Carlisle Companies Reports Record Third Quarter Results
Carlisle Companies Incorporated (“Carlisle”) announced its third quarter 2022 financial results.
- Generated record year-over-year third quarter revenues of $1.8 billion, up 36.4% (28.3% organic)
- Delivered record GAAP Diluted EPS of $4.84 and Adjusted Diluted EPS of $5.66, an increase of 89.3% from prior year
- Underlying trends in U.S. non-residential construction markets remained strong
- Significant interest and activity in Carlisle’s sustainable building solutions driven by rising energy costs, sustainability trends and projected investment from the Inflation Reduction Act
- Repurchased 105 thousand shares for $26 million in the quarter, totaling $201 million YTD
- Increased annual dividend 39% to $3.00, our 46th consecutive year of increases
Comments from Chris Koch, Chair, President and Chief Executive Officer
“In the third quarter, the Carlisle team continued to focus on delivering and enhancing the Carlisle Experience – our commitment to meeting the needs of our end users, distributors and contractors by providing industry-leading, energy-efficient solutions with the highest quality standards – to drive outstanding results. The performance delivered by the entire Carlisle team this quarter was especially remarkable given the macroeconomic environment, which has been a challenge for several years, and is becoming even more complicated with rising interest rates, high inflation and a war in Europe. Despite another year of uncertainty and volatility in global markets, the Carlisle team came together to deliver on our commitments, leveraging strong underlying U.S. non-residential construction demand and mitigating market pressures to deliver a sixth consecutive quarter of record year-over-year sales and earnings performance in the midst of a global pandemic and recovery.
As we move into the fourth quarter, these results continue to demonstrate Carlisle’s progress towards achieving our goals as laid out in Vision 2025, including delivering $15 of GAAP earnings per share.
Highlighting some of the significant drivers and accomplishments in the third quarter:
- U.S. non-residential construction demand remains strong, and we are optimistic that solid underlying trends will overcome recent and well-understood macroeconomic pressures;
- Pricing at all of our businesses continues to be positive;
- Across our businesses, improvements in supply chain and greater availability of materials are leading us toward a more normalized operating environment;
- Residential markets are facing increased pressure due to interest rate hikes, significant inflation, and, at the consumer level, a reduction in building products expenditures. While impactful in the short term, we believe that longer term, fundamentals in residential markets remain attractive given the undersupply of homes in the U.S. and growing demand for energy-efficient building solutions, particularly given recent supporting legislation and rising energy costs;
- Aerospace markets continue their recovery, driving record backlogs and increased profitability in our CIT business on the back of restructuring actions taken over the past few years. We are very optimistic about the prospects for continued recovery in the aerospace markets, supported by a well-known shortage of aircraft which has caused U.S. airlines to cut back on flights as they struggle to cope with the rebound in passenger demand;
- We also continued our disciplined approach to capital allocation in the third quarter by:
- Repurchasing 105 thousand shares for $26.1 million, adding to our cumulative share repurchases since 2017 of $2 billion;
- Paying $38.9 million of dividends in the quarter, and raising our annual dividend 39% to $3.00, which continues our 46-year trend of annual dividend increases; and
- Investing $47.8 million into our businesses in the form of capital expenditures to drive innovation and the Carlisle Experience as exemplified by the third quarter launch of our industry-first 16′ TPO line in Carlisle, PA.
In closing, I want to again express my gratitude for the hard work and perseverance of our employees. Their resilience and experience have helped us deliver record results throughout 2022 and will continue to provide Carlisle with a competitive advantage as we navigate this highly complex environment. We remain optimistic for the remainder of 2022, and are excited to continue our drive to exceed Carlisle’s commitments under Vision 2025.”
Third Quarter 2022
Revenue for the third quarter of $1.8 billion increased 36.4% year-over-year. Organic revenue increased 28.3% (organic revenue defined as revenue excluding acquired revenues within the last 12 months and the impact of changes in foreign exchange rates versus the U.S. Dollar). Acquired revenues contributed a total of 9.2% in the quarter. Changes in foreign exchange rates had a negative 1.1% impact on revenues.
Operating income for the third quarter of $348.2 million increased 109.1% from $166.5 million in the third quarter of 2021. Income from continuing operations for the third quarter of $255.2 million increased 125.8% from $113.0 million in the third quarter of 2021. Adjusted EBITDA for the third quarter of $437.8 million increased 74.9% from $250.3 million in the third quarter of 2021.
Diluted earnings per share (EPS) for the third quarter of $4.84 increased 128.3% from $2.12 in the third quarter of 2021. Adjusted diluted EPS for the third quarter of $5.66 increased 89.3% from $2.99 in the third quarter of 2021. The increase in EPS reflects strong operating results at CCM, continued contributions from CWT, improving performance at CIT and CFT, and share repurchases.
Third Quarter 2022 Segment Highlights
Carlisle Construction Materials (“CCM”)
- Revenues of $1.1 billion, up 39.1% (+40.1% organic) year-over-year, were driven by the strength of U.S. commercial roofing demand and price realization, partially offset by what we consider near-term softness in our Architectural Metals business, challenges in our European business due to war and the related energy crisis, and unfavorable impact from changes in foreign exchange rates.
- Operating income was $341.7 million, up 88.7% year-over-year. Adjusted EBITDA was $354.1 million, up 82.4% year-over-year, reflecting an adjusted EBITDA margin of 32.5%, which was positively impacted by higher volumes, positive pricing, and savings from the Carlisle Operating System (COS), and partially offset by unfavorable product mix and raw material, freight and wage inflation.
- We now expect to deliver full year revenue growth in the 35-40% range.
Carlisle Weatherproofing Technologies (“CWT”)
- Revenues of $406.7 million, up 44.3% (+2.2% organic) year-over-year, were driven by the Henry acquisition and positive pricing.
- Operating income was $9.6 million, up 60.0% year-over-year. Adjusted EBITDA was $59.1 million, up 27.4% year-over-year reflecting an adjusted EBITDA margin of 14.5%, which was positively impacted by contribution from Henry, positive pricing, and savings from COS, and partially offset by lower volumes in residential-related businesses, and raw material, freight and wage inflation.
- We continue to expect full year 2022 sales to increase approximately 60% year-over-year.
Carlisle Interconnect Technologies (“CIT”)
- Revenues of $223.7 million, up 25.2% (+25.5% organic) year-over-year, were driven by continued strengthening of aerospace and medical end markets.
- Operating income was $12.9 million, up from a loss of $0.5 million in 2021. Adjusted EBITDA was $33.3 million, up 43.5% year-over-year reflecting an adjusted EBITDA margin of 14.9%, which was positively impacted by higher volumes, positive pricing, and COS savings, partially offset by wage inflation and unfavorable mix.
- We now expect full year 2022 sales to exceed 20% year-over-year.
Carlisle Fluid Technologies (“CFT”)
- Revenues of $73.4 million, up 3.2% (+10.1% organic) year-over-year, reflected higher volumes and positive pricing, partially offset by unfavorable impact from changes in foreign exchange rates.
- Operating income was $11.7 million, up 149% year-over-year. Adjusted EBITDA was $15.8 million, up 45.0% year-over-year reflecting an adjusted EBITDA margin of 21.5%, which was positively impacted by price realization and savings from COS, and partially offset by raw material and wage inflation, and unfavorable impact of foreign exchange.
- We now expect full year 2022 sales to increase mid-single digits including foreign exchange headwinds.
Operating cash flow from continuing operations for the nine months ended September 30, 2022, was $591.2 million, an increase of $315.8 million versus the prior year. Free cash flow from continuing operations was $460.7 million, an increase of $267.5 million versus prior year (defined as cash provided by operating activities less capital expenditures, and comprised of continuing operations). This increase was driven by higher net income year-over-year, partially offset by higher working capital uses related to the impact of rising raw material costs and volume on inventory. During the quarter ended September 30, 2022, we deployed $26.1 million toward share repurchases and paid $38.9 million in cash dividends. As of September 30, 2022, we had $625.4 million of cash and cash equivalents and $1.0 billion of availability under our revolving credit facility.
For the full third quarter results, click here.
About Carlisle Companies Incorporated
Carlisle Companies Incorporated is a leading supplier of innovative Building Envelope products and energy-efficient solutions for customers creating sustainable buildings of the future. Through its building products businesses (CCM and CWT) and family of leading brands, Carlisle delivers innovative, labor-reducing and environmentally responsible products and solutions to customers through the Carlisle Experience. Over the life of a building, Carlisle’s products help drive lower greenhouse gas emissions, improve energy savings for building owners and operators, and increase a building’s resiliency to the elements. Driven by its strategic plan, Vision 2025, Carlisle is committed to generating superior shareholder returns and maintaining a balanced capital deployment approach, including investments in our businesses, strategic acquisitions, share repurchases and continued dividend increases. Carlisle also is a leading provider of products to the Aerospace, Medical Technologies and General Industrial markets through its Interconnect Technologies (CIT) and Fluid Technologies (CFT) business segments.
Jim Giannakouros, CFA – Vice President of Investor Relations – email@example.com – (480) 781-5135
Source: Carlisle Companies Incorporated