Carlisle Companies, Inc. (CSL)’s 2014 Earnings Update Conference Call Transcript

Jennifer: And your next question is from Jim Gianocor [inaudible 00:13:50].

Jim: How are you? Morning, guys. As far as your 2015 outlook in CCM, can you give us your take on home much of that growth is going to come from new construction. Are you going to get a new construction [inaudible 00:14:09] that maybe you haven’t seen this far or is it predominantly your take on reroofing, specifically?

David: Well, I think reroofing is still going to be the dominant percent of the overall sales. But certainly the growth, the double digit growth that will come out of our new construction then you’ll have low to mid single growth in reroofing. And reroofing, I would expect, Is going to be- as far as there is going to be a net 70% to 75% range of total volume, and then new construction being an up take, and I think it will grow faster than what it has over the last couple of years. The size is very positive for non residential construction.

Jim: I agree. Can you fabricate the margin profile between new construction and reroofing? Is there a material difference they can call out?

David: No, there really isn’t. I think we’ve said in the past to most everyone is that your dollar amount is higher with the new construction primarily because you’ve got more installation accessories and so on that go in the roof. But the margin profile is very close to the same.

Jim: Okay. And on to COS, is there a rule that we should thinking about how much cost you are targeting to take out of our efficiencies however you want to pay over the dollar amount or a percentage gain on an annual basis that you are trying to kind of study and state impact on your close structure?

David: Yeah. It’s almost [inaudible 00:15:51] on how it’s been about $20 million a year of the last, I guess it’s been five or four years now, four or five years since we implemented COS. I would expect that to slow a bit. But, at the same time with the addition of LHI and then eventually the finishing brand’s business, I think you will see significant savings come out of those two acquisitions.

We’ve already have some [inaudible 00:16:19] that we’ve held at LHI. They’ve been very productive from an [inaudible 00:16:26] stand point and from a close stand point. And we are just beginning them. So, we think we’ll get significant saving, a margin improvement out of LHI, and I would expect that we won’t get as much margin improvement in the finishing brands business, but we will get margin improvement. It’s a well run business today and I think that we will get some margin improvement, though, as we go.

Jim: Okay, thank you.

David: You are welcome.