Carlisle Companies Q2 2025 Earnings Report

Carlisle Companies EPS Results

• Actual EPS: $6.27
• Consensus EPS: $6.67
• Beat/Miss: Missed by -$0.40
• One Year Ago EPS: $6.24

Carlisle Companies Revenue Results

• Actual Revenue: $1.45 billion
• Expected Revenue: $1.50 billion
• Beat/Miss: Missed by -$47.97 million
• YoY Revenue Growth: -0.10%

Carlisle Companies Announcement Details

• Quarter: Q2 2025
• Date: 7/30/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, July 30, 2025
• Conference Call Time: 5:00PM ET

Carlisle Companies (NYSE:CSL) Inc. is a diversified global manufacturer serving a broad array of markets with engineered products, systems and solutions. The company’s operations span several core business segments, including construction materials, fluid technologies, interconnect technologies, brake and friction systems, and engineered products. Carlisle is known for its expertise in developing high-performance building envelope solutions, precision-engineered hoses and fluid-handling components, lightweight interconnect systems for aerospace and defense, and heavy-duty brake and friction products.

Within its construction materials segment, Carlisle offers single-ply roofing membranes, polyiso insulation, and waterproofing systems designed for commercial and industrial buildings. The fluid technologies division supplies custom rubber and thermoplastic hoses, fittings and assemblies for agriculture, food and beverage, and industrial applications. Carlisle Interconnect Technologies delivers advanced electrical and optical multi-channel connectivity solutions to the aerospace, defense and industrial markets, while the brake and friction group produces linings, pads and related components for heavy-duty trucks, buses and trailers.

Founded in 1917 as the Carlisle Tire & Rubber Company, Carlisle has grown through strategic acquisitions and organic innovation to establish a global footprint. Today, the company operates manufacturing and service facilities across North America, Europe, Asia and Australia, supporting a diverse customer base in construction, transportation, infrastructure, energy and industrial end markets. Over more than a century, Carlisle has focused on product development, quality manufacturing and supply-chain integration to maintain its competitive position worldwide.

Headquartered in Scottsdale, Arizona, Carlisle Companies is led by President and Chief Executive Officer Daryl A. Kelly, who has overseen the company’s development of market-leading technologies and expansion into high-growth end markets. Under his leadership, Carlisle continues to emphasize operational excellence, research and development, and strategic partnerships to drive long-term value for its customers and stakeholders.

Carlisle Companies Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Carlyle delivered a record adjusted EPS of $6.27 in Q2 and returned $343 million to shareholders through dividends and share repurchases, underscoring strong earnings power.
• Positive Sentiment: Commercial reroofing remained robust—accounting for ~70% of CCM’s roofing business—backed by a substantial multi-year backlog and a mid-single-digit full-year growth outlook.
• Positive Sentiment: The strategic acquisition of Bonded Logic adds sustainable denim insulation to Carlisle’s portfolio, aiming for >50% gross margins and double-digit revenue CAGR in a $14 billion market.
• Negative Sentiment: Q2 revenues held flat at $1.4 billion as softer new construction and residential markets led management to cut full-year adjusted EBITDA margin expectations by ~150 bps.
• Neutral Sentiment: Full-year 2025 guidance assumes low single-digit revenue growth, flat second-half pricing, and a free cash flow margin above 15% despite macro headwinds.

Presentation

[Operator]

Good afternoon. My name is Andrew, and I will be your conference call operator today. At this time, I would like to welcome everyone to The Carlyle Companies Second Quarter twenty twenty five 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.

[Operator]

I would like to turn the call over to Mr. Mehul Patel, Carlyle's Vice President of Investor Relations. Mehul, please go ahead.

[Mehul Patel, Vice President, Investor Relations at Carlisle Companies]

Thank you, and good afternoon, everyone. Welcome to Carlyle's second quarter twenty twenty five earnings call. I'm Mehul Patel, Vice President of Investor Relations for Carlyle. We released our second quarter financial results today and you could 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, he is our Board Chair, President and CEO along with Kevin Zimmel, who is our CFO.

[Mehul Patel, Vice President, Investor Relations at Carlisle Companies]

Today's call will begin with Chris providing key highlights of the second quarter. Kevin will follow Chris and provide an overview of our Q2 financial performance and our outlook for the full year of 2025. Following our prepared remarks, we will open up the line for questions. 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.

[Mehul Patel, Vice President, Investor Relations at Carlisle Companies]

As Carlyle provides non GAAP financial information, we provided reconciliations between GAAP and non GAAP measures in a 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.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Thank you, Mihul. Good afternoon, everyone, and thank you for joining us for Carlyle's second quarter twenty twenty five earnings call. To start, I'd like to direct your attention to Slide three of the presentation. Carlyle was pleased to announce another quarter of solid performance and deliver a message of thanks to our outstanding Carlyle team for achieving a record adjusted EPS of $6.27 amidst the dynamic and evolving U. S.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Building products landscape in the second quarter. Carlyle revenues while less than we had planned for in Q2 held steady at $1,400,000,000 year over year and we continue to drive margins above our Vision 2,030 targets showcasing the resilience and strength of our focused pure play building products model. Our second quarter performance underscores the enduring strength of our reroofing business at CCM backed by a substantial multi year backlog enabling us to achieve top tier industry margins despite challenges in new construction. The commercial reroofing market continues to align with our long term growth expectations reinforcing its role as a reliable and recurring revenue stream accounting for approximately 70 of CCM's commercial roofing business. This momentum is driven by the aging commercial building stock, energy efficiency mandates and the trust our customers place in the Carlyle experience and our premium solutions.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

While CCM's performance remains strong, we faced some challenges at CWT due to well known factors such as higher interest rates and negative builder sentiment impacting new and remodel residential markets. Nevertheless, we have continued to prioritize our capital allocation strategies returning $343,000,000 to shareholders through dividends and share repurchases, investing in innovation and strategically acquiring bonded logic to enhance our position in the sizable and growing market for insulation. As we approach the end of the second quarter, building product markets and new construction failed to gain the momentum we had anticipated, including an anticipated return to a more historically normal inventory load in by distribution to prepare for the construction season. We had previously outlined the risks to our full year outlook that were present and emerging in April, such as tariffs, interest rate cuts and builder sentiment. Despite those risks, we maintained our confidence that improved conditions would materialize in the second half of the year.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Our optimism was supported by positive contractor sentiment, anticipated policy resolutions and strong backlogs promising robust activity aligned with historic norms. Although some of the external risks materialized and influenced market activity, our teams diligently address the challenges and focused on factors within our control. They also remain committed to our key strategic actions to deliver on our goal of $40 of adjusted EPS by 02/1930. We remain optimistic about our strong re roofing performance balancing the macroeconomic pressures in new construction. We remain confident in the fact that many of the headwinds are merely delays as repair and remodel and new construction continue to have strong underlying drivers of long term growth as has been exhibited by our re roofing business in CCM.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Carlyle is committed to Vision 2030 and continues to invest in initiatives that will ensure our long term success. On Slide four, the July Carlyle market survey results showcase the continued resilience of the commercial reroofing market with full year mid single digit growth expectations remaining robust. Our commitment to leadership in the re roofing sector is supported by our comprehensive product portfolio, strong specifications, full warranties, superb contractor training programs, cutting edge product innovations and unparalleled service capabilities. In the residential segment, while repair and remodel activity is showing signs of stabilization, expectations have shifted slightly from previous growth projections for 2025. Nevertheless, we continue to see substantial opportunity for increased sales and profitability when residential markets rebound.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Our focus now is squarely on our efforts and strategies to enhance our manufacturing cost position, strengthen our innovation and launch of new products, and enhance our product portfolio to continue to drive to complete building envelope solutions. The new construction market has softened somewhat for both commercial and residential segments since our April market survey. On the residential front, although the survey indicates a mid single digit decline in new construction activity, our resilient approach and adaptable strategies prepare us to navigate these changes effectively. Despite recent headlines noting challenges such as record high home prices and elevated mortgage rates, we remain optimistic about our strategic pathways to growth. In new commercial construction, while expectations have adjusted to low single digit decline, it's important to note the potential positive impact of recent political developments such as the reinstatement of the 100% bonus depreciation and a renaissance of U.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

S. Manufacturing which could invigorate demand. This is especially true in burgeoning sectors like data centers and manufacturing facilities where Carlyle is strategically positioned to capitalize on growth opportunities. Our readiness to capture investments in these areas remains strong and we are optimistic about the future. Moving to slide five, I'm excited to highlight our recent strategic acquisition of Bonded Logic, which perfectly embodies our commitment to innovation and strategic acquisitions as growth drivers.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Bonded Logic based in Phoenix, Arizona brings to Carlisle and the Henry brand an innovative approach to energy efficiency with its recycled denim insulation technology through the UltraTouch brand. This acquisition strengthens our commitment to comprehensive building envelope solutions and align seamlessly with our sustainability goals and Vision 2030 objective of generating 25% of revenue from new products introduced within the past five years. Though currently generating approximately $35,000,000 in revenue, Bonded Logic operates in an estimated market for insulation of $14,000,000,000 and specifically within the rapidly growing segment focused on sustainable insulation products. We see tremendous potential for double digit revenue CAGR in the insulation market as we integrate Bonded Logic's unique material platform with Henry's extensive retail distribution network and customer relationships. We anticipate this acquisition to reach run rate EBITDA margins that support our Vision 2,030 objectives.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

From a market expansion standpoint, we are uniquely poised to leverage the benefits of denim insulation to penetrate the large fiberglass and mineral wool markets. Market feedback and our retail success have been exceedingly positive. Currently, Henry UltraTouch insulation is available at over 400 Home Depot stores with Home Depot serving as our exclusive big box retail distributor. We are thrilled to announce that Henry has been selected as a finalist for the Home Depot's 2025 merchandising innovation award for the Henry UltraTouch product. This prestigious award recognizes products that has significantly transformed the home improvement landscape.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

This recognition also underscores and validates our commitment to innovation as a key driver of Vision 2030 and highlights the significant growth opportunities that Bonded Logic offers through their cutting edge denim insulation capabilities. Now turning to Slide six, innovation is at the heart of our Vision 2030 goals and serves as a key differentiator for Carlyle. Our robust pipeline of new products is focused on delivering energy savings, labor efficiencies, and integrated building envelope solutions. Our unwavering commitment to innovation is evident in the significant strides we've made in 2024 and 02/2025, including the refinement and implementation of our advanced stage gate and voice of the customer processes. These initiatives ensure our teams deliver straightforward innovations that meet the evolving needs of building owners, contractors, architects, and other stakeholders.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

We aim for our products to offer measurable outcomes such as a solid return on investment, providing value to users and allowing us to price based on the value created, ultimately creating the opportunity for substantial returns for Carlyle shareholders. This quarter, we've advanced several product development initiatives capturing emerging market opportunities, enhancing labor savings and improving energy efficiency for our customers. As previously mentioned, our acquisition of Bonded Logic brings revolutionary denim insulation technology to tap into a vast addressable market. Organically, products like the new dual tank flexible fast adhesive, our expanding blue skin portfolio with innovations such as Zero Flash and VP Tech, along with larger 12 inches Insul based flat polyiso panels positions us to meet the increasing demand for integrated building envelope solutions. These solutions enable contractors to work more efficiently while delivering superior building performance.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Looking to the second half of the year, we are proactively addressing market headwinds by implementing measures such as reducing CWT's footprint and gaining efficiencies through automation. We anticipate our COS initiatives combined with acquisition synergies to generate over $30,000,000 in savings contributing to more than 200 basis points of margin improvement for CWT. While some benefits will take time to fully materialize, we are confident in our ability to drive significant margin expansion over the Vision 2030 timeframe. Looking ahead, we remain optimistic about our long term strategic positioning. The key drivers of our businesses including aging building stock, energy efficiency requirements and infrastructure investment needs continue to be strong.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

In residential markets, the ongoing housing shortage supports longer term growth opportunities. Our strong balance sheet provides the flexibility for continued strategic investments while we maintain our commitment to returning capital to our shareholders. And with that, I'll turn it over to Kevin to provide additional financial details and color on our outlook for 2025. Kevin?

[Kevin Zdimal, VP & CFO at Carlisle Companies]

Thank you, Chris. Moving on to slide seven, I'll review our second quarter financial results. During the quarter, we achieved revenue of $1,400,000,000 essentially flat compared to the 2024. The acquisitions of MTL, Plastafab and ThermoFoam contributed $39,000,000 of revenue in the second quarter, While strong re roofing activity provided some stability, we experienced lower volumes resulting from slower new construction across both residential and commercial segments, lower residential repair and remodel and an increase in weather related disruptions. Adjusted EBITDA for the quarter came in at $389,000,000 with a margin of 26.9%, a decline of 190 basis points from last year.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

This decline was mainly due to volume deleverage and softer market conditions at CWT, higher operating costs related to preparing for a strong construction season and the load in that Chris mentioned at CCM, and our ongoing strategic investments and innovation and enhancements to the Carlyle experience. Adjusted EPS had a record $6.27, up from $6.24 in the prior year. Share repurchases and accretive acquisitions more than offset lower organic earnings, which faced pressures from the previously mentioned end market challenges. Now let's turn to our segment performance beginning with CCM on Slide eight. The Construction Materials segment reported second quarter revenues of $1,100,000,000 growing approximately 1% year over year with the increase coming from the positive contribution from the MTL acquisition.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

Organic revenue was effectively flat in the quarter with reroofing growth offset by a decline from new construction headwinds and unfavorable weather. Also as a reminder, CCM's second quarter revenue was negatively impacted by approximately $15,000,000 as Canadian customers accelerated purchases in the 2025 in anticipation of tariff related price increases. Adjusted EBITDA for CCM was $346,000,000 down 5% compared to last year with a margin of 31.6%. Adjusted EBITDA margin declined by 180 basis points to the previously mentioned higher operating costs as we anticipated stronger second half volumes and investments in innovation and enhancements to the Carlyle experience. Pricing and raw materials were flat on a year over year basis in the quarter.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

The MTL acquisition continues to exceed expectations, creating substantial value through additional content per square foot in our broader warrantied system offering and strategic account expansions, offering comprehensive building envelope solutions. Turning to slide nine. Our CWT segment reported second quarter revenues of $354,000,000, a 2% decline from the prior year with organic revenue down 10% largely due to softer residential end markets, roof coatings demand and new commercial construction. CWT's adjusted EBITDA was $71,000,000 a 13% year over year decline with an adjusted EBITDA margin of 19.9%, a decrease of two sixty basis points. This margin compression was primarily due to volume deleverage.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

However, we are encouraged by the investments we are making in automation and COF initiatives, which we expect to yield an incremental $12,000,000 of annualized EBITDA. Integration of our recent acquisitions, including MTL, Plastafab and ThermoFoam are ahead of plan, and we expect year three synergies to exceed $34,000,000 annually. We are leveraging our broader building envelope systems approach to drive cross selling opportunities illustrating the effectiveness of our M and A playbook. Moving to Slide 11, Our balance sheet remains strong with $68,000,000 in cash and a net debt to EBITDA ratio of 1.4 times. We have $1,000,000,000 available under our revolving credit facility, offering significant flexibility for strategic investments.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

As shown on Slide 12, during the quarter, we generated free cash flow of $258,000,000 maintaining a balanced approach to capital deployment. We repurchased 800,000 shares for $300,000,000 bringing our year to date share repurchases to $700,000,000 in line with our 2025 share repurchase target of $1,000,000,000 We expect to generate approximately $1,000,000,000 of free cash flow in 2025, which would be our fourth consecutive year of delivering over $1,000,000,000 in operating cash flow. The strong consistent cash generation provides us with the financial flexibility to facilitate continued investment in capital expenditures, innovation, synergistic acquisitions, share buybacks, and dividends, and drive to our $40 of adjusted EPS goal. Turning to Slide 13, our updated outlook for the full year of 2025 reflects low single digit revenue growth at both CCM and CWT as we expect contributions from recent acquisitions will be substantially offset by persistent end market challenges related to interest rate pressures, housing affordability, and lack of buyer confidence. We expect commercial reroofing demand will remain strong.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

However, we reduced our expectations for commercial and residential new construction and residential repair and remodel. We also expect second half pricing to be flat year over year at both CCM and CWT. As a result, we now anticipate a 150 basis point decline in our full year adjusted EBITDA margin due to the lower volume expectations and limited traction on the price increases announced earlier this year. We continue to expect our free cash flow margin to exceed 15% for the year. In conclusion, while we navigate these challenging end markets, our strong fundamentals support long term growth.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

We remain focused on executing our Vision 2030 initiatives and delivering our Vision 2030 financial goals. With that, I will hand it back to Chris.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Thank you, Kevin.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Turning to Slide 14, I am pleased to highlight the team's proactive approach, focusing on the factors within our control, positioning Carlyle for an even stronger future margin profile while staying true to our strategic priorities outlined in our Vision 2030 plans. In our CCM business, we are maintaining our market leadership and have robust margin recovery strategies in place. Despite current market challenges, our business model remains strong and resilient. We anticipate margin expansion through volume leverage, ongoing MTL synergy realization, operational improvements via our Carlyle operating system, disciplined pricing through the Carlyle experience and the adoption of emerging AI technologies. Our innovation pipeline is strong, featuring products like FlexFast solutions, which offer customers premium labor savings and energy efficiency enhancements.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

For CWT, self help initiatives are pivotal during this period and are set to drive higher margins in 2026 leading to significant long term margin expansion towards our Vision 2030 goal of achieving 30% adjusted EBITDA margins for CWT. We're harnessing automation benefits, optimizing our facility footprint and capitalizing on synergies from our PlastiFab and ThermoFoam acquisitions. Additionally, are fostering growth through our innovative new products like UltraTouch and expanding our Home Depot relationship to include single ply roofing, insulation, flashing and air barriers. Company wide, we're focused on seamlessly integrating our strategic acquisitions while accelerating innovation through new product development. Our Vision 2030 targets remain firmly on track despite near term challenges.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

We are committed to more than doubling adjusted EPS to $40 plus by 02/1930, maintaining industry leading ROIC of 25% and achieving free cash flow margins exceeding 15%. With a target organic revenue CAGR of over 5% and anticipated cumulative free cash flow exceeding $6,000,000,000 we have multiple pathways to achieve our $40 of adjusted EPS as committed to in Vision 02/1930. The actions we're taking today ranging from operational improvements and strategic acquisitions to innovation investments position Carlyle to bridge current performance to these long term objectives all the while maintaining a disciplined approach to capital allocation. In conclusion, the second quarter showcased the robust strength of our business model and strategic positioning. Our emphasis on the recurring re roofing revenue stream, strategic investments in innovation and disciplined capital deployment are driving solid performance.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

I extend my gratitude to our Carlyle employees for their unwavering dedication. Their commitment to excellence is the foundation of our success and will continue to propel our outperformance. That concludes our formal comments. Operator, we are now ready for questions.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Session.

[Operator]

Your first question is from Garik Shmois from Loop Capital. Please go ahead.

[Garik Shmois, Managing Director at Loop Capital Markets LLC]

Hi, thanks. Just starting off, was wondering if you could provide a little bit more color on how we should be thinking about EBITDA margins by segment in the second half of the year given the new outlook.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

Yes. Garik, this is Kevin. And yes, as we look at the margins overall as we look from Q2 to Q3, I'll start with CCM, that the revenue in Q3 is lower than Q2. So some of that volume carries over that will challenge the margin a little bit. So we expect to be around 31% in Q3.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

And then Q4, as you know, that's a lighter quarter for us overall. And we have CCM down around 29% in Q4. And then as you look at CWT, we would expect to be both the Q3 and Q4 right around 20%, some of that improvement because they have a lighter revenue as well in Q4. But some that's when some of the synergies are kicking in from the Placifab acquisition as well as some of the automation that we've done in the factories.

[Garik Shmois, Managing Director at Loop Capital Markets LLC]

Great. That's helpful. My follow-up question is just if you can speak in a little bit more detail on some of the actions you're taking in CWT, the footprint rationalization, the automation, how to think of the timing of some of these cost savings. And I think you mentioned two figures in the prepared remarks. I think there was $12,000,000 and $30,000,000 Just wanted to be clear on these amounts or these run rate figures or these the expected savings you're anticipating in the second half.

[Garik Shmois, Managing Director at Loop Capital Markets LLC]

Just a little bit more handholding on the actions you're taking there. And then maybe also if there's any plans for CCM, just given the weaker demand environment.

[Mehul Patel, Vice President, Investor Relations at Carlisle Companies]

Hey, Derek. I'll take the breakdown on CWT. So overall, to your point on the earnings call, Chris and Kevin mentioned there's $12,000,000 of total synergies in CWT from automation projects that we implemented for Fernley and Kingman. There's also some additional plants that we're looking at to implement automation. And in addition to that, with those automation projects, the next phase is looking at some footprint consolidation.

[Mehul Patel, Vice President, Investor Relations at Carlisle Companies]

So you add those together. That's $12,000,000, and those are annualized savings. So we'll get a portion of that in the second half of, '25, and then we'll get the remaining, amount in '26. So we'll continue to see margin expansion there, going into next year. And then lastly, on the synergies from the PlastiFab and ThermoFoam acquisition, there's a total of roughly $14,000,000 of synergy.

[Mehul Patel, Vice President, Investor Relations at Carlisle Companies]

So you add those together, that's how you get to roughly $30,000,000 of opportunities for CWT.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

Then on the CCM side, yes, we continue to one, we had some expenses in the second quarter that we will not have repeat in the third quarter and the fourth quarter. Those were expenses that we added for the buildup for what we expected to be a strong season that didn't pan out. Those costs will be removed. And then, of course, we're working on COS as well at CCM, and there's opportunities there to improve margins.

[Garik Shmois, Managing Director at Loop Capital Markets LLC]

Very good. Thank you very much.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

Thanks, Gary.

[Operator]

Your next question is from Bryan Blair from Oppenheimer. Please go ahead.

[Bryan Blair, MD & Senior Research Analyst at Oppenheimer & Co. Inc.]

Thank you. Good afternoon, guys.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Hey, good afternoon.

[Bryan Blair, MD & Senior Research Analyst at Oppenheimer & Co. Inc.]

I was hoping you could offer a little more detail on, you know, monthly order and revenue phasing through q two by segment and, you know, what you're seeing in the the month of July relative to the Q2 run rate and how that perhaps influences the guide?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Brian, similar to how we exited, I don't see a lot of change from June to July. Of course, July has the holiday and some other things in it. So usually it's not a terribly robust month or what we have high expectations for. But as we went through the first quarter, obviously, when we were at the April, we did our Carlisle market survey and we looked at where we were on what I'll call macro our political macro front, I think we were more optimistic. As we got through the quarter, I think more anxiety crept in, which really, we saw Powell today say that housing market was still weak on his report.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

And from the commercial side for us, think a few contractors that I talked to about a week ago characterized it as healthy activity, but the activity changed and that a reduction in bids to a certain degree, especially on the new side. And then something that was interesting was this idea that there were a lot of pending but to yet be awarded or decisions were just not being made. It wasn't going to happen, but the industry environment, the economic outlook and the anxiety over tariffs and that were causing people to have a more difficult time making decisions. So I think that progressed through the quarter and that was a definite tone for maybe where we were more optimistic in April. And I think that tone is still here and you heard some of the questions that the Fed Chair got today around even some conflict on the Fed Board there, I think, to dissenters about where we are.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

So I think that's causing some anxiety, are making people delay things. It doesn't mean that we're not having activity. It doesn't mean that activity isn't planned or the economy isn't going well. It's just creating more anxiety. So that's kind of where we sit.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

And then in June, I think we also saw in some regions some weather impact about a day or two that had an impact there as well. So kind of a little bit of more degradation, I would say, in the throughout the quarter. And then, you know, from June to July, as you asked, pretty consistent with with each other.

[Bryan Blair, MD & Senior Research Analyst at Oppenheimer & Co. Inc.]

Okay. That's very helpful. Maybe offer a little more, I guess, big picture color on on how your team's thinking about the impact or catalysts of, you know, one big beautiful bill on construction markets going forward and how tax incentives may may influence your own, investment planning. You're obviously never been shy about investing in the business. There's incentive to do more.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Yeah. Well, I think first on the I'll I'll talk about the beautiful little Kevin can talk about the investing. But, you know, one thing I'd remind everyone, everyone, I think we called it on, is that we're still generating a lot of cash flow, you know, over the last $4,000,000,000 a year. So you're right, we've never been shy about investing in innovation or investing in our manufacturing facilities to drive that, be the low cost producer in the industry, and we're going to continue to do that. We're also seeing more investment in things like AI that we didn't have five years ago, but we're seeing some opportunities there that Kevin can get into as well.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

As far as the big beautiful build from a non tax side from just generating of potential revenue, obviously, biggest one for us is this idea that we bring manufacturing back to The U. S, right? And what that means and reinvestment in The U. S. When we looked at the sectors or verticals, Dodge produced them, I think, recently.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

In 2023, manufacturing was down 12024%, I think 2023%, 2024% and then even in 2025 now about 19%. So if we could see that bill have a reinvestment in America and we can see the tariffs have the action of driving some manufacturing back, think that would be very positive for us. When you couple it up with the fact that our dollar per square foot on new construction and on reroofing is higher than it was five years ago and ten years ago and fifteen years ago based upon additional demands for energy efficiency and labor savings, I think it could put us in a good position as we move forward. And Kevin, why don't you pick up the tax and then Carlisle, do we change our investment?

[Kevin Zdimal, VP & CFO at Carlisle Companies]

Yes. The first thing we look at for on a capital investment is going to be ROIC. So certainly having depreciation in year one versus over multiple years, that helps the return, so higher ROIC. So and that only impacts manufacturing facilities, R and D, new facilities. So I don't think it'll be the number one driver for us adding anything with new facilities, but certainly it will have a positive impact on the ROIC as we're looking at those projects.

[Bryan Blair, MD & Senior Research Analyst at Oppenheimer & Co. Inc.]

All makes sense. Quick level setting questions on bonded logic. You had mentioned run rate sales and that EBITDA margins will be supportive of Vision 02/1930. What should we think about as as normalized growth for the asset? And where are margins currently and what kind of profitability are you targeting over time?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Well, for targeting over time, we would ideally like to see something north of 50% gross margin. I mean, that's one of the things that we talk about on new products that that's and why we get there is that we want to see value add, we want to price the value, and gross margin is a good indicator of price and value to the market and also how efficiently we're producing the product. So I think from a big picture perspective, that's where we like to see Bond and Logic add up.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

Yes. And as a new product, that's really what we're looking at is almost picking up, buying a new product, and the CAGR is going to be very high from a revenue standpoint. It's going to be, I mean, well into the double digits as far as what we're looking at. It will take a year or two before it really starts ramping. But even in those initial years, that's what we're looking at.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

And yes, I would agree with Chris on the gross margins and EBITDA margins above or even where we stand today.

[Bryan Blair, MD & Senior Research Analyst at Oppenheimer & Co. Inc.]

Understood. Appreciate the detail.

[Operator]

Your next question is from Susan Maklari from Goldman Sachs. Please go ahead. Once again, your next question is from Susan Maklari from Goldman Sachs. Please go ahead.

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

Can you hear me?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Yes. Susan, we've got you.

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

Okay. Good afternoon. How are you?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Good afternoon. All well here. Thanks.

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

Good. My first question is thinking about the opportunities that you do see in a more challenging environment. You talked in your prepared remarks about investing in innovations and the Carlyle experience. Can you help us understand how you can further those initiatives to perhaps even gain market share or maintain market share in this kind of a situation? And what you're seeing in terms of the competition out there and what that could perhaps mean for Carlyle in the upcoming quarters?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Yes, Sue. I think this idea of investing in the Carlyle experience and one of the things we're looking at in there is how can we use obviously AI to help facilitate that? How can we use mobile devices to provide more information quicker? One of the big discussions I had and I talked to contractors quite a bit and one of the big discussions we had was around trucking, right? And it was very interesting that one of the contractors said to us, It's been a problem for a long time, our biggest issue trucking.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

It's not that the trucks are hard to get. It's not that we don't have them coming in, but if they're supposed to be there at 8AM, know, they'll call us at noon and then they won't show up until the next day. Right? So that's kind of a direct quote. So how can we apply technology?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

How can we make investments in our Carlyle experience to help provide better information, better real time information, better tracking, coordinate better with trucking companies, maybe even invest in our own certain assets to enhance that. So that once again, get back to those key that key pillar of labor efficiency, right? Even for the contract, it's not on the roof, but it's no use having a crew at a job site at eight a. M. And not being able to begin work, right?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

That's just wasted time. So I think that gets to the investing in the Carlyle experience. Also, also specifications. We've been looking at ways we can also another example would be on inspections. You know, before we can issue a warranty and before a contract could be paid, we do an inspection of the roof.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

And, you know, right now, typical inspections for us would be, you know, somewhere around thirty days at outset, the longest. But how could we get those to be condensed into something like a day later? Or how could we have our contracts would be able to do their own inspection some way with technology through whatever it might be, video or something like that or using AI. So, again, it it it all these go back on that idea of how do we make the life of the contractor easier, how do we allow them to be more profitable. We can also do it through investments in innovation, which you know we're doing, where we're combining products into solutions that help them put up the job up quicker.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

So all that points to share gains hopefully and it points to more profitability as we, I would say, share that labor savings or share that efficiency with them, make them making more money and they'll be happier to buy Carlyle. The other thing it does, and you brought up competition, is it embeds us closer and creates a stickiness, right? Obviously, once you get something rolling on a trucking perspective or on a new product perspective that makes your life easier, you want to use that product more and more. Also, want to train your people. We do a great job of training and providing training.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

And as these products get more technical, the better training we can do both at our locations like Carlisle, PA, where we have a massive infrastructure around training, but also to ones where we can work with distribution to train in the field or at a contractor's job site just makes it stickier again for us and helps with competition. I think when we get into competition, it probably begs the question around what's happening with some of the competitors we've talked about that might be foreign or otherwise. And I would say that as we've always said, our U. S. Competition, the changes there with MRIs and Elevate, the changes over GAF have been productive.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

I think the industry has certainly become more professional and is investing in the right things as an industry around innovation, manufacturing excellence. And then I think what that also does though is it makes it more difficult for new competitors to enter as we larger organizations that are well established and have deep seated roots in manufacturing and architectural relationships and contact relationships. It makes it harder with all those things I talked about initially to displace us. So not much happening out of the ordinary on the competition front. A lot of talk out there, but not much that we're seeing that's changed over the last six months.

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

Okay. That's a very helpful color. And then can you talk a bit about what you're seeing in terms of the M and A environment given the macro and the housing backdrop that we're in? And I guess if there are any changes in that M and A pipeline, how you're thinking about capital allocation in this environment and your willingness to perhaps do more on the buybacks or other forms of shareholder return?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Yeah. The M and A pipeline, it's been, I would say, good, robust as we've talked about. Are deals that are attempting to be made. I think what I said probably in the last call and I've said before has been this gap between sellers and buyers in terms of value. And I think it points back to this discussion we've had around increasing anxiety in the markets on people not wanting to take action because of uncertainty or greater uncertainty.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

So we've had a look, I can say one example we were in where it basically ended up being a failed process because the gap between seller and buyer was too big and it wasn't just us obviously, if a process sales. It was across, you know, the the entire set of bidders. So I think that, you know, kinda typifies where we are. So that where two parties can come together and be reasonable, there's probably gonna be a transaction. Obviously, PlanetLogic is what we worked on for a while.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

We're able close that. Plastic pad was another one. But a great many of them don't ever get there. So that's kind of where we are. Capital allocation, Kevin, I'll take that for you.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

Yeah. Capital allocation, we've been fortunate to generate a lot of cash and be able to pick where we want to invest. So we look at each one of them, M and A, buybacks, dividends, CapEx independently. Each one of them, we're looking for we have return hurdles that we're looking for. So on M and A, as Chris said, we will remain a disciplined buyer.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

We're going to look for acquisitions that can be bolt on acquisitions to our current product line or geography expansions, continue to do that but at the right cost. And then same with buybacks. When we look at buybacks, we look at our intrinsic value and that's how we base our buyback decisions. So we'll continue with that going forward.

[Susan Maklari, Senior Equity Research Analyst at Goldman Sachs]

Okay. Thank you both for the color and good luck with everything.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Okay. Thank you.

[Operator]

Your next question is from Tim Wojt from Baird. Please go ahead.

[Timothy Wojs, Senior Research Analyst at Robert W. Baird & Co]

Hey, guys. Good afternoon. Thanks for just the first question, just on the lack of pricing traction. Is as you kind of step back and think about that, is it is it just the weaker volume environment? It doesn't sound competitive, but but maybe there's some of that. Is it just lower raw materials and kind of the lower raw material basket? Just how would you kind of frame up just that kind of lack of pricing traction and the drivers of that?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Yes. I would say that, first of all, I think the pricing environment is pretty good, considering we may not have achieved traction on the latest round of price increases, but we also haven't seen much degradation on pricing. And when we look at the bidding environment, I think, Tim, it relates just to the volume around new that with going down, obviously competitors or contractors are out there looking at reroofing. Our reroofing contractors are very strong. We're seeing you can see that in there, but I think with a reduction in new, you're getting more bids on the jobs that are there.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

So I'm not unhappy with where we are in pricing. I think it's been pretty rational, and especially with the fact that raw materials are staying relatively flat too. So so not a lot there. I think just pretty much, I just said, it's volume related.

[Timothy Wojs, Senior Research Analyst at Robert W. Baird & Co]

Okay. Okay. And then guess on the on the delays and and some of the kind of bidding pushes and things, is is that strictly in new construction? And is it the whole building? Or is it because it obviously, if you're putting up a building, you're gonna need a roof.

[Timothy Wojs, Senior Research Analyst at Robert W. Baird & Co]

So I I guess is it the just the overall new construction environment and that's kind of kind of hitting you guys, or has that also kind of bled into any sort of, like, discretionary reroofing activity?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Yeah. It doesn't appear to have moved into reroofing. Reroofing has been strong, continues to be strong. We've said that. I think actually in a way this is a really good example of something that we'd had concerns about, not us but the market I think around what happens in a pullback as reroofing stays strong, is there really backlog?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

And obviously in the quarter reroofing stayed strong, labor is allocated to that, pricing remained good and we had good strength in reroofing. It's really related to new construction. And I think it's pretty much across the country, right, that whether we're up in Seattle in the Northwest or we're in LA, I think when we look at the marketing or the markets, excuse me, the sectors, I mentioned the manufacturing being down. I still think that's still the case. Warehousing has been down for now three years.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Data centers are up. That's a popular one, we think somewhere between 3040% year over year. But the ones I mentioned and then a little bit of retail being impacted, I think, this year, last year had some good growth, high single digits, and this year it's pretty flat. So again, it gets back to that idea. I like the phrase of pending to be awarded, meaning it's there.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

And, you know, if I can wait thirty days to see what's happening, maybe that's a good decision. Maybe something changed on the interest rates, and, obviously, maybe it makes some things loosen up. But I think it really is just the the statement around people being confused, harder to make a comfortable decision, and that anxiety. And, obviously, it's it's on the margin. So yeah.

[Timothy Wojs, Senior Research Analyst at Robert W. Baird & Co]

Okay. Okay. And then I just have I'm gonna sneak one last one in just kind of a broader kinda open ended question, but but I think it's kinda topical for people. Just how should we think of Carlyle just kind of in the context of of kind of a you know, kinda what's going on in a kind of a changing market. You know, two of your kind of larger distributors in roofing have been acquired by by different entities.

[Timothy Wojs, Senior Research Analyst at Robert W. Baird & Co]

There's some larger m and a in the market. You're seeing kind of maybe some some contractor m and a that's kinda kinda going on too. So how does that all kind of, you know, piece together, and where does Carlyle kinda come out the other side with this?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Yeah. Tim, no question. That I I think I said to someone, you know, when when I joined in seventeen years ago compared to today, who knew that roofing and building products was going to be such an interesting space, but obviously the distribution changes and by the way, that might have impacted things in the second quarter as well where we have a transaction occurring and they're working through the integration and things like that. So obviously those changes, private equity getting in and buying contractors, there's been strong activity there. When I do talk to contractors, they will tell you that there's definitely activity and they're being talked to by people who are interested in rolling up that side of the industry.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Manufacturing, we see more people wanting to get into the business. So it's an evolving environment. But I think the key thing is that we still at least on the commercial roofing side, we think we're the leader there. We've got very strong competitive advantages in commercial roofing and building envelope solution. We've got scale.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

I mean, margins, our cash flow generation are giving us tremendous opportunity to invest in things right now, whether it be our own stock or whether it be AI or customer excellence, whether it's innovation or driving cost reduced down in our factories through automation and even through the use of AI there, we just those margins, that cash flow sets Carlisle up to be able to make the investments we need to as we go forward and maintain our leadership position. R and D and innovation is going be key. I think one of the big things for us is going to be to be the preferred choice, to be that sticky preferred choice to own the contractor, to make it through our customer service experience and customer intimacy, to our innovation, to our operational excellence, the product of choice. And I think if we do that, everything else is going to work out. I think there will be changes around us, but I'd like to think of us as being the one place where people can come and get a consistent response from an organization that's been around for a long time.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

You know what you're going to get. You're going get high quality price to value, excellent customer service from our teams. And we've got good teams with good tenure. We've got a good workforce. We've invested over the years.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

So I think about that flywheel and you add M and A in there and you expand our product offering and building envelope, and I like where we end up.

[Timothy Wojs, Senior Research Analyst at Robert W. Baird & Co]

Okay. Great. Thank you for all the color. Appreciate it.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

You bet, Tim.

[Operator]

The next question is from Tomohiko Sano from JPMorgan. Please go ahead.

[Tomohiko Sano, Managing Director at JP Morgan]

Hi, good afternoon. Thank you for taking my questions. This is Tomoh.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Hi, Tomoh.

[Tomohiko Sano, Managing Director at JP Morgan]

Thank you. My first question is, I like to have more color on pricing and have stable commercial reroofing allowed you to sustain pricing power through, innovation and the car ride experiences compared to a softer demand in other end markets and pricing competitions? So that's my first question.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

Yes.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

We look at innovation. That's where we look to price for the value that we bring to whether it's a contractor or building owner. If we can bring them opportunities to reduce labor for their costs, then we deserve a higher price for our product. We share some of that savings with the contractor. Similar for a building owner, if it's energy efficiency play and the building owner is going to save money and energy, then we look to price our product higher there and share that savings with the building owner.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

So overall, we have pricing this year. It's more about the volume that Chris talked about into the second half of the year and we're looking at pricing being stable both in the third and fourth quarters.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Tomo, I would say that pricing is a reflection of how well we're delivering on our value proposition to the customers. So it also helps us preserve price because they can clearly see that if we deliver on time with the right product, if they don't have callbacks for warranty, if they have a smooth warranty inspection process, if their questions are answered quickly, if they have good training, then they can see the value in that. And then that helps us maintain pricing even in an environment where there may be more competition or new construction may be slowing.

[Tomohiko Sano, Managing Director at JP Morgan]

Okay. Thank you very much. And my last question is EPS forecast. And you mentioned record EPS for 2025, but compared to the prior comment of 10% plus growth, so the tone this time seems slightly more tempered. But should we interpret your EPS outlook including strong capital returns have flat to slightly up year over year right now?

[Kevin Zdimal, VP & CFO at Carlisle Companies]

Yes. Yeah. We definitely, with our revised guidance, see it lower than what we talked about at the double digit number, but we're still looking in the growth rate on our EPS. We don't do EPS specific guidance. But, yes, if you put the factors in, I think you should come up with something that's going to be, again, a record EPS year for us in 2025.

[Operator]

Your next question is from David MacGregor from Longbow Research.

[Joseph Nolan, Associate Analyst at Longbow Research]

Hi. Good afternoon. This is Joe Nolan on for David.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Hey, Joe.

[Joseph Nolan, Associate Analyst at Longbow Research]

CCM, can you just talk hey, guys.

[Joseph Nolan, Associate Analyst at Longbow Research]

On the CCM side, can you just talk about channel inventory levels for TPO, EPDM and polyiso and just how you expect those to develop into the second half of the year?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Yeah. I think the obviously, we didn't get the load that we wanted. So I would say that inventory levels have just been pretty consistent with what they were in the fall. And as we move through the spring, a little bit on the lighter side, I think relative to what we would have expected, especially if the season had been more robust around new construction. But I don't see a big change in inventory levels at Carlisle.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Certainly, have plenty of supply to keep our OTD up and to service all those. But no real change, I think. Perhaps at the distribution level in a couple of cases where they're going through integrations and acquisitions and that, there may be some delay and maybe light in some areas, but nothing of note that I picked up, Kevin.

[Kevin Zdimal, VP & CFO at Carlisle Companies]

I would agree with that analysis as well. Nothing bad.

[Joseph Nolan, Associate Analyst at Longbow Research]

Okay. And then just to follow on the pricing questions. We heard that some manufacturers announced the polyiso increase. Could you just talk about your confidence in that increase given the softer traction on the earlier increases?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Yeah. I think that we've embodied that in our projection for really a flat second half on pricing. And as we mentioned, we didn't see a lot of traction occurring on those polyisode price increases. And I wouldn't anticipate without some change in demand on the new construction side, wouldn't see that or the one other variable that could have happened or could happen is that there was some major action from a supplier of MDI or that might related tariffs or otherwise, it might create some price issue there. But our forecast for that is no traction on those price increases and flat for the year.

[Joseph Nolan, Associate Analyst at Longbow Research]

Okay. Got it. And then if I could sneak one last one in. In the prepared remarks, you talked about a $20,000,000 impact to volumes from weather in the second quarter. Should we expect that to be fully made up in the second half?

[Joseph Nolan, Associate Analyst at Longbow Research]

And was there any incremental storm demand created from those? Or were these maybe too moderate of storms to create that demand?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

I can't really comment on the storms. I think the storms have been getting worse. Know on the residential side, they talk about that a lot on the shingles. On the commercial construction side, roofs are very robust. And I would say that any storms we had, they do impact future demand because obviously where leaking occurs or some damage that creates future demand.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

The demand that we saw from the weather show up in the third quarter? I imagine some of it, but remember we think we're at a pretty full employment of contractor labor situation. So likely that rolls into the backlog or pushes something else into the backlog while they repair that. So we're still a little bit constrained and it probably goes without saying that certain integration actions and things like that have also been affected or contracts have been affected by that. So I wouldn't say there's surplus labor that can address that kind of weather related demand and make it up in one quarter.

[Joseph Nolan, Associate Analyst at Longbow Research]

Got it. Makes sense. Thanks. I'll pass it on.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Thanks, Joe.

[Operator]

Your next question is from Keith Hughes from Truist. Please go ahead.

[Keith Hughes, Managing Director at Truist Securities]

Thank you. I'm pushing on some inputs, particularly MDI. We've seen some acceleration in that first half of the year. Are you expecting that to kind of flatten out, as we go to the second half, given this kind of flattish price environment you're talking about here in your end use products?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Yes, indeed. A little bit in '25 here in a rise from Q1 to Q2, couple of percent, but then flattening out through Q3 and Q4, Keith.

[Keith Hughes, Managing Director at Truist Securities]

Is that year or that would still be some inflation? That would still be inflation year over year though, Mr. Gannan?

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

It would be if you look from '24 to, yeah, Q2 twenty five, but sequentially not much inflation after Q1 of this year or really not much inflation actually since '24.

[Keith Hughes, Managing Director at Truist Securities]

Okay. And if we look within CWT, you talked a lot about flat pricing, nontraction price increases. Is there any product there that you're specifically struggling with to get price increases through and maybe, ultimately, some you're doing a little bit better than average?

[Mehul Patel, Vice President, Investor Relations at Carlisle Companies]

Yeah. So overall, Keith, this is Mehul here. For CWT, pricing is stable, year over year, and it's pretty much across all the different, segments.

[Keith Hughes, Managing Director at Truist Securities]

Okay. Thank you.

[Mehul Patel, Vice President, Investor Relations at Carlisle Companies]

In spray foam, Keith, just I know last year, there was pricing pressure in that specific category, so that's bottomed out. Earlier this year, there was some price increase announcements, but I think given the challenges in residential, it's going to remain stable versus going up.

[Keith Hughes, Managing Director at Truist Securities]

Okay, great. Thank you.

[Operator]

There are no further questions at this time. Please proceed with closing remarks.

[D. Christian Koch, Chair, President & CEO at Carlisle Companies]

Well, you, Andrew. This concludes our second quarter earnings call for 2025. I want to thank everybody for your participation. And as usual, we look forward to speaking with you at the next earnings call. Thank you.

[Operator]

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

Participants

Executives

• Mehul Patel, Vice President, Investor Relations
• D. Christian Koch, Chair, President & CEO
• Kevin Zdimal, VP & CFO

Analysts

• Garik Shmois, Managing Director at Loop Capital Markets LLC
• Bryan Blair, MD & Senior Research Analyst at Oppenheimer & Co. Inc.
• Susan Maklari, Senior Equity Research Analyst at Goldman Sachs
• Timothy Wojs, Senior Research Analyst at Robert W. Baird & Co
• Tomohiko Sano, Managing Director at JP Morgan
• Joseph Nolan, Associate Analyst at Longbow Research
• Keith Hughes, Managing Director at Truist Securities