Carlisle Companies Incorporated Q2 FY2025 earnings call

• Carlisle achieved a record adjusted EPS of $6.27 amidst a dynamic U.S. building products landscape. Revenues were steady at $1.4 billion YOY. - CCM's reroofing business was strong, with ~70% of commercial roofing, and the MTL acquisition exceeded expectations. - CWT faced challenges from softer residential markets but is investing in automation and COS initiatives for margin improvement. - Strategic acquisition of Bonded Logic for energy efficiency and sustainable insulation, operating in a $14B insulation market. - Focus on innovation with a pipeline of new products for energy savings and labor efficiencies, including advancements in AI and building envelope solutions.

CCM (Construction Materials): Second quarter revenues of $1.1 billion, growing approximately 1% year-over-year (organic revenue flat with reroofing growth offset by new construction headwinds and weather; MTL acquisition contributed). Adjusted EBITDA was $346 million, down 5% compared to last year with a margin of 31.6%. CWT (Commercial & Industrial Products): Second quarter revenues of $354 million, a 2% decline from the prior year (organic revenue down 10% due to softer residential end markets, roof coatings demand, and new commercial construction). CWT's adjusted EBITDA was $71 million, a 13% year-over-year decline with an adjusted EBITDA margin of 19.9%.

• Low single-digit revenue growth expected for CCM and CWT, offset by end market challenges. - Adjusted EBITDA margin expected to decline by 150 basis points due to lower volumes and limited pricing traction. - Free cash flow expected to exceed 15% for 2025. - CCM margin expected ~31% in Q3, ~29% in Q4; CWT margin expected ~20% in Q3 and Q4, with synergies from Plasti-Fab and automation.

• Dynamic U.S. building products landscape with new construction softness, interest rates, and builder sentiment posing risks. - Second quarter volume impact from weather, with uncertain recovery in the second half. - Challenges in integrating acquisitions and realizing synergies from M&A.

Q: Garik Shmois asked about EBITDA margins by segment in the second half.

A: Kevin Zdimal said CCM expected ~31% in Q3, ~29% in Q4; CWT ~20% in Q3 and Q4, with synergies from Plasti-Fab and automation.

Q: Garik Shmois followed with actions in CWT, footprint rationalization, automation.

A: Mehul Patel said $12M annualized savings from automation and footprint consolidation in CWT, with $30M total opportunities including Plasti-Fab/ThermaFoam synergies.

Q: Bryan Blair asked about monthly order and revenue phasing, Big Beautiful Bill, tax impact.

A: Christian Koch said manufacturing reinvestment and tariffs could benefit; Kevin Zdimal said ROIC is key for capital investment, with tax depreciation aiding ROIC.

Q: Bryan Blair asked about Bonded Logic's normalized growth, margins.

A: Christian Koch said targeting north of 50% gross margin, with Bonded Logic in $14B insulation market, ~$35M revenue, and EBITDA margins supportive of Vision 2030.

Q: Susan Maklari asked about investing in Carlisle experience, competition.

A: Christian Koch discussed technology investments to improve contractor efficiency, training, and product stickiness to maintain market share.

Q: Timothy Wojs asked about lack of pricing traction, drivers.

A: Christian Koch said volume-related, with reroofing strong, new construction soft; Kevin Zdimal said innovation helps price for value.

Q: Joseph Nolan asked about CCM channel inventory, polyiso pricing.

A: Christian Koch said inventory levels stable, no major change; pricing flat with no traction on polyiso increases.

Q: Joseph Nolan followed with weather impact on volumes, storm demand.

A: Christian Koch said weather impact may roll into backlog, but labor constraints limit full recovery.