CSL - Earnings call transcript Q4 2024 | Carlisle Companies Incorporated

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. My name is Constantine, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Carlisle Companies Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions]

I would like to turn the call over to Mr. President Relations. Vice Carlisle's Patel, of Investor Mehul Mehul, ahead. please go

Mehul Patel

Relations good everyone. you, the of Patel, Carlisle's and released you Investor press results Fourth in both and XXXX Thank fourth Vice Carlisle. to website. quarter our our of can Mehul Quarter afternoon, call today, I'm section the Welcome presentation and Investor financial today's We Relations Call. XXXX President our find for release Earnings for

Board and me call On 'XX Chris financial performance highlights full Kevin results and year are Chris, today on commentary some Chair, the our Zdimal, and Today's President fourth will along Koch, give CFO. full who with an and will on outlook Kevin overview with quarter follow an update for call on XXXX. our XXXX. QX year and key provide CEO; Chris with our will our XXXX and provide our of begin

questions. the remarks, prepared our Following for we open up line will

But are current before on where due number press will and based to statements these of we materially could include and forward-looking from our which comments of X refer note filings. differ a that we uncertainties, statements begin, Actual today discussed results please expectations. in to our presentation, release risks Slide SEC

website. in our Carlisle non-GAAP on of provided and As the materials, in release are financial reconciliations we available appendix between information, measures our provides press GAAP and our non-GAAP which presentation

With that, I will over the turn Chris. call to

D. Koch

thank Carlisle's Fourth Call. XXXX everyone, you, Thank for Mehul. Quarter afternoon, you for us and joining Good Earnings

portfolio exceeding members to EPS to our businesses year $XX company. by of of XXXX, for industrial to all from I very productive XXXX Vision this in extending completing appreciation start sincere to for X past a pure-play like a products adjusted a general presentation. initiatives building start XXXX the pivot Slide in to and of delivering Turning our Carlisle team our my would

the a pivot several $X of year last made key company as strategic was the products accomplishments CIT year. To building the Carlisle proud XXXX over the to a historic pure-play company sale start, in our second quarter. for very of billion with We're completed we

building on our successful has to building in the innovation and delivered path refined performance XXXX for highlighted EPS and financial best-in-class pillars products of strong playbook Vision for XXXX. M&A our our employees provided our and investors, a mission adding that businesses focus adjusted already Our and $XX products have clarified well-established by and a years to of clear

growing year-over-year in year. XXXX, the driven Carlisle delivered in increase, record mid-single up XX% part from significant representing which by revenue EPS of stream throughout $XX.XX a digits adjusted reroofing, our and was recurring

to within also patterns We our inventory the normalized benefited more from channels levels contractor. buying the to return and

XXX record margins year of important was Our expanding margin this EBITDA XX.X%. adjusted when also factors. performance even points is with to a are more reminded X impressive This strong basis we

commercial markets. the negative First, well-forecasted negative serve. price a decline CCM impact CWT's we impacted markets the in of low residential in the was through worked substantially margin second, but trends by And single-digit nonetheless significant

space within businesses nearly to position Carlisle. market deploying of added also envelope acquisitions $XXX continued We the to strengthen X building into our in existing capital million that synergistic by

wide the MTL metal, as enables First, architectural metal. addition expanded such to solutions edge of acquisition capabilities leading and edge us coping and panels for composite the perimeter our metal range building authority the MTL with fascia, a commercial of on envelope. prefabricated of systems roofing's offer

metal front superb synergies leadership our fit of the Carlisle. to leader expect and on now of year acquisition through superior positions of the category. MTL's billion as This MTL progressed, also team an estimate we increase $XX our And industry expectations architectural our million with exceeded Carlisle over synergy further the million. integration initial playbook, well As to validated we the from now $XX $X in

of integrated in applications. acquisition vertically expanded of for insulation advances commercial, the residential contractors polystyrene infrastructure seek expanded products as building building across customers innovation recent our and position efficiency, leading our Plasti-Fab Second, for Plasti-Fab's seek polystyrene construction America. drives professionals market energy the comprehensive North solutions. and manufacturer Plasti-Fab products and

which the to As significant XXXX. we with And as expanded only integrated America, we business increase and existing $XX superb move polystyrene with company those synergies fit North estimated in meets at as our MTL, a EPS vertically needs. we million, expect Plasti-Fab through currently expect

completed Carlisle's builds the completed adding which of Texas we integrated acquisition insulation coverage Central leverages the geographic Plasti-Fab polystyrene announced recently acquisition and South States. previously while in expanded Texas-based and on vertically of manufacturer, United ThermaFoam, Yesterday, the expanded polystyrene capabilities

quarter fourth weather construction sales, below performance and patterns. negatively heavily XXXX markets. factors continued conditions These X. and the unfavorable These the headwinds more market broad the to Slide new residential impacted and experience at Carlisle new higher Looking outlook. markets XXXX to weighted midyear on the R&R results interest our lending and rates, headwinds were restricting commercial included

adjusted ROIC principles focus challenging fourth of year-over-year, this our disciplined $X.XX. businesses adjusted capital both essentially same on our record billion grew in $X.X organically quarter consolidated and Despite EPS growing through journey of of to confident stakeholders by were and pleased XXXX per as We environment, Vision well: remain EPS revenues see remained committed X% our flat continued to and we robust to share. EPS the QX remain Carlisle's know M&A. a growth allocation, to a $XX We

and provide systems in widely positioned ability well including innovative, ongoing ahead. macro commercial an benefit energy-efficient is and our Carlisle years to and the understood shortage solutions demand, reroofing trends, from labor-saving growing to housing

key strategy Vision path elements. XXXX guides Looking XXXX, forward our to through our ahead X

past accelerating labor-saving expansion we of supporting XX% solutions. revenues capabilities necessary of in the more million-plus products Carlisle, innovative, state-of-the-art are accelerate generating goal innovation PA. X from provide new integrated of focused solutions Nothing years. energy-efficient, innovation our resources and energy and our and new our innovation additional This efficiency to our development to our introduced in within investment on commitment labor-saving exemplifies First, will $XX systems, than center

pricing our for seek will the innovative we by experience products continue Operating Carlisle solutions Carlisle and and through the innovative System. driving Second, delivering our products by value-enhancing by value to to excellence solutions operational provide, margins the those and through we best-in-class expand

strategically will market expand the with we positions strong in process Third, our M&A growth our building envelope complement to efforts. best-in-class a organic

by strategic will integrations acquisitions advantage provide Our continue now playbook well-defined of successful was competitive and M&A Henry, our and Plasti-Fab. MTL drive on Carlisle, deals returns to significant for exemplified as and a

integration employing achieved acquisition selection criteria Leveraging our M&A adhering playbook, X disciplined Carlisle process a targets key by investment our ensuring maximize value to creation strategically. by We process. in and aims this to aligned

talent Carlisle As team; executing solid cost criteria target proven three, hard story already value with and and meaningful integration organic reminder, the underway identified are: X a through the those our the two, lastly, ability add one, a in M&A company; synergies; a to playbook. management growth

M&A the of As In using acquisition MTL, of acquisition $X we approximately a than $XX more hard recent over we acquisitions. we of reminder, identified through cost have of and our to add million Plasti-Fab. EPS these synergies of expect synergies the expect playbook, XXXX, through $XX million through

$XXX growth XXXX through to delivering shareholders increased superior strategic capital and into $X.X investments buybacks committed dividends. million nearly returned acquisitions remain results Carlisle share and this Balancing we in deployed fourth, with deployment. year disciplined billion shareholder returns, And through to

XXXX. to turn let's Now

quarter continue the the of half the We we during market expect challenges to through first fourth experienced XXXX.

of little continuing XX% also in the administration and from in tariffs than the days. our sourced U.S. of less XX% tariffs. the recent impact to of we direct new the actions sales are expect With by materials outside digest We the on U.S., taken over recent our raw

However, tariffs pressure the in may how the who have all we impact are the served may about the impact space consumers on interest concerned residential already are our potential markets. tariffs under and in rates

expect another and labor said, indicators And Carlisle's that and That solutions housing XXXX that the XXXX shortages, efficiency that year. to be into buildings given will volatile continue necessary backdrop. cautiously positive energy and improvements increasingly us environmental to address XXXX optimistic recent in record deliver significant an ability trend we make

reroofing of survey to an a indicated conducted overall deliver expect market negative impact build flat the from XXX early results QX commercial volume January over expect on we of by increase participants XXXX to year survey, year new Based expectations Our with single-digit any the Carlisle more in weather. growth than our latest And the for volume roofing then we driven market to when of positive low slow for excluding through start in construction. the rest XXXX.

price survey, still contractors market single-digit quarter. low second beginning expect September in with the increases Consistent our XXXX

summer by should construction QX. Additionally, costs. mid be to inventory channel lower leans late to in comparisons season pickup into as the expected the in historical is higher the stocking in carrying inventory A due channel

down to market second for flat Carlisle with volume the residential and single low XXXX survey the digits as mid-single first digits side, the the On low low up single-digit residential rebound. half markets to growth indicates half

In we and the while anticipated U.S. on impact are we Reserve some understanding rate the to new a addition, stabilize administration's actions cuts and indicators year as of obtain tariffs conditions through the expect the of Federal progress impact consumers. mixed, better on interest of

immigrants. the and outlook We've policies tariffs the potentially a impact with monitoring have interest Currently, how share we could actions are estimates those of In seen potential of could Federal workers about get XXXX, contending with administration's labor rate impact on already cuts the of construction in negative and be may to the shortage for are proposed undocumented worse prices may XX% new rising the to labor. administration's workers a addition significant related builders immigrants, the undocumented. that are Reserve's

cross-selling new and to penetration advancements our XXXX resiliency Architectural in factors on continue and are into Carlisle look businesses. introductions, and our our we our the CWT market through Metals maintain product in businesses As that efforts beyond, into will control, and focus

combine the support Operating decade with productivity second on our drive these of and to initiatives efficiencies increased margins. share We to utilizing innovation will System our our focus and gain Carlisle

growth through Carlisle M&A. System and balance innovation, through Overall, remain progress strategic XXXX the are Carlisle Vision as underlying long-term XXXX, clear supporting pillars exceptional growth to our achieved provided with to sustained value our experience, strong, commitment we service all our the for stakeholders of and goals. Vision our include operational accretive our we drive strong anchored towards positioned and sheet strategic and well vision, Combined by create which fundamentals the the Operating excellence

provide I'll to to Kevin? And it Kevin and for outlook with on that, color financial details our turn XXXX. additional over

Kevin Zdimal

you, Chris. Thank

for achieved with X%; margin revenue record of $XX.XX, adjusted XX.X%, of We we the XX.X%; are of XXXX, XXX including full extremely XXXX; of from prior growth of year; adjusted from strong record EPS X%, and EBITDA margin flow up of XX.X%. XX% solid year cash basis points up organic the where pleased our results free growth ROIC

growth operational XX% of EPS The results Our us pricing $XX. adjusted margin reflects strong toward in towards our adjusted demonstrate Vision goals. The our System. XXXX expansion progress in efficiency our target track discipline point success basis and the adjusted on through EPS early Carlisle initiatives the Operating of puts XXXX EBITDA firmly XXX

cash flexibility to Our continued flow XX.X% free providing goals, invest in to returning with also XXXX with capital margin shareholders. aligns our while us of Vision growth

a Slides conditions. essentially X housing margin. quarter weather flat adjusted delivered result due interest to primarily by EBITDA the MTL, X% negatively CCM's end of revenues and quarter in year-over-year. unfavorable CCM lower CWT a in rates, negative than consolidated the more basis of were residential was Fourth points X. adjusted higher billion XXX softer the XX.X%, the year-over-year were through challenging and XX.X%, decline volumes, by to revenues Fourth Moving down EBITDA price/cost activity. XX.X% CWT's quarter margin an which driven as EBITDA mix. while affordability $X.X and unfavorable new revenues construction were markets markets acquisition X%, margin offset CWT's adjusted was quarter, of impacted grew price.

reference, year fourth your and adjusted EPS full the XX year-over-year bridges. XX For Slides and provide quarter

to XX. XX through Slides Moving

balance Our facility million revolving $XXX strong $X of our remains available in billion and ratio sheet credit X.Xx. with a under cash, debt-to-EBITDA net

in flow $XXX dividends and while activity. acquisitions, free million flexibility $X.X of maintaining deployed shares produced strategic $XXX billion million, continued M&A nearly of million for towards paid XXXX, repurchased During cash $XXX we

for shares our program. million under available repurchase repurchase X.X have We share

Now moving XX. Slide our to financial XXXX on outlook

and the For we activity expect benefit reroofing year mid-single-digit growth CCM, driven acquisition. from the continued MTL revenue by full strength in

We expect operational margins and via to volume increases, leverage expand efficiencies. price

growth Plasti-Fab the high of acquisitions expect single-digit full impact driven we revenue of year by the and ThermaFoam. CWT, For

our improvement System, margin factories. expect the and Carlisle leveraging acquisition Operating automation from in We synergies including

We expect of contribution digits driven the mid-single towards consolidated back revenues demand, price recent to weighted solid year, by half grow from the our increases reroofing full acquisitions. the and year

to XX approximately expense efficiencies points margin operational basis acquisition expected to expansion. support and in this to on our achieving outlook on way on products. R&D achieve an and EPS Overall, XX% record are Vision also increase focus increasing us to innovative new continued puts goals. in expected pipeline COS, synergies This XXXX year an year-over-year Additionally, growth of drive track adjusted another EBITDA of double-digit our factors

for XXXX year summary, and adjusted EPS of was record Carlisle with XX.X%. of a In EBITDA $XX.XX margin adjusted

As we of interest from XXXX, has taking announced uncertainty including timing projects. to potential in economy, approach recently customers enter broader broader the wait-and-see rate a and impact economic our the tariffs cuts,

our we and Operating growth expand products, solid the to Carlisle experience have place drive are the are by However, initiatives above-market System. and and control through leveraging plans in in Carlisle on the synergistic focusing margins innovative that acquisitions

I turn to that, it remarks. Chris With for closing over

D. Koch

year the resilience performance quarter Carlisle a pivot model business faced full leading we headwinds XXXX our Thank the XXXX, of company. success of products strategic you, record of to conclusion, while Kevin. and the pure-play building our in demonstrates In fourth the

in enter we through Vision sustainable and remain As strategic acquisitions. XXXX innovation, on organic focusing ability growth we our growth XXXX, drive confident to excellence, operational initiatives, our

Carlisle XXXX. thank I this all their of our and would throughout opportunity like once exceptional employees to efforts again perseverance for take to

been further and well as Thank in has achieving ahead. in instrumental all your support our interest results in continued years for and the us strong dedication Your positioning Carlisle. you for success

for our That Operator, concludes are comments. questions. formal now we ready

Operator

the question Baird. [Operator Tim Instructions] Your first line Wojs of comes from from

Timothy Wojs

first just Maybe question.

this fourth in quarter? down price CCM. remarks, inflation. margin of about I'm guess XXXX in I asking to some single guess better it year said is to get material And reason did it you your I it like was raw was I stick kind do pricing As and expansion kind you -- the in need the you that digits think get seems of any to offset low -- think in Chris,

of to confidence that we through how positive kind just of start what and pricing kind talk maybe So could tracked has some price year. this gives you maybe see

D. Koch

would second And Kevin Yes, says sure. through here I And your it And comment that's were get we of second it any to January, It I better helpful. think for improved wouldn't can while And and we and think just XXXX, because 'XX. of the December we and QX they then probably in see middle into but we our when the we that in the in as that of year. pleased how we into -- the timing should the announced price it increases the then likely in more your I look at better there detail, March-April went greater on quoted, still year. recovered as the go that market about in think get all, as price got did hikes be QX. right? needed demand through will traction was hit that later got we there timeframe it that expectation survey

as construction we'd season, plays probably we what demand how out, say obviously, is that's there, still I when So light. into year get if think you thing at are look inventories another historically that the the

we if that so the light helps demand And as out, pricing. year, maybe too, into there, is some situation, stock inventory go with in

So see that's of out. playing kind year the how we

Kevin Zdimal

flattens as And year. Chris increases as to down our in for in we a X%. down second that as first the then be from quarter, Yes. first said, in expecting season the where really, the And far seeing Tim, increases the get quarter, and would as the pricing price guide then benefit the half just the the start that's pricing carryover, we're be into the price quarter of from it second

Timothy Wojs

Okay.

half gets sticks? also negative in you're of price/cost that of then year and should probably the price organic somewhat well, and kind assume So as builds first better as growth that the we

Kevin Zdimal

and Right. quarter in We start of year. then negative the and yes, first half -- second that's definitely flatten quarter the in to the benefit starting second then,

D. Koch

it ROS maybe Tim, on right address the now. think just could I you about thing, when --

neutral industry in things thinking we're price are, probably is already retardant you're this ROS got increases 'XX where the we've some polyiso got We've in that. seeing the aware ATO of. overall. We've increases comes retardant just experiencing well of PVC imports as other far fire that flat China that As -- material but that for because to some other areas got declines. in due restricting in got then we're where We've to raw are that flame

And so for across for the ROS stable takes board, the I all our with puts think outlook year. and is stable pretty the pretty

Timothy Wojs

Okay.

if could should price/cost price positive Is -- stable, price/cost be basically, so what material sticks. that be actually, raw you're So saying? and

D. Koch

second Yes. we're yes, and say I I half. would would weighted say heavily --

Timothy Wojs

Okay.

deployment in built M&A Got for comment, what's And Okay. anything in and EPS earmarked just last then number? there that for have guess for what's growth capital And guidance? in the buybacks? one, you. XX%-plus you I the in just

D. Koch

XXXX I Yes, buybacks, bit X We've accelerates. around year. quickly similar more $XXX M&A, in be $XXX to on like target it I at R&D to And I would think we'd depends million a got acquisitions. something thinking then sized similar see least we than think little CapEx, on On for probably million, could say that. on -- how we're around the buybacks

Kevin Zdimal

XXXX. Right. to will as part types for similar the share what levels loaded in guidance. those obviously overall, the is that we're year be not probably more looking acquisitions the full we we're buybacks. That's looking Tim, Chris of The said, buybacks, put revenue for out at. in do our acquisitions, half But similar guide of it on

Timothy Wojs

Okay.

would incremental? So buybacks million be is $XXX and of in M&A the

D. Koch

Correct.

Operator

Oppenheimer. line next comes from from the of Your question Bryan Blair

Bryan Blair

can CCM bit QX. volume revenues out maybe you offer shake trends, a detail more So monthly on how little level set a in on

incremental November. volatility, deferrals, of kind of specifically a Our lot project checks suggested in

into was versus variance that you're seeing what that or any kind cadence. and if then more saw there's and what flattish that And in expectation cited. curious order your of through you QX volume December importantly, January Just you if reflected

D. Koch

Yes.

optimistic I I the think we when about went the through think actually increasingly quarter. quarter, you got

little I November more driver, I that of I as trends. we can't But went I certainty. that that election, a you got to that's would as we there the think the more I maybe the after it yours bit. think but end And the contradicts was give and year. through So got not only exact say order the think maybe positive

don't we talked for then that we as first I see really quarter. of Kevin the lot about first out look quarter, a it volume And the in think

I still I a mean that recall, -- rate few macroeconomic these happened you really second there's are happening. more conditions cuts. had then We a were things ended that think when and that the we I get the quarter, few with things the we didn't and other think we optimistic election.

to on wouldn't I that think I point delays, And that, trepidation. that, with your caused that, argue

For on We've to in. hasn't It business. it's inventory less survey side, I on what think been in and caused seeing sure, least market the that our people slowed commercial it really resilient, -- the But very our been of XX% still that's is at reroofing news. bring Carlisle we're down.

into kicks new stable, more we in as get then as the hopefully, So the things year and get well.

wanted. The -- to rates Henry and and related side housing great. is to fast bit moving we the hasn't is spending construction exactly as new construction interest improving a Obviously, prices been probably consumer indications not some the got different. as little We've people the

it chain. retail we that of that are all see and products out see through there, sorts in can the different You

like detail. And for business. at weather was more then the on an Mehul about if He West the -- surprisingly XX had impact weather Henry The this dry you'd years. coatings on roof talk Coast can

didn't say gives I you of CWT would cadence well. have that as the So kind really same. the it

I on I more. the I side the be the say CWT it'd side year. as on the was positive think more was and would on ended CCM we than I reroofing

Bryan Blair

the detail there. Appreciate Yes.

think I is you've top full Did You've half offered for on the Is bridge? the helpful about ask expansion, is on for second should neutral? CCM directly dynamics, your that CWT line first within consolidated your we price/cost versus year, then segments, the And about hear correctly the how point in color basis you dynamics that XX price/cost case cadence. the that that understanding versus that assumptions in case? base built the to margin

D. Koch

ended on on the think little that's of a think bit what and neutral we're I Well, -- first positive ROS. I Tim with question, price seeing

more, on said, be is positive And I it us full that, in positive half. you a would So ROS. second second gets over the to ROS, the of Kevin can say, going much the price like take year And price then question. the

Kevin Zdimal

Yes.

segments, X in 'XX. for it's the and price/cost positive half both same exact looking pretty second for For on between also the price/cost, overall much segments being first it at both half, the story

Operator

question next from the comes Your from Boroditsky of line Saree Jefferies.

Saree Boroditsky

you improvement Just commentary believe the from acquisition. margin building the have some there, on headwinds I

acquisitions. you're what excluding impact the underlying just maybe improvement So seeing margin an from story, of dilutive

Kevin Zdimal

a to we acquisitions be side are you price/costs a you top there. Yes, is with even that about, on obviously still rest System, segment, Carlisle will talking it the we've volume when it's The for it's get but dilutive of But that's MTL and Operating XX%, the which XX%. also looking though leveraging benefit. going attractive say, as benefit. -- CCM the to be the to number number. And that a nice are compare that's EBITDA been

both CCM looking and CWT of at overall, the basis segments. improvement points So XX in

Saree Boroditsky

But or year acquisitions my then volume this growth and sorry, for -- sales help clarify to and quarter, the just well? your underlying then for understand first for top end. as the full demand was versus mid-single-digit the on flat for just quarter us could within impact you confusing the And guidance first from then year full line

D. Koch

question, a good That's Saree.

Kevin Zdimal

we acquired year, to first Full segment. it year it's in Obviously, in CCM, -- I'll by MTL be May. yes. of in do impact going it's a half the bigger that the CCM,

half is the incremental $XX then for second no the second and quarter on million million acquisitions. About first quarter. in in CCM impact So $XX

are and the split year and first fourth CCM quarters So On there. of our typical side. the full $XXX stronger of over just the for the that's that million quarters than M&A, and third CWT, more on second it's

Operator

from Capital. comes Shmois Loop line question the Garik of from next Your

Garik Shmois

think can into remember volume just CWT, you if assumptions -- price do had to started I'm a and you to for And correctly, to last see quarter? in you several go bit Has continue the of your stabilize more fourth pricing bit all? specifically hoping detail if at on that insulation just that. I the I regarding little been wondering headwind a quarters, on CWT, 'XX. Or pressure On in

D. Koch

Well, just the that Mehul can detail. polyurethane into decline. some the I that talking not spray were teens 'XX Yes, get foam hit I was say -- about, we the would of insulation. you're around low in and

I as think we we to there about going think. don't And in a quarter have different I contractors. handle in got as good sales great Carlisle and more which we've are know and I issue technological would go-to-market other approach, how mean ago. a a has new shape. market to I been, And still actually solution. it's to strategy direct products. some differences, leader a some We've pretty -- distribution well, maybe the between is put we're well I got say, think, growth. the The emphasizing really industry great I our

that which you help 'XX. So to... in we'll improvements us I in should see But think want Mehul, segment,

Mehul Patel

Yes.

that's half. it, which conditions then add the see have our But those year, on pretty second of reads impact the basis you of and be with seeing they in But second more to the growth That's we XX to up be price market, Plasti-Fab we half much this year. to in for We're ThermaFoam. So first high half way some announcements guide, see the high be have contractors, put to get going CWT. optimistic market our flat. for macro end we deterioration what in data the what into know, full single about Garik, as And XXX this feel will the single our in the based there the will we going then we're increase markets going driver going biggest points. digits. on year with to CWT, The CWT, and to in the Overall, we, continue see there. CCM, you together, similarly do on is digits markets M&A both

Garik Shmois

a it the if certain to And it And little on made, got bidding Okay. the fourth activity new here. respect just construction? versus year? a the near quarter there. 'XX kind expect of should just construction? bit some of a you more reroofing comment just we through follow-up more on the on of is construction start outlook earlier Chris, a expect That's very the new detail Or term. can with bit little in Or as an progressed Is then go you helpful. to or from move -- better Wondering Maybe into as thoughts and maybe new side the to in strength you would your verticals? softness reroofing on continuation show growth you some

D. Koch

political distributors, over We we've survey. market Carlisle I people stability change. X had as with little And interest have and in the with the that's had a fall our contractors, Yes. lot -- a the also months. we caught were just lot a bit I mean off Kevin situation, the big the a we gathered been I in with think when got through -- of and out we then fall, I have think more guard last And rates.

presidential You election. have a

go. As got continue I we to things at closer that think reroofing some stability, that saw the there's least to on to be and side, going

had I -- have their they bad had realized going like as a to it's in they just of think might mind. feel as be and tension, people then I probably not lot

it. behind great got drivers we've So

think labor be are -- know delays what beginning, I the because it, if delay of think I is continue I the the became labor much think don't very resi it in being to to up. specifically you less going I chances real the because new reallocated, on back. and construction just soft labor side, tight. apparent getting that specifically delay picks that but then -- gets if side on the I a you you you of how of situation can

into a are the where it you've it, if on level the there's it of big get move backlog. So can you're on be delayed project. mean on. I a degree, depending and you to completed certain to got But

at right seen survey, X that If has of out much, hovered of speaking around We haven't our look I got to backlog throughout backlog. the what months. year, we X

So in relatively that XXXX for reroofing. were that And in to coming 'XXs put late see roofs and it's the been continue on increase stable. we

So too. on increasing side, that's demand that

to all have and trends, that think that, together positive negative of underlying get I can got everything So couple where are about people puts you just quarters work. it, are we've but yes, back a these to

answered well, know don't very I tried. I but I question your that So

Operator

next the Susan Maklari line Your Sachs. question from from of comes Goldman

Susan Maklari

get to the about your want half and talking you talk lift about business? your are market If the can in the organically of that the the assumption share I products that do in seeing given you happen, new to the some the of gains ability outpace year. back in housing in some we guide start that doesn't with

D. Koch

Yes.

to and construction comment on, would that what think I I and say couple you A and products some we're going specifically just a doing a the the show I around highlight I could great can new then areas. speak right, new front. -- of R&R definitely on other that, you're of that to don't that's got We've still. lot because sit we innovation

insulation But launched on organic Depot. we've just cotton-based side, a new the sales Home into

consumers the without by fiberglass It think any be issues. the similarities it's great has of will Coast. West but in the now RXX, I It's to out being received out on insulations both contractors. the there, some stores really and there well XXX

wear to need a don't You mask.

in worry it. all to itching. about need don't cotton. no It's You fiberglass There's

is say in. And like than insulation. gets would so fiberglass that, something by the way, its point And traditional that penetration higher price I

we to think always value, there's So price going we're out, as and value point to there. we

So that's one.

our really team the received, and value, continues barrier one momentum. well for us a that. gaining vapor as margin and just not Ready and Another Frank high to again, is cheap Blueskin be good developed product It's well. product a

specify roll impact. we those that a we as So has think as out, those I continue to get positive and

operation doing projects. that years of automation with going in Two new that automated blending. filling, online, continued we've Margins, now, And factories our X system. we automated is to come started ago,

be We'll scrap. out well. of margins getting a as through better for efficiency taking labor be we'll and that process. so improves the the And process lot less Obviously, of us wasteless

we're just the within we bought our continue the good. Kevin And that We as business, to on COS. is of to aspirational mid-XXs couple deploy be side, both on mentioned certainly margin still the We're with well, So that innovation XX% that a obviously, examples when factories. doing MTL over that.

so And can System, our from model. million see original you purchasing we like Operating how deal synergies from $XX the things upped the Carlisle over leverage, the

on focus there. as We low-cost continue to a producer well being

slowdown any recovery help we'd those of the quickly or construction kind failure or are in have that think, I the mitigate, a So like. to new demand things side as on will us as

Susan Maklari

about Okay. ability That's Can double is you talk you year. that, that building and to in the you great to continue this color. that made R&D plan comments pipeline of on one what multiyear means price And the that to of for the maybe the for spend terms value? products

D. Koch

Yes.

faster, but products is realize that the we want takes new I we time. same innovation just So think thing all

will investment let's fire through and need the bring as we which testing product to year development over can thing build testing the more will in testing do process. this quicker made say, through like We in-house, that, things time. we get the We've we that more ratings in-house, the we increase the and bring more in space the see go as PA. Carlisle, probably actually center R&D the So

shut in We've which helps got can to factory product. we line bring to in in sense off-line the have pilot well, down which we We that want Carlisle, lines -- as the it PA. to us a well, don't do test

is talked a accelerator say, we're Some X We're last, third years. for going the this, things an we've had cohort. about and in but -- our haven't I'd lot we other doing

to we're be we sheet now, say, companies characteristics with out performance under able just have products technology in in insulation applied weather. advances that same cubic to the Right let's from of the coatings XX of wet working a R-value get, on inch Xx new insulation new to of like being that have range

to So doesn't be done. the It curing is dry. need able still be to

applications, number for more put charge of waterproofing going job below-grade be the that under-grade applications means days we quicker contractors efficient. can and for obviously increases And to could get that. So those down, or the off they're could which

you'll I see it, areas. our X of think So in R&D more

and We're area. the it see and to engineers and the we're in campus traditional chemists. You're in in going going Carlisle in-house, investing to do why that's

like look You'll to may be outside That see have. the going or accelerator, it technologies. universities in things we're may emerging where community we for the entrepreneurial

And the in our then bead vertically now bought ideas and bead, you'll our qualities we around bead because bead to always also can and the EPS very process boards. see being R&D We at coming We've just improve improve to we they're make vertically from the can the to there our are interesting acquisitions. Plasti-Fab integrated. of EPS brought start enhancements integrated. look some of the

they're everyone, we'll expect So that, better, obviously, those paid that. be we'll we communicate and how when to to values show for do

Operator

question from Longbow the is David from MacGregor next of Your line Research.

David S. MacGregor

you're what's you M&A macro uncertainty? the Yes. of motivated perhaps seeing seeing happening and a Are on that. expectations? be more and bit looking any helpful. could multiple was Are color in the Chris, just now. give Just wondering talk all us I if market would about a by you sellers That the little meaningful right what little change in

D. Koch

deals say multiples seen that I we've don't wouldn't changed think the looked with have that we've us. the for at. much I

seller I the than are think still over expectations X, ago. X, let's David, been years X last, higher X, they've say,

the say, look criteria. we have I'd coming seeing, are we of the We through number X uptick at. a in deals Obviously, slight that

day of they And of so our see I criteria, seeing a the deals so lot But here. meet never deals. light and more say would don't those we're

we've deals been MTL, you we doing a -- also ThermaFoam. what the done like from side, see, think are the and Plasti-Fab I can deal have deals

out ThermaFoam can geographic We that or us then year a of small unwinds, may Plasti-Fab give deals few like more see bolt-ons So into the midsize some Henry there. a markets, we're we that the size we as those up I technology. got new all the the new brings presence positive. meaningful still seeing to -- to And like And deal way see is like MTL a access that think those are Canada. which think I

David S. MacGregor

seems in just the It in in like on Interesting. guess the of I'm we're you your I a the consequential, distribution second function your event on cusp here. And could regarding consequential consolidation on not maybe you it's consolidation And distribution just And then level business. channels question, strategic perhaps comment more more think if wondering in might you why. thoughts be. how could explain

D. Koch

to Well, consolidation distribution. I in definitely, see think you're continue going to

in going space. it see roll-ups also you're think the in some I We've seen contractor contractors. to

all partners major X, X, last over of years. distribution consolidate I think seen you've our the X X,

probably as can You those to find online did. deals what they

think I that's going so continue. And to

I also you're well. consolidation think going continuation as manufacturer some to have of

obviously, continue by will to that Plasti-Fab. buying and do it, I MTL continue. We And think buying

distribution have things The ramifications, impacted be obviously, when to consolidates.

You public And is can and efficient Brad QXO happening or data becoming a distribution around with what's Beacon information at think and look more Jacobs. I the organization.

there So Beacon how and some form contractors with be would like ideas on in interact must future ourselves. a there suppliers

We the they their or hasn't think where type their our changed have same direct sales or other distribution the we've to increase. capabilities. either I've contractors calls you've seen where benefits on it provided contractors seen this, have and past of places about have talked size And I in seen

years we fact, to sold So we now think flexible. stated went ago, I probably contractors, mid-teens. XX And Carlisle been than and somewhere direct has think I probably the we're back you if X% in less in

and -- a experience, this our logistics to team said to through that of that site while job distribution having distribution, just an landscape, think freight and is team been Carlisle we're before, we close from of XX% our sales publicly that we delivered sales the and sold I've seeing most least Carlisle. direct So change the at I positioned I'm a outstanding already well pleased in we've with and

contractors experience logistics dealing have in our and great in a with directly. we So

to And support have they also, is experience of to happy continue capabilities But so Carlisle we think service the service distribution, for with sell to the and customer our important. necessary, level and which expect customers direct we us. come to same we're when the same

color for too little that there you. So much. wasn't Hopefully,

Operator

question of from Baumgarten line Your last Adam the from comes Zelman.

Adam Baumgarten

just believe the on ago. part go weeks in much went move what active know in And the given a more for timing, kind you and into as through of will on those that confidence CCM, so I I far, effective XQ we just the of season? but gives Just receptivity increases spring they the price the curious you're not building few

D. Koch

back least surveys -- now, trying of were any to GAF years to at controlling XXXX that I we're our already I September, I we Right. it's price can some type -- think where couple as that push information I seen to control -- own initiated Well, we a don't think had do We'd degree. price coming in of the our market some these months. people Carlisle ago these in look on to increase When you earlier see. tried a planning there. action really took effect, out already think or

can't in price. I think seen organizations that most changes But December have have we -- here increased I also

have some -- reason confidence so you then and I while. I would is there the And to is say a what it's for been

that, demand quarter, that construction things. that And two, one season the expecting then survey this it idea tied people underway. of says our in think second That's really improves. gets and expecting are I they're to the the

the price a imagined situation. So that's ATO the both market. Obviously, impact, I'm some this increase real people with sure, consequences, and tariff real for raw are of flat the out that China PVC been had material as has in

So impacted. seen that we've

And on will of people tariffs, that, that increased So hear somewhere the into all late surveys, expected it, yes, And an rolling increase. seasonality in that's demand, the that is impact here the that and for that, and what second reality price just the think quarter on we we prepared have anticipate prices. some 'XX. I of are and we'd action in the it

Adam Baumgarten

has had fourth of business? it you'll get also weather, mentioned then in impact? our you weather Anything know disruptive. just some relates And A to fairly as first those that back quarter? the I in sales as Okay. quarter. is be idea the One, there I have it to And do then think aware South January the do questions. Got the was of Two, of on couple know it. just helpful. any headwind in a That's you

D. Koch

million I $XX we fourth the to in first impact. couple probably -- million maybe we a of -- Well, days, all, of of $XX think quarter,

years we're leaks. the to first would the say going it's United can focused, not. It Henry. coming. are Henry just quarter? at didn't than retail side, seen doesn't fact And get roofs a mostly think side. talk channel He wet States the that in and see bit look But that I Mehul XX for the those there it. of little demand potential rain have I like weather Western materialize. there wasn't we we it's the little a was ultimately, a that Carlisle would about On through the different bit Will But means lot probably a

you happens Mehul. think if a I the And over it So your XX rain, in find second quarter get you years, going been that's and leak. eventually have you're to Henry's

I it just quarter-to-quarter. And think impact is out. ultimately, the washes all

Mehul Patel

Yes, that's exactly right.

events. directly Xx, So rain see you as Xx cells to Home X it's year, X rain rain. POS do or you see high correlation with months events. When had rain Depot of know, you with spikes X events, we And the at this

roof for to impact going have on a coatings. that's direct So demand

D. Koch

have out I as think may confirm a last impact first other that point Kevin of the well. had year And a in of can only I'd the right? quarter quarter, I thing couple we it, first in of that the little days think, is And so bit impact,

Kevin Zdimal

X had call Right. that We first the year weather mentioned of in a benefit quarter to maybe we on last of numbers. days our positive our

a this benefit. we don't that's versus that assuming same tougher comp obviously, last year So year, have

Operator

the go please call for further would like There at this Chris no time. hand Sir, Koch remarks. closing to to questions are back ahead. I

D. Koch

thanks, evening, earnings good this to Thanks, look next speaking on earnings the our quarter I us which will I want to everybody with call. first end everyone. joining at call, of be Well, forward and thank have the fourth a for you quarter. Constantine.

Operator

Thank for conference much very today's call. you concludes your participation. This

You may now disconnect.

Carlisle Companies (CSL) 4 Feb 252024 Q4 Earnings call transcript