NYSE:CSL Carlisle Companies Q4 2024 Earnings Report $351.28 -0.85 (-0.24%) As of 11:47 AM Eastern This is a fair market value price provided by Polygon.io. Learn more. Earnings HistoryForecast Carlisle Companies EPS ResultsActual EPS$4.47Consensus EPS $4.43Beat/MissBeat by +$0.04One Year Ago EPS$4.17Carlisle Companies Revenue ResultsActual RevenueN/AExpected Revenue$1.16 billionBeat/MissN/AYoY Revenue GrowthN/ACarlisle Companies Announcement DetailsQuarterQ4 2024Date2/4/2025TimeAfter Market ClosesConference Call DateTuesday, February 4, 2025Conference Call Time5:00PM ETUpcoming EarningsCarlisle Companies' Q1 2025 earnings is scheduled for Wednesday, April 23, 2025, with a conference call scheduled at 5:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Carlisle Companies Q4 2024 Earnings Call TranscriptProvided by QuartrFebruary 4, 2025 ShareLink copied to clipboard.There are 11 speakers on the call. Operator00:00:00Good afternoon. My name is Konstantin, and I will be your conference operator for today. At this time, I would like to welcome everyone to The Carlyle Company's Fourth Quarter twenty twenty four Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, we will conduct a question and answer session. Operator00:00:21I would like to turn the call over to Mr. Mehul Patel, Carlyle's Vice President of Investor Relations. Mehul, please go ahead. Speaker 100:00:31Thank you, and good afternoon, everyone. Welcome to Carlyle's fourth quarter twenty twenty four earnings call. I'm Mehul Patel, Vice President of Investor Relations for Carlyle. We released our fourth quarter twenty twenty four financial results today, and you can find both our press release and the presentation for today's call in the Investor Relations section of our website. On the call with me today are Chris Koch, our Board Chair, President and CEO along with Kevin Zimmel, our CFO. Speaker 100:01:00Today's call will begin with Chris, who will provide key highlights on our fourth quarter and full year 2024 results and some commentary on 2025. Kevin will follow Chris and provide an overview of our Q4 and full year 2024 financial performance and give an update on our outlook for 2025. Following our prepared remarks, we will open up the line for questions. But before we begin, please refer to Slide two of our presentation, where we note that comments today will include forward looking statements based on current expectations. Actual results could differ materially from these statements due to a number of risks and uncertainties, which are discussed in our press release and SEC filings. Speaker 100:01:44As Carlisle provides non GAAP financial information, we provided reconciliations between GAAP and non GAAP measures in our press release and in the appendix of our presentation materials, which are available on our website. With that, I will turn the call over to Chris. Speaker 200:01:59Thank you, Mehul. Good afternoon, everyone, and thank you for joining us for Carlyle's twenty twenty four fourth quarter earnings call. Turning to Slide three of the presentation, I would like to start by extending my sincere appreciation to all our Carlyle team members for delivering a very productive start to our Vision 2,030 initiatives in 2024, exceeding $20 of adjusted EPS this past year and for completing our pivot in 2024 from a general industrial portfolio of businesses to a pure play building products company. We're very proud of several key accomplishments the company made over the last year. To start, 2024 was a historic year for Carlyle as we completed our strategic pivot to a pure play building products company with the $2,000,000,000 sale of CIT in the second quarter. Speaker 200:02:50Our focus on building products has clarified and refined our mission for our employees and investors, highlighted the best in class financial performance that our building products businesses have delivered for years and provided a clear path to $40 of adjusted EPS in 02/1930 by adding innovation and a strong M and A playbook to our already well established and successful pillars of Vision 2025. Carlisle delivered record adjusted EPS of $20.2 in 2024, representing a significant 30% year over year increase, driven in part by our growing and recurring revenue stream from reroofing, which was up mid single digits throughout the year. We also benefited from the return to more normalized inventory levels and buying patterns within our channels to the contractor. Our margin performance was also strong this year with adjusted EBITDA margins expanding 150 basis points to a record 26.6%. This is even more impressive when we are reminded of two important factors. Speaker 200:03:53First, CWT's margin was substantially impacted by the significant negative trends in the residential markets we serve. And second, CCM worked through the well forecasted, but nonetheless negative impact of a low single digit price decline in commercial markets. We also continued to strengthen our market position in the building envelope space by deploying nearly $700,000,000 of capital into two synergistic acquisitions that added to existing businesses within Carlisle. First, the acquisition of MTL expanded our architectural metal capabilities with the addition of Commercial Roofing's leading authority on perimeter edge metal. MTL enables us to offer a wide range of prefabricated solutions such as edge metal, fascia, coping and composite panels and systems for the building envelope. Speaker 200:04:47As the year progressed, we validated the superb fit of MTL's leadership team with Carlisle. And through our superior integration playbook, we exceeded our expectations on the synergy front and now expect synergies to increase from our initial estimate of $13,000,000 to now well over $20,000,000 This acquisition of MTL also further positions Carlyle as an industry leader in the $4,000,000,000 architectural metal category. Second, our recent acquisition of PlastiFab advances our position as the leading vertically integrated manufacturer of expanded polystyrene insulation for the building products market across North America. PlastiFab drives innovation in expanded polystyrene products for commercial, residential and infrastructure construction applications. PlastiFab's customers seek energy efficiency and contractors and building professionals seek comprehensive solutions. Speaker 200:05:48As the only vertically integrated expanded polystyrene company in North America, Plastifab meets those needs. And as with MTL, we expect a superb fit with our existing EPS business and significant synergies currently estimated at $14,000,000 which we expect to increase as we move through 2025. Yesterday, we completed the previously announced acquisition of Texas based expanded polystyrene insulation manufacturer ThermoFoam, which builds on the recently completed acquisition of PlastiFab and leverages Carlyle's vertically integrated expanded polystyrene capabilities while adding geographic coverage in Texas and the South Central United States. Looking at the fourth quarter twenty twenty four performance on Slide four. Carlisle continued to experience broad market headwinds more heavily weighted to the residential new and R and R markets and the commercial new construction markets. Speaker 200:06:49These headwinds included higher interest rates, restricting lending conditions and unfavorable weather patterns. These factors negatively impacted sales and the results were below our midyear twenty twenty four outlook. Despite this challenging environment, Carlyle's consolidated Q4 revenues of $1,100,000,000 remained essentially flat year over year and adjusted EPS grew by 7% to a fourth quarter record of $4.47 We were pleased to see continued EPS growth as we remain confident in our Vision 02/1930 journey to $40 of adjusted EPS per share. We remain committed to the same principles our stakeholders know well: disciplined capital allocation, a focus on ROIC and growing our businesses both organically and through robust M and A. Carlyle is well positioned to benefit from widely understood macro trends, including growing commercial reroofing demand, an ongoing housing shortage and our ability to provide innovative, energy efficient and labor saving solutions and systems in the years ahead. Speaker 200:07:58Looking ahead to 2025, our Vision 02/1930 strategy guides our path forward through four key elements. First, we are accelerating innovation focused on energy efficiency and labor saving solutions. Nothing exemplifies our commitment to innovation more than our $45,000,000 plus investment in our new state of the art innovation center in Carlisle, PA. This expansion will provide additional capabilities and resources development of innovative, energy efficient, labor saving solutions and integrated systems, supporting our goal of generating 25% of revenues from new products introduced within the past five years. Second, we will seek to continue to expand our best in class margins by pricing our innovative products and solutions for the value we provide. Speaker 200:08:49By delivering those innovative products and solutions through the value enhancing Carlyle experience and by driving operational excellence through the Carlyle operating system. Third, we will strategically expand our market positions in the building envelope with a best in class M and A process to complement our strong organic growth efforts. Our well defined M and A playbook will continue to drive significant returns on deals and provide a strategic competitive advantage for Carlisle, as was exemplified by our successful acquisitions and integrations of Henry, MTL and now PlastiFAP. Leveraging our M and A playbook, Carlyle aims to maximize value creation by employing a disciplined integration process and ensuring acquisition targets align strategically. We achieved this by adhering to four key investment criteria in our selection process. Speaker 200:09:43As a reminder, those four criteria are: one, a solid organic growth story already underway in the target company two, a talent management team three, identified and meaningful hard cost synergies and lastly, the ability to add value through executing the integration with our proven Carlyle M and A playbook. As a reminder, using our M and A playbook, we have identified over $20,000,000 of synergies through the acquisition of MTL, and we expect more than $14,000,000 of hard cost synergies through the acquisition of Plastifab. In 2025, we expect to add approximately $1 of EPS through these recent acquisitions. And fourth, we remain committed to delivering superior results through disciplined capital deployment. Balancing growth investments with shareholder returns, Carlyle deployed nearly $700,000,000 this year into strategic acquisitions and returned $1,800,000,000 to shareholders in 2024 through share buybacks and increased dividends. Speaker 200:10:48Now let's turn to 2025. We expect the market challenges we experienced during the fourth quarter to continue through the first half of twenty twenty five. We are also continuing to digest the recent actions taken by the new administration on tariffs in recent days. With over 90% of our sales in The U. S. Speaker 200:11:09And less than 10% of our raw material sourced outside of The U. S, we expect a little direct impact from the tariffs. However, we are concerned about how the tariffs may impact consumers in the residential space who are already under pressure and the potential impact the tariffs may have on interest rates in all our served markets. That said, recent indicators make us cautiously optimistic that 2025 will be another record year. And we expect that positive trend to continue into 2026 and 2027, given Carlisle's ability to deliver solutions that address the significant housing and labor shortages, necessary energy efficiency improvements in buildings and an increasingly volatile environmental backdrop. Speaker 200:11:55Our latest Carlyle market survey of over 500 market participants conducted in early January indicated positive 2025 volume expectations for commercial roofing, driven more by re roofing than new construction. Based on the results of our survey, we expect a slow start to the year with Q1 flat when excluding any negative impact from weather. And then we expect growth to build through the rest of the year to deliver an overall low single digit increase in volume for 2025. Consistent with our September 2024 market survey, contractors still expect low single digit price increases beginning in the second quarter. Additionally, inventory in the channel is lower by historical comparisons due to higher carrying costs. Speaker 200:12:40A pickup in inventory stocking should be expected as the channel leans into the summer construction season in mid to late Q2. On the residential side, the Carlisle market survey indicates flat to low single digit volume growth for 2025 with the first half down low single digits and the second half up low to mid single digits as residential markets rebound. In addition, while some indicators are mixed, we expect conditions to stabilize as we progress through the year and obtain a better understanding of the impact of tariffs on anticipated Federal Reserve interest rate cuts and the impact of the new administration's actions on U. S. Consumers. Speaker 200:13:23In addition to the negative impact that tariffs and rising prices could have on the outlook for their Federal Reserve's interest rate cuts in 2025, we are also monitoring how the new administration's potential policies may impact labor. Currently, builders are already contending with a labor shortage that could potentially get worse with the administration's proposed actions related to undocumented immigrants. We've seen estimates of about 30% of construction workers are immigrants and a significant share of those workers may be undocumented. As we look into 2025 and beyond, Carlyle will continue to focus our efforts on the factors that are in our control, maintain resiliency in our businesses through advancements in new product introductions, cross selling and market penetration into CWT and our Architectural Metals businesses. We will combine these share gain initiatives with our increased focus on innovation and our second decade of utilizing the Carlyle operating system to drive productivity and efficiencies to support our margins. Speaker 200:14:27Overall, the underlying fundamentals supporting our long term growth remain strong, anchored by the pillars of Vision 02/1930, which include our commitment to innovation, exceptional service provided through the Carlyle experience, operational excellence achieved through the Carlyle operating system and strategic and accretive M and A. Combined with our strong balance sheet and clear strategic vision, we are well positioned to drive sustained growth and create value for all our stakeholders as we progress towards our Vision 02/1930 goals. And with that, I'll turn it over to Kevin to provide additional financial details and color on our outlook for 2025. Kevin? Speaker 300:15:06Thank you, Chris. We're extremely pleased with our results for the full year 2024, where we achieved record adjusted EPS of $20.2 up 30% from 2023 revenue growth of 9%, including organic growth of 7% record adjusted EBITDA margin of 26.6%, up 150 basis points from the prior year. Strong free cash flow margin of 18.8% and solid ROIC of 28.5%. Our 2024 results demonstrate strong early progress towards our Vision 02/1930 goals. The 30% growth in adjusted EPS puts us firmly on track toward our adjusted EPS target of $40 That 150 basis point expansion in adjusted EBITDA margin reflects the success of our pricing discipline and operational efficiency initiatives through the Carlyle operating system. Speaker 300:16:16Our free cash flow margin of 18.8% also aligns with our Vision 2,030 goals, providing us with continued flexibility to invest in growth while returning capital to shareholders. Moving to Slide seven through nine. Fourth quarter consolidated revenues of $1,100,000,000 were essentially flat year over year. CCM revenues grew 2% driven by the acquisition of MTL, which more than offset challenging new construction activity. CWT's markets were negatively impacted by higher interest rates, housing affordability and unfavorable weather conditions. Speaker 300:16:57CWT's revenues were down 7% in the quarter, primarily as a result of the softer residential end markets and price. Fourth quarter adjusted EBITDA margin was 25.1%, a 130 basis points year over year decline due to lower volumes, negative price costs in the quarter and unfavorable mix. CCM's adjusted EBITDA margin was 29.4%, while CWT delivered an 18.3% adjusted EBITDA margin. For your reference, Slides ten and eleven provide the year over year fourth quarter and full year adjusted EPS bridges. Moving to slides 12 through 14. Speaker 300:17:42Our balance sheet remains strong with $754,000,000 in cash, $1,000,000,000 available under our revolving credit facility and a net debt to EBITDA ratio of 0.8 times. During 2024, we produced free cash flow of $938,000,000 deployed nearly $700,000,000 towards acquisitions, repurchased $1,600,000,000 of shares and paid $172,000,000 in dividends, while maintaining strategic flexibility for continued M and A activity. We have 3,500,000.0 shares available for repurchase under our share repurchase program. Now moving to our 2025 financial outlook on Slide 15. For CCM, we expect mid single digit revenue growth driven by continued strength in reroofing activity and the full year benefit from the MTL acquisition. Speaker 300:18:44We expect to expand margins via price increases, volume leverage and operational efficiencies. For CWT, we expect high single digit revenue growth, driven by the full year impact of the acquisitions of PlastiFab and ThermoFoam. We expect margin improvement from acquisition synergies and leveraging the Carlyle operating system, including automation in our factories. We expect consolidated revenues to grow mid single digits weighted towards the back half of the year, driven by solid reroofing demand, price increases and the full year contribution from our recent acquisitions. Additionally, continued focus on COS, operational efficiencies and acquisition synergies are expected to drive approximately 50 basis points of adjusted EBITDA margin expansion. Speaker 300:19:41This also factors in an expected 50% year over year increase in R and D expense to support an increasing pipeline of innovative new products. Overall, this outlook puts us on track to achieve double digit EPS growth and another record year on our way to achieving our Vision 02/1930 goals. In summary, 2024 was a record year for Carlyle with $20.2 of adjusted EPS and adjusted EBITDA margin of 26.6%. As we enter 2025, uncertainty in the broader economy, including broader economic impact from recently announced tariffs and the timing of potential interest rate cuts has our customers taking a wait and see approach to projects. However, we have solid plans in place and are focusing on the initiatives that are in our control to drive above market growth through innovative products, synergistic acquisitions and the Carlyle experience and expand margins by leveraging the Carlyle operating system. Speaker 300:20:51With that, I turn it over to Chris for closing remarks. Speaker 200:20:55Thank you, Kevin. In conclusion, while we faced headwinds in the fourth quarter of twenty twenty four, our full year 2024 record performance demonstrates the resilience of the Carlyle business model and the success of our strategic pivot to a leading pure play building products company. As we enter 2025, we remain confident in our ability to drive sustainable growth through our Vision 2,030 initiatives, focusing on innovation, operational excellence, organic growth and strategic acquisitions. I would once again like to take this opportunity to thank all of our Carlisle employees for their exceptional efforts and perseverance throughout 2024. Your dedication has been instrumental in achieving our strong results and positioning us for further success in the years ahead. Speaker 200:21:43Thank you all as well for your continued support and interest in Carlisle. That concludes our formal comments. Operator, we are now ready for questions. Operator00:21:56Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of Tim Wise from Baird. Please go ahead. Speaker 400:22:30Hey, everybody. Good afternoon. Thanks for the Speaker 200:22:33all the call. Speaker 400:22:37Maybe just, first question, as you think about I think you said in your remarks, Chris, that pricing was down low single digits in 2024 in CCM. I guess, was it did it get any better in the fourth quarter? And I guess the reason I'm asking is, it seems like you do need some price to kind of stick this year to kind of get margin expansion and to offset raw material inflation. So maybe just kind of talk through how pricing has kind of tracked and what maybe gives you confidence that we could start to see some positive price this year? Speaker 200:23:11Yes, for sure. Kevin, you go into greater detail, but it improved through the year. And I think that says it all right. It got better and better as we went through the year. And I think your second that's 24%. Speaker 200:23:23And then your second comment about we needed in 2025%, it should be helpful. And I think when we look at our market survey that we did here in the January, we were pleased to see that while we probably wouldn't get any in Q1, just because of the timing of the announced price increases in December and then how they get quoted, it would likely hit more in the March timeframe that there was still expectation that there would be traction on the price hikes as demand recovered as we got later into Q2. So I think that's another thing that when you look at how the year plays out, obviously, as we get into the construction season, if demand is there, inventories are still what we'd say probably historically light. And so as we go into the year, if demand is there, a light inventory situation, maybe some stock in helps out too with that pricing. So that's kind of how we see the year playing out. Speaker 500:24:26And Tim, as far as our guide for the first quarter, we're expecting pricing to be down just from the carryover that pricing would be down in the first quarter '1 percent. And then as Chris said, as we get the price increases into the season really that's where flattens in the second quarter and then start seeing a benefit from the price increases in the second half of the year. Speaker 400:24:49Okay. Okay. So we should also kind of assume that you're probably somewhat price cost negative in the first half of the year as well and then that builds as organic growth gets better and price Speaker 500:25:00picks? Right. We start to definitely negative in the first quarter and then second quarter starting to flatten and then yes benefit in the second half Speaker 200:25:08of the year. And Tim on the RAS thing, when you think about it, just maybe address it right now as far as where raws are, we're thinking neutral for '25 overall. We've got some things that you're probably well aware of. We've got this ATO flame retardant PVC that already is experiencing price increases, in the industry just because of the raw material increases that comes due to China restricting imports and that we've got some other fire retardants and polyiso that are but then we've got other areas where, we're seeing flat to declines. And so across the board, I think our outlook for raws is a pretty stable with all the puts and takes pretty stable for the year. Speaker 400:25:49Okay. So price cost so basically raw material should be stable and actually price cost could be positive at price six? Is that what you're saying? Speaker 200:25:59Yes. I would say yes. And I would say, we're heavily weighted second half. Speaker 400:26:04Okay. Okay. Got you. And then just the last one, just what's built in for capital deployment and guidance? I guess in the 10% plus EPS growth comment, what's in there for buybacks? Speaker 400:26:16And have you earmarked anything for M and A in that number? Speaker 200:26:23I think we'd like to see something similar to 2024 on M and A, at least two similar sized acquisitions. On CapEx, I think we're thinking around $150,000,000 could be a little bit more than that. It depends on how quickly R and D accelerates. And then I would say on bear buybacks, we probably target around $800,000,000 in buybacks for the year. Speaker 500:26:53Right, Tim. And for those buybacks, probably it will be more half loaded on the share buybacks. The part of the acquisitions is percent similar levels is what we're looking at. That's obviously not in our guide that we put out for a full year revenue guidance. But overall, we're looking to do similar types of acquisitions in 2025. Speaker 400:27:19Okay. So the ANR $1,000,000 of buybacks is in and M and A would be incremental? Speaker 500:27:24Correct. Speaker 400:27:26Got you. Okay. Sounds good. I'll hop back in queue. Thank you. Speaker 200:27:29Thanks, Tim. Operator00:27:33Your next question comes from the line of Brian Blair from Oppenheimer. Please go ahead. Speaker 600:27:40Thank you. Good afternoon, guys. Speaker 200:27:42Hey, good afternoon, Brian. Speaker 600:27:46To level set a bit on CCM volume trends, maybe you can offer a little more detail on how, your monthly revenue shook out in Q4. Our checks kind of suggested a lot of volatility, you know, incremental project deferral specifically in November. Just curious if that was, you know, reflected in your order cadence. And then more importantly, you know, what you're seeing or what you saw through December and into January and if there's any variance versus that kind of flattish Q1 volume expectation that you started? Speaker 200:28:22Yes. I think when you went through the quarter, I think we got actually increasingly optimistic about the quarter. So maybe that contradicts yours a little bit. Can't give you the exact order trends. But I think as we got through November in that after the election, I think there was more certainty. Speaker 200:28:44And maybe that's not the only driver, but I think I would say that it got more positive as we went to the end of the year. And then as we look out for the first quarter, I think Kevin talked about it that we don't really see a lot of volume in the first quarter. I think there's a few things that are still happening. I mean, these macroeconomic conditions that really and I think you recall, we were more optimistic when we ended the second quarter and then we didn't get the rate cuts. We had a few other things that happened with the election. Speaker 200:29:14And I think that to your point on delays, I wouldn't argue with that, but that caused trepidation for sure. It caused people to bring less inventory in. But I think what we're seeing in our Carlyle market survey is that at least on the reroofing side, still 70% of our commercial business, it hasn't really slowed down. That's been very resilient, and it's been on the news. So hopefully, as we get into the year and things get more stable, then the new kicks in as well. Speaker 200:29:41The Henry side is a little bit different. Obviously, the construction, the new construction related to interest rates and people moving and housing prices is probably not improving as fast as we wanted. We've got some indications here that consumer spending hasn't been exactly great. You can see that in all sorts of different products that are out there and we see it through the retail chain. And then weather surprisingly, and Mehul can talk about this if you'd like more detail. Speaker 200:30:07He was at Henry for nineteen years. The dry weather on the West Coast had an impact on the roof coatings business. So that kind of gives you the CWT cadence as well. I would say it didn't really have the same I think it'd be more I was more positive on the reroofing and on the CCM side than I would say I was on the CWT side as we ended the year. Speaker 600:30:33Yes. Appreciate the detail there. You've offered helpful color on top line dynamics to the year price cost cadence. Did I hear you correctly that the base case assumption that you've built in for the full year understanding first versus second half, is that price cost is about neutral? Is that the case? Speaker 600:30:53And then to ask directly on the segments within the 50 basis point consolidated margin expansion, how should we think about CCM versus CWT in that bridge? Speaker 200:31:05Well, I think on the first question, we're seeing I think that's what Tim ended with, a little bit positive price and neutral on raws. So it gets us full year a more, I would say, positive price for raws, positive on the price over the raws. And much of that, like you said, is going to be in the second half. And then Kevin can take the second question. Speaker 500:31:28Yes. For between the two segments, it's pretty much the exact same story on both the pricecosts looking at it for first half, second half and also being positive overall pricecost in both segments for 25. Speaker 200:31:47Understood. Thanks again. You bet. Thank you. Operator00:31:54Your next question comes from the line of Sari Burdicki from Jefferies. Please go ahead. Speaker 700:32:01Hi, thanks for taking the question. Just building on the margin improvement commentary there, I believe you have some headwinds from the acquisition. So maybe just what you're seeing from an underlying margin improvement story excluding the dilutive impact of acquisitions? Speaker 600:32:18Yes, it's Speaker 500:32:19going to be we are looking to get volume on the top side and leveraging that with the Carlyle operating system, which will be a benefit The price cost we've been talking about, that's also a benefit. And as you say, even though the NPL acquisitions are 25%, that's obviously a nice number, EBITDA 25%. But when you compare that to the rest of the CCM segment, it's dilutive for it, but still attractive number there. So overall, looking at 50 basis points of improvement in both the CCM and CWT segments. Speaker 700:32:59And then just to clarify, sorry if this was just confusing on my end, but within your guidance for mid single digit growth for the full year and then flat sales in the first quarter, could you help us understand the top line impact from acquisitions versus underlying demand or volume for the first quarter and then for the full year as well? Thank you. Speaker 200:33:21That's a good question, Suri. Yes, fair enough. Speaker 500:33:27Full year, it's, yes, obviously, CCM, I'll do it by segment. CCM, it's going to be a bigger impact in the first half of the year in that we acquired NPL in May. So no second half impact for CCM on acquisitions, about 25,000,000 in the first quarter and then $20,000,000 is incremental in the second quarter. So that's on the CCM side. On CWT, just over $100,000,000 for the full year of M and A and it's more of our typical split that the second and third quarters are stronger than the first and fourth quarters there. Speaker 700:34:09Thanks. That's very helpful. Appreciate it. Speaker 600:34:12That's right. Operator00:34:17Your next question comes from the line of Garth Meiss from Loop Capital. Please go ahead. Speaker 800:34:24Hi, Gary. On CWC, just wondering if you hey, good afternoon. On CWC, we're just hoping you can go into a little bit more detail on your assumptions regarding volume and price in 2025. And if I remember correctly, I think insulation pricing had been a bit of a headwind for the last several quarters, specifically to that. Has that started to stabilize at all or did you continue to see pressure in the fourth quarter? Speaker 200:34:51Well, Mehul can get into some of the details. I'll just hit that the polyurethane that you're talking about, the spray foam insulation. Yes, it I would say '24 was not we were in and around that low teens decline. I think we have well, I don't think I know we put in a new leader about a quarter ago, and we've got a different approach, I would say, to how we're going to handle distribution as well as maybe some more direct sales to contractors. And the industry actually is still in pretty good shape. Speaker 200:35:24I mean, it's a great solution. We've got great market growth. The issue has been, I think really our growth market strategy and emphasizing the technological differences, which there are some between Carlisle and other products. So I think we'll see improvements in that segment, which should help us in 2025. But, Moli, you want to Speaker 100:35:47Yes. So, Garik, on CWT, as you know, we in our guide have high single digits growth for CWT. The biggest driver there is going to be M and A for both our PlastiFab and ThermoFoam. We're pretty much going to get the full year impact there. That's going to be up high single digits. Speaker 100:36:02Overall, the market, the way we see it, what we're seeing in the deterioration macro conditions, in the second half of this year. That's going to continue into the first half of this year. But then we see, based on our market data reads with what we see with, the in markets and contractors, they feel more optimistic in the second half. But you put those together, the markets will be flat. And then similarly to, CCM, we do have some price increase announcements on CWT, which will add about 50 to 100 basis points. Speaker 800:36:35Okay. That's very helpful. And then just on a follow-up from an earlier comment you made, Chris, just with respect to some of the near term, maybe the bidding activity or the outlook got a little bit better as the fourth quarter progressed here. Wondering if you can go into a little bit more detail there. Is it certain verticals or is it more on the re roofing side versus deconstruction? Speaker 800:37:00And maybe just your thoughts on should we expect in 2025 kind of a continuation of strength on reroofing and softness in new construction? Or would you expect new constructions to start to show some growth as you move through the year? Speaker 200:37:17Yes. I mean, I think when we have Kevin and I have been out with a lot of contractors, distributors. We've also gathered a lot over the last six months. We had our Carlisle market survey. And I just think people were caught a little bit off guard with in the fall with the interest rates. Speaker 200:37:38And then as we got through the fall, we got more stability in the political situation. And it's a big change. We don't have a presidential election. As we got closer to that and saw that there's going to be some stability, I think at least on the reroofing side, things continue to go. I think I just feel like people had a lot of attention and then they realized it's probably not going to be as bad as they might have had in their mind. Speaker 200:38:02So we've got great drivers behind it. I think new construction is going to continue to be soft in the beginning, specifically on the resi side, but that it picks up. I just I think the delays became less apparent specifically because of the labor situation being tight. I don't know how much you can delay because I think if you on a very real side of it, if you delay and that labor gets reallocated, what are the chances of you getting that labor back? So to a certain degree, it can be delayed depending on where you are on the level of the project. Speaker 200:38:39But if you're into it, you've got to get it completed and move on. I mean, is a big backlog. We haven't seen much, speaking of backlog. If I look at what we got out of our survey, throughout the year, that backlog has hovered right around eight to nine months. So it's been relatively stable. Speaker 200:38:59And we continue to see roofs that were put on in that increase in the late '90s and 2,000 coming for re roofing. So that increasing that's increasing demand on that side too. So I think that just all puts together that, yes, yes, you can have a couple of quarters where people are negative about it, but underlying everything are these positive trends and we've got to get back to work. So I don't know that I answered your question very well, but I tried. Speaker 800:39:22No, I appreciate your thoughts there and I guess I'll pass it on. Best of luck. Speaker 200:39:27All right. Thanks, Geric. Operator00:39:32Your next question comes from the line of Susan Maklari from Goldman Sachs. Please go ahead. Speaker 900:39:38Thank you. Good afternoon, everyone. Speaker 200:39:41Hi, Sue. Speaker 900:39:42Hi. Good afternoon. I want to start with talking about the assumption in your guide that we do get some lift in housing in the back half of the year. If that doesn't happen, can you talk about your ability to outpace the market organically given some of the new products and the share gains that you are seeing in the business? Speaker 200:40:03Yes. I think definitely that and that's a great comment around what we're doing because as you're right, we don't sit still. We've got a lot of innovation going on, specifically on the R and R. And I would say the new construction front, a couple of new products that I could highlight just to show you that and then I can speak to some other areas. But on the sales side, we just launched a new organic cotton based insulation into Home Depot. Speaker 200:40:29I think it's out there now in what will be 300 stores on the West Coast. It's being received really well by both consumers and contractors. It has some great similarities to the fiberglass installations out there in an R-nineteen. But without any of the issues, you don't need to wear a mask, you don't need to worry about itching, there's no fiberglass in it, it's all cotton. So something like that that gets penetration in. Speaker 200:40:55And by the way, I would say its price point is higher than traditional fiberglass insulation. So as we always point out, we're going to price to value and we think there's value there. So that's one. Another one is our Blueskin vapor barrier continues to be really well received, gaining momentum. Frank Reddy and the team that developed that, it's just high value and again not a cheap product and a good margin product for us as well. Speaker 200:41:22So as we specify those and as we get those continue to roll out, I think that has a positive impact. Margins, we've continued with automation projects. Two years ago, we started doing automated filling, automated blending in three of our factories now that operation is going to come online, that new system. And so we'll be taking a lot of labor out of the process. We'll be getting better efficiency through the process and less waste, less scrap. Speaker 200:41:54Obviously, that improves margins for us as well. So just couple of examples that we're doing both on the innovation side within our factories, we still continue to deploy COS. And Kevin mentioned that with MTL as well that we bought the business, obviously, the mid-20s margin is good. We're certainly aspirational to Carl operating system, the purchasing leverage, you can see it how we upped our synergies from over $20,000,000 from the original deal model. We continue to focus on being the low cost producer as well there. Speaker 200:42:27So those are the kind of things that will help us mitigate, I think, any slowdown in demand or on the new construction side or failure to have a recovery as quickly as we'd like. Speaker 900:42:38Okay. That's great color. And maybe building on that, one of the comments that you made is that you plan to double the R and D spend this year. Can you talk about what that means in terms of the multiyear pipeline for products and the ability to continue to price for value? Speaker 200:42:53Yes. So the thing that I think we all realize is we want new products faster, but innovation just takes time. So this thing will build over time. We've made the investment in the R and D center in Carlisle, PA. We actually probably will increase that space as we go through the year, as we see the need to do more testing and bring more testing in house, which the more testing we bring in house, let's say fire ratings and things like that, the quicker we can get through the product development process. Speaker 200:43:24We've got pilot lines we want to bring in well, which is well, which helps us in the sense that we don't have to shut down a factory line to test the product. We can do it offline in Carlisle, PA. Some other things we're doing is and we haven't talked a lot about this, but we've had an accelerator going for the last, I'd say, two years. We're in our third cohort right now. We have just under 10 companies we're working with on new products that range from new advances in insulation technology to get, let's say, 2x the R value out of the same cubic inch of a sheet of insulation to coatings that have performance characteristics like being able to be applied in wet weather. Speaker 200:44:11So the curing is still able to be done. It doesn't need to be dry. So for undergrade applications or below grade applications, that increases the number of days and those contractors can put waterproofing down, which obviously means they're going to get off the job quicker and can be more efficient and we can charge for that. So I think you'll see more of it our R and D in three areas. You're going to see the traditional area where we're going to do it in house and that's where investing in the Carlisle campus and in engineers and in chemists. Speaker 200:44:40You'll see in things like the Accelerator where we're going outside to look for emerging technologies that maybe universities or the entrepreneurial community may have. And then you'll also see R and D coming from our acquisitions. PlastiFab brought some very interesting ideas around EPSB just because they're vertically integrated. We've always bought our bead and now we are in the process of being vertically integrated. We can start to look at enhancements we can make to the bead there to improve the qualities of the bead and improve our EPS board. Speaker 200:45:13So when we do that, obviously, we'll communicate those values to everyone, show how they're better and we'll expect to be paid for that. Speaker 900:45:21That's great color, Chris. Thank you for briefing and good luck. Speaker 200:45:25Okay. Thanks so much, Sue. Operator00:45:29Your next question is from the line of David MacGregor from Longbow Research. Please go ahead. Speaker 1000:45:37Yes. Good afternoon, everyone, and thanks for taking my questions. Operator00:45:40Chris, I was wondering if you could Speaker 1000:45:41just talk about the M and A market and what you're seeing right now? Are sellers looking perhaps a little more motivated by what's happening in the macro and all the uncertainty? Are you seeing any meaningful change in multiple expectations? Just give us a little bit of color on that, it would be helpful. Speaker 200:45:58I wouldn't say that the multiples have changed much for us. I don't think we've seen that with the deals we've looked at. I think seller expectations are still higher than they've been over the last, let's say, David, five, six, seven, eight years ago. We are seeing, I'd say a slight uptick in the number of deals coming through that we look at. Obviously, we have the four criteria. Speaker 200:46:22And so a lot of those deals don't meet our criteria, and so they never see the light of day here. But I would say we're seeing more deals. I think the deals are well, you can see we've been doing deals from the MTL plus fab side and we also have done a deal like ThermoFoam. So we're seeing small bolt ons that can give us a meaningful geographic presence like ThermoFoam all the way up to a mid size deal like the Plastifab or MTL that brings access to new markets, new technology. We got into Canada. Speaker 200:46:56And then we still see some deals like the Henry size that are out there. And I think those we may see a few more of those as the year unwinds, which I think is positive. Speaker 1000:47:09Interesting. Thanks for that. And then I guess second question, just more on a strategic level here. It seems like we're maybe on the cusp of more consolidation in the distribution function in your business. And I'm just wondering if you could comment on your thoughts regarding how consequential consolidation in distribution channels might be. Speaker 1000:47:31In the event you think it's not consequential, perhaps you could explain why. Speaker 200:47:36Well, I think definitely you're going to continue to see consolidation in distribution. I think you're also going to see it in contractors. We've seen some roll ups in the contractor space. I think you've seen all of our major distribution partners consolidate over the last five, six, seven, eight years. You can probably find those deals online as to what they did. Speaker 200:48:03And so I think that's going to continue. I think you're also going to have some continuation of manufacturer consolidation as well. We continue to do it obviously by buying NPL and buying Plastifab, and I think that will continue. The ramifications, obviously, things have to be impacted. When distribution consolidates, you can look at what's happening with QXL and Beacon and Brad Jacobson. Speaker 200:48:29I think the public data information is around becoming a more efficient distribution organization. So there must be some ideas there on how Beacon in a future form would interact with contractors and suppliers like ourselves. We have seen this and I think I've talked about it on other calls where we've seen places where distribution hasn't provided the same type of benefits they have in the past or contractors have changed either their size or their capabilities. And you've seen our direct sales to contractors increase. So Carlyle has been flexible. Speaker 200:49:08And in fact, I think if you went back ten years ago, we probably sold less than 5% direct to contractors and now I think we've probably stated we're somewhere in the mid teens. So we've already been seeing a change in the distribution landscape and we're at least I'm pleased, I think Carl is well positioned with just an outstanding logistics team and a freight team and having that experience And I've said this publicly before that while we sold most of our sales through distribution, we delivered close to 70% of our sales to the job site direct from Carlisle. So we have a great experience in logistics and in dealing with our contractors direct. And so we're happy to continue to support distribution, which we think is important, but we also, when necessary, have the capabilities to sell direct and service our customers with the same Carlisle experience and the same experience and the same level of customer service they've Speaker 600:50:02come to expect for us. Speaker 200:50:03So a little color there for you. Hopefully, that wasn't too much. Speaker 1000:50:06No, no, that was a great answer. Thanks, Chris, and good luck. Speaker 200:50:09Yes, you bet. Thank you. Operator00:50:14Your last question comes from the line of Adam Baumgarten from Zelman. Please go ahead. Hey, everyone. Thanks for taking my question. Just on the price increases in CCM, I believe they went effective a few weeks ago. Operator00:50:27And I know you're not building much for 1Q just given the timing, but just curious on the receptivity so far and what gives you confidence that those will go through as we move into the kind of more active part of the spring season? Speaker 200:50:41Right. Well, we do these we initiated I think it's a couple of years ago now these Carlisle market surveys, where we're controlling or trying to at least control our own information to some degree. When I look back to September, I think people were already planning on some type of price action in the coming months. We'd already seen in 2024 earlier that GAF had tried to push a price increase out there. I don't really think that took any effect as you can see. Speaker 200:51:11But we also have seen changes here in December that I can't I think most organizations have increased price. And so what I would say to you is the reason I have some confidence is it's been there for a while. I think our survey says that people are expecting that and they're expecting it in the second quarter really tied to this idea that demand improves. That's one of the things. And then two, that the construction season gets underway. Speaker 200:51:42So that's where the flat raw material situation. Obviously, the tariff impact is, I'm sure, had some both imagined and real consequences. This ATO out of China has been a real price increase for people that are in the PVC market. So we've seen that impact. And so that will have an impact on increased prices. Speaker 200:52:03And I just think that all of that, the demand, the seasonality and some action here on tariffs and that people are prepared for the price increase. And that's what we hear in the surveys is that, yes, we expected it and we'd anticipate it rolling into reality somewhere in the late second quarter of twenty five. Operator00:52:26Okay, got it. That's helpful. And then just on weather, I know it was mentioned as a headwind in the fourth quarter. A couple Speaker 500:52:32of questions. One, do you have Operator00:52:34an idea of the impact? Two, do you think you'll get those sales back in the first quarter? And then just January, you've had some weather also in the South that I know is fairly disruptive. Anything to be aware of there as it Speaker 600:52:45relates to your business? Speaker 200:52:47Well, first of all, I think we've been in the fourth quarter, we've probably a couple of days, maybe $10,000,000 to $15,000,000 of impact. On the Henry set, it's a little bit different than the Carlisle side. I mean, it was there nineteen years. And Henry, he could talk a little bit about it. But I think it's mostly Western United States focused. Speaker 200:53:04And the fact that there wasn't rain means that the demand we would have seen through the retail channel just didn't materialize. Will we get that in the first quarter? I would say probably not. It doesn't look like we're going to see a lot of wet weather coming. But ultimately, those roofs are potential for leaks. Speaker 200:53:24So if it happens in the second quarter and you get rain, you're eventually going to find you have a leak. And I think that's been Henry's over your nineteen years middle. I think ultimately it all washes out and the impact is just quarter to quarter. Speaker 100:53:36Yes, that's exactly right. So it's high correlation with the rain events. When you do see rain events, you see spikes of 2x, 3x POS sales at Home Depot directly linked to the rain events. And as you know, this year, we had nine or eight months with zero rain. So, that's going to have a direct impact on demand for wood coatings. Speaker 100:53:56Yes. Speaker 200:53:56And the only other thing I'd point out is I think last year in the first quarter, I think Kevin can confirm it, that we had a couple of days of impact, right? And so that may have a little bit impact in the first quarter as well. Speaker 500:54:10Right. We mentioned on our call last year in the first quarter that we had benefit of maybe three days of positive weather to our numbers. So obviously, that's a tougher comp this year versus last year, assuming we don't have that same benefit. Speaker 200:54:26Got it. Thank you. Uh-huh. Thank you. Operator00:54:32There are no further questions at this time. I would like to hand the call back to Chris Cook for closing remarks. Sir, please go ahead. Speaker 200:54:40Well, thanks, Constantine. I want to thank everybody for joining us on this fourth quarter earnings call. Look forward to speaking with you at our next earnings call, which will be the end of the first quarter. Thanks and have a good evening everyone. Operator00:54:56This concludes today's conference call. Thank you very much for your participation. You may now disconnect.Read moreRemove AdsPowered by Conference Call Audio Live Call not available Earnings Conference CallCarlisle Companies Q4 202400:00 / 00:00Speed:1x1.25x1.5x2xRemove Ads Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Carlisle Companies Earnings HeadlinesCarlisle Companies (CSL) Projected to Post Earnings on WednesdayApril 16 at 3:49 AM | americanbankingnews.comCarlisle upgraded to Neutral from Underperform at ZelmanApril 15 at 5:28 AM | markets.businessinsider.comCould this be the start of AI’s Second Wind?We're living in unprecedented times. Most people think it's too late to get into AI right now … That the biggest profits are already off the table.April 16, 2025 | Weiss Ratings (Ad)Carlisle Companies (NYSE:CSL) Raised to Neutral at Zelman & AssociatesApril 15 at 3:15 AM | americanbankingnews.comCarlisle Companies Inc (CSL) in Madison Small Cap Fund Q3 2024April 14 at 7:03 PM | gurufocus.comCarlisle price target lowered to $430 from $450 at Loop CapitalApril 11, 2025 | markets.businessinsider.comSee More Carlisle Companies Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Carlisle Companies? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Carlisle Companies and other key companies, straight to your email. Email Address About Carlisle CompaniesCarlisle Companies (NYSE:CSL) operates as a manufacturer and supplier of building envelope products and solutions in the United States, Europe, North America, Asia and the Middle East, Africa, and internationally. It operates through two segments: Carlisle Construction Materials and Carlisle Weatherproofing Technologies. The company produces single-ply roofing products, and warranted roof systems and accessories, including ethylene propylene diene monomer, thermoplastic polyolefin and polyvinyl chloride membrane, polyiso insulation, and engineered metal roofing and wall panel systems for commercial and residential buildings. It also offers building envelope solutions, including high-performance waterproofing and moisture protection products, protective roofing underlayments, fully integrated liquid and sheet applied air/vapor barriers, sealants/primers and flashing systems, roof coatings and mastics, spray polyurethane foam and coating systems, block-molded expanded polystyrene insulation, and engineered products for HVAC applications. It sells its products under the Carlisle SynTec, Versico, WeatherBond, Hunter Panels, Resitrix, and Hertalan brands. Carlisle Companies Incorporated was founded in 1917 and is headquartered in Scottsdale, Arizona.View Carlisle Companies ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Tesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? 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There are 11 speakers on the call. Operator00:00:00Good afternoon. My name is Konstantin, and I will be your conference operator for today. At this time, I would like to welcome everyone to The Carlyle Company's Fourth Quarter twenty twenty four Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, we will conduct a question and answer session. Operator00:00:21I would like to turn the call over to Mr. Mehul Patel, Carlyle's Vice President of Investor Relations. Mehul, please go ahead. Speaker 100:00:31Thank you, and good afternoon, everyone. Welcome to Carlyle's fourth quarter twenty twenty four earnings call. I'm Mehul Patel, Vice President of Investor Relations for Carlyle. We released our fourth quarter twenty twenty four financial results today, and you can find both our press release and the presentation for today's call in the Investor Relations section of our website. On the call with me today are Chris Koch, our Board Chair, President and CEO along with Kevin Zimmel, our CFO. Speaker 100:01:00Today's call will begin with Chris, who will provide key highlights on our fourth quarter and full year 2024 results and some commentary on 2025. Kevin will follow Chris and provide an overview of our Q4 and full year 2024 financial performance and give an update on our outlook for 2025. Following our prepared remarks, we will open up the line for questions. But before we begin, please refer to Slide two of our presentation, where we note that comments today will include forward looking statements based on current expectations. Actual results could differ materially from these statements due to a number of risks and uncertainties, which are discussed in our press release and SEC filings. Speaker 100:01:44As Carlisle provides non GAAP financial information, we provided reconciliations between GAAP and non GAAP measures in our press release and in the appendix of our presentation materials, which are available on our website. With that, I will turn the call over to Chris. Speaker 200:01:59Thank you, Mehul. Good afternoon, everyone, and thank you for joining us for Carlyle's twenty twenty four fourth quarter earnings call. Turning to Slide three of the presentation, I would like to start by extending my sincere appreciation to all our Carlyle team members for delivering a very productive start to our Vision 2,030 initiatives in 2024, exceeding $20 of adjusted EPS this past year and for completing our pivot in 2024 from a general industrial portfolio of businesses to a pure play building products company. We're very proud of several key accomplishments the company made over the last year. To start, 2024 was a historic year for Carlyle as we completed our strategic pivot to a pure play building products company with the $2,000,000,000 sale of CIT in the second quarter. Speaker 200:02:50Our focus on building products has clarified and refined our mission for our employees and investors, highlighted the best in class financial performance that our building products businesses have delivered for years and provided a clear path to $40 of adjusted EPS in 02/1930 by adding innovation and a strong M and A playbook to our already well established and successful pillars of Vision 2025. Carlisle delivered record adjusted EPS of $20.2 in 2024, representing a significant 30% year over year increase, driven in part by our growing and recurring revenue stream from reroofing, which was up mid single digits throughout the year. We also benefited from the return to more normalized inventory levels and buying patterns within our channels to the contractor. Our margin performance was also strong this year with adjusted EBITDA margins expanding 150 basis points to a record 26.6%. This is even more impressive when we are reminded of two important factors. Speaker 200:03:53First, CWT's margin was substantially impacted by the significant negative trends in the residential markets we serve. And second, CCM worked through the well forecasted, but nonetheless negative impact of a low single digit price decline in commercial markets. We also continued to strengthen our market position in the building envelope space by deploying nearly $700,000,000 of capital into two synergistic acquisitions that added to existing businesses within Carlisle. First, the acquisition of MTL expanded our architectural metal capabilities with the addition of Commercial Roofing's leading authority on perimeter edge metal. MTL enables us to offer a wide range of prefabricated solutions such as edge metal, fascia, coping and composite panels and systems for the building envelope. Speaker 200:04:47As the year progressed, we validated the superb fit of MTL's leadership team with Carlisle. And through our superior integration playbook, we exceeded our expectations on the synergy front and now expect synergies to increase from our initial estimate of $13,000,000 to now well over $20,000,000 This acquisition of MTL also further positions Carlyle as an industry leader in the $4,000,000,000 architectural metal category. Second, our recent acquisition of PlastiFab advances our position as the leading vertically integrated manufacturer of expanded polystyrene insulation for the building products market across North America. PlastiFab drives innovation in expanded polystyrene products for commercial, residential and infrastructure construction applications. PlastiFab's customers seek energy efficiency and contractors and building professionals seek comprehensive solutions. Speaker 200:05:48As the only vertically integrated expanded polystyrene company in North America, Plastifab meets those needs. And as with MTL, we expect a superb fit with our existing EPS business and significant synergies currently estimated at $14,000,000 which we expect to increase as we move through 2025. Yesterday, we completed the previously announced acquisition of Texas based expanded polystyrene insulation manufacturer ThermoFoam, which builds on the recently completed acquisition of PlastiFab and leverages Carlyle's vertically integrated expanded polystyrene capabilities while adding geographic coverage in Texas and the South Central United States. Looking at the fourth quarter twenty twenty four performance on Slide four. Carlisle continued to experience broad market headwinds more heavily weighted to the residential new and R and R markets and the commercial new construction markets. Speaker 200:06:49These headwinds included higher interest rates, restricting lending conditions and unfavorable weather patterns. These factors negatively impacted sales and the results were below our midyear twenty twenty four outlook. Despite this challenging environment, Carlyle's consolidated Q4 revenues of $1,100,000,000 remained essentially flat year over year and adjusted EPS grew by 7% to a fourth quarter record of $4.47 We were pleased to see continued EPS growth as we remain confident in our Vision 02/1930 journey to $40 of adjusted EPS per share. We remain committed to the same principles our stakeholders know well: disciplined capital allocation, a focus on ROIC and growing our businesses both organically and through robust M and A. Carlyle is well positioned to benefit from widely understood macro trends, including growing commercial reroofing demand, an ongoing housing shortage and our ability to provide innovative, energy efficient and labor saving solutions and systems in the years ahead. Speaker 200:07:58Looking ahead to 2025, our Vision 02/1930 strategy guides our path forward through four key elements. First, we are accelerating innovation focused on energy efficiency and labor saving solutions. Nothing exemplifies our commitment to innovation more than our $45,000,000 plus investment in our new state of the art innovation center in Carlisle, PA. This expansion will provide additional capabilities and resources development of innovative, energy efficient, labor saving solutions and integrated systems, supporting our goal of generating 25% of revenues from new products introduced within the past five years. Second, we will seek to continue to expand our best in class margins by pricing our innovative products and solutions for the value we provide. Speaker 200:08:49By delivering those innovative products and solutions through the value enhancing Carlyle experience and by driving operational excellence through the Carlyle operating system. Third, we will strategically expand our market positions in the building envelope with a best in class M and A process to complement our strong organic growth efforts. Our well defined M and A playbook will continue to drive significant returns on deals and provide a strategic competitive advantage for Carlisle, as was exemplified by our successful acquisitions and integrations of Henry, MTL and now PlastiFAP. Leveraging our M and A playbook, Carlyle aims to maximize value creation by employing a disciplined integration process and ensuring acquisition targets align strategically. We achieved this by adhering to four key investment criteria in our selection process. Speaker 200:09:43As a reminder, those four criteria are: one, a solid organic growth story already underway in the target company two, a talent management team three, identified and meaningful hard cost synergies and lastly, the ability to add value through executing the integration with our proven Carlyle M and A playbook. As a reminder, using our M and A playbook, we have identified over $20,000,000 of synergies through the acquisition of MTL, and we expect more than $14,000,000 of hard cost synergies through the acquisition of Plastifab. In 2025, we expect to add approximately $1 of EPS through these recent acquisitions. And fourth, we remain committed to delivering superior results through disciplined capital deployment. Balancing growth investments with shareholder returns, Carlyle deployed nearly $700,000,000 this year into strategic acquisitions and returned $1,800,000,000 to shareholders in 2024 through share buybacks and increased dividends. Speaker 200:10:48Now let's turn to 2025. We expect the market challenges we experienced during the fourth quarter to continue through the first half of twenty twenty five. We are also continuing to digest the recent actions taken by the new administration on tariffs in recent days. With over 90% of our sales in The U. S. Speaker 200:11:09And less than 10% of our raw material sourced outside of The U. S, we expect a little direct impact from the tariffs. However, we are concerned about how the tariffs may impact consumers in the residential space who are already under pressure and the potential impact the tariffs may have on interest rates in all our served markets. That said, recent indicators make us cautiously optimistic that 2025 will be another record year. And we expect that positive trend to continue into 2026 and 2027, given Carlisle's ability to deliver solutions that address the significant housing and labor shortages, necessary energy efficiency improvements in buildings and an increasingly volatile environmental backdrop. Speaker 200:11:55Our latest Carlyle market survey of over 500 market participants conducted in early January indicated positive 2025 volume expectations for commercial roofing, driven more by re roofing than new construction. Based on the results of our survey, we expect a slow start to the year with Q1 flat when excluding any negative impact from weather. And then we expect growth to build through the rest of the year to deliver an overall low single digit increase in volume for 2025. Consistent with our September 2024 market survey, contractors still expect low single digit price increases beginning in the second quarter. Additionally, inventory in the channel is lower by historical comparisons due to higher carrying costs. Speaker 200:12:40A pickup in inventory stocking should be expected as the channel leans into the summer construction season in mid to late Q2. On the residential side, the Carlisle market survey indicates flat to low single digit volume growth for 2025 with the first half down low single digits and the second half up low to mid single digits as residential markets rebound. In addition, while some indicators are mixed, we expect conditions to stabilize as we progress through the year and obtain a better understanding of the impact of tariffs on anticipated Federal Reserve interest rate cuts and the impact of the new administration's actions on U. S. Consumers. Speaker 200:13:23In addition to the negative impact that tariffs and rising prices could have on the outlook for their Federal Reserve's interest rate cuts in 2025, we are also monitoring how the new administration's potential policies may impact labor. Currently, builders are already contending with a labor shortage that could potentially get worse with the administration's proposed actions related to undocumented immigrants. We've seen estimates of about 30% of construction workers are immigrants and a significant share of those workers may be undocumented. As we look into 2025 and beyond, Carlyle will continue to focus our efforts on the factors that are in our control, maintain resiliency in our businesses through advancements in new product introductions, cross selling and market penetration into CWT and our Architectural Metals businesses. We will combine these share gain initiatives with our increased focus on innovation and our second decade of utilizing the Carlyle operating system to drive productivity and efficiencies to support our margins. Speaker 200:14:27Overall, the underlying fundamentals supporting our long term growth remain strong, anchored by the pillars of Vision 02/1930, which include our commitment to innovation, exceptional service provided through the Carlyle experience, operational excellence achieved through the Carlyle operating system and strategic and accretive M and A. Combined with our strong balance sheet and clear strategic vision, we are well positioned to drive sustained growth and create value for all our stakeholders as we progress towards our Vision 02/1930 goals. And with that, I'll turn it over to Kevin to provide additional financial details and color on our outlook for 2025. Kevin? Speaker 300:15:06Thank you, Chris. We're extremely pleased with our results for the full year 2024, where we achieved record adjusted EPS of $20.2 up 30% from 2023 revenue growth of 9%, including organic growth of 7% record adjusted EBITDA margin of 26.6%, up 150 basis points from the prior year. Strong free cash flow margin of 18.8% and solid ROIC of 28.5%. Our 2024 results demonstrate strong early progress towards our Vision 02/1930 goals. The 30% growth in adjusted EPS puts us firmly on track toward our adjusted EPS target of $40 That 150 basis point expansion in adjusted EBITDA margin reflects the success of our pricing discipline and operational efficiency initiatives through the Carlyle operating system. Speaker 300:16:16Our free cash flow margin of 18.8% also aligns with our Vision 2,030 goals, providing us with continued flexibility to invest in growth while returning capital to shareholders. Moving to Slide seven through nine. Fourth quarter consolidated revenues of $1,100,000,000 were essentially flat year over year. CCM revenues grew 2% driven by the acquisition of MTL, which more than offset challenging new construction activity. CWT's markets were negatively impacted by higher interest rates, housing affordability and unfavorable weather conditions. Speaker 300:16:57CWT's revenues were down 7% in the quarter, primarily as a result of the softer residential end markets and price. Fourth quarter adjusted EBITDA margin was 25.1%, a 130 basis points year over year decline due to lower volumes, negative price costs in the quarter and unfavorable mix. CCM's adjusted EBITDA margin was 29.4%, while CWT delivered an 18.3% adjusted EBITDA margin. For your reference, Slides ten and eleven provide the year over year fourth quarter and full year adjusted EPS bridges. Moving to slides 12 through 14. Speaker 300:17:42Our balance sheet remains strong with $754,000,000 in cash, $1,000,000,000 available under our revolving credit facility and a net debt to EBITDA ratio of 0.8 times. During 2024, we produced free cash flow of $938,000,000 deployed nearly $700,000,000 towards acquisitions, repurchased $1,600,000,000 of shares and paid $172,000,000 in dividends, while maintaining strategic flexibility for continued M and A activity. We have 3,500,000.0 shares available for repurchase under our share repurchase program. Now moving to our 2025 financial outlook on Slide 15. For CCM, we expect mid single digit revenue growth driven by continued strength in reroofing activity and the full year benefit from the MTL acquisition. Speaker 300:18:44We expect to expand margins via price increases, volume leverage and operational efficiencies. For CWT, we expect high single digit revenue growth, driven by the full year impact of the acquisitions of PlastiFab and ThermoFoam. We expect margin improvement from acquisition synergies and leveraging the Carlyle operating system, including automation in our factories. We expect consolidated revenues to grow mid single digits weighted towards the back half of the year, driven by solid reroofing demand, price increases and the full year contribution from our recent acquisitions. Additionally, continued focus on COS, operational efficiencies and acquisition synergies are expected to drive approximately 50 basis points of adjusted EBITDA margin expansion. Speaker 300:19:41This also factors in an expected 50% year over year increase in R and D expense to support an increasing pipeline of innovative new products. Overall, this outlook puts us on track to achieve double digit EPS growth and another record year on our way to achieving our Vision 02/1930 goals. In summary, 2024 was a record year for Carlyle with $20.2 of adjusted EPS and adjusted EBITDA margin of 26.6%. As we enter 2025, uncertainty in the broader economy, including broader economic impact from recently announced tariffs and the timing of potential interest rate cuts has our customers taking a wait and see approach to projects. However, we have solid plans in place and are focusing on the initiatives that are in our control to drive above market growth through innovative products, synergistic acquisitions and the Carlyle experience and expand margins by leveraging the Carlyle operating system. Speaker 300:20:51With that, I turn it over to Chris for closing remarks. Speaker 200:20:55Thank you, Kevin. In conclusion, while we faced headwinds in the fourth quarter of twenty twenty four, our full year 2024 record performance demonstrates the resilience of the Carlyle business model and the success of our strategic pivot to a leading pure play building products company. As we enter 2025, we remain confident in our ability to drive sustainable growth through our Vision 2,030 initiatives, focusing on innovation, operational excellence, organic growth and strategic acquisitions. I would once again like to take this opportunity to thank all of our Carlisle employees for their exceptional efforts and perseverance throughout 2024. Your dedication has been instrumental in achieving our strong results and positioning us for further success in the years ahead. Speaker 200:21:43Thank you all as well for your continued support and interest in Carlisle. That concludes our formal comments. Operator, we are now ready for questions. Operator00:21:56Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of Tim Wise from Baird. Please go ahead. Speaker 400:22:30Hey, everybody. Good afternoon. Thanks for the Speaker 200:22:33all the call. Speaker 400:22:37Maybe just, first question, as you think about I think you said in your remarks, Chris, that pricing was down low single digits in 2024 in CCM. I guess, was it did it get any better in the fourth quarter? And I guess the reason I'm asking is, it seems like you do need some price to kind of stick this year to kind of get margin expansion and to offset raw material inflation. So maybe just kind of talk through how pricing has kind of tracked and what maybe gives you confidence that we could start to see some positive price this year? Speaker 200:23:11Yes, for sure. Kevin, you go into greater detail, but it improved through the year. And I think that says it all right. It got better and better as we went through the year. And I think your second that's 24%. Speaker 200:23:23And then your second comment about we needed in 2025%, it should be helpful. And I think when we look at our market survey that we did here in the January, we were pleased to see that while we probably wouldn't get any in Q1, just because of the timing of the announced price increases in December and then how they get quoted, it would likely hit more in the March timeframe that there was still expectation that there would be traction on the price hikes as demand recovered as we got later into Q2. So I think that's another thing that when you look at how the year plays out, obviously, as we get into the construction season, if demand is there, inventories are still what we'd say probably historically light. And so as we go into the year, if demand is there, a light inventory situation, maybe some stock in helps out too with that pricing. So that's kind of how we see the year playing out. Speaker 500:24:26And Tim, as far as our guide for the first quarter, we're expecting pricing to be down just from the carryover that pricing would be down in the first quarter '1 percent. And then as Chris said, as we get the price increases into the season really that's where flattens in the second quarter and then start seeing a benefit from the price increases in the second half of the year. Speaker 400:24:49Okay. Okay. So we should also kind of assume that you're probably somewhat price cost negative in the first half of the year as well and then that builds as organic growth gets better and price Speaker 500:25:00picks? Right. We start to definitely negative in the first quarter and then second quarter starting to flatten and then yes benefit in the second half Speaker 200:25:08of the year. And Tim on the RAS thing, when you think about it, just maybe address it right now as far as where raws are, we're thinking neutral for '25 overall. We've got some things that you're probably well aware of. We've got this ATO flame retardant PVC that already is experiencing price increases, in the industry just because of the raw material increases that comes due to China restricting imports and that we've got some other fire retardants and polyiso that are but then we've got other areas where, we're seeing flat to declines. And so across the board, I think our outlook for raws is a pretty stable with all the puts and takes pretty stable for the year. Speaker 400:25:49Okay. So price cost so basically raw material should be stable and actually price cost could be positive at price six? Is that what you're saying? Speaker 200:25:59Yes. I would say yes. And I would say, we're heavily weighted second half. Speaker 400:26:04Okay. Okay. Got you. And then just the last one, just what's built in for capital deployment and guidance? I guess in the 10% plus EPS growth comment, what's in there for buybacks? Speaker 400:26:16And have you earmarked anything for M and A in that number? Speaker 200:26:23I think we'd like to see something similar to 2024 on M and A, at least two similar sized acquisitions. On CapEx, I think we're thinking around $150,000,000 could be a little bit more than that. It depends on how quickly R and D accelerates. And then I would say on bear buybacks, we probably target around $800,000,000 in buybacks for the year. Speaker 500:26:53Right, Tim. And for those buybacks, probably it will be more half loaded on the share buybacks. The part of the acquisitions is percent similar levels is what we're looking at. That's obviously not in our guide that we put out for a full year revenue guidance. But overall, we're looking to do similar types of acquisitions in 2025. Speaker 400:27:19Okay. So the ANR $1,000,000 of buybacks is in and M and A would be incremental? Speaker 500:27:24Correct. Speaker 400:27:26Got you. Okay. Sounds good. I'll hop back in queue. Thank you. Speaker 200:27:29Thanks, Tim. Operator00:27:33Your next question comes from the line of Brian Blair from Oppenheimer. Please go ahead. Speaker 600:27:40Thank you. Good afternoon, guys. Speaker 200:27:42Hey, good afternoon, Brian. Speaker 600:27:46To level set a bit on CCM volume trends, maybe you can offer a little more detail on how, your monthly revenue shook out in Q4. Our checks kind of suggested a lot of volatility, you know, incremental project deferral specifically in November. Just curious if that was, you know, reflected in your order cadence. And then more importantly, you know, what you're seeing or what you saw through December and into January and if there's any variance versus that kind of flattish Q1 volume expectation that you started? Speaker 200:28:22Yes. I think when you went through the quarter, I think we got actually increasingly optimistic about the quarter. So maybe that contradicts yours a little bit. Can't give you the exact order trends. But I think as we got through November in that after the election, I think there was more certainty. Speaker 200:28:44And maybe that's not the only driver, but I think I would say that it got more positive as we went to the end of the year. And then as we look out for the first quarter, I think Kevin talked about it that we don't really see a lot of volume in the first quarter. I think there's a few things that are still happening. I mean, these macroeconomic conditions that really and I think you recall, we were more optimistic when we ended the second quarter and then we didn't get the rate cuts. We had a few other things that happened with the election. Speaker 200:29:14And I think that to your point on delays, I wouldn't argue with that, but that caused trepidation for sure. It caused people to bring less inventory in. But I think what we're seeing in our Carlyle market survey is that at least on the reroofing side, still 70% of our commercial business, it hasn't really slowed down. That's been very resilient, and it's been on the news. So hopefully, as we get into the year and things get more stable, then the new kicks in as well. Speaker 200:29:41The Henry side is a little bit different. Obviously, the construction, the new construction related to interest rates and people moving and housing prices is probably not improving as fast as we wanted. We've got some indications here that consumer spending hasn't been exactly great. You can see that in all sorts of different products that are out there and we see it through the retail chain. And then weather surprisingly, and Mehul can talk about this if you'd like more detail. Speaker 200:30:07He was at Henry for nineteen years. The dry weather on the West Coast had an impact on the roof coatings business. So that kind of gives you the CWT cadence as well. I would say it didn't really have the same I think it'd be more I was more positive on the reroofing and on the CCM side than I would say I was on the CWT side as we ended the year. Speaker 600:30:33Yes. Appreciate the detail there. You've offered helpful color on top line dynamics to the year price cost cadence. Did I hear you correctly that the base case assumption that you've built in for the full year understanding first versus second half, is that price cost is about neutral? Is that the case? Speaker 600:30:53And then to ask directly on the segments within the 50 basis point consolidated margin expansion, how should we think about CCM versus CWT in that bridge? Speaker 200:31:05Well, I think on the first question, we're seeing I think that's what Tim ended with, a little bit positive price and neutral on raws. So it gets us full year a more, I would say, positive price for raws, positive on the price over the raws. And much of that, like you said, is going to be in the second half. And then Kevin can take the second question. Speaker 500:31:28Yes. For between the two segments, it's pretty much the exact same story on both the pricecosts looking at it for first half, second half and also being positive overall pricecost in both segments for 25. Speaker 200:31:47Understood. Thanks again. You bet. Thank you. Operator00:31:54Your next question comes from the line of Sari Burdicki from Jefferies. Please go ahead. Speaker 700:32:01Hi, thanks for taking the question. Just building on the margin improvement commentary there, I believe you have some headwinds from the acquisition. So maybe just what you're seeing from an underlying margin improvement story excluding the dilutive impact of acquisitions? Speaker 600:32:18Yes, it's Speaker 500:32:19going to be we are looking to get volume on the top side and leveraging that with the Carlyle operating system, which will be a benefit The price cost we've been talking about, that's also a benefit. And as you say, even though the NPL acquisitions are 25%, that's obviously a nice number, EBITDA 25%. But when you compare that to the rest of the CCM segment, it's dilutive for it, but still attractive number there. So overall, looking at 50 basis points of improvement in both the CCM and CWT segments. Speaker 700:32:59And then just to clarify, sorry if this was just confusing on my end, but within your guidance for mid single digit growth for the full year and then flat sales in the first quarter, could you help us understand the top line impact from acquisitions versus underlying demand or volume for the first quarter and then for the full year as well? Thank you. Speaker 200:33:21That's a good question, Suri. Yes, fair enough. Speaker 500:33:27Full year, it's, yes, obviously, CCM, I'll do it by segment. CCM, it's going to be a bigger impact in the first half of the year in that we acquired NPL in May. So no second half impact for CCM on acquisitions, about 25,000,000 in the first quarter and then $20,000,000 is incremental in the second quarter. So that's on the CCM side. On CWT, just over $100,000,000 for the full year of M and A and it's more of our typical split that the second and third quarters are stronger than the first and fourth quarters there. Speaker 700:34:09Thanks. That's very helpful. Appreciate it. Speaker 600:34:12That's right. Operator00:34:17Your next question comes from the line of Garth Meiss from Loop Capital. Please go ahead. Speaker 800:34:24Hi, Gary. On CWC, just wondering if you hey, good afternoon. On CWC, we're just hoping you can go into a little bit more detail on your assumptions regarding volume and price in 2025. And if I remember correctly, I think insulation pricing had been a bit of a headwind for the last several quarters, specifically to that. Has that started to stabilize at all or did you continue to see pressure in the fourth quarter? Speaker 200:34:51Well, Mehul can get into some of the details. I'll just hit that the polyurethane that you're talking about, the spray foam insulation. Yes, it I would say '24 was not we were in and around that low teens decline. I think we have well, I don't think I know we put in a new leader about a quarter ago, and we've got a different approach, I would say, to how we're going to handle distribution as well as maybe some more direct sales to contractors. And the industry actually is still in pretty good shape. Speaker 200:35:24I mean, it's a great solution. We've got great market growth. The issue has been, I think really our growth market strategy and emphasizing the technological differences, which there are some between Carlisle and other products. So I think we'll see improvements in that segment, which should help us in 2025. But, Moli, you want to Speaker 100:35:47Yes. So, Garik, on CWT, as you know, we in our guide have high single digits growth for CWT. The biggest driver there is going to be M and A for both our PlastiFab and ThermoFoam. We're pretty much going to get the full year impact there. That's going to be up high single digits. Speaker 100:36:02Overall, the market, the way we see it, what we're seeing in the deterioration macro conditions, in the second half of this year. That's going to continue into the first half of this year. But then we see, based on our market data reads with what we see with, the in markets and contractors, they feel more optimistic in the second half. But you put those together, the markets will be flat. And then similarly to, CCM, we do have some price increase announcements on CWT, which will add about 50 to 100 basis points. Speaker 800:36:35Okay. That's very helpful. And then just on a follow-up from an earlier comment you made, Chris, just with respect to some of the near term, maybe the bidding activity or the outlook got a little bit better as the fourth quarter progressed here. Wondering if you can go into a little bit more detail there. Is it certain verticals or is it more on the re roofing side versus deconstruction? Speaker 800:37:00And maybe just your thoughts on should we expect in 2025 kind of a continuation of strength on reroofing and softness in new construction? Or would you expect new constructions to start to show some growth as you move through the year? Speaker 200:37:17Yes. I mean, I think when we have Kevin and I have been out with a lot of contractors, distributors. We've also gathered a lot over the last six months. We had our Carlisle market survey. And I just think people were caught a little bit off guard with in the fall with the interest rates. Speaker 200:37:38And then as we got through the fall, we got more stability in the political situation. And it's a big change. We don't have a presidential election. As we got closer to that and saw that there's going to be some stability, I think at least on the reroofing side, things continue to go. I think I just feel like people had a lot of attention and then they realized it's probably not going to be as bad as they might have had in their mind. Speaker 200:38:02So we've got great drivers behind it. I think new construction is going to continue to be soft in the beginning, specifically on the resi side, but that it picks up. I just I think the delays became less apparent specifically because of the labor situation being tight. I don't know how much you can delay because I think if you on a very real side of it, if you delay and that labor gets reallocated, what are the chances of you getting that labor back? So to a certain degree, it can be delayed depending on where you are on the level of the project. Speaker 200:38:39But if you're into it, you've got to get it completed and move on. I mean, is a big backlog. We haven't seen much, speaking of backlog. If I look at what we got out of our survey, throughout the year, that backlog has hovered right around eight to nine months. So it's been relatively stable. Speaker 200:38:59And we continue to see roofs that were put on in that increase in the late '90s and 2,000 coming for re roofing. So that increasing that's increasing demand on that side too. So I think that just all puts together that, yes, yes, you can have a couple of quarters where people are negative about it, but underlying everything are these positive trends and we've got to get back to work. So I don't know that I answered your question very well, but I tried. Speaker 800:39:22No, I appreciate your thoughts there and I guess I'll pass it on. Best of luck. Speaker 200:39:27All right. Thanks, Geric. Operator00:39:32Your next question comes from the line of Susan Maklari from Goldman Sachs. Please go ahead. Speaker 900:39:38Thank you. Good afternoon, everyone. Speaker 200:39:41Hi, Sue. Speaker 900:39:42Hi. Good afternoon. I want to start with talking about the assumption in your guide that we do get some lift in housing in the back half of the year. If that doesn't happen, can you talk about your ability to outpace the market organically given some of the new products and the share gains that you are seeing in the business? Speaker 200:40:03Yes. I think definitely that and that's a great comment around what we're doing because as you're right, we don't sit still. We've got a lot of innovation going on, specifically on the R and R. And I would say the new construction front, a couple of new products that I could highlight just to show you that and then I can speak to some other areas. But on the sales side, we just launched a new organic cotton based insulation into Home Depot. Speaker 200:40:29I think it's out there now in what will be 300 stores on the West Coast. It's being received really well by both consumers and contractors. It has some great similarities to the fiberglass installations out there in an R-nineteen. But without any of the issues, you don't need to wear a mask, you don't need to worry about itching, there's no fiberglass in it, it's all cotton. So something like that that gets penetration in. Speaker 200:40:55And by the way, I would say its price point is higher than traditional fiberglass insulation. So as we always point out, we're going to price to value and we think there's value there. So that's one. Another one is our Blueskin vapor barrier continues to be really well received, gaining momentum. Frank Reddy and the team that developed that, it's just high value and again not a cheap product and a good margin product for us as well. Speaker 200:41:22So as we specify those and as we get those continue to roll out, I think that has a positive impact. Margins, we've continued with automation projects. Two years ago, we started doing automated filling, automated blending in three of our factories now that operation is going to come online, that new system. And so we'll be taking a lot of labor out of the process. We'll be getting better efficiency through the process and less waste, less scrap. Speaker 200:41:54Obviously, that improves margins for us as well. So just couple of examples that we're doing both on the innovation side within our factories, we still continue to deploy COS. And Kevin mentioned that with MTL as well that we bought the business, obviously, the mid-20s margin is good. We're certainly aspirational to Carl operating system, the purchasing leverage, you can see it how we upped our synergies from over $20,000,000 from the original deal model. We continue to focus on being the low cost producer as well there. Speaker 200:42:27So those are the kind of things that will help us mitigate, I think, any slowdown in demand or on the new construction side or failure to have a recovery as quickly as we'd like. Speaker 900:42:38Okay. That's great color. And maybe building on that, one of the comments that you made is that you plan to double the R and D spend this year. Can you talk about what that means in terms of the multiyear pipeline for products and the ability to continue to price for value? Speaker 200:42:53Yes. So the thing that I think we all realize is we want new products faster, but innovation just takes time. So this thing will build over time. We've made the investment in the R and D center in Carlisle, PA. We actually probably will increase that space as we go through the year, as we see the need to do more testing and bring more testing in house, which the more testing we bring in house, let's say fire ratings and things like that, the quicker we can get through the product development process. Speaker 200:43:24We've got pilot lines we want to bring in well, which is well, which helps us in the sense that we don't have to shut down a factory line to test the product. We can do it offline in Carlisle, PA. Some other things we're doing is and we haven't talked a lot about this, but we've had an accelerator going for the last, I'd say, two years. We're in our third cohort right now. We have just under 10 companies we're working with on new products that range from new advances in insulation technology to get, let's say, 2x the R value out of the same cubic inch of a sheet of insulation to coatings that have performance characteristics like being able to be applied in wet weather. Speaker 200:44:11So the curing is still able to be done. It doesn't need to be dry. So for undergrade applications or below grade applications, that increases the number of days and those contractors can put waterproofing down, which obviously means they're going to get off the job quicker and can be more efficient and we can charge for that. So I think you'll see more of it our R and D in three areas. You're going to see the traditional area where we're going to do it in house and that's where investing in the Carlisle campus and in engineers and in chemists. Speaker 200:44:40You'll see in things like the Accelerator where we're going outside to look for emerging technologies that maybe universities or the entrepreneurial community may have. And then you'll also see R and D coming from our acquisitions. PlastiFab brought some very interesting ideas around EPSB just because they're vertically integrated. We've always bought our bead and now we are in the process of being vertically integrated. We can start to look at enhancements we can make to the bead there to improve the qualities of the bead and improve our EPS board. Speaker 200:45:13So when we do that, obviously, we'll communicate those values to everyone, show how they're better and we'll expect to be paid for that. Speaker 900:45:21That's great color, Chris. Thank you for briefing and good luck. Speaker 200:45:25Okay. Thanks so much, Sue. Operator00:45:29Your next question is from the line of David MacGregor from Longbow Research. Please go ahead. Speaker 1000:45:37Yes. Good afternoon, everyone, and thanks for taking my questions. Operator00:45:40Chris, I was wondering if you could Speaker 1000:45:41just talk about the M and A market and what you're seeing right now? Are sellers looking perhaps a little more motivated by what's happening in the macro and all the uncertainty? Are you seeing any meaningful change in multiple expectations? Just give us a little bit of color on that, it would be helpful. Speaker 200:45:58I wouldn't say that the multiples have changed much for us. I don't think we've seen that with the deals we've looked at. I think seller expectations are still higher than they've been over the last, let's say, David, five, six, seven, eight years ago. We are seeing, I'd say a slight uptick in the number of deals coming through that we look at. Obviously, we have the four criteria. Speaker 200:46:22And so a lot of those deals don't meet our criteria, and so they never see the light of day here. But I would say we're seeing more deals. I think the deals are well, you can see we've been doing deals from the MTL plus fab side and we also have done a deal like ThermoFoam. So we're seeing small bolt ons that can give us a meaningful geographic presence like ThermoFoam all the way up to a mid size deal like the Plastifab or MTL that brings access to new markets, new technology. We got into Canada. Speaker 200:46:56And then we still see some deals like the Henry size that are out there. And I think those we may see a few more of those as the year unwinds, which I think is positive. Speaker 1000:47:09Interesting. Thanks for that. And then I guess second question, just more on a strategic level here. It seems like we're maybe on the cusp of more consolidation in the distribution function in your business. And I'm just wondering if you could comment on your thoughts regarding how consequential consolidation in distribution channels might be. Speaker 1000:47:31In the event you think it's not consequential, perhaps you could explain why. Speaker 200:47:36Well, I think definitely you're going to continue to see consolidation in distribution. I think you're also going to see it in contractors. We've seen some roll ups in the contractor space. I think you've seen all of our major distribution partners consolidate over the last five, six, seven, eight years. You can probably find those deals online as to what they did. Speaker 200:48:03And so I think that's going to continue. I think you're also going to have some continuation of manufacturer consolidation as well. We continue to do it obviously by buying NPL and buying Plastifab, and I think that will continue. The ramifications, obviously, things have to be impacted. When distribution consolidates, you can look at what's happening with QXL and Beacon and Brad Jacobson. Speaker 200:48:29I think the public data information is around becoming a more efficient distribution organization. So there must be some ideas there on how Beacon in a future form would interact with contractors and suppliers like ourselves. We have seen this and I think I've talked about it on other calls where we've seen places where distribution hasn't provided the same type of benefits they have in the past or contractors have changed either their size or their capabilities. And you've seen our direct sales to contractors increase. So Carlyle has been flexible. Speaker 200:49:08And in fact, I think if you went back ten years ago, we probably sold less than 5% direct to contractors and now I think we've probably stated we're somewhere in the mid teens. So we've already been seeing a change in the distribution landscape and we're at least I'm pleased, I think Carl is well positioned with just an outstanding logistics team and a freight team and having that experience And I've said this publicly before that while we sold most of our sales through distribution, we delivered close to 70% of our sales to the job site direct from Carlisle. So we have a great experience in logistics and in dealing with our contractors direct. And so we're happy to continue to support distribution, which we think is important, but we also, when necessary, have the capabilities to sell direct and service our customers with the same Carlisle experience and the same experience and the same level of customer service they've Speaker 600:50:02come to expect for us. Speaker 200:50:03So a little color there for you. Hopefully, that wasn't too much. Speaker 1000:50:06No, no, that was a great answer. Thanks, Chris, and good luck. Speaker 200:50:09Yes, you bet. Thank you. Operator00:50:14Your last question comes from the line of Adam Baumgarten from Zelman. Please go ahead. Hey, everyone. Thanks for taking my question. Just on the price increases in CCM, I believe they went effective a few weeks ago. Operator00:50:27And I know you're not building much for 1Q just given the timing, but just curious on the receptivity so far and what gives you confidence that those will go through as we move into the kind of more active part of the spring season? Speaker 200:50:41Right. Well, we do these we initiated I think it's a couple of years ago now these Carlisle market surveys, where we're controlling or trying to at least control our own information to some degree. When I look back to September, I think people were already planning on some type of price action in the coming months. We'd already seen in 2024 earlier that GAF had tried to push a price increase out there. I don't really think that took any effect as you can see. Speaker 200:51:11But we also have seen changes here in December that I can't I think most organizations have increased price. And so what I would say to you is the reason I have some confidence is it's been there for a while. I think our survey says that people are expecting that and they're expecting it in the second quarter really tied to this idea that demand improves. That's one of the things. And then two, that the construction season gets underway. Speaker 200:51:42So that's where the flat raw material situation. Obviously, the tariff impact is, I'm sure, had some both imagined and real consequences. This ATO out of China has been a real price increase for people that are in the PVC market. So we've seen that impact. And so that will have an impact on increased prices. Speaker 200:52:03And I just think that all of that, the demand, the seasonality and some action here on tariffs and that people are prepared for the price increase. And that's what we hear in the surveys is that, yes, we expected it and we'd anticipate it rolling into reality somewhere in the late second quarter of twenty five. Operator00:52:26Okay, got it. That's helpful. And then just on weather, I know it was mentioned as a headwind in the fourth quarter. A couple Speaker 500:52:32of questions. One, do you have Operator00:52:34an idea of the impact? Two, do you think you'll get those sales back in the first quarter? And then just January, you've had some weather also in the South that I know is fairly disruptive. Anything to be aware of there as it Speaker 600:52:45relates to your business? Speaker 200:52:47Well, first of all, I think we've been in the fourth quarter, we've probably a couple of days, maybe $10,000,000 to $15,000,000 of impact. On the Henry set, it's a little bit different than the Carlisle side. I mean, it was there nineteen years. And Henry, he could talk a little bit about it. But I think it's mostly Western United States focused. Speaker 200:53:04And the fact that there wasn't rain means that the demand we would have seen through the retail channel just didn't materialize. Will we get that in the first quarter? I would say probably not. It doesn't look like we're going to see a lot of wet weather coming. But ultimately, those roofs are potential for leaks. Speaker 200:53:24So if it happens in the second quarter and you get rain, you're eventually going to find you have a leak. And I think that's been Henry's over your nineteen years middle. I think ultimately it all washes out and the impact is just quarter to quarter. Speaker 100:53:36Yes, that's exactly right. So it's high correlation with the rain events. When you do see rain events, you see spikes of 2x, 3x POS sales at Home Depot directly linked to the rain events. And as you know, this year, we had nine or eight months with zero rain. So, that's going to have a direct impact on demand for wood coatings. Speaker 100:53:56Yes. Speaker 200:53:56And the only other thing I'd point out is I think last year in the first quarter, I think Kevin can confirm it, that we had a couple of days of impact, right? And so that may have a little bit impact in the first quarter as well. Speaker 500:54:10Right. We mentioned on our call last year in the first quarter that we had benefit of maybe three days of positive weather to our numbers. So obviously, that's a tougher comp this year versus last year, assuming we don't have that same benefit. Speaker 200:54:26Got it. Thank you. Uh-huh. Thank you. Operator00:54:32There are no further questions at this time. I would like to hand the call back to Chris Cook for closing remarks. Sir, please go ahead. Speaker 200:54:40Well, thanks, Constantine. I want to thank everybody for joining us on this fourth quarter earnings call. Look forward to speaking with you at our next earnings call, which will be the end of the first quarter. Thanks and have a good evening everyone. Operator00:54:56This concludes today's conference call. Thank you very much for your participation. You may now disconnect.Read moreRemove AdsPowered by