Q2 2025 Carlisle Companies Inc Earnings Call

Andrew (Conference Call Operator): Good afternoon. My name is Andrew, and I will be your conference call operator today. At this time, I would like to welcome everyone to the Carlisle Company's second quarter 2025 earnings conference call. 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. Mehul Patel, Carlisle's Vice President of Investor Relations. Mehul, please go ahead.

Good afternoon. My name is Andrew and I will be your conference call Operator today at this time, I would like to welcome everyone. To the Carlile companies second quarter 2025 earnings conference call 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 a call over to Mr. Mehul Patel Carl's vice president of investor relations mahul, please go ahead.

Mehul Patel: Thank you and good afternoon, everyone. Welcome to Carlisle's second quarter 2025 earnings call. I'm Mehul Patel, Vice President of Investor Relations for Carlisle. We released our second quarter financial results today, and you could find both our press release and the presentation for today's call in the Investor Relations section of our website. On the call with me today are Chris Koch. He's our Board Chair, President, and CEO, along with Kevin Zdimal, who is our CFO. Today's call will begin with Chris providing key highlights of the second quarter. Kevin will follow Chris and provide an overview of our Q2 financial performance and our outlook for the full year of 2025. Following our prepared remarks, we will open up the line for questions. Before we begin, please refer to slide two of our presentation where we note that comments today will include forward-looking statements based on current expectations.

Thank you and good afternoon, everyone. Welcome to carlile's second quarter 2025 earnings call I'm Mel Patel vice president of investor relations for Carlile.

We released our second quarter Financial results today and you could find both our press release and the presentation for today's call and the investor relations section of our website. On a call with me today are Chris KO. These are board chair, president and CEO along with Kevin zimmel who's our CFO

Today's call Will begin with Chris. Providing key. Highlights of the second quarter, Kevin Will Follow Chris and provide an overview of our Q2 financial performance and our outlook for the full year of 2025.

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

Mehul Patel: 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. As Carlisle provides non-GAAP financial information, we provided reconciliations between GAAP and non-GAAP measures in a press release and in the appendix of our presentation materials, which are available on our website. With that, I will turn the call over to Chris.

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. Actual results could defer materially from the statements due to a number of risks and uncertainties which are discussed in a press release and SEC filings.

As Carlisle provides non-GAAP financial information, we have provided reconciliations between GAAP and non-GAAP measures in a press release and in the appendix of our presentation materials, which are available on our website. With that, I will turn the call over to Chris.

Chris Koch: Thank you, Mehul. Good afternoon, everyone, and thank you for joining us for Carlisle's second quarter 2025 earnings call. To start, I'd like to direct your attention to slide three of the presentation. Carlisle is pleased to announce another quarter of solid performance and deliver a message of thanks to our outstanding Carlisle team for achieving a record-adjusted EPS of $6.27 amidst the dynamic and evolving U.S. building products landscape in the second quarter. Carlisle revenues, while less than we had planned for in Q2, held steady at $1.4 billion year over year, and we continued to drive margins above our Vision 2030 targets, showcasing the resilience and strength of our focused pure play building products model. Our second quarter performance underscores the enduring strength of our reroofing business at CCM, backed by a substantial multi-year backlog, enabling us to achieve top-tier industry margins despite challenges in new construction.

Thank you me. Good afternoon, everyone and thank you for joining us. For Carl's second quarter, 2025 earnings call to start. I'd like to direct your attention to slide 3 of the presentation.

Carlile was pleased to announce another quarter of solid performance and deliver a message of thanks to our outstanding Carlile team for achieving a record adjusted EPS of $6.27.

Amidst the dynamic and evolving us Building Products landscape in the second quarter.

Carlile revenues, while less than we had planned for in Q2 held steady at 1.4 billion dollars year-over-year and we continued to drive margins above our vision, 2030 targets, showcasing the resilience and strength of our focused Pure Play Building Products model.

Chris Koch: The commercial reroofing market continues to align with our long-term growth expectations, reinforcing its role as a reliable and recurring revenue stream, accounting for approximately 70% of CCM's commercial roofing business. This momentum is driven by the aging commercial building stock, energy efficiency mandates, and the trust our customers place in the Carlisle experience and our premium solutions. While CCM's performance remains strong, we face some challenges at CWT due to well-known factors such as higher interest rates and negative builder sentiment impacting new and remodeled residential markets. Nevertheless, we have continued to prioritize our capital allocation strategies, returning $343 million to shareholders through dividends and share repurchases, investing in innovation, and strategically acquiring bonded logic to enhance our position in the sizable and growing market for insulation.

Our second quarter performance, underscores the enduring strength of our re-roofing business at CCM. Backed by a substantial multi-year backlog enabling us to achieve top tier industry margins. Despite challenges in new construction

The commercial re-roofing market continues to align with our long-term growth expectations, reinforcing its role as a reliable and recurring revenue stream, accounting for approximately 70% of CCM's commercial roofing business.

This momentum is driven by the aging commercial building stock, energy efficiency mandates, and the trust our customers place in the Carlisle experience and our premium solutions.

While CCM's performance remains strong, we face some challenges at CWT due to well-known factors such as higher interest rates and negative builder sentiment impacting new and remodel residential markets.

Nevertheless, we have continued to prioritize our capital allocation strategies, returning $343 million to shareholders through dividends and share repurchases, investing in innovation, and strategically acquiring Bonded Logic to enhance our position.

Chris Koch: As we approach the end of the second quarter, building product markets and new construction failed to gain the momentum we had anticipated, including an anticipated return to a more historically normal inventory load-in by distribution to prepare for the construction season. We had previously outlined the risks to our full-year outlook that were present and emerging in April, such as tariffs, interest rate cuts, and builder sentiment. Despite those risks, we maintained our confidence that improved conditions would materialize in the second half of the year. Our optimism was supported by positive contractor sentiment, anticipated policy resolutions, and strong backlogs promising robust activity aligned with historic norms. Although some of the external risks materialized and influenced market activity, our teams diligently addressed the challenges and focused on factors within our control.

And the sizable and growing market for insulation.

As we approach the end of the second quarter Building, Product markets and new construction failed to gain the momentum. We had anticipated including an anticipated return to a more historically, normal inventory load in by distribution to prepare for the construction season.

We had previously outlined the risks to our full year outlook that were present and emerging in April such as tariffs, interest rate, cuts and Builder sentiment.

Despite those risks, we maintained our confidence that improved conditions would materialize in the second half of the year. Our optimism was supported by positive contractor sentiment, anticipated policy resolutions, and strong backlogs promising robust activity aligned with historic norms.

Al risks, materialized and influenced Market activity.

Chris Koch: They also remain committed to our key strategic actions to deliver on our goal of $40 of adjusted EPS by 2030. We remain optimistic about our strong reroofing performance, balancing the macroeconomic pressures in new construction. We remain confident in the fact that many of the headwinds are merely delays as repair and remodel and new construction continue to have strong underlying drivers of long-term growth, as has been exhibited by our reroofing business in CCM. Carlisle is committed to Vision 2030 and continues to invest in initiatives that will ensure our long-term success. On slide four, the July Carlisle Market Survey results showcase the continued resilience of the commercial reroofing market, with full-year mid-single-digit growth expectations remaining robust. Our commitment to leadership in the reroofing sector is supported by our comprehensive product portfolio: strong specifications, full warranties, superb contractor training programs, cutting-edge product innovations, and unparalleled service capabilities.

Our team's diligently addressed the challenges and focused on factors within our control.

They also remain committed to our key strategic actions to deliver on our goal of $40 of adjusted EPS by 2030.

We remain optimistic about our strong re-roofing performance balancing the macroeconomic pressures in new construction.

We remain confident in the fact that many of the headwinds are merely delayed as repair and Remodel and new construction continue to have strong, underlying drivers of long-term growth as has been exhibited by our re-roofing business in CCM. Carlile is committed to Vision 2030 and continues to invest in initiatives. That will ensure our long-term success on slide 4, the July Carlile Market, survey results, showcase the continued resilience of the commercial re-roofing Market.

With full year. Mid single-digit, growth expectations, remaining robust,

Our commitment to leadership in the re-roofing sector is supported by our comprehensive product portfolio. Strong specifications, full warranties, and superb contractor training programs.

Chris Koch: In the residential segment, while repair and remodel activity is showing signs of stabilization, expectations have shifted slightly from previous growth projections for 2025. Nevertheless, we continue to see substantial opportunity for increased sales and profitability when residential markets rebound. Our focus now is squarely on our efforts and strategies to enhance our manufacturing cost position, strengthen our innovation and launch of new products, and enhance our product portfolio to continue to drive to complete building envelope solutions. The new construction market has softened somewhat for both commercial and residential segments since our April Carlisle Market Survey. On the residential front, although the survey indicates a mid-single-digit decline in new construction activity, our resilient approach and adaptable strategies prepare us to navigate these changes effectively. Despite recent headlines noting challenges such as record-high home prices and elevated mortgage rates, we remain optimistic about our strategic pathways to growth.

Cutting Edge product Innovations, and unparalleled service capabilities.

In the residential segment, while repair and remodel activity is showing signs of stabilization expectations. Have shifted slightly from previous growth projections for 2025

Nevertheless, we continue to see substantial opportunity for increased sales and profitability when residential markets rebound.

Our focus now is squarely on our efforts and strategies to enhance our manufacturing cost position, strengthen our innovation and launch of new products, and enhance our product portfolio to continue to drive complete building envelope solutions.

The new construction Market has softened somewhat for both commercial and residential segments since our April Carlile Market survey.

Chris Koch: In new commercial construction, while expectations have adjusted to low single-digit decline, it's important to note the potential positive impact of recent political developments, such as the reinstatement of the 100% bonus depreciation and a renaissance of U.S. manufacturing, which could invigorate demand. This is especially true in burgeoning sectors like data centers and manufacturing facilities, where Carlisle is strategically positioned to capitalize on growth opportunities. Our readiness to capture investments in these areas remains strong, and we are optimistic about the future. Moving to slide five, I'm excited to highlight our recent strategic acquisition of Bonded Logic, which perfectly embodies our commitment to innovation and strategic acquisitions as growth drivers. Bonded Logic, based in Phoenix, Arizona, brings to Carlisle and the Henry brand an innovative approach to energy efficiency with its recycled denim insulation technology through the Ultra Touch brand.

On the residential front, although the survey indicates a mid single digit decline, in new construction activity, our resilient approach in adaptable, strategies. Prepare us to navigate these changes effectively, despite recent headlines noting challenges such as record, high home prices, and elevated mortgage rates. We remain optimistic about our strategic Pathways to growth.

In new commercial construction, while expectations have adjusted to low single-digit decline, it's important to note the potential positive impact of recent political developments such as the reinstatement of the 100% bonus depreciation, and a Renaissance of us manufacturing, which could invigorate demand.

This is especially true emerging sectors, like data centers and Manufacturing facilities where Carlile is strategically positioned to capitalize on growth opportunities. Our Readiness to capture investments in these areas remain strong and we are optimistic about the future.

Chris Koch: This acquisition strengthens our commitment to comprehensive building envelope solutions and aligns seamlessly with our sustainability goals and Vision 2030 objective of generating 25% of revenue from new products introduced within the past five years. Though currently generating approximately $35 million in revenue, Bonded Logic operates in an estimated market for insulation of $14 billion, and specifically within the rapidly growing segment focused on sustainable insulation products. We see tremendous potential for double-digit revenue CAGR in the insulation market as we integrate Bonded Logic's unique material platform with Henry's extensive retail distribution network and customer relationships. We anticipate this acquisition to reach run-rate EBITDA margins that support our Vision 2030 objectives. From a market expansion standpoint, we are uniquely poised to leverage the benefits of denim insulation to penetrate the large fiberglass and mineral wool markets. Market feedback and our retail success have been exceedingly positive.

Moving to slide 5, I'm excited to highlight our recent strategic acquisition of Bonded Logic, which perfectly embodies our commitment to innovation and strategic acquisitions as growth drivers. Bonded Logic, based in Phoenix, Arizona, brings to Carlisle and the Henry brand an innovative approach to energy efficiency with its recycled denim insulation technology through the UltraTouch brand.

This acquisition strengthens our commitment to comprehensive building envelope Solutions and align seamlessly with our sustainability goals and vision. 2030 object of generating, 25% of revenue from new products introduced within the past 5 years,

Though, currently generating approximately 35 million in Revenue bonded, logic operates. In an estimated market for insulation of 14 billion dollars and specifically within the rapidly growing segment focused on sustainable insulation products

We see tremendous potential for double-digit revenue CAGR in the insulation market. As we integrate bonded objects, unique material, and platform with Henry's extensive retail distribution network and customer relationships.

We anticipate this acquisition to reach run rate EBIT down margins that support our Vision 2030 objectives.

Chris Koch: Currently, Henry Ultra Touch Insulation is available at over 400 Home Depot stores, with Home Depot serving as our exclusive big-box retail distributor. We are thrilled to announce that Henry has been selected as a finalist for the Home Depot's 2025 Merchandising Innovation Award for the Henry Ultra Touch product. This prestigious award recognizes products that have significantly transformed the home improvement landscape. This recognition also underscores and validates our commitment to innovation as a key driver of Vision 2030 and highlights the significant growth opportunities that Bonded Logic offers through their cutting-edge denim insulation capabilities. Now, turning to slide six, innovation is at the heart of our Vision 2030 goals and serves as a key differentiator for Carlisle. Our robust pipeline of new products is focused on delivering energy savings, labor efficiencies, and integrated building envelope solutions.

From a market expansion standpoint, we are uniquely poised to leverage the benefits of denim insulation to penetrate the large fiberglass and mineral wool markets. Market feedback and our retail success have been exceedingly positive.

Currently Henry, Ultra touch insulation is available at over, 400 Home, Depot stores with Home Depot serving as our exclusive big box. Retail distributor, we are thrilled to announce that Henry has been selected as a finalist for the Home. Depot's, 2025 merchandising Innovation award for the Henry Ultra touch product.

Award recognizes products that have significantly transformed the Home Improvement, landscape.

This recognition also, underscores and validates our commitment to Innovation as a key driver of vision 2030 and highlights. The significant growth opportunities. That bonded logic offers through their Cutting Edge denim, insulation capabilities,

Chris Koch: Our unwavering commitment to innovation is evident in the significant strides we've made in 2024 and 2025, including the refinement and implementation of our advanced stage gate and voice of the customer processes. These initiatives ensure our teams deliver straightforward innovations that meet the evolving needs of building owners, contractors, architects, and other stakeholders. We aim for our products to offer measurable outcomes, such as a solid return on investment, providing value to users, and allowing us to price based on the value created, ultimately, creating the opportunity for substantial returns for Carlisle shareholders. This quarter, we've advanced several product development initiatives aimed at capturing emerging market opportunities, enhancing labor savings, and improving energy efficiency for our customers. As previously mentioned, our acquisition of Bonded Logic brings revolutionary denim insulation technology to tap into a vast addressable market.

Now, turning to slide 6 Innovation is at the heart of our vision 2030 goals and serves as a key differentiator for Carlile, our robust pipeline of new products is focused on delivering Energy savings labor, efficiencies and integrated building envelopes Solutions.

Our unwavering commitment to innovation is evident in the significant strides we've made in 2024 and 2025, including the refinement and implementation of our advanced stage gate and voice of the customer processes.

These initiatives ensure our teams deliver straightforward innovations, that meet the evolving needs of building owners, contractors Architects, and other stakeholders.

We aim for our products to offer measurable outcomes such as a solid return on investment, providing value to users, and allowing us to price based on the value, created ultimately creating the opportunity for a substantial returns for Carlile shareholders.

This quarter, we've Advanced several product development, initiatives aimed at capturing Emerging Market opportunities, enhancing labor, savings and improving Energy Efficiency for our customers.

Chris Koch: Organically, products like the new dual tank flexible fast adhesive, our expanding Blue Skin portfolio with innovations such as ZeroFlash and VP Tech, along with larger 12-inch insulate-based flat polyiso panels, positions us to meet the increasing demand for integrated building envelope solutions. These solutions enable contractors to work more efficiently while delivering superior building performance. Looking to the second half of the year, we are proactively addressing market headwinds by implementing measures such as reducing CWT's footprint and gaining efficiencies through automation. We anticipate our COS initiatives, combined with acquisition synergies, to generate over $30 million in savings, contributing to more than 200 basis points of margin improvement for CWT. While some benefits will take time to fully materialize, we are confident in our ability to drive significant margin expansion over the Vision 2030 timeframe. Looking ahead, we remain optimistic about our long-term strategic positioning.

As previously mentioned, our acquisition of Bonded Logic brings revolutionary denim insulation technology to tap into a vast addressable market.

organically products like the new dual tank flexible fast adhesive

Our expanding blue skin portfolio, with innovations such as 0 Flash and VP Tech, along with larger 12-inch Insel base flat poly ISO panels, positions us to meet the increase in demand for integrated building envelope solutions. These solutions enable contractors to work more efficiently while delivering superior building performance.

Looking to the second half of the year, we are proactively addressing Market. Headwinds by implementing measures such as reducing cwt's footprint and gaining efficiencies through automation. We anticipate our cos initiatives combined with acquisition synergies to generate over 30 million dollars in savings contributing to more than 200 basis points of margin Improvement for cwt,

while some benefits will take time to fully materialize, we are confident in our ability to drive significant margin expansion over the vision, 2030 time frame,

Chris Koch: The key drivers of our businesses, including aging building stock, energy efficiency requirements, and infrastructure investment needs, continue to be strong. In residential markets, the ongoing housing shortage supports longer-term growth opportunities. Our strong balance sheet provides the flexibility for continued strategic investments while we maintain our commitment to returning capital to our shareholders. And with that, I'll turn it over to Kevin to provide additional financial details and color on our outlook for 2025. Kevin.

Looking ahead. We remain optimistic about our long-term, strategic positioning, the key drivers of our businesses, including aging building stock Energy, Efficiency, requirements and infrastructure investment needs continue to be strong and residential markets. The ongoing housing shortage supports, longer-term growth opportunities. Our strong balance sheet provides the flexibility for continued strategic Investments while we maintain our commitment to returning Capital to our shareholders.

Speaker 6: Thank you, Chris. Moving on to slide seven, I'll review our second quarter financial results. During the quarter, we achieved revenue of $1.4 billion, essentially flat compared to the second quarter of 2024. The acquisitions of MTL, PlastaFab, and Thermafoam contributed $39 million of revenue in the second quarter. While strong reroofing activity provided some stability, we experienced lower volumes resulting from slower new construction across both residential and commercial segments, lower residential repair and remodel, and an increase in weather-related disruptions. Adjusted EBITDA for the quarter came in at $389 million, with a margin of 26.9%, a decline of 190 basis points from last year.

And with that, I'll turn it over to Kevin Zdimal to provide additional financial details and color on our outlook for 2025. Kevin.

Thank you. Chris, moving on to slide 7, I'll review our second quarter financial results. During the quarter, we achieved revenue of $1.4 billion, essentially flat compared to the second quarter of 2024. The acquisitions of MTL, plus the Fab and Thermafoam, contributed $39 million of revenue in the second quarter, while strong re-roofing activity provided some stability. We experienced lower volumes resulting from slower new construction across both residential and commercial segments, lower residential repair and remodel, and an increase in weather-related disruptions.

Speaker 6: This decline was mainly due to volume deleverage and softer market conditions at CWT, higher operating costs related to preparing for a strong construction season, and the load-in that Chris mentioned at CCM, and our ongoing strategic investments and innovation and enhancements to the Carlisle experience. Adjusted EPS hit a record $6.27, up from $6.24 in the prior year. Share repurchases and accretive acquisitions more than offset lower organic earnings, which face pressures from the previously mentioned market challenges. Now, let's turn to our segment performance, beginning with CCM on slide eight. The construction materials segment reported second quarter revenues of $1.1 billion, growing approximately 1% year over year, with the increase coming from the positive contribution from the MTL acquisition. Organic revenue was effectively flat in the quarter, with reroofing growth offset by a decline from new construction headwinds and unfavorable weather.

Adjusted ebit die for a quarter, came in, at 389%, a decline of 190 basis points from last year. This decline was mainly due to volume D leverage, and softer market conditions at cwt higher operating costs related to preparing for a strong construction season and a load in that Chris mentioned at CCM and our ongoing, strategic Investments, and Innovation and enhancements to the Carlile experience.

Adjusted EPS had a record $6.27 up from $6.24 in the prior year.

Share repurchases and a creative Acquisitions more than offset. Lower organic earnings which face pressures from a previously mentioned and Market challenges.

Speaker 6: Also, as a reminder, CCM's second quarter revenue was negatively impacted by approximately $15 million as Canadian customers accelerated purchases in the first quarter of 2025 in anticipation of tariff-related price increases. Adjusted EBITDA for CCM was $346 million, down 5% compared to last year, with a margin of 31.6%. Adjusted EBITDA margin declined by 180 basis points to the previously mentioned higher operating costs as we anticipated stronger second-half volumes and investments in innovation and enhancements to the Carlisle experience. Pricing and raw materials were flat on a year-over-year basis in the quarter. The MTL acquisition continues to exceed expectations, creating substantial value through additional content per square foot in our broader warranty system offering and strategic account expansions, offering comprehensive building envelope solutions.

With CCM on slide 8, the construction material segment reported second quarter revenues of 1.1 billion growing approximately. 1% year-over-year with the increase. Coming from the positive contribution from the MTL acquisition. Organic Revenue was effectively flat in the quarter with re-roofing growth offset by a decline from new construction, headwinds and unfavorable weather. Also, as a reminder CCM second quarter Revenue was negatively impacted by approximately 15 million dollars. As Canadian customers accelerated purchases in the first quarter of 2025 in anticipation of tariff, related price increases

Adjusted ebit. Da for CCM. Was 346 million down 5% compared to last year with a margin of 31.6%. Adjusted ebit. Damn margin declined by 180 basis points to the previously mentioned higher operating costs. As we anticipated stronger second half volumes and investments in Innovation and enhancements to the Carlile experience.

Pricing and raw materials for flat on a year-over-year basis in the quarter.

Speaker 6: Turning to slide nine, our CWT segment reported second quarter revenues of $354 million, a 2% decline from the prior year, with organic revenue down 10%, largely due to softer residential end markets, roof coatings demand, and new commercial construction. CWT's adjusted EBITDA was $71 million, a 13% year-over-year decline, with an adjusted EBITDA margin of 19.9%, a decrease of 260 basis points. This margin compression was primarily due to volume deleverage. However, we are encouraged by the investments we are making in automation and COS initiatives, which we expect to yield an incremental $12 million of annualized EBITDA. Integration of our recent acquisitions, including MTL, PlastaFab, and Thermafoam, are ahead of plan, and we expect year-three synergies to exceed $34 million annually. We are leveraging our broader building envelope systems approach to drive cross-selling opportunities, illustrating the effectiveness of our M&A playbook.

The MTL acquisition continues to exceed expectations, creating substantial value through additional content per square foot in our broader warrantied system offering and strategic account expansions offering comprehensive building envelope Solutions.

Turning to slide 9, our CWT segment reported second quarter revenues of $354 million, a 2% decline from the prior year, with organic revenue down 10%, largely due to softer residential markets, roof coatings demand, and new commercial construction.

CWT's adjusted EBITDA was $71 million, a 13% year-over-year decline, with an adjusted EBITDA margin of 19.9%, a decrease of 260 basis points. This margin compression was primarily due to volume deleverage. However, we are encouraged by the investments we are making in automation and cost initiatives, which we expect to yield an incremental $12 million of annualized EBITDA.

Integration of our recent acquisitions, including MTL Plastifab and Thermafoam, is ahead of plan. We expect year 3 to sink $34 million annually.

Speaker 6: Moving to slide 11, our balance sheet remains strong with $68 million in cash and a net debt to EBITDA ratio of 1.4 times. We have $1 billion available under our revolving credit facility, offering significant flexibility for strategic investments. As shown on slide 12, during the quarter, we generated free cash flow of $258 million, maintaining a balanced approach to capital deployment. We repurchased 800,000 shares for $300 million, bringing our year-to-date share repurchases to $700 million, in line with our 2025 share repurchase target of $1 billion. We expect to generate approximately $1 billion of free cash flow in 2025, which would be our fourth consecutive year of delivering over $1 billion in operating cash flow.

We are leveraging our broader building envelope systems approach to drive cross-selling opportunities, illustrating the effectiveness of our M&A playbook.

Moving to slide 11, our balance sheet remains strong with 68 million in cash. And a net debt to debit Dow ratio of 1.4 times. We have 1 billion dollars available under our revolving credit facility offering significant flexibility for strategic Investments.

As shown on slide 12 during the quarter, we generated free cash flow of 258 million. Maintaining a balanced approach to Capital deployment. We repurchased 800,000 shares for $300 million. Bringing our year-to-date share repurchases to $700 million in line with our 2025 share repurchase Target of 1 billion dollars.

Speaker 6: The strong, consistent cash generation provides us with the financial flexibility to facilitate continued investment in capital expenditures, innovation, synergistic acquisitions, share buybacks, and dividends, and drive to our $40 of adjusted EPS goal. Turning to slide 13, our updated outlook for the full year of 2025 reflects low single-digit revenue growth at both CCM and CWT, as we expect contributions from recent acquisitions will be substantially offset by persistent end market challenges related to interest rate pressures, housing affordability, and lack of buyer confidence. We expect commercial reroofing demand will remain strong; however, we reduced our expectations for commercial and residential new construction and residential repair and remodel. We also expect second-half pricing to be flat year over year at both CCM and CWT.

We expect to generate approximately 1 billion dollars of free cash flow in 2025, which would be our fourth consecutive year of delivering over 1 billion dollars in operating cash flow.

The strong, consistent cash generation provides us with the financial flexibility to facilitate continued investment in capital expenditures, innovation, synergistic acquisitions, share buybacks, and dividends, and drive toward our $4.00 adjusted EPS goal.

Turning to slide 13. Our updated outlook for the full year of 2025 reflects low, single digit Revenue growth at both CCM and cwt as we expect contributions from recent acquisitions, will be substantially offset by persistent and Market, challenges related to interest rate, pressures, housing, affordability, and lack of buyer confidence.

We expect commercial re-roofing demand will remain strong. However, we reduce our expectations for commercial and residential new construction and residential repair and remodel,

Speaker 6: As a result, we now anticipate a 150 basis point decline in our full-year adjusted EBITDA margin due to the lower volume expectations and limited traction on the price increases announced earlier this year. We continue to expect our free cash flow margin to exceed 15% for the year. In conclusion, while we navigate these challenging end markets, our strong fundamentals support long-term growth. We remain focused on executing our Vision 2030 initiatives and delivering our Vision 2030 financial goals. With that, I will hand it back to Chris.

Expect second half pricing to be flat. Year-over-year at both CCM and cwt.

As a result. We now, anticipate a 150 basis, point Decline, and our full year, adjusted ebitda margin due to the lower volume expectations, and limited traction, on the price increases announced earlier this year.

We continue to expect our free cash flow margin to exceed, 15% for the year.

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

In conclusion while we navigate these challenging and markets are strong fundamentals, support long-term growth. We remain focused on executing our vision, 2030 initiatives and delivering, our vision 2030 financial goals with that, I will hand it back to Chris.

Thank you, Kevin turning to slide 14. And I am pleased to highlight the team's proactive approach focusing on the factors within our control, positioning Carlile for an even stronger. Future margin profile while staying true to our strategic priorities. Outlined in our vision 2030 plans.

In our CCM business, we are maintaining our Market leadership and have robust margin recovery strategies in place.

Despite current market challenges, our business model remains strong and resilient. We anticipate margin expansion through volume leverage ongoing. MTL Synergy, realization operational improvements via our Carlile operating system discipline, pricing through the Carlile experience and the adoption of emerging AI Technologies.

Chris Koch: For CWT, our self-help initiatives are pivotal during this period and are set to drive higher margins in 2026, leading to significant long-term margin expansion towards our Vision 2030 goal of achieving 30% adjusted EBITDA margins for CWT. We're harnessing automation benefits, optimizing our facility footprint, and capitalizing on synergies from our PlastaFab and Thermafoam acquisitions. Additionally, we are fostering growth through our innovative new products like Ultra Touch and expanding our Home Depot relationship to include single-ply roofing, insulation, flashing, and air barriers. Company-wide, we're focused on seamlessly integrating our strategic acquisitions while accelerating innovation through new product development. Our Vision 2030 targets remain firmly on track despite near-term challenges. We are committed to more than doubling adjusted EPS to $40 plus by 2030, maintaining industry-leading ROIC of 25% and achieving free cash flow margins exceeding 15%.

Our Innovation pipeline is strong, featuring products like Flex fast Solutions, which offer, customers premium, labor, savings, and Energy, Efficiency, enhancements.

For cwt, our self-help initiatives are pivotal during this period and are set to drive higher margins in 2026 leading to significant long-term margin expansion, towards our vision, 2030 goal of achieving 30% adjusted ebit da margins for cwt.

We're harnessing automation benefits. Optimizing our facility footprint and capitalizing on synergies from our plasti Fab and thermophilic acquisitions.

Additionally, we are fostering growth through our Innovative new products like Ultra touch and expanding. Our Home Depot relationship to include single ply, Roofing, insulation, flashing and are barriers.

Companywide we're focused on seamlessly integrating our strategic Acquisitions while accelerating Innovation through new product development.

Chris Koch: With a target organic revenue CAGR of over 5% and anticipated cumulative free cash flow exceeding $6 billion, we have multiple pathways to achieve our $40 of adjusted EPS as committed to in Vision 2030. The actions we're taking today, ranging from operational improvements and strategic acquisitions to innovation investments, position Carlisle to bridge current performance to these long-term objectives, all the while maintaining a disciplined approach to capital allocation. In conclusion, the second quarter showcased the robust strengths of our business model and strategic positioning. Our emphasis on the recurring reroofing revenue stream, strategic investments in innovation, and disciplined capital deployment are driving solid performance. I extend my gratitude to our Carlisle employees for their unwavering dedication. Their commitment to excellence is the foundation of our success and will continue to propel our outperformance. That concludes our formal comments, operator. We are now ready for questions.

Our vision 2030 targets, remain firmly on track. Despite near-term challenges, we are committed to more than doubling adjusted EPS to forty dollars plus by 2030. Maintain industry-leading roic of 25% and achieving free cash flow margins. Exceeding 15%

with a Target, organic revenue kager of over 5% and anticipated. Cumulative, free cash flow exceeding 6 billion. We have multiple Pathways to achieve our 40 dollars of adjusted EPS as committed to Envision 2030.

The actions we're taking today ranging from operational improvements and strategic Acquisitions to Innovation Investments position. Carlile to bridge current performance to these long-term objectives. All the while maintaining a disciplined approach to Capital, allocation

In conclusion, the second quarter of showcase, the robust strength of our business model and strategic, positioning our emphasis on the recurring re-roofing. Revenue stream, strategic investments in Innovation and discipline Capital deployment are driving solid performance. I extend my gratitude to our Carlile employees for their unwavering dedication.

Their commitment to excellence is the foundation of our success and will continue to propel our outperformance. That concludes our formal comments. Operator, we are now ready for questions.

Andrew (Conference Call Operator): Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question is from Garrett Schweiss from New Capital. Please go ahead.

Thank you.

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

Should you have a question, please? Press the star, followed by the number 1 on your touchtone phone.

You will hear a prompt that your hand has been raised.

Should you wish to decline from Napoleon process? Please press the star, followed by the number 2.

If you are using a speakerphone,

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1 moment, please for your first question.

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

Oh, hi, thanks. Um, just starting off, I was wondering if you could provide a little bit more color on how we should be thinking about Evita margins by segments in the second half of the year, given the new outlook.

Kevin Zdimal: Yes, Garrett. This is Kevin. And yeah, as we look at the margins, you know, overall, as we look from Q2 to Q3, I'll start with CCM, that the revenue in Q3 is lower than Q2. So some of that volume carries over that. We'll challenge the margin a little bit. So we expect to be around 31% in Q3. And then Q4, as you know, that's the lighter quarter for us overall. And we have CCM down around 29% in Q4. And then as you look at CWT, we would expect to be both the Q3 and Q4 right around 20%, some of that improvement because they have a lighter revenue as well in Q4. But that's when some of the synergies are kicking in from the PlastaFab acquisition as well as some of the automation that we've done in the factories.

Yes. Garrett, Miss Kevin and yes, we look at the margins, you know, overall, as we look from Q2 to Q3, I'll start with CCM that the revenue in Q3 is lower than Q2. So some of that volume carries over that, well, uh, challenge of margin a little bit. So we expect to be around 31% in Q3 and then Q4, as you know, that's the lighter quarter for us overall and we have CCM down around 29% in Q4.

And then if you look at ccwt, we would expect to be both the uh, Q3 and Q4 right around 20%, some of that Improvement because they have a lighter Revenue as well in Q4. But some, that's when some of the synergies are kicking in from the plaza Fab acquisition as well as some of the automation that we've done in the factories.

Garrett Schweiss: Great. That's helpful. My follow-up question is just if you can speak in a little bit more detail on some of the actions you're taking in CWT, the footprint rationalization, the automation, how to think of the timing of some of these cost savings. And I think you mentioned two figures, the target marks. I think there are 12 million and 30 million. Just wanted to be clear on these amounts or these run-rate figures or these expected savings you're anticipating in the second half. Just a little bit more hand-holding on the actions you're taking there. And then maybe also if there's any plans for CCM, just given the weaker demand environment.

Mehul Patel: And Garrett, I'll take the breakdown on CWT. So overall, to your point on the earnings call, Chris and Kevin mentioned there's $12 million of total synergies in CWT from automation projects that we implemented for Fernley and Kingman. There's also some additional plants that we're looking at to implement automation. And in addition to that, with those automation projects, the next phase is looking at some footprint consolidation. So you add those together, that's $12 million. And those are annualized savings. So we'll get a portion of that in the second half of '25, and then we'll get the remaining amount in '26. So we'll continue to see margin expansion there going into next year. And then lastly, on the synergies from the PlastaFab and Thermafoam acquisition, there's a total of roughly $14 million of synergy.

Great. That's that's helpful. Um that's all question is. Just if you can speak in a little bit more detail on some of the actions you're taking in cwt, the footprint rationalization, the the automation has a thicker, the timing of some of these cost savings and I think you mentioned 2 figures, the prepared remarks, I think there are 12 million and 30 million just wanted to be clear uh, on these amounts or these run rate figures or these. The expected savings are, you're anticipating the second half just just a little bit more handholding on on the actions you're taking there and then maybe also if there's any plans for for CCM, uh, just given the weaker demand environment.

Hey Derek, I'll take the a breakdown on cwt. So overall, uh, to your point on the um, earnings call. Um, Chris and Kevin mentioned there's 12 million dollars of total uh, synergies in cwt from automation projects that we implemented uh for friendly and Kingman. Uh, there's also some additional plants um that we're looking at to implement um Automation and in addition to that with those automation projects, the next phase is looking at some footprint consolidation. So you add those together, that's 1 million dollars and those are annualized savings. So, we'll get a portion of that in the second half of, uh, 25. And then we'll get a, uh, the remaining, uh, amount in 26. So we'll continue to see margin expansion there, uh, going into next year and then lastly, on the um, uh, synergies from the pasta table.

Mehul Patel: So you add those together, that's how you get to the roughly $30 million of opportunities for CWT.

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

Thermafoam acquisition. There's a total of roughly $14 million of synergy. So, you have those together; that's how you get to the roughly $30 million of opportunities for CWT.

And then on the CCM. Yep, CCM side. Yeah, we continue to 1, we had some expenses in the second quarter that we will not have repeat in the third quarter and the fourth quarter. Those were expenses that we added for the build-up for what we expected to be a strong season that didn't pan out. So those costs will be removed and then of course we're working on cos

Garrett Schweiss: Very good. Thank you very much.

As well at CCM, and there's opportunities there to improve margins.

Chris Koch: Thanks, Garrett.

Very good. Thank you very much.

That's scary.

Andrew (Conference Call Operator): Your next question is from Brian Blair from Oppenheimer. Please go ahead.

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

Brian Blair: Thank you. Afternoon, guys.

Kevin Zdimal: Hey, good afternoon.

Thank you. Good afternoon, guys.

Hey, good afternoon.

Brian Blair: I was hoping you could offer a little more detail on monthly order and revenue phasing through Q2 by segment and what you're seeing in the month of July relative to the Q2 run rates and how that perhaps influences the guy.

I was hoping you could offer a little more detail on. Um,

you know, monthly order and revenue phasing through, Q2 by segment and

Um, you know what you're seeing in these, uh,

The month of July relative to Q2, you know, run rates and how that.

Uh, perhaps influences, the guy.

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

Yeah, Brian similar to uh, what, you know, how we exited. Uh, I don't see a lot of change from from June to July, um, of course, you know, July has the holiday and some other things in it. So, usually it's not a, a terribly, uh, a robust month or 1. We have high expectations for but, you know, as we went through the

Chris Koch: And you know from the commercial side for us, I think a few contractors that I talked to about a week ago characterized it as, you know, healthy activity, but the activity had changed and that, you know, a reduction in bids to a certain degree, especially on the new side. And then something that I thought was interesting was this idea that there were a lot of pending to be pending but to yet be awarded, where decisions were just not being made. It wasn't that it wasn't going to happen, but the interest rate environment and the economic outlook and the anxiety over tariffs and that were causing people to have a more difficult time making decisions. So I think that progressed through the quarter, and that was a definite tone for maybe where we were more optimistic in April.

Being changed.

Chris Koch: And I think that tone is still here, and you heard some of the questions that the Fed chair got today around, you know, even some conflict on the Fed board there, I think, two dissenters about where we are. So I think that's causing some anxiety, which are making people delay things. It doesn't mean that we're not having activity. It doesn't mean that activity isn't planned or the economy isn't going well. It's just creating more anxiety. So that's kind of where we sit. And then, you know, in June, I think we also saw in some regions some weather impact, you know, about a day or two that that had an impact there as well. So, you know, kind of a little bit of more degradation, I would say, in the throughout the quarter.

And that um, you know, a reduction in bids to a certain degree uh especially on the new side and then uh something that that was interesting was this this idea that there were a lot of pending to be be pending but to yet be awarded where decisions were just not being made. It wasn't that it wasn't going to happen but the interest rate environment and the economic Outlook and the anxiety over tariffs and that were causing people to have a more difficult time making decisions. So I think that progressed through the quarter and that was a definite tone for maybe where we were more optimistic in April, and I think that tone is still here and you heard some of the questions that the Fed chair got today around, uh, you know, even some conflict on on the uh, fed board there. I think to denters about where we are. So I think that's causing some anxiety, which are making people delay things, it doesn't mean that we're not having activity. It doesn't mean that activity isn't planned or the economy isn't isn't going well, it's just creating more anxiety. So that's kind of where we sit. And then, you know, in June, I think uh, we also saw it in in some regions, some weather impact.

You know, about a day or 2 that uh that had an impact there as well. So, you know,

Chris Koch: And then, you know, from June to July, as you asked, pretty consistent with with each other.

Kind of a little bit of more degradation, I would say in the throughout the quarter, and then, uh, you know, from June to July, as you asked a pretty consistent with with each other.

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

Okay, it's very helpful.

Uh, maybe offer.

Uh, a little more, I guess, big picture color on on how your team's thinking about the impact or, uh, catalysts of, you know 1, big beautiful, bill on construction, markets, going forward and you have tax incentives. May may influence your own.

Uh, investment planning, or obviously never been shy about investing in the business.

Chris Koch: Yeah. Well, I think first on the I'll talk about the beautiful bill. Kevin could talk about the investing. But you know, one thing I'd remind everyone on, I think we called it out on, is that we're still generating a lot of cash flow, you know, over the last $40 billion a year. So you're right. We've never been shy about investing in innovation or investing in our manufacturing facilities to drive that, be the low-cost producer in the industry, and we're going to continue to do that. We're also seeing more investment in things like AI that we didn't have five years ago, but we're seeing some opportunities there that Kevin can get into as well.

But there's uh, incentive to do more.

Chris Koch: As far as the big, beautiful bill from a non-tech side, from just a generating of potential revenue, obviously, the biggest one for us is this idea that we bring manufacturing back to the US, right? And what that means and reinvestment in the US. When we looked at the sectors or verticals, Dodge produced them, I think, recently. You know, in '23, manufacturing was down a percent and a half. In '24, I think 23, 24 percent, and then even in '25 now about 19. So, you know, if we could see that bill have a reinvestment in America and we can see the tariffs have the action of driving some manufacturing back, I think that'd be very positive for us.

Yeah, I think first on the uh I'll talk about the beautiful little Kevin could talk about the investing but you know, 1 thing, I'd remind everyone of and I think we called it out on is that we're still generating a lot of cash flow uh, you know over the last 4 years billion dollars a year. So you're right. We've never uh been shy about investing in Innovation or investing in our manufacturing facilities uh to drive that be the low cost producer in the industry and we're going to continue to do that. We're also seeing more investment in things like AI that we didn't have 5 years ago, but we're we're seeing some opportunities there that Kevin can get into as well as far as the, the big beautiful bill for a non- tax side from just a, a generating of potential Revenue. Obviously the biggest 1 for us is this idea that we bring manufacturing, uh, back to the US, right? Uh, and what that means. And reinvestment in the US, uh, when we looked at, uh, the sectors, um, or verticals that is Dodge produced them. I think recently, you know, in 23 manufacturers was about a percent and a half and 24. I think, uh, 2324

Chris Koch: When you couple it up with the fact that our dollar per square foot on new construction and on reroofing is higher than it was five years ago and 10 years ago and 15 years ago, based upon additional demands for energy efficiency and labor savings, I think, you know, it could put us in a good position as we move forward. And Kevin, why don't you pick up the tax and how Carlisle would change our investment?

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

4% and then even in 25 now about 19. So you know if we could see that bill uh have a reinvestment in America and we can see the tariffs have the action of driving some manufacturing back. I think that'd be very positive for us. Uh when you couple it up with the fact that our dollar per square foot on new construction and on re-roofing is higher than it was 5 years ago and ten years ago and 15 years ago based upon additional demands for Energy. Efficiency, uh and labor savings. Um, I think you know, it could put us in a good position as we move forward and Kevin why don't you pick up the tax and how Carlile it would change our investment?

Yeah, the first thing we look at for a capital investment is going to be ROIC. So, certainly having depreciation in Year 1 versus over multiple years helps us return a higher ROIC. And that only impacts manufacturing facilities and R&D for new facilities. So, I don't think it'll be the number one driver for us in adding anything with new facilities, but certainly, it will have a positive impact on the ROIC as we're looking at those projects.

Brian Blair: All makes sense. And quick level-setting questions on Bonded Logic. You had mentioned, you know, run-rate sales and that EBITDA margins will, you know, be supportive of Vision 2030. What should we think about as normalized growth for the asset? And where are margins currently and what kind of profitability are you targeting over time?

All makes sense. A quick little sitting question on bonded logic: you had mentioned, you know, run rate sales.

And that even on margins will, you know, be supportive of vision 2030? Uh what should we think about? As as normalized growth for the asset? Um, and where are margins currently and what kind of profitability are you targeting over time?

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

Kevin Zdimal: Yeah. And as a new product, that's really what we're looking at is almost picking up, buying a new product. And the CAGR is going to be very high from a revenue standpoint. It's going to be, I mean, well into the double digits as far as what we're looking at. It'll take a year or two before it really starts ramping. But even in those initial years, that's what we're looking at. And yeah, I would agree with Chris on the gross margins and EBITDA margins above even where we stand today.

I'm almost picking up buying a new product, and the Keger is going to be very high from a revenue standpoint. It's going to be, I mean, well into double digits as far as what we're looking at. It'll take a year or two before it really starts ramping. But even in those initial years, that's what we're looking at. And yeah, I would agree with Chris on the gross margins and EBITDA margins, above or even where we stand today.

Brian Blair: Understood. Appreciate the detail.

Chris Koch: Thanks, Kevin.

Understood the detail.

Next.

Andrew (Conference Call Operator): Your next question is from Susan McLaurie from Goldman Sachs. Please go ahead. Once again, your next question is from Susan McLaurie from Goldman Sachs. Please go ahead.

Your next question is from Susan.

From Golden Sachs.

Please go ahead.

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

Susan Maklari: Can you hear me?

Chris Koch: Yeah. Sue we've got. Yes.

Can you hear me?

Susan Maklari: Okay. Good afternoon. How are you?

Yes, see we've got you.

Chris Koch: Afternoon. All well here. Thanks.

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

Okay, good afternoon. How are you? How are you? Good afternoon. Oh well here thanks.

Good. My first question is speaking about.

The opportunities that you do see in a more challenging environment, you talked in your prepared remarks about investing in Innovation and the Carlile experience can you help us? Understand how you can further those initiatives to perhaps even gain market, share or maintain market share in this kind of a situation?

Situation and what you're seeing in terms of the competition out there and what that could perhaps mean for Carlile in the upcoming quarters.

Chris Koch: Yeah, Sue, you know, I think this idea of investing in the Carlisle experience, and one of the things we're looking at in there is how can we use, obviously, AI to help facilitate that? How can we use mobile devices to provide more information quicker? One of the big discussions I had, and I talked to contractors quite a bit, and one of the big discussions we had was around trucking, right? And it was very interesting that one of the contractors said to us, "You know, it's been a problem for a long time. Our biggest issue is trucking. You know, it's not that the trucks are hard to get. It's not that we don't have them coming in, but if they're supposed to be there at 8:00 AM, they'll call us at noon, and then they won't show up until the next day," right?

Chris Koch: So that's kind of a direct quote. So how can we apply technology? How can we make investments in our Carlisle experience to help provide better information, better real-time information, better tracking, coordinate better with trucking companies, maybe even invest in our own, you know, certain assets to enhance that so that, once again, we get back to those key that key pillar of labor efficiency, right? Even for the contractor, it's not on the roof, but it's no use having a crew at a job site at 8:00 AM and not being able to begin work, right? That's just wasted time. So I think that gets to the investing in the Carlisle experience. It also helps with specifications. We've been looking at ways we can also, another example would be on inspections.

Yeah. Sue. You know, I think this idea of investing uh in the Carlo experience and and 1 of the things we're looking at in there is how can we use obviously AI to help? Facilitate that? How can we use mobile? Uh devices to provide more information quicker, 1 of the big uh discussions I had and I I you know, I talked to contractors quite a bit. Um and 1 of the big discussions we had was around Trucking, right? And, uh, it was very interesting, uh, that, that 1 of the contractors said to us, you know, it's been a, it's been a problem. Uh, for a long time, our biggest issue Trucking. You know, it it's not that the trucks are hard to get, it's not that, um, we don't have them coming in, but if they're supposed to be there at 8:00 am, uh, you know, they'll call us at noon and then they won't show up until the next day, right? So that's kind of a direct quote. So how can we, uh, apply technology? How can we make investments in our Carlile experience to help provide? Um, better information, better real-time information better tracking, uh, coordinate better with trucking companies, Maybe

Even invest in our own uh you know certain assets to to enhance that. So that once again we get back to those those key that key pillar of Labor, efficiency, right? Even for the contractor. It's not on the roof but it's no use having a, a, a crew at a job site at 8 a.m. and not being able to Begin work, right? That's just wasted time. So I think that gets to the

Chris Koch: You know, before we can issue a warranty and before a contractor can be paid, we do an inspection of the roof. And you know, right now, typical inspections for us would be, you know, somewhere around 30 days at the outset or the longest. But how could we get those to be condensed into something like a day later? Or how could we have our contractors be able to do their own inspection in some way with technology through whatever it might be, video or something like that, or using AI? So again, all these go back on that idea of how do we make the life of the contractor easier? How do we allow them to be more profitable? We can also do it through investments in innovation, which you know we're doing, where we're combining products into solutions that help them put the job up quicker.

Investing in the Carlile experience also helps with specifications. We've been looking at ways, we can. Also another example would be on inspections, you know, before we can issue a warranty and before a contract could be paid, uh, we do an inspection of the roof and, uh, you know, right now, uh, typical inspections for, uh, for us would be, you know, somewhere around 30 days at the, at the outset at the longest. But how could we get those to, uh, be condensed into something like a a day later? Or how could we have a our contracts be able to do their own inspections? Some way with technology through, um, whatever it might be a video or something like that uh or using AI. So again it it all these go back on that idea of how do we make?

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

The life of the contractor easier. How do we allow them to be more profitable? Uh, we can also do it through investments in Innovation, which, you know, we're doing, uh, where we're combining, uh, products into solutions, that help them, uh, put up, you know, put the job up quicker. So, um, all that points to share gains hopefully, and it points to more profitability. As we, I would say, share that, that labor savings or share that efficiency with them. Make them making more money and they'll be happier to buy Carlile. The other thing it does and you brought up competition, is it embeds us closer and creates a stickiness, right? Obviously, once you get something rolling on a trucking perspective, or on a new product perspective, it makes your life easier. Uh, you want to

Chris Koch: And as these products get more technical, the better training we can do both in our locations like Carlisle, PA, where we have a massive infrastructure around training, but also to ones where we can work with distribution to train in the field or at a contractor's job site, it just makes it stickier again for us and helps with competition. You know, I think when we get into competition, it probably begs the question around what's happening with some of the competitors we've talked about that might be foreign or otherwise. And you know, I would say that as we've always said, our US competition, the changes there with, you know, AMRIs and Elevate, the changes over at GAF have been productive. I think the industry has certainly become more professional and is investing in the right things as an industry around innovation, manufacturing excellence.

Chris Koch: And then I think what that also does, though, is it makes it more difficult for new competitors to enter as we have larger organizations that are well-established and have deep-seated roots in manufacturing and architecture relationships and contractor relationships. It makes it harder with all those things I talked about initially to displace us. So not much happening out of the ordinary on the competition front. A lot of talk out there, but not much that we're seeing that's changed over the last six months.

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

Um, you know, I think, when we get into competition, it probably begs the question on what's Happening uh, with some of the competitors. We've talked about that might be foreign or otherwise. And, you know, I would say that as, as we've always said, our us competition the changes there with, uh, you know, Amorous and Elevate the changes, over GAF have been productive. I think the industry is, uh, certainly become more professional and is investing in the right things as an industry around Innovation, uh, manufacturing Excellence. Uh, and then I think with that also does those. It makes it more difficult for new competitors to enter as we, uh, larger organizations that are well established and have deep seated roots and Manufacturing and Architectural relationships, and contract relationships, it makes it harder with all those things I talked about initially, uh, to displace this. So not much happening out of the ordinary on the competition front. A lot of talk, uh, out there but, but not not much that we're seeing. That's changed over the last 6 months.

Chris Koch: Yeah, the M&A pipeline, it's been, you know, I would say good, robust, as we've talked about. There are, you know, deals that are attempting to be made. I think what I said probably in the last call and I've said before has been this gap between sellers and buyers in terms of value. And I think it points back to this discussion we've had around increasing anxiety in the markets on people not wanting to take action because of uncertainty or greater uncertainty. So we've had a look, I can cite one example we were in where it basically ended up being a failed process because the gap between seller and buyer was too big, and it wasn't just us, obviously. If the process fails, it was across, you know, the entire set of bidders.

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

Yeah, the m&a pipeline. It's it's been, you know, I would say good robust is we've talked about uh there are um you know, deals that are tempting to be made. I think what I said it probably in the last call and I've said before has been this gap between uh, sellers and buyers in terms of value and I think it points back to

This discussion we've had around increasing anxiety in the markets is about people not wanting to take action because...

Chris Koch: So I think that, you know, kind of typifies where we are, that where two parties can come together and be reasonable, there's probably going to be a transaction. Obviously, Bonded Logic was one we worked on for a while. We were able to close that. PlastaFab was another one. But a great many of them don't ever get there. So that's kind of where we are. And capital allocation, Kevin will take that for you.

Of uncertainty, or or greater uncertainty. So, we've, uh, we've had a look. I, I could say, 1 example, we were in where, uh, it was, it basically ended up being a failed process because the gap between, uh, seller and buyer was too big and it wasn't just us. Obviously, if a process fails, it is a process, you know, the, the entire set of bitters. So I think that, you know, kind of typifies where we are so that, where 2 parties can come together and be reasonable, there's probably going to be a transaction obviously, biological is where we work on for a while. We're able to close that plastic. That was another 1, uh,

Kevin Zdimal: Yeah. Capital allocation, we've been fortunate to generate a lot of cash and be able to pick where we want to invest. So we look at each one of them, M&A, buybacks, dividends, capex, independently. Each one of them, we're looking for, we have return hurdles that we're looking for. So on M&A, as Chris said, we will remain a disciplined buyer. We're going to look for acquisitions that can be bolt-on acquisitions to our current product line or geography expansions. Continue to do that, but at the right cost. And then same with buybacks. When we look at buybacks, we look at our intrinsic value, and that's how we base our buyback decisions. So we'll continue with that going forward.

But a great, many of them don't ever get there so that's kind of where we are in capital allocation Capital. Yeah Capital allocation. We've been fortunate to generate a lot of cash and be able to pick where we want to invest so we look at each 1 of them. M&a BuyBacks dividends capex independently each 1 of them, we're looking for, we have returned hurdles that we're looking for. So

As Chris said, we will remain a disciplined buyer. We're going to look for acquisitions that can be both on acquisitions to our current product line or geography expansions. We will continue to do that, but at the right cost. And then same with buybacks, when we look at buybacks, we look at our intrinsic value, and that's how we base our buyback decisions. So, we'll continue with that going forward.

Susan Maklari: Okay. Thank you both for the color, and good luck with everything.

Chris Koch: Okay. Thanks, Sue!

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

Okay, thank you.

Andrew (Conference Call Operator): Your next question is from Tim Walsh from Baird. Please go ahead.

Your next question is from Tim Lodge from bear. Please. Go ahead.

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

Hey guys. Good afternoon. Thanks. Uh, thanks.

Chris Koch: Yeah, I would say that, first of all, I think the pricing environment is pretty good, considering we may not have achieved traction on the latest round of price increases, but we also haven't seen much degradation on pricing. And you know, when we look at the bidding environment, I think, Tim, it relates just to the volume around new, that with new going down, obviously, competitors or contractors are out there looking at reroofing. Our reroofing contractors are very strong. We're seeing, you can see that in there, but I think with a reduction in new, you're getting more bids on the jobs that are there. So, you know, I'm not unhappy with where we are on pricing. I think it's been pretty rational, and especially with the fact that raw materials are staying relatively flat too. So.So

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

Yeah, I would say that, uh, first of all, I think the pricing environment is pretty good. Uh, considering we may not have, uh,

Achieve traction on the the latest round of price increases but we also have it seen much degradation on pricing and you know, when we look at the bidding environment, I think Tim. It relates just to the volume around new that uh with new going down, obviously uh competitors or contractors are out there looking at re-roofing. Um our re-roofing contractors are very strong. We're seeing you can see that in there but I think uh with a reduction in new, you're getting uh more bids uh on the the jobs that are that are there. So um

Andrew (Conference Call Operator): not a lot there. I think just pretty much I just say it's volume related.

And especially with the fact that raw materials are staying relatively flat too. So

Speaker 2: Okay. Okay. And then I guess on the on the delays and some of the kind of bidding pushes and things, is is that strictly in new construction? and is it the whole building or is it because it obviously, if you're putting up a building, you're going to need a roof. So I guess is it the just the overall new construction environment and that's kind of kind of hitting you guys, or has that also kind of bled into any sort of like discretionary reroofing activity?

So, not a lot there. I think just pretty much I just say it's volume related.

Okay.

Andrew (Conference Call Operator): No, it doesn't appear to have moved into reroofing. Reroofing has been strong, continues to be strong. We've said that I think actually in a way this is a really good example of something that, we'd had concerns about, and not us, but the market, I think around what what happens in a pullback. Does reroofing stay strong? Is there really backlog? And obviously, in the quarter, reroofing stayed strong. labor was allocated to that pricing remained good and and we had good strength in reroofing. It's really related to new construction. and I think it's pretty much across the country, right? That, whether we're up, in Seattle in the northwest, or we're, in in LA, you know, I think when we look at the marketing, or the markets, excuse me, the sectors, you know, I mentioned the manufacturing being down. I still think that's still the case.

Okay. And then I guess on the, on the delays and and some of the kind of bidding pushes and things is, is that strictly in new construction, um, and is it the whole building or is it because it, obviously, if you're putting up a building, you're going to need a roof. So, I, I guess is it just that the overall, new construction environment and that's kind of kind of hitting you guys, or as that also kind of bled into any sort of like, discretionary reroofing activity.

No, it doesn't appear to have moved into re-roofing. Re-roofing has been strong and continued to be strong. We've said that I think actually in a way this is a really good example of something that uh uh, we'd had concerns about or not us. But the market, I think around what what happens in a pullback is re-roofing stays strong, is there really backlog. And obviously, uh, in the quarter re-roofing stage drawing labor is allocated to that pricing remain, good and and we had good strength and re-roofing. It's really related to new construction. Um, and I think it's pretty much across the country, right that, uh, whether we're up um,

Andrew (Conference Call Operator): warehousing has been down for now three years. data centers are up. You know, that's a popular one. We think somewhere between 30 and 40% year over year. But, the ones I mentioned and then a little bit of retail being impacted, I think this year, last year had some good growth, high single digits, and this year it's pretty flat. So again, it gets back to that idea of, I like the phrase of pending to be awarded, meaning it's there. and you know, if I can wait 30 days to see what's happening, maybe that's a good decision. maybe something changed on the interest rates and obviously would be a, maybe it makes some things loosen up. But I think it really is just the the statement around people being confused, harder to make a comfortable decision, and that anxiety. And obviously, it's it's on the margin.

In Seattle in the Northwest, uh, where we're uh, in in La. Um, you know, I think it's when we look at the marketing, uh, or the markets. Excuse me, the sectors. You know. I mentioned the manufacturing being down, I think that's still the case. Uh, warehousing has been down for now, 3 years, uh, data centers are up, you know, that's a popular 1, we think somewhere between 30 and 40% year-over-year, but uh, the ones I mentioned and then a little bit of retail being impacted. I think this year last year had some big growth High single digits in this year it's pretty flat

So again, it gets back to that idea. I like the phrase "pending to be awarded," meaning it's there. And, you know, if I can wait 30 days to see what's happening, maybe that's a good decision. Maybe something changed on the interest rates, and obviously would be.

Andrew (Conference Call Operator): So, yeah.

Speaker 2: Okay. Okay. And then I just have, I'm going to sneak one last one in, just kind of a broader kind of open-ended question, but but I think it's kind of topical for people. Just how should we think of Carlisle just kind of in the context of of kind of a, you know, kind of what's going on in a kind of a changing market? you know, two of your kind of larger distributors in roofing have been acquired by by different entities. there's some larger M&A in the market. you're seeing kind of maybe some some contractor M&A that's kind of kind of going on too. So how does that all kind of, you know, piece together and where does Carlisle kind of come out the other side with this?

Uh, maybe it makes some things loosen up, but I think it really is just that the statement around people being confused makes it a harder decision and that anxiety. And obviously, it's on the margin. So, um, yeah.

Okay. Okay and then I just have I'm going to speak 1 last 1 and just kind of a broader kind of open-ended question, but but I think it's kind of topical for people just

How should we think of Carlile, just kind of in the context of of kind of a, you know, kind of what's going on in a kind of a changing Market. Um, you know, 2 of your kind of larger, Distributors and Roofing have been acquired by by different entities. Uh, there's some larger m&a in the market. Um you're seeing kind of maybe some some contractor m&a that's kind of kind of going on too. So how does that all kind of? Um, you know, piece together and we're just Carlile kind of come out the other side with this.

Andrew (Conference Call Operator): Yeah, Tim, no question. That, I think I said to someone, you know, when when I joined in 17 years ago, compared to today, who knew that, roofing and building products was going to be such an interesting space. But obviously, the distribution changes. And by the way, you know, that might have impacted things in the in the second quarter as well, where we have a transaction occurring and, you know, they're working through the integration and things like that. So, obviously, those changes, private equity getting in and and buying contractors, there's been strong activity there. When I do talk to contractors, they they will tell you that there's definitely activity and they're being, you know, they're being talked to by people who are interested in rolling up that side of the industry. manufacturing, we see, more people wanting to get into the business.

Yeah, I tell no question that uh I think I said to someone, you know, when when I joined in 17 years ago, compared to today who knew that uh Roofing and Building Products was going to be such an interesting space, but obviously uh the distribution changes. And, and by the way, you know, that might have been impacted uh, things in the in the second quarter as well where we have a transaction occurring and you know, they're working through the integration and things like that. So um,

Andrew (Conference Call Operator): So it's a, it's a, evolving environment. But I think the key thing is that we still, you know, at least on the commercial roofing side, we think we're the leader there. we've got very strong competitive advantages in commercial roofing and building envelope solutions. We've got scale. I mean, our margins and our cash flow generation are giving us tremendous opportunity to invest in things right now, whether it be our own stock or whether it be AI or, you know, customer excellence, whether it's innovation or driving, costs reduced down in our factories through automation, and even through the use of AI there. you know, we just, those those margins that cash flow, sets Carlisle up to be able to make the investments we need to as we go forward and maintain our leadership position. R&D and innovation is going to be key.

Obviously those changes uh, private Equity getting in and and buying contractors. There's been strong activity there. When I do talk to contractors, they they will tell you that there is definitely activity and they're being, uh, you know, they're being talked to by people who are interested in rolling up that side of the industry, uh, manufacturing. We see uh, more people wanting to get into the business. So it's a, it's a, uh, evolving environment. But I think the key thing is that we still

Andrew (Conference Call Operator): I think one of the big things for us is going to be to be the preferred choice, to be that sticky preferred choice, to own the contractor, to make it through our customer service experience and customer intimacy, through our innovation, through our operational excellence, the product of choice. And I think if we do that, you know, everything else is going to work out. I think there will be changes around us, but I'd like to think of us as being, you know, the one place where people can come and get a consistent response from an organization that's been around for a long time. You know what you're going to get. You're going to get high quality, price to value, excellent customer service from our teams. And you know, we've got we've got good teams with good tenure. We've got a good workforce.

You know, at least on the commercial roofing side, we think we're the leader there. Uh, we've got very strong competitive advantages in Commercial Roofing and building envelope solution. Um, we've got scale, I mean, our margins and our cash flow generation are giving us tremendous opportunity to invest in things right now, whether it be our own stock or whether it be AI or, um, you know, customer Excellence, uh, whether it's Innovation or driving, uh, cost reduced down in our factories, through automation, uh, and even through the UCI there. Uh, you know, we just those those margins that cash flow, uh, sets Carlo up to be able to make the Investments. We need to, as we go forward and maintain our leadership position, uh, R&D and, and Innovation is going to be key. I I think 1 of the big things for us is going to be to be the Preferred Choice, to be that sticky. Preferred Choice to own the contractor to make it through our customer service, experience and customer intimacy to our Innovation to our operational.

Do that.

Andrew (Conference Call Operator): We've invested over the years. So I think about that that flywheel and you add M&A in there and you expand our product offering to the building envelope, and I like I like where we end up.

You know, everything else is going to work out. I think there will be changes around us, but I'd like to think of us as being, you know, the 1 place where people can come and get a consistent response from an organization that's been around for a long time. You know what? You're going to get, you're going to get high quality, uh, price to Value. Uh, excellent customer service from our teams. And, you know, we've got, we've got good teams with good tenure. We've got a good Workforce, we've invested over the years. So I think about that, that flywheel and you add m&a in there and you expand our product offering to the building envelope. And I like, I like where we end up.

Speaker 2: Okay. Great. Thank you for all the color. Appreciate it.

Andrew (Conference Call Operator): You bet, Tim.

Okay, great. Thank you, uh, for all the color. I appreciate it.

You bet Tim.

Kevin Zdimal: The next question is from Tomo Ikosano from JP Morgan. Please go ahead.

The next question is from Tomo.

From JP Morgan. Please go ahead.

Mehul Patel: Hi. Good afternoon. Thank you for taking my questions. This is Tomo.

Chris Koch: Hi, Tomo.

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

Mehul Patel: Thank you. My first question is, I like to have more color on pricing. And have stable commercial reroofing allowed you to sustain pricing power through, innovation and the color I experience compared to a softer demand in other in-markets and rising competitions? So that's my first question.

Thank you, my pleasure. Question is, um, I like to have more color on pricing and have favorable commercial re-roofing. Allowed you to sustain pricing power through, uh, Innovation and the Colorado experiences compared to the softer demand in other in markets and Rising competitions. So that's my, uh, first question.

Chris Koch: Yes. We look at innovation. That's where we look to price of the value that we bring to whether it's a contractor or a building owner. If we can bring them opportunities to reduce labor for their costs, then we deserve a higher price for our product. We share some of that savings with the contractor. Similar for a building owner, if it's energy efficiency play and the building owner is going to save money on energy, then we look to price our product higher there and share that savings with the building owner. So overall, as we have pricing this year, it's more about the the volume that Chris talked about into the second half of the year, and we're looking at pricing being stable both in the third and fourth quarters.

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

Yes, we look at Innovation that's where we look to price of the value that we bring to whether it's a contractor or building owner, if we can bring them opportunities, to reduce labor for their costs, then we deserve a higher price for our product. We share some of that savings with the contractor similar for building owner, if its Energy Efficiency play and the building owner is going to save money on energy, then we look to price our product higher there and and share that savings with the uh, building owner. So overall, as we have pricing this year, it's more about the, uh, the volume that Chris talked about into the second half of the year and we're looking at pricing being stable, both in the third and fourth quarters.

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

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

Okay, thank you very much. And my, uh, last question is, uh, EPS, uh, forecasts and you mentioned Reco, EPS for 2025, but compared to the prior comment of 10% plus growth. So, the tone this time seems slightly more tempered. Uh, but should we interpret your EPS upload including um, strong Capital, returns has a flat to slightly up year over year right now.

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

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

In 2025.

Mehul Patel: Yep. That's very clear. Thank you very much. That's all.

Andrew (Conference Call Operator): Thank you, Tomo.

Yep. Uh that's very clear. Thank you very much. That's all

Thank you, Tom.

Kevin Zdimal: Your next question is from David McGregor from Longbow Research. Please go ahead.

Your next question is from David McGregor from Longbow, research, please. Go ahead.

Speaker 6: Hi. Good afternoon. This is Joe Nolan on for David.

Andrew (Conference Call Operator): Hey, Joe.

Speaker 6: CCM, can you just talk? Hey, guys. On the CCM side, can you just talk about channel inventory levels for PPO, EPDM, and polyiso and just how you expect those to develop into the second half of the year?

Hi, good afternoon. This is Joe Nolan on for David.

CM: Can you just talk? Hey, guys.

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

Andrew (Conference Call Operator): Yeah. I think the, you know, obviously, we didn't get the loading we wanted. So I would say that inventory levels have just been pretty consistent with what they were in the fall. And as we move through the spring, a little bit on the lighter side, I think, relative to, you know, what we would have expected, especially if the season had been more robust around new construction. But I don't see a big, you know, change in inventory levels at Carlisle. Certainly, we have plenty of supply to keep our OTD up and to service all those. But no real change, I think. Perhaps at the distribution level in a couple of cases where they're going through integrations and acquisitions and that, there may be some delay and maybe light in some areas, but nothing of note that I picked up, Kevin.

Uh, yeah, I think the, uh, you know, obviously we didn't get the load we wanted. So I would say that inventory levels have just been pretty consistent with what they were in the fall. And as we move through the spring, um,

Those, um, but I, I no real change, I think, perhaps, um, at the distribution level in a couple of cases where they're going through integrations and, uh, acquisitions. And that there may be some delay and maybe light in some areas, but, um, nothing of note that I, I picked up, Kevin.

Chris Koch: I would agree with that analysis as well. Nothing bad.

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

Speaker 6: Okay. Thanks. And then just to follow on the pricing questions, we heard that some manufacturers have announced a polyiso increase. Could you just talk about your confidence in that increase given the softer traction on the earlier increases?

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

Okay, thanks, and then just to follow on the pricing questions. We heard that some manufacturers have announced a poly ISO increase. Um, could you just talk about your confidence in that increase given the softer traction on the earlier increases?

yeah, I think that you know, we've embodied that in our projection for really a a flat second half on pricing and um

as we mentioned, we didn't see a lot of traction, uh, occurring on those polio so price increases and I I wouldn't anticipate without

Some change in, in demand, on the new construction side. I wouldn't see uh, that or uh, the 1 other variable that would could have happened or could happen is if there was some, uh,

Major, uh, you know, action from A supplier of MDI or that that might, uh, related tariffs or otherwise it might create some, uh, price issue there. But, uh, our forecast for that is, is, uh, no traction on those price increases in Flats of the year.

Speaker 6: Okay. Got it. And then if I could sneak one last one in. In the prepared remarks, you talked about a $20 million impact to volumes from weather in the second quarter. Do we expect that to be fully made up in the second half? And was there any incremental storm demand created from those, or were these maybe too moderate of storms to create that demand?

Okay, I got it. And then if I could sneak one last one in in the prepared remarks, you talked about a $20 million impact to volumes from weather in the second quarter. Should we expect that to be fully made up in the second half? And was there any incremental storm demand created from those, or were these maybe too moderate of storms to create that demand?

Andrew (Conference Call Operator): I can't really comment on the storms. I think the storms have been getting worse. I know on the residential side, they talk about that a lot. On the shingles, on the commercial construction side, our roofs are very robust. And I would say that any storms we had, you know, they do impact future demand because obviously, where leaking occurs or some damage that creates future demand. Will it, will the demand that we saw from the weather show up in the third quarter? I imagine some of it, but remember, we think we're at a pretty full employment, of, contractor labor, situation. So likely, that rolls into the backlog or pushes something else into the backlog while they repair that. So we're still a little bit constrained.

Andrew (Conference Call Operator): And it probably goes without saying that, certain immigration actions and things like that have also been affected, you know, or contracts have been affected by that. So I wouldn't say there's surplus labor that can address, you know, that that kind of weather-related demand and make it up in one quarter.

I can't really comment on the storms. I think the storms have been getting worse. I know on the residential side, uh, they talk about that a lot on the shingles. On, the commercial construction side are, are roofs, are are very robust. Uh, and, um, I would say that any storms, we had, you know, they do impact future demand, because, obviously we're leaking occurs or some damage that creates future demand, will, it will the demand that we saw from the weather show up in the third quarter. I imagine some of it, but remember, we think we're at a pretty full employment, uh, of uh, contractor labor, uh, situation. So likely, uh, that rolls into the backlog or pushes something else into the backlog while they repair that. So, we're still a little bit constrained and probably goes without saying that uh, certain immigration actions and things like that. Have also been affected, you know, or contracts have been affected by that. So I wouldn't say they're Surplus labor that can address, you know that

That kind of weather related demand and make it up in 1 quarter.

Speaker 6: Got it. Makes sense. Thanks, I'll pass it on.

Andrew (Conference Call Operator): Thanks, Joe.

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

Thanks Joe.

Kevin Zdimal: Your next question is from Keith Hughes from Tourist. Please go ahead.

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

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

Andrew (Conference Call Operator): Yeah, indeed. a little bit in '25 here in, in a rise from, Q1 to Q2, a couple percent, but then flattening out through Q3, and Q4, Keith.

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

Garrett Schweiss: Okay. Is that?

Yeah, and indeed, uh, a little bit in 25 years, in, uh, a rise from Q1 to Q2, uh, a couple percent. Uh, but then flattening out through Q3, uh, in Q4.

Andrew (Conference Call Operator): If I may.

Garrett Schweiss: Yeah, that would still be some inflation. That would still be inflation this year, though, in the second half?

Andrew (Conference Call Operator): It would be if you look from Q2 of '24 to, yeah, Q2 of '25, but sequentially, not much inflation after Q1 of this year, or really not much inflation actually, since Q3 of '24.

Garrett Schweiss: Okay. and if we look within CWT, you talked we talked a lot about flat pricing, non-traction of price increases. Is there any product there that you're specifically struggling with to get price increases through and maybe alternately something you're doing a little bit better than average?

Okay, is that? Yeah, that would still be some inflation. That would still be in place here, though. In the second half it, it it, it would be if you look from Q2 of 24 to, uh, yeah, Q2 of, of, um, 25, but sequentially, not much inflation after q1 of this year or really not much inflation actually, uh, since Q3 of 24,

Brian Blair: Yeah. So overall, this is Maple here for CWT. Pricing is is stable year over year, and it's pretty much across all the different segments.

Okay um and if we look within cwt, you've talked we talked a lot about flat pricing, you know, non-raid struggling with to get price increases through and maybe alternately some, you're doing a little bit better than average.

Yeah, so overall, this is Mayo here for CWT. Pricing is stable year-over-year, and it's pretty much across all the different segments.

Garrett Schweiss: Okay. Thank you.

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

Okay, thank you in Springfield Keith. Just I know last year uh there was uh pricing pressure on that specific category so that's bottomed out um earlier this year there was some price increase announcements but I think given the challenges in residential um it's going to remain stable versus going up.

Garrett Schweiss: Okay. Great. Thank you.

Okay, great. Thank you.

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

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

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

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

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