Carlisle Companies Incorporated

Good afternoon. My name is Megan and I will be your conference call operator today. At this time, I would like to welcome everyone to the Carlyle Company's third quarter 2026 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, Carlyle's Vice President of Investor Relations. Mehul, please go ahead.

Thank you, operator, and good afternoon. On behalf of Carlyle, welcome. Earlier today, we reported third quarter results. The press release and the slides are available on the investor relations page of our website. With me on the call are Chris Koch, our chair of the board, president and CEO, and our chief financial officer, Kevin Zdimal. Chris will start with his perspective on pricing, raw materials, margins, and competitive dynamics. Kevin will then review our financial results and fourth quarter outlook. And Chris will follow with their Vision 2030 priorities. And then we'll take your questions. Before we begin, please turn to slide two. Today's remarks contain forward-looking statements that reflect our current expectations and are subject to risks and uncertainties. Factors that could cause actual outcomes to differ are described in our SEC filings and today's press release, and we undertake no obligation to update these statements except as required by law. We will also refer to non-GAAP financial measures with reconciliations in today's presentation and press release. With that, I'll hand the call to Chris, starting on slide three.

Thank you, Mehul, and good afternoon, everyone. Our third quarter results build on the strong demand we saw in quarter two. Despite significant market volatility, we maintained high single-digit growth, and importantly, demand remained resilient through our pricing actions. We remain focused on superior capital allocation and our path towards $40 of adjusted EPS in 2030. With that, let me turn to the key areas of focus as we enter the fourth quarter. Price cost, margins, demand, and the competitive environment. Let me start with pricing. We addressed the cost increases that began in quarter one with multiple price increases and freight surcharges. Historically, price realization has lagged cost increases by approximately three to six months, primarily because we honor existing quotes and firm orders already in our system. On our quarter two call, we said we expected price costs to be close to parity in quarter three and then turn slightly positive in quarter four. Unanticipated cost increases in quarter three did not change the shape or the direction of that curve, but pushed the timing of achieving parity out by one quarter. Price realization and our freight surcharges are gaining meaningful traction and we now expect to reach price-cost parity as we exit 2026. Pricing has not had a detrimental impact on demand and we saw no additional pre-buying in the quarter. Our July outlook assumed raw material and freight costs would stabilize. Instead, oil and diesel costs rose further, pressuring petrochemical-based raw materials, freight and virtually all of our costs. U.S. diesel reached record levels of about $6.50 per gallon in late September and was approximately $6.35 as of yesterday, roughly 75% higher than one year ago. Thank you for joining us. We view the pressure as a timing issue, not a structural one. The drivers of margin expansion remain intact, and those are increasing price realization, freight offsets, parallel operating system productivity, CWT efficiency programs, operating leverage, and new products. As costs normalize, we would expect margin expansion to resume, and with that, our Vision 2030 targets are unchanged. On the demand side, re-roofing at CCM continues to be a consistent mid-single-digit contributor, as it has been for decades. Despite seeing some pre-buying activity ahead of the price increases in Q2, our channel inventories remain at normal levels. We confirmed this through hundreds of Carlisle Market Survey interviews and real-time feedback from our almost 1,000-person sales force. Data centers continue to build momentum, driven by our newly formed and dedicated data center market team. Our premium TPO portfolio and our manufacturing capacity is benefiting data center customers as PVC supply remains constrained and as these customers discover the excellent attributes of TPO for data center roofs. We thus expect the trend towards premium TPO systems on data centers to continue to increase. These factors help offset softness in new construction, which is a positive as our near-term outlook does not assume a recovery in new construction markets overall. At CWT, where residential is roughly 45% of revenue, share gains and cost actions are offsetting residential softness in sales. We also expect no near-term recovery in residential end markets as mortgage applications, list price, and home sales have declined sequentially. On the competitive front, our distribution relationships remain healthy, productive, and aligned. We continue to monitor new market entrants and their investments, but we have not seen any meaningful impact from them on our volumes. Finally, capital allocation. Our balance sheet is strong. Repurchases are on track for $1.2 billion this year, and we are proud to be a dividend king with 50 consecutive years of dividend increases. And of course, our M&A criteria have not changed. With that, I'll turn the call over to Kevin to cover the financials. and I will return to discuss our progress towards Vision 2030 before we end the call. Thank you Chris and good afternoon everyone.