Q1 2024 Carlisle Co Inc Earnings Call

Konstantin: Good afternoon, my name is Konstantin, and I will be your conference operator today. At this time, I would like to welcome everyone to the Carlisle Companies' first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.

Good afternoon. My name is Constantine and I will be your conference operator today at this time I would like to welcome everyone to the Carlisle companies first quarter 'twenty 'twenty four earnings conference call.

Jim: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, we will conduct a question and answer session I would like to turn the call over to Mr. Jin Yan Knockers scorecard layoffs, Vice President of Investor Relations. Jim. Please go ahead.

Konstantin: After the speaker's remarks, we will conduct a question and answer session. I would like to turn the call over to Mr. Jim Giannakouros, Carlisle's Vice President of Investor Relations. Jim, please go ahead.

Mehul Patel: Thank you and good afternoon, everyone. I want to welcome all of you today to Carlisle's first quarter 2024 earnings call. I am Mehul Patel.

Thank you and good afternoon, everyone I want to welcome all of you today to Carlyle's first quarter 'twenty 'twenty four earnings call I am Mehul Patel I'm head of Investor Relations.

Mehul Patel: I am head of investor relations. We released today our first quarter 2024 financial results, and you can find both our press release and the presentation for today's call in the Investors Relations section of our website. On the call with me today, we have Chris Koch. He is our board chair, president, and CEO, along with Kevin Zdimal, who is our CFO.

Mehul Patel: We released today, our first quarter 'twenty 'twenty four financial results and you can find both our press release and the presentation for today's call in the investors relations section of our website.

Jim: On the call with me today, we have Chris Koch. He is a board chair President and CEO, along with Kevin Zimmer, who is our CFO.

Mehul Patel: Today's call will begin with Chris. He will provide highlights of our results, along with an update on our key accomplishments. And then Kevin will follow up with an overview of our financial performance and provide an update on our outlook for 2024. Following our prepared remarks, we will open up the line for questions. But before we begin, please refer to slide 2 of our presentation, where we note that comments today will include forward-looking statements based on current expectations.

Chris Koch: Today's call will begin with Chris He will provide highlights of our results along with an update on our key accomplishments and then Kevin will follow up with an overview on our financial performance and provide an update on our outlook for 2024.

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

Speaker Change: But 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.

Mehul Patel: Actual results could differ materially from these statements due to a number of risks and uncertainties which are discussed in a press release and SEC filing. As Carlisle provides non-GAAP financial information, we've provided reconciliations between GAAP and non-GAAP measures in our press release and in the appendix of our presentation materials, which are available on our website. And with that, I will turn the call over to Chris. Thank you, Mehul.

Speaker Change: 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.

Speaker Change: As Carlisle provides non-GAAP financial information, we've provided reconciliations between GAAP and non-GAAP measures in our press release and in the appendix of our presentation materials, which are available on our website and with that I will turn the call over to Chris. Thank you <unk>. Good afternoon, everyone and thank you for joining us for Carlyle.

Chris Koch: Thank you, Mehul. Good afternoon, everyone, and thank you for joining us for Carlisle's first quarter 2024 earnings call. To start, I'd like to direct your attention to slide three of the presentation. We were pleased with our overall sales growth and margin expansion during the first quarter, which reinforces the underlying themes and key strategies we've outlined in Vision 2030. First quarter sales of 1.1 billion reflect a 23% year-over-year increase and are in line with our previous comments that destocking ended in Q4 of 2023.

Chris Koch: First quarter 2024 earnings call.

Chris Koch: To start I'd like to direct your attention to slide three of the presentation.

Chris Koch: We were pleased with our overall sales growth and margin expansion during the first quarter, which reinforces the underlying themes and key strategies, we've outlined in vision 2030 <unk>.

Chris Koch: First quarter sales of 1.1 billion reflect a 23% year over year increase and were in line with our previous comments that Destocking ended in Q4 of 2023.

Chris Koch: We also indicated that we expected a benefit of approximately $200 million in year-over-year sales as a result of a return to normal ordering levels, rebounding as predicted from a Q1 of 2023 that had been negatively affected by destocking. This return to normal ordering patterns was primarily experienced in our CCM business, which demonstrated substantial year-over-year sales growth of 36%.

We also indicated that we expected a benefit of approximately $200 million of year over year sales as a result of a return to normal ordering levels rebounding as predicted from a Q1 of 2023 that had been negatively affected by Destocking.

Chris Koch: This return to normal ordering patterns was primarily experienced in our CCM business, which demonstrated substantial year over year sales growth of 36%.

Chris Koch: Robust re-roofing activity from pent-up demand and favorable weather conditions fostering healthy construction activity were additional positive factors that assisted our first quarter performance and more than offset the impact of the negative price in Q1 that we had stated in our year-end earnings call. In addition to a positive sales story, the Q1 margin story was also a success. Our relentless focus on improving operational efficiency, our commitment to delivering the unparalleled value of the Carlisle experience to our customers, and our COS efforts contributed to a strong bottom-line result.

Chris Koch: Robust re roofing activity from pent up demand and favorable weather conditions fostering healthy construction activity, where additional positive factors that assisted our first quarter performance and more than offset the impact from negative price in Q1 that we had stated in our year end earnings call.

Jim: In addition to a positive sales story. The Q1 margin story was also a success our relentless focus on improving operational efficiency, our commitment to delivering the unparalleled value and the Carlisle experience to our customers and our C. O S efforts contributed to a strong bottom line result.

Chris Koch: Improved margins across both CCM and CWT drove adjusted EBITDA of over $260 million, marking an increase of well over 50% year-over-year. The focus on continuously improving adjusted EBITDA performance was underpinned in Q1 by robust margin expansion bolstered by the increased Henry integration synergies, our commitment to our Lean Sigma initiatives under our flagship Carlisle operating system, and efficiencies gained by leveraging our higher volumes in our operations Pricing continues to be in line with our expectations, where we anticipated pricing would be down 2 to 3% for the full year, with substantially all of the impact in the first half of the year.

Jim: Improved margins across both CCM and CWT drove adjusted EBITDA of over $260 million, marking an increase of well over 50% year over year.

Jim: The focus on continuously improving adjusted EBITDA performance was underpinned in Q1 by robust margin expansion bolstered by the increased Henry integration synergies our commitment to our lean Sigma initiatives under our flagship Carlisle operating system and efficiencies gained by leveraging our higher volumes in our operation.

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Jim: Pricing continues to be in line with our expectations, where we anticipated pricing would be down 2% to 3% for the full year with substantially all of the impact in the first half of the year.

Chris Koch: We are bullish on the pricing outlook for the balance of the year based on the recent price increases announced by the major competitors in our industry. Additionally, we achieved substantial growth in adjusted EPS of over 80% year-over-year. Our steadfast dedication to the Carlisle experience, operational excellence, innovation, synergistic acquisitions, and organic investments continues to contribute to our superior performance and solidify Carlisle's position for sustained success in the future. In keeping with the theme of positioning Carlisle for sustained success in the future, we were pleased to follow the delivery of our Vision 2030 plan in December of last year with the announcement that we were selling the Carlisle Interconnect business and taking In January, we reached an agreement with the Amphenol Corporation to acquire our CIT business. We expect the transaction to close in the second quarter of this year.

Jim: We are bullish on the pricing outlook for the balance of the year based on the recent price increases announced by the major competitors in our industry <unk>.

Jim: Additionally, we achieved substantial growth in adjusted EPS of over 80% year over year, our steadfast dedication to the Carlisle experience operational excellence innovation synergistic acquisitions and organic investments continues to contribute to our superior performance and solidify.

Jim: Carlyle's position for sustained success in the future.

Jim: Carrying on with the theme of positioning Carlyle for sustained success in the future. We were pleased to follow the delivery of our vision 2030 plan in December of last year with the announcement that we are selling the Carlisle interconnect business and taking the final step in delivering on our commitment to become a pure play building products.

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Jim: In January we reached an agreement with the Amphenol Corporation to acquire our CIB business, we expect the transaction to close in the second quarter of this year.

Chris Koch: The anticipated proceeds from the sale of nearly $2 billion will be strategically deployed to fund further acquisitions, execute approximately $1 billion in share repurchases, and fuel additional organic growth initiatives. In our pursuit of generating significant value creation through strategic investments, we're excited to announce the acquisition of MTL, a Wisconsin-based specialty manufacturer of high-performance metal edge and wall systems. The acquisition of MTL is perfectly aligned with Carlisle's Vision 2030 strategy and our four criteria for all acquisitions. And as a reminder, those criteria are, one, a solid organic growth story, and two, meaningful hard synergies. Three, a talented management team, and lastly, a clear and easily actionable integration playbook.

Jim: The anticipated proceeds from the sale of nearly $2 billion will be strategically deployed to fund further acquisitions.

Jim: <unk> approximately $1 billion in share repurchases and fuel additional organic growth initiatives.

Jim: In our pursuit of generating significant value creation through strategic investments. We're excited to announce the acquisition of M. T. L. A wisconsin based specialty manufacturer of high performance metal edge and wall systems. The acquisition of M. P. L is perfectly aligned with Carlyle's vision 2030.

Jim: Strategy and our four criteria for all acquisitions.

Jim: And as a reminder, those criteria are one a solid organic growth story.

Jim: Two meaningful hard synergies.

Jim: Three a talented management team and lastly, a clear and easily actionable integration playbook.

Chris Koch: Our acquisitions are always aimed at enriching and expanding our building envelope product offerings. The planned MTL acquisition and CIT divestiture reinforce our commitment to our pure play building product strategy, our philosophy of superior capital allocation, and ultimately driving best-in-class ROIC. And lastly, we are very pleased to have continued our longstanding tradition of returning value to our shareholders through dividends and share buybacks in Q1. During Q1, we completed $150 million in share repurchases as part of our plan to repurchase $1.4 billion worth of shares in 2024. We also paid $42 million in dividends in the first quarter, as we continue to be proud of our history of having raised our dividend for over 47 consecutive years.

Jim: Our acquisitions are always aimed at enriching and expanding our building envelope product offerings the.

Jim: The planned MTL acquisition and divestiture reinforce our commitment to our pure play building product strategy or philosophy of superior capital allocation and ultimately driving best in class ROIC.

Jim: And lastly, we are very pleased to have continued our long standing tradition of returning value to our shareholders through dividends and share buybacks in Q1.

Jim: During Q1, we completed $150 million of share repurchases as part of our plan to repurchase $1 $4 billion worth of shares in 2024.

Jim: We also paid $42 million in dividends in the first quarter as we continue to be proud of our history of having raised our dividend for over 47 consecutive years.

Chris Koch: These actions underscore our commitment to enhancing shareholder value and our confidence in Carlisle's long-term growth trajectory. Please turn to slide 4 as I discuss our Vision 2030 Value Creation Drivers and Targets. After completing Vision 2025 three years early, we are now fully engaged in building on Vision 2025's success and executing Vision 2030.

Jim: These actions underscore our commitment to enhancing shareholder value and our confidence in carlyle's long term growth trajectory.

Jim: Please turn to slide four as I discuss our vision 2030 value creation drivers and targets.

Jim: After completing vision 2025 three years early we are now fully engaged in building on vision 2025 success and the execution of vision 2030.

Chris Koch: As outlined in our Vision 2030 video, we plan to continue delivering on the foundational strategies that have produced such positive results under Vision 2025. Coupled with major secular tailwinds, we are committed to delivering innovative building envelope solutions, driving above market growth, and unlocking additional value for shareholders in this next important phase of Carlisle's growth journey. The key pillars of Vision 2030 include enhanced levels of innovation with a commitment to investing 3% of sales to drive the creation of new products and solutions that add value to our customers through advancements in sustainability, energy, and labor efficiency.

Jim: As outlined in our vision 2030 video we plan to continue delivering on the foundational strategies that have produced such positive results under vision 2025.

Jim: Coupled with major secular tailwind, we are committed to delivering innovative building envelope solutions driving above market growth and underlying additional value for shareholders. In this next important phase of carlyle's growth journey.

Jim: The key pillars of vision 2030 include.

Jim: Enhanced levels of innovation with a commitment to investing 3% of sales to drive the creation of new products and solutions that add value to our customers through advancements in sustainability energy and labor efficiency.

Chris Koch: A continued emphasis on synergistic M&A, as demonstrated by our recent agreement to acquire MTL, which aligns seamlessly with our strategy to enhance and expand our building envelope product portfolio. Attracting and retaining top talent to ensure we have the best talent to execute our strategic initiatives and drive above-market growth.

Jim: Our continued emphasis on synergistic M&A as demonstrated by our recent agreement to acquire MTL, which aligns seamlessly with our strategy to enhance and expand our building envelope product portfolio.

Jim: Attracting and retaining top talent to ensure we have the best talent to execute our strategic initiatives and drive above market growth and holding steadfast to our sustainability commitments as evidenced by our progress in 2023 against our stated objectives, which you can find it.

Chris Koch: And holding steadfast to our sustainability commitments, as evidenced by our progress in 2023 against our stated objectives, which you can find in our latest Corporate Sustainability Report. As we move forward, we are confident that the execution of Vision 2030 will drive superior shareholder returns and position Carlisle as a premier investment opportunity in the building products sector.

Jim: Our latest corporate sustainability report as we move forward. We are confident that the execution of vision 2030 will drive superior shareholder returns and positioning Carlyle as a premier investment opportunity in the building products sector.

Jim: Turning to slide five.

Chris Koch: Our planned acquisition of MTL is directly aligned with our goal to invest prudently in high-returning businesses with best-in-class building envelope products and solutions that expand and complement our existing system offerings. With an expected close in the second quarter of 2024, MTL reinforces Carlisle as an industry leader in the multibillion dollar architectural metal market and is expected to add approximately 60 cents of adjusted EPS in 2025, with over 13 million dollars of hard cost synergies expected within the first three years. MTL's values are highly aligned with Carlisle's, especially with respect to MTL's superior customer focus and solid track record of above-market growth.

Jim: Our planned acquisition of M. T. L is directly aligned with our goal to invest prudently in high returning businesses with best in class building envelope products and solutions that expand and complement our existing system offerings.

Jim: With an expected close in the second quarter of 2024, MTL reinforces Carlyle as an industry leader in the multibillion dollar architectural metal market and is expected to add approximately 60 of adjusted EPS in 2025 with over $13 million of hard cost synergies.

Jim: Expected within the first three years.

Jim: Mtl's values are highly aligned with carlyle's, especially with respect to MTL superior customer focus and solid track record of above market growth.

Chris Koch: Now, please turn to slide six as I share recent updates on our progress with Carlisle's sustainability initiative. We seek to positively impact the environment while creating value for all our stakeholders through the three pillars of our sustainability strategy, which are 1. Manufacturing energy efficient products, 2. Minimizing our value chain greenhouse gas emissions, and 3. Diverting waste and end-of-life materials from landfills.

Jim: Now please turn to slide six as I share recent updates on our progress with Carlisle sustainability initiatives.

Chris Koch: We seek to positively impact the environment, while creating value for all our stakeholders through the three pillars of our sustainability strategy, which are one manufacturing energy efficient products to minimizing our value chain greenhouse gas emissions and three diverting waste and end of life.

Jim: Materials from landfills.

Chris Koch: Under our first pillar, we provide our end-user customers access to solutions that drive energy efficiency in their buildings. As I mentioned earlier, in 2023, we made significant progress against this pillar with $3.2 billion in LEED-qualified product sales, representing an impressive 70% of our total revenue, which is up from 65% in 2022, reflecting the increasing demand and trends for more energy-efficient buildings. Our second pillar, reducing our operational and value chain emissions, helps Carlisle reduce its carbon footprint and environmental impact.

Jim: Under our first pillar, we provide our end user customers access to solutions that drive energy efficiency in their buildings as I mentioned earlier in 2023, we made significant progress against this pillar with $3.2 billion in lead qualified product sales, representing an impressive 70% of our total revenue.

Jim: <unk>, which is up from 65% in 2022, reflecting the increasing demand and trends for more energy efficient buildings.

Jim: Our second pillar, reducing our operational and value chain emissions helps carlisle reduce our carbon footprint and environmental impacts.

Chris Koch: Carlisle began Phase 1 of metering the significant energy users, or SEUs, at our major manufacturing facilities. The data that results from metering this equipment will enable our plants to conduct real-time energy analysis and make more informed decisions on energy efficiency. In Q1, Carlisle installed metering at our Tooele, Utah polyisomembrane facility.

Chris Koch: Carlisle began phase one of metering the significant energy users or SCE use at our major manufacturing facilities. The data the results from metering. This equipment will enable our plans to conduct real time energy analysis and make more informed decisions on energy efficiency clean Q1, Carlyle installed me.

Chris Koch: Stirring at our Tooele, Utah Poly I saw a membrane facility.

Chris Koch: Lastly, our third pillar focuses on the reduction of construction waste entering landfills. In 2023, Carlisle's recycling initiatives enabled the diversion of over 90,000 metric tons of waste from landfills through operational scrap reduction, purchased recycled raw materials, and rooftop takeoffs. Significant contributors were the purchased recycled content of polyiso, facer paper, and polyols, as well as 30,000 tons of recycled metal from the CAM business unit. Sustainability is a very important focus for Carlisle. As an organization, we remain committed to being a responsible environmental stakeholder, and our products continue to offer a strong value proposition in a world looking for energy efficient, value-added solutions.

Chris Koch: Lastly, our third pillar focuses on the reduction of construction waste entering landfills in 2023, carlyle's recycling initiatives enabled the diversion of over 90000 metric tons of waste from landfills through operational scrap reduction purchase recycled raws and rooftop takeoffs.

Jim: Significant contributors were the purchased recycled content of poly ISO facer paper and polyol <unk> as well as 30000 tons of recycled metal from the Cam business unit.

Chris Koch: Sustainability is a very important focus for Carlyle as an organization, we remain committed to being a responsible environmental stakeholder and our products continue to offer a strong value proposition in a world looking for energy efficient value added solutions.

Chris Koch: Our first-quarter results reinforce many of the themes we discussed in our Vision 2030 presentation, including being well-positioned to leverage megatrends in energy efficiency, labor savings, and growing re-roof demand within the building envelope marketplace. With this in mind, and in combination with the strength of our first-quarter results, we are increasing our full-year 2024 growth outlook. And with that, I'll turn it over to Kevin to provide additional financial details.

Jim: Our first quarter results reinforced many of the themes, we discussed in our vision 2030 presentation, including being well positioned to leverage Megatrends and energy efficiency labor savings and growing re roof demand within the building envelope marketplace with this in mind and in combination with the strength of our first quarter results were.

Chris Koch: We're increasing our full year 2024 growth outlook and with that I'll turn it over to Kevin to provide additional financial details Kevin.

Kevin Zimmer: Thank you Chris.

Kevin P. Zdimal: Our first quarter financial results reflect the strength of our business model and the successful execution of our strategic priorities to start off 2024 on solid footing. Looking at our first quarter results on slide 7, we grew revenue by 23% year over year to $1.1 billion. Driven by normalization of inventory in the channels, growing re-roofing activity, which benefited from pent-up demand, increasing residential starts, and favorable weather across the U.S., we leveraged our strong top-line performance to expand our EBITDA margins by 530 basis points to 24.2%.

Kevin Zimmer: Our first quarter financial results reflect the strength of our business model and the successful execution of our strategic priorities to start off 2024 on solid footing looking at our first quarter results on slide seven we grew revenue by 23% year over year to $1 1 billion.

Kevin Zimmer: Driven by normalization of inventory in the channels growing re roofing activity, which benefited from pent up demand in.

Kevin Zimmer: Increasing residential starts and favorable weather across the U S.

Kevin Zimmer: We leveraged our strong topline performance to expand our EBITDA margins by 530 basis points to 24, 2%.

Kevin P. Zdimal: Furthermore, we grew our earnings 85% year over year to an adjusted EPS of $3.72. The EPS increase was driven by sales growth, margin expansion, and share repurchases. Looking at our segment highlights, starting with CCM on slide 8. CCM delivered first quarter revenues of $784 million, up 36% from the first quarter of 2023. The increase was driven by a return to normalization of order patterns, including the end of destocking in the channel, positive re-roof activity, and favorable weather.

Kevin Zimmer: Furthermore, we grew our earnings 85% year over year to an adjusted EPS of $3 and 72 sets. The EPS increase was driven by sales growth margin expansion and share repurchases looking at our segment highlights starting with CCM onsite eight CCM Dill.

Kevin Zimmer: <unk> first quarter revenues of $784 million up 36% from the first quarter of 2023. The increase was driven by return to normalization of order patterns, including the end of Destocking in the channel positive re roof activity and favorable.

Kevin P. Zdimal: Bolt weather.

Kevin P. Zdimal: CCM's adjusted EBITDA increased 66% to $227 million, with an adjusted EBITDA margin of 510 basis points to 28.9%. This was driven by a combination of leveraging higher volume growth and continued operating efficiencies through the Carlisle operating system. Moving to slide 9, revenues at CWT decreased 1% year-over-year, primarily due to lower carryover prices from 2023 in select categories.

Kevin Zimmer: CCM adjusted EBITDA increased 66% to $227 million with adjusted EBITDA margin up 510 basis points to 28, 9%.

Kevin P. Zdimal: This was driven by a combination of leveraging higher volume growth and continued operating efficiencies through the Carlisle operating system moving to slide nine revenues at CWT decreased 1% year over year, primarily due to lower carryover prices from 2023.

Kevin Zimmer: In select categories. However, despite the revenue decline, we were able to drive adjusted EBITDA growth of 20% to $65 million. This represented an adjusted EBITDA margin of 27% expanding 370 basis points from.

Kevin P. Zdimal: However, despite the revenue decline, we were able to drive adjusted EBITDA growth of 20% to $65 million. This represented an adjusted EBITDA margin of 20.7%, expanding 370 basis points from the first quarter of 2023. The margin improvement was driven by operational efficiencies gained through COS, lower input costs through strategic sourcing, and the realization of synergies from the Henry Acquisition. Synergies from the Henry Acquisition are expected to exceed $50 million in 2024, significantly above our deal model estimate of $30 million. Slide 10 provides a year-over-year first quarter adjusted EPS bridge item for your reference.

Kevin Zimmer: The first quarter of 2023.

Kevin P. Zdimal: The margin improvement was driven by operational efficiencies gained through C. O S lower input costs through strategic sourcing and the realization of synergies from the Henry acquisition.

Kevin P. Zdimal: Synergies from the Henry acquisition are expected to exceed $50 million in 2024 significantly above our deal model estimate of $30 million.

Kevin Zimmer: Slide 10 provides a year over year first quarter adjusted EPS bridge items for your reference moving to slides 11 through 13 Carlyle ended the first quarter of 2024 with $553 million of cash on hand, we have $1 billion of availability under our revolving credit facility.

Kevin P. Zdimal: Moving to slides 11 through 13, Carlisle ended the first quarter of 2024 with $553 million of cash on hand. We have $1 billion of availability under a revolving credit facility, which we amended in April to extend the maturity to 2029. We generated operating cash flow from continuing operations of $156 million and invested $24 million in capital expenditures. We achieved solid cash flow performance for the quarter with a free cash flow margin of 12%, and we remain on pace for a free cash flow margin of over 15% for the full year. We ended the quarter with a net leverage ratio of 1.4 times, which is within our target of 1 to 2 times.

Kevin Zimmer: Which we amended in April to extend the maturity to 2029.

Kevin P. Zdimal: We generated operating cash flow from continuing operations of $156 million and invested $24 million and capital expenditures.

Kevin P. Zdimal: We achieved solid cash flow performance for the quarter was our free cash flow margin of 12% and we remain on pace for our free cash flow margin of over 15% for the full year.

Kevin Zimmer: We ended the quarter with a net leverage ratio of one four times within our target of one to two times.

Kevin P. Zdimal: We are already making significant progress against the capital allocation goals outlined in our Vision 2030 strategy. We're doing so by reinvesting in our high ROIC building products businesses through continued investment and growth CapEx and returning value to shareholders through dividends, including $42 million in dividends paid and repurchasing $150 million of shares during the first quarter of 2024. We are also making synergistic acquisitions that will deliver significant opportunities for value creation, such as our recently announced agreement to acquire MTL for $410 million.

Kevin P. Zdimal: We are already making significant progress against our capital allocation goals outlined in our vision 2030 strategy.

Kevin P. Zdimal: We are doing so by reinvesting in our high ROIC building products businesses through continued investment in growth Capex and returning value to shareholders through dividends, including $42 million in dividends paid and repurchasing $150 million of shares during the <unk>.

Kevin Zimmer: First quarter of 'twenty 'twenty four.

Kevin Zimmer: We are also making synergistic acquisitions that will deliver significant opportunities for value creation, such as our recently announced agreement to acquire MTL for $410 million. These.

Kevin P. Zdimal: These actions are collectively aligned with our Disciplined Capital Allocation Framework, which forms an integral part of delivering ROIC in excess of 25% and ultimately reaching $40 plus of adjusted EPS by 2030. Following the repurchase of $150 million of shares during the first quarter, we have 6.9 million shares remaining under our share repurchase program.

Kevin P. Zdimal: These actions are collectively aligned with our disciplined capital allocation framework, which forms an integral part of delivering ROIC in excess of 25% and ultimately reaching $40 plus of adjusted EPS by 2030.

Kevin P. Zdimal: Following the repurchase of $150 million of shares during the first quarter, we have $6 9 million shares remaining under our share repurchase program.

Kevin P. Zdimal: A robust financial position is underpinned by a solid balance sheet and a prudent approach to leverage. This conservative capital structure affords us the ability to strategically allocate resources in pursuit of superior returns. Complimented by our substantial liquidity of approximately $1.6 billion, we are well-equipped to capitalize on opportunities that arise, unlocking additional value for our stakeholders in the coming quarters and years. And, as a reminder, we expect to receive an additional $2 billion of gross proceeds from the CIT sale in the second quarter, further enhancing our financial flexibility.

Kevin P. Zdimal: Our robust financial position is underpinned by a solid balance sheet and a prudent approach to leverage this conservative capital structure affords us the ability to strategically allocate resources and pursuit of superior returns.

Kevin P. Zdimal: Complemented by our substantial liquidity of approximately $1 $6 billion, we are well equipped to capitalize on opportunities that arise unlocking additional value for our stakeholders in the coming quarters and years.

Kevin Zimmer: And as a reminder, we expect to receive an additional $2 billion of gross proceeds from the city sale in the second quarter further enhancing our financial flexibility. We believe we are well positioned to drive additional value creation in the quarters and years ahead, turning to slide 14.

Kevin P. Zdimal: We believe we are well positioned to drive additional value creation in the quarters and years ahead. Turning to slide 14, I will discuss our full year financial outlook. We are raising our full year 2024 revenue outlook to approximately 10% growth over the prior year, which is double our outlook at year-end when we were expecting a 5% increase. This increase in outlook is driven by a combination of our solid first quarter and stronger re-roofing demand for the balance of the year.

Kevin P. Zdimal: I will discuss our full year financial outlook.

Kevin P. Zdimal: We are raising our full year 2020 for revenue outlook to approximately 10% growth over the prior year, which is double our outlook at year end, when we were expecting a 5% increase.

Chris Koch: This increase in outlook is driven by a combination of our solid first quarter and stronger re roofing demand for balance of the year.

Kevin P. Zdimal: Leveraging the additional revenue through the Carlisle operating system, along with a more positive outlook on pricing, we now expect adjusted EBITDA margins to expand by at least 100 basis points, as compared to our previous guidance of 50 basis points. Additionally, we maintain our expectations to deliver free cash flow margins of at least 15% and ROIC in excess of 25%. As such, we continue to expect double-digit EPS growth in 2024. This is directly aligned with the objectives outlined in our Vision 2030 strategy, and we are experiencing a strong start toward our 2030 goal of $40 plus adjusted EPS.

Kevin Zimmer: Leveraging the additional revenue through that Carlisle operating system, along with a more positive outlook on pricing. We now expect adjusted EBITDA margins to expand by at least 100 basis points as compared to our previous guidance of 50 basis points.

Kevin P. Zdimal: Additionally, we maintain our expectations to deliver free cash flow margins of at least 15% and ROIC in excess of 25%.

Kevin P. Zdimal: As such we continue to expect double digit EPS growth in 2024. This is directly aligned with the objectives outlined in our vision 2030 strategy and we are experiencing a strong start towards our 2030 goal of $40 plus of adjusted EPS.

Kevin P. Zdimal: Looking at the components of the Outlook for CCM, we now expect year-over-year revenue to grow in the low double digits in 2024. The primary drivers are tailwinds from the return to normalization and order patterns that were absent during 2023 due to destocking, and strong contractor backlogs from the pent-up re-roofing demand. For CWT, we now expect year-over-year revenue to grow in the mid-single digits in 2024 from strong sales execution on key growth initiatives as well as stronger trends in our market. With that, I turn it over to Chris for closing remarks. Thanks, Kevin.

Kevin P. Zdimal: Looking at the components of the outlook for CCM, we now expect year over year revenue to grow in the low double digits. In 2024. The primary drivers are tailwind from the return to normalization in order patterns that was absent during 2023 due to destocking.

Kevin Zimmer: And strong contractor backlogs from the pent up re roofing demand.

Kevin P. Zdimal: For CWT, we now expect year over year revenue to grow in the mid single digits in 'twenty 'twenty four from strong sales execution on key growth initiatives as well as stronger trends in our markets with that I turn it over to Chris for closing remarks.

Chris Koch: Thanks, Kevin. In conclusion, I want to reiterate our confidence in Carlisle's strategic direction under Vision 2030 and reinforce it with our strong first quarter results. As we move forward, our ability to innovate with a focus on energy efficiency and labor-saving solutions puts us on the right path to drive above-market growth and, in return, drive superior financial results. The simplification of our building products portfolio, combined with a robust free cash flow engine and the anticipated proceeds from the sale of CIT, places us in an excellent position to create further significant value for our shareholders.

Chris Koch: Thanks, Kevin <unk>.

Chris Koch: In conclusion, I want to reiterate our confidence in carlyle's strategic direction under vision 2030, and reinforced by our strong first quarter results.

Chris Koch: As we move forward, our ability to innovate with a focus on energy efficiency and labor saving solutions puts us on the right path to drive above market growth and in return drive superior financial results the simplification.

Chris Koch: Occasion of our building products portfolio combined with a robust free cash flow engine and the anticipated proceeds from the sale of C. I T places us in an excellent position to create further significant value for our shareholders.

Chris Koch: I would also like to take this opportunity to once again express my sincere gratitude to all of Carlisle's employees. The exceptional efforts of all of our team members have ensured a strong start to what we expect will be another exceptional year for Carlisle in 2024. And with Vision 2030 already deeply embedded in our operations, I'm incredibly optimistic about Carlisle's long-term success. Our strong brand, solid capital position, and superb cash flow generation provide us with the flexibility to successfully execute our strategy and unlock additional value for all our stakeholders. Thank you everyone for your continued support. Together, we are building a brighter future for Carlisle. And that concludes our formal comments. Operator, we are now ready for questions.

Chris Koch: I would also like to take this opportunity to once again express my sincere gratitude to all of Carlyle's employees. The exceptional efforts of all of our team members have ensured a strong start to what we expect will be another exceptional year for Carlyle in 2024.

Chris Koch: And with vision 2030 already deeply embedded in our operations I'm incredibly optimistic about carlyle's long term success.

Chris Koch: Our strong brand solid capital position and superb cash flow generation provides us with the flexibility to successfully execute our strategy and unlock additional value for all our stakeholders. Thank you everyone for your continued support together, we are building a brighter future for Carlyle.

Chris Koch: And that concludes our formal comments operator, we are now ready for questions.

Konstantin: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any key. One moment while we compile the questions for you. Your first question comes from the line of Team Wojs from Baird. Please go ahead.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the number one on your Touchtone phone, you'll hear a prompt that their hand has been raised should you wish to decline from the polling process. Please press star followed by the number two if you were.

Konstantin: We're using a speaker phone please lift the handset before pressing any keys, one went for a while the year compile the question for you.

Team Wojs: Your first question comes from the line of <unk> <unk> from Baird. Please go ahead.

Team Wojs: Hey guys, good afternoon. Nice job.

Team Wojs: Hey, guys good afternoon nice job.

Team Wojs: Thank you.

Team Wojs: Um, maybe just my first question. So when you look at CCM, I mean, it just seems like the tone around re-roofing is a lot better than what it was, you know, 60 to 90 days ago. So I guess, what have you seen in your business to kind of get comfort or confidence that there is kind of pent-up demand on the re-roofing side?

Team Wojs: Maybe just my first question. So when you look at CCM.

Team Wojs: I mean, it just seems like the tone around re roofing.

Team Wojs: Lot better than what it was in a 60 to 90 days ago. So.

Team Wojs: I guess, what have you seen in your business to kind of get comfort or confidence that there is pent up demand on the roofing side.

Chris Koch: Yeah, Tim, it really goes back to COVID. I mean, we've been talking about this for a while that during COVID with re-roofing, you weren't able, or contractors weren't able to get on the roofs initially. And then when we came out of COVID, we had a strong period of new construction in the last couple of years, and we talked about just due to the lack of labor that some of the re-roofing was being deferred.

Speaker Change: Yeah, Tim It really goes back to Covid I mean, we've been talking about this for a while that during COVID-19 with regrouped you werent able or contractors weren't able to get on the routes initially.

Chris Koch: And then when we came out of Covid, we had a strong period of new construction in the last couple of years and we talked about just due to the lack of labor that some other regroup was being deferred they were doing some patch work and some of that resulted in this pent up demand that we're now seeing come through in <unk>.

Chris Koch: They were doing some patchwork, and some of that resulted in this pent-up demand that we're now seeing come through. And frankly, that's the reason we raised our forecast that a good chunk of the increase, about half of it, was due to the re-roof improvement.

Chris Koch: Thankfully that's the reason we raised our forecast that a good chunk of the increase about half of that was due to the re roof improvement.

Kevin P. Zdimal: Okay, okay, gotcha. And I guess on that point, Kevin, just, if you can maybe kind of go through the revenue bridge just within CCM. I mean, last quarter, it was 6%. You know, now it's kind of low double digits, kind of what are the pieces if you kind of go through the restocking, you know, kind of the underlying volume, and then just your kind of updated price assumptions.

Chris Koch: Okay. Okay got you and I guess on that point, Kevin just if you could maybe kind of go through the revenue bridge just within CCM I mean last quarter it was 6%.

Kevin P. Zdimal: It's kind of low double digits kind of what are the pieces. If you kind of go through the restocking.

Kevin P. Zdimal: The underlying volume and then just your kind of updated pricing assumptions.

Kevin P. Zdimal: Yeah, the de-stocking didn't change. We had an about 11% increase for the full year. We still expect it to be about 11%. We had said the dollar amount was $375 million for the year, $200 million in the first quarter. And that's what we saw, the $200 million in the first quarter.

Kevin: Yeah. The Destocking didn't change we had at about 11% increase for the full year, we still expect it to be about 11%. We had said that dollar amount was $375 million 40 year 200 million in the first quarter and that's what we saw.

Kevin P. Zdimal: The $200 million in the first quarter, so nothing changed on the destock what did change as both the volume and the price on the volume side I just talked about the reboot thing coming in to the year. We had said we thought the total end market would be down 2% to 3% now we think it'll be up flight.

Kevin P. Zdimal: So nothing changed on the de-stock. What did change was both the volume and the price. On the volume side, I just talked about the re-roofing coming in this year. We had said we thought the total end market would be down 2% to 3%. Now we think it'll be up slightly. We still think new construction will be down in the high single digits, but re-roofing, we think it will be up in the mid-single digits. And then on pricing, we recently announced some price increases, and we now think that we will only be down about 1% for the full year on price, where, as you may recall, at the beginning of the year, we thought we'd be down 2 to 3%. So when you sum that all up, we pretty much doubled that 6% of what we were talking about at the beginning of the year for CCM.

Kevin P. Zdimal: We still think new construction will be down high single digits, but re roof. We think will be up mid single digits and then on pricing.

Kevin P. Zdimal: <unk> recently announced some price increases we now think that will only be down about 1% for the full year on price, where as you may recall at the beginning of the year, we thought we'd be down 2% to 3%.

Kevin P. Zdimal: So when you sum that all up.

Kevin P. Zdimal: We pretty much double that 6% of what we were talking about at the beginning here for CCM.

Kevin P. Zdimal: Okay, okay, great. And then maybe just, you know, the last question, just to kind of sneak in here: how would you kind of characterize the pace of what you're seeing on the input cost side? You know, MDI, polyols, I guess. Does the price-cost mass change? Or are you just seeing a little bit more inflation? And so net-net on the epithel line, it kind of sums to zero.

Speaker Change: Okay, Okay great.

Kevin P. Zdimal: And then maybe just.

Kevin P. Zdimal: Last question just to kind of sneak in here I mean, how would you kind of characterize.

Kevin P. Zdimal: The pace of what Youre seeing on the input cost side.

Kevin P. Zdimal: MDI Polyol I guess does the price cost Matt change.

Kevin P. Zdimal: Or are you seeing a little bit more inflation in segment net on the EBITDA line.

Kevin P. Zdimal: Zero.

Kevin P. Zdimal: Yeah, when we came into the year, we had said that it was going to be pretty flat for the year. The raw materials have been a little bit of a mixed bag. Some raw materials are up, some are down, but not too much has changed there. But now with pricing, getting a little bit better pricing, I would think that number will be positive for the full year, maybe a full year increase of about $20 million on price costs.

Kevin P. Zdimal: Yeah, when we came into the year, we had said that.

Kevin P. Zdimal: So it is going to be pretty flat for the year.

Kevin P. Zdimal: The Ross has been a little bit of a mixed bag on raw materials. Some raw materials are up some are down but not too much has changed there, but now with pricing getting a little bit better pricing well think that number will be positive for the full year, maybe a full year up about $20 million on price cost.

Speaker Change: Okay, Okay, perfect Alright ill hop back in queue. Thanks, guys. Good luck.

Team Wojs: Okay, okay, perfect. All right, I'll hop back to Q. Thanks, guys. Good luck.

Speaker Change: Thanks, Dan.

Team Wojs: Your next question comes from the line of Susan Mcclary from Goldman Sachs. Please go ahead.

Team Wojs: All right. I'll hop back to Q. Thanks, guys.

Speaker Change: Thank you good afternoon, everyone.

Speaker Change: Good afternoon.

Susan Mcclary: Your next question comes from the line of Susan McClary from Goldman Sachs. Please go ahead.

Speaker Change: Oh, yes.

Speaker Change: It's good to be here.

Susan Mcclary: Yes.

Susan Mcclary: Thank you. Good afternoon, everyone.

Susan Mcclary: Question is on CCM is well appreciating that you've got this re roofing.

Susan Mcclary: My first question is on CCM as well, you know appreciating that you've got this re-roofing tailwind that is coming through but can you also talk a bit about some of your own initiatives around some of the products and and the work that you've done with the customers and do you think that that's also incrementally adding to this and and how do you think about the sustainability of that through this year and and maybe the cadence as we move through the next couple quarters for the revenues there?

Susan Mcclary: Tailwind that is coming through but can you talk a bit about some of your own initiatives around some.

Susan Mcclary: Some of the products and the work that he's done with the customers and do you think that that's also incrementally adding to this and how do you think about the sustainability of that through this year and maybe the cadence as we move through the next couple of quarters for the revenues there.

Chris Koch: Well, overall, Suze, you know, we really look at three areas in the initiatives. I think we talked about margin for customer intimacy. Really, this involves a lot of contractor training and architect training.

Susan Mcclary: Overall as you know, we really look at three areas on the initiatives I think we talked about margin.

Chris Koch: We're going to see really this this involves a lot of contractor training Arctic trading our digital experience is getting better and better.

Chris Koch: Our digital experience is getting better and better. We've done a lot of work with enhancing the sales excellence of our teams, things like optimizing our quote process, really cross-selling, trying to increase dollars per square foot. And I think it is taking hold.

Chris Koch: We've done a lot of work with the enhancing sales excellence of our teams things like optimizing our quote process really.

Chris Koch: Ross selling trying to increase.

Chris Koch: Per square foot and I think it is taking a hold you know we really got into a lot of the selling initiatives last year and I do think they are starting to show up in <unk>.

Chris Koch: We really got into a lot of selling initiatives last year, and I do think they're starting to show up in marketing and sales. We also talked about innovation. Innovation is, for us, Undervision 2030 is a longer, obviously a much longer total play, but we're already seeing new products in the market at a higher rate. We're investing a little bit more, as you can see, in our SG&A, and I think that will continue to gain momentum.

Chris Koch: In sales. We also talk about innovation innovation is for US under vision 2030 is a longer obviously are much longer total played but we're already seeing new products hit the market at a higher rate, we're investing a little bit more as you can see in our SG&A and I think that will continue to gain momentum.

Chris Koch: You know, last year in January, we introduced the 16-foot TPO. We had a product called Ready Flash in April. We're going to introduce some other products coming out. One of them is Seam Shield, which is going to be introduced in Q2 of 2024.

Chris Koch: Last year in January we introduced 16 for GPO.

Chris Koch: Protocol ready flash in April.

Chris Koch: We're going to introduce some other.

Chris Koch: Products coming out one of them is same shield thats going to.

Chris Koch: Be introduced in Q2 of 2004, so we continue to build momentum there obviously, our commitment to moving up to 3% is going to take a couple of years, but we should see increased momentum every quarter as we continue to drive innovation through CCM and frankly, CWT and then lastly, it's really this operational excellence and that's just an ongoing.

Chris Koch: So, we continue to build momentum there. Obviously, our commitment to moving up to 3% is going to take a couple of years, but we should see increased momentum every quarter as we continue to drive innovation through CCM and, frankly, CWT. And then lastly, it's really this operational excellence, and that's just an ongoing expectation that we're getting that 1% to 2% of sales through COS every year. AI in our factories is starting to work on improving efficiency, everything from the quote process to actually how we deal with the data coming off the line to become a little bit more – maybe anticipate any quality issues that may come about by looking at the data.

Chris Koch: Expectation that we're getting in that 1% to 2% of sales.

Chris Koch: Through pass every year.

Chris Koch: AI in our factories is starting to work on to improve the efficiency everything from the quote process to actually how we do.

Chris Koch: Deal with the data coming off the line to become a little bit more.

Chris Koch: It maybe anticipate it.

Chris Koch: Any quality issues that may come about by looking at the data. We also are trying to do a better job of forecasting through using AI, and then really driving the sustainability efforts through our factories to drive efficiencies so trying to use less product in the in.

Chris Koch: We also are trying to do a better job of forecasting by using AI. And then really driving the sustainability efforts through our factories to drive efficiency. So, trying to use less product in the whole process, trying to have less waste throughout it, whether it's freight, or whether it's actually the movement of goods within the factories trying to reduce waste.

Chris Koch: And the whole process trying to have less waste throughout it whether it's.

Chris Koch: Great or whether it's actually movement of goods within the fact, it's trying to reduce waste and in turn I think that produces a nice efficiency.

Chris Koch: And in turn, I think that produces a nice efficiency program there, not just for energy, but in all ways, and we're starting to see returns there. So you know, we look at the James we have had over the last five to 10 years; a lot of these things have played into it. I think we're doing a better job articulating it, but we've continued to see some pretty good margin expansion. And I think Henry's probably the latest best example where, in each quarter, we continue to see margin expansion. And in this last one, even on down sales. So a bit of a long answer for you, but I try to be a little more comprehensive. Maybe Kevin wants more granularity.

Chris Koch: Program. They are not just for energy, but in all ways and we're starting to see returns there. So when we look at the.

Chris Koch: Gains that we've had over the last five to 10 years a lot of these things have played into it I think we're doing a better job of articulating it but we continue to see some pretty good margin expansion and I think Henry is.

Chris Koch: The latest Best example, where in each quarter, we continue to see margin expansion and then this last one even on down sales.

Chris Koch: So a bit of long answer for you but.

Speaker Change: Try to be able to more comprehensive maybe Kevin Lewis.

Kevin P. Zdimal: The second part of your question, 24 is playing out to be a more normal year for us. From the seasonality standpoint, at the beginning of the year, we had said sales would be, for the second quarter, about 29% of full-year sales, and in Q3, we said about 27% of full-year sales, and that seasonality still looks to be holding strong for us. So, that would be the best estimate for quarterly revenue for the CCM business, and as far as CWT is concerned, that's still consistent with what we talked about in the year-end call as well.

Chris Koch: Second part.

Chris Koch: To your question 24 is playing out to be a more normal year for us from the seasonality standpoint at the beginning of the year. We had said sales would be for the second quarter about 29% of full year sales in Q3, we said about 27% of full year.

Kevin P. Zdimal: Sales and that seasonality still looks to be holding strong for us so that would be the best estimate for quarterly revenue for the CCM business and as far as CWT, that's still consistent with what we talked about in our year end call as well.

Susan Mcclary: Okay, that's great color. That's very helpful. And then maybe just following up on that, I think you mentioned that you expect to now exceed $50 million in synergies at Henry versus the $30 million guide that you had given before. Can you just talk about what's driving that incremental $20 million in there and, you know, any thoughts on how that'll come through?

Speaker Change: Okay. That's great color, that's very helpful. And then maybe just following up on that.

Susan Mcclary: You mentioned that you expect to now exceed 50 million in synergies.

Susan Mcclary: And Henry versus the 30 million guide that you had given before can you just talk about what's driving that incremental $20 million in there and you know any thoughts on how that will come through.

Chris Koch: Yeah, in terms of what we're working on, cross-selling is helping some new initiatives around sales, and automation within the factories. We're doing a better job of, I think, managing our efficiency within our factories. How it comes through on the P&L, I'm going to defer to Kevin on that one.

Susan Mcclary: Yeah in terms of what we're working on the cross selling is helping us new initiatives around sales.

Chris Koch: Automation within the factories, we're doing a better job I think managing our efficiency within our factories outcomes through on the P&L I would.

Kevin: Kevin on that one.

Kevin P. Zdimal: Yeah, so the $50 million that we see, that's pretty good. We're at that run rate in the first quarter, so about $14 million a quarter is what we're going to get. The first quarter of last year was about half of that number, so we did see those synergies in Q1, but we did ramp up as the year went on last year.

Kevin: So the $50 million that we see that's pretty well, where we're at that run rate in the first quarter. So about.

Kevin P. Zdimal: About $14 million a quarter is what we're going to get.

Kevin P. Zdimal: First quarter of last year was about half of that number. So we did see those synergies in Q1, but we did ramp up as the year went on last year.

Susan Mcclary: Okay, thanks for the color and good luck with everything. Thank you, and it's great to have.

Speaker Change: Okay. Thanks for the color and good luck with everything.

Chris Koch: Thank you, and it's great to have you with us, Carlisle. We appreciate it.

Speaker Change: Thank you and great to have you with us.

Chris Koch: Carlisle, we appreciate it.

Chris Koch: Yes.

Garik Simha Shmois: Your next question comes from the line of Garik Shmois from Loop Capital. Please go ahead.

Chris Koch: Your next question comes from the line of Gary Weiss from Loop capital. Please go ahead.

Garik Simha Shmois: Oh, hi, thanks. A decent quarter.

Garik Simha Shmois: Oh, hi, thanks, so decent quarter.

Garik Simha Shmois: Wanted to ask, you know, first off, I think in the release you spoke to lower carryover prices and CWT. Was there any new downward pricing pressure during the quarter? And, you know, how should we think of pricing moving forward and potentially when would you anniversary some of the carryover pricing?

Garik Simha Shmois: One or two.

Garik Simha Shmois: Yes, first off I'll kick it off.

Garik Simha Shmois: Luis you spoke to lower carryover pricing.

Garik Simha Shmois: T.

Garik Simha Shmois: Was there any new downward pricing pressure during the quarter.

Garik Simha Shmois: And how should we think of.

Garik Simha Shmois: Pricing moving forward and potentially and when would you anniversary some of the other carryover pricing pressures.

Kevin P. Zdimal: Yeah, I don't think there's any price pressure you weren't aware of that came through, you know, we just lapped that and as we detailed that it'll, you know, the way pricing would work, we were probably down around 4-5% in the first quarter will move to probably 2-3% in the second, then you think about the third quarter will be flat and then based upon what we're seeing on the pricing increases that have come out, ours and others, you know, Garik, I think, you know, how it works, it doesn't hit on day one, it takes a little bit to get into the bidding and that and so we would anticipate then that we might be up 1-2% in the fourth quarter.

Speaker Change: Yes, I don't think there is any.

Kevin P. Zdimal: The pricing pressure you were aware of that came through.

Kevin P. Zdimal: We just lapped that and as we detailed that it'll go the way pricing would work we were probably down around.

Kevin P. Zdimal: Four 5% in the first quarter, we will move to probably two or three in the second then you think about the third quarter will be flat and then based upon what we're seeing on the pricing increases that have come out of ours and others Garik.

Kevin P. Zdimal: It works it doesn't hit on day, one it takes a little bit to get into the.

Kevin P. Zdimal: Bidding in that and so we would anticipate then that we might be up 1% to 2% in the fourth quarter.

Garik: Got it.

Kevin P. Zdimal: Just kind of circle.

Kevin P. Zdimal: Circle back to Bill for <unk> volume strength.

Kevin P. Zdimal: Recognizing it's a seasonally slower quarter, but you know I think their answer was pretty notable relative to.

Garik Simha Shmois: Got it. And why don't we just kind of circle back to the one cue volume string in CCM, you know, recognizing that it's a decently slower quarter, but you know, I think that the variance was pretty notable relative to what we were expecting. You saw The Lapping of the D-Stock, that tracked as expected. But you also cited weather as being favorable, so just wanted to see if you think some of the benefit was weather, and how much of the 1QL performance was due to a stronger, stronger market. Did you see any, you know, inventory build at either the distribution or the contractor level?

Garik Simha Shmois: What we were expecting.

Garik Simha Shmois: You saw the.

Garik Simha Shmois: The lapping of the destock.

Garik Simha Shmois: That truck as expected, but you're also segment, whether it's being favorable so just.

Garik Simha Shmois: Wanted to see.

Garik Simha Shmois: Do you think some of the benefit was was weather how much of the.

Garik Simha Shmois: <unk> outperformance was stronger.

Garik Simha Shmois: Stronger market did.

Garik Simha Shmois: Did you see any.

Garik Simha Shmois: Inventory build.

Garik Simha Shmois: Either distributions and contractor level, just any additional color as to the <unk> sure. So that strength would be great. Yes, let me hit a couple of dozen Kevin I'll pick some up to I don't know, whether you know maybe two to three days.

Garik Simha Shmois: Depending on where you were in the country obviously.

Garik Simha Shmois: That is a big weather in the northwest through your volume I may compared to some others out of summit people have announced that they had weaker impacted due to weather. So I think that depends on where you are but for us about two to three days.

Chris Koch: Just just any additional colors to the one cue. Sure. Strength would be great. Yeah.

Chris Koch: Great. Yeah, let me hit on a couple of those, and Kevin will pick some up too.

Chris Koch: I think on weather, you know, maybe two to three days, depending on where you were in the country, obviously, you know, that has a big, you know, whether you're in the Northwest or your volume, I mean, compared to some others, I know some of people have announced that they had Unknown Executive, James Giannakouros, Mehul Patel, Daniel Oppenheim, Kevin Zdimal, Unknown Unknown Executive, James Giannakouros, Mehul Patel, Daniel Oppenheim, Kevin Zdimal, Unknown, So, overall, I think, you know, that might have had a little bit to do, especially the conservatism around the $200 million, around why we might be a little bit heavier.

Speaker Change: The destock being over that was a big deal going into the end of the year I think we were a little conservative around that.

Chris Koch: We had talked about $200 million in Q1.

Chris Koch: As you are sitting there in the Q1 call and Youre not seeing much of it unfold yet you want to be conservative and I was pretty pleased that we got all of that.

Chris Koch: And then the Destocking was over we also picked up we think some extra.

Chris Koch: Re roofing, which was good.

Chris Koch: That seemed to build in the quarter.

Chris Koch: So overall I think.

Chris Koch: <unk> had a little bit to do especially the conservatism around there around the $200 million around.

Chris Koch: While we might be a little bit.

Garik Simha Shmois: Got it. Okay, that's great.

Chris Koch: The heavier than expected.

Garik Simha Shmois: Got it okay that's great.

Chris Koch: You asked about inventory build-in. I think what our data, what our conversations, and that are showing in the first quarter is that really, a lot of the channel, while the D-stock is over, we're not seeing a huge build in inventory. I think as we get closer to the season, people are still concerned about, obviously, the carrying costs of inventory are higher now than they have been, maybe a little bit of conservatism around getting burned again by having too much inventory.

Speaker Change: Thanks, Paul.

Garik Simha Shmois: About <unk>.

Chris Koch: You'd asked about inventory build and I think what we're what our data what our conversations are that are showing in the first quarter or is it really.

Chris Koch: A lot of the channel while the destock is over we're not seeing a huge build in inventory I think as we get closer to the season people are still.

Chris Koch: You talked about obviously the carrying cost of inventory are higher now than they have been.

Chris Koch: Maybe a little bit of conservatism around getting burned again on on having too much inventory. So if demand holds up obviously, there that will need to be addressed and we think we're in a good position to be able to address that increased demand, even if distributors are carrying and contractors aren't carrying as much inventory as maybe we would like them to have going into the season.

Chris Koch: So, if demand holds up, obviously, that'll need to be addressed, and we think we're in a good position to be able to address that increased demand, even if distributors aren't carrying and contractors aren't carrying as much inventory as maybe we'd like them to have going into the season.

Chris Koch: Yeah.

Garik Simha Shmois: Got it. Okay. No, thanks for that. I'll pass it on.

Speaker Change: Got it okay, well, thanks for that I'll pass it on.

Garik Simha Shmois: Yes.

Bryan Francis Blair: Your next question comes from the line of Bryan Blair from Oppenheimer. Please go ahead.

Garik Simha Shmois: Your next question comes from the line of Bryan Blair from Oppenheimer. Please go ahead.

Bryan Francis Blair: Yeah.

Bryan Francis Blair: Good afternoon. We'll press start to go into the air.

Bryan Francis Blair: Good afternoon impressive start to the year.

Bryan Francis Blair: Thanks, Bryan. [inaudible] Kevin, you walked through the full-year bridge for CCM revenue, and I apologize if, in all the detail that you offered during the script and Q&A, I missed this, but can you do the same for CWT so we have that kind of level set? And then, it would be great if you guys could offer some more color on what you're seeing in commercial versus residential applications specific to the CWT sector.

Bryan Francis Blair: Thanks, Brian.

Bryan Francis Blair: Yeah.

Jeff: Hey, Jeff.

Bryan Francis Blair: Yeah.

Bryan Francis Blair: Kevin you walked into the full year bridge for CCM revenue and I apologize, if and all the detail that you've offered.

Bryan Francis Blair: And during the script in Q&A and I missed this but.

Bryan Francis Blair: Can you do the same for for CW team. So we have that.

Bryan Francis Blair: Just kind of level set and then that would be great. If you guys could offer some more color on what youre seeing in.

Bryan Francis Blair: Commercial.

Bryan Francis Blair: Versus residential applications specific to the CWT sector.

Chris Koch: Yeah, let me take the first one. Kevin can give you that walk through the year. You know, in what we're seeing out in the CWT, and I think what we're seeing in the real estate market is, on the residential side, just this idea that there still is an underlying need for additional housing units when we look at, and we see builders still buying land and still making investments in that, addressing that demand. We're optimistic about that for the year.

Speaker Change: Yeah, Let me let me take the first one Kevin can get you that walk through the.

Chris Koch: The year.

Chris Koch: In what we're seeing out in the CWT.

Chris Koch: Uh huh.

Chris Koch: Market is really on the resi side.

Chris Koch: This idea that there still is an underlying need for additional housing units.

Chris Koch: When we look out and we see.

Chris Koch: Bill are you still buying land in still making investments in that addressing that demand.

Chris Koch: We're optimistic about that for the year I think could there be a blip could there be some hesitation as Pete.

Chris Koch: I think, you know, could there be a blip? Could there be some hesitation as people digest things around the, you know, the stuff we've seen today, like the GDP, or, you know, the first two or three cuts. And now we're headed perhaps to not as many, but I think resi again, that underlying demand is going to continue to be a drumbeat as we go through the year, or that need for additional housing units. You get to the commercial.

Chris Koch: <unk> digest things around that.

Chris Koch: The stuff we've seen today like the GDP or first with two or three cuts and now we're headed perhaps too not as many.

Chris Koch: But I think Rosie again that underlying demand is going to continue to be a drumbeat as we go through the year or that need for additional housing units you get to the commercial I think it's really.

Chris Koch: I think it really depends on the segment. Obviously, the office and retail side for CWT has been a bit tough not to be, I think, expected. But I think it could be expected. Excuse me.

Chris Koch: It depends on the segment obviously.

Chris Koch: The office and retail sides of CWT has been a bit tough.

Chris Koch: Not to be expected I think it can be expected excuse me warehousing, a little bit tough to and then when you get into the healthcare education government spending those tended to be positive. So as we look across that.

Chris Koch: We're having a little bit of a tough time too, and then when you get into healthcare education and government spending, those tended to be positive. So, as we look across the portfolio segments, it's kind of a mixed bag. And then, really, when we look down at the margin, and we continue to anticipate driving improved margin, it's really around automation. First of all, and that's something that I think Carl brought to the table, and you've seen it in CCM, and you're going to see it run through CWT this year. Next year is just this idea that we're approving the factors.

Chris Koch: Portfolio segments.

Chris Koch: And of a mixed bag and then.

Chris Koch: Really when we looked out at the margin and we continue to anticipate driving improved margin.

Chris Koch: It's really around automation first of all and Thats something that I think Carlyle brought to the table and you've seen it in CCM and youre going to see it run through.

Chris Koch: <unk> T. This year next year is this idea that we're improving the factors we've talked about it before being more efficient appliance Pos and lean Sigma and then innovation.

Kevin P. Zdimal: We've talked about it before being more efficient, applying and leading Sigma, and then innovation. We've got innovation running as well as building in CWT, and then lastly, this positive price cost. The spread that they're seeing should be helpful in a year or 2. I think we were probably a little bit more on the cost saving side of Raw Materials in the first quarter than the negative impact on price. So, and we should also see as volume continues to improve that 1% volume, we get more volume through the factories. We see some benefits from that too. So, Kevin, you want to talk about the walk? Yeah, and about the seasonality.

Kevin: Got innovation running as well and building and CWT and then lastly, this positive price cost.

Kevin: Spread that theyre seeing should be helpful. In a year or two I think we were.

Kevin P. Zdimal: Probably a little bit more.

Kevin: To the.

Kevin: Cost savings side on.

Kevin: On raw materials in the first quarter, then the negative impact of price so.

Kevin: And we should also see as volume continues to improve that 1% volume will get more volume through the factories, we see some benefits from that too so.

Kevin: And you want to talk about the walk yes. The seasonality you know that both of our businesses very much.

Kevin P. Zdimal: Yeah, and the seasonality, you know that both our businesses very much, the summer months are the stronger months. But as we look at CWT specifically, it's really the same as we talked about at the end of the year, where we think about 22% of the full year sales would be in Q1. And then Q2 and Q3 are both about 27%, and then you exit with the balance into Q4. As far as EBITDA drops through, we still see CWT in the low to mid 30s for incrementals, and CCM; they're at about 40% on the incrementals.

Kevin P. Zdimal: Summer months.

Kevin P. Zdimal: Stronger months, but as we look at CWT, specifically, it's really the same as we talked about at the end of the year, where we think about 22% of the full year sales would be in Q1, and then Q2 and Q3 are both about 27% and then you exit with the balance into Q.

Kevin P. Zdimal: For as far as EBITDA drop through we still see CWT in the low to mid thirties for Incrementals in CCM, they're at about 40% on the Incrementals.

Bryan Francis Blair: I understand. Very helpful detail, perhaps offer a little more on the strategic fit of MTL and how the asset strengthens the product suite of the metals platform and growth potential looking forward.

Speaker Change: Understood very helpful detail.

Kevin P. Zdimal: And perhaps offer a little more on the strategic fit.

Speaker Change: MTL and how the asset strengthens the product suite at the metals platform.

Speaker Change: Growth potential looking forward.

Chris Koch: Right. Well, MTL is just a great company. The leader of MTL, Tony Mallinger, has done a great job over the years of driving some wonderful performances. And it really centers around edge metal, which, as we've talked about before, edge metal goes on basically every low soil proof that we put on. And so that's something that MTL brings to us. We think it's a big benefit to get that into the Carlisle specification, to get that into the Carlisle warranty. You know what happens there?

Speaker Change: Alright, well Npls, just a great company.

Chris Koch: The leader of MTL <unk> done a great job over the years.

Chris Koch: That's driving some wonderful performance and it really centers around edge metal, which as we've talked about before edge metal goes on basically every looser.

Chris Koch: So a proof that we put on.

Chris Koch: So.

Chris Koch: That's something that MTL brings to us we think that's a big benefit to get that into the Carlyle specification to get that into the Carlyle warranty.

Chris Koch: What happens there also there is some architectural and other.

Chris Koch: Also, there are some architectural and other products that they have that are value-accretive. They actually have patents on a lot of things, something that you wouldn't expect in an edge metal or perhaps an architectural metal business, but this patented technology just shows you the type of innovation that Tony and his team have been bringing to the market over the years. So the addition really fits when we look right down the line from the specification, integrating it into our portfolio, being able to train our contractors, and offering it to our contractors.

Chris Koch: Metal products that they have they're value accretive they actually have patents on a lot of things something that you wouldn't expect.

Chris Koch: In a edge metal or perhaps architectural metal.

Chris Koch: Business, but this patented technology just shows you the type of innovation that Tony and his team have.

Chris Koch: <unk> been bringing to the market through the year. So the addition really fits when we write down the line from the specification.

Chris Koch: Integrating it into our portfolio being able to train our contractors being able to offer to our contractors and.

Chris Koch: And we also think there are going to be some good synergies by bringing MTL into the Drexel and Peterson group as well and having a much, much more complete product line in metal, as well as the synergies when we think about raw material purchases, the volume that that metal adds to shipping and other things like that. So it will be a good addition. And I think, you know, when we look back at what we said, it would be I think we had about 25 cents accretion on EPS in 24 and then something like 60 cents in 2025.

Chris Koch: And we also think they're going to be some good synergies by bringing MTL into the Drexel and Peterson group as well and having a much much more complete product line of metal as well as the synergies when we think about raw material purchases the volume of that metal ads.

Chris Koch: Do we think about shipping and other things like that so.

Chris Koch: Good addition, and I think when we look back to what we said.

Chris Koch: It would be I think we had about 25.

Chris Koch: Accretion.

Chris Koch: On EPS in 2004, and then something like 60.

Chris Koch: In.

Chris Koch: So right away, some good benefits there, and I think the targeted and stated Savings and Synergies are going to be around $13 million. But my expectation, and I think as the team gets into it, is that we'll exceed that, just like we did with health.

Chris Koch: 2025, so right away.

Chris Koch: Some good benefits there and I think our targeted at stated.

Chris Koch: Savings and revenue synergies is going to be up $13 million, but my expectation and I think as a team gets into it is that we will exceed that just like we did with Henry.

Bryan Francis Blair: Got it. Again, very helpful. Thank you. Yeah, thanks.

Bryan Francis Blair: Got it okay very helpful. Thanks, guys.

Speaker Change: Yes, Thanks, Brian.

Saree Emily Boroditsky: Your next question comes from the line of Saree Boroditsky from Jeffries. Please go ahead.

Bryan Francis Blair: Your next question comes from the line of serine Bartnicki from Jefferies. Please go ahead.

Saree Emily Boroditsky: Just a couple of cleanup questions here. First, just to build on the price-cost, you talked about a positive $20 million. Could you just provide any detail on how that plays out through the year?

Saree Emily Boroditsky: Just a couple of cleanup questions here. So first just to build on the price curve. She talked about a positive 20 million could you just kind of adding Quito and how that plays out through the year.

Speaker Change: Yes, the first quarter, we got about half of that and then through the balance of the year its pretty much pro rata.

Kevin P. Zdimal: Yeah, in the first quarter, we got about half of that. And then through the balance of the year, it's pretty much pro rata.

Kevin P. Zdimal: Perfect and then on <unk>.

Kevin P. Zdimal: Yeah.

Kevin P. Zdimal: Ill provide more details on the architectural metals market I believe in the past you talked about it growing two times GDP, but what it would be great to get an update on that.

Chris Koch: Yeah, I definitely think that it's growing at a higher rate. I think you could probably say that you could probably stick with your two times GDP.

Kevin P. Zdimal: Yes, I definitely think that it's growing at a higher rate.

Chris Koch: You could probably say probably stick with your two times GDP one of the things that the metals business brings to us is obviously.

Chris Koch: One of the things that the metals business brings to us is obviously the recyclability of the product line, and that's something that is obviously a huge benefit. The metals market is, I think at one point, we had an eight hundred billion dollar market, so there's plenty for us to go after. We also want to go after more, what I would say, prefab applications where we're doing it in the factory, and we're getting more standardization on product lines and shipping that out. So, I can give you more information, Saree, if you want to ask, that's about where I would stop, or I'll just keep talking about the metal business, but it's a good business. It's very complimentary.

Chris Koch: The ability of the product line and Thats something that obviously is a huge benefit the metals market.

Chris Koch: I think it was where we had 800.

Chris Koch: $1 billion market, so there's plenty.

Chris Koch: For us to go after.

Chris Koch: We also want to go after more what I would say prefab.

Chris Koch: <unk> locations, where we're doing it in the factory and we're getting more standardization on product lines.

Chris Koch: And shipping that out so.

Chris Koch: I can give you more information sorry, if you on Asps.

Chris Koch: That's about where I would stop here I'll, just keep talking about the metal business, but it's a good business.

Chris Koch: It's very complementary we talked about edge metal the other thing I would just add this that when we look at a lot of the buildings of that flat roofs on them, especially warehouses and small.

Chris Koch: We talked about edge metal. The other thing I would just add is that when we look at a lot of the buildings that have flat roofs on them, especially warehouses and small manufacturing facilities and things like that, a lot of the time, people will put an office building on the side in the front. Maybe it's two stories on the warehouse or three, and they'll put a one-story office building. A lot of the time, when they seek to add differentiation there, they'll do it with an architectural metal setup either on the roof or on the roof and the wall. And again, value-add, highly specified, and wrapping it into that whole warranty system that Carlisle can provide really gives us some great expanded market potential to go after.

Chris Koch: Factoring facilities and things like that a lot of the time people will put on an office building on the side in the front, maybe it's two stories on the Weyerhaeuser three and they'll put it was drops building a lot of the time when they seek to add differentiation or they'll do it with an architectural metal set up either on the roof or the roof on the wall and again value add highly specified.

Chris Koch: And wrapping it into that whole warranty system that Carlyle can provide really gives us some great expanded market potential to go after.

Saree Emily Boroditsky: I appreciate the color. And then just one last one, just so everyone's on the same page.

Speaker Change: I appreciate the color and then just one last one just on the same page you have net interest expense guidance for the year of $20 million $10 million of interest expense this quarter. So just.

Kevin P. Zdimal: You have net interest expense guidance for the year of $20 million. You had $10 million of interest expense this quarter. So just how you're getting to build that interest income through the year would be helpful.

Kevin P. Zdimal: Just how are you doing to build that interest income through the year would be helpful.

Kevin P. Zdimal: Yeah, it really comes down to the timing of CIT. When we close, we're expecting to close at the end of May, somewhere in that range. As far as CIT, hard to say with regulatory approvals out of our control, but all is going well there, and we have no concerns.

Speaker Change: Yes, it's really comes down to the timing of.

Kevin P. Zdimal: When we close we're expecting to close it.

Kevin P. Zdimal: End of May some time in that range as far as the city hard to say with regulatory approvals out of our control, but all is going well there and we have no concerns.

Kevin P. Zdimal: As far as forecasting interest income when youre getting $2 billion makes it a little bit more challenging so what we had this year. We did have the acquisition of MTL for $410 million. So we have to take that into consideration as well.

Kevin P. Zdimal: But as far as forecasting interest income, when you're getting $2 billion, it makes it a little bit more challenging. So what we had this year, we did have the acquisition of MTL for $410 million. So we have to take that into consideration as well, that we expect to close early May. And then there is the interest rate. We're not expecting the cuts now that we might have been looking at at the beginning of the year, so that will increase our interest income. So the net interest expense is positive against the MTL use of cash. We still think the net interest expense of around $20 million is a good number to use.

Kevin P. Zdimal: That we expect to close early may.

Kevin P. Zdimal: And then the.

Kevin P. Zdimal: Interest.

Kevin P. Zdimal: Great.

Kevin P. Zdimal: Not expecting the cuts now that we might have been looking at the beginning of the year. So that will increase our interest income so net that positive against the MTL use of cash we still think the net.

Kevin P. Zdimal: Net interest expense of around $20 million, a good number to use.

Saree Emily Boroditsky: Okay, thanks for the caller.

Speaker Change: Okay. Thanks for the color.

David Sutherland MacGregor: Your next question comes from the line of David MacGregor from Longbow Research. Please go ahead.

Saree Emily Boroditsky: Your next question comes from the line of David Macgregor from Longbow Research. Please go ahead.

David Sutherland MacGregor: Yeah, good afternoon. Thanks for taking the questions. Congratulations on a great quarter. Thank you. Yeah, really strong results. I guess on the CWT, excuse me, business, I just wanted to get a sense of the lower carryover prices for 2023. What percentage of segment revenues would that represent?

David Sutherland MacGregor: Yeah. Good afternoon, thanks for taking the questions and congratulations on a great quarter.

Speaker Change: Thank you.

David Sutherland MacGregor: Yeah really strong results I guess on the <unk> CW CWT excuse me business I, just wanted to get a sense of the lower carryover prices for 2023, what percentage of segment revenues represented.

Kevin P. Zdimal: So, as far as the carryover in the first quarter is concerned, it was down mid single digits.

David Sutherland MacGregor: So as far as the carryover in the first quarter was down mid single digits.

Unknown Executive: Hey David, Zemelow here. I... From the segment side of it, it's probably roughly 30% of the business. That's where the selected price decreases were last year.

Speaker Change: Hey, David is that all.

Unknown Executive: Okay.

David: The segment side of it is probably roughly 30% of the business, that's where the selected price increases were last year.

David Sutherland MacGregor: Right. Okay, that was the question. 30%. Thanks.

David: Right. Okay that was the question 30%. Thanks.

David Sutherland MacGregor: And then, you know, Kevin's provided a little bit of granularity around kind of the price cost, and you've talked a little bit about the volume leverage, but just piece it all together here. So let me just ask you if you could just talk directly about that 66% EBITDA growth: how much of that was volume leverage? How much of it was favorable price cost? I will get you to go back and just provide some numbers around that.

Zemelow: And then.

David Sutherland MacGregor: Kevin provided a little bit of granularity around kind of the price cost in <unk>.

David Sutherland MacGregor: You've talked a little bit about the volume leverage.

David Sutherland MacGregor: Pizza altogether here. So let me just ask you. If you could just talk directly about 66% EBITDA growth how much of that was volume leverage how much of it was favorable price cost.

David Sutherland MacGregor: Just to go back and just provide some numbers around that.

Kevin P. Zdimal: You're looking at Q1? Yeah, so on Q1, yeah, substantially all of it on the CCM side, you can just put the 40% incrementals in there, and then price and cost pretty much offset each other on the CCM side. And that number would drop right to the bottom line and even down to 40%. And that explains that segment. On the CWT side, also that slight volume increase, but then most of their pickup was a combination of these operating efficiencies with the synergies that we talked about. And then the balance was price costs, so they had positive price costs at CWT in the first quarter, close to $10 million.

Speaker Change: Youre looking at Q1 Q1, yeah, yeah. So in Q1.

Kevin P. Zdimal: Yes, it's substantially all of it on the CCM side, you can just put the 40% incrementals in there and then price costs.

Kevin P. Zdimal: Pretty much offset each other on the CCM side and.

Kevin P. Zdimal: That number would drop right to the bottom line on EBITDA and a 40% and that explains that segment on the CW side also.

Kevin P. Zdimal: <unk> volume increase but then most of their pickup was combination of these operating efficiencies with the synergies that we talked about and then the balances price cost. So that they had positive price cost that CWT in the first quarter close to $10 million.

David Sutherland MacGregor: Okay, terrific. That's it for me. Thanks very much.

Speaker Change: $10 million you referenced that earlier, okay terrific. That's it for me thanks very much.

Adam Michael Baumgarten: Your next question comes from the line of Adam Baumgarten from Zelman. Please go ahead.

Speaker Change: Thanks, David.

Adam Michael Baumgarten: Your next question comes from the line of Adam Baumgarten from Zelman. Please go ahead.

Adam Michael Baumgarten: Hey guys, thanks for taking my question. Um, I was just thinking about the full-year outlook and maybe how it tracks back to 1Q. It looks like you're expecting kind of flattish end markets, you know, extra destocking and pricing. And if I back out the destocking in 1Q and CCM, and there's some modestly negative price, it looks like volumes were up maybe 5% or so or mid single digits. So do you expect that to kind of, as you get tougher comps, maybe come down throughout the year? Just giving a strong start to the year.

Adam Michael Baumgarten: Hey, guys. Thanks for taking my question, just thinking about the full year outlook and maybe how it.

Adam Michael Baumgarten: Back to <unk>, it looks like you're expecting kind of flattish end markets.

Adam Michael Baumgarten: The destocking in pricing and if I back out the destocking in <unk>, and CCM and yeah, Theres some modestly negative price it looks like volumes were up maybe 5% or so or mid single digit. So do you expect that to kind of as you get tougher comps maybe come down throughout the year, just given the strong start to the year.

Kevin P. Zdimal: So as you remove the D stock number, we just won't talk about that. But just talking in the markets, we're expecting re-roofing to be up mid single digits, and then we do expect new construction to be down high single digits. So overall, that might be a slight positive on the end markets. Yeah.

Kevin P. Zdimal: So as you remove the destock number we just we won't talk about that but just talking end markets. We're expecting re roof to be up mid single digits and then we do expect new construction down high single digits.

Kevin P. Zdimal: Overall that might be a slight positive.

Kevin P. Zdimal: The end markets.

Adam Michael Baumgarten: Yeah, I'm just trying to get it. I think the first quarter was a bit better than that; it seems right.

Speaker Change: Yes, I'm just trying to get at I think the first quarter was a bit better than that it seems right.

Kevin P. Zdimal: Yeah, we had some positive weather in the first quarter as well. I think if you take that out, then it's going to be pretty consistent.

Adam Michael Baumgarten: Yeah.

Kevin P. Zdimal: Yes, we had some positive weather in the first quarter as well I think if you take that out then its going to be pretty consistent.

Adam Michael Baumgarten: Okay, got it. And then just on pricing, it sounds like it's playing out as you expected. Things have been stable since year-end last year throughout the first quarter. Yeah, I think pricing is playing out.

Speaker Change: Okay got it.

Adam Michael Baumgarten: And then just on pricing it sounds like it's playing out as you expected things have been stable since year end last year throughout the first quarter.

Adam Michael Baumgarten: Yes, I think pricing is playing out I mean, there's a couple of things one the destock. We're super pleased that it ended up being around 200, we think our projections there on the pricing was right in line, the carryover and things seem to be.

Chris Koch: Yeah, I think pricing is playing out. I mean, there are a couple of things.

Adam Michael Baumgarten: One, the D stock, we're super pleased that it ended up being, you know, around 200. We think our projections there on the pricing were right in line, the carryover, and things seem to be, you know, there's a lot of turmoil out there in the broader economy that you know about. I don't need to tell you about GDP or that. But in our markets, things are progressing pretty much as planned, and I'd say stable.

Adam Michael Baumgarten: Now, there's a lot of turmoil out there.

Adam Michael Baumgarten: In the broader economy.

Adam Michael Baumgarten: About I don't need to tell you about there from Gd peer that but there are markets things are progressing pretty much as planned and I would say stable.

Speaker Change: Okay got it thanks.

Chris Koch: There are no further questions at this time. I'll hand the call over to Chris Koch for closing remarks. Please go ahead.

Adam Michael Baumgarten: Mhm.

Chris Koch: There are no further questions at this time I'll hand, the call over to Chris Koch for closing remarks. Please go ahead.

Chris Koch: Thank you. This concludes the fourth quarter at FLIR. I'm sorry, it concludes our first quarter. Excuse me. Carl, thanks for your participation and, obviously, we look forward to speaking with you on our next order call.

Chris Koch: Thank you this concludes the fourth quarter and full year.

Chris Koch: Full year I am sorry, its fourth correctly or I am sorry. It concludes our first quarter excuse me.

Chris Koch: Paul Thanks for your participation and obviously, we look forward to speaking with you on our second.

Chris Koch: For call coming up thank you.

Konstantin: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Konstantin: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Konstantin: Okay.

Konstantin: Yeah.

Konstantin: Yeah.

Konstantin: [music].

Konstantin: Okay.

Konstantin: [music].

Konstantin: Okay.

Konstantin: Okay.

Konstantin: Right.

Konstantin: Yes.

Konstantin: [music].