<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from_________to_________
Commission file number 1-9278
Carlisle Companies Incorporated
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 31-1168055)
- ------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization identification no.)
250 South Clinton Street, Suite 201, Syracuse, New York 13202-1258
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (315) 474-2500
--------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
Common stock, $1 par value New York Stock Exchange
- -------------------------- -----------------------
Preferred Stock Purchase Rights New York Stock Exchange
- ------------------------------- -----------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No___
---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of voting common stock held
by non-affiliates at February 24, 1998 $1,276,973,417
Shares of common stock outstanding at February 24, 1998 30,188,136
Portions of the definitive Proxy Statement for the Annual Meeting of
Shareholders on April 20, 1998 are incorporated by reference in Part III.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
CONSOLIDATED STATEMENT OF EARNINGS
FOR YEARS ENDED DECEMBER 31
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT PER SHARE DATA)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1997 1996 1995
------------ ------------ ----------
Net sales..................................................................... $ 1,260,550 $ 1,017,495 $ 822,534
Cost and expenses:
Cost of goods sold.......................................................... 974,089 779,797 624,860
Selling and administrative expenses......................................... 143,246 128,676 109,236
Research and development expenses........................................... 15,824 11,900 12,339
------------ ------------ ----------
1,133,159 920,373 746,435
Other income (deductions):
Investment income........................................................... 1,172 666 2,020
Interest expense............................................................ (16,502) (9,062) (6,075)
Other, net.................................................................. 4,723 3,314 814
------------ ------------ ----------
(10,607) (5,082) (3,241)
------------ ------------ ----------
Earnings before income taxes.................................................. 116,784 92,040 72,858
Income taxes.................................................................. 46,118 36,360 28,777
Net earnings.................................................................. $ 70,666 $ 55,680 $ 44,081
------------ ------------ ----------
------------ ------------ ----------
Average shares outstanding-basic.............................................. 30,235 30,281 30,759
Basic earnings per share...................................................... $ 2.34 $ 1.84 $ 1.43
------------ ------------ ----------
Average shares outstanding-diluted............................................ $ 31,025 30,953 31,266
Diluted earnings per share.................................................... $ 2.28 $ 1.80 $ 1.41
------------ ------------ ----------
------------ ------------ ----------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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, 1994................................................ $ 19,665 $ 7,958 $ 282,919 $ (62,692)
Net earnings................................................... -- -- 44,081 --
Cash dividends--$0.420 per share............................... -- -- (12,928) --
Exercise of stock options & other.............................. -- 1,358 -- 2,344
Purchase of 496,616 treasury shares............................ -- -- -- (9,448)
--------- ----------- ---------- ----------
Balance at
December 31, 1995................................................ $ 19,665 $ 9,316 $ 314,072 $ (69,796)
Net earnings................................................... -- -- 55,680 --
Cash dividends -$0.465 per share............................... -- -- (14,129) --
Exercise of stock options & other.............................. -- 3,765 -- 3,098
Purchase of 649,966 treasury shares............................ -- -- -- (14,168)
--------- ----------- ---------- ----------
19,665 13,081 355,623 (80,866)
Two-for-one stock split........................................ 19,666 (12,601) (7,065) --
--------- ----------- ---------- ----------
Balance at
December 31, 1996................................................ $ 39,331 $ 480 $ 348,558 $ (80,866)
Net earnings................................................... -- -- 70,666 --
Cash dividends--$0.525 per share............................... -- -- (15,868) --
Exercise of stock options & other.............................. -- 1,350 -- 3,295
Purchase of 550,980 treasury shares............................ -- -- -- (18,110)
--------- ----------- ---------- ----------
Balance at
December 31, 1997................................................ $ 39,331 $ 1,830 $ 403,356 $ (95,681)
--------- ----------- ---------- ----------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
16
<PAGE>
CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31
<TABLE>
<CAPTION>
(IN THOUSANDS EXCEPT SHARE DATA) 1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents............................................................. $ 1,732 $ 8,312
Receivables, less allowances of $5,180 in 1997 and $4,097 in 1996..................... 184,796 158,463
Inventories .......................................................................... 180,331 137,092
Deferred income taxes................................................................. 28,462 25,036
Prepaid expenses and other............................................................ 22,212 17,030
----------- -----------
Total current assets................................................................ 417,533 345,933
----------- -----------
Property, plant and equipment, net...................................................... 294,165 264,238
----------- -----------
Other assets
Patents, goodwill and other intangibles............................................... 121,772 108,648
Investments and advances to affiliates................................................ 16,467 11,976
Receivables and other assets.......................................................... 11,279 9,854
Deferred income taxes................................................................. -- 1,814
----------- -----------
Total other assets.................................................................. 149,518 132,292
----------- -----------
$861,216 $ 742,463
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt, including current maturities......................................... $ 24,332 $ --
Accounts payable...................................................................... 75,936 74,338
Accrued expenses...................................................................... 125,815 96,310
----------- -----------
Total current liabilities........................................................... 226,083 170,648
----------- -----------
Long-term liabilities
Long-term debt........................................................................ 209,642 191,167
Product warranties.................................................................... 73,715 71,478
Deferred compensation and other liabilities........................................... 2,940 1,667
----------- -----------
Total long-term liabilities......................................................... 286,297 264,312
----------- -----------
Shareholders' equity
Preferred stock, $1 par value. Authorized and unissued 5,000,000 shares
Common stock, $1 par value. Authorized 50,000,000 shares; issued 39,330,624 shares.... 39,331 39,331
Additional paid-in capital............................................................ 1,830 480
Retained earnings..................................................................... 403,356 348,558
Cost of shares in treasury-9,171,915 shares in 1997 and 8,979,300 shares in 1996...... (95,681) (80,866)
----------- -----------
Total shareholders' equity.......................................................... 348,836 307,503
----------- -----------
$861,216 $ 742,463
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
17
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR YEARS ENDED DECEMBER 31
<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
(IN THOUSANDS)
OPERATING ACTIVITIES
Net earnings................................................................. $ 70,666 $ 55,680 $ 44,081
Reconciliation of net earnings to cash flows:
Depreciation............................................................... 32,477 25,320 20,331
Amortization............................................................... 6,278 4,438 2,899
(Gain)/loss on sales of property, equipment and business..................... (993) 216 570
Changes in assets and liabilities, excluding effects of acquisitions and
divestitures:
Current and long-term receivables.......................................... (19,659) (13,237) (8,616)
Inventories................................................................ (31,118) (5,837) (17,324)
Accounts payable and accrued expenses...................................... 9,245 16,667 1,928
Prepaid, deferred and current income taxes................................. 10,887 (4,260) (993)
Long-term liabilities...................................................... 3,279 4,939 7,429
Other...................................................................... 1,924 2,106 5,398
---------- ---------- ----------
Net cash provided by operating activities.................................... 82,986 86,032 55,703
---------- ---------- ----------
Investing Activities
Capital expenditures....................................................... (59,531) (34,990) (37,467)
Acquisitions, net of cash.................................................. (45,380) (133,719) (67,006)
Sales of property, equipment and business.................................. 15,815 3,489 2,794
Other ..................................................................... (4,090) (155) 1,014
---------- ---------- ----------
Net cash used in investing activities........................................ (93,186) (165,375) (100,665)
Financing Activities
Proceeds from short-term debt.............................................. 13,458 -- --
Proceeds from long-term debt............................................... 150,000 124,358 --
Reductions of long-term debt............................................... (125,860) (11,604) (436)
Dividends.................................................................. (15,868) (14,129) (12,928)
Purchases of treasury shares............................................... (18,110) (14,168) (9,448)
---------- ---------- ----------
Net cash provided by (used in) financing activities.......................... 3,620 84,457 (22,812)
---------- ---------- ----------
Change in cash and cash equivalents ......................................... (6,580) 5,114 (67,774)
Cash and cash equivalents
Beginning of year.......................................................... 8,312 3,198 70,972
---------- ---------- ----------
End of year................................................................ $ 1,732 $ 8,312 $ 3,198
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
18
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Carlisle Companies Incorporated and Subsidiaries
SUMMARY OF ACCOUNTING POLICIES
BASIS OF CONSOLIDATION. The consolidated financial statements include the
accounts of the Company and its subsidiaries. Investments in affiliates where
the Company does not have majority control, none of which are significant,
are accounted for under the equity method. All material intercompany
transactions and accounts have been eliminated.
REVENUE RECOGNITION. The Company recognizes revenues from product sales upon
shipment to the customer. The substantial majority of the Company's product
sales are to customers in the United States.
USE OF ESTIMATES. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS. Debt securities with a remaining maturity of
three months or less when acquired are considered cash equivalents. Cash and
cash equivalents are stated at cost, which approximates market value.
INVENTORIES. Inventories are valued at lower of cost or market. Cost for
inventories is determined for a majority of the Company's inventories by the
last-in, first-out (LIFO) method with the remainder determined by the
first-in, first-out (FIFO) method.
PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment are stated at
cost. Costs allocated to property, plant and equipment of acquired companies
are based on estimated fair value at the date of acquisition. Depreciation is
principally computed on the straight line basis over the estimated useful
lives of the assets. Asset lives are 20 to 40 years for buildings, 5 to 15
years for machinery and equipment and 3 to 10 years for leasehold
improvements.
PATENTS, GOODWILL AND OTHER INTANGIBLES. Patents and other intangibles,
recorded at cost, amounted to $5.3 million and $6.9 million at December 31,
1997 and 1996, respectively (net of accumulated amortization of $14.6 million
and $12.8 million, respectively), and are amortized over their remaining
lives, which average five years. Goodwill, representing the excess of
acquisition cost over the fair value of specifically identifiable assets
acquired, was $116.5 million and $101.8 million at December 31, 1997 and
1996, respectively (net of accumulated amortization of $7.8 million and $3.6
million, respectively), and is amortized on a straight line basis over
various periods not exceeding 30 years. The Company evaluates the
recoverability of goodwill based on the estimated, undiscounted future cash
flows attributable to the operations with which the goodwill is associated.
19
<PAGE>
PRODUCT WARRANTIES. The Company offers warranties on the sales of certain of
its products and records an accrual for estimated future claims. Such
accruals are based upon historical experience and management's estimate of
the level of future claims.
LEASES. The Company is obligated under various noncancelable operating
leases for certain facilities and equipment. Rent expense was $5.4 million,
$2.6 million and $2.8 million, in 1997, 1996, and 1995, respectively.
INCOME TAXES. Deferred tax assets and liabilities are recognized for the
future tax consequences of the differences between financial statement
carrying amounts of assets and liabilities and their respective tax bases.
These balances are measured using enacted tax rates expected to apply to
taxable income in the years in which such temporary differences are expected
to be recovered or settled. If a portion or all of a deferred tax asset is
not expected to be realized, a valuation allowance is recognized.
NET EARNINGS PER SHARE. In 1997, the Financial Accounting Standards Board
issued Statement No. 128, "Earnings per Share." SFAS No. 128 replaced the
calculation of primary and fully diluted earnings per share with basic and
diluted earnings per share. Basic earnings per share excludes the dilutive
effects of options, warrants, and convertible securities. Diluted earnings
per share gives effect to all dilutive securities that were outstanding
during the period. All earnings per share amounts have been presented or
restated to conform to the SFAS No. 128 requirements. The only difference
between basic and diluted earnings per share of the Company is the effect of
dilutive stock options.
FAIR VALUE OF FINANCIAL INSTRUMENTS. The estimated fair market values of the
Company's financial instruments approximate their recorded values.
RECLASSIFICATIONS. Certain reclassifications have been made to prior years'
information to conform to 1997 presentation.
20
<PAGE>
INVENTORIES
The components of inventories are:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
In Thousands
FIFO cost (approximates current costs):
Finished goods........................................................................... $ 111,403 $ 82,253
Work in process.......................................................................... 23,250 17,574
Raw materials............................................................................ 60,375 51,872
---------- ----------
$ 195,028 $ 151,699
Excess of FIFO cost over LIFO value...................................................... (14,697) (14,607)
---------- ----------
$ 180,331 $ 137,092
---------- ----------
---------- ----------
</TABLE>
PROPERTY, PLANT & EQUIPMENT
The components of property, plant and equipment are:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
In Thousands
Land...................................................................................... $ 6,804 $ 6,316
Buildings & leasehold improvements........................................................ 123,432 114,384
Machinery & equipment..................................................................... 383,560 341,296
Projects in progress...................................................................... 25,686 21,016
---------- ----------
539,482 483,012
Accumulated depreciation.................................................................. (245,317) (218,774)
---------- ----------
$ 294,165 $ 264,238
---------- ----------
---------- ----------
</TABLE>
BORROWINGS
Long-term debt includes:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
In Thousands
Short-term obligations to be refinanced................................................... $ -- $ 124,358
7.25% senior notes due 2007............................................................... 150,000 --
8.09% senior notes due 1998-2002 48,000 48,000
Industrial Development and Revenue Bonds due through 2014................................. 12,460 12,505
Other, including capital lease obligations................................................ 10,056 7,005
---------- ----------
$ 220,516 $ 191,868
Less current maturities................................................................... (10,874) (701)
---------- ----------
$ 209,642 $ 191,167
---------- ----------
---------- ----------
</TABLE>
On January 28, 1997, the Company issued $150 million in notes due in 2007 at
an interest rate of 7.25%. The net proceeds were used to repay all amounts
outstanding under the Company's revolving credit facility, to repay other
short-term indebtedness, and for general corporate purposes.
21
<PAGE>
In 1997, the Company amended its revolving credit facility with various
banks to reduce the amount from $150 million to $125 million. As of December 31,
1997, $123 million was available under this facility. The Company has available
unsecured lines of credit from banks of $20 million, of which $18.5 million was
available as of December 31, 1997.
At December 31, 1997, letters of credit amounting to $19.5 million were
outstanding, primarily to provide security under insurance arrangements and
certain borrowings.
The weighted average interest rates on the revenue bonds for 1997 and 1996
were 4.2% and 3.5%, respectively.
The debt facilities contain various restrictive covenants and limitations,
all of which were complied with in 1997 and 1996. The industrial development and
revenue bonds are collateralized by the facilities and equipment acquired
through the proceeds of the related bond issuances.
Cash payments for interest were $12.3 million in 1997, $6.9 million in 1996,
and $5.9 million in 1995.
The aggregate amount of long-term debt maturing in each of the next five
years is approximately $10.9 million in 1998, $11.4 million in 1999 through
2001, and $10.4 million in 2002.
ACQUISITIONS
In each of the last three years, the Company has completed various
acquisitions, all of which have been accounted for as purchases. Results of
operations for these acquisitions, which have been included in the consolidated
financial statements since their respective acquisition dates, did not have a
material effect on consolidated operating results of the Company in the years of
acquisition.
22
<PAGE>
SHAREHOLDERS' EQUITY
On October 4, 1996, the Company's Board of Directors authorized a
two-for-one stock split which was completed on January 15, 1997, to
shareholders of record on January 2, 1997. The split resulted in the issuance
of 19,665,312 new shares of common stock including 4,489,650 shares issued as
treasury shares. In addition, authorized shares were increased from
25,000,000 to 50,000,000. All references in the financial statements to
average number of shares outstanding and related prices, per share amounts,
and stock option plan data have been restated to reflect the split.
The Company has a Shareholders' Rights Agreement which is designed to
protect shareholder investment values. A dividend distribution of one Preferred
Stock Purchase Right for each outstanding share of the Company's common stock
was declared, payable to shareholders of record on March 3, 1989. The Rights
will become exercisable under certain circumstances, including the acquisition
of 25% of the Company's common stock, or 40% of the voting power, in which case
all rights holders except the acquiror may purchase the Company's common stock
at a 50% discount. If the Company is acquired in a merger or other business
combination, and the Rights have not been redeemed, rights holders may purchase
the acquiror's shares at a 50% discount. On August 7, 1996, the Company amended
the Shareholders' Rights Agreement to, among other things, extend the term of
the Rights until August 6, 2006.
Common shareholders of record on May 30, 1986 are entitled to five votes per
share. Common stock acquired subsequent to that date entitles the holder to one
vote per share until held four years, after which time the holder is entitled to
five votes.
EMPLOYEE STOCK OPTIONS & INCENTIVE PLAN
The Company maintains an Executive Incentive Program for executives and
certain other employees of the Company and its operating divisions and
subsidiaries. The Program contains a plan, for those who are eligible, to
receive cash bonuses and/or shares of restricted stock. The Program also has a
stock option plan available to certain employees who are not eligible to receive
cash or restricted stock awards.
At December 31, 1997, 24,885 nonvested shares were outstanding and 2,190,266
shares were available for issuance under the Company's restricted stock plan.
23
<PAGE>
The activity under the stock option plan is as follows:
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
NUMBER EXERCISE
OF SHARES PRICE
----------- -----------
<S> <C> <C>
Outstanding at December 31, 1994.......................................................... 1,253,272 $ 11.60
Options granted........................................................................... 442,000 17.87
Options exercised......................................................................... (211,476) 9.49
Options surrendered....................................................................... (4,798) 12.32
-----------
Outstanding at December 31, 1995.......................................................... 1,478,998 $ 13.77
Options granted........................................................................... 396,000 20.73
Options exercised......................................................................... (175,892) 10.05
Options surrendered....................................................................... (2,276) 12.32
-----------
Outstanding at December 31, 1996.......................................................... 1,696,830 15.77
Options granted........................................................................... 214,000 29.50
Options exercised......................................................................... (340,584) 11.71
-----------
Outstanding at December 31, 1997.......................................................... 1,570,246 18.52
Available for grant at December 31, 1997.................................................. 74,182
-----------
-----------
</TABLE>
The following tables summarize information about stock options outstanding as
of December 31, 1997:
<TABLE>
<CAPTION>
Options Outstanding:
RANGE OF
EXERCISE NUMBER WEIGHTED AVERAGE WEIGHTED AVERAGE
PRICES OUTSTANDING REMAINING YRS. EXERCISE PRICE
- -------------- ----------- ------------------- -----------------
<S> <C> <C> <C>
$ 8.07-9.78 175,732 4.5 $ 9.01
12.32-17.25 367,182 6.6 15.07
17.32-19.63 392,000 8.0 17.63
19.88-29.50 635,332 9.3 23.69
-----------
1,570,246
-----------
</TABLE>
<TABLE>
<CAPTION>
Options Exercisable:
RANGE OF
EXERCISE NUMBER WEIGHTED AVERAGE
PRICES EXERCISABLE EXERCISE PRICE
- -------------- ----------- -----------------
<S> <S> <C>
$ 8.07-9.78 175,732 $ 9.01
12.32-17.25 367,182 15.07
17.32-19.63 392,000 17.63
19.88-29.50 362,221 22.47
----------
1,297,135
----------
</TABLE>
At December 31, 1996, 1,285,497 options were exercisable at a weighted
average price of $14.52.
In accordance with the provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation," the Company applies APB Opinion 25 and related
interpretations in accounting for its stock compensation plans and, accordingly,
does not recognize compensation cost for its stock option plan. Compensation
cost was estimated using the Black-Scholes model with the following assumptions:
dividend yield of 1.75 percent;
24
<PAGE>
a life of 7 years; volatility of 24 percent; and risk-free interest rate of 6
percent. The weighted-average fair value of those stock options granted in
1997, 1996, and 1995 was $9.61, $6.75, and $5.82, respectively. If the
Company had elected to recognize compensation cost based on the fair value of
the options granted at grant date as prescribed by SFAS No. 123, the pro
forma effect on net earnings and earnings per share, in 1997 ,1996 and 1995,
would have been approximately $1.5 million or $.05 per share, $1.1 million or
$.03 per share and $0.5 million or $.02 per share, respectively. Pursuant to
the transition provisions of SFAS No. 123, the pro forma effect includes only
the vested portion of options granted during and after 1995. Options vest
over a three year period.
RETIREMENT PLANS
The Company maintains defined benefit retirement plans for the majority of
its employees. Benefits are based primarily on years of service and earnings of
the employee. Plan assets consist primarily of publicly-listed common stocks and
corporate bonds.
Pension expense includes:
<TABLE>
<CAPTION>
1997 1996 1995
---------- ---------- ----------
<S> <C> <C> <C>
In Thousands
Service cost.................................................................. $ 4,366 $ 3,374 $ 2,335
Interest cost on projected benefit obligation................................. 6,734 6,122 5,682
Actual return on plan assets.................................................. (17,976) (12,376) (16,338)
Net amortization and deferral................................................. 10,496 5,856 10,318
---------- ---------- ----------
Total pension expense......................................................... $ 3,620 $ 2,976 $ 1,997
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
The funded status of the plans at December 31 was:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
In Thousands
Actuarial present value of accumulated benefit obligation
Vested.................................................................................... $ 80,936 $ 72,709
Non-vested................................................................................ 6,362 1,435
---------- ----------
$ 87,298 $ 74,144
---------- ----------
---------- ----------
Plan assets at fair value................................................................. $ 104,015 $ 90,737
Projected benefit obligation.............................................................. (99,551) (86,135)
---------- ----------
Plan assets in excess of projected benefit obligation..................................... 4,464 4,602
Unamortized transition asset.............................................................. (3,589) (4,285)
Unrecognized prior service costs.......................................................... (3,889) 3,031
Unrecognized net gains.................................................................... (9,078) (11,695)
---------- ----------
Accrued pension expense .................................................................. $ (12,092) $ (8,347)
---------- ----------
---------- ----------
</TABLE>
25
<PAGE>
The projected benefit obligation was determined using an assumed discount
rate of 7.25% in 1997 and 7.75% in 1996 and 1995. The assumed rate of
compensation increase was 4% in 1997 and 4.5% in 1996 and 1995; and the expected
rate of return on plan assets was 8.75% in 1997, 1996, and 1995.
Additionally, the Company maintains a retirement savings plan covering
substantially all employees other than those employees under collective
bargaining agreements. Plan expense was $4.7 million, $3.2 million, and $2.7
million, in 1997, 1996, and 1995, respectively.
The Company also has a limited number of unfunded post-retirement benefit
programs for which the expense, inclusive of the components of service costs,
interest costs and the amortization of the unrecognized transition obligation,
was approximately $0.4 million in 1997 and $0.6 million in 1996 and 1995. The
present value of the Company's obligation under these plans is not significant.
INCOME TAXES
The provision for income taxes was as follows:
<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
In Thousands
Currently payable
Federal........................................................................ $ 39,262 $ 27,954 $ 24,828
State, local and other......................................................... 8,242 9,788 7,742
--------- --------- ---------
$ 47,504 $ 37,742 $ 32,570
Deferred (benefit)
Federal........................................................................ $ (1,363) $ (1,238) $ (3,563)
State, local and other......................................................... (23) (144) (230)
--------- --------- ---------
$ (1,386) $ (1,382) $ (3,793)
--------- --------- ---------
Total Provision.................................................................. $ 46,118 $ 36,360 $ 28,777
--------- --------- ---------
--------- --------- ---------
</TABLE>
Deferred tax assets (liabilities) are comprised of the following at December
31:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
In Thousands
Product warranty.......................................................................... $ 35,346 $ 34,232
Inventory reserves........................................................................ 3,197 2,703
Doubtful receivables...................................................................... 1,719 2,423
Employee benefits......................................................................... 12,114 7,206
Other, net................................................................................ 12,088 9,699
---------- ----------
Deferred assets........................................................................... $ 64,464 $ 56,263
---------- ----------
Depreciation.............................................................................. $ (37,394) $ (29,037)
Other, net................................................................................ (1,606) (376)
---------- ----------
Deferred liabilities...................................................................... (39,000) (29,413)
---------- ----------
Net deferred tax assets................................................................... $ 25,464 $ 26,850
---------- ----------
---------- ----------
</TABLE>
26
<PAGE>
No valuation allowance is required for the deferred tax assets based on the
Company's past tax payments and estimated future taxable income.
A reconciliation of taxes computed at the statutory rate with the tax
provision is as follows:
<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
In Thousands
Federal income taxes at statutory rate........................................... $ 40,875 $ 32,214 $ 25,500
State income taxes, net of federal income tax benefit............................ 3,842 2,912 2,706
Other, net....................................................................... 1,401 1,234 571
--------- --------- ---------
$ 46,118 $ 36,360 $ 28,777
Effective income tax rate........................................................ 39.5% 39.5% 39.5%
</TABLE>
Cash payments for income taxes were $30.7 million, $40.5 million, and $28.7
million in 1997, 1996, and 1995, respectively.
27
<PAGE>
SEGMENT INFORMATION
The Company's operations are classified into the following business
segments:
CONSTRUCTION MATERIALS--the principal products of this segment are rubber,
plastic and fleece back sheeting used predominantly on non-residential flat
roofs and related roofing accessories, including flashings, fasteners, sealing
tapes, coatings and waterproofings. The markets served include new construction,
re-roofing and maintenance of low slope roofs, water containment, HVAC sealants,
and coatings and waterproofings.
TRANSPORTATION PRODUCTS--the principal products of this segment are heavy
duty friction and braking systems for truck and off-highway equipment, rubber
and plastic automotive components, high grade aerospace wire and specialty
electronic cable, specialty trailers, self-contained ISO 40-foot perishable
cargo shipping containers, standard and custom-built high payload trailers and
dump bodies. Customers include truck OEMs, shipping lines, heavy equipment and
truck dealers and aftermarket distributors, commercial haulers, automotive OEMs
and systems suppliers, and dairy product distributors.
GENERAL INDUSTRY--the principal products of this segment include small
bias-ply rubber tires, stamped and roll-formed wheels, commercial and
institutional plastic foodservice permanentware and catering equipment, fiber
glass and composite material trays and dishes, ceramic tableware, specialty
rubber and plastic cleaning brushes and stainless steel processing equipment and
their related process control systems. Customers include golf car manufacturers,
power equipment manufacturers, boat and utility trailer manufacturers, food
service distributors and dealers, and dairy and pharmaceutical processors.
CORPORATE--includes general corporate and idle property expenses. Corporate
assets consist primarily of cash and cash equivalents, facilities, and other
invested assets.
28
<PAGE>
Financial information for operations by reportable business segment is
included in the following summary:
In Thousands
<TABLE>
<CAPTION>
EARNINGS
BEFORE DEPREC.
INCOME & CAPITAL
SALES TAXES ASSETS AMORT. SPENDING
------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
1997
Construction Materials............................. $ 322,228 $ 49,398 $ 177,270 $ 6,401 $ 8,109
Transportation Products............................ 521,181 45,101 338,770 16,738 24,856
General Industry................................... 417,141 50,912 320,205 14,723 26,357
Interest, net...................................... -- (15,337) -- -- --
Corporate.......................................... -- (13,290) 24,971 893 209
------------ ---------- ---------- ---------- ----------
$ 1,260,550 $ 116,784 $ 861,216 $ 38,755 $ 59,531
------------ ---------- ---------- ---------- ----------
------------ ---------- ---------- ---------- ----------
1996
Construction Materials............................. $ 325,165 $ 43,582 $ 183,836 $ 6,220 $ 6,580
Transportation Products............................ 371,517 27,495 309,125 11,637 16,960
General Industry................................... 320,813 40,260 225,282 11,201 11,360
Interest, net...................................... -- (8,396) -- -- --
Corporate.......................................... -- (10,901) 24,220 700 90
------------ ---------- ---------- ---------- ----------
$ 1,017,495 $ 92,040 $ 742,463 $ 29,758 $ 34,990
------------ ---------- ---------- ---------- ----------
------------ ---------- ---------- ---------- ----------
1995
Construction Materials............................. $ 308,327 $ 36,676 $ 169,476 $ 5,810 $ 9,622
Transportation Products............................ 278,867 20,241 210,700 9,617 14,175
General Industry................................... 235,340 29,627 143,606 7,076 13,404
Interest, net...................................... -- (4,055) -- -- --
Corporate.......................................... -- (9,631) 18,641 727 266
------------ ---------- ---------- ---------- ----------
$ 822,534 $ 72,858 $ 542,423 $ 23,230 $ 37,467
------------ ---------- ---------- ---------- ----------
------------ ---------- ---------- ---------- ----------
</TABLE>
QUARTERLY FINANCIAL DATA
(In thousands except per share
data) (unaudited)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH YEAR
------------ ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C>
1997
Net sales.......................................... $ 287,819 337,372 315,707 319,652 $ 1,260,550
Gross margin....................................... $ 63,592 76,712 75,089 71,068 $ 286,461
Operating expenses................................. $ 38,319 38,925 40,273 41,553 $ 159,070
Net earnings....................................... $ 13,421 20,980 19,518 16,747 $ 70,666
Basic earnings per share(1)........................ $ 0.44 0.69 0.65 0.56 $ 2.34
Diluted earnings per share(1)...................... $ 0.43 0.68 0.63 0.54 $ 2.28
Dividends per share................................ $ 0.1225 0.1225 0.1400 0.1400 $ 0.5250
Stock price:
High............................................. $ 35 5/8 37 46 7/8 46 3/4
Low.............................................. $ 29 1/4 27 34 3/4 39 5/8
1996
Net sales.......................................... $ 225,121 262,315 252,603 277,456 $ 1,017,495
Gross margin....................................... $ 52,371 64,484 62,638 58,205 $ 237,698
Operating expenses................................. $ 33,733 35,273 35,551 36,019 $ 140,576
Net earnings....................................... $ 10,639 16,441 15,461 13,139 $ 55,680
Basic earnings per share(1)........................ $ 0.35 0.54 0.51 0.43 $ 1.84
Diluted earnings per share(1) $ 0.35 0.53 0.50 0.42 $ 1.80
Dividends per share................................ $ 0.1100 0.1100 0.1225 0.1225 0.4650
Stock price:
High............................................. $ 22 9/16 28 3/16 28 1/16 30 1/2
Low.............................................. $ 19 1/16 21 5/8 24 1/4 26 7/8
</TABLE>
(1) The 1996 and first three quarters of 1997 earnings per share amounts have
been restated to comply with Statement of Financial Accounting Standards No.
128, "Earnings Per Share."
29
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Carlisle Companies Incorporated:
We have audited the accompanying consolidated balance sheets of Carlisle
Companies Incorporated (a Delaware corporation) and subsidiaries as of
December 31, 1997 and 1996 and the related consolidated statements of
earnings, shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Carlisle Companies
Incorporated and subsidiaries as of December 31, 1997 and 1996, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1997, in conformity with generally accepted accounting
principles.
Arthur Andersen LLP
/s/ Arthur Andersen LLP
New York, New York
January 26, 1998
30
<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, President and a Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
/s/ Stephen P. Munn /s/ Peter F. Krogh
Stephen P. Munn, Chairman, Chief Executive Peter F. Krogh, Director
Officer and a Director
(Principal Executive Officer) /s/ Donald G. Calder
/s/ Robert J. Ryan, Jr. Donald G. Calder, Director
Robert J. Ryan, Jr., Vice President, /s/ Paul J. Choquette, Jr.
Treasurer and Chief Financial Officer
(Principal Financial Officer and Paul J. Choquette, Jr. Director
Principal Accounting Officer)
/s/ Henry J. Forrest
Henry J. Forrest, Director
March 9, 1998
34
