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CARLISLE COMPANIES INC (CSL)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $1.12B (-0.4% YoY), GAAP diluted EPS was $3.56 (-9.0% YoY), while adjusted EPS reached a quarterly record $4.47 (+7.2% YoY) as margins compressed on lower volumes and negative price/cost .
  • Segmentally, CCM grew revenue 2% to $834M with 29.4% adjusted EBITDA margin, while CWT declined 7% to $289M with 18.3% margin; drivers included resilient re-roofing offset by weaker new construction and residential end markets plus dry weather impacts on roof coatings .
  • 2025 outlook: mid-single-digit consolidated revenue growth and ~50 bps adjusted EBITDA margin expansion; CCM mid-single-digit growth, CWT high-single-digit growth, with management highlighting innovation, COS execution, and M&A synergies; R&D spend planned up ~50% YoY .
  • Q4 revenues missed the Q3 outlook (which guided LSD growth for Q4), though Q4 adjusted EBITDA margin ~25% was in line; catalysts include pricing actions expected to gain traction in Q2, distribution channel restocking into summer, and acquisitions (MTL, Plasti-Fab, ThermaFoam) adding ~$1 EPS in 2025 .

What Went Well and What Went Wrong

What Went Well

  • Record adjusted EPS in Q4 ($4.47) and FY ($20.20, +30% YoY) driven by resilient re-roofing, COS efficiency, and disciplined pricing; “we progressed towards our Vision 2030 target of $40 of adjusted EPS” .
  • Strong capital deployment: $1.6B share repurchases in 2024 ($420M in Q4), dividends of $172M FY ($45M in Q4); liquidity intact with $754M cash and $1.0B revolver availability .
  • Strategic M&A execution: completed Plasti-Fab acquisition and announced ThermaFoam; MTL synergy target raised from $13M to >$20M; management expects acquisitions to add ~+$1 EPS in 2025 .

What Went Wrong

  • Margin compression: Q4 operating margin fell to 19.9% (-260 bps YoY) and adjusted EBITDA margin to 25.1% (-130 bps YoY) due to lower volumes, negative price/cost, and mix .
  • CWT weakness: revenue -7% (-8% organic) with lower prices in insulation, dry weather suppressing retail roof coatings demand; adjusted EBITDA margin down to 18.3% .
  • Q4 revenue missed the Q3 outlook for LSD growth; macro headwinds persisted (higher rates, affordability, unfavorable weather) impacting construction activity .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$1,450.6 $1,333.6 $1,122.9
YoY Revenue Growth %11.0% 5.9% -0.4%
Diluted EPS ($USD)$5.94 $5.30 $3.56
YoY Diluted EPS Growth %34.4% 22.7% -9.0%
Adjusted EPS ($USD)$6.24 $5.78 $4.47
YoY Adjusted EPS Growth %32.8% 23.5% 7.2%
Operating Margin %26.0% 23.7% 19.9%
Adjusted EBITDA Margin %28.8% 27.6% 25.1%
Consensus Revenue ($USD Millions)N/A – SPGI consensus unavailableN/A – SPGI consensus unavailableN/A – SPGI consensus unavailable
Consensus EPS ($USD)N/A – SPGI consensus unavailableN/A – SPGI consensus unavailableN/A – SPGI consensus unavailable

Segment breakdown

Segment MetricQ2 2024Q3 2024Q4 2024
CCM Revenue ($USD Millions)$1,088.9 $998.2 $833.6
CCM Adjusted EBITDA Margin %33.4% 32.8% 29.4%
CWT Revenue ($USD Millions)$361.7 $335.4 $289.3
CWT Adjusted EBITDA Margin %22.5% 20.7% 18.3%

KPIs and cash deployment

KPIQ2 2024Q3 2024Q4 2024
Free Cash Flow from continuing ops ($USD Millions)$155.8 $309.4 $341.1
Share Repurchases ($USD Millions)$550 $466 $420
Dividends Paid ($USD Millions)$40 $46 $45
Cash And Equivalents ($USD Millions)$1,736.3 $1,530.6 $753.5
Long-term Debt incl. current ($USD Millions)$2,290.1 $2,290.2 $1,890.6

Non-GAAP adjustments (Q4)

  • Adjusted EPS adds $0.36 for pension settlement losses, $0.44 acquisition-related amortization, +$0.17 inventory step-up/transaction costs, and -$0.07 discrete tax items; adjusted net income $204.0M vs GAAP net income $162.8M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Revenue GrowthFY 2025—Mid-single-digit YoY increase New
Adjusted EBITDA Margin ExpansionFY 2025—~+50 bps New
CCM Revenue GrowthFY 2025—Mid-single-digit YoY increase New
CWT Revenue GrowthFY 2025—High-single-digit YoY increase New
R&D ExpenseFY 2025—+~50% YoY to support pipeline Increase
Share RepurchasesFY 2025—Target ~$800M (half-loaded) New
CapExFY 2025—Approx. $150M New
Q4 RevenueQ4 2024“Revenues to increase LSD” (Oct guide) $1,122.9M (-0.4% YoY) Lower than guided (miss)
Q4 Adjusted EBITDA MarginQ4 2024~25% (Oct guide) 25.1% In-line

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Pricing and price/costPricing discipline; favorable raws supporting margins CCM margin expansion on volume and raws Pricing down ~1% in Q1; price gains expected to stick in Q2/Q3; price/cost negative H1 then positive H2 Improving pricing traction into H2 2025
Reroofing demandStrong pent-up demand; channels normalized Robust reroofing; contractor backlogs supportive Reroofing remains resilient; survey points to positive volumes; Q1 flat ex-weather Resilient; stable-to-improving 2025
Residential marketsCWT resilient but pricing pressure select categories CWT down 3% on higher rates/affordability Continued softness H1; recovery H2; dry weather hurt roof coatings Weak H1; potential H2 rebound
Tariffs/macroNot a focus in Q2 commentaryHeadwinds (weather, port strike) cited New administration tariffs; limited direct exposure but potential consumer/interest-rate impacts Macro uncertainty elevated
Innovation/R&DCOS and pricing-to-value emphasized Product innovation as growth catalyst R&D spend +50%; new Carlisle innovation center; goal 25% of revenues from last 5 years of products Accelerating investment
M&A and synergiesMTL acquired; synergies raised to $20M Plasti-Fab announced; $14M synergies ThermaFoam announced; acquisitions expected to add ~$1 EPS in 2025 Accretive pipeline continues
Distribution/Go-to-market——Increasing direct-to-contractor sales (mid-teens %); prepared for distribution consolidation Flexibility improving
Weather impacts—Weather/port strike impacted Q3 shipping/contractor days Q4 weather impact of ~$10–$15M; Jan weather comp vs Q1 2024 favorable Transient headwind

Management Commentary

  • “We are pleased to report that Carlisle ended 2024 with a record full year adjusted EPS of $20.20… supported by resilient and recurring re-roofing revenue….” (Chris Koch) .
  • “Our guidance for 2025 reflects mid-single-digit revenue growth, along with approximately 50 basis points of adjusted EBITDA margin expansion.” (Chris Koch) .
  • “Our balance sheet remains strong with $754 million in cash, $1 billion available under our revolving credit facility and a net debt-to-EBITDA ratio of 0.8x.” (Kevin Zdimal) .
  • “We expect to add approximately $1 of EPS through these recent acquisitions.” (Chris Koch) .
  • “We are monitoring how the new administration’s potential policies may impact labor… builders are already contending with a labor shortage…” (Chris Koch) .

Q&A Highlights

  • Pricing trajectory and margin implications: Pricing down ~1% in Q1, expected to flatten in Q2 and benefit in H2; price/cost negative in H1 turning positive H2; raws broadly neutral with specific FR inputs (ATO in PVC, polyiso) up .
  • Capital deployment 2025: Target ~$800M buybacks (half-loaded); similar-sized M&A to 2024; CapEx around $150M; M&A incremental to revenue guidance .
  • CCM volume/reroof cadence: Q4 order trends improved post-election; backlog stable at ~8–9 months; reroofing remained resilient versus new construction softness .
  • CWT dynamics: Insulation pricing headwind persisted in 2024; leadership and go-to-market changes expected to improve; CWT price increases of ~50–100 bps planned; acquisitions drive most of 2025 growth .
  • Weather impact quantification: Q4 impact of ~$10–$15M; retail coatings demand correlated to rain events; Q1 comp tougher absent prior year positive weather days .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable at time of analysis due to an SPGI request limit; as a result, we cannot definitively classify beat/miss versus consensus for Q4. Management guides to mid-single-digit revenue growth and ~50 bps adjusted EBITDA margin expansion in FY 2025, implying double-digit EPS growth, which may prompt upward estimate revisions contingent on pricing traction and H2 volume improvements .

Key Takeaways for Investors

  • Q4 showed resilience in adjusted EPS and FCF despite macro and weather headwinds; margin compression reflects transitory volume and price/cost factors expected to improve in H2 2025 .
  • CCM remains the profit engine, supported by reroofing and MTL integration, but near-term margins will be diluted by lower-margin acquisitions until COS synergies ramp .
  • CWT is the swing factor: acquisitions (Plasti-Fab, ThermaFoam) and modest price actions should lift revenue and margin in H2 as residential trends stabilize .
  • Watch pricing realization in Q2/Q3 and raw material trajectories (FR inputs) as catalysts for margin expansion and sentiment turn .
  • Capital returns remain robust (target ~$800M buybacks in 2025) with ample liquidity, supporting EPS growth even if volumes are slow to recover .
  • Strategic pipeline is active; accretive M&A and raised synergy targets bolster multi-year EPS path toward Vision 2030 ($40 adjusted EPS) .
  • Near-term trading: sensitivity to macro/tariff headlines and Q1 seasonality; medium-term thesis: innovation/R&D ramp, COS-driven efficiency, and building envelope platform consolidation underpin premium multiples and estimate momentum .