<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13
[X] OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
--------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13
[ ] OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
250 South Clinton Street, Suite 201, Syracuse, New York 13202
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(Address of principal executive offices) (Zip code)
315-474-2500
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(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
--- -----
Shares of common stock outstanding at November 1, 1997 30,155,909
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Page 1 of 9
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PART I. FINANCIAL INFORMATION
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statement of Earnings
Three Months and Nine Months ended September 30, 1997 and 1996
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------- ----------------------
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales.............................................. $ 315,707 $ 252,603 $ 940,897 $ 740,039
Cost and expenses:
Cost of goods sold................................... 240,618 189,965 725,505 560,547
Selling and administrative........................... 36,331 32,519 105,811 95,446
Research and development............................. 3,942 3,032 11,705 9,110
---------- ---------- ---------- ----------
280,891 225,516 843,021 665,103
Operating profit....................................... 34,816 27,087 97,876 74,936
Other income (deductions):
Investment income.................................... 409 247 991 452
Interest expense..................................... (3,961) (1,888) (12,231) (5,987)
Other, net........................................... 1,045 175 2,652 1,088
---------- ---------- ---------- ----------
(2,507) (1,466) (8,588) (4,447)
---------- ---------- ---------- ----------
Earnings before income taxes........................... 32,309 25,621 89,288 70,489
Income taxes........................................... 12,791 10,160 35,369 27,948
---------- ---------- ---------- ----------
Net earnings........................................... $ 19,518 $ 15,461 $ 53,919 $ 42,541
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Average common shares outstanding...................... 31,036 30,980 31,024 30,895
---------- ---------- ---------- ----------
Net earnings per share:................................ $ 0.63 $ 0.50 $ 1.74 $ 1.38
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Dividends declared and paid per share.................. $ .1400 $ .1225 $ .3850 $ .3425
---------- ---------- ---------- ----------
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</TABLE>
See accompanying notes to interim financial statements.
Page 2 of 9
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CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30, 1997 and December 31, 1996
(Dollars in thousands except share amounts)
<TABLE>
<CAPTION>
SEPT. 30, DEC. 31,
1997 1996
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<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents.................................... $ 16,274 $ 8,312
Receivables, less allowances of $4,840 in
1997 and $4,097 in 1996.................................... 193,367 158,463
Inventories.................................................. 162,009 137,092
Deferred income taxes........................................ 25,282 25,036
Prepaid expenses and other................................... 21,022 17,030
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Total current assets....................................... 417,954 345,933
---------- ----------
Property, plant and equipment.................................. 520,649 483,013
Less accumulated depreciation................................ 239,720 218,775
---------- ----------
Net property, plant and equipment.......................... 280,929 264,238
---------- ----------
Other assets
Patents and other intangibles................................ 114,305 108,648
Investments and advances to affiliates....................... 14,770 11,976
Receivables and other assets................................. 9,637 9,854
Deferred income taxes........................................ 3,713 1,814
---------- ----------
Total other assets......................................... 142,425 132,292
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$ 841,308 $ 742,463
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---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable............................................. $ 94,424 $ 74,338
Accrued expenses............................................. 120,148 96,310
---------- ----------
Total current liabilities.................................. 214,572 170,648
---------- ----------
Long-term liabilities
Long-term debt............................................... 218,744 191,167
Product warranties........................................... 72,047 71,478
Deferred compensation and other liabilities.................. (512) 1,667
---------- ----------
Total long-term liabilities................................ 290,279 264,312
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Stockholders' equity:
Common stock, $1 par value. Authorized 50,000,000 shares;
issued 39,330,624 shares.................................... 39,331 39,331
Additional paid-in capital................................... 1,753 480
Retained earnings............................................ 390,829 348,558
Cost of shares in treasury (1997--9,174,815 shares;
1996--9,124,858 shares).................................... (95,456) (80,866)
---------- ----------
Total stockholders' equity................................. 336,457 307,503
---------- ----------
$ 841,308 $ 742,463
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</TABLE>
See accompanying notes to interim financial statements.
Page 3 of 9
<PAGE>
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Statements of Consolidated Cash Flows
Nine Months ended September 30, 1997 and 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
1997 1996
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<S> <C> <C>
Operating Activities
Net earnings............................................. $ 53,919 $ 42,541
Reconciliation of net earnings to cash flows:
Depreciation........................................... 25,238 19,196
Amortization........................................... 4,652 2,896
Changes in assets and liabilities, excluding
effects of acquisitions and sale of business:
Current & long-term receivables.................... (29,259) (19,579)
Inventories........................................ (19,319) (3,760)
Accounts payable & accrued expenses................ 22,027 14,516
Prepaid, deferred & current income taxes........... 10,972 (2,853)
Loss on sale of facility........................... 332 --
Long-term liabilities.............................. (1,612) 4,063
Other.............................................. 2,138 2,419
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69,088 59,439
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Investing Activities
Capital expenditures..................................... (39,218) (26,061)
Acquisitions, net of cash................................ (30,603) (53,437)
Sales of property, equipment & business.................. 12,336 4,158
Other.................................................... (2,794) (1,698)
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(60,279) (77,038)
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Financing Activities
Proceeds from short-term borrowings...................... -- 55,989
Proceeds from long-term debt............................. 153,796 --
Reductions of long-term debt............................. (125,127) (11,590)
Dividends................................................ (11,647) (10,376)
Purchases of treasury shares............................. (17,869) (11,951)
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(847) 22,072
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Change in cash and cash equivalents........................ 7,962 4,473
Cash and cash equivalents
Beginning of period...................................... 8,312 3,198
---------- ---------
End of period............................................ $ 16,274 $ 7,671
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</TABLE>
See accompanying notes to interim financial statements.
Page 4 of 9
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE AND THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(1) The accompanying unaudited condensed consolidated financial statements
include the accounts of Carlisle Companies Incorporated and its wholly-owned
subsidiaries (together, the "Company"). Intercompany transactions and
balances have been eliminated in consolidation. The unaudited condensed
consolidated financial statements have been prepared in accordance with
Article 10-01 of Regulation S-X of the Securities and Exchange Commission
and, as such, do not include all information required by generally accepted
accounting principles. However, in the opinion of the Company, these
financial statements contain all adjustments, consisting of only normal
recurring adjustments, necessary to present fairly the financial position as
of September 30, 1997 and December 31, 1996, the results of its operations
for the three months and the nine months ended September 30, 1997 and 1996,
and its cash flows for the nine months ended September 30, 1997 and 1996.
While the Company believes that the disclosures presented are adequate to
make the information not misleading, it is suggested that these financial
statements be read in conjunction with the financial statements and notes
included in the Company's 1996 Annual Report to Stockholders.
(2) The components of inventories are as follows:
SEPT. 30, DEC. 31,
1997 1996
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(000)'S
First-in, first-out (FIFO) costs:
Finished goods................................. $ 96,769 $ 82,253
Work in process................................ 22,982 17,574
Raw materials.................................. 57,056 51,872
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$ 176,807 $ 151,699
Excess of FIFO cost over Last-in,
First-out (LIFO) inventory value............... (14,798) (14,607)
---------- ----------
LIFO inventory value............................. $ 162,009 $ 137,092
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(3) Net earnings per share of common stock are based on the weighted average
number of shares outstanding of 31,035,746 for the three months ended September
30, 1997 and 31,023,928 for the nine months ended September 30, 1997 assuming
the exercise of dilutive stock options.
Page 5 of 9
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Management's Discussion and Analysis of
Financial Condition and Results of Operations
Carlisle Companies Incorporated reported record third quarter sales and
earnings. For the quarter ended September 30, 1997 sales of $315.7 million
reflect a 25% increase over 1996 third quarter sales of $252.6 million.
Earnings of $19.5 million, or $.63 a share, increased 26% over 1996 earnings
of $15.5 million, or $.50 a share. For the nine months ended September 30,
1997, sales totaled $940.9 million, a 27% increase over 1996 sales of $740.0
million. Year-to-date earnings rose 27% to $53.9 million, or $1.74 a share,
from 1996 earnings of $42.5 million, or $1.38 a share.
Construction Materials segment sales of $94.4 million, for the third
quarter 1997, remained flat over 1996 third quarter sales levels, after
eliminating the sales of Carlisle's engineered metal roofing business, which
was sold in February 1997. On a year-to-date basis, sales of $222.2 million,
are down slightly this year compared to 1996, net of engineered metals' sales
impact. Declines in volumes in the roofing market overall and tight
roofer-labor market conditions have had a negative impact on sales. Favorable
product mix, cost control efforts and elimination of the losses of divested
engineered metals operations contributed to the 13% increase in 1997 third
quarter earnings of $17.1 million and to the 15% increase in year-to-date
earnings of $37.0 million.
Transportation Products segment sales of $124.2 million for the third
quarter reflect a 49% increase over 1996, while earnings of $10.6 million
exceeded 1996 levels by 71%. On a year-to-date basis, both sales and earnings
increased 51% over 1996. Repeated positive performances at the Company's
container leasing joint venture, coupled with significantly improved results
at the Company's container manufacturing operations, contributed to this
quarter's results. Sales and earnings of the Company's engineered plastics
operations continue to benefit from its 1996 integration of the Engineered
Plastics Division of Johnson Controls. Fueled by higher sales and production
volumes and manufacturing efficiencies, the Company's aerospace wire
operations continue to exceed 1996 sales and earnings. Strong performances by
the Company's specialized trailer operations continue to contribute
positively to this segment's sales and earnings. The negative impact of the
strengthening US dollar to European currencies in the heavy friction business
offset record sales and earnings attained in the Company's industrial
friction business.
General Industry segment sales of $97.1 million increased 36% over 1996
third quarter sales of $71.3 million while earnings increased 32% over 1996 to
$11.2 million. For the nine-months ended September 30, 1997, segment sales
totaled $331.6 million versus $242.7 in 1996. Year-to-date earnings rose 29% to
$40.4 million. Increased sales volumes across most OE and aftermarket product
lines coupled with improved manufacturing efficiencies and cost reduction
programs, continue to produce record sales and earnings at the Company's tire
and wheel operations. In July of 1997, the Company completed the acquisition of
The City Machine and Wheel Company, a manufacturer and seller of stamped steel
wheels to customers in the United States and Canada. In September of 1997, the
Company completed the acquisition of Conestoga Tire & Rim Inc. and Wheeltech
North America, Inc. Conestoga and Wheeltech are in the business of
Page 6 of 9
<PAGE>
assembling, marketing and distributing tire and wheel assemblies to various
markets in the United States and Canada. Additionally, on October 31, 1997,
the Company acquired Tilden Corporation, a value-added distributor of tire
and wheel assemblies for the lawn and garden and other specialty tire and
wheel markets. Sales in the Company's speciality electronic wire business
reached record levels due to the growth of its low density cable products.
Third quarter sales in the Foodservice operations maintained the upward trend
over 1996 levels while intense competition dampened margins for the quarter.
The Company's stainless steel processing equipment operations continue to
report favorable results.
There are no trends, demands, commitments, events or uncertainties that
will result in or that are reasonably likely to result in the Company's
liquidity increasing or decreasing in any material way nor are there any
known material trends, favorable or unfavorable, in the Company's capital
resources.
Working capital was $203.4 million at September 30, 1997 compared to
$207.1 million at June 30, 1997 and $123.2 million a year ago. Working
capital at September 30, 1996 included short term borrowings which were
refinanced in 1997.
Page 7 of 9
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits applicable to the filing of this report are as follows:
(12) Ratio of Earnings to Fixed Charges.
(27) Financial Data Schedule as of September 30, 1997 and for the nine
months ended September 30, 1997.
(b) Report on Form 8-K
No reports on Form 8-K were filed during the quarter for which this
report on Form 10-Q is filed.
Page 8 of 9
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CARLISLE COMPANIES INCORPORATED
Date November 12, 1997 By /s/ Robert J. Ryan, Jr.
---------------------------- ------------------------------
Robert J. Ryan, Jr.
Vice President, Treasurer and
Chief Financial Officer
Page 9 of 9
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Exhibit 12
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED DECEMBER 31
ENDED -------------------------------------
9/30/97 1996 1995 1994 1993 1992
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<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges..... 6.26% 7.47% 8.70% 9.73 9.89% 7.78%
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
are defined as earnings before income taxes plus fixed charges. Fixed charges
consist of interest expense (including capitalized interest) and the portion of
rental expense that is representative of the interest factor (deemed to be one-
third of minimum operating lease rentals). The earnings to fixed charges
calculation reflects the Company's proportionate share of income, expense and
fixed charges attributable to the Company's investment in majority-owned
unconsolidated subsidiaries and joint ventures.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains Summary Financial Information extracted from the
Financial Statements of Carlisle Companies Incorporated for the nine month
period ending September 30, 1997, and is qualified in its entirety by reference
to such Financial Statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 16,274
<SECURITIES> 0
<RECEIVABLES> 198,207
<ALLOWANCES> 4,840
<INVENTORY> 162,009
<CURRENT-ASSETS> 417,954
<PP&E> 520,649
<DEPRECIATION> 239,720
<TOTAL-ASSETS> 841,308
<CURRENT-LIABILITIES> 214,572
<BONDS> 218,744
0
0
<COMMON> 39,331
<OTHER-SE> 297,126
<TOTAL-LIABILITY-AND-EQUITY> 841,308
<SALES> 940,897
<TOTAL-REVENUES> 940,897
<CGS> 725,505
<TOTAL-COSTS> 843,021
<OTHER-EXPENSES> (2,652)
<LOSS-PROVISION> 914
<INTEREST-EXPENSE> 11,240
<INCOME-PRETAX> 89,288
<INCOME-TAX> 35,369
<INCOME-CONTINUING> 53,919
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53,919
<EPS-PRIMARY> 1.74
<EPS-DILUTED> 1.74
</TABLE>
