Carlisle Companies Reports Third Quarter Results

Carlisle Companies Incorporated announced its third quarter 2024 financial results.

• Record third quarter diluted EPS of $5.30 and adj. EPS of $5.78, +24% year-over-year
  • Revenue of $1.3 billion, an increase of 6% YoY
  • Operating margin of 23.7% and Q3 record adj. EBITDA margin of 27.6%, +60 bps YoY
  • CCM grew revenue 9% and expanded adj. EBITDA margin 110 bps to Q3 record of 32.8%
  • Continued headwinds in residential markets negatively impacted CWT
• Repurchased 1.1 million shares for $466 million and increased quarterly dividend by 18%
• Signed agreement to acquire Plasti-Fab
• Awarded Home Depot’s Building Materials Partner of the Year for the 2 ^nd time since 2022

Comments from Chris Koch, Chair, President and Chief Executive Officer

“Carlisle delivered another quarter of strong performance, despite a continued decline in residential markets along with the well-known weather-related and port strike events, which negatively impacted shipping days, contractor days on the roof and manufacturing output. We continued to execute on our Vision 2030 strategies, and we are pleased with our third quarter performance against our 2030 goal of $40 of adjusted EPS, growing 24% year-over-year and adjusted EBITDA margins expanding to 27.6%.

“CCM continued its strong momentum with its 2024 accomplishments into the third quarter, driven by healthy contractor backlogs, robust re-roofing activity, and excellent margin performance. CCM sales were up 9% year-over-year assisted by the inventory normalization in the channel and the acquisition of MTL. CCM’s impressive 32.8% adjusted EBITDA margin in the third quarter reflected strong volume leverage, a positive raw material environment, and excellent operating execution through the Carlisle Operating System (COS).

“As we look at CWT’s performance, while we were pleased with progress on share gain initiatives within CWT, a higher interest rate environment, low housing turnover, and affordability challenges resulted in a further slowing of housing activity in the quarter. For the quarter, these challenges impacted sales and drove a decline of 3% year-over-year. Despite the near-term challenges facing CWT, we remain extremely pleased and optimistic about the prospects for this segment.

“We continue to be encouraged by the positive long-term outlook in the North America building products markets and the strength of the Carlisle business model. Our pivot to a “pure play” building products company is delivering the expected outcomes and demonstrating our commitment to being superior capital allocators. Additionally, we believe that leveraging the megatrends around energy efficiency and labor savings, along with growing re-roof demand, and our introduction of innovative new products are creating additional catalysts for growth. Similar to Vision 2025, we believe Vision 2030 positions us well to drive above-market growth and earn a premium in the marketplace.

“Carlisle remains committed to generating superior shareholder returns through our balanced capital deployment approach. This quarter, we repurchased 1.1 million shares for $466 million and increased our dividend by 18%, marking the 48th consecutive annual dividend increase.

“We are excited about our recent agreement to acquire Plasti-Fab, which aligns perfectly with our Vision 2030 strategy to enhance our “best-in-class” building envelope product portfolio following the completion of our pivot to a “pure play” building products company earlier this year. The acquisition of Plasti-Fab establishes Carlisle as a leading manufacturer in the $1.5 billion North American expanded polystyrene insulation market and provides vertically integrated polystyrene capabilities to our Insulfoam business while adding scale, supporting retail channel growth, and filling key geographic gaps in the U.S. and Canada. We expect this acquisition to generate approximately $14 million in annual cost synergies and be accretive to our adjusted EPS by approximately $0.30 in 2025.

“As we look forward to the remainder of the year, we expect the residential headwinds experienced this year to continue. Based on that outlook, we expect to deliver approximately 10% revenue growth and increase adjusted EBITDA margin by approximately 150 bps for 2024. We are confident in our ability to continue delivering value for all our stakeholders as we progress further towards our Vision 2030 goals, demonstrating the strength of margin resiliency through the Carlisle Experience and driving superior returns on capital through our strategic initiatives.”

Third Quarter 2024 Segment Highlights

Carlisle Construction Materials (“CCM”)

• Revenue of $998 million, increased 9% (+6% organic) year-over-year, driven by the acquisition of MTL, the normalization of inventory in the channels, and robust re-roof activity from pent up demand.
• Operating income was $303 million, up 11% year-over-year. Adjusted EBITDA was $328 million, up 13% year-over-year, reflecting an adjusted EBITDA margin of 32.8%. The 110 basis point increase compared to the prior year was driven by volume leverage on strong sales growth, favorable raw materials and operating efficiencies achieved through COS.

Carlisle Weatherproofing Technologies (“CWT”)

• Revenue of $335 million, declined 3% (-4% organic) year-over-year, primarily due to softer residential end markets and price declines in select product categories, partially offset by growth in commercial categories, share gain initiatives and the acquisition of Polar Industries.
• Operating income was $47 million, down 20% year-over-year. Adjusted EBITDA was $69 million, down 14% year-over-year, reflecting an adjusted EBITDA margin of 20.7%. The 270 basis point decrease compared to the prior year was primarily due to strategic investments in the business to support longer term growth initiatives in addition to lower sales in the quarter as a result of broader residential market weakness from higher interest rates.

Cash Flow

Operating cash flow from continuing operations for the nine months ended September 30, 2024, was $662 million, no change versus the prior year. Free cash flow from continuing operations was $597 million, an increase of $22 million versus the prior year (defined as cash provided by operating activities less capital expenditures and comprised of continuing operations). This increase was driven by a decrease in capital expenditures due to timing of projects from continuing operations.

During the nine months ended September 30, 2024, we deployed $1.2 billion toward share repurchases, including $466 million in the current quarter, and paid $127 million in cash dividends, including $46 million in the current quarter. As of September 30, 2024, we had 4.5 million shares available for repurchase under our share repurchase program with $1.5 billion of cash and cash equivalents and $1 billion of availability under our revolving credit facility.

2024 Fourth Quarter Outlook

• Revenues to increase LSD
  • CCM – up MSD
  • CWT – down LSD
• Adjusted EBITDA margin ~ 25%

For full results click here.

About Carlisle Companies Incorporated

Carlisle Companies Incorporated is a leading supplier of innovative building envelope products and solutions for more energy efficient buildings. Through its building products businesses – Carlisle Construction Materials (“CCM”) and Carlisle Weatherproofing Technologies (“CWT”) – and family of leading brands, Carlisle delivers innovative, labor-reducing and environmentally responsible products and solutions to customers through the Carlisle Experience. Carlisle is committed to generating superior shareholder returns and maintaining a balanced capital deployment approach, including investments in our businesses, strategic acquisitions, share repurchases and continued dividend increases. Leveraging its culture of continuous improvement as embodied in the Carlisle Operating System (“COS”), Carlisle has committed to achieving net-zero greenhouse gas emissions by 2050.

Contact:

Mehul Patel – Vice President, Investor Relations – mpatel@carlisle.com – (310) 592-9668

Source: Carlisle Companies Incorporated