-----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, GHs59alpHLdVUCdcHXox19Bu0+/YM4nxAShZBW0sIkie33lDnnjaz+isSpisEG9i hMcJzpB03GL64sUvIP42Bw== 0000912057-00-023681.txt : 20000515 0000912057-00-023681.hdr.sgml : 20000515 ACCESSION NUMBER: 0000912057-00-023681 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 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: 627586 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) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000 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 Identification No.) incorporation or organization) 250 SOUTH CLINTON STREET, SUITE 201, SYRACUSE, NEW YORK 13202 315-474-2500 (Address of principal executive office, including zip code) (Telephone Number) 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, 2000 30,253,824 --------------- Page 1 of 10 PART I. FINANCIAL INFORMATION CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES Condensed Consolidated Statements of Earnings Three Months ended March 31, 2000 and 1999 (Dollars in thousands, except per share amounts) (unaudited) 2000 1999 --------- --------- Net sales $ 434,018 $ 390,024 Cost and expenses: Cost of goods sold 336,527 305,401 Selling and administrative expenses 48,922 42,945 Research and development expenses 4,092 3,925 (Gain) on divestiture of business ($16.6m), net of other charges ($15.9m) -- (685) Other (income) & expense, net (1,189) (1,679) --------- --------- Earnings before interest & income taxes 45,666 40,117 Interest expense, net 5,179 4,657 --------- --------- Earnings before income taxes 40,487 35,460 Income taxes 15,028 13,652 --------- --------- Net earnings $ 25,459 $ 21,808 ========= ========= Average shares outstanding - basic 30,191 30,183 Basic earnings per share $ 0.84 $ 0.72 --------- --------- Average shares outstanding - diluted 30,526 30,639 Diluted earnings per share $ 0.83 $ 0.71 --------- --------- Dividends declared and paid per share $ 0.18 $ 0.16 --------- --------- See accompanying notes to interim financial statements. Page 2 of 10 CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES Condensed Consolidated Balance Sheets March 31, 2000 and December 31, 1999 (Dollars in thousands, except share data)
MARCH 31, Dec. 31, 2000 1999 ----------- ----------- ASSETS (unaudited) CURRENT ASSETS Cash and cash equivalents $ 3,624 $ 10,417 Receivables 270,281 245,120 Inventories (Note 2) 231,040 219,270 Deferred income taxes 32,149 32,108 Prepaid expenses and other 33,972 34,123 ----------- ----------- TOTAL CURRENT ASSETS 571,066 541,038 ----------- ----------- PROPERTY, PLANT AND EQUIPMENT, NET 350,647 349,451 ----------- ----------- OTHER ASSETS Patents, goodwill and other intangibles 158,859 157,967 Investments and advances to affiliates 16,299 14,321 Receivables and other assets 18,473 17,885 ----------- ----------- TOTAL OTHER ASSETS 193,631 190,173 ----------- ----------- $ 1,115,344 $ 1,080,662 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Short-term debt, including current maturities $ 2,472 $ 1,989 Accounts payable 113,823 106,283 Accrued expenses 139,708 132,106 ----------- ----------- TOTAL CURRENT LIABILITIES 256,003 240,378 ----------- ----------- LONG-TERM LIABILITIES Long-term debt 281,379 281,744 Product warranties 82,094 79,858 Other liabilities 288 549 ----------- ----------- TOTAL LONG-TERM LIABILITIES 363,761 362,151 ----------- ----------- SHAREHOLDERS' EQUITY Preferred stock, $1 par value. Authorized and unissued 5,000,000 shares Common stock, $1 par value. Authorized 100,000,000 shares; issued 39,330,624 shares 39,331 39,331 Additional paid-in capital 7,086 5,571 Cumulative translation adjustments (3,040) (1,658) Retained earnings 565,420 545,404 Cost of shares in treasury - 9,109,423 shares in 2000 and (113,217) (110,515) 9,203,095 shares in 1999 ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 495,580 478,133 ----------- ----------- $ 1,115,344 $ 1,080,662 =========== ===========
See accompanying notes to interim financial statements. Page 3 of 10 CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES Condensed Statements of Consolidated Cash Flows Three Months ended March 31, 2000 and 1999 (Dollars in thousands) (unaudited)
2000 1999 -------- -------- OPERATING ACTIVITIES Net earnings $ 25,459 $ 21,808 Reconciliation of net earnings to cash flows: Depreciation 11,968 11,294 Amortization 2,036 1,590 (Gain)/Loss on sales of property, equipment and business -- (685) Changes in assets and liabilities, excluding effects of acquisitions and divestitures: Current and long-term receivables (22,578) (22,654) Inventories (10,742) (8,919) Accounts payable and accrued expenses (1,053) 1,798 Prepaid, deferred and current income taxes 14,321 49,613 Long-term liabilities 829 785 Other 547 1,112 -------- -------- NET CASH PROVIDED BY OPERATING ACTIVITIES 20,787 55,742 -------- -------- INVESTING ACTIVITIES Capital expenditures (12,874) (14,638) Acquisitions, net of cash (4,929) (10,584) Proceeds from sale of property, equipment and business -- 11,568 -------- -------- Other (3,265) 3,863 -------- -------- NET CASH USED IN INVESTING ACTIVITIES (21,068) (9,791) -------- -------- FINANCING ACTIVITIES Net change in short-term debt 483 (29,285) Proceeds from long-term debt -- 8,441 -------- -------- Reductions of long-term debt (365) (346) Dividends (5,443) (4,830) Purchases of treasury shares (1,187) (509) -------- -------- NET CASH USED IN FINANCING ACTIVITIES (6,512) (26,529) -------- -------- CHANGE IN CASH AND CASH EQUIVALENTS (6,793) 19,422 CASH AND CASH EQUIVALENTS Beginning of period 10,417 3,883 -------- -------- End of period $ 3,624 $ 23,305 -------- --------
See accompanying notes to interim financial statements. Page 4 of 10 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Three Months Ended March 31, 2000 and 1999 (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, 2000 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 1999 Annual Report to Stockholders. Certain reclassifications have been made to prior year information in order to conform to 2000 presentation. (2) The components of inventories are as follows: MARCH 31, Dec. 31, 2000 1999 --------- --------- (000)'S First-in, first-out (FIFO) costs: Finished goods $ 137,432 $ 132,719 Work in process 29,805 27,052 Raw materials 74,948 70,735 --------- --------- $ 242,185 $ 230,506 Excess of FIFO cost over Last-in, First-out (LIFO) inventory value (11,145) (11,236) --------- --------- LIFO inventory value $ 231,040 $ 219,270 ========= ========= (3) Diluted earnings per share of common stock are based on the weighted average number of shares outstanding of 30,525,887 for the three months ended March 31, 2000 assuming the exercise of dilutive stock options. (4) In January 1999, the Company announced the reduction of its interest in its perishable cargo business, consisting of its container leasing joint venture and container manufacturing operations. On January 28, 1999 the Company sold 85% of its interest in its leasing joint venture. In connection with the reduction in the Company's interest in the leasing joint venture, the Company suspended operations at its container manufacturing facility. As a result, the Company recognized a pretax gain of $16.6 million in the first quarter of 1999. These operations are associated with the Company's General Industry (All Other) segment. In conjunction with the implementation of the 1999 business plan, the Company completed certain product line realignments, manufacturing improvements and facility relocations and upgrades at Page 5 of 10 its operating businesses resulting in certain assets that are no longer required or will be reallocated. In the first quarter of 1999, the Company recognized a $15.9 million pretax charge related to these assets. Approximately 75% of this charge related to machinery and equipment primarily associated with the foodservice, roofing, tire and wheel and automotive components manufacturing operations, with the remainder related to goodwill and other intangible assets associated with acquisitions made in prior years. The amount of the charge of machinery and equipment was determined to be the excess of the recorded values over the estimated fair values. The fair values were determined using estimated market values or projected future discounted cash flows, whichever was deemed appropriated. The charge related to the intangible assets was determined as the excess of the recorded value over the projected future discounted cash flows. The net effect of the above items is reflected under the caption "gain on divestiture of business and other charges" on the face of the Company's Consolidated Statement of Earnings. (5) Financial information for operations by reportable business segment is included in the following summary: MARCH 2000 - YTD SEGMENT INFORMATION IN THOUSANDS SALES EBIT ASSETS ----- ---- ------ Construction Materials $ 87,580 $ 8,924 $ 231,256 Industrial Components 162,975 24,435 365,314 Automotive Components 83,431 7,194 192,469 General Industry (All Other) 100,032 8,611 284,269 Corporate/Eliminations -- (3,498) 42,036 ========= ========== ========== $ 434,018 $ 45,666 $1,115,344 ========= ========== ========== MARCH 1999 - YTD SEGMENT INFORMATION IN THOUSANDS SALES EBIT ASSETS ----- ---- ------ Construction Materials $ 76,277 $ 8,333 $ 221,385 Industrial Components 145,099 20,403 347,502 Automotive Components 81,920 6,650 226,851 General Industry (All Other) 86,728 7,421 226,990 Corporate/Eliminations -- *(2,690) 44,314 ========= ========== ========== $ 390,024 $ 40,117 $1,067,042 ========= ========== ========== *In the first quarter of 1999, the gain on the divestiture of the Company's perishable cargo business and charges related to certain assets were recorded at the corporate level. See Note 4 in the Notes to Condensed Consolidated Financial Statements. Page 6 of 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Carlisle Companies Incorporated reported record sales for any quarter of $434 million, up 11% over 1999, and record first quarter net earnings of $25.5 million or $0.83 per share (diluted), an increase of 17% versus first quarter 1999 earnings of $21.8 million. Strong sales over 1999 were led by Carlisle Tire & Wheel (Industrial Components), Carlisle Systems & Equipment (General Industry), Carlisle SynTec (Construction Materials) and Carlisle FoodService Products (General Industry). Market share gains and expanded product line offerings were the primary factors drawing sales. Earnings growth resulted from the increased sales, as well as the continued focus on cost reduction and efficiency improvement programs across all operations. Additionally, through continued implementation of tax savings strategies throughout the Company, the effective tax rate has been further reduced from 38% to 37%. The impact of this change is an additional $0.01 a share. Construction Materials' sales of $88 million were up 16% over 1999 first quarter sales of $76 million. Sales to Carlisle SynTec's domestic roofing markets were responsible for much of this increase. Despite inclement winter weather conditions, Carlisle SynTec benefited from strong EPDM rubber membrane sales as well as the continued growth of the Company's thermoplastic polyolefin (TPO) membrane and insulation product lines. Segment earnings for the quarter rose 7% versus 1999 first quarter earnings of $8.3 million. This increase reflects higher sales levels impacted by raw material price increases and product mix. The need to recover cost increases experienced over the last year resulted in the announcement of a price increase on EPDM rubber membrane which took effect April 1, 2000. In February 2000, the Company acquired the assets of DynAir, Inc., a Canadian manufacturer of duct supplies to the heating, ventilation and air conditioning market. This acquisition will complement the product offerings of Carlisle Coatings & Waterproofing's existing business. Industrial Components' sales increased 12% to $163 million versus 1999 first quarter sales of $145 million. Carlisle Tire & Wheel exhibited a strong performance as activity in the lawn and garden markets commenced for the spring selling season. The brake and friction businesses also reported improved first quarter sales with a strong improvement in earnings over 1999. Healthy sales to original equipment manufacturers in the heavy friction business and strengthening demand in the haulage/mining markets combined with margin improvement to generate the overall improvement in the friction and brake businesses. Sales at Tensolite's specialty cable and cable assembly businesses also increased, fueled by a broad customer base and increased demand including a recovery in aerospace markets. Segment earnings increased 20% to $24.5 million over the 1999 first quarter. The earnings increase, beyond the rate of sales, is largely attributable to cost reduction programs and efficiency programs. Automotive Components' segment sales of $83 million, a record, reflect steady demand as vehicle builds remained at record levels throughout the quarter. Segment earnings of $7.2 million, grew 9% over first quarter 1999 as a result of the Company's ability to adapt to persistent high volumes, coupled with the continued reduction of inefficiencies related to the high demand. Good progress is being made in managing controllable assets, especially in reduced working capital needs. General Industry segment sales of $100 million showed a 15% improvement over 1999 first quarter sales of $87 million. After eliminating the results of the perishable cargo business, which was divested during the first quarter of 1999, segment sales and earnings were up 40% and 36%, respectively, over last year. Carlisle Systems & Equipment was the primary driver behind this increase as Johnson Truck Bodies, acquired in May of 1999, continued to experience strong demand from the home delivery markets it serves. In April of this year, the Company announced the acquisition of Extract Technologies Limited, a leading biotech/pharmaceutical systems provider, headquartered in Huddersfiled, England. The Company will merge Page 7 of 10 Extract with Carlisle Barrier Systems to comprise Carlisle Pharmaceutical Systems. Scherping Systems, the Company's cheese processing systems business, has been able to capitalize on the robust demands of the cheese/dairy industry to contribute to both sales and earnings. In addition, in March 2000, Scherping completed the acquisition of Damrow Denmark and Damrow USA, global equipment suppliers to the cheese industry. The acquisition of Damrow, coupled with the recent acquisition of Innovative Engineering Ltd. of New Zealand, makes Carlisle the leading global supplier of cheese manufacturing systems. Trail King's specialty trailer business continues to benefit from strong demand in the construction market, but diesel fuel price increases have dampened sales of trailers to commercial haulers. Carlisle FoodService experienced robust sales gains for the quarter from improved international sales. In addition, in April of this year, Carlisle FoodService completed the acquisition of the Dura-Ware Company, a manufacturer of commercial cookware and servingware for the foodservice and hospitality markets. Segment earnings of $8.6 million, for the quarter, were up 15% over first quarter 1999. The earnings increase was driven by the increase in sales, particularly at Johnson Truck Bodies, as well as the implementation of operational improvements at Carlisle Systems & Equipment and Carlisle FoodService offset somewhat by softer margins at Trail King and Carlisle Home Products. ACQUISITIONS In the first quarter, Carlisle completed two acquisitions; Damrow Denmark and Damrow USA, global equipment suppliers to the cheese industry, and DynAir, Inc., a Canadian manufacturer of duct supplies to the HVAC market. In addition, two acquisitions were completed in early April; Dura-Ware Company, a manufacturer of commercial cookware and servingware for the foodservice and hospitality markets, and Extract Technologies Limited, a leading biotech/pharmaceutical systems provider, headquartered in Huddersfiled, England. On April 14, the acquisition of the Tire and Wheel Consumer Products Division of Titan International, Inc. was announced. The annualized rate of sales of these acquisitions is approximately $175 million. CASH FLOWS Cash generated from operations for the first quarter was $21 million, attributable to improved earnings and higher depreciation and amortization. For the first quarter 1999, cash generated from operations and cash used in investing activities reflect the impact of proceeds, net of a $39 million tax payment, from the divestiture of the perishable cargo business. BACKLOG The consolidated backlog of $245 million at March 31, 2000 approximated March 31, 1999 levels. Stronger backlog positions have been experienced at Tensolite and the Systems & Equipment businesses with a slight decline at Carlisle SynTec and Trail King. The backlog has not yet been adjusted for recently announced acquisitions. Page 8 of 10 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, 2000 and for the three months ended March 31, 2000. (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 9 of 10 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 8, 2000 By: /s/ Dennis J. Hall -------------------- ------------------------------------- Dennis J. Hall Vice Chairman Page 10 of 10 EX-12 2 EXHIBIT 12 Exhibit 12 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, -------- -------------------------------- 3/31/00 1999 1998 1997 1996 1995 ------- ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges 7.37 7.41 5.19 6.06 7.47 8.70 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 EXHIBIT 27
5 This schedule contains Summary Financial Information extracted from the Financial Statement of Carlisle Companies Incorporated for the three month period ending March 31, 2000, and is qualified in its entirety by reference to such Financial Statements. 1,000 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 3,624 0 276,432 6,151 231,040 571,066 670,471 319,823 1,115,344 256,003 281,379 0 0 39,331 456,249 1,115,344 344,018 434,018 336,527 389,541 1,189 410 5,179 40,487 15,028 25,459 0 0 0 25,459 .84 .83
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