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, 1998
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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
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
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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. [X]
Aggregate market value of voting common stock held
by non-affiliates at February 24, 1999 $1,161,579,144
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Shares of common stock outstanding at February 24, 1999 30,190,871
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Portions of the definitive Proxy Statement for the Annual Meeting of
Shareholders on April 20, 1999 are incorporated by reference in Part III.
<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 across
a broad range of industries, including, among others, roofing, construction,
trucking, automotive, foodservice, industrial equipment, lawn and garden and
aircraft manufacturing. The Company markets its products both as a component
supplier to original equipment manufacturers ("OEMs"), as well as directly to
end users.
Sales of the Company's products are reported by distribution to the
following four industry segments: Construction Materials, Industrial Components,
Automotive Components and All Other. The principal products, services and
markets or customers served in each of the industry segments include:
Construction Materials. The principal products of this segment are rubber,
plastic and FleeceBACK(TM) 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.
Industrial Components. The principal products of this segment are small bias-ply
rubber tires, stamped and roll-formed wheels, heavy duty friction and braking
systems for truck and off-highway equipment, high grade aerospace wire and
speciality electronic cable. Customers include golf car manufacturers, power
equipment manufacturers, boat and utility trailer manufacturers, truck OEMs,
heavy equipment and truck dealers and aftermarket distributors, aerospace OEMs,
and electronic equipment manufacturers.
Automotive Components. The principal products of this segment are highly
engineered rubber and plastic components for Tier I suppliers and other
manufacturers in the automotive market.
All Other. The principal products of this segment include 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, stainless steel processing equipment and
their related process control systems, specialty trailers and standard and
custom-built high payload trailers and dump bodies, self-contained ISO
perishable cargo shipping containers and perishable cargo container leasing.
Customers include food service distributors,
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restaurants, dairy product processors and distributors, heavy equipment and
truck dealers, shipping lines and commercial haulers.
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):
1998 1997 1996
---- ---- ----
Construction Materials ............ $ 371.5 $ 316.6 $ 318.0
Industrial Components ............. 510.8 396.9 320.7
Automotive Components ............. 272.0 241.3 124.1
All Other ......................... 363.2 305.7 254.7
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Total ............................. $1,517.5 $1,260.5 $1,017.5
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. Since many of the Company's customers are OEMs,
marketing methods and 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, Industrial Components, Automotive Components and All
Other industry segments. The Company believes that energy sources are secure and
sufficient quantities of raw materials can be obtained through normal sources to
avoid interruption of production in 1999.
The Company owns or holds the right to use a variety of patents,
trademarks, licenses, inventions, trade secrets and other intellectual property
rights which, in the aggregate, are considered significant to the successful
conduct of each of the Company's four industry segments. The Company has adopted
a variety of measures and programs to ensure the continued validity and
enforceability of its various intellectual property rights.
In each industry segment, the Company is engaged in businesses, and its
products serve markets, that generally are highly competitive. Product lines
serving most markets tend to be price competitive and all lines also compete on
service and product performance. Except for Automotive Components, no industry
segment is dependent upon a single customer, or a few customers, the loss of
which would have a material adverse effect on the segment. Sales to its largest
customer represented 22% of total Automotive Components segment sales in 1998.
Order Backlog was $262.1 million at December 31, 1998, and $281.6 million at
December 31, 1997, and $200.8 million at December 31, 1996.
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Research and Development expenses increased to $16.2 million in 1998,
compared to $15.8 million in 1997, and $11.9 million in 1996. The 1997 increase
is primarily attributable to product development for the Automotive Components
segment.
The Company employs approximately 9,500 persons on a full-time basis.
The businesses of the Construction Materials, Automotive Components and
All Other industry segments are generally not seasonal in nature. Within the
Industrial Components segment, distribution of lawn and garden products
generally reach peak sales volume during the first two quarters of the year. The
businesses of all four segments are affected by the state of the general
economy.
In 1998, the Company completed the following acquisitions. In January, the
Company acquired Hardcast Europe, a Dutch manufacturer of adhesive and sealant
products for the construction market. In March, the Company acquired the assets
of Vermont Electromagnetics Corporation and in September the Company acquired
the assets of Quality Microwave Interconnects, Inc., both manufacturers of
specialty coaxial cable assemblies and connectors serving the computer, medical,
electronics and telecommunications markets. In October, the Company acquired
Industrial Tire Products, Inc., a distributor of industrial and recreational
tire and wheel assemblies. In addition, in January, 1998 the Company completed a
joint venture in the United Kingdom with Lander Plastics, a British manufacturer
of plastic automotive components.
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, earnings and identifiable assets by
industry segments for the last three fiscal years is as follows:
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(In Thousands) 1998 1997 1996
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Sales to Unaffiliated Customers(1)
Construction Materials $ 371,547 $ 316,597 $ 318,036
Industrial Components 510,780 396,941 320,708
Automotive Components 271,955 241,283 124,148
All Other 363,212 305,729 254,603
Earnings before interest and income taxes
Construction Materials $ 53,030 $ 49,120 $ 42,781
Industrial Components 61,261 47,509 38,821
Automotive Components 17,638 18,633 9,428
All Other 38,166 30,142 20,307
Corporate(2) (10,110) (13,290) (10,901)
Identifiable Assets
Construction Materials $ 218,045 $ 174,157 $ 180,245
Industrial Components 319,519 278,458 194,038
Automotive Components 213,900 178,206 157,776
All Other 262,393 215,777 192,250
Corporate(3) 8,995 14,618 18,154
(1) Intersegment sales or transfers are not material.
(2) Includes general corporate and idle property expenses.
(3) Consists primarily of cash and cash equivalents, facilities, andother
invested assets.
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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, 1998:
<TABLE>
<CAPTION>
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O - Office
Principal Product M - Manufacturing Owned Floor Space Approximate Approximate
or Activity W - Warehousing Location or Leased (sq. ft.) Acreage
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<S> <C> <C> <C> <C> <C>
Corporate headquarters O Syracuse, NY Leased to 2005 15,500 -
O,M,W Zevenaar, Holland Owned 26,000 1
---------
41,500
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Elastomeric membranes O,M,W Carlisle, PA Owned 557,474 79
and related roofing O,M,W Greenville, IL Owned 165,430 35
products O,M,W Stafford, TX Owned 108,500 9
O,M,W Sapulpa, OK Owned 34,550 3
O,M,W Wylie, TX Owned 44,000 6
O,M,W Senatobia, MS Owned 54,500 -
O Enfield, CT Leased to 1999 2,170 -
O Akron, OH Leased to 1999 9,600 -
O Fairfield, CA Leased to 1999 500 -
W Greenville, IL Leased to 1999 75,500 -
W Carlisle, PA Leased to 1999 49,600 -
O,W Carollton, TX Leased to 1999 26,878 -
W Herington, Kansas Leased to 1999 32,000 -
O,W Sewickley, PA Leased to 2000 27,852 -
O Chicago, IL Leased to 2000 3,000 -
O,M,W Fontana, CA Leased to 2001 72,587 -
O Kennesaw, GA Leased to 2002 10,720 -
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1,274,861 132
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Small pneumatic tires O,M,W Carlisle, PA Owned 640,609 29
and tubes; stamped and O,M,W Aiken, SC Owned 420,500 23
roll-formed wheels O,M Point Fortin, Owned 167,604 -
Trinidad, W.I.
O,M,W Long Beach, CA Owned 60,000 3
M Milwaukee, WI Owned 99,000 -
O,M,W Ontario, CA Owned 60,000 -
O,M,W Lenexa, KS Leased to 2001 112,900 6
W Trenton, SC Leased to 1999 176,450 -
W Lakeland, FL Leased to 1999 15,000 -
W Springfield, TN Leased to 1999 26,000 -
W Spokane, WA Leased to 2000 16,000 -
M Stow, OH Leased to 2000 20,000 5
O,W Mansfield, TX Leased to 2001 38,160 -
W Perrysburg, OH Leased to 2002 64,300 -
W Villa Rica, GA Leased to 2002 43,000 -
W Winnepeg, Manitoba Leased to 2002 48,800 -
W Saskatoon,
Saskatchewan Leased to 2002 30,200 -
W Carson, CA Leased to 2003 84,044 -
O,M,W Ontario, CA Leased to 2003 87,143 -
W Waterloo, Ontario Leased to 2007 69,000 -
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2,278,710 66
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Molded plastics products M Oklahoma City, OK Owned 146,985 8
for commercial food O,M,W Fredonia, WI Owned 192,500 12
service; ceramic tableware O,M Zanesville, OH Owned 125,600 16
O,M,W Sparta, WI Owned 40,000 3
W Oklahoma City, OK Leased to 1999 253,760 -
O Atlanta, GA Leased to 1999 1,610 -
O Des Plaines, IL Leased to 2001 1,462 -
O,W Charlottesville, NC Leased to 2009 210,560 -
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972,477 39
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Custom-manufactured M Middlefield, OH Owned 200,581 28
rubber and plastics M Crestline, OH Owned 172,997 40
products, including M Canton, OH Owned 87,845 17
precision-molded engine M Lake City, PA Owned 100,000 30
components
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C>
and blow-molded M Trenton, SC Owned 67,695 10
bumper beams M Belleville, MI Owned 46,000 5
M Erie, PA Owned 95,800 15
M Lapeer, MI Owned 96,300 6
M Tuscaloosa, AL Owned 67,376 15
W Mayville, MI Leased to 1998 40,000 -
O Chardon, OH Leased to 1999 8,033 -
M Canton, OH Leased to 2000 31,840 -
M,W Ashtabula, OH Leased to 2000 30,000 -
O Livonia, MI Leased to 2000 2,673 -
M,W Erie, PA Leased to 2004 142,000 -
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1,189,140 166
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Brake lining for trucks O,M Ridgway, PA Owned 117,300 7
and trailers; brakes and O,M Fredericksburg, VA Owned 90,042 27
actuation systems; O Charlottesville,VA Owned 25,000 4
friction products O,M,W Logansport, IN Owned 112,200 26
O,M Bloomington, IN Owned 250,000 19
W Lancaster, PA Leased to 2000 39,000 2
M,W Stockton, CA Leased to 2000 27,600 2
O,M Brantford, Ont. Leased to 2002 40,000 2
M,W Pittsburg, KS Leased to 2004 30,000 3
M Nampa, ID Leased to 2007 106,400 5
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837,542 97
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Specialized lowbed trailers O,M Mitchell, SD Owned 240,250 27
for construction and O,M Brookville, PA Owned 160,000 22
commercial markets O,M Green Pond, AL Owned 49,860 14
M,W Mitchell, SD Leased to 2003 14,800 -
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464,910 63
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Liquid transport tanks and O,M,W New Lisbon, WI Owned 252,850 31
in-plant processing O,M,W Elroy, WI Owned 84,300 7
equipment O,M,W Winsted, MN Owned 390,894 7
O,M,W Tavares, FL Leased to 1999 73,967 12
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802,011 57
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High- and medium- O,M,W St. Augustine, FL Owned 166,750 17
temperature insulated O,M Wilmington, MA Leased to 2000 16,500 -
wire and cable O,M Williston, VA Leased to 1999 27,000 -
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210,250 17
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Refrigerated marine O,M,W Green Cove Springs, Leased to 2004 110,000 10
containers FL
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8,181,401 648
========= ===
</TABLE>
Total plant space of 8,181,401 sq. ft. is used for:
Owned Leased Total
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Office 461,938 156,090 618,028
Manufacturing 3,960,555 457,601 4,418,156
Warehousing 1,274,849 1,723,118 2,997,967
Other 119,950 27,300 147,250
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5,817,292 2,364,109 8,181,401
========= ========= =========
As of December 31, 1998, an additional 655,825 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
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from twenty to seventy years old and have been maintained in good condition.
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<PAGE>
Item 3. Legal Proceedings
As of December 31, 1998, 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.
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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, 1998, there were 2,443 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 1998 and 1997 were as follows:
First Second Third Fourth
----- ------ ----- ------
1998
Dividends per share $.1400 $.1400 $.1600 $.1600
Stock Price
High $51 1/4 $53 1/16 $47 15/16 $51 5/8
Low $40 1/16 $39 3/8 $35 1/2 $32 11/16
1997
Dividends per share $.1225 $.1225 $.1400 $.1400
Stock Price
High $35 5/8 $37 $46 7/8 $46 3/4
Low $29 1/4 $27 $34 3/4 $39 5/8
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Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
(In Thousands except
per share data) 1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Summary Of Operations
Net Sales $1,517,494 1,260,550 1,017,495 822,534 692,650
Net Earnings $ 84,866 70,666 55,680 44,081 35,568
Basic Earnings per share(1)(2) $ 2.81 2.34 1.84 1.43 1.17
Diluted Earnings per share(1)(2) $ 2.77 2.28 1.80 1.41 1.15
Financial Position
Total assets $1,022,852 861,216 742,463 542,423 485,283
Long-term debt $ 273,521 209,642 191,167 72,725 69,148
Other Data
Dividends paid $ 18,105 15,868 14,129 12,928 11,605
Per share(1) $ .600 0.525 0.465 0.420 0.380
</TABLE>
(1) All share and per share amounts have been restated to reflect the
two-for-one stock split completed on January 15, 1997.
(2) Earnings per share amounts prior to 1997 have been restated to comply with
Statement of Financial Accounting Standards No. 128, "Earnings Per Share."
See the Notes to Consolidated Financial Statements.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Carlisle Companies Incorporated sales grew to $1.52 billion in 1998, up
20%, or $256.9 million, from 1997 sales of $1.26 billion. This increase is
primarily due to the expansion of product lines and market shares of Carlisle's
core businesses, as well as the integration of several small, complementary
acquisitions made in 1997 and 1998.
In 1998, net earnings kept pace with these increased sales, reaching $84.9
million, or $2.77 per share of common stock, a 20% increase over 1997 net
earnings of $70.7 million, or $2.28 per share.
In 1997, sales increased 24%, or $243.1 million, due to continued growth
in core businesses, as well as acquisitions made in 1997 and the full-year
effect of acquisitions made in 1996. Net earnings increased 27%, or $15.0
million, in 1997 reflecting both the increased sales levels and cost reductions.
During 1998, we acquired the following companies that fit well with our
existing businesses: Vermont Electromagnetics Corporation and Quality Microwave
Interconnects, Inc., both of which are manufacturers of specialty cable
assemblies and connectors that will open new opportunities for the growth of our
wire and cable business, and Industrial Tire Products, Inc., a distributor of
industrial and recreational tire and wheel assemblies, which will help to extend
our
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tire and wheel products to the replacement market. Additionally, in January
1998, we completed a joint venture in the U.K. with Lander Plastics, a British
manufacturer of plastic automotive components, and the acquisition of Hardcast
Europe, a Dutch manufacturer of adhesive and sealant products for the
construction market.
In 1997, we completed a record number of acquisitions. These acquisitions
include several bias-ply tire and wheel manufacturing and distributing
companies, Overland Brakes Incorporated, a spring-brake manufacturing company,
complementing our heavy duty friction products and Zimmerman Brush Co., a
privately owned manufacturer of brushes for the janitorial and sanitation
market.
Operating Segments
In accordance with the requirements of the recently issued Statement of
Financial Accounting Standards ("SFAS") No. 131, "Disclosures about Segments of
an Enterprise and Related Information," we have recast our businesses into three
identifiable segments and a fourth classification of All Other. The Construction
Materials segment consists of the manufacturing of membranes and accessories
necessary for rubber (EPDM) and plastic (TPO) roofing systems for
non-residential flat roofs. Also, included in this segment is the manufacture
and distribution of coatings and waterproofing products for construction
markets. The Industrial Components segment includes businesses that manufacture
and distribute tire and wheel assemblies, heavy duty friction and braking
products and high-performance wire/cable and cable assemblies. The Automotive
Components segment is engaged in manufacturing highly engineered plastic and
rubber components for Tier I suppliers and other manufacturers in the automotive
industry. Several businesses, which altogether have not met the guidelines to be
identified as a separate segment, have been aggregated under an All Other
(General Industry) category. Activities in this category include the
manufacturing and distributing of specialty trailers and dump bodies, stainless
steel in-plant processing equipment, institutional plastic foodservice
permanentware, and the manufacturing and leasing of intermodal perishable cargo
shipping containers. Earnings before interest and income taxes (EBIT) herein
referred to as "earnings," is used to measure the profitability of the business
segments. Following is a general discussion and analysis of the 1998 and 1997
sales and profitability of these business segments.
Construction Materials
Segment sales grew by 17% in 1998 to $371.5 million, an increase of $54.9
million over 1997 sales of $316.6 million. This growth is due to increasing
market share, as well as increased sales of insulation products. In 1997,
segment sales declined 0.4% from 1996 sales of $318.0 million due to the effect
of divesting our metal roofing business offsetting slightly increased sales in
the ongoing business.
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Earnings were up 8% in 1998 to $53.0 million, reflecting the increased
sales levels, partially offset by increased raw material costs, competitive
pricing and a change in product mix, which included a higher level of lower
margin insulation sales. The 1997 earnings of $49.1 million in this segment were
up 15% over 1996 earnings of $42.8 million, reflecting improving margins,
improved warranty results and the elimination of losses due to the divestiture
of the metal roofing company.
Industrial Components
Segment sales reached $510.8 million in 1998, a 29%, or $113.8 million,
increase over 1997 sales of $396.9 million. This increase is primarily due to
the internal growth of tire and wheel assemblies, especially to the aftermarket;
the continued integration of tire and wheel distribution companies acquired in
1997; increased shipments of high-quality wire to aircraft manufacturers; and
the acquisition of two high-speed data cable and connector companies. Sales of
heavy duty friction and braking products increased just 3% in 1998 after robust
gains in 1997. In 1997, sales in this segment climbed 24%, or $76.2 million over
the 1996 sales of $320.7 million, reflecting increased shipments of aircraft
wire, increased market penetration of our tire and wheel products, as well as
sales gains of heavy duty friction materials to the aftermarket.
Earnings increased 29%, or $13.8 million, to $61.3 million in 1998. This
increase generally follows the increased level of segment sales. In 1997, this
segment earned $47.5 million, growing 22%, or $8.7 million, from the 1996 level
of $38.8 million. This earnings growth is consistent with the increase in sales,
offset by costs associated with integrating tire and wheel manufacturers and
distributors acquired in 1996 and 1995.
Automotive Components
In 1998, segment sales jumped 13% to $272.0 million, a $30.7 million
increase over 1997 sales of $241.3 million. This increase is due to internal
growth, which was dampened by the General Motors strike in the summer months.
The dramatic increase in 1997 sales of 94%, from $124.1 million, reflects the
full-year consolidation of The Engineered Plastics Division of Johnson Controls,
acquired in October 1996, to form Carlisle Engineered Products.
Earnings of $17.6 million in this segment did not keep pace with sales,
falling 5% from the 1997 level of $18.6 million. This decline is due primarily
to inefficiencies generated by the rapid ramp-up of production for new programs
interrupted by the General Motors strike. Earnings grew 98% in 1997 following
the increased sales level in that year.
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All Other (General Industry) Category
Aggregate sales of companies included in this category grew 19%, or $57.5
million, to $363.2 million in 1998. This increase is primarily due to growth in
the specialty trailers business and the manufacturing of refrigerated containers
for the perishable cargo business. Plastic permanentware, which is manufactured
and distributed to the institutional foodservice industry, contributed to this
growth, growing its sales by 7% in 1998. In 1997, total sales in this category
increased 20% to $305.7 million related to increased sales of specialty trailers
to construction markets, the full-year effect of acquisitions in the in-plant
processing and ceramic tableware manufacturing businesses made in 1996 and
increased direct sales of manufactured refrigerated containers.
Aggregate earnings of the businesses in this category grew 27% to $38.2
million in 1998. This growth is due to general increased sales levels, improved
manufacturing efficiencies and increased share of the leasing market in our
perishable cargo business. In 1997, the earnings of these businesses grew 48% to
$30.1 million. This increase is due to the increased level of sales and
increased margins due to improved manufacturing processes in the specialty
trailer business and especially in the refrigerated container business. In
January 1999, we announced the suspension of container manufacturing operations
in Green Cove Springs, Florida and the sale, to our partner, of the major
portion of our interest in Carlisle Leasing International Company, significantly
reducing our activity in the refrigerated container business.
Financial Results
Gross margin, expressed as a percent of sales, represents the difference
between net sales and cost of goods sold. These margins declined from 23.4% of
sales in 1996 to 22.7% in 1997 and 21.6% in 1998. This decline largely reflects
the competitive marketplace and changing mix in Carlisle's total sales. In 1998,
operations with lower gross margins, but also with lower corresponding selling,
general and administrative costs, represent greater proportions of total
Carlisle sales.
Selling and administrative costs, expressed as a percent of sales,
declined from 12.6% in 1996 to 11.4% in 1997 and 10.6% in 1998, reflecting both
disciplined cost control throughout all operations and the increasing proportion
of activities with lower cost structures in Carlisle's overall business.
Total costs, which include raw material, manufacturing, selling, general
and administrative costs, expressed as a percentage of total sales, remain
fairly consistent with 1997 levels, increasing slightly in 1998 to 90.0% of
sales, up from 89.9% of sales in 1997. Improvements in
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<PAGE>
total costs, evident throughout Carlisle, were offset by the impact of the GM
strike and the change in product mix in the construction materials operations.
The 1997 decline from 1996's level of 90.5% percent of sales was due to improved
purchasing, manufacturing and distribution of products throughout all Carlisle
operations.
Interest expense increased to $22.7 million in 1998 from $16.5 million in
1997 and $9.1 million in 1996, due to the increasing level of debt used to
finance planned capital expenditures and acquisitions amid slightly lower
overall interest rates.
Other, net increased to $8.4 million in 1998 due to one-time gains
recognized on the sales of various assets, as well as overall improvements in
earnings of equity investments.
Income taxes, for financial reporting purposes, have remained constant at
an effective rate of 39.5% of earnings before tax in 1998, 1997 and 1996,
generally reflecting stable Federal and state tax rates. Taxes are discussed
more completely in the Notes to Consolidated Financial Statements.
Receivables, less allowances, were $225.3 million, an increase of 21.9%
over the 1997 level of $184.8 million. The high level of December 1998 sales
throughout most of Carlisle's businesses drives this increase. The 1997 level of
receivables represents a 16.6% increase over 1996, and is primarily attributable
to a higher level of sales, partially offset by an increasing portion of sales
from businesses that require a lower investment in receivables, and an ongoing
effort to manage receivables at all operations.
Inventories, valued primarily by the last-in, first-out (LIFO) method,
were $193.6 million at year-end 1998, a 7.4% increase over the 1997 year-end
level of $180.3 million. This modest increase is the result of increased
capacity at most operations, partially offset by a renewed Company-wide focus on
inventory management. The year-end 1997 inventory level increased $43.2 million
over 1996 levels, or 31.5%, due primarily to acquisitions made during the year,
normal seasonal buildup, strong demand and backlogs at most operations.
Capital expenditures totaled $96.0 million in 1998, a significant increase
over the 1997 level of $59.5 million. This increase is primarily attributable to
investments in injection-molding and blow-molding equipment to meet growth
opportunities in Carlisle's automotive components operation. Additionally, other
significant projects in 1998 include expanded warehousing and distribution
facilities for foodservice products, finished specialty tire and wheel
assemblies and EPDM roofing products, increased production capacity of specialty
tire and wheel assemblies, specialty trailer products, Tufflite(TM) wire and
high-speed data wire and cable assemblies, and plant and equipment to
manufacture
15
<PAGE>
TPO roofing membranes. In 1997, the major projects include injection-molding and
blow-molding equipment, plant and equipment to produce TPO roofing membrane,
warehousing for specialty tire and wheel assemblies and EPDM roofing membranes,
increased capacity to produce Tufflite(TM) wire and in-plant processing
equipment for the food and pharmaceutical industries.
Liquidity, Capital Resources and Environmental
Cash flows provided by operating activities rose to $96.8 million in 1998,
from $83.0 million in 1997. This increase is primarily due to increases in net
earnings before depreciation and amortization charges, slightly offset by higher
working capital levels. Cash flows from operating activities were $86.0 million
in 1996. Cash used in investing activities was $133.0 million; an increase from
the 1997 level of $93.2 million, resulting from the increased level of capital
expenditures and equity investments, slightly offset by lower acquisition
spending. In 1996, the cash used in investing activities was $165.4 million,
which includes $133.7 million of acquisition expenditures. The net cash provided
by financing activities in 1998 was $38.3 million, which reflects the net
increase in debt, after the early payment of higher cost debt, dividend payments
and stock repurchases. The net cash provided by financing activities in 1997 was
essentially due to increases in debt offset by dividend payments and stock
repurchases.
Carlisle has a $125.0 million revolving credit facility available for
acquisitions and general corporate purposes. In May 1998, Carlisle issued to the
public $100.0 million of ten-year bonds at a rate of 6.70%. The net proceeds
from these bonds were used to repay amounts outstanding under the revolving
credit facility and to fund other needs throughout 1998. The Company's primary
sources of liquidity and capital are cash flows from operations and borrowing
capacity. Carlisle continues to maintain substantial flexibility to meet
anticipated needs for liquidity and capital investment opportunities.
Carlisle management recognizes the importance of the Company's
responsibilities toward matters of environmental concern. Programs are in place
to monitor and test facilities and surrounding environments and, where
practical, to recycle materials. Carlisle has not incurred any material charges
relating to environmental matters in 1998 or in prior years, and none are
currently anticipated.
Year 2000
During the last several years, and in the normal course of business,
Carlisle has replaced a substantial portion of its older computer software and
systems with new systems that are Year 2000 compliant. With respect to the
remaining information systems, as well as the Company's embedded technology, the
Company has adopted a program (involving both
16
<PAGE>
internal personnel and third-party consultants) of (i) assessment, (ii)
remediation, and (iii) authentication. At this time, the Company has
substantially completed the assessment phase and is pursuing appropriate
remedial action for the systems determined to be non-compliant. The
authentication phase includes simulated testing in a Year 2000 environment. The
estimated cost of the Company's completed and remaining efforts is not expected
to exceed $500,000.
Carlisle also has a formal communication program with its significant
suppliers and large customers and once the assessment phase is completed, the
Company will determine what remedial action should be taken (including
contingency plans).
Carlisle has completed the remediation phase of its program throughout
most of its operations, with the remaining operations expected to be completed
by mid-1999, and the authentication phase continuing throughout 1999. The
Company believes that upon completion of the program, the Year 2000 issue will
not pose a significant operational problem for its computer systems. However,
there can be no guarantee that the failure of third parties to become Year
2000-ready would not have a material adverse effect on the Company's financial
condition or operations.
Backlog and Future Outlook
Backlog was $262.1 million at December 31, 1998 compared to $281.6 million
in 1997. Notwithstanding stronger positions at all major operations within the
Company, and especially in the automotive components operation, our backlog
decreased 7% due to an unusually high backlog, associated with a large one-time
contract, at the container manufacturing operation, at December 31, 1997.
Excluding the container contract, backlog in the Company is up a healthy 14%.
Our companies continue to implement consistent strategies to grow their
businesses both internally and through acquisition. In 1998, Carlisle increased
market shares, improved manufacturing processes and targeted new markets with
expanded products to complement the Company's strengths. As 1998 closes, we are
optimistic about the opportunities waiting for us in 1999. With a strong backlog
position, growing markets and a committed organization, we look forward to
continued success in 1999.
17
<PAGE>
Item 8. Financial Statements and Supplementary Data.
Consolidated Statement of Earnings
For years ended December 31
(In Thousands except per share data)
1998 1997 1996
----------- ----------- -----------
Net sales $ 1,517,494 $ 1,260,550 $ 1,017,495
----------- ----------- -----------
Cost and expenses:
Cost of goods sold 1,189,379 974,089 779,797
Selling and administrative
expenses 160,366 143,246 128,676
Research and development
expenses 16,178 15,824 11,900
----------- ----------- -----------
1,365,923 1,133,159 920,373
Other income (deductions):
Investment income 2,999 1,172 666
Interest expense (22,715) (16,502) (9,062)
Other, net 8,414 4,723 3,314
----------- ----------- -----------
(11,302) (10,607) (5,082)
----------- ----------- -----------
Earnings before income taxes 140,269 116,784 92,040
Income taxes 55,403 46,118 36,360
Net earnings $ 84,866 $ 70,666 $ 55,680
=========== =========== ===========
Average shares outstanding-basic 30,179 30,235 30,281
Basic earnings per share $ 2.81 $ 2.34 $ 1.84
----------- ----------- -----------
Average shares outstanding-diluted 30,674 $ 31,025 30,953
Diluted earnings per share $ 2.77 $ 2.28 $ 1.80
=========== =========== ===========
See accompanying Notes to Consolidated Financial Statements.
18
<PAGE>
Consolidated Statement of Shareholders' Equity
(In Thousands except per share data)
Additional Cost of
Common Paid-in Retained Shares in
Stock Capital Earnings Treasury
----- ------- -------- --------
Balance at
December 31, 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)
Net earnings -- -- 84,866 --
Cash dividends - $0.600
per share -- -- (18,105) --
Exercise of stock
options & other -- 2,371 -- 3,309
Purchase of 283,598
treasury shares -- -- -- (14,372)
----------------------------------------------
Balance at
December 31, 1998 $39,331 $ 4,201 $ 470,117 $(106,744)
----------------------------------------------
See accompanying Notes to Consolidated Financial Statements.
19
<PAGE>
Consolidated Balance Sheet
As of December 31
(In Thousands except share data) 1998 1997
------ ------
ASSETS
Current assets
Cash and cash equivalents $ 3,883 $ 1,732
Receivables, less allowances of $4,864
in 1998 and $5,180 in 1997 225,348 184,796
Inventories 193,650 180,331
Deferred income taxes 26,040 28,462
Prepaid expenses and other 29,604 22,212
----------- ---------
Total current assets 478,525 417,533
----------- ---------
Property, plant and equipment, net 354,769 294,165
----------- ---------
Other assets
Patents, goodwill and other intangibles 139,744 121,772
Investments and advances to affiliates 34,892 16,467
Receivables and other assets 14,922 11,279
----------- ---------
Total other assets 189,558 149,518
----------- ---------
$ 1,022,852 $ 861,216
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term debt, including
current maturities $ 31,241 $ 24,332
Accounts payable 101,859 75,936
Accrued expenses 122,237 125,815
----------- ---------
Total current liabilities 255,337 226,083
----------- ---------
Long-term liabilities
Long-term debt 273,521 209,642
Product warranties 75,084 73,715
Other liabilities 12,005 2,940
----------- ---------
Total long-term liabilities 360,610 286,297
----------- ---------
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 4,201 1,830
Retained earnings 470,117 403,356
Cost of shares in treasury-9,152,167
shares in 1998 and 9,171,915
shares in 1997 (106,744) (95,681)
----------- ---------
Total shareholders' equity 406,905 348,836
----------- ---------
$ 1,022,852 $ 861,216
=========== =========
See accompanying Notes to Consolidated Financial Statements.
20
<PAGE>
Consolidated Statement of Cash Flows
For years ended December 31
(In Thousands) 1998 1997 1996
------ ------ ------
Operating Activities
Net earnings $ 84,866 $ 70,666 $ 55,680
Reconciliation of net earnings
to cash flows:
Depreciation 37,617 32,477 25,320
Amortization 7,604 6,278 4,438
(Gain)/loss on sales of property,
equipment and business (3,156) (993) 216
Changes in assets and liabilities,
excluding effects of
acquisitions and divestitures:
Current and long-term receivables (43,786) (19,659) (13,237)
Inventories (10,526) (31,118) (5,837)
Accounts payable and accrued expenses 25,450 9,245 16,667
Prepaid, deferred and current income
taxes (7,568) 10,887 (4,260)
Long-term liabilities 5,217 3,279 4,939
Other 1,086 1,924 2,106
--------- --------- ---------
Net cash provided by operating
activities 96,804 82,986 86,032
--------- --------- ---------
Investing Activities
Capital expenditures (95,970) (59,531) (34,990)
Acquisitions, net of cash (31,577) (45,380) (133,719)
Sales of property, equipment and
business 11,344 15,815 3,489
Other (16,761) (4,090) (155)
--------- --------- ---------
Net cash used in investing activities (132,964 (93,186) (165,375)
--------- --------- ---------
Financing Activities
Net Proceeds from short-term debt 15,827 13,458 --
Proceeds from long-term debt 104,235 150,000 124,358
Reductions of long-term debt (49,274) (125,860) (11,604)
Dividends (18,105) (15,868) (14,129)
Purchases of treasury shares (14,372) (18,110) (14,168)
--------- --------- ---------
Net cash provided by
financing activities 38,311 3,620 84,457
--------- --------- ---------
Change in cash and cash equivalents 2,151 (6,580) 5,114
Cash and cash equivalents
Beginning of year 1,732 8,312 3,198
--------- --------- ---------
End of year $ 3,883 $ 1,732 $ 8,312
========= ========= =========
See accompanying Notes to Consolidated Financial Statements.
21
<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 are accounted for under the equity method. Equity income
related to such investments is recorded in Other, net. 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 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 $4.3 million and
$5.3 million at December 31, 1998 and 1997, respectively (net of accumulated
amortization of $16.3 million and $14.6 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 $135.4 million and $116.5 million at December
31, 1998 and 1997,
22
<PAGE>
respectively (net of accumulated amortization of $13.6 million and $7.8 million,
respectively), and is amortized on a straight line basis over various periods
not exceeding 30 years.
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 $6.6 million, $5.4 million
and $2.6 million, in 1998, 1997 and 1996, 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.
Earnings Per Share.
Earnings per share is determined in accordance with Statement of Financial
Accounting Standards (SFAS) No. 128, "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. 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.
Other Comprehensive Income.
The Company has determined the components of other comprehensive income, such as
cumulative translation adjustments and minimum pension liability, are not
significant.
Reclassifications.
Certain reclassifications have been made to prior years' information to conform
to 1998 presentation.
23
<PAGE>
INVENTORIES
The components of inventories are:
1998 1997
---- ----
In Thousands
FIFO cost (approximates current costs):
Finished goods $ 113,852 $ 111,403
Work in process 24,665 23,250
Raw materials 68,979 60,375
--------- ---------
$ 207,496 $ 195,028
Excess of FIFO cost over LIFO value (13,846) (14,697)
--------- ---------
$ 193,650 $ 180,331
========= =========
PROPERTY, PLANT & EQUIPMENT
The components of property, plant and equipment are:
1998 1997
---- ----
In Thousands
Land $ 6,936 $ 6,804
Buildings & leasehold improvements 142,525 123,432
Machinery & equipment 436,222 383,560
Projects in progress 44,890 25,686
--------- ---------
$ 630,573 $ 539,482
Accumulated depreciation (275,804) (245,317)
--------- ---------
$ 354,769 $ 294,165
========= =========
BORROWINGS
Long-term debt includes:
1998 1997
---- ----
In Thousands
6.70% senior notes due 2008 $ 100,000 --
7.25% senior notes due 2007 $ 150,000 $ 150,000
8.09% senior notes due 1998-2002 -- 48,000
Industrial Development and Revenue
Bonds due through 2014 16,645 12,460
Other, including capital lease obligations 8,832 10,056
--------- ---------
$ 275,477 $ 220,516
Less current maturities (1,956) (10,874)
--------- ---------
$ 273,521 $ 209,642
========= =========
On May 15, 1998, the Company issued $100 million in notes due in 2008 at
an interest rate of 6.70%. 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.
On December 29, 1998, the Company retired the 8.09% senior notes due
1998-2002 with cash generated from operations and short-term borrowings.
Included in Other, net is a $1.8 million charge related to this prepayment.
24
<PAGE>
The Company has a $125 million revolving credit facility with various
banks. As of December 31, 1998, $115 million was available under this facility.
The Company has available unsecured lines of credit from banks of $40 million,
of which $21.6 million was available as of December 31, 1998.
At December 31, 1998, letters of credit amounting to $21.2 million were
outstanding, primarily to provide security under insurance arrangements and
certain borrowings.
The weighted average interest rates on the revenue bonds for 1998 and 1997
were 4.3% and 4.2%, respectively.
The debt facilities contain various restrictive covenants and limitations,
all of which were complied with in 1998 and 1997. 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 $21.3 million in 1998, $12.3 million in
1997 and $6.9 million in 1996.
The aggregate amount of long-term debt maturing in each of the next five
years is approximately $2.0 million in 1999, $2.2 million in 2000 and 2001, $1.2
million in 2002, $3.7 million in 2003 and $264.2 million thereafter.
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.
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 this 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
25
<PAGE>
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
restricted stock awards.
At December 31, 1998, 23,472 nonvested shares were outstanding and
2,165,365 shares were available for issuance under the Company's restricted
stock plan.
The activity under the stock option plan is as follows:
Weighted
Average
Number Exercise
of Shares Price
--------- --------
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
Options granted 239,000 46.56
Options exercised (282,413) 16.32
---------
Outstanding at December 31, 1998 1,526,833 23.32
=========
Available for grant at December 31, 1998 435,182
The following tables summarize information about stock options outstanding
as of December 31, 1998:
Options Outstanding:
26
<PAGE>
Weighted
Number Range of Weighted Average Average
Outstanding Exercise Remaining Exercise
at 12/31/98 Prices Years Price
----------- ------ --------------- -----
152,407 $ 8.10- 9.78 2.7 $ 9.10
248,094 12.32-17.25 4.5 14.38
252,000 17.32-19.63 6.1 17.75
634,332 19.88-29.50 7.5 23.68
240,000 32.75-46.56 9.1 46.51
---------
1,526,833
=========
Options Exercisable:
Range of Number
Exercise Exercisable Weighted Average
Prices at 12/31/98 Exercise Price
-------- ----------- ----------------
$ 8.10 - 9.78 152,407 $ 9.10
12.32-17.25 248,094 14.38
17.32-19.63 252,000 17.75
19.88-29.50 563,332 22.94
32.75-46.56 80,333 46.45
---------
1,296,166
=========
At December 31, 1997, 1,297,135 options were exercisable at a weighted
average price of $17.09.
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. 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 1998, 1997 and 1996, would
have been approximately $1.7 million or $.06 per share, $1.5 million or $.05 per
share and $1.1 million or $.03 per share, respectively. Pursuant to the
transition provisions of SFAS No. 123, the pro forma effect includes only the
vested portion of options granted in and after 1995. Options vest over a
three-year period. Compensation cost was estimated using the Black-Scholes model
with the following assumptions: expected dividend yield of 1.20% in 1998 and
1.75% in 1997 and 1996; an expected life of 7 years; expected volatility of
25.6% in 1998 and 24.0% in 1997 and 1996; and risk-free interest rate of 5.5% in
1998 and 6.0% in 1997 and 1996. The weighted average fair value of those stock
options granted in 1998, 1997 and 1996 was $16.35, $9.61 and $6.75,
respectively.
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.
27
<PAGE>
The Company adopted SFAS No. 132 "Employers' Disclosures about Pensions
and Other Postretirement Benefits." The Company has restated prior year defined
benefit retirement plan disclosures to conform to the requirements of SFAS No.
132.
The change in projected benefit obligation:
1998 1997
---- ----
In Thousands
Benefit obligation at beginning of year $ 99,551 $ 86,135
Service cost 5,258 4,366
Interest cost 7,113 6,734
Amendments 702 (5,313)
Actuarial gain 2,972 13,577
Benefits paid (7,717) (5,948)
--------- --------
Benefit obligation at end of year $ 107,879 $ 99,551
========= ========
The change in plan assets:
1998 1997
---- ----
In Thousands
Fair value of plan assets at
beginning of year $ 104,015 $ 90,737
Actual return on plan assets 17,098 17,975
Company contribution 1,069 1,251
Benefits paid (7,717) (5,948)
--------- ---------
Fair value of plan assets at end of year $ 114,465 $ 104,015
========= =========
Reconciliation of the accrued benefit cost recognized in the financial
statements:
1998 1997
---- ----
In Thousands
Funded status $ 6,586 $ 4,464
Unrecognized net actuarial loss (15,321) (9,078)
Unrecognized prior service cost (3,363) (3,889)
Unrecognized transition asset (2,901) (3,589)
-------- --------
Accrued benefit cost $(14,999) $(12,092)
======== ========
Components of net periodic benefit cost at December 31:
1998 1997 1996
---- ---- ----
In Thousands
Service cost $ 5,258 $ 4,366 $ 3,374
Interest cost 7,113 6,734 6,122
Expected return on plan assets (8,014) (6,968) (6,440)
Net amortization and deferral (381) (512) (80)
------- ------- -------
Net periodic benefit cost $ 3,976 $ 3,620 $ 2,976
======= ======= =======
28
<PAGE>
The projected benefit obligation was determined using an assumed discount
rate of 7.0% in 1998, 7.25% in 1997 and 7.75% in 1996. The assumed rate of
compensation increase was 4.0% in 1998 and 1997 and 4.5% in 1996; and the
expected rate of return on plan assets was 9.25% in 1998 and 8.75% in 1997 and
1996.
Additionally, the Company maintains a retirement savings plan covering
substantially all employees other than those employees under collective
bargaining agreements. Plan expense was $4.9 million, $4.7 million and $3.2
million, in 1998, 1997 and 1996, 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 1998 and 1997 and $0.6 million in 1996. The
present value of the Company's obligation under these plans is not significant.
INCOME TAXES
The provision for income taxes was as follows:
1998 1997 1996
---- ---- ----
In Thousands
Currently payable
Federal $ 38,496 $ 39,262 $ 27,954
State, local and other 8,340 8,242 9,788
-------- -------- --------
$ 46,836 $ 47,504 $ 37,742
======== ======== ========
Deferred liability (benefit)
Federal $ 5,572 $ (1,363) $ (1,238)
State, local and other 2,995 (23) (144)
-------- -------- --------
8,567 (1,386) (1,382)
-------- -------- --------
Total provision $ 55,403 $ 46,118 $ 36,360
======== ======== ========
Deferred tax assets (liabilities) are comprised of the following at
December 31:
1998 1997
---- ----
In Thousands
Product warranty $ 46,047 $ 35,346
Inventory reserves 3,495 3,197
Doubtful receivables 3,742 1,719
Employee benefits 11,799 12,114
Other, net 11,879 12,088
-------- --------
Deferred assets $ 76,962 $ 64,464
-------- --------
Depreciation (55,473) (37,394)
Other, net (4,591) (1,606)
-------- --------
Deferred liabilities (60,064) (39,000)
-------- --------
Net deferred tax assets $ 16,898 $ 25,464
======== ========
No valuation allowance is required for the deferred tax assets based on
the Company's past tax payments and estimated future taxable income.
29
<PAGE>
A reconciliation of taxes computed at the statutory rate with the tax
provision is as follows:
1998 1997 1996
---- ---- ----
In Thousands
Federal income taxes at
statutory $49,095 $40,875 $32,214
State income taxes, net of
federal income tax benefit 5,798 3,842 2,912
Other, net 510 1,401 1,234
------- ------- -------
$55,403 $46,118 $36,360
Effective income tax rate 39.5% 39.5% 39.5%
Cash payments for income taxes were $58.7 million, $30.7 million and $40.5
million in 1998, 1997 and 1996, respectively.
SUBSEQUENT EVENT
In January 1999, the Company announced that it will reduce its interest in
the perishable cargo business. On January 28, 1999, the Company sold 85% of its
interest in its perishable cargo container leasing joint venture. Furthermore,
in connection with the reduction of the Company's interest in the leasing joint
venture, the Company announced the suspension of operations at its perishable
cargo container manufacturing facility. These operations are associated with the
Company's All Other business segment. The Company will continue to participate
in the perishable cargo business with its remaining interest in the leasing
joint venture. The Company will recognize a net gain of approximately $17
million resulting from the reduction of its interest in the perishable cargo
business.
30
<PAGE>
SEGMENT INFORMATION
Effective December 31, 1998, the Company adopted the provisions of SFAS
No. 131, "Disclosures about Segments of an Enterprise and Related Information."
The Company has restated its prior year segment disclosures to conform to the
requirements of SFAS No. 131. The Company's reportable segments have been
organized around differences in products and services, and operating segments
have been aggregated. The accounting policies of the segments are the same as
those described in the summary of significant accounting policies. The chief
operating decision maker evaluates segment performance by earnings before
interest and income taxes. The Company's operations are classified into the
following segments:
Construction Materials -- the principal products of this segment are rubber,
plastic and FleeceBACK(TM) 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.
Industrial Components -- the principal products of this segment are small
bias-ply rubber tires, stamped and roll-formed wheels, heavy duty friction and
braking systems for truck and off-highway equipment, high grade aerospace wire
and speciality electronic cable. Customers include golf car manufacturers, power
equipment manufacturers, boat and utility trailer manufacturers, truck OEMs,
heavy equipment and truck dealers and aftermarket distributors, aerospace OEMs,
and electronic equipment manufacturers.
Automotive Components -- the principal products of this segment are highly
engineered rubber and plastic components for Tier I suppliers and other
manufacturers in the automotive market.
All Other -- the principal products of this segment include 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, stainless steel processing equipment and
their related process control systems, specialty trailers and standard and
custom-built high payload trailers and dump bodies, self-contained ISO
perishable cargo shipping containers and perishable cargo container leasing.
Customers include foodservice distributors, restaurants, dairy product
processors and distributors, heavy equipment and truck dealers, shipping lines
and commercial haulers.
Corporate -- includes general corporate and idle property expenses. Corporate
assets consist primarily of cash and cash equivalents, facilities, and other
invested assets.
31
<PAGE>
Financial information for operations by reportable business segment is
included in the following summary:
<TABLE>
<CAPTION>
Earnings
Before
Interest & Deprec.
Income & Capital
Sales Taxes Assets Amort. Spending
---------- ----------- ---------- ------- -------
In Thousands
<S> <C> <C> <C> <C> <C>
1998
Construction Materials $ 371,547 $ 53,030 $ 218,045 $ 7,439 $12,849
Industrial Components 510,780 61,261 319,519 15,270 33,540
Automotive Components 271,955 17,638 213,900 10,005 27,442
All Other 363,212 38,166 262,393 11,590 21,749
Corporate -- (10,110) 8,995 917 390
---------- ----------- ---------- ------- -------
$1,517,494 $ 159,985 $1,022,852 $45,221 $95,970
========== =========== ========== ======= =======
1997
Construction Materials $ 316,597 $ 49,120 $ 174,157 $ 6,179 $ 8,109
Industrial Components 396,941 47,509 278,458 12,398 19,743
Automotive Components 241,283 18,633 178,206 8,571 14,454
All Other 305,729 30,142 215,777 10,714 17,016
Corporate -- (13,290) 14,618 893 209
---------- ----------- ---------- ------- -------
$1,260,550 $ 132,114 $ 861,216 $38,755 $59,531
========== =========== ========== ======= =======
1996
Construction Materials $ 318,036 $ 42,781 $ 180,245 $ 5,976 $ 6,416
Industrial Components 320,708 38,821 194,038 10,113 14,582
Automotive Components 124,148 9,428 157,776 4,016 3,198
All Other 254,603 20,307 192,250 8,953 10,704
Corporate -- (10,901) 18,154 700 90
---------- ----------- ---------- ------- -------
$1,017,495 $ 100,436 $ 742,463 $29,758 $34,990
========== =========== ========== ======= =======
</TABLE>
Reconciliation of earnings before interest and income taxes to Earnings before
income taxes:
1998 1997 1996
---- ---- ----
Earnings before interest and
income taxes $ 159,985 $ 132,114 $ 100,436
Investment Income 2,999 1,172 666
Interest Expense (22,715) (16,502) (9,062)
--------- --------- ---------
Earnings before income taxes $ 140,269 $ 116,784 $ 92,040
--------- --------- ---------
32
<PAGE>
QUARTERLY FINANCIAL DATA
(In Thousands except per share data)
(unaudited)
<TABLE>
<CAPTION>
First Second Third Fourth Year
----- ------ ----- ------ ----
<S> <C> <C> <C> <C> <C>
1998
Net sales $363,090 395,580 377,985 380,839 $1,517,494
Gross margin $ 78,555 88,363 81,948 79,249 $ 328,115
Operating expenses $ 43,993 44,644 43,437 44,470 $ 176,544
Net earnings $ 18,979 24,551 22,320 19,016 $ 84,866
Basic earnings per share $ 0.63 0.81 0.74 0.63 $ 2.81
Diluted earnings per share $ 0.62 0.80 0.73 0.62 $ 2.77
Dividends per share $ 0.1400 0.1400 0.1600 0.1600 $ 0.6000
Stock price:
High $51 1/4 53 1/16 47 15/16 51 5/8
Low $40 1/16 39 3/8 35 1/2 32 11/16
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 $ 0.44 0.69 0.65 0.56 $ 2.34
Diluted earnings per share $ 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
</TABLE>
33
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors
Carlisle Companies Incorporated:
We have audited the accompanying consolidated balance sheets of Carlisle
Companies Incorporated (a Delaware corporation) and subsidiaries as of December
31, 1998 and 1997 and the related consolidated statements of earnings,
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
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 financial statements referred to above present fairly,
in all material respects, the financial position of Carlisle Companies
Incorporated and subsidiaries as of December 31, 1998 and 1997, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1998, in conformity with generally accepted accounting
principles.
Arthur Andersen LLP
/s/ Arthur Andersen LLP
New York, New York
January 28, 1999
34
<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 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.
<TABLE>
<CAPTION>
Name Age Positions With Company Period of Service
- ---- --- ---------------------- -----------------
<S> <C> <C> <C>
Stephen P. Munn 56 Chief Executive Officer September, 1988
since September, 1988, to date
Chairman of the Board
since January, 1994, and
President from September,
1988 to February, 1995.
Dennis J. Hall 57 Chief Operating Officer August, 1989
and Vice Chairman since to date
March, 1999, President from
February, 1995 to March, 1999,
and Executive Vice President,
Treasurer and Chief Financial
Officer from August, 1989 to
February, 1995.
Scott C. Selbach 43 Vice President, Corporate July, 1989
Development since August, 1997, to date
Vice President, Europe from August,
1995 to August, 1997 and Vice
President, Secretary and General
Counsel from July, 1989 to
August, 1995.
John S. Barsanti 47 Vice President and Chief April, 1991
Financial Officer from March, to date
1999. President of Walker
Stainless Equipment Company from
October, 1995 to March, 1999, and
Vice President, Planning &
Administration from April, 1991
to October, 1995.
Steven J. Ford 39 Vice President, Secretary July, 1995
and General Counsel, since July, to date
1995. Formerly an associate with
Bond, Schoeneck & King, Syracuse, NY.
Richmond D. McKinnish 49 Executive Vice President from August, 1974
March, 1999 and President of to date
Carlisle Tire & Wheel Company since
January, 1991.
</TABLE>
35
<PAGE>
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 9, 1999.
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 9, 1999.
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 9, 1998.
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, 1998, 1997
and 1996
Consolidated Statement of Shareholders' Equity, years ended December 31,
1998, 1997 and 1996
Consolidated Balance Sheet, December 31, 1998 and 1997
Consolidated Statement of Cash Flows, years ended December 31, 1998, 1997
and 1996
Notes to Consolidated Financial Statements
Financial statement supplementary notes applicable to the filing of this
report are as follows:
Page
1. Other current liabilities 39
All other schedules are omitted because the required information is
inapplicable or the information is presented in the financial statements or
related notes.
36
<PAGE>
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.****
(3.2) Certificate of Amendment of the Restated Certificate of
Incorporation dated December 20, 1996.******
(4) Shareholders' Rights Agreement, February 8, 1989.*
(4.1) Amendment to Shareholders' Rights Agreement, dated August 7,
1996.*****
(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.***
(12) Ratio of Earnings to Fixed Charges.
(21) Subsidiaries of the Registrant.
(23) Consent of Independent Public Accountants.
(27) Financial Data Schedule as of December 31, 1998 and for the twelve
months ended December 31 1998.
* 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.
***** Filed as an Exhibit to Form 8-A/A filed on August 9, 1996 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, 1996 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.
37
<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, Chief Operating Officer and Vice Chairman
of the Board of Directors
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, Chief Peter F. Krogh, Director
Executive Officer and
Chairman of the Board of Directors
(Principal Executive Officer) /s/ Donald G. Calder
/s/ John S. Barsanti Donald G. Calder, Director
John S. Barsanti, Vice
President and Chief /s/ Henry J. Forrest
Financial Officer
(Principal Financial Officer Henry J. Forrest, Director
and Principal Accounting
Officer)
/s/ Peter L.A. Jamieson
Peter L.A. Jamieson, Director
/s/ G. FitzGerald Ohrstrom
G. FitzGerald Ohrstrom, Director
/s/ Robin W. Sternbergh
Robin W. Sternbergh, Director
March 9, 1999
38
<PAGE>
Carlisle Companies Incorporated and Subsidiaries
Supplementary Notes to the Consolidated Financial Statements
December 31, 1998
Note 1. Other Current Liabilities - Other current liabilities at December 31
consist of the following:
(000's)
1998 1997
---- ----
Employee compensation and benefits $ 36,435 $ 32,268
Product warranties 29,440 29,710
Insurance 11,993 12,250
Other accrued expenses 44,369 51,587
-------- --------
$122,237 $125,815
======== ========
39
<PAGE>
CARLISLE COMPANIES INCORPORATED
COMMISSION FILE NUMBER 1-9278
FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1998
EXHIBIT LIST
(12) Ratio of Earnings to Fixed Charges
(21) Subsidiaries of the Registrant
(23) Consent of Independent Public Accountants
(27) Financial Data Schedule as of December 31, 1998 and for the twelve
months ended December 31, 1998
40
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:
Year Ended December 31,
------------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges 5.19 6.06 7.47 8.70 9.73
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.
Exhibit 21
CARLISLE COMPANIES INCORPORATED
Subsidiaries of the Registrant
Jurisdiction of
Incorporation
---------------
Carlisle Companies Incorporated (Registrant) Delaware
Subsidiaries:
Carlisle Corporation -
Carlisle Container Manufacturing Company Delaware
Carlisle Engineered Products, Inc. Delaware
Carlisle FoodService Products Incorporated Delaware
Three wholly-owned domestic subsidiaries
Carlisle SynTec Incorporated Delaware
Four wholly-owned domestic subsidiaries
Carlisle Tire & Wheel Company Delaware
Three wholly-owned domestic subsidiaries
One wholly-owned foreign subsidiary
Geauga Company Delaware
Motion Control Industries, Inc. Delaware
One foreign joint ventures (49% ownership)
One wholly-owned domestic subsidiary
Tensolite Company Delaware
Trail King Industries, Inc. South Dakota
Walker Stainless Equipment Company, Inc. Delaware
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, 33-66934 and 333-16785.
Arthur Andersen LLP
/s/ Arthur Andersen LLP
New York, New York
March 9, 1999
<TABLE> <S> <C>
<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, 1998, and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 3,883
<SECURITIES> 0
<RECEIVABLES> 230,212
<ALLOWANCES> 4,864
<INVENTORY> 193,650
<CURRENT-ASSETS> 478,525
<PP&E> 630,573
<DEPRECIATION> 275,804
<TOTAL-ASSETS> 1,022,852
<CURRENT-LIABILITIES> 255,337
<BONDS> 273,521
0
0
<COMMON> 39,331
<OTHER-SE> 367,574
<TOTAL-LIABILITY-AND-EQUITY> 1,022,852
<SALES> 1,517,494
<TOTAL-REVENUES> 1,517,494
<CGS> 1,189,379
<TOTAL-COSTS> 1,365,923
<OTHER-EXPENSES> 8,414
<LOSS-PROVISION> 747,058
<INTEREST-EXPENSE> 19,716
<INCOME-PRETAX> 140,269
<INCOME-TAX> 55,403
<INCOME-CONTINUING> 84,866
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 84,866
<EPS-PRIMARY> 2.81
<EPS-DILUTED> 2.77
</TABLE>
