• Adjusted EPS: $20.20 in 2024, a 30% year-over-year increase.
• Q4 Adjusted EPS: $4.47, a 7% increase year-over-year.
• Revenue: $1.1 billion in Q4 2024, flat year-over-year.
• Adjusted EBITDA Margin: 26.6% for 2024, up 150 basis points from the prior year.
• Free Cash Flow Margin: 18.8% for 2024.
• Return on Invested Capital (ROIC): 28.5% for 2024.
• CCM Revenue Growth: 2% in Q4 2024.
• CWT Revenue Decline: 7% in Q4 2024.
• Cash and Credit Availability: $754 million in cash and $1 billion available under revolving credit.
• Net Debt to EBITDA Ratio: 0.8 times.
• Shareholder Returns: $1.8 billion returned in 2024 through share buybacks and dividends.
• Acquisitions: Nearly $700 million deployed in 2024.

• Warning! GuruFocus has detected 3 Warning Sign with CSL.

Release Date: February 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Carlisle Companies Inc (NYSE:CSL) achieved a record adjusted EPS of $20.20 in 2024, marking a 30% year-over-year increase.
• The company successfully completed its strategic pivot to a pure play building products company with the $2 billion sale of CIT.
• Carlisle Companies Inc (NYSE:CSL) expanded its market position through strategic acquisitions, including MTL and Plastifab, which are expected to generate significant synergies.
• The company reported strong margin performance, with adjusted EBITDA margins expanding by 150 basis points to a record 26.6%.
• Carlisle Companies Inc (NYSE:CSL) is well-positioned to benefit from macro trends such as growing commercial re-roofing demand and ongoing housing shortages.

Negative Points

• The company faced broad market headwinds, including higher interest rates, restrictive lending conditions, and unfavorable weather patterns, impacting sales.
• Fourth quarter revenues remained flat year-over-year, and results were below the mid-year 2024 outlook.
• Carlisle Companies Inc (NYSE:CSL) anticipates continued market challenges in the first half of 2025, including potential impacts from new tariffs.
• The residential markets served by CWT experienced significant negative trends, affecting overall performance.
• The company expects to be price/cost negative in the first half of 2025, with improvements anticipated in the second half.

Q & A Highlights

Q: Can you discuss the pricing trends in 2024 for Carlisle Construction Materials (CCM) and expectations for 2025? A: Christian Koch, Chair, President, and CEO, noted that pricing improved throughout 2024. While no price increases are expected in Q1 2025, there is confidence that price hikes will gain traction as demand recovers later in the year. The expectation is for pricing to be flat in Q2 and beneficial in the second half of 2025.

Q: What are the expectations for capital deployment in 2025, particularly regarding share buybacks and M&A? A: Christian Koch stated that they aim for similar M&A activity as in 2024, with capital expenditures around $150 million. They plan to target approximately $800 million in share buybacks, likely front-loaded in the year.

Q: How did CCM's volume trends look in Q4 2024, and what are the expectations for Q1 2025? A: Christian Koch mentioned that optimism increased towards the end of Q4 2024. However, for Q1 2025, they do not anticipate significant volume growth due to ongoing macroeconomic conditions. The re-roofing segment remains resilient, while new construction is expected to be softer initially.

Q: Can you elaborate on the margin improvement strategy, excluding the impact of acquisitions? A: The company is focusing on leveraging volume growth and the Carlisle Operating System for operational efficiencies. Despite acquisitions being slightly dilutive, they expect a 50 basis point improvement in margins for both CCM and Carlisle Weatherproofing Technologies (CWT).

Q: What is the outlook for CWT in terms of volume and pricing in 2025? A: CWT is expected to see high single-digit revenue growth, primarily driven by M&A. The market is anticipated to be flat overall, with some price increases contributing 50 to 100 basis points. The second half of the year is expected to be more optimistic based on market data.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.