-----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, HvjHl0cSde4acfYVq0+2DWa8XWvZNZmBl7wS9CTLRyJdnuJid236OosGVe5u2QCe L9Dbk7DMkwX/IukQFkZxXg== 0001047469-98-009796.txt : 19980317 0001047469-98-009796.hdr.sgml : 19980317 ACCESSION NUMBER: 0001047469-98-009796 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980313 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-K/A SEC ACT: SEC FILE NUMBER: 001-09278 FILM NUMBER: 98565264 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-K/A 1 FORM 10-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A [X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] 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 13202-1258 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (315) 474-2500 -------------- Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered - ------------------- ----------------------------------------- Common stock, $1 par value New York Stock Exchange - -------------------------- ----------------------- Preferred Stock Purchase Rights New York Stock Exchange - ------------------------------- ----------------------- Indicate by check mark whether the 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___ --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] Aggregate market value of voting common stock held by non-affiliates at February 24, 1998 $1,276,973,417 Shares of common stock outstanding at February 24, 1998 30,188,136 Portions of the definitive Proxy Statement for the Annual Meeting of Shareholders on April 20, 1998 are incorporated by reference in Part III. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. CONSOLIDATED STATEMENT OF EARNINGS FOR YEARS ENDED DECEMBER 31
(IN THOUSANDS EXCEPT PER SHARE DATA) - ---------------------------------------------------------------------------------------------------------------------- 1997 1996 1995 ------------ ------------ ---------- Net sales..................................................................... $ 1,260,550 $ 1,017,495 $ 822,534 Cost and expenses: Cost of goods sold.......................................................... 974,089 779,797 624,860 Selling and administrative expenses......................................... 143,246 128,676 109,236 Research and development expenses........................................... 15,824 11,900 12,339 ------------ ------------ ---------- 1,133,159 920,373 746,435 Other income (deductions): Investment income........................................................... 1,172 666 2,020 Interest expense............................................................ (16,502) (9,062) (6,075) Other, net.................................................................. 4,723 3,314 814 ------------ ------------ ---------- (10,607) (5,082) (3,241) ------------ ------------ ---------- Earnings before income taxes.................................................. 116,784 92,040 72,858 Income taxes.................................................................. 46,118 36,360 28,777 Net earnings.................................................................. $ 70,666 $ 55,680 $ 44,081 ------------ ------------ ---------- ------------ ------------ ---------- Average shares outstanding-basic.............................................. 30,235 30,281 30,759 Basic earnings per share...................................................... $ 2.34 $ 1.84 $ 1.43 ------------ ------------ ---------- Average shares outstanding-diluted............................................ $ 31,025 30,953 31,266 Diluted earnings per share.................................................... $ 2.28 $ 1.80 $ 1.41 ------------ ------------ ---------- ------------ ------------ ----------
See accompanying Notes to Consolidated Financial Statements. 15 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (In thousands except per share data)
ADDITIONAL COST OF COMMON PAID-IN RETAINED SHARES IN STOCK CAPITAL EARNINGS TREASURY --------- ----------- ---------- ---------- Balance at December 31, 1994................................................ $ 19,665 $ 7,958 $ 282,919 $ (62,692) Net earnings................................................... -- -- 44,081 -- Cash dividends--$0.420 per share............................... -- -- (12,928) -- Exercise of stock options & other.............................. -- 1,358 -- 2,344 Purchase of 496,616 treasury shares............................ -- -- -- (9,448) --------- ----------- ---------- ---------- Balance at December 31, 1995................................................ $ 19,665 $ 9,316 $ 314,072 $ (69,796) Net earnings................................................... -- -- 55,680 -- Cash dividends -$0.465 per share............................... -- -- (14,129) -- Exercise of stock options & other.............................. -- 3,765 -- 3,098 Purchase of 649,966 treasury shares............................ -- -- -- (14,168) --------- ----------- ---------- ---------- 19,665 13,081 355,623 (80,866) Two-for-one stock split........................................ 19,666 (12,601) (7,065) -- --------- ----------- ---------- ---------- Balance at December 31, 1996................................................ $ 39,331 $ 480 $ 348,558 $ (80,866) Net earnings................................................... -- -- 70,666 -- Cash dividends--$0.525 per share............................... -- -- (15,868) -- Exercise of stock options & other.............................. -- 1,350 -- 3,295 Purchase of 550,980 treasury shares............................ -- -- -- (18,110) --------- ----------- ---------- ---------- Balance at December 31, 1997................................................ $ 39,331 $ 1,830 $ 403,356 $ (95,681) --------- ----------- ---------- ----------
See accompanying Notes to Consolidated Financial Statements. 16 CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31
(IN THOUSANDS EXCEPT SHARE DATA) 1997 1996 ----------- ----------- ASSETS Current assets Cash and cash equivalents............................................................. $ 1,732 $ 8,312 Receivables, less allowances of $5,180 in 1997 and $4,097 in 1996..................... 184,796 158,463 Inventories .......................................................................... 180,331 137,092 Deferred income taxes................................................................. 28,462 25,036 Prepaid expenses and other............................................................ 22,212 17,030 ----------- ----------- Total current assets................................................................ 417,533 345,933 ----------- ----------- Property, plant and equipment, net...................................................... 294,165 264,238 ----------- ----------- Other assets Patents, goodwill and other intangibles............................................... 121,772 108,648 Investments and advances to affiliates................................................ 16,467 11,976 Receivables and other assets.......................................................... 11,279 9,854 Deferred income taxes................................................................. -- 1,814 ----------- ----------- Total other assets.................................................................. 149,518 132,292 ----------- ----------- $861,216 $ 742,463 ----------- ----------- ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term debt, including current maturities......................................... $ 24,332 $ -- Accounts payable...................................................................... 75,936 74,338 Accrued expenses...................................................................... 125,815 96,310 ----------- ----------- Total current liabilities........................................................... 226,083 170,648 ----------- ----------- Long-term liabilities Long-term debt........................................................................ 209,642 191,167 Product warranties.................................................................... 73,715 71,478 Deferred compensation and other liabilities........................................... 2,940 1,667 ----------- ----------- Total long-term liabilities......................................................... 286,297 264,312 ----------- ----------- Shareholders' equity Preferred stock, $1 par value. Authorized and unissued 5,000,000 shares Common stock, $1 par value. Authorized 50,000,000 shares; issued 39,330,624 shares.... 39,331 39,331 Additional paid-in capital............................................................ 1,830 480 Retained earnings..................................................................... 403,356 348,558 Cost of shares in treasury-9,171,915 shares in 1997 and 8,979,300 shares in 1996...... (95,681) (80,866) ----------- ----------- Total shareholders' equity.......................................................... 348,836 307,503 ----------- ----------- $861,216 $ 742,463 ----------- ----------- ----------- -----------
See accompanying Notes to Consolidated Financial Statements. 17 CONSOLIDATED STATEMENT OF CASH FLOWS FOR YEARS ENDED DECEMBER 31
1997 1996 1995 ---------- ---------- ---------- (IN THOUSANDS) OPERATING ACTIVITIES Net earnings................................................................. $ 70,666 $ 55,680 $ 44,081 Reconciliation of net earnings to cash flows: Depreciation............................................................... 32,477 25,320 20,331 Amortization............................................................... 6,278 4,438 2,899 (Gain)/loss on sales of property, equipment and business..................... (993) 216 570 Changes in assets and liabilities, excluding effects of acquisitions and divestitures: Current and long-term receivables.......................................... (19,659) (13,237) (8,616) Inventories................................................................ (31,118) (5,837) (17,324) Accounts payable and accrued expenses...................................... 9,245 16,667 1,928 Prepaid, deferred and current income taxes................................. 10,887 (4,260) (993) Long-term liabilities...................................................... 3,279 4,939 7,429 Other...................................................................... 1,924 2,106 5,398 ---------- ---------- ---------- Net cash provided by operating activities.................................... 82,986 86,032 55,703 ---------- ---------- ---------- Investing Activities Capital expenditures....................................................... (59,531) (34,990) (37,467) Acquisitions, net of cash.................................................. (45,380) (133,719) (67,006) Sales of property, equipment and business.................................. 15,815 3,489 2,794 Other ..................................................................... (4,090) (155) 1,014 ---------- ---------- ---------- Net cash used in investing activities........................................ (93,186) (165,375) (100,665) Financing Activities Proceeds from short-term debt.............................................. 13,458 -- -- Proceeds from long-term debt............................................... 150,000 124,358 -- Reductions of long-term debt............................................... (125,860) (11,604) (436) Dividends.................................................................. (15,868) (14,129) (12,928) Purchases of treasury shares............................................... (18,110) (14,168) (9,448) ---------- ---------- ---------- Net cash provided by (used in) financing activities.......................... 3,620 84,457 (22,812) ---------- ---------- ---------- Change in cash and cash equivalents ......................................... (6,580) 5,114 (67,774) Cash and cash equivalents Beginning of year.......................................................... 8,312 3,198 70,972 ---------- ---------- ---------- End of year................................................................ $ 1,732 $ 8,312 $ 3,198 ---------- ---------- ---------- ---------- ---------- ----------
See accompanying Notes to Consolidated Financial Statements. 18 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Carlisle Companies Incorporated and Subsidiaries SUMMARY OF ACCOUNTING POLICIES BASIS OF CONSOLIDATION. The consolidated financial statements include the accounts of the Company and its subsidiaries. Investments in affiliates where the Company does not have majority control, none of which are significant, are accounted for under the equity method. All material intercompany transactions and accounts have been eliminated. REVENUE RECOGNITION. The Company recognizes revenues from product sales upon shipment to the customer. The substantial majority of the Company's product sales are to customers in the United States. USE OF ESTIMATES. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS. Debt securities with a remaining maturity of three months or less when acquired are considered cash equivalents. Cash and cash equivalents are stated at cost, which approximates market value. INVENTORIES. Inventories are valued at lower of cost or market. Cost for inventories is determined for a majority of the Company's inventories by the last-in, first-out (LIFO) method with the remainder determined by the first-in, first-out (FIFO) method. PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment are stated at cost. Costs allocated to property, plant and equipment of acquired companies are based on estimated fair value at the date of acquisition. Depreciation is principally computed on the straight line basis over the estimated useful lives of the assets. Asset lives are 20 to 40 years for buildings, 5 to 15 years for machinery and equipment and 3 to 10 years for leasehold improvements. PATENTS, GOODWILL AND OTHER INTANGIBLES. Patents and other intangibles, recorded at cost, amounted to $5.3 million and $6.9 million at December 31, 1997 and 1996, respectively (net of accumulated amortization of $14.6 million and $12.8 million, respectively), and are amortized over their remaining lives, which average five years. Goodwill, representing the excess of acquisition cost over the fair value of specifically identifiable assets acquired, was $116.5 million and $101.8 million at December 31, 1997 and 1996, respectively (net of accumulated amortization of $7.8 million and $3.6 million, respectively), and is amortized on a straight line basis over various periods not exceeding 30 years. The Company evaluates the recoverability of goodwill based on the estimated, undiscounted future cash flows attributable to the operations with which the goodwill is associated. 19 PRODUCT WARRANTIES. The Company offers warranties on the sales of certain of its products and records an accrual for estimated future claims. Such accruals are based upon historical experience and management's estimate of the level of future claims. LEASES. The Company is obligated under various noncancelable operating leases for certain facilities and equipment. Rent expense was $5.4 million, $2.6 million and $2.8 million, in 1997, 1996, and 1995, respectively. INCOME TAXES. Deferred tax assets and liabilities are recognized for the future tax consequences of the differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. These balances are measured using enacted tax rates expected to apply to taxable income in the years in which such temporary differences are expected to be recovered or settled. If a portion or all of a deferred tax asset is not expected to be realized, a valuation allowance is recognized. NET EARNINGS PER SHARE. In 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings per Share." SFAS No. 128 replaced the calculation of primary and fully diluted earnings per share with basic and diluted earnings per share. Basic earnings per share excludes the dilutive effects of options, warrants, and convertible securities. Diluted earnings per share gives effect to all dilutive securities that were outstanding during the period. All earnings per share amounts have been presented or restated to conform to the SFAS No. 128 requirements. The only difference between basic and diluted earnings per share of the Company is the effect of dilutive stock options. FAIR VALUE OF FINANCIAL INSTRUMENTS. The estimated fair market values of the Company's financial instruments approximate their recorded values. RECLASSIFICATIONS. Certain reclassifications have been made to prior years' information to conform to 1997 presentation. 20 INVENTORIES The components of inventories are:
1997 1996 ---------- ---------- In Thousands FIFO cost (approximates current costs): Finished goods........................................................................... $ 111,403 $ 82,253 Work in process.......................................................................... 23,250 17,574 Raw materials............................................................................ 60,375 51,872 ---------- ---------- $ 195,028 $ 151,699 Excess of FIFO cost over LIFO value...................................................... (14,697) (14,607) ---------- ---------- $ 180,331 $ 137,092 ---------- ---------- ---------- ----------
PROPERTY, PLANT & EQUIPMENT The components of property, plant and equipment are:
1997 1996 ---------- ---------- In Thousands Land...................................................................................... $ 6,804 $ 6,316 Buildings & leasehold improvements........................................................ 123,432 114,384 Machinery & equipment..................................................................... 383,560 341,296 Projects in progress...................................................................... 25,686 21,016 ---------- ---------- 539,482 483,012 Accumulated depreciation.................................................................. (245,317) (218,774) ---------- ---------- $ 294,165 $ 264,238 ---------- ---------- ---------- ----------
BORROWINGS Long-term debt includes:
1997 1996 ---------- ---------- In Thousands Short-term obligations to be refinanced................................................... $ -- $ 124,358 7.25% senior notes due 2007............................................................... 150,000 -- 8.09% senior notes due 1998-2002 48,000 48,000 Industrial Development and Revenue Bonds due through 2014................................. 12,460 12,505 Other, including capital lease obligations................................................ 10,056 7,005 ---------- ---------- $ 220,516 $ 191,868 Less current maturities................................................................... (10,874) (701) ---------- ---------- $ 209,642 $ 191,167 ---------- ---------- ---------- ----------
On January 28, 1997, the Company issued $150 million in notes due in 2007 at an interest rate of 7.25%. The net proceeds were used to repay all amounts outstanding under the Company's revolving credit facility, to repay other short-term indebtedness, and for general corporate purposes. 21 In 1997, the Company amended its revolving credit facility with various banks to reduce the amount from $150 million to $125 million. As of December 31, 1997, $123 million was available under this facility. The Company has available unsecured lines of credit from banks of $20 million, of which $18.5 million was available as of December 31, 1997. At December 31, 1997, letters of credit amounting to $19.5 million were outstanding, primarily to provide security under insurance arrangements and certain borrowings. The weighted average interest rates on the revenue bonds for 1997 and 1996 were 4.2% and 3.5%, respectively. The debt facilities contain various restrictive covenants and limitations, all of which were complied with in 1997 and 1996. The industrial development and revenue bonds are collateralized by the facilities and equipment acquired through the proceeds of the related bond issuances. Cash payments for interest were $12.3 million in 1997, $6.9 million in 1996, and $5.9 million in 1995. The aggregate amount of long-term debt maturing in each of the next five years is approximately $10.9 million in 1998, $11.4 million in 1999 through 2001, and $10.4 million in 2002. ACQUISITIONS In each of the last three years, the Company has completed various acquisitions, all of which have been accounted for as purchases. Results of operations for these acquisitions, which have been included in the consolidated financial statements since their respective acquisition dates, did not have a material effect on consolidated operating results of the Company in the years of acquisition. 22 SHAREHOLDERS' EQUITY On October 4, 1996, the Company's Board of Directors authorized a two-for-one stock split which was completed on January 15, 1997, to shareholders of record on January 2, 1997. The split resulted in the issuance of 19,665,312 new shares of common stock including 4,489,650 shares issued as treasury shares. In addition, authorized shares were increased from 25,000,000 to 50,000,000. All references in the financial statements to average number of shares outstanding and related prices, per share amounts, and stock option plan data have been restated to reflect the split. The Company has a Shareholders' Rights Agreement which is designed to protect shareholder investment values. A dividend distribution of one Preferred Stock Purchase Right for each outstanding share of the Company's common stock was declared, payable to shareholders of record on March 3, 1989. The Rights will become exercisable under certain circumstances, including the acquisition of 25% of the Company's common stock, or 40% of the voting power, in which case all rights holders except the acquiror may purchase the Company's common stock at a 50% discount. If the Company is acquired in a merger or other business combination, and the Rights have not been redeemed, rights holders may purchase the acquiror's shares at a 50% discount. On August 7, 1996, the Company amended the Shareholders' Rights Agreement to, among other things, extend the term of the Rights until August 6, 2006. Common shareholders of record on May 30, 1986 are entitled to five votes per share. Common stock acquired subsequent to that date entitles the holder to one vote per share until held four years, after which time the holder is entitled to five votes. EMPLOYEE STOCK OPTIONS & INCENTIVE PLAN The Company maintains an Executive Incentive Program for executives and certain other employees of the Company and its operating divisions and subsidiaries. The Program contains a plan, for those who are eligible, to receive cash bonuses and/or shares of restricted stock. The Program also has a stock option plan available to certain employees who are not eligible to receive cash or restricted stock awards. At December 31, 1997, 24,885 nonvested shares were outstanding and 2,190,266 shares were available for issuance under the Company's restricted stock plan. 23 The activity under the stock option plan is as follows:
WEIGHTED AVERAGE NUMBER EXERCISE OF SHARES PRICE ----------- ----------- Outstanding at December 31, 1994.......................................................... 1,253,272 $ 11.60 Options granted........................................................................... 442,000 17.87 Options exercised......................................................................... (211,476) 9.49 Options surrendered....................................................................... (4,798) 12.32 ----------- Outstanding at December 31, 1995.......................................................... 1,478,998 $ 13.77 Options granted........................................................................... 396,000 20.73 Options exercised......................................................................... (175,892) 10.05 Options surrendered....................................................................... (2,276) 12.32 ----------- Outstanding at December 31, 1996.......................................................... 1,696,830 15.77 Options granted........................................................................... 214,000 29.50 Options exercised......................................................................... (340,584) 11.71 ----------- Outstanding at December 31, 1997.......................................................... 1,570,246 18.52 Available for grant at December 31, 1997.................................................. 74,182 ----------- -----------
The following tables summarize information about stock options outstanding as of December 31, 1997:
Options Outstanding: RANGE OF EXERCISE NUMBER WEIGHTED AVERAGE WEIGHTED AVERAGE PRICES OUTSTANDING REMAINING YRS. EXERCISE PRICE - -------------- ----------- ------------------- ----------------- $ 8.07-9.78 175,732 4.5 $ 9.01 12.32-17.25 367,182 6.6 15.07 17.32-19.63 392,000 8.0 17.63 19.88-29.50 635,332 9.3 23.69 ----------- 1,570,246 -----------
Options Exercisable: RANGE OF EXERCISE NUMBER WEIGHTED AVERAGE PRICES EXERCISABLE EXERCISE PRICE - -------------- ----------- ----------------- $ 8.07-9.78 175,732 $ 9.01 12.32-17.25 367,182 15.07 17.32-19.63 392,000 17.63 19.88-29.50 362,221 22.47 ---------- 1,297,135 ----------
At December 31, 1996, 1,285,497 options were exercisable at a weighted average price of $14.52. In accordance with the provisions of SFAS No. 123, "Accounting for Stock-Based Compensation," the Company applies APB Opinion 25 and related interpretations in accounting for its stock compensation plans and, accordingly, does not recognize compensation cost for its stock option plan. Compensation cost was estimated using the Black-Scholes model with the following assumptions: dividend yield of 1.75 percent; 24 a life of 7 years; volatility of 24 percent; and risk-free interest rate of 6 percent. The weighted-average fair value of those stock options granted in 1997, 1996, and 1995 was $9.61, $6.75, and $5.82, respectively. If the Company had elected to recognize compensation cost based on the fair value of the options granted at grant date as prescribed by SFAS No. 123, the pro forma effect on net earnings and earnings per share, in 1997 ,1996 and 1995, would have been approximately $1.5 million or $.05 per share, $1.1 million or $.03 per share and $0.5 million or $.02 per share, respectively. Pursuant to the transition provisions of SFAS No. 123, the pro forma effect includes only the vested portion of options granted during and after 1995. Options vest over a three year period. RETIREMENT PLANS The Company maintains defined benefit retirement plans for the majority of its employees. Benefits are based primarily on years of service and earnings of the employee. Plan assets consist primarily of publicly-listed common stocks and corporate bonds. Pension expense includes:
1997 1996 1995 ---------- ---------- ---------- In Thousands Service cost.................................................................. $ 4,366 $ 3,374 $ 2,335 Interest cost on projected benefit obligation................................. 6,734 6,122 5,682 Actual return on plan assets.................................................. (17,976) (12,376) (16,338) Net amortization and deferral................................................. 10,496 5,856 10,318 ---------- ---------- ---------- Total pension expense......................................................... $ 3,620 $ 2,976 $ 1,997 ---------- ---------- ---------- ---------- ---------- ----------
The funded status of the plans at December 31 was:
1997 1996 ---------- ---------- In Thousands Actuarial present value of accumulated benefit obligation Vested.................................................................................... $ 80,936 $ 72,709 Non-vested................................................................................ 6,362 1,435 ---------- ---------- $ 87,298 $ 74,144 ---------- ---------- ---------- ---------- Plan assets at fair value................................................................. $ 104,015 $ 90,737 Projected benefit obligation.............................................................. (99,551) (86,135) ---------- ---------- Plan assets in excess of projected benefit obligation..................................... 4,464 4,602 Unamortized transition asset.............................................................. (3,589) (4,285) Unrecognized prior service costs.......................................................... (3,889) 3,031 Unrecognized net gains.................................................................... (9,078) (11,695) ---------- ---------- Accrued pension expense .................................................................. $ (12,092) $ (8,347) ---------- ---------- ---------- ----------
25 The projected benefit obligation was determined using an assumed discount rate of 7.25% in 1997 and 7.75% in 1996 and 1995. The assumed rate of compensation increase was 4% in 1997 and 4.5% in 1996 and 1995; and the expected rate of return on plan assets was 8.75% in 1997, 1996, and 1995. Additionally, the Company maintains a retirement savings plan covering substantially all employees other than those employees under collective bargaining agreements. Plan expense was $4.7 million, $3.2 million, and $2.7 million, in 1997, 1996, and 1995, respectively. The Company also has a limited number of unfunded post-retirement benefit programs for which the expense, inclusive of the components of service costs, interest costs and the amortization of the unrecognized transition obligation, was approximately $0.4 million in 1997 and $0.6 million in 1996 and 1995. The present value of the Company's obligation under these plans is not significant. INCOME TAXES The provision for income taxes was as follows:
1997 1996 1995 --------- --------- --------- In Thousands Currently payable Federal........................................................................ $ 39,262 $ 27,954 $ 24,828 State, local and other......................................................... 8,242 9,788 7,742 --------- --------- --------- $ 47,504 $ 37,742 $ 32,570 Deferred (benefit) Federal........................................................................ $ (1,363) $ (1,238) $ (3,563) State, local and other......................................................... (23) (144) (230) --------- --------- --------- $ (1,386) $ (1,382) $ (3,793) --------- --------- --------- Total Provision.................................................................. $ 46,118 $ 36,360 $ 28,777 --------- --------- --------- --------- --------- ---------
Deferred tax assets (liabilities) are comprised of the following at December 31:
1997 1996 ---------- ---------- In Thousands Product warranty.......................................................................... $ 35,346 $ 34,232 Inventory reserves........................................................................ 3,197 2,703 Doubtful receivables...................................................................... 1,719 2,423 Employee benefits......................................................................... 12,114 7,206 Other, net................................................................................ 12,088 9,699 ---------- ---------- Deferred assets........................................................................... $ 64,464 $ 56,263 ---------- ---------- Depreciation.............................................................................. $ (37,394) $ (29,037) Other, net................................................................................ (1,606) (376) ---------- ---------- Deferred liabilities...................................................................... (39,000) (29,413) ---------- ---------- Net deferred tax assets................................................................... $ 25,464 $ 26,850 ---------- ---------- ---------- ----------
26 No valuation allowance is required for the deferred tax assets based on the Company's past tax payments and estimated future taxable income. A reconciliation of taxes computed at the statutory rate with the tax provision is as follows:
1997 1996 1995 --------- --------- --------- In Thousands Federal income taxes at statutory rate........................................... $ 40,875 $ 32,214 $ 25,500 State income taxes, net of federal income tax benefit............................ 3,842 2,912 2,706 Other, net....................................................................... 1,401 1,234 571 --------- --------- --------- $ 46,118 $ 36,360 $ 28,777 Effective income tax rate........................................................ 39.5% 39.5% 39.5%
Cash payments for income taxes were $30.7 million, $40.5 million, and $28.7 million in 1997, 1996, and 1995, respectively. 27 SEGMENT INFORMATION The Company's operations are classified into the following business segments: CONSTRUCTION MATERIALS--the principal products of this segment are rubber, plastic and fleece back sheeting used predominantly on non-residential flat roofs and related roofing accessories, including flashings, fasteners, sealing tapes, coatings and waterproofings. The markets served include new construction, re-roofing and maintenance of low slope roofs, water containment, HVAC sealants, and coatings and waterproofings. TRANSPORTATION PRODUCTS--the principal products of this segment are heavy duty friction and braking systems for truck and off-highway equipment, rubber and plastic automotive components, high grade aerospace wire and specialty electronic cable, specialty trailers, self-contained ISO 40-foot perishable cargo shipping containers, standard and custom-built high payload trailers and dump bodies. Customers include truck OEMs, shipping lines, heavy equipment and truck dealers and aftermarket distributors, commercial haulers, automotive OEMs and systems suppliers, and dairy product distributors. GENERAL INDUSTRY--the principal products of this segment include small bias-ply rubber tires, stamped and roll-formed wheels, commercial and institutional plastic foodservice permanentware and catering equipment, fiber glass and composite material trays and dishes, ceramic tableware, specialty rubber and plastic cleaning brushes and stainless steel processing equipment and their related process control systems. Customers include golf car manufacturers, power equipment manufacturers, boat and utility trailer manufacturers, food service distributors and dealers, and dairy and pharmaceutical processors. CORPORATE--includes general corporate and idle property expenses. Corporate assets consist primarily of cash and cash equivalents, facilities, and other invested assets. 28 Financial information for operations by reportable business segment is included in the following summary: In Thousands
EARNINGS BEFORE DEPREC. INCOME & CAPITAL SALES TAXES ASSETS AMORT. SPENDING ------------ ---------- ---------- ---------- ---------- 1997 Construction Materials............................. $ 322,228 $ 49,398 $ 177,270 $ 6,401 $ 8,109 Transportation Products............................ 521,181 45,101 338,770 16,738 24,856 General Industry................................... 417,141 50,912 320,205 14,723 26,357 Interest, net...................................... -- (15,337) -- -- -- Corporate.......................................... -- (13,290) 24,971 893 209 ------------ ---------- ---------- ---------- ---------- $ 1,260,550 $ 116,784 $ 861,216 $ 38,755 $ 59,531 ------------ ---------- ---------- ---------- ---------- ------------ ---------- ---------- ---------- ---------- 1996 Construction Materials............................. $ 325,165 $ 43,582 $ 183,836 $ 6,220 $ 6,580 Transportation Products............................ 371,517 27,495 309,125 11,637 16,960 General Industry................................... 320,813 40,260 225,282 11,201 11,360 Interest, net...................................... -- (8,396) -- -- -- Corporate.......................................... -- (10,901) 24,220 700 90 ------------ ---------- ---------- ---------- ---------- $ 1,017,495 $ 92,040 $ 742,463 $ 29,758 $ 34,990 ------------ ---------- ---------- ---------- ---------- ------------ ---------- ---------- ---------- ---------- 1995 Construction Materials............................. $ 308,327 $ 36,676 $ 169,476 $ 5,810 $ 9,622 Transportation Products............................ 278,867 20,241 210,700 9,617 14,175 General Industry................................... 235,340 29,627 143,606 7,076 13,404 Interest, net...................................... -- (4,055) -- -- -- Corporate.......................................... -- (9,631) 18,641 727 266 ------------ ---------- ---------- ---------- ---------- $ 822,534 $ 72,858 $ 542,423 $ 23,230 $ 37,467 ------------ ---------- ---------- ---------- ---------- ------------ ---------- ---------- ---------- ----------
QUARTERLY FINANCIAL DATA (In thousands except per share data) (unaudited)
FIRST SECOND THIRD FOURTH YEAR ------------ ---------- --------- --------- ------------ 1997 Net sales.......................................... $ 287,819 337,372 315,707 319,652 $ 1,260,550 Gross margin....................................... $ 63,592 76,712 75,089 71,068 $ 286,461 Operating expenses................................. $ 38,319 38,925 40,273 41,553 $ 159,070 Net earnings....................................... $ 13,421 20,980 19,518 16,747 $ 70,666 Basic earnings per share(1)........................ $ 0.44 0.69 0.65 0.56 $ 2.34 Diluted earnings per share(1)...................... $ 0.43 0.68 0.63 0.54 $ 2.28 Dividends per share................................ $ 0.1225 0.1225 0.1400 0.1400 $ 0.5250 Stock price: High............................................. $ 35 5/8 37 46 7/8 46 3/4 Low.............................................. $ 29 1/4 27 34 3/4 39 5/8 1996 Net sales.......................................... $ 225,121 262,315 252,603 277,456 $ 1,017,495 Gross margin....................................... $ 52,371 64,484 62,638 58,205 $ 237,698 Operating expenses................................. $ 33,733 35,273 35,551 36,019 $ 140,576 Net earnings....................................... $ 10,639 16,441 15,461 13,139 $ 55,680 Basic earnings per share(1)........................ $ 0.35 0.54 0.51 0.43 $ 1.84 Diluted earnings per share(1) $ 0.35 0.53 0.50 0.42 $ 1.80 Dividends per share................................ $ 0.1100 0.1100 0.1225 0.1225 0.4650 Stock price: High............................................. $ 22 9/16 28 3/16 28 1/16 30 1/2 Low.............................................. $ 19 1/16 21 5/8 24 1/4 26 7/8
(1) The 1996 and first three quarters of 1997 earnings per share amounts have been restated to comply with Statement of Financial Accounting Standards No. 128, "Earnings Per Share." 29 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Carlisle Companies Incorporated: We have audited the accompanying consolidated balance sheets of Carlisle Companies Incorporated (a Delaware corporation) and subsidiaries as of December 31, 1997 and 1996 and the related consolidated statements of earnings, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Carlisle Companies Incorporated and subsidiaries as of December 31, 1997 and 1996, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. Arthur Andersen LLP /s/ Arthur Andersen LLP New York, New York January 26, 1998 30 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities 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 /s/ Dennis J. Hall By: Dennis J. Hall, President and a Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated. /s/ Stephen P. Munn /s/ Peter F. Krogh Stephen P. Munn, Chairman, Chief Executive Peter F. Krogh, Director Officer and a Director (Principal Executive Officer) /s/ Donald G. Calder /s/ Robert J. Ryan, Jr. Donald G. Calder, Director Robert J. Ryan, Jr., Vice President, /s/ Paul J. Choquette, Jr. Treasurer and Chief Financial Officer (Principal Financial Officer and Paul J. Choquette, Jr. Director Principal Accounting Officer) /s/ Henry J. Forrest Henry J. Forrest, Director March 9, 1998 34 -----END PRIVACY-ENHANCED MESSAGE-----