<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[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, 1994
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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
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Commission file number 1-9278
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CARLISLE COMPANIES INCORPORATED
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(Exact name of registrant as specified in its charter)
DELAWARE 31-1168055
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(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
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (315) 474-2500
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Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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COMMON STOCK, $1 PAR VALUE NEW YORK STOCK EXCHANGE
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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 21, 1995 $485,392,472
Shares of common stock outstanding at February 21, 1995 15,405,782
Portions of the definitive Proxy Statement for the Annual Meeting of
Shareholders on April 20, 1995 are incorporated by reference in Part III.
1 of 40
<PAGE>
PART I
ITEM 1. BUSINESS.
Carlisle Companies Incorporated was incorporated in 1986 in Delaware as a
holding company for Carlisle Corporation, whose operations began in 1917, and
its wholly-owned subsidiaries. Unless the context of this report otherwise
requires, the words "Company" and "registrant" refer to Carlisle Companies
Incorporated and its wholly-owned subsidiaries and any divisions or subsidiaries
they may have. The Company's diversified manufacturing operations are conducted
through its subsidiaries.
The Company manufactures and distributes a wide variety of products for
industry, primarily of rubber, plastics and metal content. Its products include
both components used by other companies in the manufacture of capital and
consumer goods and those for the aftermarket. The Company is the leading
producer, or among the leading producers, of many of its lines.
Sales of the Company's products are reported by distribution to the following
three industry segments: Construction Materials, Transportation Products and
General Industry. The principal products produced and services rendered in each
of the industry segments include:
Construction Materials--elastomeric membranes, metal roofing components,
adhesives and related products for roofing systems and water barrier
applications and outdoor recreation tiles;
Transportation Products--custom manufactured rubber and plastic products for the
automotive market, brake linings and pads for heavy duty trucks, trailers and
off-road vehicles, specialty friction products, brakes and actuation systems for
construction equipment, refrigerated containers and insulated wire products;
General Industry--molded plastic foodservice products, small pneumatic tires,
stamped and roll-formed wheels, medical monitoring devices and insulated wire
products.
The amount of total revenue contributed by the products or services in each
industry segment for each of the last three fiscal years is as follows (in
millions):
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Construction Materials $ 288.6 $ 247.6 $ 198.7
Transportation Products 200.2 177.0 172.9
General Industry 203.9 186.7 156.5
-------- -------- --------
Total $ 692.7 $ 611.3 $ 528.1
</TABLE>
In each industry segment, the Company's products are generally distributed
either by Company-employed field sales personnel or manufacturers'
representatives. In a few instances distribution is through dealers and
independent distributors. Inasmuch as some of the Company's customers are other
manufacturers of relatively
2
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significant size, marketing methods in certain operations are designed to
accommodate the requirements of a small group of high-volume producer-customers.
In each industry segment, satisfactory supplies of raw materials and adequate
sources of energy essential for operation of the Company's businesses have
generally been available to date. Uncertain economic conditions, however, could
cause shortages of some basic materials, particularly those which are petroleum
derivatives (plastic resins, synthetic rubber, etc.) and used in the
construction materials, transportation products and general industry segments.
The Company believes, though, that energy sources are secure and sufficient
quantities of raw materials can be obtained through normal sources to avoid
interruption of production in 1995.
Patents, trademarks and licenses held by the Company generally are not
considered significant to the successful conduct of most of the segments'
businesses.
In each industry segment, the Company is engaged in businesses, and its products
serve markets, which generally are highly competitive. Product lines serving
most markets tend to be price competitive; all lines compete not only on
pricing, but also on service and product performance. No industry segment is
dependent upon a single customer, or a few customers, the loss of any one or
more of which would have a material adverse effect on the segment.
Order Backlog, which believed to be firm, was $103.9 million at December 31,
1994 and $86.4 million at December 31, 1993. Improved market conditions and
market share gains were particularly evident in stronger backlog positions at
construction materials and general industry operations. Specialty tires and
wheels operations, which serve markets which are cyclically stronger in the
first half of the year, recorded backlog levels almost 40% higher than a year
ago. A similar increase when compared to a year ago was recorded by foodservice
plastics operations at the end of 1994.
Research and Development expenses increased to $11.9 million in 1994 compared to
$11.2 million in 1993 and $10.7 million in 1992. The additional research and
development expenses incurred as a result of the start-up of the company's
container manufacturing was one of the reasons for the increase in 1994.
Construction materials operations also incurred higher research expenses in
1994, as a number of product development projects were on-going throughout the
year.
The average number of persons employed by the Company during 1994 was 4,440.
The businesses of the Construction Materials and Transportation Products
industry segments are not seasonal in nature. Within the General Industry
segment, distribution of lawn and garden products generally reach peak sales
volume during the first two quarters of the year.
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In 1994, the Company acquired the assets of Quaker Construction Products, Inc.
and certain of its affiliates and now operates a coatings and waterproofing
business with the assets under the name Carlisle Coatings & Waterproofing, Inc.
The Company also acquired by merger Sparta Brush Co., Inc., a manufacturer of
specialized brushes and cleaning tools.
In each industry segment, the Company's compliance with Federal, State and local
provisions which have been enacted or adopted regulating the discharge of
materials into the environment, or otherwise relating to the protection of the
environment is not anticipated to have a material effect upon the capital
expenditures, earnings or the financial and competitive position of the Company
or its divisions and subsidiaries.
Information on the Company's revenues, operating profit or loss and identifiable
assets by industry segments for the last three fiscal years, the nature and
effect of the restatement of such information as a result of changes made in the
way the Company's products or services are grouped into industry segments and
the principal products in each segment is as follows:
<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Sales to Unaffiliated Customers(1)
Construction Materials 288,533 247,573 198,737
Transportation Products 200,213 177,005 172,849
General Industry 203,904 186,692 156,466
Operating Profit or Loss
Construction Materials 35,066 25,496 23,715
Transportation Products 13,497 11,622 11,603
General Industry 21,391 18,904 12,685
Interest, net (1,670) (1,152) (528)
Corporate(2) (9,493) (7,958) (7,755)
Identifiable Assets
Construction Materials 155,383 139,990 99,034
Transportation Products 122,031 109,523 97,196
General Industry 105,482 90,534 78,116
Corporate(3) 102,387 80,316 108,904
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<FN>
1. Intersegment sales or transfers are not material.
2. Includes general corporate and idle property expenses.
3. Consists primarily of cash, cash equivalents and excess facilities.
</TABLE>
4
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ITEM 2. PROPERTIES
The following table sets forth certain information with respect to the principal
properties and plants of the Company as of December 31, 1994:
<TABLE>
<CAPTION>
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O - OFFICE APPROXIMATE
PRINCIPAL PRODUCT M - MANUFACTURING OWNED FLOOR SPACE
OR ACTIVITY W - WAREHOUSING LOCATION OR LEASED (SQ. FT) ACREAGE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Corporate headquarters O Syracuse, NY Leased to 2005* 15,500 -
- ---------------------------------------------------------------------------------------------------------
Elastomeric membranes, O,M,W Carlisle, PA Owned 388,000 79
metal roofing components O,M,W Greenville, IL Owned 165,400 35
and related roofing O,M Stafford, TX Owned 108,500 8
products O,M Jemison, AL Owned 40,900 8
O,M Lodi, CA Leased to 1995 41,800 -
O,M Tualatin, OR Leased to 1995 59,900 5
O,M Stafford, TX Leased to 1995 56,840 3
O,M,W Fontana, CA Leased to 2001* 76,500 -
O,M,W Sapulpa, OK Owned 34,000 3
O,M,W Wylie, TX Owned 44,000 6
O,W Brussels, Belgium Leased to 1996* 11,000 -
O Akron, OH Leased to 1996* 9,600 -
--------- ---
1,036,440 147
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Small pneumatic tires O,M,W Carlisle, PA Owned 465,900 29
and tubes; stamped and O,M,W Aiken, SC Owned 220,500 23
roll-formed wheels O,M,W Shenzhen, China Leased to 1999* 75,000 5
------- ---
761,400 57
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Molded plastics products O,M,W Oklahoma City, OK Owned 147,000 8
for commercial food W Oklahoma City, OK Leased to 1996* 175,000 -
service O,M,W Fredonia, WI Owned 192,500 12
O,M,W Sparta, WI Owned 41,100 3
O Northbrook, IL Leased to 1997* 7,300 -
------- ---
562,900 23
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Custom-manufactured O,M,W Middlefield, OH Owned 200,600 28
rubber and plastics O,M,W Crestline, OH Owned 173,000 40
products O,M,W Canton, OH Owned 87,800 17
O,M,W Lake City, PA Owned 103,000 30
O,M,W Trenton, SC Owned 67,700 10
O Chardon, OH Leased to 1998* 7,500 -
------- ---
639,600 125
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Brake lining for trucks O,M,W Ridgway, PA Owned 117,350 15
and trailers; brakes and O,M,W Fredericksburg, VA Owned 90,000 30
actuation systems; O,M,W Logansport, IN Owned 112,000 50
friction products O,M,W Bloomington, IN Owned 250,000 21
O,M,W Zevenaar, Holland Owned 26,000 1
------- ---
595,350 117
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High- and medium- O,M,W St. Augustine, FL Owned 166,750 17
temperature insulated
wire and cable
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Refrigerated marine O,M Green Cove Springs, Leased to 2003* 100,000 8
containers FL
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Recording and monitoring O,M,W Burnsville, MN Leased to 1999* 14,700 2
devices
3,892,640 496
--------- ---
--------- ---
<FN>
* Lease provides for renewal
</TABLE>
5
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Total plant space of 3,892,640 sq. ft. is used for
<TABLE>
<CAPTION>
OWNED LEASED TOTAL
----- ------ -----
<S> <C> <C> <C>
Office 288,360 84,600 372,960
Manufacturing 2,007,258 276,340 2,283,598
Warehousing 946,382 289,700 1,236,082
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3,242,000 650,640 3,892,640
--------- ------- ---------
--------- ------- ---------
</TABLE>
As of December 31, 1994, the Company owned three additional facilities. One is
related to a wire and cable business sold in early 1988, one is related to a
wire and cable operation relocated in 1989, and the other is related to a
braking systems assembling operation relocated in 1994. These facilities,
totaling approximately 390,000 sq. ft., are being held for sale. An additional
409,000 sq. ft. is leased by the Company, under various agreements, principally
for warehousing and distribution. All of the manufacturing and most of the
office and warehousing space is of masonry and steel construction and most are
equipped with automatic sprinkler systems. Approximately one-third of the owned
office, manufacturing and warehousing space has been constructed within the last
twenty years; the remaining buildings are from twenty to seventy years old and
have been maintained in good condition.
ITEM 3. LEGAL PROCEEDINGS
As of December 31, 1994, other than ordinary routine litigation incidental to
the business, which is being handled in the ordinary course of business, neither
the Company nor any of its subsidiaries is a party to, nor are any of their
properties subject to any material pending legal proceedings, nor are any such
proceedings known to be contemplated by governmental authorities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
6
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.
The Company's common stock is traded on the New York Stock Exchange. As of
December 31, 1994, there were 2,350 shareholders of record.
Quarterly cash dividends paid and the high and low prices of the Company's stock
on the New York Stock Exchange in 1994 and 1993 were as follows:
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
<S> <C> <C> <C> <C>
1994
----
Dividends per share $ .18 $ .18 $ .20 $ .20
Stock Price
High $35.25 $34.63 $35.38 $36.13
Low $30.25 $31.25 $31.25 $31.38
1993
----
Dividends per share(1) $ .17 $ .17 $ .18 $ .18
Stock Price(1)
High $27.75 $29.88 $34.25 $34.50
Low $23.13 $26.38 $28.13 $28.50
<FN>
(1) Reflects two-for-one stock split on June 1, 1993.
</TABLE>
ITEM 6. SELECTED FINANCIAL DATA.
<TABLE>
<CAPTION>
(In thousands except
per share data) 1994 1993 1992 1991(1) 1990
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net Sales $692,650 611,270 528,052 500,771 498,473
Net earnings from
continuing operations $ 35,568 28,378 24,228 6,554 24,408(2)
Per share $ 2.30 1.83 1.58 0.43 1.54(3)
Net earnings (loss) from
discontinued operations $ - - 471 (14,989) (2,650)
Per share(2) $ - - 0.03 (0.98) (0.17)
Net earnings (loss) $ 35,568 28,378 24,699 (8,435) 21,758
Per share(2) $ 2.30 1.83 1.61 (0.55) 1.37
FINANCIAL POSITION
Total assets $485,283 420,363 383,250 324,720 300,858
Long-term debt $ 67,498 59,548 69,098 48,623 44,501
OTHER DATA
Dividends paid $ 11,605 10,705 10,076 9,597 9,675
Per share(2) $ .76 0.70 0.66 0.63 0.61
7
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<FN>
(1) In 1991, the operational restructuring of the Company resulted in certain
of its business units being accounted for as discontinued operations. The
information presented above reflects the activities and balances of continuing
operations, unless otherwise noted.
(2) All share and per share amounts have been restated to reflect a two-for-one
stock split on June 1, 1993.
(3) In 1992, SFAS No. 109 "Accounting for Income Taxes" was adopted
retroactively in 1990. As a result, an additional charge of $1.0 million,
($0.06) a share, was recorded against net earnings from continuing operations in
1990, and shareholders' equity and total assets were restated in 1991 and 1990.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Record sales and record earnings were achieved by Carlisle Companies
Incorporated in 1994 as market conditions improved, costs continued to be
controlled and gains were made in market share. Sales in 1994 were $692.7
million, an increase of 13% over 1993's sales of $611.3 million. Net earnings
increased to $35.6 million, a 25% improvement over 1993's earnings of $28.4
million. Each of the Company's three operating segments recorded excellent
improvements over the strong operating results reported a year ago. While raw
material cost increases and operational start-up costs affected gross margins
during 1994, the Company was successful in achieving a ratio of selling and
administrative expenses to sales of 14.9%, surpassing the Company's objective of
15% and last year's ratio of 16.1%.
During 1994, the Company completed two acquisitions, adding to its construction
materials and general industry segments. In October 1994, the Company acquired
the coatings and waterproofing business of Quaker Construction Products, Inc.
This acquisition increased the Company's presence in the waterproofing segment
of the commercial construction industry and allowed the Company to solidify a
position as a full service supplier to the roofing industry. On December 31,
1994, the Company completed the acquisition of Sparta Brush Company, a leading
manufacturer of specialized brushes and cleaning tools. Sparta is a leading
supplier to the foodservice, food and dairy processing, marine and janitorial
markets and now operates as a unit of the Company's foodservice plastics
operations. The two acquisitions should generate approximately $20.0 million in
sales in 1995.
Two divestitures were also completed during 1994 as the Company sold its DSI and
NETstor operations to third parties. DSI, which sells connectivity and
migrating systems, and NETstor, which develops and sells storage management
software, had total sales while part of company operations of $6.6 million in
1994 and $9.9 million in 1993 and were part of the general industry segment.
8
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Sales in 1994 of $692.7 million were $81.4 million higher than 1993's sales of
$611.3 million, a 13% increase. Sales in 1992 were $528.1 million. A summary
of sales by operating segment is presented below.
<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
Construction Materials $288.6 $247.6 $198.7
Transportation Products $200.2 $177.0 $172.9
General Industry $203.9 $186.7 $156.5
------ ------ ------
Total $692.7 $611.3 $528.1
</TABLE>
Construction Materials segment sales increased 17% in 1994 to $288.6 million
compared to $247.6 million in 1993. Domestic non-residential roofing sales
accounted for a majority of the increase as over 25% more square feet of roofing
membrane was shipped in 1994 versus 1993. Market share gains were achieved from
increased participation in the private label market and through strong marketing
of the Company's "Sure-Seal[REGISTRATION MARK]" roofing products. Metal
roofing, coatings and waterproofing, and international operations also
participated in the overall improved construction market in 1994, adding to the
higher segment sales compared to the prior year.
Transportation Products segment sales totalled $200.2 million in 1994, a 13%
increase over 1993. The Company's custom-molded and extruded plastics and
rubber parts operations participated in the strong domestic automotive markets
in 1994 while expanding its production capabilities. At the beginning of 1994
operation of the Company's Lake City, Pennsylvania plant was transferred from
the foodservice plastics operations to this segment. The strong market, new
products and additional capacity combined for an increase of over 25% in sales
from these plastic and rubber operations in 1994 versus 1993. Heavy duty
friction sales to truck and trailer manufacturers continued to be strong in
1994, as truck and trailer build levels remained high throughout the year.
Aftermarket friction sales levels were somewhat stagnant in 1994 due to very
competitive pricing. New products in both the industrial friction and braking
systems operations were successfully marketed during 1994, increasing sales
levels from these operations. Aircraft wire product sales declined in 1994 over
$2.0 million compared to a year ago. Fewer purchases of aircraft by commercial
airlines and cuts in defense spending caused a recession in both the commercial
and military aircraft industry, impacting 1994 sales. The Company's container
manufacturing operation recorded its initial sales toward the end of 1994,
contributing almost $0.5 million in sales for the year.
General Industry segment sales increased $17.2 million to $203.9 million in 1994
compared to 1993, a 9% improvement. The segment sales comparisons are
unfavorably impacted when comparing 1994 to 1993 by approximately $7.7 million
due to the divestitures of DSI and NETstor and the transfer of the Lake City,
Pennsylvania plant in 1994. Another record performance by the Company's
specialty
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tires and wheels operations in 1994 resulted in an increase in sales of $19.5
million compared to its previous record of a year ago. Strong market share
gains and the continued strength in demand for lawn and garden, trailer and golf
car equipment combined for the increased tires and wheels revenues. Replacement
sales were also up in 1994, though at a much lower level than sales to the
original equipment market, as production capabilities were prioritized to meet
the original equipment demand. Foodservice plastics operations also produced a
very successful year in 1994. Expanded foodservice plastics product offerings
combined with aggressive marketing programs and the operation's strong
distribution network to improve domestic sales in 1994. International sales
also increased in 1994 in the first full year of operating a separate
distribution facility in Europe. Overall, foodservice plastics operations
increased sales by over 9% in 1994 versus comparable operations in 1993. High
speed data wire and cable sales improved slightly in 1994, but a strong finish
to the year and a good backlog should bring even better performance in 1995.
Net Earnings increased 25% to a record $35.6 million, $2.30 a share, in 1994.
This compares to total net earnings of $28.4 million, $1.83 a share, in 1993 and
$24.7 million, or $1.61 a share, in 1992. Strong operating performances by each
of the Company's major operations accounts for record earnings in 1994, despite
the absorption of $2.7 million of initial year costs of the Company's container
manufacturing operation.
A summary of after-tax results for the last three years is presented below.
<TABLE>
<CAPTION>
1994 1993 1992
----- ----- -----
<S> <C> <C> <C>
Net earnings-
Continuing operations $35.6 $28.4 $24.2
Per share $2.30 $1.83 $1.58
Discontinued operations --- --- $ 0.5
Per share --- --- $0.03
----- ----- -----
Net Earnings $35.6 $28.4 $24.7
Per share $2.30 $1.83 $1.61
----- ----- -----
</TABLE>
Earnings by operating segment, before income tax, interest, and corporate
expense, are summarized below.
<TABLE>
<CAPTION>
1994 1993 1992
----- ----- -----
<S> <C> <C> <C>
Construction Materials $35.1 $25.5 $23.7
Transportation Products $13.5 $11.6 $11.6
General Industry $21.4 $18.9 $12.7
----- ----- -----
Total $70.0 $56.0 $48.0
</TABLE>
10
<PAGE>
Construction Materials segment earnings in 1994 increased a strong 38% over
1993's results. The segment's $41 million increase in sales drove earnings
higher, as margins improved slightly and operating expenses were well
controlled. Margins were unfavorably impacted by increased sales of lower
margin items and raw material cost increases which were unable to be passed
along to customers. These negative items were offset by increased absorption of
expenses achieved from the higher production levels and cost reduction programs
designed to improve plant efficiencies. Selling and administrative expenses in
1994 as a ratio to sales dropped 9% when compared to 1993, as streamlined
administrative organizations handled the volume increases throughout the year.
Transportation Products segment earnings improved 16% in 1994, after flat
earnings comparisons between 1993 and 1992. The segment's 1994 pre-tax earnings
include start-up costs associated with the Company's container manufacturing
operation of $2.7 million. The other operations in the segment produced strong
earnings increases on the strength of 1994's revenue increases. Custom plastics
and rubber operations achieved better margins in 1994, halting the decline
caused by pricing actions in the automotive market segment. Improved
efficiencies, increased expense absorption and a more profitable product mix
contributed to a 5% margin rate improvement in 1994. Friction and braking
systems operations effectively controlled costs and expenses as their sales
volumes increased during 1994. Selling and administrative expenses as a ratio
to sales improved 10% for these operations in 1994. The friction operation's
joint venture in Mexico was not profitable in 1994 and its Brazilian operation
was shut down during the year, negatively impacting earnings of the segment by
over $1.5 million on a pre-tax basis in 1994. Aircraft wire operations, despite
a $2.2 million reduction in sales, maintained consistent profitability between
1994 and 1993.
General Industry segment earnings increased 13% in 1994 versus 1993. Specialty
tires and wheels operations achieved another record earnings improvement in 1994
despite declining margins. Raw material cost increases, pricing pressure and
start-up costs associated with a new manufacturing site in China contributed to
lower margin rates. Lower selling and administration expenses on a $19.5
million increase in sales in 1994, however, created an earnings improvement of
over 25% compared to 1993. Foodservice plastics operations were able to improve
margins in 1994 on higher production volumes while absorbing higher material
costs. Operating expense ratios were improved contributing to overall earnings
improvement from foodservice plastics operations of over 20% in 1994.
Offsetting the gains made by the two major operations of this segment in 1994
were expenses and reduced earnings associated with the divested operations of
NETstor and DSI, and Vistatech's ceramic tape operation.
Gross Margins as a percent of sales were 25.5% in 1994 compared to 25.9% in 1993
and 26.3% in 1992. Manufacturing start-up costs and under-absorbed overhead at
the Company's container manufacturing and ceramic tape operations, as well as
the divestiture of two high margin operations resulted in the decline in margins
in 1994. All major operations within the construction materials and
11
<PAGE>
transportation products segments, as well as foodservice plastics operations,
improved gross margin ratios in 1994.
Across most operations, raw material costs rose in 1994, but little success was
achieved in passing these increased costs through to the customers. Higher
production volumes, however, allowed manufacturing expenses to be more
effectively absorbed resulting in improved gross margins at most operations in
1994.
Selling and Administrative expenses declined as a percent of sales to 14.9% in
1994, from 16.1% in 1993 and 16.4% in 1992. The strong performance in
controlling expenses was evident in the fact that selling and administrative
expenses rose just $4.5 million to support the 1994 sales increase of $81.4
million. The best improvement in expense control was achieved by construction
materials operations, as programs to reduce administrative expenses and improve
productivity were effectively in place in 1994. General industry operations
also contributed to the lower expense ratios as both specialty tires and wheels
and foodservice plastics operations maintained strong cost controls. Friction
and braking systems operations successfully reduced selling expenses while
increasing sales over 7% in 1994.
Research and Development expenses increased to $11.9 million in 1994 compared to
$11.2 million in 1993 and $10.7 million in 1992. The additional research and
development expenses incurred as a result of the start-up of the Company's
container manufacturing was one of the reasons for the increase in 1994.
Construction materials operations also incurred higher research expenses in
1994, as a number of product development projects were on-going throughout the
year.
Interest Expense was $4.6 million in 1994, $4.3 million in 1993 and $5.2 million
in 1992. In the second half of 1994, the Company secured $8.0 million of low-
rate, industrial development bonds to finance equipment purchases for its
container manufacturing operations. This action, along with higher interest
rates in the latter half of 1994, contributed to the higher interest expense in
1994. In 1993, the Company paid down $12.0 million of its 8.09% senior notes
and refinanced its $8.5 million revenue bond issue to an adjustable rate
instrument, causing the interest expense reduction between 1993 and 1992.
Income Taxes were computed for financial statement purposes at 39.5% in 1994,
the same rate used in 1993, compared to the 39.0% rate used in 1992. The
increase in the corporate federal tax rate legislated in 1993 is reflected in
the 1994 and 1993 income tax rate for the Company. An analysis of income taxes
for each year is presented in the Notes to Consolidated Financial Statements.
Order Backlog was $103.9 million at December 31, 1994 and $86.4 million at
December 31, 1993. Improved market conditions and market share gains were
particularly evident in stronger backlog positions at construction materials and
general industry operations. Specialty tires and wheels operations, which serve
markets which are cyclically stronger in the first half of the year, recorded
backlog levels almost 40% higher than a year ago. A
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<PAGE>
similar increase when compared to a year ago was recorded by foodservice
plastics operations at the end of 1994.
Accounts Receivable were $99.4 million at year end 1994 compared to $91.2
million at the end of 1993. Higher fourth quarter sales revenue at each of the
Company's major operations were the primary factors reflected in the higher
receivables balance. The acquisitions made in 1994 account for approximately
$2.8 million of the increase at year end. Receivables continue to be well
managed across the Company as throughout the year the average days accounts
receivable remained outstanding declined to 60 days from 61 days in the prior
year.
Inventories valued primarily by the last-in, first-out (LIFO) method were $74.9
million at December 31, 1994 compared to $65.0 million at December 31, 1993.
The $9.9 million increase in year-end inventories is primarily attributable to
construction materials and general industry operations. Construction materials
inventories increased $3.8 million on a year-to-year basis reflecting higher
demand and backlog levels at year end, as well as $2.0 million due to 1994's
acquisition. Foodservice plastics operations account for $4.8 million of the
Company's increased inventory levels at year end, again reflecting strong
demand and backlog and also the operation's efforts to increase its ability to
more effectively fill customer's orders. Specialized tires and wheels
operations also recorded higher inventory levels at the end of 1994 in
anticipation of another strong performance in the early stages of 1995.
Working Capital was $164.7 million at December 31, 1994 and $144.5 million at
December 31, 1993. Cash balances have increased $19.2 million at year end 1994
versus 1993 as the result of strong operating performances during the year.
Increased end of year sales and production activity is reflected in both
receivables and inventories balances, as well as current liability accounts at
December 31, 1994.
Capital Expenditures totalled $31.1 million in 1994 and $28.5 million in 1993.
The major capital project for the Company in 1994 was the purchase of machinery
and equipment for its container manufacturing facility, which began operations
toward the end of 1994. Other significant projects in 1994 included the
purchase of additional molds and assets to establish specialty tires and wheels
operations in China, expansion of molding production capabilities at custom
plastics and rubber operations and the purchase of presses and molds to increase
capacity and product availability for foodservice plastics operations. In 1993,
the major components of capital spending were projects to provide advanced
technology into construction materials operations, increase capacity at
specialty tires and wheels operations and expand automotive rubber and plastics
operations.
Cash Flows provided by operating activities were $72.6 million in 1994 compared
to $32.8 million in 1993. Strong earnings growth and aggressive management of
receivables and payables contributed to the significant increase in operating
cash in 1994. Investing activities, primarily Company acquisitions and capital
13
<PAGE>
expenditures, totalled $38.8 million in 1994 and $49.4 million in 1993. In
1994, the Company secured an additional $8.0 million in long-term financing,
purchased $10.9 million of treasury stock and paid out $11.6 million in
dividends. Of the treasury stock purchased, $9.9 million was re-issued for the
acquisition of Sparta Brush Company. Comparably in 1993, the Company paid down
$12.0 million in long-term debt and paid out $10.7 million in dividends.
Overall, cash available for operations increased to $71.0 million at the end of
1994 compared to $51.8 million at the end of 1993.
The Company's primary liquidity and capital sources are its operations, bank
lines of credit and long-term borrowings. The Company continues to have
substantial borrowing capacity and financial flexibility.
The Company recognizes the importance of its responsibilities toward matters of
environmental concern. Programs are in place to monitor and test facilities and
surrounding environments, as well as to recycle materials where practical. The
Company has not incurred any material charges relating to environmental matters
in 1994 or prior years, and none are anticipated in the foreseeable future.
The 1995 outlook is good. In all major markets the Company's competitive
position is sound. As 1994 has shown, the Company emerged from the recession
well positioned. Continuation of the attention to fundamental practices of cost
control, quality improvement, product development, and customer service, when
combined with a variety of attractive market opportunities, will result in a
year of solid performance.
Non-residential roofing markets, long dominated by repair and replacement
demand, will see a continuation of the strengthened new construction roofing
market following the record performance in 1994.
In the transportation markets, interest rate increases may temper automobile
demand, but success in broadening the Company's base of customers for custom
molded rubber and plastics products will lead to another year of improved
performance. Following a period of record demand by original equipment
customers of friction products, a resurgence is expected in demand for more
profitable aftermarket products. A good domestic market outlook combined with
improving international markets will provide the opportunity for strong
performance. A steady improvement in the high performance wire and cable
business is expected as gains in market share continue, derived from superior
product advantages.
In 1994, the Company began to build a strong base of products and services to
serve the international markets for containerized shipment of perishable cargo,
primarily food. The initial market acceptance of the Company's specialized
leasing joint venture has been very encouraging. A new container manufacturing
facility shipped its first production units in November 1994. International
container demand is strong and the long term outlook is for above average
growth.
14
<PAGE>
The Company's leading position in specialty tires and wheels is expected to
result in another record year supported by the new low cost production capacity
added in China during 1994. Foodservice plastics has been a targeted growth
opportunity for Carlisle and this will continue. Record 1994 performance will
be enhanced in 1995 with the December 1994 acquisition of Sparta Brush Company,
the leading supplier of brushes to the commercial foodservice market.
Overall, the outlook for 1995 and beyond is good. The order backlog is strong,
financial resources are secure. A tapering down of economic activity in
domestic markets should not prevent the Company from producing improved results.
The variety of markets served and growing international activities will sustain
the Company's growth momentum.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
CONSOLIDATED STATEMENT OF EARNINGS
FOR YEARS ENDED DECEMBER 31
(In thousands except per share data)
<TABLE>
<CAPTION>
1994 1993 1992
-------- --------- ---------
<S> <C> <C> <C>
Net sales $692,650 $611,270 $528,052
-------- --------- ---------
Cost and expenses:
Cost of goods sold 516,282 452,792 389,191
Selling and
administrative
expenses 102,992 98,449 86,876
Research and
development
expenses 11,933 11,165 10,724
-------- --------- ---------
631,207 562,406 486,791
-------- --------- ---------
Other income (deductions):
Investment income 2,977 3,158 4,646
Interest expense (4,647) (4,310) (5,174)
Other, net (982) (800) (1,013)
-------- --------- ---------
(2,652) (1,952) (1,541)
-------- --------- ---------
Earnings from continuing
operations before 58,791 46,912 39,720
income taxes
Income taxes 23,223 18,534 15,492
-------- --------- ---------
Earnings from continuing
operations 35,568 28,378 24,228
-------- --------- ---------
Earnings from discontinued
operations - - 471
-------- --------- ---------
Net earnings $ 35,568 $ 28,378 $ 24,699
-------- --------- ---------
-------- --------- ---------
Average shares and 15,480 15,478 15,337
equivalents
Net earnings per share:
Continuing operations $ 2.30 $ 1.83 $ 1.58
Discontinued operations - - 0.03
-------- --------- ---------
$ 2.30 $ 1.83 $ 1.61
</TABLE>
15
<PAGE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In thousands except per share data)
<TABLE>
<CAPTION>
Additional Cost of
Common Paid-in Retained Shares in
Stock Capital Earnings Treasury
-------- ------------ -------- ---------
<S> <C> <C> <C> <C>
Balance at
December 31, 1991 9,833 1,039 234,906 (56,660)
Net earnings - - 24,699 -
Cash dividends - $0.66
a share - - (10,076) -
Exercise of stock
options & other - 397 - 1,084
Purchase of 46,566
treasury shares - - - (1,020)
-----------------------------------------------------
Balance at
December 31, 1992 9,833 1,436 249,529 (56,596)
Net earnings - - 28,378 -
Cash dividends - $0.70
a share - - (10,705) -
Exercise of stock
options & other - 282 - 351
Two-for-one stock split 9,832 (1,586) (8,246) -
Purchase of 64,734
treasury shares - - - (1,985)
------------------------------------------------------
Balance at
December 31, 1993 $19,665 $ 132 $258,956 $(58,230)
Net earnings - - 35,568 -
Cash dividends - $0.76
a share - - (11,605) -
Exercise of stock
options & other - 7,826 - 6,442
Purchase of 328,741
treasury shares - - - (10,904)
------------------------------------------------------
Balance at
December 31, 1994 $19,665 $ 7,958 $282,919 $(62,692)
</TABLE>
See accompanying notes to Consolidated Financial Statements.
16
<PAGE>
CONSOLIDATED BALANCE SHEET
AT DECEMBER 31
<TABLE>
<CAPTION>
1994 1993
(In thousands except per --------- ---------
share data)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 70,972 $ 51,802
Receivables, less allowances of $3,835 in
1994 and $3,906 in 1993 99,412 91,158
Inventories 74,937 64,976
Deferred income taxes 17,041 12,287
Prepaid expenses and other 10,881 12,287
--------- ---------
Total current assets 273,243 236,679
--------- ---------
Property, plant and equipment,
net 158,238 142,229
--------- ---------
Other assets
Patents and other intangibles 18,373 15,831
Investments and advances to affiliates 19,009 14,780
Receivables and other assets 10,951 7,889
Deferred income taxe 5,469 2,955
--------- ---------
Total other assets 53,802 41,455
--------- ---------
$ 485,283 $ 420,363
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 34,123 $ 28,681
Accrued expenses 74,451 63,524
--------- ---------
Total current liabilities 108,574 92,205
--------- ---------
Long-term liabilities
Long-term debt 67,498 59,548
Product warranties 57,981 46,803
Deferred compensation and other liabilities 3,380 1,284
--------- ---------
Total long-term liabilities 128,859 107,635
--------- ---------
Shareholders' equity
Preferred stock, $1 par value. Authorized
and unissued 5,000,000 shares
Common stock, $1 par value. Authorized
25,000,000 shares; issued 19,665,312
shares 19,665 19,665
Additional paid-in capital 7,958 132
Retained earnings 282,919 258,956
Cost of shares in treasury - 4,252,782
shares in 1994 and 4,412,188 shares
in 1993 (62,692) (58,230)
--------- ---------
Total shareholders' equity 247,850 220,523
--------- ---------
$ 485,283 $ 420,363
--------- ---------
--------- ---------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
17
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR YEARS ENDED DECEMBER 31
(In thousands)
<TABLE>
<CAPTION>
1994 1993 1992
------- -------- --------
<S> <C> <C> <C>
Operating Activities
Net earnings $ 35,568 $ 28,378 $ 24,699
Reconciliation of net earnings
to cash flows:
Depreciation 18,322 18,125 17,159
Amortization 3,618 2,563 1,647
Loss (gain) on sales of property,
equipment and business 108 25 (992)
Changes in assets and liabilities
excluding effects of acquisitions
and divestitures:
Current and long-term receivables (8,558) (15,107) 1,234
Inventories (7,572) (5,792) 2,341
Accounts payable and accrued expenses 13,763 14,284 (3,517)
Prepaid, deferred and current income
taxes 1,270 (4,293) 6,943
Long-term liabilities 13,302 (1,621) 673
Other 2,755 (3,770) (357)
-------- -------- --------
Net cash provided by operating
activities 72,576 32,792 49,830
-------- -------- --------
Investing Activities
Capital expenditures (31,082) (28,490) (19,924)
Acquisitions, net of cash (8,417) (15,701) (997)
Sales of property, equipment and business 4,881 921 4,309
Other (4,229) (6,085) 198
Net activities of discontinued operations -- -- 34,723
-------- -------- --------
Net cash provided by (used in)
investing activities (38,847) (49,355) 18,309
-------- -------- --------
Financing Activities
Proceeds from long-term debt 8,000 2,500 23,000
Reductions of long-term debt (50) (12,050) (3,850)
Dividends (11,605) (10,705) (10,076)
Purchases of treasury shares (10,904) (1,985) (1,020)
-------- -------- --------
Net cash provided by (used in)
financing activities (14,559) (22,240) 8,054
-------- -------- --------
Change in cash and cash equivalents 19,170 (38,803) 76,193
Cash and cash equivalents
Beginning of year 51,802 90,605 14,412
-------- -------- --------
End of year $ 70,972 $ 51,802 $ 90,605
-------- -------- --------
-------- -------- --------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
18
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF ACCOUNTING POLICIES
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 on the equity
method. All material intercompany transactions and accounts have been
eliminated.
The Company recognizes revenues from product sales upon shipment to the
customer.
The Company generally considers securities with a remaining maturity of three
months or less when acquired to be cash equivalents. Cash and cash equivalents
are stated at cost, which approximates market value.
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 are stated at cost. Costs assigned 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 and other intangibles, obtained through acquisitions, are recorded at
cost (net of accumulated amortization of $7.8 million and $5.4 million at
December 31, 1994 and 1993, respectively) and amortized over their remaining
lives averaging six to eight years. Also included is the excess of acquisition
cost over the value of specifically identifiable assets acquired, $8.2 million
and $2.3 million at December 31, 1994 and 1993, respectively, and is being
amortized over various periods not exceeding 30 years. Amortization expense is
recorded on the straight-line method.
The Company maintains product warranties reserves to provide for future claims.
Extended periods of coverage are available on certain products for a fee.
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 it is more likely than not that some portion or all of a deferred
tax asset will not be realized, a valuation allowance is recognized.
19
<PAGE>
Net earnings per share of common stock are based on the weighted average number
of common shares and common equivalent shares outstanding during the period,
assuming the exercise of stock options.
Certain reclassifications have been made to prior years' information to conform
to 1994 presentation.
INVENTORIES
The components of inventories are:
<TABLE>
<CAPTION>
(In thousands) 1994 1993
-------- --------
<S> <C> <C>
FIFO cost (approximates current costs):
Finished goods $47,885 $43,714
Work in process 9,192 8,761
Raw materials 30,622 27,212
-------- --------
$87,699 $79,687
Excess of FIFO cost over LIFO value (12,762) (14,711)
-------- --------
$74,937 $64,976
</TABLE>
PROPERTY, PLANT & EQUIPMENT
The components of property, plant and equipment are:
<TABLE>
<CAPTION>
(In thousands) 1994 1993
-------- --------
<S> <C> <C>
Land $ 4,750 $ 5,109
Buildings & leasehold improvements 88,218 87,268
Machinery & equipment 241,069 216,289
Projects in progress 7,908 10,128
-------- --------
341,945 318,794
Accumulated depreciation (183,707) (176,565)
-------- --------
$158,238 $142,229
</TABLE>
20
<PAGE>
BORROWINGS
Long-term debt, all unsecured, includes:
<TABLE>
<CAPTION>
(In thousands) 1994 1993
------- -------
<S> <C> <C>
8.09% senior notes due 1998-2002 $48,000 $48,000
Variable rate revenue bonds due 2008 8,500 8,500
Variable rate revenue bonds due 2003 2,500 2,500
Variable rate revenue bonds due 2004 8,000 ---
Other 548 598
------- -------
$67,548 $59,598
Less current maturities 50 50
------- -------
$67,498 $59,548
</TABLE>
At December 31, 1994, the fair value of each of the above debt instruments and
two interest rate swaps with a $30 million aggregate notional amount and a 21-
month remaining term, were not materially different from their carrying amount.
The weighted average interest rates on the revenue bonds for 1994 and 1993 were
3.1% and 3.2%, respectively.
The debt facilities contain various restrictive covenants and limitations, all
of which were complied with in 1994 and 1993.
Cash payments for interest were $4.4 million in 1994, $4.9 million in 1993, and
$3.7 million in 1992.
The Company had $5.7 million and $10.1 million of outstanding letters of credit
issued against credit lines at December 31, 1994 and 1993, respectively.
The aggregate amount of long-term debt maturing in each of the five years
subsequent to December 31, 1994 is approximately $0.1 million a year through
1997 and $9.7 million in 1998 and 1999.
ACQUISITIONS
Acquisitions completed by the Company in the last three years include: 1994-
Sparta Brush Company, a manufacturer of specialized brushes and cleaning tools,
and the coatings and waterproofing business of Quaker Construction Products,
Inc; 1993-ECI Building Components, Inc., a metal roofing manufacturer and
Goodyear Tire & Rubber Company's Roofing System Division, a distributor and
seller of non-residential roofing systems. These acquisitions were completed for
cash, assumption of debt, and issuance of stock aggregating approximately $49.7
million and have been accounted for as purchases. The Sparta Brush Company
acquisition included the issuance of treasury shares amounting to $9.9 million
in 1994.
21
<PAGE>
Results of operations, 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.
DISCONTINUED OPERATIONS
In September 1991, the Company announced its decision to sell its businesses
engaged in the production, sale and maintenance of computer tape products and
systems integration hardware.
In 1992, the Company sold its quarter-inch tape business, as well as its half-
inch tape business, to substantially eliminate the operations which were
classified as discontinued operations. The Company recognized earnings in 1992
from discontinued operations of $0.9 million, $0.5 million after-tax, as it
adjusted its estimates due to better than anticipated performance. At December
31, 1993, all discontinued businesses had been sold.
SHAREHOLDERS' EQUITY
On April 20, 1993, the Company's Board of Directors authorized a two-for-one
stock split which was issued on June 1, 1993, to shareholders of record on May
11, 1993. The split resulted in the issuance of 9,832,656 new shares of common
stock and the reissuance of 2,175,479 shares of common stock held in treasury.
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 Stockholders' Rights Plan 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.
Common shareholders of record 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.
22
<PAGE>
In 1994, 11,333 shares of restricted stock were issued and 553 shares were
surrendered under the terms of the Program. At December 31, 1994 an additional
558,438 shares of the Company's common stock was available for issuance as
restricted stock.
The activity under the stock option plan is as follows:
<TABLE>
<CAPTION>
NUMBER OPTION
OF SHARES PRICES
--------- ------------
<S> <C> <C>
Outstanding at December 31, 1991 348,374 $13.88-18.00
Options granted 118,300 19.57
Options exercised (72,998) 15.00-19.57
Options surrendered (7,162) 13.88-19.57
--------
Outstanding at December 31, 1992 386,514 $13.88-19.57
Options granted 293,775 24.63-30.75
Options exercised (7,030) 13.88-19.56
Options surrendered (12,900) 19.56-24.63
--------
Outstanding at December 31, 1993 660,359 $16.13-30.75
Options granted 100,500 32.50-34.50
Options exercised (119,790) 16.13-24.63
Options surrendered (14,433) 24.63
--------
Outstanding at December 31, 1994 626,636 $16.13-34.50
--------
--------
Exercisable at December 31, 1994 428,346 $16.13-34.50
--------
--------
Available for grant at
December 31, 1994 539,731
--------
--------
</TABLE>
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:
<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
Service Cost $2,498 $2,396 $2,435
Interest cost on projected
benefit obligation 5,037 5,053 4,892
Actual return on plan assets (5,757) (8,617) (4,488)
Net amortization and deferral (57) 2,944 (1,000)
------- ------- ------
Total pension expense $1,721 $1,776 $1,839
</TABLE>
23
<PAGE>
The funded status of the plans at December 31 was:
<TABLE>
<CAPTION>
(In thousands) 1994 1993
------- -------
<S> <C> <C>
Actuarial present value of
accumulated benefit obligation:
Vested $55,728 $56,680
Non-vested 1,140 1,025
------- -------
$56,868 $57,705
------- -------
------- -------
Plan assets at fair value $68,992 $71,811
Projected benefit obligation (66,242) (68,548)
------- -------
Plan assets in excess of projected
benefit obligation 2,750 3,263
Unamortized transition asset (5,658) (5,695)
Unrecognized prior service costs 5,657 4,413
Unrecognized net gains (7,341) (6,830)
------- -------
Accrued pension expense $(4,592) $(4,849)
------- -------
------- -------
</TABLE>
The projected benefit obligation was determined using an assumed discount rate
of 8.25% in 1994 and 7.75% in 1993. The assumed rate of compensation increase
was 4.5% in 1994 and 1993. The expected rate of return on plan assets was 8.75%
in 1994, 1993 and 1992.
The Company also has a limited number of unfunded post-retirement benefit
programs. In the first quarter of 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 106, "Employers
Accounting for Post-Retirement Benefits Other Than Pensions". The Company
elected to record the previously unrecognized obligations arising from the
adoption of SFAS No. 106 prospectively as a component of future years expense,
amortized over a 20 year period. The SFAS No. 106 expense for the Company,
inclusive of the components of service costs, interest costs and the
amortization of the unrecognized transition obligation, was approximately $0.6
million, $0.4 million after tax during 1994 and 1993. This expense was not
materially different than the Company's post-retirement benefits expense in
1992. The projected benefit obligation related to these plans is not material.
24
<PAGE>
INCOME TAXES
The provision for income taxes was as follows:
<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Continuing operations $23,223 $18,534 $15,492
Discontinued operations -- -- 390
------- ------- -------
Total provision $23,223 $18,534 $15,882
------- ------- -------
------- ------- -------
Currently payable
Federal $18,276 $15,981 $ 6,330
State, local and other 8,046 4,272 3,003
------- ------- -------
$26,322 $20,253 $ 9,333
Deferred (benefit)
Federal $ (839) $(1,588) $ 5,661
State, local and other (2,260) (131) 888
------- ------- -------
$(3,099) $(1,719) $ 6,549
------- ------- -------
Total Provision $23,223 $18,534 $15,882
------- ------- -------
------- ------- -------
</TABLE>
Deferred tax assets (liabilities) are comprised of the following at December 31:
<TABLE>
<CAPTION>
(In thousands) 1994 1993
-------- --------
<S> <C> <C>
Product warranty $ 26,737 $ 19,728
Inventory reserves 1,822 1,636
Doubtful receivables 1,748 2,000
Employee benefits 5,162 3,739
Asset write-downs and
relocation expense 1,386 2,477
Other, net 8,684 6,568
-------- --------
Deferred assets $ 45,539 $ 36,148
-------- --------
Depreciation $(21,433) $(13,901)
Other, net (1,596) (2,836)
-------- --------
Deferred liabilities $(23,029) $(16,737)
-------- --------
Net deferred tax assets $ 22,510 $ 19,411
-------- --------
-------- --------
</TABLE>
No valuation allowance is required for the deferred tax assets based on the
Company's past tax payments and estimated future taxable income.
25
<PAGE>
A reconciliation of taxes computed at the statutory
rate with the tax provision is as follows:
<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Federal income taxes
at statutory rate $20,577 $16,419 $13,798
State income taxes, net of
federal income tax benefit 2,881 2,051 1,944
Other, net (235) 64 140
------- ------- -------
$23,223 $18,534 $15,882
Effective income tax rate 39.5% 39.5% 39%
</TABLE>
The Company adopted SFAS No. 109 "Accounting for Income Taxes", in 1992 and
applied its provisions retroactively to 1990.
Cash payments for income taxes were $22.3 million, $23.6 million and $9.6
million in 1994, 1993 and 1992, respectively.
26
<PAGE>
SEGMENT INFORMATION
The Company's continuing operations are classified into the following business
segments:
CONSTRUCTION MATERIALS--elastomeric membranes, adhesives and related products
for roofing systems and water barrier applications, metal roofing components and
outdoor recreation tiles.
TRANSPORTATION PRODUCTS--custom manufactured rubber and plastic products for the
automotive market, brake linings and pads for heavy-duty trucks, trailers and
off-road vehicles, specialty friction products, brakes and actuation systems for
construction equipment, refrigerated containers and insulated wire products.
GENERAL INDUSTRY--molded plastic foodservice products, small pneumatic tires,
stamped and roll-formed wheels, medical monitoring devices and insulated wire
products.
CORPORATE--includes general corporate and idle property expenses. Corporate
assets consist primarily of cash and cash equivalents and excess facilities.
Financial information for continuing operations by reportable business segment
is included in the following summary:
<TABLE>
<CAPTION>
(In thousands)
EARNINGS
BEFORE DEPREC.
INCOME & CAPITAL
SALES TAXES ASSETS AMORT. SPENDING
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
1994
- ----
Construction Materials $288,533 $ 35,066 $155,383 $ 5,886 $ 3,166
Transportation Products 200,213 13,497 122,031 8,906 16,403
General Industry 203,904 21,391 105,482 6,296 11,214
Interest, net -- (1,670) -- -- --
Corporate -- (9,493) 102,387 852 299
-------- -------- -------- -------- --------
$692,650 $ 58,791 $485,283 $ 21,940 $ 31,082
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
1993
- ----
Construction Materials $247,573 $ 25,496 $139,990 $ 5,762 $ 3,474
Transportation Products 177,005 11,622 109,523 7,220 10,887
General Industry 186,692 18,904 90,534 6,864 9,074
Interest, net -- (1,152) -- -- --
Corporate -- (7,958) 80,316 842 5,055
-------- -------- -------- -------- ----------
$611,270 $ 46,912 $420,363 $ 20,688 $ 28,490
-------- -------- -------- -------- ----------
-------- -------- -------- -------- ----------
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
EARNINGS
BEFORE DEPREC.
INCOME & CAPITAL
SALES TAXES(1) ASSETS AMORT. SPENDING
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
1992
- ----
Construction Materials $198,737 $ 23,715 $ 99,034 $ 5,098 $ 2,451
Transportation Products 172,849 11,603 97,196 7,026 7,830
General Industry 156,466 12,685 78,116 6,187 8,330
Interest, net -- (528) -- -- --
Corporate -- (7,755) 108,904 495 1,313
-------- -------- -------- -------- ---------
$528,052 $ 39,720 $383,250 $ 18,806 $ 19,924
-------- -------- -------- -------- ---------
-------- -------- -------- -------- ---------
</TABLE>
QUARTERLY FINANCIAL DATA
<TABLE>
<CAPTION>
(In thousands except per share
data) (unaudited) FIRST SECOND THIRD FOURTH YEAR
--------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
1994
- ----
Net sales $ 154,700 183,787 184,131 170,032 $692,650
Gross margin $ 39,467 47,246 47,790 41,865 $176,368
Operating expenses $ 27,883 29,874 29,765 27,403 $114,925
Net earnings $ 6,758 10,105 10,235 8,470 $ 35,568
Net earnings per share: 0.44 0.65 0.66 0.55 2.30
1993
- ----
Net sales $ 138,420 160,785 160,615 151,450 $611,270
Gross margin $ 35,174 41,953 41,623 39,728 $158,478
Operating expenses $ 24,855 29,049 28,054 27,656 $109,614
Net earnings $ 5,901 7,483 8,061 6,933 $ 28,378
Net earnings per share: $ 0.38 0.48 0.52 0.45 $ 1.83
</TABLE>
All per share amounts have been restated to reflect the two-for-one stock split
on June 1, 1993.
28
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
Carlisle Companies Incorporated:
We have audited the accompanying consolidated balance sheet of Carlisle
Companies Incorporated and subsidiaries as of December 31, 1994, and the related
consolidated statements of earnings, shareholders' equity, and cash flows for
the year then ended. These financial statements and the supplementary notes
referred to below are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
supplementary notes based on our audit. The consolidated financial statements
of Carlisle Companies Incorporated and subsidiaries as of December 31, 1993 and
1992 were audited by other auditors whose report dated February 2, 1994
expressed an unqualified opinion on those statements.
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 audit provides 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, 1994, and the results of their operations
and their cash flows for the year then ended, in conformity with generally
accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary notes to the consolidated
financial statements listed in Item 14 are presented for purposes of complying
with the Securities and Exchange Commission's rules and are not part of the
basic financial statements. These supplementary notes have been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly state in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
Arthur Andersen LLP
/s/ Arthur Andersen LLP
New York, New York
January 30, 1995
29
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Carlisle Companies Incorporated:
We have audited the accompanying consolidated balance sheet of Carlisle
Companies Incorporated and subsidiaries as of December 31, 1993, and the related
consolidated statements of earnings, shareholders' equity and cash flows for the
years in the two-year period ended December 31, 1993. These consolidated
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 audits 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Carlisle Companies
Incorporated and subsidiaries as of December 31, 1993, and the results of their
operations and their cash flows for each of the years in the two-year period
ended December 31, 1993, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
Syracuse, New York
February 2, 1994
30
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth certain information relating to each executive
officer of the Company as of December 31, 1994, as furnished to the Company by
the executive officers. Except as otherwise indicated each executive officer
has had the same principal occupation or employment during the past five years.
NAME AGE POSITIONS WITH COMPANY PERIOD OF SERVICE
- ---- --- ---------------------- -----------------
Stephen P. Munn 52 President and Chief September, 1988
Executive Officer of the to date
Company, since September,
1988, and Chairman of the
Board of the Company,
since January, 1994.
Dennis J. Hall 53 Executive Vice President, August, 1989
Treasurer and Chief to date
Financial Officer of the
Company. President, 1988-
1989, Carrier Transicold, a
division of United Tech-
nologies Corporation.
John W. Altmeyer 36 Vice President, Corporate August, 1989
Development of the to date
Company. Previously held
various financial positions
with Carrier Corporation, a
division of United Technolo-
gies Corporation, since
1981.
John S. Barsanti 43 Vice President, Planning April, 1991
and Administration of the to date
Company. Chief Financial
Officer, 1989-1991, Legrand
SA, North American operations.
James B. Pineau 37 Vice President, Controller May, 1989
and Assistant Treasurer to date
of the Company. Previously
held various financial
management positions with
Continental Information
Systems, Inc., since 1987.
31
<PAGE>
Scott C. Selbach 39 Vice President, Secretary July, 1989
and General Counsel of to date
the Company. Associate,
1984-1989, Bond, Schoeneck
& King, Syracuse, New York.
The officers have been elected to serve at the pleasure of the Board of
Directors of the Company. There are no family relationships between any of the
above officers, and there is no arrangement or understanding between any officer
and any other person pursuant to which he was selected an officer.
Information required by Item 10 with respect to directors of the Company is
incorporated by reference to the Company's definitive proxy statement filed with
the Securities and Exchange Commission on March 7, 1995.
ITEM 11. EXECUTIVE COMPENSATION.
Information required by Item 11 is incorporated by reference to the Company's
definitive proxy statement filed with the Securities and Exchange Commission on
March 7, 1995.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Information required by Item 12 is incorporated by reference to the Company's
definitive proxy statement filed with the Securities and Exchange Commission on
March 7, 1995.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not Applicable
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
Financial statements required by Item 8 are as follows:
Consolidated Statement of Earnings, years ended December 31, 1994,
1993 and 1992
Consolidated Statement of Shareholders' Equity, years ended December
31, 1994, 1993 and 1992
Consolidated Balance Sheet, December 31, 1994 and 1993
Consolidated Statement of Cash Flows, years ended December 31, 1994,
1993 and 1992
Notes to Consolidated Financial Statements
Financial statement supplementary notes applicable to the filing of this report
are as follows:
Page
1. Other current liabilities 35
2. Discontinued operations 35
32
<PAGE>
All other schedules are omitted because the required information is inapplicable
or the information is presented in the financial statements or related notes.
Exhibits applicable to the filing of this report are as follows:
(3) By-laws of the Company *
(3.1) Restated Certificate of Incorporation as amended April 22, 1991****
(4) Shareholders' Rights Agreement, February 8, 1989.*
(10.1) Executive Incentive Program.**
(10.2) Representative copy of Executive Severance Agreement, dated December
19, 1990, between the Company and certain individuals, including the
five most highly compensated executive officers of the Company.***
(10.3) Summary Plan Description of Carlisle Companies Incorporated Director
Retirement Program, effective November 6, 1991.***
(21) Subsidiaries of the Registrant.
(23) Consent of Independent Public Accountants.
(27) Financial Data Schedule as of December 31, 1994 and for the twelve
months ended December 31 1994.
* Filed as an exhibit to the Company's annual report on Form 10-K for
the year ended December 31, 1988 and incorporated herein by reference.
** Filed with the Company's definitive proxy statement dated March 9,
1994 and incorporated herein by reference.
*** Filed as an Exhibit to the Company's annual report on Form 10-K for
the year ended December 31, 1990 and incorporated herein by reference.
**** Filed as an Exhibit to the Company's annual report on Form 10-K for
the year ended December 31, 1991 and incorporated herein by reference.
No reports on Form 8-K were filed during the last quarter of the period covered
by this report.
The Company will furnish to the Commission upon request its long-term debt
instruments not listed in this Item.
33
<PAGE>
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, Executive Vice President and Treasurer
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/ Magalen O. Bryant
Stephen P. Munn, Chairman, Magalen O. Bryant, Director
President and Chief Executive
Officer and a Director
(Principal Executive Officer)
/s/ Donald G. Calder
/s/ Dennis J. Hall Donald G. Calder, Director
Dennis J. Hall, Executive Vice
President, Treasurer and Chief
Financial Officer /s/ Paul J. Choquette, Jr.
(Principal Financial Officer)
Paul J. Choquette, Jr., Director
/s/ James B. Pineau
James B. Pineau, Vice President /s/ Henry J. Forrest
and Controller
(Principal Accounting Officer) Henry J. Forrest, Director
/s/ David G. Thomas
David G. Thomas, Director
March 7, 1995
34
<PAGE>
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
SUPPLEMENTARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1994
Note 1. OTHER CURRENT LIABILITIES - Other current liabilities
at December 31 consist of
the following:
(000's)
<TABLE>
<CAPTION>
1994 1993
------- ------
<S> <C> <C>
Employee compensation and benefits $16,038 14,676
Product warranties 26,639 21,404
Insurance 7,433 5,867
Other accrued expenses 24,341 21,577
------- ------
74,451 63,524
------- ------
------- ------
</TABLE>
Note 2. DISCONTINUED OPERATIONS
Net sales from discontinued operations were $58.4 million in 1992.
35
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Carlisle Companies Incorporated
Under date of February 2, 1994, we reported on the consolidated balance sheet of
Carlisle Companies Incorporated and subsidiaries as of December 31, 1993, and
the related consolidated statements of earnings, stockholders' equity, and cash
flows for each of the years in the two-year period ended December 31, 1993 as
contained in the annual report on Form 10-K for the year ended December 31,
1993. In connection with our audits of the aforementioned consolidated
financial statements, we also have audited the related supplementary notes
and financial statement schedules as listed in Item 14 of the Form 10-K. These
supplementary notes and financial statement schedules are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these supplementary notes and financial statement schedules based on our
audits.
In our opinion, such supplementary notes and financial statement schedules, when
considered in relation to the basic consolidated financial statements taken as a
whole, present fairly, in all material respects, the information set forth
therein.
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
Syracuse, New York
February 2, 1994
36
<PAGE>
CARLISLE COMPANIES INCORPORATED
COMMISSION FILE NUMBER 1-9278
FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1994
EXHIBIT LIST
PAGE
----
(21) Subsidiaries of the Registrant
(23) Consent of Independent Public
Accountants
(23.1) Independent Auditors' Consent
(27) Financial Data Schedule as of
December 31, 1994 and for the twelve
months ended December 31, 1994
37
<PAGE>
Exhibit 21
CARLISLE COMPANIES INCORPORATED
Subsidiaries of the Registrant
JURISDICTION OF
INCORPORATION
---------------
Carlisle Companies Incorporated (Registrant) Delaware
Subsidiaries:
Carlisle Corporation -
Carlisle SynTec Systems, Division Delaware
(Roofing Systems)
Four wholly-owned foreign subsidiaries
Four wholly-owned domestic subsidiaries
Braemar, Inc. Minnesota
Carlisle Corporation of Canada, Ltd. Canada
(Roofing Systems, Braking Systems
and Friction Materials)
Carlisle Systems Group Incorporated Delaware
Carlisle Tire & Rubber Company Delaware
Continental Carlisle Incorporated Delaware
(Plastic Foodservice and Giftware Products
d/b/a Continental/SiLite International)
Four wholly-owned domestic subsidiaries
Geauga Company Delaware
Motion Control Industries, Inc. Delaware
(Braking Systems and Friction Materials)
Two wholly-owned foreign subsidiaries
One wholly-owned domestic subsidiary
Tensolite Company Delaware
Vistatech Corporation Delaware
38
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 10-K, into the Company's previously filed
Registration Statement File Nos. 33-28052, 33-56737, 33-66932, 33-56735, 33-
57113 and 33-66934.
Arthur Andersen LLP
/s/ Arthur Andersen LLP
New York, New York
March 7, 1995
39
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Carlisle Companies Incorporated
We consent to incorporation by reference in the (i) Registration Statement No.
33-66932 on Form S-8; (ii) Registration Statement No. 33-66934 on Form S-3; and
(iii) Registration Statement No. 33-28052 on Form S-8; (iv) Registration
Statement No. 33-56737 on Form S-8; (v) Registration Statement No. 33-56735 on
Form S-3; and (vi) Registration Statement No. 33-57113 on Form S-3 of
Carlisle Companies Incorporated of our report dated February 2, 1994, relating
to the consolidated balance sheet of Carlisle Companies Incorporated and
subsidiaries as of December 31, 1993, and the related consolidated statements
of earnings, stockholders' equity, and cash flows and related schedules for
the years ended December 31, 1993 and 1992, which report appears in the 1994
annual report on Form 10-K of Carlisle Companies Incorporated.
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
Syracuse, New York
March 7, 1995
40
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains Summary Financial information extracted from the
Financial Statements of Carlisle Companies Incorporated for the twelve month
period ending December 31, 1994, and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-1-1994
<PERIOD-END> DEC-31-1994
<CASH> $ 70,972
<SECURITIES> 0
<RECEIVABLES> 103,247
<ALLOWANCES> 3,835
<INVENTORY> 74,937
<CURRENT-ASSETS> 273,243
<PP&E> 341,945
<DEPRECIATION> 183,707
<TOTAL-ASSETS> 485,283
<CURRENT-LIABILITIES> 108,574
<BONDS> 67,498
<COMMON> 19,665
0
0
<OTHER-SE> 228,185
<TOTAL-LIABILITY-AND-EQUITY> 485,283
<SALES> 692,650
<TOTAL-REVENUES> 692,650
<CGS> 516,282
<TOTAL-COSTS> 631,207
<OTHER-EXPENSES> 982
<LOSS-PROVISION> 698
<INTEREST-EXPENSE> 1,670
<INCOME-PRETAX> 58,791
<INCOME-TAX> 23,223
<INCOME-CONTINUING> 35,568
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,568
<EPS-PRIMARY> 2.30
<EPS-DILUTED> 2.30
</TABLE>
