Carlisle Companies (CSL) 27 Apr 232023 Q1 Earnings call transcript

Good afternoon. My name is Frances and I will be your conference operator today. At this time, I would like to welcome everyone to the Carlisle Companies First Quarter 2023 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Mr. Jim Giannakouros, Carlisle's Vice President and Investor Relations. ahead. go please Jim,

can afternoon, begin Relations conference welcome first call. the With presentation And results Good and today press quarter call me of earnings quarter Carlisle's our XXXX after slide you today. closed earnings We the market both everyone you. our to release Investor and in first Officer. financial find section Thank released carlisle.com. our our with website, a Officer; Koch, providing and Chief Kevin and Today's on outlook Chair, call will Chief our discussion outlook update Chris our will are of our details Kevin Executive for Financial Chris and highlights additional first current President Zdimal, results financial XXXX. discuss you and and quarter business of

open prepared line we the our for remarks, will up questions. Following

we statements to begin, SEC include today comments our discussed Actual results filings. materially to note which release uncertainties Slide could on expectations. in refer of will we where are our please and current due X press differ presentation, a these But number of risks that and forward-looking based statements before from

appendix Carlisle our are non-GAAP website. As provided measures the in materials information, reconciliations presentation our provides press we've available in and on and GAAP which release between financial our non-GAAP of

With the that, I call will Chris. turn over to

Good turn Slide X. to Jim. you for quarter Please call. joining and you, afternoon, Thank thank first everyone earnings us on XXXX our

effort on and Their Let hard complementing commitment create me value team culture continuous extremely positions stakeholders. our to global during their our our to improvement for to steadfast greatest the efforts all some and and begin a significant my by first are to of commentary to work our Carlisle in dedication challenging experience of quarter. Carlisle delivering continue well Carlisle our customers assets the

that distribution contractors significant for in weather quarter year-over-year and of noted both disruptions occurring of first On be the due of challenge tough and the CCM, inventory we patterns the the would channel, comparisons to in much a XXXX normalization call, our year-end buying potential country.

across the in U.S. quarter XXXX in these products in taken that fact, industry of now buying left expect XXXX. that Our distributors buying resolved much return challenges and financial the resolved inventory were, normalization normalization contractors products that it driven for entire constraints of third industry. were longer The XXXX XXXX in than industry's experienced year. and the constraints reflected with of began this first building QX and of destocking most of QX building the for supply patterns by of to the company has This anticipated and as positions chain performance faced, U.S. building part, XXXX. be increased were of a supply But to patterns by quarter substantially we in

year, at of XXXX and During continued contractor market as well-known positive strong the this QX demand QX of level saw we trends continued.

and the cold last prolonging channel on quarters see inventory the progress has of a adjust X quarter in effects contractors down what did their to and and efforts excess the their made orders we during substantial impact distributors However, have greater work effectively levels. much reflecting The that process. despite the during had weather remains to inventory negative been the Carlisle, higher-than-normal precipitation

first unusual quarter into and weather in experienced impactful the The continued March. well

our end to QX the over destocking the for orders season an for demand picks products we substantially effectively contractors, increasing levels. Looking These are factors gives up us patterns and continuing improve quarter. more see in at second coming to favorable confidence QX, becoming what weather in as

of positives construction the such solutions a pipeline with For our underlying for a reroofing increased coming for resulting improved secular products markets, market, healthy profitability. of new in and a multiyear nonresidential and baseline by for positive demand backlog driven the and term, projects growing of sales very in buildings, supporting outlook strong remainder to XXXX continue a of to as longer energy-efficient robust investment in see residential activity, we R&D, demand

said, further interest higher rates tightening will And in markets, in that such continue could increased for the be headwinds, With sentiment conditions. that negative the anticipated financial are potential as of to any we be and we around economic mindful even related impacts anticipating deteriorating vigilant forthcoming.

being reduce constrained potential ability contractors' that to time XXX% demand, of aware do their an driver not also limit soon. are for continue as impediment roof the a significant And an on of our effectively installation. technology focus aside address see We to labor resolved to anytime we is markets new

We EBITDA adjusted $X.XX. billion Turning of delivered results. to sales $X.X of and $XXX adjusted million quarter, consolidated our of in the EPS

on our growth impact our While Building impacted tailwinds benefiting year-over-year earnings trends, very to results. are Products financial particularly will a difficult results influenced recent focused short-term Instead, intermediate long-term for against compared by several not our when comparisons, believe destocking expectations, by weather we segments. from we disruption heavily do inclement or temporary reflect

Please turn to X. Slide

grid codes the insulation across in this we energy-efficient of that the are know energy core building envelope to the more and resulting reduce which perhaps nation's the of eco-conscious, At is thought in of is on building increased for First, the savings investment. need expected substantial is pressure products. demand a becoming source way building best electrical

future continue expect grown that and we have the continue than Notably, summer. including over few able our faster new roofing increase. manufacturing XX% our to years production Missouri made to growing have polyiso foreseeable in membrane we service for which to value Our demand, state-of-the-art be growth facility the in Sikeston, as this sales investments to past investment traditional in this polyiso begins requirements

LEED is on being to our facility more company. certification, sustainable achieve also a commitment a Platinum track to reflection Sikeston Our of

X and of improve helping roofing our to industry profitable Ply contractor our ability their the demand Carlisle more continue decades committed and services. around by membrane sustainability those innovation that remained become service effectively ago, products to innovate contractor our commercial and Since industry: Single constraints, efficiency. And Second, And the pain pressures Sure-Seal efficiently. is Carlisle points we a significant transformed that EPDM constraints demonstrate introduction its to can with addresses we've the profitability. cost for value contractors key way labor we of addressing labor

recent XX-foot help include Examples that Slide X line more and and where installation. fewer the our TPO deliver our on can product reduce become hours found contractors introductions roof a profitable, be faster of on seams labor

and quickly. glass coated provides competitive innovative product R&D. Class ReadyFlash wall more pricing. reduces better in our work products forward allowing investment We that introducing months XCI leveraging more our growing the in fire plus to resistance completed Our to insulation look phaser adhesion time, many which be A And years, and coming

and to training Third, more every we commitment and increasingly industry, center Pennsylvania, construction invest our in to given complex day. continue professionals systems our specify in helping education challenging install our Carlisle, to world-class best We products training all field related practices, focusing enhance and relationships. and solidify innovative offer our on opportunities the hands-on systems contractor the of and roofing installation warranted help Carlisle

We this ease contractors. choice, demonstrate competing aim a again are the of for and be and year price helping the of to our new we create value on contractor's that excited installation facilitate manufacturer we to fair for product launches will commitment our earning about

large is building sustainability. owners A our energy available of the in building the within and a to solution intensity push our squarely products positioned opportunities set Long-term to build supporting with today. fourth buildings tailwind outlook reduce products are to continue positive

circularity content of essential is product the working products also recycled and concept an We believe to part hard future products. new we're introduce of our recyclable and increasingly into

upgrades retrofits, building Reduction renovations Additionally, efficiency tailwind tax the and in for that incentivizes commercial to early owners supportive energy-efficient building a Inflation the while benefit the Act invest still decade. innings, for expect next and residential we in

lastly, support the a CCM. decade backlog roofs to steady nondiscretionary continue to the well corresponding And of demand and backdrop reroofing reroofed should be in next find for

with products sustainable truly best-in-class together believe our And this. outlined, tailwinds growth and Taken reflects building runway. confidence we creation clear Carlisle our of products company portfolio value to building with all in differentiated pivot a our is a

projected exposures segment. expected geographies. opportunities replace across The in Carlisle continues for construction, Weatherproofing and well commercial came Henry on original and very team and plans, CWT versus executing model our Technology of quarter in synergies repair is first obtain to Weatherproofing integrate slightly lines between business consolidating deal ahead and Moving our the With to Carlisle deal balanced and than better new residential results the Technologies.

team effectively. is price The driving also managing greater efficiencies cost our plants in and

EBITDA CWT's expect we despite the declines we remain this, stable revenue organic for model to Given year-over-year XXXX. currently

see continues the significant business. to grow, growth, CIT done CIT. These by wide production reliable paying backlog and the this during work CIT, downturn in stronger than continuing next few helped more the in ramp, the hard At actions and tailwinds the years continues on And we to last years should CIT With taken at from aerospace pandemic off. airframe in leverage production. while are aircraft several to narrow-body importantly, restructuring both capitalizing for COVID emerge driven growth their now increased before

as I'm CIT the follow-up very its for strong proud Electrical commercial pleased CIT high of Supplier recently customers on for also as new product level XX of innovation and of Airbus' from Year Airbus recognized Parts this all go introductions, recipient mile. another the out operational competing to this and across example to performance Carlisle CIT year's experience was benefiting Carlisle recognizing willingness and the of chosen and suppliers extra is was collaboration, received robust Standard recognition that commitment XXXX. platforms. performance, and project

improving which to this strong an at attractive managing efficiencies with CFT. in standard strong Now growth. XXXX. profitability order contributing CFT Fluid product Backlogs growth of story for quarter. launches, on rates leverage also all proactively gains and continues be incoming significant contributing to new to remains focused are on CFT on Carlisle continue operational this grow price with to mix, Technologies revenue and products to

Slide to X. turn Please

that demonstrate Carlisle. the Our Vision continue strategy has for results XXXX been to right

demonstrating products our higher to achieve be allocators. Carlisle. benefited more This creation teams strong to sustainable process of excellent superior sets and generation multiyear proven portfolio to higher business stage execute goals. diversified A driven In focused, ambitious flow our pivot significant building from been at our capital a desire both has of understood world-class the and balance for returning to for company value to flexibility provide from by and reshaping returning our transformation future portfolio products a path a industrial better of businesses, addition cash our strategic a and model, portion success the and we sheet to financial

of pillars remain Vision forward. are established and The to Carlisle's strategy core well going XXXX

few the to years, we mission vision of first our the challenges Vision have multiple by XXXX. strategic our by outlined be clarity as XXXX despite guided Over teams faced, continue in last the announced

of in strategic year. that plan the we will successor the and milestones last of of to this later on As we a introduced working many be were year, goals new the the completion simultaneously Vision XXXX, approach XXXX Vision formally

and principles come same Vision we establish of XXXX the with that pillars will improvement. be many plan performance it, committed to And new of will continuous our XXXX. used will a represent levels expectations to of Vision culture and

accretive pillars sustained Operating include As organic utilize XXXX strategy to to a shareholders. improvement the scale Carlisle returns-focused build drive the build M&A strategy under COS, operations, growth, disciplined or and Vision aforementioned value greater investment our our foundational creation organic capital revenue in with to at efficiency to reminder, including and Carlisle continuous synergistic drive acquisitions, growth, approach capital allocation drive for maintain a returning mid-single-digit System,

develop we've share paid Notably, be of $XX exceptional continuing none dividends. shareholders possible in to without million to million $XX course, thus in and could returned of XXXX, of nearly talent. repurchases million far And this invest $XX and in with

absolutely XXXX, Carlisle to of XXXX in the which our a a decentralized a entrepreneurial workplace, improvement foundation, value plan. diversified strategic spirit creation Through and will journey of Vision style, built be to beyond our continuous guide and culture leveraging has management solid will core execution XXXX Vision and continue

innovation more had that like has Slide believe pledge. environment of recent continuous X. sustainable core also Turning to long for a a is and Net-Zero our sustainable some to our improvement. but of steps all by towards commitment legacy taken century driven I cultural We highlight shareholders. responsible to stewardship our creating mentioned our our I'd productive focus, stakeholder of Carlisle value

stakeholder sustainability. committed being is a Carlisle environmental organization, of an with responsible our As X environmental pillars to

second, and energy-efficient greenhouse waste the customers; products our to solutions material develop lower landfills. from reduce costs building operations First, and into gas, or GHG, reduce going help emissions operating for

scrap tube of our history we into in incorporated Our when the began inner recycling production. XXXXs rubber

measures. emissions tradition GHG that third, and of on of processes today. implementation continue conservation We operations manufacturing the energy the our And with lowering focus enhanced

across goal. Several to months into our journey commitment entire emissions after XXXX, achieve to this ambitious we our our value take GHG steps announcing towards chain by important achieving continue Net-Zero

develop pounds certain to raw production. purchasing material. bio-based test of For We've XX% example, we've in of and sourced replaced million carbon bio-MDI our black several products with and to prime also bio-polyol materials committed recycled into our approximately

tear-off steps piloting our we're EPDM management we're of process getting where our we into end-of-life collect lastly, it all mission These rubber and And further going. towards roofs, sustainability products. just consumer and progress

I'll And with turn well financial outlook. as over additional to as Kevin? it details our Kevin that, to updated provide XXXX

you, Thank Chris.

For of previously due due X. XX% segment These to decline price. the first The tough Slide across to highlights, were the mentioned, U.S. including turn year. by from delivered reasons the revenues project destocking offset the in CCM was please down and weather million, positive Chris partially $XXX quarter comps, delays channel to severe prior

absorption, negatively offset impacted margin from by XX% of partially lower Adjusted was lower EBITDA realization and and savings by cost COS. price volumes year-over-year

The continues COS residential efficiencies partially XX% CWT to the at drive and XX%, million realization. integration quarter businesses. Henry, price of significant to notably greater by throughout Sales investment due rolling basis $XX Adjusted offset operations Moving points and on EBITDA businesses and focus to demand, down XX retail of in the our our the of XXXX. the out to continued from first softness acquisition margin in X. just synergies team was CWT Slide in strength from realizing in stated decreased

favorable Slide the platforms, more primarily reflecting in volume, EBITDA XXXX, ramp in demand on points than realization, momentum passenger see CIT efficiencies to first gained to price XX%, activities restructuring by and build of XX. levels. increased approach up as and quarter strength our to leverage global driven XX% aerospace continues expanded from COS. as basis to Adjusted commercial XXX pre-pandemic continue we orders Moving revenue margin

than XX by bridge X.X%, provides and volume, partially EPS. to Turning favorable to first pricing favorable CFT by price more Adjusted by gained a quarter XX%, from FX. X% of efficiencies driven growth expanded to a points headwind volume, on Slide year-over-year basis XX. Slide margin EBITDA from adjusted CFT generated year-over-year and positive XXX driven offset COS. items

Moving million to on million in flow $XX revolving from in of under and towards quarter the expenditures. of with dividends. share first availability continuing generated credit facility. repurchases hand and million Slides of We ended operations $XXX $XX million XX invested and capital billion Carlisle million XX. $XXX XXXX of and $X We our deployed cash cash paid $XX

repurchase the of under repurchase we have of X.X shares program. million for first As the quarter, end available our share

Turning Slide XX. to

provided our XXXX updated have outlook. We financial

revenue and full our of As revenue challenging and segment, for a decline second quarter CCM, CWT, CCM our persisting outlook XXXX. CIT in mid-single unchanged. we into the revenue the is as destocking CFT in at first result The quarter now to year entirely our change expect digits for our consolidated outlook remain

costs disciplined XXX the decline, for of managing We to revenue result and by points continuous year through our full the basis we a expect approximately focused now XXXX. remain on As margins efforts. operational decline improvement efficiencies pricing,

by approximately margins decline, year As to decline XXXX. of XXX expect for the we full revenue basis result now the a points

through managing continuous efficiencies improvement focused remain disciplined and operational on our costs pricing, efforts. We

to best-in-class the our that our Carlisle continue expanding also invest systems. customers service information and provide experience improving customer our We cutting-edge R&D with businesses with in operations,

in channel the will of be strong the Despite better quarter by us and the in XXXX, half very April our in This second we this first longer with deeper over the demand. are the improvement first business inventory will that end sequential levels. in mirror occurring the gives orders the market strong set destocking summer the and seeing showing of confidence shipments half momentum period level

remarks. turn I closing to Chris that, it over With for

one contributed the deep way the no another. and of has to appreciation destocking COVID express Carlisle's Kevin. since to From concern the years. the the to to my and Carlisle the excellent challenges employees work XXXX. few a thanks launch shown achieved fast flexibility by in of especially for a recovery like and accomplishments buying characteristics employees, the in last have small resilience, the would Vision furious of and accompanying over again to XXXX the remarkable and closing, for team patterns, XXXX I Thanks, In onset all once incredible Those the recent normal pandemic XXXX, in return

objectives Carlisle, an deeper long-term throughout As and us flexibility strong we the success ingrained optimistic flow-generating XXXX as the I position of cash superb incredible year well brand Carlisle, for by and move we leverage remain into the afforded with extremely and a reputation, Vision capital capabilities.

and a potentially culture of commitment mindset Despite growing near-term and drive an improvement, superior to allocation. to will capital entrepreneurial we challenges, continue continuous economic

We will customers of experience this for Carlisle stakeholders value create the to the complex continue our take operating to necessary all environment, to deliver the and actions company. navigate

our formal questions. for concludes that we're And ready now Operator, comments.

first Bryan Our line Blair Instructions] with of question comes from [Operator the Oppenheimer.

you little detail to normalized relative any a the normalized the more a then are the line weather, relative impact seeing? what the patterns. early the you offer destocking seasonality? order quantify I offer trends season? a there's to And weak respectively, to perhaps first to April seasonal to hearing year, to time channel of that but way the normalize color Understandable was an could on relative inflection more the to QX are CCM quarter little and what from path start construction hoping order a and in year challenging frame you and there to Is

bulk being look at contractor be when for When sales distributors, look XX-XX, destocking. we look you we we take most is of We'll Sure, the a put I the one a When you weather. attribute lot some with if at somewhere of out-the-door our activity. decline by volume them at XX-XX, with destocking things there. to one. there, completed, in the going -- mean, it's

surveys. X.X, new I endpoints where contacted We've about company you excuse we've In because our initiative on know these surveys. -- actually different regional the doing we're doing across the our XXX over own. a guys differences. we fact, own do months, have me, country, We're X taken last probably

at in distributor last level, of a lot XX-plus of cases, what year. were they at seeing we're And percent what XXXX out-the-door in is the that we're

incoming from positive February April, we at now at and distribution we're when happening trajectory. from into our we bookings that building March through positive and other up look with real look So right momentum what's good and sources, seeing

the second that off that we we so comment will our care should CCM. we'll and that, be of and to end that the normal with cadence And make where back done by of that's then take that it believe be destocking quarter. And tapering

of kind follow-on. then, And natural a

In of QX and think terms how sales volume what's And contemplated and half CCM should the about for rates? revised guide, growth we the price way? along back

$XXX I mostly and we're volume as breaking we revenue. you'll price. hit year, as it's price then the from and far the throughout of quarter as part, but the much -- not have destock, most out second about the so flattish to that's going for second see million second quarter. on price think so And still quarter, in And

right fourth easy Third last last we'll equal quarter and more quarter, were be year's comp. year then back to to level

improvement So you CCM. fourth double-digit for the should see in quarter

stability setup? growth growth half, inflection return the and that rebound QX, And to back the a can consolidated QX growth, half in EPS with earnings during with comp the back relative weak drives CCM to to

certainly. the the In second of year, half

up at we'll we EBITDA XX% look from full last below or come year. we a As little the think year,

be So we that. below might

are Our plus CCM margins. XX% new long term for EBITDA targets

in XXXX. be to there back expect We

with Tim question Wojs next from The Baird. comes

of last kind seen Maybe just relative the things. Have couple of increase of get mean, of put industry destocking I you are know anything volume back to quarters weather how reacted side? price over of price is I the you competitive incremental the But the have given seen and your an the on how kind for on I challenges we've July. market with -- price? And and just more going the that I to price. has how mean, competitors -- one decline? guess Obviously, through

of a taking maybe Tim, couple sections.

hoped. would are and as that work that the bulk fourth over in or think well And think be those mentioned, for as say I -- had price the Kevin mean, what of you're in for we to going that last increase. And getting that the talking bringing had I you price of And products. hoped certainly indeed, made In first price we probably pretty being And the all increases to out us would seeing pricing think your price traction create a how on XXXX. of would And though, and to in I quarter of that leader, is I think, the saw we is all, you improvements the had had that on we it's heard the you general, new do say year. not have years distribution that. we I I industry about some flat about bringing in we on goes good. back that value, comments discipline, X, my value. pricing market X and implement we've

is the of thing we're think desire in value also some And changes the to -- for seeing at interesting the and drive get with the I competitors, other value other that. to our at a leadership real

So there price about Yes, And deviations to from time some happened. they've hear time? them. in we are

there though, special I've like direct do pricing I price there. that. deal people might There's think the I time, and who think pretty position is good leadership those and have to And players but will with part, they contractor that go been have where We or through obviously holding disciplined. And on do a time or discipline. that been market offer a for those something to are maybe price most But in to deals not pleased from go a things the remaining try cut pricing, the people April, that. are been on. whole,

just or you portfolio? membranes cost the think within one. if install mix you like happen mean, shift And other TPO? I to kind sort EPDM roofing I'm selling any like trying higher just share a of between in shift systems Have then variance your seen a kind have maybe the perspective, of you're from the that of any And mix is one or versus seen of

But biggest can its had I talk about year. Kevin some but over saw blood too shift, it maybe that is actually last last greater and when I were year the -- the from and and this, some I sell of year, PVC benefited through as that. at quotes for was out shift us, with and amounts know, TPO, think do happened some where sold that constrained, least you and was think, we right Jim there players Where here

fasteners So there with in as years, might the been some We and have us of all might some but a premium have margin, We VELCRO of They the shift back an -- have gains a use substituted some think and orders seen replaced QX on issues roof metal where maybe fasteners. industry that at were TPO come were pretty there. kind we had I those X QX, different. that's PVC fulfilling as adhesives supply people minimal. constraints came But may or have and off. for do

shifts We there. look our EPDM, see remained much brand. And have market relatively stable Things then oldest don't we there. at

those will So go that and think out. of EPS, will normalize the we last PVC, And polyiso, mix years same TPO, to really, as I they'll things around PDM, get get over back all sorted type disruption X through things. the year, that

just maybe then one. And last

for the expectation your is And performing of how the now cost -- kind basket relative initial of the year? kind Just expectations? to what's

to change our million mean, year seeing much $XX still as seeing not higher see in the that probably year. the into margin we're the costs, that I than a raw guidance material were $XX we're for million certainly what entering factored that we full going on into versus we we'd year thought this of year. benefit So is and

think, And half. the Tim, most of would second I that in be,

comes Boroditsky question Jefferies. Saree with next The from

of there in but skepticism remained to backlogs contractor nonresi. Obviously, now a lot appears strong right be

you would a So very frame Like help today scenario? XXXX-type just a maybe what scenario us? for look could like downside CCM in

of see I see roofing enough understand in of lowest occurring XXXX, Again, the are There's QX it I I and And the occurring can't they of I those is happening for question. we anxiety just and concern. or look commentary. out But And year this months that scenario into destocking for XXXX. but we can't labor. contractor I what backlogged. think what's I There you. with America. a I us with and the as agree have in mentioned in backlog out and think into we're XXXX 'XX part isn't appreciate QX. there, at completely in the forecast the North the obviously lot a

when these due to contractors done, too. to and So that get to just work roof have off the that we days weather, backlog need adds the

So that type It go angles second I be again, but there's with see in would a of that occur half. have pretty don't we lot the can them we're on would helping that just downside. how to something dramatic of

an get improved answer comps in And perspective we But as well from QX. downturn. Kevin as Carlisle margin basis as mentioned, things on well the into EBITDA a to your question, has performed always

XXXX to margins in in back we had can X%. data And and the improved. that we've, EBITDA at look fact, go can then great You

So happening, EBITDA producing would don't good still be cash occur, I it through good that. say I we'd if see while it that and did flow margins

you organic growth margin declines, CWT performance there how year? about maybe into then, given margins strong through another as the remainder thinking you are go the of in And held skipping segment. the

Yes.

basis look we think year. up year-over-year, full the As point pick at in hundred get and CWT. definitely improvement we there's year-over-year of couple see we're year, second We the for could to of a half benefit going

Garik comes from with Loop next The Capital. question Shmois

you, distributors. distortions ask of destocking, side with lot I for the manufacturers, demand CCM both a inventory there's for given wanted to just on

beginning roofing sense, backlogs, And contractors since all this if though, and year installations? has have just contractor a of comments is wondering, that the for demand given you what around your Just strong the changed year? at market the underlying

look a I When quarter actually And that. we that the practice anxiety think and resi Garik, that's are changed, the I the think, places, may again, concern. one of at seen but affected markets bit. and thought we got specific I'd if there affected verticals, be at -- little last than not banking interest probably side you've year nonresi of and bit destocking I probably actually more creates again, say, was. X. we think, under rates that don't the we a to the it at number out are that's has the creates think has it point know. a a Obviously, in -- don't that throughout I in a we year, the certainly thought bit there down the lower strong, I things in beginning warehouses think of decreases about educational have percentage look the much, a had where little might we been to going continue. or It's some the The that's whether

but again, there I and the some driven, Internet to too, thing. the more stores, some of online move purchasing think maybe by that's sales maybe impact doing

good, Healthcare than thought. better has probably we been been

So what residential look other it kind just the even when is that, had. of pretty would -- line we the multifamily bigger we I on say and even we buildings segment one and at with much in that deal

right we So I I think year, this that would we if don't flat were are when probably you last And all I together, we that we're see for look say, now. at I think being affected. take where out where even of year,

then than into done be destocking We'll that that, well, the well could up. the quarter. lot And happening that But we'll quarter call 'XX, a first with at into a the call with will again have of be I As obviously, a we lot think affect and parts of season get of more it. out there's a the call, things picking there, second the telling season. end moving

comment the the you the to 'XX that I for the you just anniversaried second increases specifically? get that Is are last pricing be year-on-year wanted expect that a more the flat? was a to year, you've XXXX, if case, to pricing little as price what follow communicated you flat. that's Or a the bit on clarity comment think expectations, the expecting in on quarter than I on little half be might different to of call. And that for made pricing up just maybe bit be

Yes. Go ahead, Kevin.

Yes.

So that's full year. for the flat

carryover. some putting maybe year-over-year. looking But on flat the a we're to were yes, I at up we we slightly. we price that whole It earlier think I had what that mean, for call, lot were now is wasn't

when more price would that I it's would Garik, a attributed destocking price that to. we thought at thought and little traction. increase We would We there the And be difference all you be ending that look quarter gain sooner. had fourth Yes. that, think

price centers I we would that mentioned year as And the was on one price our adding hold. competitors X%. was we're up. X% then for that, assumption And our have, you saw, flat don't thought earlier, a was what that well. think really now and of as increase I And think was in there that holding. know I not being to original back it around what or there pricing

one question me. for Just last

quarter, that switching can on retail provide to wondering the related bit channel or to any in Just benefits? Just in color there. strength a if happened little you was the what timing fill CWT, more

Yes.

happens what of products got was that type On a stores a They weather that's see up around after the to the it. same about and surge attributed to Henry big because the of it of retail and pick a unbelievable have population of affected retail there channel, where and retail get that big lot if job heck the to what that addressed rollout. there in they box product was in we've not to West tend did an by in reallocate and kind way production. out most it. to improvement was really and make CWT We divert But in and that those especially doing got the like They've a any way, products team our box we're rain. sure thinking that, weather, of talking

have have maybe and big load had other like some tend you introductions don't to companies. new occur the those see but some We product

that weather. So related to all yes, really

The next Capital is question BMO from John with Joyner Markets.

So destocking say I'll restocking about But That's for brake mean, or I historically CCM. ask many recall and I ever guess, word. areas how the around we we other can than destocking. like times friction, can -- in much I past, really don't discussion that see

simply CCM, much I I So so inventory that to partners? it is understand maybe there discussions help has that it me around relates any too destocking Or much the bought been just maybe your over past historically. don't recall they at just mean, changes as channel because year?

lot we left and back bottom you're then I right. go XXXX, that inventory good Cats mean was the one fell and was I a and the out a I to the think Yes, CBF. of if -- at it That's XXXX, on there at think Komatsus inventory. with

So get we we the into far And as through or 'XX, where contractors went and they Distributors still a spring our in little a shipments our QX it you'd while, thing -- in, while they'd product at a nothing season. season. that we fall, once we inventory, That's kind as some will or ago. QX -- late work a good better. an if the When of sales for concerned, see has the really be in in the have is through were make call. we'd the a had early least, doing season. But It load brings back CCM bit would down, in winter, changed. And memories. work

better think QX single-digit I had fact, year a a every to few 'XX, successfully In for gotten by years improvement. prior

when things I suppliers we hate comes stock could They think to as couple a to, surge they grab product. tended saw would was well go ensure then things: there's of through to had we others everybody I'd and multiple that COVID which supply to multiple product it. the were they what but well -- use and word putting and and the known. people saw they issues So do order and tended jobs decline chain at back hoard And got

we new when I we I in that gave was inventory had that one other idea think you that first bad anticipated estimate. as was stocking And that the for on very really us. concept a building us. We the we well. fourth hadn't missed, contractors mean John, were quarter the people

market, take it. under have done, to of COVID through So which crisis And supply we'll I it another think, we to visibility now the going unless it be to chain think been pretty a would over and of contractors, has the system back cadence years, for really I distributors. that mean, order because we think how good how introduce don't me, it. has. CCM lot anticipate, we we time get it's how it Once doing and at I gotten just supply to we And efficient time, we of that did which I it's they've have to magnitude we normal products

to would back we I So it which we would do to think the probably the go was best practice. way used

So call onetime -- X-year a it's just let's aberration. think it, I

to but I I more the actually realize you this I I just then, quite performed building think I were maybe people performed looking the quite focusing well. and mean but core to intend focus products And on CCM, But one get know at just kind CFT that well. answer it the maybe on of businesses. business CFT,

So have implemented have for at CFT you operational strategy? CFT, a with fits improvements that with how you the lifting you to forward regard that of portfolio business, lot possibly rethought going your it view heavy within how

No.

terms CFT on fight pretty Building while the allocators it, still and to I CFT the terms CCM. the we runway it's what since P&L, the -- we it's what think of to force performing came performance into bought we still our data, I it. obviously, being for that ROIC he you at and and for improving think had in and Sutter think well, work That in when hard operations a introducing also Products products, the recognize in it And would have small business at history effect capital superior the million. and new of done be initially business when you I terms look in right part sales of everything. at know Fred the have look against. And hard is team But you're and of segment magnitude in within $XXX that's the mind it's

time that And be it to point in building to way for to pivot driving to better sense a to allocate the get would them to a make where opposed would tough it products. big that to as core

think work makes think we've the the building foreseeable to where products of most the pivot we for we So and the we future. done us put sense our in for capital, terms

but figured I I to ask. just answer I knew wanted the

where from nice couple But really a years thanks a for the been turnaround were That's recognizing we ago. team. of

& The next question with Adam Associates. comes from Zelman Baumgarten

million, then where within distributors. more So just to out portfolio? for the specific elevated they're some kind also million that think of just are where do and than of how XQ, in you that there splits of I contractors needs have any And $XXX between done that a said you've given products and inventory that, the within of -- better sense others come $XXX surveys you

think level the of I to apologize. on don't breakdown that I and No distributor. got granularity contractor we

we contractors we're We that will though, my the new continue have that at we'll the I'm regularly, probably distribution do going a off at to drive It's and the that don't it, on major addition so if contractors. have breakdown. this think things. better we'll get it. these bulk -- But of is to at gut, I point, still going

I say would of distribution. it's so And bulk the its

that's and guess even there, as far apologize. that's and I I any another one I products out As to one want couldn't wouldn't --

high just more level. maybe one, then And the other

are you're a that give the financing? for projects Just can reroofing you sense of that -- percentage

reroofing, mostly Jim that. think project I owner's roof roofs the it of and budget. -- of out part one or on I coming comes you Remember, out or at But a there and of operating then expense big that new sold gets their an a just of or And they budget. budget this, to it's on it had do all capital then think that's reroof a know the -- it's and XX when a on coming I discussion XX construction, kind the year typically in request once it's that, it's or however building whatever, the to customer included financed. the XX and under

specific probably pretty percentage a I financed. that say low as would it's So are

were are EBITDA of guiding XXX you down for basis guys year. XXX quarterly and year-over-year on down on great. And get margins then XXX just help some to Maybe about in first back kind quarter down would some be maybe help to to that points the progression there the the

be looking projecting you're just by the I it so guess obviously. we it's you did volume, going -- the overall for do margins first for that and quarter of and quarter volume. see margins we by lot business, at can As the of a whatever What absorption talked on to have off you're we so when quarter, you

You to the line. margins that you probably on get XXs high be help business there should the by able and drop We're should CCM decremental for to that bottom quarter.

The with next from MacGregor question David Longbow Research. is

kind $XXX about wanted that the to about was low the growth where the single-digit obviously, guidance ask first declines, revenue $XXX delta. with I'm just to revenue a implies of from said reconcile here. you it you million, million revenue go When quarter high trying I single-digit to revision differential.

think destock. weather here said of whether the through in Can that you that I'm you're portion you've the half in XX% got or change another coming have -- coming just with XQ. the a million And being guide. would of any there's that? the $XXX year to of sense just catch-up been to guess $XXX You XX% just from their conservative trying I help to me second whether get million

Yes.

little I nature do Kevin biggest contractors But does be long think Jim Two can it. roof think weigh always longer just there's catch just talked it one certainly, how we've can That's well, QX the biggest. into on X are and continues, relevant how much on we about continue. conservative maybe the things I not we that in. the going because putting The roofs better probably -- We think or and I up. things a about around here. the in the that worry of very general not the one weather can and fall we got for

labor how put we down. is much discussing one is labor keep then can and we that constraint other around the The a really and

with the catch-up situation we're don't getting so we see And CCM the labor multiyear almost because think R&D backlog can it's team, -- and there's the that, I to deal help better. with we been so really tripling investment any again, that

are up Act have and we to that only and see demand we're around do drivers And consume things think that reshoring, weather we now, ourselves, efficiency. around labor. to we every then, the year Investment think these all future catch not we And from but stimulating have we positive going other around the for energy for

our lot about the into a up. and we new drives that much investment can are us catch would how I those things what really there. that's little conservative say make X of mean I So But effort a the products

like and like Although do of catch possible. some up you as our shareholders, all love quickly as to we'd

it delivered at in And guess both the calls being actually site go I us talked I and your terms past the good distributors number maybe about not changed is products you've guess, the give just year or that a has occurring but with I distributors to a passing in and of through distributed and through a of fact that your want goes different the on already, to commented does hoping we of surplus to And think to could how clarify, an the you've ago. a versus just business being that distribution earlier the contractors. call is percentage percentage job you distributor that is business just was about maybe should direct I update since going in of how contractors. at directly inventory And the

direct distributor, COVID? opposed did. as contractor delivering the any take more it masking that But because there in site of question. our it job of deliver to what go because a difference appreciate to My are that have to to I have going probably say XX% distributor, or how around employees been earlier the on that just to Did the comment site. distribution, delivery shipped you through sales a statement on that that that pick for much around clarified I beneficial it the of a and the direct I'm the it made directly that's to don't come kind on a contractor. pricing local XX-plus really that. XX% fact is a change some the while I during percent might details interface up to PP&E with with is I guess Yes, good is and a may that's much contractor how to know have we don't that sell stuff of we and that constraints

my it that other much than hasn't that. So is guess changed

undertaken is In of just production other those goods shipment happened finished the vis-à-vis production me for this. How to guess, compensate quantify the question to you inventories? that curtailments would here words, Last I curtailments your you've extent what's reductions? actual for

We've are the We cut piece still year we're Yes. back 'XX. of back second piece that cut labor, shifts and train labor, holding we've optimistic that it. of for to and But into half of the it. on going temp

build about winter as really comment -- we months. I mentioned inventory, in the we earlier, Your

our of we're and in down. inventory anything, the up QX If And have not needs has it's QX. so gone going anticipation gone to in

you inventory ready a you've if got get up, So go... catch do to

additional some Absolutely XX-foot capacity, the too. that [indiscernible] TPO, gives line us

is Oppenheim Suisse. question Credit next The with Dan from

but was CCM inventory quarter given the the which side, in prevented obviously that issues the reroofing I wondering some first the weather also on issues occurred the of [indiscernible].

more the do conditions As inventory, you think with quarter terms you do some and demand is we there there such? sort catch-up? that? and is such of weather How it much second get to the with of so, a there's of so to labor sort in pent-up view more it? and service if normal for ability the a the there better here that of Or work is through potential not And potential of in that

the just well. There is I'll was really it, demand top there just we and up some think labor COVID built of on I demand as is is though that repeat think Yes, what is about that's during demand that which probably talked a we constraint. but

backlog were to this for be that XX reroofed. roofs and And has age needing so all contributed their existed hitting XX, XX, already that a were out, to year aging

crews So the case, labor just QX constraint, and that put get down. probably the it can you to in in one biggest is

the is sites. there's contractor. us we're out hand inventory of already that So Most on from that, QX distributor contractors our what maybe serve my catch-up being being rather from job there I'm and in talking that's much of conservative catch-up serve about demand than on to guess inventory won't for is be about able of

at again, catch XXXX shortened and to on there. help to catch-up, a I'd and where of either end some would for -- opportunity 'XX QX point QX look winter So opportunities QX give some up and of days we season when

terms I recently? here, might there on the we've than is of signs terms side, given a early decent any sort still feeling residential have in of year of Like but better you And little that over the you more trends are this guess of CWT positive course some construction any view? in just seen

season. Yes, to we're market into definitely. I mean, to side blow that was tough a optimistic on the resi CWT the coming or but resi the

a of couple eliminated. one, fully there production getting a sites. And and sites are excitement the believers We've that think getting that. had team COS have just And we've of into actually efficient. my things really factors implemented Henry more at CWT become been Frank couple also is in put around and bolster our I Ready that are: other that

got taking hold been and we've new are new of coming couple contractor getting on again, increase products products that new A that of before. there. what some efficient effectiveness more there. is we're driving automation So really, and efficiency And are doing. out spring -- haven't coming introduced the We're the then that ones this now

their and income disposable good repairs people with summer in making investing months coupled that are that and for in again in So interested that. homes the

the even under very the had we it. is initiatives on their still along a again, the the team issues, model. positive we're on all deal delivering number synergy of and still Yes, with We other -- lot

what So can yes, optimistic very we're they about do.

waiting Koch to any over remarks. There at Chris so time, I'll are additional pass this questions no the for conference back

the Well, next forward call. choosing to want quarter we speaking questions thanks, you our Carlisle. does And at XXXX you. Frances. earnings conclude their And first that everyone in to with and call. the interest our earnings participation, for thank I look great Thank

XXXX the you first Carlisle call. your earnings for concludes That quarter Companies Thank participation.

lines. disconnect now your may You