in the we’d team increased a look job future. see the think I there to has great inroads the at and making performance done

Charley Brady

much. Great. very Thanks

Operator

Your ahead. Please from from last question Northcoast line the Research. go Kevin comes of Hocevar

line open. is Your

Kevin Hocevar

year. everybody, Hey, start the to nice

Christian Koch

you, Thank Kevin.

Kevin Hocevar

that with ramps the you have year. there X% in produced not or the the assumptions just it’s point MAX, at XXX that to be a for some assumption some XXXX? balance year, Maybe mentioned headwind the the that you do Is will of

Christian Koch

the That’s XX% reduction through out the calculated just year. the end of

Kevin Hocevar

your then you the CCM raws last And are throughout several a you the move Okay. dynamics oil of pricing the a same. have in lot use of here always terms different I prices precursor, months. raws supply moved doesn’t segment that have know use raws And higher and demand but oil as – in –

million now So raw I’m what wondering if you higher-end that could estimate, price $XX to million comment seeing? you’ll you the at mentioned you’re – of that. you’re $XX on the Is be thinking

to inflation assumption better? what comment you Is going it in as inflation than it that what’s assumption in And raw? the see if or materials an pickup or start Is So that? expected? – on pricing in we have raw curious goes Do raw is year you more a can there? on, and less raw tailwinds

Operator

the speakers. continue hold. have Please we lost gentlemen, to and Ladies

Christian Koch

think got I there. connected sorry, Kevin? Hey, I

Operator

We’re now reconnected.

Christian Koch

That was agile. not

and Sorry, staying your for disconnected everyone. line. on somehow, – the We’ve for and we’re apologize. we patience Thanks

that? answer we did Kevin, So,

Kevin Hocevar

I don’t didn’t know, I hear.

think were disconnected. I you

Christian Koch

the will Can answer you absolutely question, please? And we it. repeat

Kevin Hocevar

precursor Yes. your buy, you And higher raws of prices just are so know have lot it raws moved dynamics. raws slightly raws I to moved a but different supply/demand oil up. a and have your seems have like your

of the be expect towards now. million So to tailwind to you $XX mentioned year this that million price that $XX you higher-end

makeup see seeing better less raw are you what tailwind materials Do has assuming there? you that going So you happen? you you And that from come or you assume start inflation do expect wondering what’s up, than pricing than to or raws expected? oil Are in inflationary Is better there? up, to pick not expected? the because pressures

Christian Koch

around months in because season. million to In savings busy obviously by $XX Yes. in to year natural start that quarter turning of second-half talked tailwind still season a fourth of about the the a lot we million, have you for and up build the would the see do first up build slower in didn’t tie inventory. of quarter, the a some We the we it assume $XX and that the that’s case. We turnaround original the ago, couple – did

So tailwind see of any we didn’t first a quarter. lot in the

two But carry the little we we back-half a bit. have. into – the expect the increase always have over next year, for do We do built to some that of

Kevin Hocevar

Gotcha.

very you thank Okay, much.

Christian Koch

Okay.

Operator

There’s no further questions call the back remarks. turn at this time. I’ll closing now Koch to Chris for

Christian Koch

apologize to earnings Kelly, the with We This and the concludes XXXX look on that everyone for quarter call. forward Kelly, next again. thanks. you, Thank disconnection speaking earnings call. thanks, Well, there. to first everyone

Operator

today’s concludes This call. conference

now disconnect. You may

Carlisle Companies (CSL) 23 Apr 192019 Q1 Earnings call transcript