-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QilnOi/K6F2Nm7t75fxZoh/nkO2SIXtiP8j1v3b5uaZ0K+/sVP3MOb4Zwy0hmEqo mFp/CyOR4GF3ZXA31WzlZA== 0001005477-98-001450.txt : 19980507 0001005477-98-001450.hdr.sgml : 19980507 ACCESSION NUMBER: 0001005477-98-001450 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980506 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARLISLE COMPANIES INC CENTRAL INDEX KEY: 0000790051 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED RUBBER PRODUCTS, NEC [3060] IRS NUMBER: 311168055 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09278 FILM NUMBER: 98611372 BUSINESS ADDRESS: STREET 1: 250 S CLINTON ST STREET 2: STE 201 CITY: SYRACUSE STATE: NY ZIP: 13202 BUSINESS PHONE: 3154779108 MAIL ADDRESS: STREET 1: 250 SOUTH CLINTON STREET STREET 2: SUITE 201 CITY: SYRACUSE STATE: NY ZIP: 13202-1258 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 |X| OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 ------------------------------------------------- OR TRANSITION REPORT PURSUANT TO SECTION 13 |_| OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to _________________ Commission file number 1-9278 ---------------------------------------------------------- CARLISLE COMPANIES INCORPORATED - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 31-1168055 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 250 South Clinton Street, Suite 201, Syracuse, New York 13202 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) 315-474-2500 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| Shares of common stock outstanding at May 1, 1998 30,181,489 ---------- Page 1 of 9 PART I. FINANCIAL INFORMATION CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES Condensed Consolidated Statements of Earnings Three Months ended March 31, 1998 and 1997 (Dollars in thousands, except per share amounts) (unaudited) 1998 1997 ---- ---- Net Sales $ 363,090 $ 287,819 Cost and expenses: Cost of goods sold 284,535 224,227 Selling and administrative 40,107 34,464 Research and development 3,886 3,855 --------- --------- 328,528 262,546 Operating profit 34,562 25,273 Other income (deductions): Investment income 458 245 Interest expense (5,029) (3,981) Other, net 1,380 687 --------- --------- (3,191) (3,049) --------- --------- Earnings before income taxes 31,371 22,224 Income taxes 12,392 8,803 --------- --------- Net earnings $ 18,979 $ 13,421 ========= ========= Average shares outstanding - basic 30,176 30,364 Basic earnings per share $ .63 $ .44 ========= ========= Average shares outstanding - diluted 30,735 31,129 Diluted earnings per share $ .62 $ .43 ========= ========= Dividends declared and paid per share $ .1400 $ .1225 ========= ========= See accompanying notes to interim financial statements. Page 2 of 9 CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES Condensed Consolidated Balance Sheets March 31, 1998 and December 31, 1997 (Dollars in thousands, except share amounts) March 31, Dec. 31, 1998 1997 ---- ---- (unaudited) ASSETS Current assets Cash and cash equivalents $ 9,709 $ 1,732 Receivables, less allowances of $5,143 in 1998 and $5,180 in 1997 219,260 184,796 Inventories 189,115 180,331 Deferred income taxes 28,520 28,462 Prepaid expenses and other 23,617 22,212 --------- --------- Total current assets 470,221 417,533 --------- --------- Property, plant and equipment 569,436 539,482 Less accumulated depreciation 253,887 245,317 --------- --------- Net property, plant and equipment 315,549 294,165 --------- --------- Other assets Patents and other intangibles 129,356 121,772 Investments and advances to affiliates 22,077 16,467 Receivables and other assets 20,233 11,279 --------- --------- Total other assets 171,666 149,518 --------- --------- $ 957,436 $ 861,216 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Short-term debt, including current maturities $ 92,421 $ 24,332 Accounts payable 101,961 75,936 Accrued expenses 123,190 125,815 --------- --------- Total current liabilities 317,572 226,083 --------- --------- Long-term liabilities Long-term debt 199,700 209,642 Product warranties 75,568 73,715 Deferred compensation and other liabilities 1,625 2,940 --------- --------- Total long-term liabilities 276,893 286,297 --------- --------- Stockholders' equity: Common stock, $1 par value. Authorized 50,000,000 shares; issued 39,330,624 shares 39,331 39,331 Additional paid-in capital 2,832 1,830 Retained earnings 418,111 403,356 Cost of shares in treasury (1998 - 9,148,167 shares; 1997 - 9,171,915 shares) (97,303) (95,681) --------- --------- Total stockholders' equity 362,971 348,836 --------- --------- $ 957,436 $ 861,216 ========= ========= See accompanying notes to interim financial statements. Page 3 of 9 CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES Condensed Statements of Consolidated Cash Flows Three Months ended March 31, 1998 and 1997 (Dollars in thousands) (unaudited) 1998 1997 ---- ---- Operating Activities Net earnings $ 18,979 $ 13,421 Reconciliation of net earnings to cash flows: Depreciation 9,967 8,336 Amortization 1,899 1,540 Changes in assets and liabilities, excluding effects of acquisitions and divestitures: Current & long-term receivables (42,280) (19,542) Inventories (6,884) (14,062) Accounts payable & accrued expenses 18,173 927 Prepaid, deferred & current income taxes 3,184 7,660 Long-term liabilities (1,530) (775) Other 254 2,622 --------- --------- Net cash provided by operating activities 1,762 127 --------- --------- Investing Activities Capital expenditures (29,087) (10,255) Acquisitions, net of cash (17,240) (2,104) Sales of property, equipment & business 3,763 5,556 Other (2,747) -- --------- --------- Net cash used in investing activities (45,311) (6,803) --------- --------- Financing Activities Proceeds from short-term borrowings 68,178 -- Proceeds from long-term debt -- 150,006 Reductions of long-term debt (10,031) (124,711) Dividends (4,225) (3,721) Purchases of treasury shares (2,396) (10,260) --------- --------- Net cash provided by financing activities 51,526 11,314 --------- --------- Change in cash and cash equivalents 7,977 4,638 Cash and cash equivalents Beginning of period 1,732 8,312 --------- --------- End of period $ 9,709 $ 12,950 ========= ========= See accompanying notes to interim financial statements. Page 4 of 9 Notes to Condensed Consolidated Financial Statements Three Months Ended March 31, 1998 and 1997 (1) The accompanying unaudited condensed consolidated financial statements include the accounts of Carlisle Companies Incorporated and its wholly-owned subsidiaries (together, the "Company"). Intercompany transactions and balances have been eliminated in consolidation. The unaudited condensed consolidated financial statements have been prepared in accordance with Article 10-01 of Regulation S-X of the Securities and Exchange Commission and, as such, do not include all information required by generally accepted accounting principles. However, in the opinion of the Company, these financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the financial statements for the interim period presented herein. Results of operations for the three-month period ended March 31, 1998 are not necessarily indicative of the operating results for the full year. While the Company believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these financial statements be read in conjunction with the financial statements and notes included in the Company's 1997 Annual Report to Stockholders. (2) The components of inventories are as follows: March 31, Dec. 31, 1998 1997 ---- ---- (000)'s First-in, first-out (FIFO) costs: Finished goods $ 115,688 $ 111,403 Work in process 22,809 23,250 Raw materials 65,459 60,375 --------- --------- $ 203,956 $ 195,028 Excess of FIFO cost over Last-in, First-out (LIFO) inventory value (14,841) (14,697) --------- --------- LIFO inventory value $ 189,115 $ 180,331 ========= ========= (3) Diluted earnings per share of common stock are based on the weighted average number of shares outstanding of 30,734,571 for the three months ended March 31, 1998 assuming the exercise of dilutive stock options. Page 5 of 9 Management's Discussion and Analysis of Financial Condition and Results of Operations Carlisle Companies achieved record first quarter sales of $363.1 million and net earnings of $19.0 million or $.62 a share (diluted). First quarter sales increased 26% over 1997 sales of $287.8 million. Earnings rose 42% over 1997 first quarter earnings of $13.4 million or $.43 a share (diluted). Record first quarter performance was spurred by the strong segment sales and earnings growth for all our segments. Construction segment sales of $70.3 million rose 24% over 1997 levels of $56.6 million. Segment earnings for the quarter improved 37% to $8.1 million compared to 1997 earnings of $5.9 million. The mild winter weather experienced in the Northeastern and Midwestern United States enabled construction projects to continue with few interruptions, thus sustaining demand for roofing products during the generally slow first quarter. While we are generally pleased with these first quarter results, some of the unusually good first quarter results can be explained by sales that would ordinarily occur throughout the year under more normal weather conditions. Transportation Products segment sales of $154.8 million reflected a 25% increase over 1997 while first quarter segment earnings of $15.3 million outpaced 1997 earnings by 50%. Significant improvements in the operating performance of the Company's container manufacturing operation coupled with continued positive results of the container leasing joint venture were the primary contributors to the jump in this segment's 1998 first quarter earnings. Sales and earnings of the Company's wire operations continue to benefit from the strong aerospace and data communications markets. In March 1998, the Company completed the acquisition of Vermont Electromagnetics Corporation, a manufacturer of specialty coaxial cable assemblies and connectors serving the computer, medical electronics and telecommunications markets. The specialized trailer operations continue to report favorable sales and earnings resulting from expanded market share and the introduction of several new products. Improved sales and earnings at the Company's heavy-duty friction and industrial friction operations reflect favorable product mix. The Company's engineered products operations continue to show improved sales and earnings through the on-going integration of the Johnson Controls assets purchased in October 1996. The Company also completed the establishment of a joint venture with Lander Plastics, Ltd. in March 1998, which will expand its capabilities to manufacture and supply components to automotive customers in the United Kingdom and other European countries. General Industry segment sales rose 28% to $138.0 million for the first quarter from $107.6 million in 1997. Earnings for the first quarter increased 17% to $15.8 million over 1997 earnings of $13.5 million. The integration of the Company's 1997 specialty tire and wheel acquisitions, coupled with favorable manufacturing performances contributed significantly to this segment's sales and earnings increase. Foodservice sales improved over 1997 levels reflecting favorable customer response and market share gains, but this unit continues to face margin pressures. This segment's first quarter results also benefited from the expansion of the Company's brush manufacturing Page 6 of 9 operations. The Company's stainless steel processing equipment operations also contributed to the favorable first quarter sales results. Gross margins were 21.6% of sales during the first three months of 1998 compared to 22.1% for the same period in 1997. This decrease reflects the continued change in sales mix across all segments. Selling and administrative expenses as a percentage of sales declined to 11% in the first three months of 1998 from 12% in the same period of 1997. This decline reflects the Company's continued commitment to control costs throughout all operations. Interest expense increased to $5.0 million for the first quarter of 1998 compared to $4.0 million for the same period of 1997, reflecting the increased level of debt. The increase in borrowings was used to finance acquisitions and capital expenditures. Capital expenditures totaled $29.1 million for the first quarter of 1998 compared to $10.3 million for the first quarter of 1997. This increase is attributable to investments in injection-molding and blow-molding equipment in the automotive components operations, the purchase of facilities for the specialty wheel operations and the purchase of warehousing space for finished specialty tire and wheel assemblies and EPDM roofing materials. Other significant projects in the first quarter of 1998 included plant and equipment to manufacture TPO roofing membranes, as well as warehousing and distribution systems for the foodservice operations. Working Capital was $152.6 million at March 31, 1998 compared to $191.5 million at December 31, 1997 and $203.3 at March 31, 1997. Excluding short-term borrowings, working capital for the quarter increased $29.2 million. The increase in receivables, inventory and current liabilities reflects increased sales levels partially offset by improved working capital management. We are enthusiastic about our record first quarter but remain realistic that this quarter's results were exceptional. The impact of favorable weather conditions and significant improvements over first quarter 1997 at our container manufacturing operations have resulted in a very good start to 1998, which should enable us to meet our goals for 1998. The Company has remediation programs in place for its systems that are not currently Year 2000 compliant. The total cost of compliance is not expected to have a material impact on the Company's operations, liquidity or capital resources. However, we are unable to predict all the implications of the Year 2000 issue as it relates to our customers, suppliers and other entities. Page 7 of 9 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits applicable to the filing of this report are as follows: (12) Ratio of Earnings to Fixed Charges. (27) Financial Data Schedule as of March 31, 1998 and for the three months ended March 31, 1998. (b) Report on Form 8-K: No reports on Form 8-K were filed during the quarter for which this report on Form 10-Q is filed. Page 8 of 9 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Carlisle Companies Incorporated Date May 4, 1998 By /s/Robert J. Ryan, Jr. -------------------- ------------------------ Robert J. Ryan, Jr. Vice President, Treasurer and Chief Financial Officer Page 9 of 9 EX-12 2 RATIO OF EARNINGS TO FIXED CHARGES RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the Company's ratio of earnings to fixed charges for periods indicated: 3 Months Ended Year Ended December 31, ----- ----------------------- 3/31/98 1997 1996 1995 1994 1993 ------- ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges 5.34 6.06 7.47 8.70 9.73 9.89 For purposes of computing the ratio of earnings to fixed charges, earnings are defined as earnings before income taxes plus fixed charges. Fixed charges consist of interest expense (including capitalized interest) and the portion of rental expense that is representative of the interest factor (deemed to be one-third of minimum operating lease rentals). The earnings to fixed charges calculation reflects the Company's proportionate share of income, expense and fixed charges attributable to the Company's investment in majority-owned unconsolidated subsidiaries and joint ventures. EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains Summary Financial Information extracted from the Financial Statements of Carlisle Companies Incorporated for the three month period ending March 31, 1998, and is qualified in its entirety by reference to such Financial Statements. 0000790051 CARLISLE COMPANIES INCORPORATED 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 9,709 0 224,403 5,143 189,115 470,221 569,436 253,887 957,436 317,572 199,700 0 0 39,331 362,971 957,436 363,090 363,090 284,535 328,528 1,380 268 4,571 31,371 12,392 18,979 0 0 0 18,979 .63 .62
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