Operator: Thank you, Mr. Wojs. The next question is from the line of Garik Shmois with Loop Capital. Please proceed.
Garik Shmois: Hi, thanks. I just want to follow-up on point you make with respect to expecting some modulation in new commercial construction. I was just wondering if you could maybe speak to that a little bit more, maybe speak to backlogs or any conversations that you might be having with your customers with respect to the timing of that?
Chris Koch: Yes. We still see, I think 2023 as a strong year. There may be a little modulation in new. We did have a really strong, I would say, bias to new construction when we were in 2022 and coming out of COVID, Garik. And I think what’s happening is we’re seeing the re-roofing pickup as a larger part of the sales in 2023. We would have expected that. I think Jim may have indicated that in previous quarters how as that may modulate a little bit re-roofing would pick up because of the backlog there. And I think we’ve shared our charts with you about how we see re-roofing playing out over the next five years to seven years. So as we came out of COVID and the delay on new construction there, I think new picked up. And obviously, it’s easier, I think, to delay re-roofing a little bit than it is to delay a new project that it was under way and COVID experienced delays due to the governmental restrictions on the job sites and things that were happening back then.
So still see a positive year, still see a good scenario for new. And then I think really what starts to happen is as we get through 2023, we’re going to have to look at what happens from the Fed, what happens with other things in the economy on a macro level to really start wondering if it’s going to have a dramatic change into 2024. Now through that whole thing, we still see underlying demand is positive for re-roofing and other things. So yes, 2023 should still remain good.
Garik Shmois: Okay. Great. Want to follow-up just on the mix impact in CCM and CWT in the fourth quarter, and how you anticipate mix to evolve in 2023, if at all?
Chris Koch: Well, we don’t normally get to that granularity on the call around mix. I would say when we look at CCM across the Board, EPDM, TPO, PVC, polyiso, really, with the exception of the last year where we’ve seen the raw material availability and then the supply availability and some different ordering patterns. For the most part, they’ve been very stable. EPDM has been a steady low-single digit grower. TPO continues to be a product that gains momentum. And obviously, polyiso with the ESG and efficiencies that are becoming now regulations and people wanting to higher our values on their roof. We’re seeing yes, polyiso continues as it has through the years to gain as a percentage of the job site. We’re still putting on maybe a square of TPO.
But underneath that, we could be now putting on two, three, four layers of polyiso, and I think that will continue to gain momentum. And then on the PVC side, our team has done a great job on PVC. We think it’s a nice product. It’s been relatively new to Carlisle. A few years ago, we opened up our plant in Greenville. And so polyiso or PVC has continued to gain some market share and had, again, good growth in the fourth quarter and in 2022 overall. So I don’t really think the mix will change much. When you look at our metals business, it’s pretty consistent there. Petersen and Drexel, the two acquisitions continue to grow at an expected rate and remain about the same percentage. CWT gets a little bit different because the businesses get a little bit smaller, but we continue to see nice improvement with Henry.
They continue to have pretty good success in the retail channels and R&R. We think R&R should pick up in 2023. And then spray foam to the Accella acquisition that had a few years ago, it was a little bit lower mix, but we’ve done some nice things there with that group to continue to drive, I would say, market or above rates, and there were some €“ I think when we did that deal, we were talking about 8% as a market growth rate there, and so they continue to grow. But then you get into some smaller businesses. And as you saw with the public announcement on side of our rubber business, we did exit that. And so obviously, that changes a little bit of the mix, but it’s not much. So try to give you some granularity there. But overall, mix pretty much stays the same that for the company and hopefully, that helps you.
Garik Shmois: It does. Thanks for all that and I appreciate and best of luck.
Chris Koch: You bet. Thanks, Garik.
Operator: Thank you, Mr. Shmois. The next question is from Dan Oppenheim with Credit Suisse. You may proceed.
Dan Oppenheim: Thanks very much. I was wondering if you can talk a little bit about CCM in terms of the low-single digit revenue there for 2023. You’ve talked about pricing in terms of still getting some benefit there. So given the impact on volume here in 1Q with inventory and such, are you essentially assuming sort of some slight benefit from pricing volumes flat to down or slightly there? Is that the way to think about it?
Chris Koch: Dan, I think we don’t want to €“ obviously, we don’t like to share too much because of competition. But just try to give you a little color. I think if we look at that number, we’d split it. We’d probably say the low-single digits. We take half in price and half in volume. So that could fluctuate a little bit. I happen to think that we’re seeing a little bit better start to the year. So could see a little bit more volume. But I think it’s a good place to just say split it 50-50.
Jim Giannakouros: And also €“ this is Jim, just that I mean, 1Q, obviously, is our toughest comp. We have our easiest comp in 4Q, right? And so that that will tend to balance out your model, Dan, to get into the low-singles on average for the year.
Dan Oppenheim: Great. And then, I guess, second thing, in terms of repurchase activity increasing there in the fourth quarter, how do you think about that in terms of planning for 2023? Should we expect more ones to get past these short-term challenges in 1Q?
Chris Koch: No. I think we’ve been pretty consistent about our allocation of capital, especially into share repurchases. And we still tend to look at our intrinsic value, and then we do some work around that to see where we end up and then we compare it to other places where you can allocate capital. And I’d say we should be in that same level for 2023 that we were for 2022. When you look at the year as a whole, obviously, it’s going to maybe vary by quarter, but I think what we did in 2022 is probably a good starting point for what we’ll do in 2023.
Dan Oppenheim: Great. Thank you.
Operator: Thank you, Mr. Oppenheim. The next question is from the line of Saree Boroditsky with Jefferies. Please proceed.
Saree Boroditsky: Thanks for taking my questions. So just following up on the CWT margin commentary. Just given the volume declines, can you just walk us through the offset that way you expand margins for the full year?
Kevin Zdimal: Yes. We €“ as far as €“ I mean, the biggest one will be price cost. As you look at that one, we’re seeing that to be a benefit in our business for 2023 at CWT, and that’s been historically, what we’ve seen in other cycles like this as you look back, whether it was financial crisis or back-end early 2000s, very similar that we didn’t own the business at the time, the Henry business, but that’s €“ they saw similar to what we saw in our core roofing business with those being tailwinds.
