Carlisle Companies Incorporated (CSL) Bundle
Understanding Carlisle Companies Incorporated (CSL) Revenue Streams
Understanding Carlisle Companies Incorporated’s Revenue Streams
The revenue of Carlisle Companies Incorporated (CSL) for the third quarter of 2024 was $1,333.6 million, representing a 5.9% increase compared to $1,259.8 million in the same quarter of 2023. For the first nine months of 2024, total revenue reached $3,880.7 million, a 12.2% increase from $3,459.4 million in the first nine months of 2023.
Breakdown of Primary Revenue Sources
The primary revenue sources for CSL are categorized into two main segments:
- Carlisle Construction Materials (CCM)
- Carlisle Weatherproofing Technologies (CWT)
For the third quarter of 2024, revenue by segment was as follows:
| Segment | Revenue (Q3 2024, in millions) | Revenue (Q3 2023, in millions) | Change (%) |
|---|---|---|---|
| CCM | $998.2 | $914.0 | 9.2% |
| CWT | $335.4 | $345.8 | -3.0% |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate for the third quarter of 2024 was driven primarily by higher sales in the non-residential construction end market, which contributed $102.2 million in growth. For the first nine months of 2024, the increase from non-residential construction was $452.6 million.
Contribution of Different Business Segments to Overall Revenue
For the first nine months of 2024, the contribution to overall revenue from each segment was:
| Segment | Revenue Contribution (in millions) | Percentage of Total Revenue |
|---|---|---|
| CCM | $2,870.7 | 73.9% |
| CWT | $1,010.0 | 26.1% |
Analysis of Significant Changes in Revenue Streams
Significant changes in revenue streams included:
- A notable increase in the CCM segment due to strong demand in non-residential construction.
- A decrease in CWT revenue, primarily due to lower sales in the residential end market, which saw a decline of $31.9 million in Q3 2024 compared to Q3 2023.
Overall, the revenue dynamics reflect a strong performance in non-residential markets while residential sales faced challenges.
A Deep Dive into Carlisle Companies Incorporated (CSL) Profitability
Profitability Metrics
In examining the financial health of the company, profitability metrics provide essential insights into its operational efficiency and overall performance. The following sections detail gross profit, operating profit, and net profit margins, along with trends over time and comparisons to industry averages.
Gross Profit, Operating Profit, and Net Profit Margins
For the third quarter of 2024, the company reported:
- Gross Profit: $514.4 million with a gross margin of 38.6%
- Operating Profit: $316.4 million with an operating margin of 23.7%
- Net Income: $244.3 million, representing a net profit margin of 18.3%
For the nine months ending September 30, 2024:
- Gross Profit: $1,482.2 million with a gross margin of 38.2%
- Operating Profit: $919.1 million with an operating margin of 23.7%
- Net Income: $1,149.0 million, leading to a net profit margin of 29.6%
Trends in Profitability Over Time
Examining the profitability trends, the following changes were observed from 2023 to 2024:
- Gross Margin: Increased from 37.0% in Q3 2023 to 38.6% in Q3 2024.
- Operating Margin: Slight decrease from 23.8% in Q3 2023 to 23.7% in Q3 2024.
- Net Profit Margin: Decreased from 21.1% in the first nine months of 2023 to 29.6% in the same period of 2024.
Comparison of Profitability Ratios with Industry Averages
The company's profitability ratios compared to industry averages are as follows:
| Metric | Company | Industry Average |
|---|---|---|
| Gross Margin | 38.6% | 35.0% |
| Operating Margin | 23.7% | 22.0% |
| Net Profit Margin | 18.3% | 15.5% |
Analysis of Operational Efficiency
The operational efficiency of the company can be analyzed through various metrics:
- Cost Management: Selling and administrative expenses increased to $191.8 million in Q3 2024, up from $161.7 million in Q3 2023, marking an increase of 18.6%.
- Gross Margin Trends: The gross margin improved significantly, indicating better cost control and pricing power.
- Adjusted EBITDA Margin: For Q3 2024, the adjusted EBITDA margin stood at 27.6%, slightly up from 27.0% in Q3 2023.
In summary, the profitability metrics reflect a strong operational performance, with margins generally exceeding industry averages and demonstrating effective cost management strategies.
Debt vs. Equity: How Carlisle Companies Incorporated (CSL) Finances Its Growth
Debt vs. Equity: How Carlisle Companies Incorporated Finances Its Growth
Debt Levels: As of September 30, 2024, the company has total long-term debt of $2,290.2 million, which includes:
| Debt Instrument | Amount (in millions) | Fair Value (in millions) |
|---|---|---|
| 2.20% Notes due 2032 | $550.0 | $465.5 |
| 2.75% Notes due 2030 | $750.0 | $689.2 |
| 3.75% Notes due 2027 | $600.0 | $590.0 |
| 3.50% Notes due 2024 | $400.0 | $398.6 |
| Unamortized discount, debt issuance costs and other | $(9.8) | N/A |
The current portion of this debt is $403.0 million, while the total long-term liabilities stand at $2,647.1 million.
Debt-to-Equity Ratio: The company’s debt-to-equity ratio as of September 30, 2024, is calculated as follows:
Debt-to-Equity Ratio = Total Debt / Total Equity
Total Equity = $2,762.9 million
Debt-to-Equity Ratio = 2,290.2 / 2,762.9 ≈ 0.83
This ratio is below the industry average of approximately 1.0, indicating a conservative approach to leveraging.
Recent Debt Issuances and Refinancing Activity: During the nine months ended September 30, 2024, the company executed borrowings and repayments under its Credit Agreement totaling $22.0 million at a weighted average interest rate of 8.50%. There was no outstanding balance as of September 30, 2024, with $1.0 billion available for use under the Credit Agreement.
Credit Ratings: The company's credit ratings reflect its financial health, with compliance to various covenants and limitations under senior notes and credit facilities as of September 30, 2024.
Balancing Debt and Equity Financing: The company maintains a strategic balance between debt financing and equity funding, which is evident from its recent capital allocation. For the nine months ended September 30, 2024, cash used in financing activities amounted to $1,242.9 million, primarily driven by share repurchases of $1,166.1 million and cash dividend payments of $127.4 million.
The company’s approach to managing its financing structure allows it to support growth initiatives while maintaining a healthy balance sheet. The net cash provided by operating activities for the same period was $659.7 million, providing a solid foundation for its financing strategies.
Assessing Carlisle Companies Incorporated (CSL) Liquidity
Assessing Carlisle Companies Incorporated's Liquidity
Current and Quick Ratios
The current ratio for Carlisle Companies Incorporated as of September 30, 2024, is 2.24, calculated by dividing current assets of $2,180.1 million by current liabilities of $974.9 million. The quick ratio is 1.32, derived from current assets minus inventories of $462.4 million, yielding a quick asset total of $1,717.7 million against current liabilities.
Analysis of Working Capital Trends
As of September 30, 2024, working capital is reported at $1,205.2 million, showing an increase from $1,041.4 million in the previous year. This positive trend indicates improved operational efficiency and liquidity management.
Cash Flow Statements Overview
The cash flow statement for the nine months ended September 30, 2024, shows:
| Cash Flow Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net cash provided by operating activities | $659.7 | $812.4 |
| Net cash provided by (used in) investing activities | $1,508.9 | ($86.7) |
| Net cash used in financing activities | ($1,242.9) | ($994.5) |
| Change in cash and cash equivalents | $925.1 | ($268.8) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the cash and cash equivalents stand at $1,530.6 million, significantly up from $576.7 million at year-end 2023. The liquidity position is bolstered by available credit facilities of $1.0 billion, ensuring ample liquidity for operational needs and strategic initiatives.
Debt Overview
The total long-term debt as of September 30, 2024, is $2,290.2 million, with a debt-to-equity ratio of 0.83. This indicates a balanced approach to leveraging, providing financial flexibility while maintaining a strong equity base.
Conclusion
Overall, the liquidity and solvency metrics indicate a strong financial position for Carlisle Companies Incorporated, with robust cash flows and a solid working capital foundation.
Is Carlisle Companies Incorporated (CSL) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will examine key valuation ratios, stock price trends, dividend yield, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a critical metric for evaluating a company's valuation relative to its earnings. As of the latest financial data:
- P/E Ratio: 19.9
- Trailing Earnings Per Share (EPS): $14.74
Price-to-Book (P/B) Ratio
The P/B ratio compares a company's market value to its book value. Current figures are:
- Market Price: $293.00
- Book Value Per Share: $78.70
- P/B Ratio: 3.72
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
This ratio provides insight into the company's overall valuation. The current EV/EBITDA ratio is:
- Enterprise Value: $6.55 billion
- Adjusted EBITDA: $1.05 billion
- EV/EBITDA Ratio: 6.2
Stock Price Trends
Analyzing stock price movements over the past 12 months:
- 12-Month High: $310.00
- 12-Month Low: $220.00
- Current Price: $293.00
- 12-Month Price Change: +15.6%
Dividend Yield and Payout Ratios
Dividends are a vital part of shareholder returns. The latest dividend metrics are:
- Annual Dividend: $2.70 per share
- Dividend Yield: 0.92%
- Payout Ratio: 18.3%
Analyst Consensus on Stock Valuation
Current analyst ratings provide insight into market sentiment:
- Buy Ratings: 8
- Hold Ratings: 5
- Sell Ratings: 2
| Metric | Value |
|---|---|
| P/E Ratio | 19.9 |
| P/B Ratio | 3.72 |
| EV/EBITDA Ratio | 6.2 |
| Current Stock Price | $293.00 |
| 12-Month High | $310.00 |
| 12-Month Low | $220.00 |
| Annual Dividend | $2.70 |
| Dividend Yield | 0.92% |
| Payout Ratio | 18.3% |
Key Risks Facing Carlisle Companies Incorporated (CSL)
Key Risks Facing Carlisle Companies Incorporated
The financial health of the company is influenced by several internal and external risk factors that investors should consider.
Industry Competition
The company operates in a highly competitive environment where it faces risks from both established players and new entrants. Competitors often engage in aggressive pricing strategies, which can pressure margins. As of September 30, 2024, the company reported revenues of $3,880.7 million, a 12.2% increase from $3,459.4 million in the same period in 2023, but competition remains a significant concern.
Regulatory Changes
Changes in regulations can impact operational costs and compliance requirements. The company has accrued $6.3 million in anticipation of potential withholding taxes due to local regulations governing cash transfers outside certain jurisdictions.
Market Conditions
Fluctuations in market demand can affect sales. The company’s revenue in the non-residential construction market increased by $102.2 million in the third quarter of 2024, driven by continued inventory normalization and re-roofing activities. However, any downturn in this sector could adversely impact revenues.
Operational Risks
Operational risks involve supply chain disruptions and production inefficiencies. The company reported $462.4 million in inventories as of September 30, 2024, reflecting a strategic response to market demands but also exposing it to risks associated with inventory management.
Financial Risks
Financial risks include exposure to interest rate fluctuations and credit risks. The company reported net interest expense of $18.6 million in Q3 2024, down from $19.4 million in Q3 2023. As of September 30, 2024, total long-term debt stood at $2,290.2 million, necessitating careful management of debt levels and refinancing risks.
Strategic Risks
Strategic risks pertain to the company’s ability to execute its business strategy effectively. The company’s recent acquisition of MTL for $414.3 million, net of cash acquired, represents a significant investment that needs to yield returns. Strategic missteps could result in financial losses or diminished market share.
Mitigation Strategies
The company employs various strategies to mitigate these risks:
- Operational Efficiency: Focus on enhancing supply chain management to reduce costs and improve delivery timelines.
- Financial Management: Active monitoring of interest rates and managing debt levels to maintain favorable financing conditions.
- Market Diversification: Exploring new markets and segments to reduce dependency on specific sectors.
Financial Overview
| Metric | Q3 2024 | Q3 2023 | Change % |
|---|---|---|---|
| Revenues | $1,333.6 million | $1,259.8 million | 5.9% |
| Operating Income | $316.4 million | $299.9 million | 5.5% |
| Net Income | $244.3 million | $265.6 million | -8.4% |
| Adjusted EBITDA | $367.9 million | $339.7 million | 8.3% |
Investors should closely monitor these risk factors to assess the overall financial health and future performance of the company.
Future Growth Prospects for Carlisle Companies Incorporated (CSL)
Future Growth Prospects for Carlisle Companies Incorporated
Analysis of Key Growth Drivers
The company is positioning itself for future growth through several strategic initiatives. Key growth drivers include:
- Product Innovations: Continuous investment in research and development (R&D) has led to increased R&D expenses of $8.1 million in Q3 2024, up from $7.2 million in Q3 2023, reflecting a focus on sustainable and energy-efficient products.
- Market Expansions: The non-residential construction market has shown strong performance, with sales increases of $102.2 million in Q3 2024 and $452.6 million year-to-date.
- Acquisitions: The acquisition of MTL for $414.3 million in 2024 is expected to enhance product offerings and market reach.
Future Revenue Growth Projections and Earnings Estimates
Revenue for the first nine months of 2024 reached $3,880.7 million, compared to $3,459.4 million in the same period in 2023, marking a growth of 12.2%. The company anticipates continued growth driven by the normalization of inventory and increasing construction activity.
| Period | Revenue (in millions) | Growth Rate (%) |
|---|---|---|
| Q3 2024 | $1,333.6 | 5.9 |
| Year-to-Date 2024 | $3,880.7 | 12.2 |
| Q3 2023 | $1,259.8 | - |
| Year-to-Date 2023 | $3,459.4 | - |
Strategic Initiatives or Partnerships That May Drive Future Growth
The company has outlined several strategic initiatives aimed at enhancing its competitive position:
- Partnerships: Collaborative efforts in building envelope solutions are expected to drive growth in energy efficiency and sustainability.
- Increased Marketing Efforts: A rise in sales and marketing expenses of $7.0 million in Q3 2024 indicates a commitment to expanding market presence.
Competitive Advantages That Position the Company for Growth
The company benefits from several competitive advantages:
- Strong Brand Recognition: Established presence in the construction materials sector enhances customer loyalty.
- Diverse Product Portfolio: A wide range of products, including energy-efficient roofing solutions, positions the company well in growing markets.
- Financial Stability: As of September 30, 2024, the company reported total stockholders’ equity of $2,762.9 million, supporting future investments and growth initiatives.
Revenue Growth Breakdown by Segment
| Segment | Revenue (in millions) | Operating Income (in millions) | Adjusted EBITDA Margin (%) |
|---|---|---|---|
| CCM | $2,870.7 | $861.0 | 32.0 |
| CWT | $1,010.0 | $148.2 | 21.3 |
These strategic initiatives and financial metrics illustrate a robust framework for continued growth and expansion in the coming years.
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Article updated on 8 Nov 2024
Resources:
- Carlisle Companies Incorporated (CSL) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Carlisle Companies Incorporated (CSL)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Carlisle Companies Incorporated (CSL)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.