Carlisle Companies Incorporated — FY2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This filing reports annual results; it does not provide a clear standalone fourth-quarter income statement.
Business context
Carlisle manufactures building-envelope products and solutions through Carlisle Construction Materials (CCM) and Carlisle Weatherproofing Technologies (CWT), as well as aerospace, medical and industrial products through Carlisle Interconnect Technologies (CIT) and Carlisle Fluid Technologies (CFT). In 2022 the company reorganized its construction businesses into CCM and CWT. Carlisle said it achieved its Vision 2025 target of $15 GAAP EPS three years ahead of schedule.
Financial performance
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | $6,591.9 million | $4,810.3 million |
| Operating income | $1,275.7 million | $567.5 million |
| Operating margin | 19.4% | 11.8% |
| Income from continuing operations | $925.2 million | $387.0 million |
| Diluted EPS from continuing operations | $17.58 | $7.26 |
| Net income | $924.0 million | $421.7 million |
| Adjusted EBITDA and margin | $1,563.0 million; 23.7% | $833.5 million; 17.3% |
| Gross margin | $2,157.4 million; 32.7% | $1,314.7 million; 27.3% |
| Operating cash flow | $1,000.9 million | $421.7 million |
| Capital expenditures | $183.5 million | $134.8 million |
Revenue grew 37.0%, reflecting pricing across segments, Henry acquisition contributions and higher volumes in CCM, CIT and CFT, partly offset by foreign exchange. Higher pricing, volumes and Carlisle Operating System (COS) savings supported margin expansion; raw-material, freight and wage inflation remained offsets. The 2022 effective tax rate was 22.6%, versus 19.8% in 2021.
Segment results
| Segment | FY2022 revenue | FY2022 operating income | FY2021 operating income |
|---|---|---|---|
| CCM | $3,885.2 million | $1,175.0 million | $619.9 million |
| CWT | $1,564.2 million | $128.6 million | $64.4 million |
| CIT | $845.4 million | $37.2 million | $(17.5) million |
| CFT | $297.1 million | $36.5 million | $24.0 million |
CCM benefited from strong U.S. commercial roofing demand and pricing. CWT growth included Henry, acquired in 2021; its results also included $24.8 million of intangible and fixed-asset impairments. CIT improved with recovery in aerospace and medical markets, higher volumes and pricing. CFT growth reflected pricing and transportation demand, partly offset by currency effects.
Liquidity, debt and capital allocation
Cash and cash equivalents were $400.0 million at year-end, compared with $324.4 million in 2021. Current assets were $2,245.0 million and current liabilities $1,078.4 million. Total debt carrying value was $2,583.3 million, including $301.8 million classified as current. The company had no revolving-credit borrowings and $1.0 billion of availability; it reported compliance with debt covenants.
Operating cash flow increased to $1,000.9 million. Cash used in financing was $862.0 million, including $400.0 million of share repurchases, $134.4 million of dividends and redemption of $350.0 million principal amount of 2022 notes. The annual dividend rate was raised to $3.00 per share in 2022. Year-end notes included $300 million due in September 2023, $400 million due in 2024, $600 million due in 2027, $750 million due in 2030 and $550 million due in 2032.
Outlook, commentary and notable items
- For 2023, management forecast low-single-digit total revenue growth: low-single-digit growth at CCM, a low-double-digit decline at CWT, and high-single-digit growth at both CIT and CFT.
- Management cited resilient commercial re-roofing demand and growing interest in energy-efficient building solutions, while expecting residential-market weakness to pressure CWT. It also described easing supply constraints and inflation, and customer inventory normalization.
- 2023 capital expenditures were expected to be approximately $200–$225 million, primarily supporting CCM and CWT. Management said it intended to continue opportunistic repurchases and pursue acquisitions meeting its return criteria.
- Henry, acquired in September 2021 for approximately $1.606 billion, contributed to CWT’s 2022 growth. Carlisle acquired MBTechnology in February 2022 for consideration of $26.3 million. CBF was sold in 2021; Carlisle received its $125 million contingent payment in February 2022.
- Risks include construction and aerospace cyclicality, customer concentration, pricing pressure, raw-material and supply-chain volatility, labor costs, foreign exchange, acquisition integration, regulatory and environmental obligations, climate commitments, cybersecurity and litigation. Beacon Roofing Supply and ABC Supply each represented approximately 10.9% of 2022 consolidated revenue.
- Management reported no material environmental remediation accruals and said ordinary-course legal matters were not expected to have a material adverse effect. The auditor issued an unqualified opinion on the financial statements and internal controls; MBTechnology was excluded from management’s internal-control assessment.
Important facts for investors to verify
- Whether 2023 segment guidance is achieved, especially the expected CWT decline and the assumed recovery in aerospace and medical demand.
- Whether pricing, volume and COS efficiencies continue to offset material, freight and wage costs.
- Henry-related integration and goodwill/intangible-asset risk: CIT Medical goodwill fair value exceeded carrying value by about 10%, and five trade names had less than 10% headroom in the annual impairment tests.
- Near-term debt refinancing or repayment plans for the $300 million notes due in September 2023, alongside planned investment and shareholder returns.
- Exposure to major roofing distributors, construction-market conditions, customer inventory levels, and any emerging legal, environmental or cybersecurity contingencies.