<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 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 Identification No.)
incorporation or organization)
250 SOUTH CLINTON STREET, SUITE 201, SYRACUSE, NEW YORK 13202 315-474-2500
(Address of principal executive office, including zip code) (Telephone Number)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No__
Shares of common stock outstanding at May 1, 2000 30,253,824
---------------
Page 1 of 10
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PART I. FINANCIAL INFORMATION
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
Three Months ended March 31, 2000 and 1999
(Dollars in thousands, except per share amounts)
(unaudited)
2000 1999
--------- ---------
Net sales $ 434,018 $ 390,024
Cost and expenses:
Cost of goods sold 336,527 305,401
Selling and administrative expenses 48,922 42,945
Research and development expenses 4,092 3,925
(Gain) on divestiture of business ($16.6m),
net of other charges ($15.9m) -- (685)
Other (income) & expense, net (1,189) (1,679)
--------- ---------
Earnings before interest & income taxes 45,666 40,117
Interest expense, net 5,179 4,657
--------- ---------
Earnings before income taxes 40,487 35,460
Income taxes 15,028 13,652
--------- ---------
Net earnings $ 25,459 $ 21,808
========= =========
Average shares outstanding - basic 30,191 30,183
Basic earnings per share $ 0.84 $ 0.72
--------- ---------
Average shares outstanding - diluted 30,526 30,639
Diluted earnings per share $ 0.83 $ 0.71
--------- ---------
Dividends declared and paid per share $ 0.18 $ 0.16
--------- ---------
See accompanying notes to interim financial statements.
Page 2 of 10
<PAGE>
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
March 31, 2000 and December 31, 1999
(Dollars in thousands, except share data)
<TABLE>
<CAPTION>
MARCH 31, Dec. 31,
2000 1999
----------- -----------
ASSETS (unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 3,624 $ 10,417
Receivables 270,281 245,120
Inventories (Note 2) 231,040 219,270
Deferred income taxes 32,149 32,108
Prepaid expenses and other 33,972 34,123
----------- -----------
TOTAL CURRENT ASSETS 571,066 541,038
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, NET 350,647 349,451
----------- -----------
OTHER ASSETS
Patents, goodwill and other intangibles 158,859 157,967
Investments and advances to affiliates 16,299 14,321
Receivables and other assets 18,473 17,885
----------- -----------
TOTAL OTHER ASSETS 193,631 190,173
----------- -----------
$ 1,115,344 $ 1,080,662
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt, including current maturities $ 2,472 $ 1,989
Accounts payable 113,823 106,283
Accrued expenses 139,708 132,106
----------- -----------
TOTAL CURRENT LIABILITIES 256,003 240,378
----------- -----------
LONG-TERM LIABILITIES
Long-term debt 281,379 281,744
Product warranties 82,094 79,858
Other liabilities 288 549
----------- -----------
TOTAL LONG-TERM LIABILITIES 363,761 362,151
----------- -----------
SHAREHOLDERS' EQUITY
Preferred stock, $1 par value. Authorized and unissued 5,000,000 shares
Common stock, $1 par value. Authorized 100,000,000 shares;
issued 39,330,624 shares 39,331 39,331
Additional paid-in capital 7,086 5,571
Cumulative translation adjustments (3,040) (1,658)
Retained earnings 565,420 545,404
Cost of shares in treasury - 9,109,423 shares in 2000 and (113,217) (110,515)
9,203,095 shares in 1999
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 495,580 478,133
----------- -----------
$ 1,115,344 $ 1,080,662
=========== ===========
</TABLE>
See accompanying notes to interim financial statements.
Page 3 of 10
<PAGE>
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Statements of Consolidated Cash Flows
Three Months ended March 31, 2000 and 1999
(Dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
2000 1999
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 25,459 $ 21,808
Reconciliation of net earnings to cash flows:
Depreciation 11,968 11,294
Amortization 2,036 1,590
(Gain)/Loss on sales of property, equipment and business -- (685)
Changes in assets and liabilities, excluding effects of acquisitions
and divestitures:
Current and long-term receivables (22,578) (22,654)
Inventories (10,742) (8,919)
Accounts payable and accrued expenses (1,053) 1,798
Prepaid, deferred and current income taxes 14,321 49,613
Long-term liabilities 829 785
Other 547 1,112
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 20,787 55,742
-------- --------
INVESTING ACTIVITIES
Capital expenditures (12,874) (14,638)
Acquisitions, net of cash (4,929) (10,584)
Proceeds from sale of property, equipment and business -- 11,568
-------- --------
Other (3,265) 3,863
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (21,068) (9,791)
-------- --------
FINANCING ACTIVITIES
Net change in short-term debt 483 (29,285)
Proceeds from long-term debt -- 8,441
-------- --------
Reductions of long-term debt (365) (346)
Dividends (5,443) (4,830)
Purchases of treasury shares (1,187) (509)
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (6,512) (26,529)
-------- --------
CHANGE IN CASH AND CASH EQUIVALENTS (6,793) 19,422
CASH AND CASH EQUIVALENTS
Beginning of period 10,417 3,883
-------- --------
End of period $ 3,624 $ 23,305
-------- --------
</TABLE>
See accompanying notes to interim financial statements.
Page 4 of 10
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Three Months Ended March 31, 2000 and 1999
(1) The accompanying unaudited condensed consolidated financial statements
include the accounts of Carlisle Companies Incorporated and its
wholly-owned subsidiaries (together, the "Company"). Intercompany
transactions and balances have been eliminated in consolidation. The
unaudited condensed consolidated financial statements have been
prepared in accordance with Article 10-01 of Regulation S-X of the
Securities and Exchange Commission and, as such, do not include all
information required by generally accepted accounting principles.
However, in the opinion of the Company, these financial statements
contain all adjustments, consisting of only normal recurring
adjustments, necessary to present fairly the financial statements for
the interim period presented herein. Results of operations for the
three-month period ended March 31, 2000 are not necessarily indicative
of the operating results for the full year.
While the Company believes that the disclosures presented are adequate
to make the information not misleading, it is suggested that these
financial statements be read in conjunction with the financial
statements and notes included in the Company's 1999 Annual Report to
Stockholders. Certain reclassifications have been made to prior year
information in order to conform to 2000 presentation.
(2) The components of inventories are as follows:
MARCH 31, Dec. 31,
2000 1999
--------- ---------
(000)'S
First-in, first-out (FIFO) costs:
Finished goods $ 137,432 $ 132,719
Work in process 29,805 27,052
Raw materials 74,948 70,735
--------- ---------
$ 242,185 $ 230,506
Excess of FIFO cost over Last-in,
First-out (LIFO) inventory value (11,145) (11,236)
--------- ---------
LIFO inventory value $ 231,040 $ 219,270
========= =========
(3) Diluted earnings per share of common stock are based on the weighted
average number of shares outstanding of 30,525,887 for the three months
ended March 31, 2000 assuming the exercise of dilutive stock options.
(4) In January 1999, the Company announced the reduction of its interest in
its perishable cargo business, consisting of its container leasing
joint venture and container manufacturing operations. On January 28,
1999 the Company sold 85% of its interest in its leasing joint venture.
In connection with the reduction in the Company's interest in the
leasing joint venture, the Company suspended operations at its
container manufacturing facility. As a result, the Company recognized a
pretax gain of $16.6 million in the first quarter of 1999. These
operations are associated with the Company's General Industry (All
Other) segment.
In conjunction with the implementation of the 1999 business plan, the
Company completed certain product line realignments, manufacturing
improvements and facility relocations and upgrades at
Page 5 of 10
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its operating businesses resulting in certain assets that are no longer
required or will be reallocated. In the first quarter of 1999, the
Company recognized a $15.9 million pretax charge related to these
assets. Approximately 75% of this charge related to machinery and
equipment primarily associated with the foodservice, roofing, tire and
wheel and automotive components manufacturing operations, with the
remainder related to goodwill and other intangible assets associated
with acquisitions made in prior years. The amount of the charge of
machinery and equipment was determined to be the excess of the recorded
values over the estimated fair values. The fair values were determined
using estimated market values or projected future discounted cash
flows, whichever was deemed appropriated. The charge related to the
intangible assets was determined as the excess of the recorded value
over the projected future discounted cash flows.
The net effect of the above items is reflected under the caption "gain
on divestiture of business and other charges" on the face of the
Company's Consolidated Statement of Earnings.
(5) Financial information for operations by reportable business segment is
included in the following summary:
MARCH 2000 - YTD
SEGMENT INFORMATION
IN THOUSANDS SALES EBIT ASSETS
----- ---- ------
Construction Materials $ 87,580 $ 8,924 $ 231,256
Industrial Components 162,975 24,435 365,314
Automotive Components 83,431 7,194 192,469
General Industry (All Other) 100,032 8,611 284,269
Corporate/Eliminations -- (3,498) 42,036
========= ========== ==========
$ 434,018 $ 45,666 $1,115,344
========= ========== ==========
MARCH 1999 - YTD
SEGMENT INFORMATION
IN THOUSANDS SALES EBIT ASSETS
----- ---- ------
Construction Materials $ 76,277 $ 8,333 $ 221,385
Industrial Components 145,099 20,403 347,502
Automotive Components 81,920 6,650 226,851
General Industry (All Other) 86,728 7,421 226,990
Corporate/Eliminations -- *(2,690) 44,314
========= ========== ==========
$ 390,024 $ 40,117 $1,067,042
========= ========== ==========
*In the first quarter of 1999, the gain on the divestiture of the Company's
perishable cargo business and charges related to certain assets were recorded at
the corporate level. See Note 4 in the Notes to Condensed Consolidated Financial
Statements.
Page 6 of 10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Carlisle Companies Incorporated reported record sales for any quarter of $434
million, up 11% over 1999, and record first quarter net earnings of $25.5
million or $0.83 per share (diluted), an increase of 17% versus first quarter
1999 earnings of $21.8 million. Strong sales over 1999 were led by Carlisle Tire
& Wheel (Industrial Components), Carlisle Systems & Equipment (General
Industry), Carlisle SynTec (Construction Materials) and Carlisle FoodService
Products (General Industry). Market share gains and expanded product line
offerings were the primary factors drawing sales.
Earnings growth resulted from the increased sales, as well as the continued
focus on cost reduction and efficiency improvement programs across all
operations. Additionally, through continued implementation of tax savings
strategies throughout the Company, the effective tax rate has been further
reduced from 38% to 37%. The impact of this change is an additional $0.01 a
share.
Construction Materials' sales of $88 million were up 16% over 1999 first quarter
sales of $76 million. Sales to Carlisle SynTec's domestic roofing markets were
responsible for much of this increase. Despite inclement winter weather
conditions, Carlisle SynTec benefited from strong EPDM rubber membrane sales as
well as the continued growth of the Company's thermoplastic polyolefin (TPO)
membrane and insulation product lines. Segment earnings for the quarter rose 7%
versus 1999 first quarter earnings of $8.3 million. This increase reflects
higher sales levels impacted by raw material price increases and product mix.
The need to recover cost increases experienced over the last year resulted in
the announcement of a price increase on EPDM rubber membrane which took effect
April 1, 2000. In February 2000, the Company acquired the assets of DynAir,
Inc., a Canadian manufacturer of duct supplies to the heating, ventilation and
air conditioning market. This acquisition will complement the product offerings
of Carlisle Coatings & Waterproofing's existing business.
Industrial Components' sales increased 12% to $163 million versus 1999 first
quarter sales of $145 million. Carlisle Tire & Wheel exhibited a strong
performance as activity in the lawn and garden markets commenced for the spring
selling season. The brake and friction businesses also reported improved first
quarter sales with a strong improvement in earnings over 1999. Healthy sales to
original equipment manufacturers in the heavy friction business and
strengthening demand in the haulage/mining markets combined with margin
improvement to generate the overall improvement in the friction and brake
businesses. Sales at Tensolite's specialty cable and cable assembly businesses
also increased, fueled by a broad customer base and increased demand including a
recovery in aerospace markets. Segment earnings increased 20% to $24.5 million
over the 1999 first quarter. The earnings increase, beyond the rate of sales, is
largely attributable to cost reduction programs and efficiency programs.
Automotive Components' segment sales of $83 million, a record, reflect steady
demand as vehicle builds remained at record levels throughout the quarter.
Segment earnings of $7.2 million, grew 9% over first quarter 1999 as a result of
the Company's ability to adapt to persistent high volumes, coupled with the
continued reduction of inefficiencies related to the high demand. Good progress
is being made in managing controllable assets, especially in reduced working
capital needs.
General Industry segment sales of $100 million showed a 15% improvement over
1999 first quarter sales of $87 million. After eliminating the results of the
perishable cargo business, which was divested during the first quarter of 1999,
segment sales and earnings were up 40% and 36%, respectively, over last year.
Carlisle Systems & Equipment was the primary driver behind this increase as
Johnson Truck Bodies, acquired in May of 1999, continued to experience strong
demand from the home delivery markets it serves. In April of this year, the
Company announced the acquisition of Extract Technologies Limited, a leading
biotech/pharmaceutical systems provider, headquartered in Huddersfiled, England.
The Company will merge
Page 7 of 10
<PAGE>
Extract with Carlisle Barrier Systems to comprise Carlisle Pharmaceutical
Systems. Scherping Systems, the Company's cheese processing systems business,
has been able to capitalize on the robust demands of the cheese/dairy industry
to contribute to both sales and earnings. In addition, in March 2000, Scherping
completed the acquisition of Damrow Denmark and Damrow USA, global equipment
suppliers to the cheese industry. The acquisition of Damrow, coupled with the
recent acquisition of Innovative Engineering Ltd. of New Zealand, makes Carlisle
the leading global supplier of cheese manufacturing systems. Trail King's
specialty trailer business continues to benefit from strong demand in the
construction market, but diesel fuel price increases have dampened sales of
trailers to commercial haulers. Carlisle FoodService experienced robust sales
gains for the quarter from improved international sales. In addition, in April
of this year, Carlisle FoodService completed the acquisition of the Dura-Ware
Company, a manufacturer of commercial cookware and servingware for the
foodservice and hospitality markets. Segment earnings of $8.6 million, for the
quarter, were up 15% over first quarter 1999. The earnings increase was driven
by the increase in sales, particularly at Johnson Truck Bodies, as well as the
implementation of operational improvements at Carlisle Systems & Equipment and
Carlisle FoodService offset somewhat by softer margins at Trail King and
Carlisle Home Products.
ACQUISITIONS
In the first quarter, Carlisle completed two acquisitions; Damrow Denmark and
Damrow USA, global equipment suppliers to the cheese industry, and DynAir, Inc.,
a Canadian manufacturer of duct supplies to the HVAC market. In addition, two
acquisitions were completed in early April; Dura-Ware Company, a manufacturer of
commercial cookware and servingware for the foodservice and hospitality markets,
and Extract Technologies Limited, a leading biotech/pharmaceutical systems
provider, headquartered in Huddersfiled, England. On April 14, the acquisition
of the Tire and Wheel Consumer Products Division of Titan International, Inc.
was announced. The annualized rate of sales of these acquisitions is
approximately $175 million.
CASH FLOWS
Cash generated from operations for the first quarter was $21 million,
attributable to improved earnings and higher depreciation and amortization. For
the first quarter 1999, cash generated from operations and cash used in
investing activities reflect the impact of proceeds, net of a $39 million tax
payment, from the divestiture of the perishable cargo business.
BACKLOG
The consolidated backlog of $245 million at March 31, 2000 approximated March
31, 1999 levels. Stronger backlog positions have been experienced at Tensolite
and the Systems & Equipment businesses with a slight decline at Carlisle SynTec
and Trail King. The backlog has not yet been adjusted for recently announced
acquisitions.
Page 8 of 10
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits applicable to the filing of this report are as follows:
(12) Ratio of Earnings to Fixed Charges.
(27) Financial Data Schedule as of March 31, 2000 and for the three
months ended March 31, 2000.
(b) Report on Form 8-K:
No reports on Form 8-K were filed during the quarter for which this
report on Form 10-Q is filed.
Page 9 of 10
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Carlisle Companies Incorporated
Date May 8, 2000 By: /s/ Dennis J. Hall
-------------------- -------------------------------------
Dennis J. Hall
Vice Chairman
Page 10 of 10
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Exhibit 12
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for periods indicated:
3 Months
ENDED YEAR ENDED DECEMBER 31,
-------- --------------------------------
3/31/00 1999 1998 1997 1996 1995
------- ---- ---- ---- ---- ----
Ratio of Earnings to
Fixed Charges 7.37 7.41 5.19 6.06 7.47 8.70
For purposes of computing the ratio of earnings to fixed charges,
earnings are defined as earnings before income taxes plus fixed charges. Fixed
charges consist of interest expense (including capitalized interest) and the
portion of rental expense that is representative of the interest factor (deemed
to be one-third of minimum operating lease rentals). The earnings to fixed
charges calculation reflects the Company's proportionate share of income,
expense and fixed charges attributable to the Company's investment in
majority-owned unconsolidated subsidiaries and joint ventures.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains Summary Financial Information extracted from the
Financial Statement of Carlisle Companies Incorporated for the three month
period ending March 31, 2000, and is qualified in its entirety by reference to
such Financial Statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 3,624
<SECURITIES> 0
<RECEIVABLES> 276,432
<ALLOWANCES> 6,151
<INVENTORY> 231,040
<CURRENT-ASSETS> 571,066
<PP&E> 670,471
<DEPRECIATION> 319,823
<TOTAL-ASSETS> 1,115,344
<CURRENT-LIABILITIES> 256,003
<BONDS> 281,379
0
0
<COMMON> 39,331
<OTHER-SE> 456,249
<TOTAL-LIABILITY-AND-EQUITY> 1,115,344
<SALES> 344,018
<TOTAL-REVENUES> 434,018
<CGS> 336,527
<TOTAL-COSTS> 389,541
<OTHER-EXPENSES> 1,189
<LOSS-PROVISION> 410
<INTEREST-EXPENSE> 5,179
<INCOME-PRETAX> 40,487
<INCOME-TAX> 15,028
<INCOME-CONTINUING> 25,459
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,459
<EPS-BASIC> .84
<EPS-DILUTED> .83
</TABLE>
