-----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, E5hmduFiWdf0Jj8jMhmC8pYLjzPxkI56m4tdA7gUJJkd+E6Fbgb5HT2mTWHCnJEM vIcn/obVpN0Dn6hc3xAiMg== /in/edgar/work/0001005477-00-007732/0001005477-00-007732.txt : 20001114 0001005477-00-007732.hdr.sgml : 20001114 ACCESSION NUMBER: 0001005477-00-007732 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARLISLE COMPANIES INC CENTRAL INDEX KEY: 0000790051 STANDARD INDUSTRIAL CLASSIFICATION: [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: 759699 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 0001.txt 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 SEPTEMBER 30, 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 November 1, 2000 30,255,302 PART I. FINANCIAL INFORMATION Carlisle Companies Incorporated and Subsidiaries Condensed Consolidated Statements of Earnings Three Months and Nine Months ended September 30, 2000 and 1999 (Dollars in thousands, except per share amounts) (unaudited)
Three Months Nine Months September 30, September 30, 2000 1999 2000 1999 ----------- ---------- ------------ ----------- Net sales $444,367 $400,855 $1,357,816 $1,216,692 Cost and expenses: Cost of goods sold 348,566 310,928 1,056,988 944,040 Selling and administrative expenses 42,857 42,516 138,306 129,709 Research and development expenses 3,878 3,908 12,045 11,886 (Gain) on divestiture of business ($16.6m), net of other charges ($15.9m) -- -- -- (685) Other (income) & expense (1,540) (1,513) (3,446) (3,694) --------- ---------- ----------- ----------- Earnings before interest & income taxes 50,606 45,016 153,923 135,436 Interest expense, net 6,418 4,893 18,585 14,328 --------- ---------- ------------ ----------- Earnings before income taxes 44,188 40,123 135,338 121,108 Income taxes 15,978 15,447 49,729 46,626 --------- ---------- ------------ ----------- Net earnings $ 28,210 $ 24,676 $ 85,609 $ 74,482 ========= ========== ============ =========== Average shares outstanding (000's)-basic 30,255 30,178 30,234 30,180 Basic earnings per share $ 0.93 $ 0.82 $ 2.83 $ 2.47 ----------- ---------- ------------ ----------- Average shares outstanding (000's)-diluted 30,611 30,616 30,599 30,636 Diluted earnings per share $ 0.92 $ 0.81 $ 2.80 $ 2.43 ----------- ---------- ------------ ----------- Dividends declared and paid per share $ 0.20 $ 0.18 $ 0.56 $ 0.50 ----------- ---------- ------------ -----------
See accompanying notes to interim financial statements. Page 2 of 11 Carlisle Companies Incorporated and Subsidiaries Condensed Consolidated Balance Sheets September 30, 2000 and December 31, 1999 (Dollars in thousands, except share data) September 30, Dec. 31, 2000 1999 ------------ ----------- Assets (unaudited) Current assets Cash and cash equivalents $ 29,513 $ 10,417 Receivables 268,500 245,120 Inventories (Note 2) 262,862 219,270 Deferred income taxes 33,527 32,108 Prepaid expenses and other 42,570 34,123 ----------- ----------- Total current assets 636,972 541,038 ----------- ----------- Property, plant and equipment, net 405,866 349,451 ----------- ----------- Other assets Patents, goodwill and other intangibles 247,974 157,967 Investments and advances to affiliates 60,190 14,321 Receivables and other assets 20,506 17,885 ----------- ----------- Total other assets 328,670 190,173 ----------- ----------- $ 1,371,508 $ 1,080,662 =========== =========== Liabilities and Shareholders' Equity Current liabilities Short-term debt, including current maturities $ 227,472 $ 1,989 Accounts payable 115,410 106,283 Accrued expenses 130,770 132,106 ----------- ----------- Total current liabilities 473,652 240,378 ----------- ----------- Long-term liabilities Long-term debt 282,216 281,744 Product warranties 72,394 79,858 Other liabilities 3,033 549 ----------- ----------- Total long-term liabilities 357,643 362,151 ----------- ----------- 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 7,707 5,571 Cumulative translation adjustments (6,012) (1,658) Retained earnings 614,074 545,404 Cost of shares in treasury - 9,075,322 shares in 2000 and 9,153,006 shares in 1999 (114,887) (110,515) ----------- ----------- Total shareholders' equity 540,213 478,133 ----------- ----------- $ 1,371,508 $ 1,080,662 =========== =========== See accompanying notes to interim financial statements. Page 3 of 11 Carlisle Companies Incorporated and Subsidiaries Condensed Statements of Consolidated Cash Flows Nine Months ended September 30, 2000 and 1999 (Dollars in thousands) (unaudited) September 30, September 30, 2000 1999 ------------ ------------ Operating activities Net earnings $ 85,609 $ 74,482 Reconciliation of net earnings to cash flows: Depreciation 38,068 32,191 Amortization 7,942 5,223 (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 (12,758) (35,871) Inventories (22,966) (6,111) Accounts payable and accrued expenses (22,079) 663 Prepaid, deferred and current income taxes 6,172 17,632 Long-term liabilities (7,989) 1,309 Other (5,006) 745 --------- --------- Net cash provided by operating activities 66,993 89,578 --------- --------- Investing activities Capital expenditures (49,692) (33,383) Acquisitions, net of cash (205,993) (28,228) Proceeds from sale of property, equipment and business 53 16,328 Other 3,692 127 --------- --------- Net cash used in investing activities (251,940) (45,156) --------- --------- Financing activities Net change in short-term debt 225,483 (28,365) Proceeds from long-term debt -- 10,000 Reductions of long-term debt (2,265) (1,744) Dividends (16,939) (15,089) Purchases of treasury shares (2,236) (2,386) --------- --------- Net cash provided by (used in) financing activities 204,043 (37,584) --------- --------- Change in cash and cash equivalents 19,096 6,838 Cash and cash equivalents Beginning of period 10,417 3,883 --------- --------- End of period $ 29,513 $ 10,721 --------- --------- See accompanying notes to interim financial statements. Page 4 of 11 Notes to Condensed Consolidated Financial Statements Nine Months Ended September 30, 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 months and nine months ended September 30, 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 and 1999 Form 10-K. Certain reclassifications have been made to prior year information in order to conform to 2000 presentation. (2) The components of inventories are as follows: September 30, Dec. 31, 2000 1999 ------ ------ (000)'s First-in, first-out (FIFO) costs: Finished goods $157,073 $132,719 Work in process 32,905 27,052 Raw materials 83,795 70,735 -------- -------- $273,773 $230,506 Excess of FIFO cost over Last-in, First-out (LIFO) inventory value ( 10,911) ( 11,236) -------- -------- LIFO inventory value $262,862 $219,270 ======== ======== (3) On June 30, 2000, the Company replaced its $125 million revolving credit facility, expiring April 30, 2001, with a $150 million three-year and a $200 million 364-day revolving credit facility. The Company has used its short term borrowings to finance acquisitions completed during the year. (4) The Company has completed several acquisitions during the year and has tentatively considered the carrying value of the acquired assets to approximate their fair value, with all of the excess of those acquisition costs being attributable to goodwill. The Company is in the process of fully evaluating the assets acquired and, as a result, the purchase price allocation among the tangible and intangible assets acquired and their useful lives may change. (5) Diluted earnings per share of common stock are based on the weighted average number of shares outstanding of 30,611,495 for the three months ended September 30, 2000 and 30,598,500 for the nine months ended September 30, 2000 assuming the exercise of dilutive stock options. (6) Pending Accounting Standards - In December 1999, the Securities an Exchange Commission issued Staff Accounting Bulletin No. 101("SAB 101"), "Revenue Recognition in Financial Page 5 of 11 Statements," which is required to be adopted by the Company in the quarter ended December 31, 2000. SAB 101 clarifies certain conditions regarding the culmination of an earnings process and customer acceptance requirements in order to recognize revenue. The adoption of this new requirement is not expected to have a material impact on the financial position or results of operations of the Company. In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of SFAS No. 133", which deferred SFAS No. 133's effective date to fiscal quarters beginning after June 15, 2000. This statement standardizes the accounting for derivatives and hedging activities and requires that all derivatives be recognized in the statement of financial position as either assets or liabilities at fair value. Changes in the fair value of derivatives that do not meet the hedge accounting criteria are to be reported in earnings. The adoption of this new requirement is not expected to have a material impact on the financial position or results of operations of the Company. (7) 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 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 appropriate. 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, net of other charges" on the face of the Company's Condensed Consolidated Statements of Earnings. (8) Financial information for operations by reportable business segment is included in the following summary: September 2000 - YTD Segment Information Table In thousands Sales EBIT Assets ----- ---- ------ Construction Materials $ 307,888 $ 46,131 $ 296,280 Page 6 of 11 Industrial Components 499,722 68,745 490,849 Automotive Components 233,469 18,007 166,727 General Industry (All other) 316,737 31,298 338,154 Corporate/Eliminations -- (10,258) 79,498 ---------- -------- ---------- $1,357,816 $153,923 $1,371,508 ---------- -------- ---------- September 1999 - YTD Segment Information Table In thousands Sales EBIT Assets ----- ---- ------ Construction Materials $ 301,366 $ 44,749 $ 242,242 Industrial Components 408,974 52,694 332,503 Automotive Components 237,148 16,070 213,636 General Industry (All other) 269,204 30,301 237,850 Corporate/Eliminations -- *(8,378) 47,282 ---------- -------- ---------- $1,216,692 $135,436 $1,073,513 ---------- -------- ---------- *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 6 in the Notes to Condensed Consolidated Financial Statements. Page 7 of 11 Management's Discussion and Analysis of Financial Condition and Results of Operations Carlisle Companies Incorporated ("Carlisle" or the "Company") reported record third quarter sales of $444 million and record third quarter net earnings of $28.2 million, or $0.92 per share (diluted). The Industrial Components segment was the primary contributor to the sales and earnings improvement. For the nine-months ended September 30, 2000, sales of $1.4 billion were up 12% over 1999 year-to-date sales of $1.2 billion, and net earnings of $85.6 million were up 15% over the same period last year. Acquisitions made in the Industrial Components and General Industry segments were the primary contributors to the sales and net earnings gains on a year-to-date basis. In addition, the Company continued to effectively implement cost reduction and productivity improvements throughout its operations. Construction Materials sales of $120 million, for the third quarter 2000, were up 5% over 1999 third quarter sales of $114 million. Increased sales of TPO membrane and insulation products were the primary contributors to the sales increase. Earnings before interest and taxes ("EBIT") for the quarter of $21.1 million were up 7% over the third quarter last year. In July, the Company announced that it purchased a 25% equity interest in Icopal a/s, a leading European roofing systems company with sales exceeding $600 million. Earnings from the investment in Icopal are accounted for using the equity method. The Icopal earnings contribution is shown in the Construction Materials segment's earnings results, but sales, under equity accounting rules, were not impacted. Icopal's contribution and continued favorable warranty experience accounted for 40% and 60% respectively, of the earnings improvement in the segment, offsetting the negative effect of rising material costs in a very competitive roofing market. Industrial Components reported robust growth in both sales and earnings. Sales of $153 million for the third quarter outpaced 1999 sales by 27%, while EBIT of $18.0 million exceeded last year by 46%. Carlisle Tire & Wheel fueled the sales and earnings growth of this segment through the acquisitions of the consumer tire and wheel business of Titan International, Inc. acquired in April of this year, and the CRAGAR steel wheel product line, which was acquired in December of 1999. Tensolite reported improved results over the third quarter of 1999 through its expansion into new cable assembly markets as well as increased aerospace cable demand. In July, the Company completed the acquisition of UniTrek Company, a manufacturer of radio frequency and microwave cable assemblies, and wire harnesses supplied to customers in various wireless markets. UniTrek will further expand the Company's product offerings in this growing market. Reduced production levels, experienced at many of the heavy-duty truck manufacturers, have negatively impacted sales and earnings of the Company's heavy-duty brake lining business. Strong aftermarket demand, favorable product mix and the successful implementation of operating efficiencies at Carlisle Industrial Brake & Friction added to this segment's sales and earnings growth. Automotive Components reported a 15% increase in EBIT on slightly lower sales for the quarter ended September 30, 2000, compared to third quarter 1999. Sales in this segment have remained strong throughout the year, after taking into consideration the deconsolidation of its small U.K. joint venture and the cessation of its tool manufacturing operations, which together contributed Page 8 of 11 $14.5 million to sales in 1999. The Company's focus on operational efficiencies has resulted in improvements to operating profits and this segment's return on assets. General Industry sales of $103 million were up 8% over 1999 third quarter sales of $95 million. Sales gains at Carlisle Systems & Equipment and Carlisle FoodService were supported by acquisitions made during the year. EBIT for this segment of $11.6 million for the third quarter 2000, was 6% below the same period last year. During the quarter FoodService announced price increases to cover cost increases already experienced, which will not have an effect until the fourth quarter. Additionally, rising fuel costs, exacerbated by higher interest rates and regulatory legislation, have negatively impacted demand and margins at Carlisle Transportation Products. Acquisitions During the third quarter, Carlisle completed four acquisitions: UniTrek, a manufacturer of radio frequency and microwave cable assemblies and complex wire harnesses, supplying OEM's in the wireless communications, electronic test and measurement, and defense electronics markets; a 25% equity investment in Icopal a/s, Europe's leading commercial roofing systems company; Red River Manufacturing Inc., a specialty trailer manufacturer; and Zimmer Corporation, which will broaden Carlisle's global offerings of cheese equipment and whey processing systems. Cash Flows Cash generated from operations for the third quarter was $11 million. Increased net income, amortization and depreciation were partially offset by higher working capital needs, as the Company took advantage of quarter-end discounts and increased inventory levels for seasonal demands. For the nine months ended September 30, 2000, cash generated from operations was $67 million, compared to $90 million in 1999 for the same period. The 1999 nine-month cash flows reflect the impact of the proceeds, net of a $39 million tax payment, from the divestiture of the Perishable Cargo business, completed in the first quarter of 1999. Excluding this tax payment, operating cash flows are up $16 million year over year. On June 30 of 2000, the Company secured financing under a $350 million revolving credit facility. Short-term borrowings of $227 million at September 30, 2000 were used to fund acquisitions completed during the year. Backlog The consolidated backlog of $264 million at September 30, 2000 rose 21% over the September 30, 1999 backlog of $218 million. Improved backlog positions at Carlisle Tire & Wheel, Tensolite and Carlisle Industrial Brake & Friction were driven by acquisitions made during the year and increased demand in these markets. Page 9 of 11 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 September 30, 2000 and for the nine months ended September 30, 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 10 of 11 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 November 10, 2000 By: /s/Dennis J. Hall ---------------------- ------------------------------------- Dennis J. Hall Vice Chairman Page 11 of 11 EX-12 2 0002.txt RATION OF EARNING TO FIXED CHARGES 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: 9 Months Ended Year Ended December 31, ------- ------------------------------ 9/30/00 1999 1998 1997 1996 1995 ------- ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges 6.78 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 0003.txt FINANCIAL DATA SCHEDULE
5 This schedule contains Summary Financial Information extracted from the Financial Statements of Carlisle Companies Incorporated for the nine month period ending September 30, 2000, and is qualified in its entirety by reference to such Financial Statements. 9-MOS DEC-31-2000 JAN-01-2000 SEP-30-2000 29,513 0 268,500 5,911 262,862 636,972 750,593 344,727 1,371,508 473,652 282,216 0 0 39,331 500,882 1,371,508 1,357,816 1,357,816 1,056,988 1,207,339 3,446 630 18,585 135,338 49,729 85,609 0 0 0 85,609 2.83 2.80
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