Carlisle Companies Incorporated ("Carlisle", the "Company", "we", "us" or "our") is a leading supplier of innovative building envelope products and energy-efficient solutions for customers creating sustainable buildings of the future. Through ourCarlisle Construction Materials ("CCM") andCarlisle Weatherproofing Technologies ("CWT") businesses and family of leading brands,Carlisle delivers innovative, labor-reducing and environmentally responsible products and solutions to customers across the world through theCarlisle 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 our strategic plan, Vision 2025,Carlisle is committed to generating superior stockholder 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 itsCarlisle Interconnect Technologies ("CIT") andCarlisle Fluid Technologies ("CFT") business segments. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide a reader of our financial statements with a narrative from the perspective of Company management. All references to "Notes" refer to our Notes to Condensed Consolidated Financial Statements in Item 1 of this Quarterly Report on Form 10-Q.
Executive Overview
In the third quarter, theCarlisle team continued to focus on delivering and enhancing the Carlisle Experience, which is 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 entireCarlisle 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 war inEurope . Despite another year of uncertainty and volatility in global markets, theCarlisle team came together to deliver on our commitments, leveraging strong underlying 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
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 theU.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 causedU.S. airlines to cut back on flights as they struggle to cope with the rebound in passenger demand. In the first nine months of 2022, we used cash generated from operations to return$95.6 million to stockholders in the form of dividends and increased our dividend 39%, continuing our 46 year trend of continued and annually increasing dividends, and repurchased$201.1 million of shares, adding to our cumulative share repurchases since 2017 of over$2 billion . We invested$130.5 million into our businesses in the form of capital expenditures to drive innovation and the Carlisle Experience as exemplified by the third quarter launch of our industry-first 16' TPO line inCarlisle, PA. 22 -------------------------------------------------------------------------------- The resilience and experience of theCarlisle team have helped us deliver record results throughout 2022 and will continue to provideCarlisle a competitive advantage as we navigate in this highly complex environment. We remain optimistic for the remainder of 2022, and are excited to continue our drive to exceedCarlisle's commitments under Vision 2025.
Summary of Financial Results
Three Months Ended Nine Months Ended September 30, September 30, (in millions, except per share amounts) 2022 2021 2022 2021 Revenues$ 1,794.1 $ 1,315.6 $ 5,137.3 $ 3,434.3 Operating income$ 348.2 $ 166.5 $ 1,036.1 $ 385.0 Operating margin 19.4 % 12.7 % 20.2 % 11.2 % Income from continuing operations$ 255.2
$
(0.5)
$ 4.84
$ (0.01) $ 0.55 $ 0.08 $ 0.70 Adjusted EBITDA(1)$ 437.8 $ 250.3 $ 1,254.8 $ 579.8 Adjusted EBITDA margin(1) 24.4 % 19.0 % 24.4 % 16.9 % (1)Adjusted EBITDA and adjusted EBITDA margin are intended to provide investors and others with information aboutCarlisle's and our segments' performance without the effect of items that, by their nature, tend to obscure core operating results due to potential variability across periods based on the timing, frequency and magnitude of such items. Refer to Non-GAAP Financial Measures in this MD&A for more information about, and a detailed reconciliation of these items. Revenues increased in the third quarter and the first nine months of 2022 primarily reflecting positive pricing across all segments, contributions from the acquisition ofASP Henry Holdings, Inc. ("Henry") in the CWT segment and higher sales volumes in the CCM and CIT segments, partially offset by unfavorable foreign currency impacts. The increase in operating margin percentage in the third quarter and the first nine months of 2022 primarily reflected positive pricing, higher volumes and favorable product mix, partially offset by raw material and wage inflation across all segments.
Diluted earnings per share from continuing operations increased in the third
quarter of 2022 primarily reflecting improved operating income performance
(
Diluted earnings per share from continuing operations increased in the first nine months of 2022 primarily reflecting improved operating performance ($9.25 per share) and reduced average shares outstanding ($0.14 per share), partially offset by higher interest expense ($0.10 per share) and a higher effective tax rate ($0.03 per share). We generated$588.6 million in operating cash flow in the first nine months of 2022 and utilized cash on hand and cash provided by operations to return capital to stockholders through dividends and share repurchases, and to fund capital expenditures.
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