Good afternoon. My name is Constantine, and I will be your conference operator today. I would like to welcome everyone to the Carlisle Companies First Quarter 2024 Earnings Conference Call. I would like to turn the call over to Mr. Jim Giannakouros, Carlisle's Vice President of Investor Relations. Jim, please go ahead.

Thank you, and good afternoon, everyone. I want to welcome all of you today to Carlisle's First Quarter 2024 Earnings Call. We released today our first quarter 2024 financial results, and you can find both our press release and the presentation for today's call in the Investors Relations section of our website. On the call with me today, we have Chris Koch. He is our Board Chair, President, and CEO; along with Kevin Zdimal, who is our CFO. Today's call will begin with Chris. He will provide highlights of our results along with an update on our key accomplishments, and then Kevin will follow up with an overview of our financial performance and provide an update on our outlook for 2024. Following our prepared remarks, we will open up the line for questions. But before we begin, please refer to Slide 2 of our presentation, where we note that comments today will include forward-looking statements based on current expectations. Actual results could differ materially from these statements due to a number of risks and uncertainties, which are discussed in our press release and SEC filings. As Carlisle provides non-GAAP financial information, we've provided reconciliations between GAAP and non-GAAP measures in our press release and in the appendix of our presentation materials, which are available on our website. And with that, I will turn the call over to Chris.

Thank you, Mehul. Good afternoon, everyone, and thank you for joining us for Carlisle's First Quarter 2024 Earnings Call. To start, I'd like to direct your attention to Slide 3 of the presentation. We were pleased with our overall sales growth and margin expansion during the first quarter, which reinforces the underlying themes and key strategies we've outlined in Vision 2030. First quarter sales of $1.1 billion reflect a 23% year-over-year increase and were in line with our previous comments that destocking ended in Q4 of 2023. We also indicated that we expected a benefit of approximately $200 million of year-over-year sales as a result of a return to normal ordering levels, rebounding as predicted from a Q1 of 2023 that had been negatively affected by destocking. This return to normal ordering patterns was primarily experienced in our CCM business, which demonstrated substantial year-over-year sales growth of 36%. Robust reroofing activity from pent-up demand and favorable weather conditions fostering healthy construction activity were additional positive factors that assisted our first quarter performance and more than offset the impact from negative pricing in Q1 that we had stated in our year-end earnings call. In addition to a positive sales story, the Q1 margin story was also a success. Our relentless focus on improving operational efficiency, our commitment to delivering unparalleled value in the Carlisle experience to our customers, and our COS efforts contributed to a strong bottom-line result. Improved margins across both CCM and CWT drove adjusted EBITDA of over $260 million, marking an increase of well over 50% year-over-year. The focus on continuously improving adjusted EBITDA performance was underpinned in Q1 by robust margin expansion, bolstered by the increased Henry integration synergies, our commitment to our Lean Sigma initiatives under our flagship Carlisle Operating System, and efficiencies gained by leveraging our higher volumes in our operations. Pricing continues to be in line with our expectations where we anticipated pricing would be down 2% to 3% for the full year, with substantially all of the impact in the first half of the year. We are bullish on the pricing outlook for the balance of the year based on the recent price increases announced by the major competitors in our industry. Additionally, we achieved substantial growth in adjusted EPS of over 80% year-over-year. Our steadfast dedication to the Carlisle experience, operational excellence, innovation, synergistic acquisitions, and organic investments continues to contribute to our superior performance and solidify Carlisle's position for sustained success in the future. Carrying on with the theme of positioning Carlisle for sustained success in the future, we were pleased to follow the delivery of our Vision 2030 plan in December of last year with the announcement that we are selling the Carlisle Interconnect business and taking the final step in delivering on our commitment to become a pure-play building products company. In January, we reached an agreement with the Amphenol Corporation to acquire our CIT business. We expect the transaction to close in the second quarter of this year. The anticipated proceeds from the sale of nearly $2 billion will be strategically deployed to fund further acquisitions, execute approximately $1 billion in share repurchases, and fuel additional organic growth initiatives. In our pursuit of generating significant value creation through strategic investments, we're excited to announce the acquisition of MTL, a Wisconsin-based specialty manufacturer of high-performance metal edge and wall systems. The acquisition of MTL is perfectly aligned with Carlisle's Vision 2030 strategy and our four criteria for all acquisitions. And as a reminder, those criteria are: one, a solid organic growth story; two, meaningful hard synergies; three, a talented management team, and lastly, a clear and easily actionable integration playbook. Our acquisitions are always aimed at enriching and expanding our building envelope product offerings. The planned MTL acquisition and CIT divestiture reinforce our commitment to our pure-play building product strategy, our philosophy of superior capital allocation, and ultimately driving best-in-class ROIC. Lastly, we are very pleased to have continued our long-standing tradition of returning value to our shareholders through dividends and share buybacks in Q1. During Q1, we completed $150 million in share repurchases as part of our plan to repurchase $1.4 billion worth of shares in 2024. We also paid $42 million in dividends in the first quarter, as we continue to be proud of our history of having raised our dividend for over 47 consecutive years. These actions underscore our commitment to enhancing shareholder value and our confidence in Carlisle's long-term growth trajectory. Please turn to Slide 4 as I discuss our Vision 2030 value creation drivers and targets. After completing Vision 2025 three years early, we are now fully engaged in building on Vision 2025 success and the execution of Vision 2030. As outlined in our Vision 2030 video, we plan to continue delivering on the foundational strategies that have produced such positive results under Vision 2025. Coupled with major secular tailwinds, we are committed to delivering innovative building envelope solutions, driving above-market growth, and unlocking additional value for shareholders in this next important phase of Carlisle's growth journey. The key pillars of Vision 2030 include enhanced levels of innovation with a commitment to investing 3% of sales to drive the creation of new products and solutions that add value to our customers through advancements in sustainability, energy, and labor efficiency. A continued emphasis on synergistic M&A, as demonstrated by our recent agreement to acquire MTL, which aligns seamlessly with our strategy to enhance and expand our building envelope product portfolio, attracting and retaining top talent to ensure we have the best talent to execute our strategic initiatives and drive above-market growth, and holding steadfast to our sustainability commitments as evidenced by our progress in 2023 against our stated objectives, which you can find in our latest corporate sustainability report. As we move forward, we are confident that the execution of Vision 2030 will drive superior shareholder returns and position Carlisle as a premier investment opportunity in the building products sector. Turning to Slide 5. Our planned acquisition of MTL is directly aligned with our goal to invest prudently in high-returning businesses with best-in-class building envelope products and solutions that expand and complement our existing system offerings. With an expected close in the second quarter of 2024, MTL reinforces Carlisle as an industry leader in the multibillion dollar architectural metal market and is expected to add approximately $0.60 of adjusted EPS in 2025 with over $13 million of hard cost synergies expected within the first three years. MTL's values are highly aligned with Carlisle's, especially with respect to MTL's superior customer focus and solid track record of above-market growth. Now please turn to Slide 6 as I share recent updates on our progress with Carlisle sustainability initiatives. We seek to positively impact the environment while creating value for all our stakeholders through the three pillars of our sustainability strategy, which are: one, manufacturing energy-efficient products; two, minimizing our value chain greenhouse gas emissions; and three, diverting waste and end-of-life materials from landfills. Under our first pillar, we provide our end user customers access to solutions that drive energy efficiency in their buildings. As I mentioned earlier, in 2023, we made significant progress against this pillar with $3.2 billion in lead qualified product sales, representing an impressive 70% of our total revenue, which is up from 65% in 2022, reflecting the increasing demand and trends for more energy-efficient buildings. Our second pillar, reducing our operational and value chain emissions, helps Carlisle reduce our carbon footprint and environmental impacts. Carlisle began Phase 1 of metering the significant energy users or SEUs at our major manufacturing facilities. The data that results from metering this equipment will enable our plants to conduct real-time energy analysis and make more informed decisions on energy efficiency. In Q1, Carlisle installed metering at our Tooele, Utah, polyiso and membrane facility. Lastly, our third pillar focuses on the reduction of construction waste entering landfills. In 2023, Carlisle's recycling initiatives enabled the diversion of over 90,000 metric tons of waste from landfills through operational scrap reduction, purchase recycled raws, and rooftop takeoffs. Significant contributors were the purchased recycled content of polyiso facer paper and polyols, as well as 30,000 tons of recycled metal from the CAM business unit. Sustainability is a very important focus for Carlisle. As an organization, we remain committed to being a responsible environmental stakeholder, and our products continue to offer a strong value proposition in a world looking for energy-efficient, value-added solutions. Our first quarter results reinforced many of the themes we discussed in our Vision 2030 presentation, including being well positioned to leverage megatrends in energy efficiency, labor savings, and growing reroof demand within the building envelope marketplace. With this in mind and in combination with the strength of our first quarter results, we are increasing our full year 2024 growth outlook. And with that, I'll turn it over to Kevin to provide additional financial details. Kevin?

Thank you, Chris. Our first quarter financial results reflect the strength of our business model and the successful execution of our strategic priorities to start off 2024 on solid footing. Looking at our first quarter results on Slide 7. We grew revenue by 23% year-over-year to $1.1 billion, driven by normalization of inventory in the channels, growing reroofing activity, which benefited from pent-up demand, increasing residential starts, and favorable weather across the U.S. We leveraged our strong topline performance to expand our EBITDA margins by 530 basis points to 24.2%. Furthermore, we grew our earnings 85% year-over-year to an adjusted EPS of $3.72. The EPS increase was driven by sales growth, margin expansion, and share repurchases. Looking at our segment highlights, starting with CCM on Slide 8. CCM delivered first quarter revenues of $784 million, up 36% from the first quarter of 2023. The increase was driven by a return to normalization of order patterns, including the end of destocking in the channel, positive reroof activity, and favorable weather. CCM adjusted EBITDA increased 66% to $227 million with adjusted EBITDA margin of 510 basis points to 28.9%. This was driven by a combination of leveraging higher volume growth and continued operating efficiencies through the Carlisle Operating System. Moving to Slide 9. Revenues at CWT decreased 1% year-over-year, primarily due to lower carryover prices from 2023 in select categories. However, despite the revenue decline, we were able to drive adjusted EBITDA growth of 20% to $65 million. This represented an adjusted EBITDA margin of 20.7%, expanding 370 basis points from the first quarter of 2023. The margin improvement was driven by operational efficiencies gained through COS, lower input costs through strategic sourcing, and the realization of synergies from the Henry acquisition. Synergies from the Henry acquisition are expected to exceed $50 million in 2024, significantly above our deal model estimate of $30 million. Slide 10 provides a year-over-year first quarter adjusted EPS bridge items for your reference. Moving to Slides 11 through 13. Carlisle ended the first quarter of 2024 with $553 million of cash on hand. We have $1 billion of availability under our revolving credit facility, which we amended in April to extend the maturity to 2029. We generated operating cash flow from continuing operations of $156 million and invested $24 million in capital expenditures. We achieved solid cash flow performance for the quarter with a free cash flow margin of 12%, and we remain on pace for a free cash flow margin of over 15% for the full year. We ended the quarter with a net leverage ratio of 1.4x within our target of 1 to 2x. We are already making significant progress against the capital allocation goals outlined in our Vision 2030 strategy. We are doing so by reinvesting in our high ROIC building products businesses through continued investment in growth CapEx and returning value to shareholders through dividends, including $42 million in dividends paid and repurchasing $150 million of shares during the first quarter of 2024. We are also making synergistic acquisitions that will deliver significant opportunities for value creation, such as our recently announced agreement to acquire MTL for $410 million. These actions are collectively aligned with our disciplined capital allocation framework, which forms an integral part of delivering ROIC in excess of 25% and ultimately reaching $40 plus of adjusted EPS by 2030. Following the repurchase of $150 million of shares during the first quarter, we have 6.9 million shares remaining under our share repurchase program. Our robust financial position is underpinned by a solid balance sheet and a prudent approach to leverage. This conservative capital structure affords us the ability to strategically allocate resources in pursuit of superior returns. Complemented by our substantial liquidity of approximately $1.6 billion, we are well equipped to capitalize on opportunities that arise, unlocking additional value for our stakeholders in the coming quarters and years. And as a reminder, we expect to receive an additional $2 billion of gross proceeds from the CIT sale in the second quarter, further enhancing our financial flexibility. We believe we are well positioned to drive additional value creation in the quarters and years ahead. Turning to Slide 14. I will discuss our full year financial outlook. We are raising our full year 2024 revenue outlook to approximately 10% growth over the prior year, which is double our outlook at year-end when we were expecting a 5% increase. This increase in outlook is driven by a combination of our solid first quarter and stronger reroofing demand for the balance of the year. Leveraging the additional revenue through the Carlisle Operating System along with a more positive outlook on pricing, we now expect adjusted EBITDA margins to expand by at least 100 basis points as compared to our previous guidance of 50 basis points. Additionally, we maintain our expectations to deliver free cash flow margins of at least 15% and ROIC in excess of 25%. As such, we continue to expect double-digit EPS growth in 2024. This is directly aligned with the objectives outlined in our Vision 2030 strategy, and we are experiencing a strong start towards our 2030 goal of $40 plus of adjusted EPS. Looking at the components of the outlook for CCM, we now expect year-over-year revenue to grow in the low double digits in 2024. The primary drivers are tailwinds from the return to normalization and order patterns that were absent during 2023 due to destocking and strong contractor backlogs from the pent-up reroofing demand. For CWT, we now expect year-over-year revenue to grow in the mid-single digits in 2024 from strong sales execution on key growth initiatives as well as stronger trends in our markets. With that, I turn it over to Chris for closing remarks.

Thanks, Kevin. In conclusion, I want to reiterate our confidence in Carlisle's strategic direction under Vision 2030 and reinforced by our strong first quarter results. As we move forward, our ability to innovate with a focus on energy efficiency and labor-saving solutions puts us on the right path to drive above-market growth and in return, drive superior financial results. The simplification of our Building Products portfolio, combined with a robust free cash flow engine and the anticipated proceeds from the sale of CIT places us in an excellent position to create further significant value for our shareholders. I would also like to take this opportunity to once again express my sincere gratitude to all of Carlisle's employees. The exceptional efforts of all of our team members have ensured a strong start to what we expect will be another exceptional year for Carlisle in 2024. And with Vision 2030 already deeply embedded in our operations, I'm incredibly optimistic about Carlisle's long-term success. Our strong brand, solid capital position, and superb cash flow generation provide us with the flexibility to successfully execute our strategy and unlock additional value for all our stakeholders. Thank you, everyone, for your continued support. Together, we are building a brighter future for Carlisle. And that concludes our formal comments. Operator, we are now ready for questions.

Your first question comes from the line of Tim Wojs from Baird.

Nice job. Maybe just my first question. So when you look at CCM, I mean, it just seems like the tone around reroofing is a lot better than what it was 60 to 90 days ago. So I guess what have you seen in your business to kind of get comfort or confidence that there is kind of pent-up demand on the reroofing side?

Yes. Tim, it really goes back to COVID. I mean, we've been talking about this for a while that during COVID, contractors weren't able to get on the routes initially. And then when we came out of COVID, we had a strong period of new construction in the last couple of years, and we talked about just due to the lack of labor that some of the reroofing was being deferred. They were doing some patchwork, and some of that resulted in this pent-up demand that we're now seeing come through. And frankly, that's the reason we raised our forecast that a good chunk of the increase, about half of that, was due to the reroof improvement.

Okay. Okay. Got you. And I guess on that point, Kevin, just if you can maybe go through the revenue bridge, just within CCM. I mean, last quarter, it was 6%. Now it's low double digits. What are the pieces if you go through the restocking the underlying volume and then just your updated price assumptions?

Yes. The destocking didn't change. We had it at about 11% increase for the full year. We still expect it to be about 11%. We had said the dollar amount was $375 million for the year, $200 million in the first quarter, and that's what we saw, the $200 million in the first quarter. So nothing changed on the destock. What did change is both the volume and the price. On the volume side, I just talked about the reroofing coming into the year. We had said we thought the total end market would be down 2% to 3%. Now we think it'll be up slightly. We still think new construction will be down high single digits, but reroof, we think will be up mid-single digits. And then on pricing, we recently announced some price increases, and we now think that will only be down about 1% for the full year on price where, as you may recall, at the beginning of the year, we thought we'd be down 2% to 3%. So when you sum that all up, we pretty much doubled that 6% of what we're talking about at the beginning of the year for CCM.

Okay. Okay. Great. And then maybe just the last question just to sneak in here. I mean, how would you characterize the pace of what you're seeing on the input cost side, MDI, polyiso. I guess does the price cost math change? Or are you just seeing a little bit more inflation, and so net-net on the EBITDA line, it sums to zero?

Yes. When we came into the year, we had said that cost was going to be pretty flat for the year. The raw materials have been a little bit of a mixed bag on raw materials; some raw materials are up, some are down. So not too much has changed there, but now with pricing getting a little bit better, we think that number will be positive for the full year, maybe a full year up of about $20 million on price cost.

Your next question comes from the line of Susan Maklari from Goldman Sachs.

My first question is on CCM as well. Appreciating that you've got this reroofing tailwind that is coming through. But can you also talk a bit about some of your own initiatives around some of the products and the work that you've done with the customers? And do you think that that's also incrementally adding to this? And how do you think about the sustainability of that through this year and maybe the cadence as we move through the next couple of quarters for the revenues there?

Overall, as we examine our initiatives, we've focused on customer intimacy, which includes contractor and architect training. Our digital experience continues to improve, and we've made significant strides in enhancing our sales team's performance. This involves optimizing our quote process, enhancing cross-selling, and increasing revenue per square foot, and we are beginning to see positive results from these efforts. We have implemented numerous selling initiatives over the past year, which are now reflecting in our sales figures. Additionally, we're committed to innovation under Vision 2030, a long-term strategy where we have started to introduce new products to the market at an increased pace. Our investment in SG&A shows our commitment to this momentum. For instance, last January, we launched a 16-foot TPO, followed by a product called ReadyFlash in April, and we plan to introduce SeamShield in Q2 of 2024. While reaching a 3% growth rate will take a couple of years, we expect to witness increasing momentum every quarter as we push forward with innovation in CCM and CWT. Finally, we emphasize operational excellence, aiming for 1% to 2% of sales through cost of sales each year. We are integrating AI in our factories to enhance efficiency across various processes, from quoting to data management, which helps us anticipate potential quality issues. We are also improving our forecasting through AI and driving sustainability initiatives in our factories to minimize waste, whether from freight or the movement of goods. These efforts contribute to our efficiency programs, and we are starting to see returns on these investments. Over the past 5 to 10 years, these initiatives have led to substantial gains, and while we believe we are better articulating our progress, we continue to observe notable margin expansion, with the most recent quarter showing improvement even amid doubt in sales. That was a lengthy response, but I aimed to provide some context, and Kevin may want to offer more detailed insights.

Second part of your question, 2024 is playing out to be a more normal year for us from the seasonality standpoint. At the beginning of the year, we had said sales would be for the second quarter, about 29% of full year sales, and Q3, we said about 27% of full year sales, and that seasonality still looks to be holding strong for us. So that would be the best estimate for quarterly revenue for the CCM business. And as far as CWT, that's still consistent with what we talked about in the year-end call as well.

Okay. That's great color. That's very helpful. And then maybe just following up on that. I think you mentioned that you expect to now exceed $50 million in synergies at Henry versus the $30 million guide that you had given before. Can you just talk about what's driving that incremental $20 million in there? And any thoughts on how that will come through?

Yes. In terms of what we're working at, the cross-selling is helping some new initiatives around sales, automation within the factories. We're doing a better job of, I think, managing our efficiency within our factories. How it comes through on the P&L, I would defer to Kevin on that one.

Yes. So the $50 million that we see, that's pretty well. We're at that run rate in the first quarter. So about $14 million a quarter is what we're going to get. First quarter of last year was about half of that number. So we did see those synergies in Q1, but we did ramp up as the year went on last year.

Your next question comes from the line of Garik Shmois from Loop Capital.

Decent quarter. Wanted to ask, first off, I think in the release, you spoke to lower carryover prices in CWT. Was there any new downward pricing pressure during the quarter? And how should we think of pricing moving forward and potentially when would you anniversary some of the carryover pricing pressure?

Yes, I don't believe there was any unexpected pricing pressure. We have already adjusted for that. As we explained, we were likely down about 4% to 5% in the first quarter, and we expect to reduce that to about 2% to 3% in the second quarter. In the third quarter, we anticipate pricing will remain flat. Based on the pricing increases we've observed from our products and others, it doesn't take effect immediately as it needs to be incorporated into bidding. Therefore, we expect a potential increase of 1% to 2% in the fourth quarter.

Got it. And I wanted to just kind of circle back to the 1Q volume strength in CCM. Recognizing it's a recently slower quarter, but I think that the variance was pretty notable relative to what we were expecting. You saw the lapping of the destock; that tracked as expected. But you also said weather as being favorable. So just wanted to see, do you think some of the benefit was weather? How much of the 1Q outperformance was a stronger market? Did you see any inventory build at either distribution or a contractor level? Just any additional color as to the 1Q strength would be great.

Sure, let me address a few of those points, and Kevin will cover some as well. Regarding the weather, it might have had an impact of about 2 to 3 days, depending on the location in the country. This clearly affected volume, especially in the Northwest, compared to other regions. Some companies have mentioned that their performance was less affected by the weather, indicating it can vary based on geography. For us, it was around 2 to 3 days of impact. The end of the destocking phase was significant going into the end of the year, and I believe we were somewhat cautious regarding that. We previously indicated $200 million for Q1, and during that call, since we hadn't seen much progress yet, a cautious approach was warranted. I was pleased that we achieved that amount. With the destocking concluding, we also noticed an increase in reroofing activity, which was positive and seemed to contribute during the quarter. Overall, this might explain why some aspects were stronger than we initially anticipated, particularly the cautiousness surrounding the $200 million guidance.

Got it. Okay. That's great.

You asked about inventory building. I think with our data, what our conversations on that are showing in the first quarter is that really a lot of the channel, while the destock is over, we're not seeing a huge build in inventory. I think as we get closer to the season, people are still concerned about, obviously, the carrying cost of inventory or higher now than they have been. Maybe a little bit of conservatism around getting burned again on having too much inventory. So if demand holds up, obviously, that will need to be addressed, and we think we're in a good position to be able to address that increased demand even if distributors aren't carrying and contractors aren't carrying as much inventories maybe we would like them to have going into the season.

Your next question comes from the line of Bryan Blair from Oppenheimer.

Pleasant start to the year.

Thanks, Bryan.

Kevin, you presented the complete yearly overview for CCM revenue. I apologize if I missed this in the details you provided during the script and Q&A, but could you do the same for CWT to ensure we have a comparable understanding? It would also be helpful if you could share additional insights on what you are observing in the commercial compared to residential applications specifically regarding the CWT segment.

Yes. Let me start with the first question. Kevin will provide an overview for the year. What we're observing in the CWT market, particularly in the residential sector, is an ongoing need for additional housing units. Builders are still purchasing land and making investments to meet this demand, which makes us optimistic for the year ahead. While there may be some fluctuations or hesitations as people process current events, such as changes in GDP forecasts, the fundamental demand for housing should remain consistent. In terms of commercial, the situation varies by segment. The office and retail areas for CWT have faced challenges, which was somewhat anticipated. Warehousing is also encountering difficulties. However, sectors like healthcare, education, and government spending have shown positive trends. Overall, when we review these segments, it's a mixed bag. When we examined the margin, we continue to expect improved margins driven primarily by automation, which Carlisle has contributed to; you've seen its impact in CCM, and it will be evident in CWT this year. Looking ahead to next year, we focus on enhancing factory efficiency by applying COS and Lead Sigma. Additionally, we are focusing on innovation within CWT. Furthermore, we anticipate that the favorable price/cost spread will also be beneficial this year. In the first quarter, we leaned more towards cost savings from raw materials rather than experiencing a negative impact from pricing. As volume improves, we expect that a 1% increase in volume will bring more benefits to the factories as well.

So, Kevin, do you want to talk about the walks? Yes. And the seasonality, you know that both our businesses very much the summer months as the stronger months. But as we look at CWT specifically, it's really the same as we talked about at the end of the year where we think about 22% of the full year sales would be in Q1 and then Q2 and Q3 are both about 27%, and then you exit with the balance into Q4. As far as EBITDA drop-through, we still see CWT in the low to mid-30s for incrementals and CCM, they're at about 40% on the incrementals.

Understood. Very helpful detail. Perhaps offer a little more on the strategic fit of MTL and how the asset strengthens the product suite of the metals platform and growth potential looking forward?

MTL is an excellent company, and its leader, Tony Mallinger, has consistently driven impressive performance. The focus is on edge metal, which is used in nearly every low roof we install. This is a significant advantage for integrating MTL into the Carlisle specifications and warranty. Additionally, MTL offers various architectural and other metal products that add value, many of which are protected by patents—something surprising for an edge metal or architectural metal business. This patented technology highlights the innovation that Tony and his team have introduced over the years. The acquisition fits well within our portfolio, allowing us to provide training for our contractors and present enhanced offerings. We also foresee beneficial synergies from incorporating MTL into the Drexel and Peterson group, which will enable a more comprehensive metal product line and efficiencies in raw material purchases and shipping. This acquisition is promising, and we anticipate an EPS accretion of about $0.25 in 2024 and around $0.60 in 2025, providing immediate benefits. We expect to exceed our targeted savings and synergies of $13 million, similar to our experience with Henry.

Your next question comes from the line of Saree Boroditsky from Jefferies.

Just a couple of questions here. So first, just to build on the price cost, you talked about a positive $20 million. Could you just provide any detail on how that plays out through the year?

Yes. The first quarter, we got about half of that. And then through the balance of the year, it's pretty much pro rata.

Perfect. And then going on MTL, can you just provide more details on the architectural metals market? I believe in the past, you talked about growing 2x GDP, but it would be great to get an update on that.

Yes, I definitely think it's growing at a higher rate. You could probably stick with your 2x GDP estimate. The metals business provides us with flexibility in our product line, which is a significant advantage. The metals market is estimated to be between $800 million and $1 billion, offering plenty of opportunities for us. We also aim to focus more on prefab applications where we can do manufacturing in the factory, leading to increased standardization in our product lines and streamlined shipping. I can provide more information if you'd like, but that gives you a general idea of the metal business, which is strong and complementary. We've discussed edge metal previously. Furthermore, when we examine many buildings, especially warehouses and small manufacturing facilities with flat roofs, it's common for an office building to be added on the side. Often, when seeking differentiation, this is accomplished with an architectural metal design either on the roof or on the walls. This adds value, is highly specified, and integrates well with the warranty system that Carlisle offers, significantly enhancing our market potential.

I appreciate the color. And then just one last one, just so we're on the same page. You have net interest expense guidance for the year of $20 million. You had $10 million of interest expense this quarter. So just how you're getting to build that interest income through the year would be helpful.

Yes. It really comes down to the timing of CIT. When we closed, we're expecting to close at the end of May, sometime in that range as far as CIT, hard to say with regulatory approvals, out of our control, but all is going well there, and we have no concerns. But as far as forecasting interest income when you're getting $2 billion makes it a little bit more challenging. So what we had this year, we did have the acquisition of MTL for $410 million. So we have to take that into consideration as well that we expect to close early May. And then the interest rate, we're not expecting the cuts now that we might have been looking at, at the beginning of the year, so that will increase our interest income. So net that positive against the MTL use of cash. We still think the net interest expense of around $20 million is a good number to use.

Your next question comes from the line of David MacGregor from Longbow Research.

Congratulations on the great quarter. Yes, really strong results. I guess on the CWT, excuse me, business, I just wanted to get a sense of the lower carryover prices for 2023. What percentage of segment revenues were that represented?

So as far as the carryover in the first quarter was down mid-single digits.

David, from the segment side of it, it's probably roughly 30% of the business. That's where the selected price decreases were last year.

Right. Okay. That was the question, 30%. And then Kevin has provided a little bit of granularity around kind of the price cost, and you talked a little bit about the volume leverage, but just trying to piece it all together here. So let me just ask you if you could just talk directly on that 66% EBITDA growth. How much of that was volume leverage? How much of it was favorable price/cost? Can I guess get you to go back and just provide some numbers around that?

You're looking at Q1?

Q1, yes.

Yes. So on Q1, yes, substantially all of it on the CCM side, you can just put the 40% incrementals in there, and then price cost pretty much offset each other on the CCM side. And that number would drop right to the bottom line on EBITDA in the 40%, and that explains that segment. On the CWT side, also ultimately that slight volume increase, but then most of their pickup was a combination of these operating efficiencies with the synergies that we talked about, and then the balance is price cost. So that they had positive price cost that CWT in the first quarter, close to $10 million.

Your next question comes from the line of Adam Baumgarten from Zelman.

In considering the full year outlook, it appears you're anticipating relatively stable end markets excluding destocking and pricing effects. If I exclude destocking in the first quarter and take into account some slight negative pricing, it seems like volumes increased by about 5% or in the mid-single digits. Are you expecting this trend to decline later in the year due to tougher comparisons, given the strong start?

As we exclude the destock number, we won't discuss that, but regarding end markets, we anticipate reroof to increase in the mid-single digits. However, we do expect new construction to decline in the high single digits. Overall, this might be a slight positive for the end markets.

Yes. I was just trying to get it. I think the first quarter was a bit better than that, it seems, right?

Yes, we had some positive weather in the first quarter as well. I think if you take that out, then it's going to be pretty consistent.

There are no further questions at this time. I'll hand the call over to Chris Koch for closing remarks. Please go ahead.

This concludes our first quarter call, and we appreciate your participation. We look forward to speaking with you during our second quarter call. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.