Carlisle(US:CSL)2025-10-29 22:00Financial Data and Key Metrics Changes - Q3 revenues reached $1.3 billion, a 1% increase year-over-year, slightly below previous expectations [5][18] - Adjusted EPS for Q3 was $5.61, down 3% compared to the previous year [18] - Adjusted EBITDA for the quarter was $349 million, resulting in an adjusted EBITDA margin of 25.9%, a decrease of 170 basis points from the prior year [18][19] Business Line Data and Key Metrics Changes - CCM reported Q3 revenue of $1 billion, essentially flat year-over-year, with adjusted EBITDA of $303 million, down 8% compared to the prior year [19][20] - CWT reported Q3 revenue of $346 million, up 3% year-over-year, but organic revenue declined 8% due to lower volumes [21][19] Market Data and Key Metrics Changes - The ongoing challenges in the new construction market are attributed to higher interest rates, affordability issues, and economic uncertainty [4][6] - Housing prices have risen over 45% since 2020, with the median home price exceeding $430,000, creating significant affordability challenges [7][8] Company Strategy and Development Direction - The company is focused on its Vision 2030 strategy, emphasizing product innovation, operational excellence, and strategic M&A to enhance capabilities and expand market reach [9][17] - Recent acquisitions are expected to create value and expand addressable markets, with a goal of two to three acquisitions annually [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to create shareholder value despite near-term challenges, citing strong demand for reroofing and ongoing innovation [8][9] - The full-year 2025 guidance has been revised to flat revenue with adjusted EBITDA margins expected to decline by approximately 250 basis points [16][24] Other Important Information - The company repurchased 800,000 shares for $300 million and raised its dividend by 10%, marking the 49th consecutive annual increase [9][15] - The company generated free cash flow of $620 million in the first nine months of 2025, on track to exceed its free cash flow margin target of 15% for the full year [22][23] Q&A Session Summary Question: Impact of destocking in Q3 and outlook for Q4 - Management indicated that destocking is expected as part of normal seasonal patterns, with no major impact anticipated [33][34] Question: Leveraging the Carlisle experience in a competitive environment - The company is enhancing its customer service capabilities to help contractors operate more efficiently, which is expected to provide a competitive advantage [40][42] Question: Outlook for EBITDA margins in Q4 by segment - CCM's adjusted EBITDA margin is expected to be around 26% in Q4, while CWT's margins are anticipated to decline by 250 to 300 basis points compared to the prior year [55] Question: Pricing outlook for CWT and raw material trends - Pricing for CWT is expected to decline slightly, with mixed trends in raw material prices, particularly MDI and polyol [69]