<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
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)
<TABLE>
<S> <C>
250 SOUTH CLINTON STREET, SUITE 201, SYRACUSE, NEW YORK 13202-1258 (315) 474-2500
(Address of principal executive office, including zip code) (Telephone Number)
</TABLE>
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
Common stock, $1 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of February 24, 2000, 30,232,491 shares of common stock of the
registrant were outstanding; the aggregate market value of the shares of common
stock of the registrant held by non-affiliates was approximately $913,759,218
based upon the closing price of the common stock on the New York Stock Exchange
on February 24, 2000.
DOCUMENTS INCORPORATED BY REFERENCE
<PAGE>
Portions of the definitive Proxy Statement for the Annual Meeting of
Shareholders to be held on April 20, 2000 are incorporated by reference in Part
III.
2
<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 General Industry (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.
GENERAL INDUSTRY (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,
refrigerated truck bodies and perishable cargo container leasing. Customers
include food service distributors, restaurants, dairy product processors and
distributors, heavy equipment and truck dealers, home delivery distributors,
shipping lines and commercial haulers.
3
<PAGE>
The amount of total revenue contributed by the products or services in
each industry segment for each of the last three fiscal years is as follows (in
millions):
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Construction Materials $ 405.4 $ 371.5 $ 316.6
Industrial Components 527.9 510.8 396.9
Automotive Components 314.3 272.0 241.3
General Industry - All Other 363.7 363.2 305.7
- ----------------------------------- -------- -------- --------
Total $1,611.3 $1,517.5 $1,260.5
</TABLE>
In each industry segment, the Company's products are generally
distributed either by Company-employed field sales personnel or manufacturers'
representatives. In a few instances, distribution is through dealers and
independent distributors. 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 General
Industry (All Other) 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 2000.
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 25.6% of total Automotive Components segment sales in 1999.
Order Backlog was $228.0 million at December 31, 1999, $262.1 million
at December 31, 1998, and $281.6 million at December 31, 1997.
Research and Development expenses were $15.8 million in 1999, compared
to $16.2 million in 1998, and $15.8 million in 1997.
The Company employs approximately 10,290 persons on a full-time basis.
4
<PAGE>
The businesses of the Construction Materials, Automotive Components and
General Industry (All Other) 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 1999, the Company completed the following acquisitions. In January,
the Company acquired the assets of Global Manufacturers Corporation, a
manufacturer of wheel centers, hub covers, bumpers and brackets for the OEM and
auto aftermarkets. In May, the Company acquired the assets of Johnson Welding &
Manufacturing Co. (d/b/a Johnson Truck Bodies), a manufacturer of custom
refrigerated truck bodies sold to the home delivery, dairy, convenience food
store and other niche delivery markets. In November, the Company acquired
certain assets of Innovative Engineering Limited, a cheese process engineering
business located in Cambridge, New Zealand. In December, the Company acquired
(i) the assets of Marko International, Inc. a manufacturer of table coverings,
table skirting and relating accessories for the foodservice industry and (ii)
certain assets of Cragar Industries relating to its steel outer rim and
accessory business. The Company also entered into an exclusive license to
manufacture and sell CRAGAR brand custom wheels.
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 segment for the last three fiscal years is as follows:
<TABLE>
<CAPTION>
(In Thousands) 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Sales to Unaffiliated Customers(1)
Construction Materials $ 405,387 $ 371,547 $ 316,597
Industrial Components 527,902 510,780 396,941
Automotive Components 314,246 271,955 241,283
General Industry (All Other) 363,721 363,212 305,729
Earnings before interest and
income taxes
Construction Materials $ 58,195 $ 53,030 $ 49,120
Industrial Components 66,001 61,261 47,509
Automotive Components 21,212 17,638 18,633
General Industry (All Other) 40,429 38,166 30,142
Corporate(2) (11,200) (10,110) (13,290)
Identifiable Assets
Construction Materials $ 229,905 $ 218,045 $ 174,157
Industrial Components 333,401 319,519 278,458
Automotive Components 209,653 213,900 178,206
General Industry (All Other) 262,435 262,393 215,777
Corporate(3) 45,268 8,995 14,618
</TABLE>
(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, and other
invested assets.
5
<PAGE>
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, 1999:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
O - OFFICE APPROXIMATE
M - MANUFACTURING FLOOR SPACE APPROXIMATE
PRINCIPAL PRODUCT OR ACTIVITY W - WAREHOUSING LOCATION OWNED OR LEASED (SQ. FT.) ACREAGE
- -------------------------------------------------------------------------------------------------------------------------
<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 1
---------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Elastomeric membranes and O,M,W Carlisle, PA Owned 557,474 79
related roofing products O,M,W Greenville, IL Owned 165,430 35
O,M,W Sapulpa, OK Owned 34,503 -
O,M,W Wylie, TX Owned 44,000 6
O,M,W Senatobia, MS Owned 54,500 -
O,M,W Bloemedalerweg,
Netherlands Leased to 2004 175,000 -
W Bloemedalerweg,
Netherlands Leased to 2004 30,000 -
O Denver, CO Leased to 2001 2,139 -
O Mississauga, Canada Leased to 2002 1,860 -
O Portland, ME Leased to 2002 5,205 -
O Sutton Courtney, UK Leased to 2003 1,000 -
W Greenville, IL Leased to 2003 40,000 -
O Akron, OH Leased to 2001 9,600 -
W Greenville, IL Leased to 2000 25,500 -
M Kingston, NY Leased to 2000 50,000 -
W Carlisle, PA Leased to 2001 49,600 -
O Bloomsburg, PA Leased to 2002 500 -
M Franklin Park, IL Leased to 2004 265,000 -
M Kingston, NY Leased to 2004 168,000 -
O Plano, TX Leased to 2004 26,878 -
O 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,W Kennesaw, GA Leased to 2002 10,720 -
---------------------------------
1,820,348 120
---------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Small pneumatic tires and O,M,W Carlisle, PA Owned 640,609 31
tubes; stamped and O,M,W Aiken, SC Owned 420,500 18
roll-formed wheels O,M,W 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 Los Angeles, CA Leased to 2000 8,000 -
M Los Angeles, CA Leased to 2003 21,000 -
W Los Angeles, CA Leased to 2003 16,800 1
M Los Angeles, CA Leased to 2003 20,515 2
O Los Angeles, CA Leased to 2003 10,000 -
W Lakeland, FL Leased to 2003 18,750 -
W Springfield, TN Leased to 2004 56,000 -
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, Leased to 2002 30,200 -
Saskatchewan
W Carson, CA Leased to 2003 84,044 -
O,M,W Ontario, CA Leased to 2003 87,143 -
W Montreal, Canada Leased to 2004 27,000 -
W Waterloo, Ontario Leased to 2007 69,000 -
---------------------------------
2,239,325 66
---------------------------------
</TABLE>
6
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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 -
W Chicago, IL Leased to 2004 16,000 -
O,W Charlotte, NC Leased to 2009 210,560 -
---------------------------------
988,477 39
---------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Custom-manufactured rubber M Middlefield, OH Owned 200,581 28
and plastics products, M Crestline, OH Owned 172,997 40
including precision-molded M Canton, OH Owned 87,845 17
engine components and M Lake City, PA Owned 100,000 30
blow-molded bumper beams M Trenton, SC Owned 67,695 10
M Belleville, MI Owned 76,000 5
M Erie, PA Owned 95,800 15
M Lapeer, MI Owned 96,300 6
M Tuscaloosa, Al Owned 67,376 15
O Chardon, OH Leased to 2004 8,033 -
W 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 -
M Chihuahua, MX Leased to 2004 50,000 8
---------------------------------
1,229,140 174
---------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Brake lining for trucks and O,M Ridgeway, PA Owned 117,300 7
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,W Bloomington, IN Owned 250,000 19
W Lancaster, PA Leased to 2002 86,000 2
M,W Stockton, CA Leased to 2000 27,600 2
O,M Brantford, Ontario Leased to 2002 40,000 2
M,W Pittsburg, KS Leased to 2004 30,000 3
M,W Nampa, ID Leased to 2007 106,400 5
---------------------------------
884,542 97
---------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Specialized lowbed trailers O,M Mitchell, SD Owned 245,000 36
for construction and O,M Brookville, PA Owned 156,000 22
commercial markets O,M Green Pond, AL Owned 49,860 14
M,W Mitchell, SD Leased to 2003 14,000 -
---------------------------------
464,860 72
---------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Liquid Transport tanks O,M,W New Lisbon, WI Owned 252,850 31
and 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 Rice Lake, WI Leased to 2002 135,000 5
O,M,W Tavares, FL Leased to 1999 73,967 12
---------------------------------
937,011 62
---------------------------------
- -------------------------------------------------------------------------------------------------------------------------
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 Essex Junction, VT Leased to 2004 46,000 -
---------------------------------
229,250 17
---------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Refrigerated marine containers O,M,W Green Cove Leased to 2004 110,000 10
Springs, FL
- -------------------------------------------------------------------------------------------------------------------------
8,944,453 658
---------------------------------
</TABLE>
7
<PAGE>
8
<PAGE>
Total plant space of 8,944,453 sq. ft. is used for:
<TABLE>
<CAPTION>
Owned Leased Total
----- ------ -----
<S> <C> <C> <C>
Office 25,000 117,312 142,312
Manufacturing 1,210,579 700,915 1,911,494
Warehousing 0 1,014,594 1,014,594
Combined 4,503,916 1,372,137 5,876,053
--------- --------- ---------
5,739,495 3,204,958 8,944,453
========= ========= =========
</TABLE>
As of December 31, 1999, 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 from twenty to seventy years old and have been
maintained in good condition.
ITEM 3. LEGAL PROCEEDINGS
As of December 31, 1999, 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.
9
<PAGE>
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, 1999, there were 2,546 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 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
First Second Third Fourth
----- ------ ----- ------
<S> <C> <C> <C> <C>
1999
Dividends per share $.1600 $.1600 $.1800 $.1800
Stock Price
High $52 15/16 $49 9/16 $51 5/16 $43 1/8
Low $41 $42 1/4 $37 7/16 $30 5/8
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
</TABLE>
10
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.
In thousands except per share data
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994
----- ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Net sales $1,611,256 1,517,494 1,260,550 1,017,495 822,534 692,650
Gross margin $ 356,989 328,115 286,461 237,698 197,674 176,368
Selling & administrative expenses $ 173,375 160,366 143,246 128,676 109,236 102,992
Research & development $ 15,762 16,178 15,824 11,900 12,339 11,933
Interest and other expenses, net $ 12,369 11,302 10,607 5,082 3,241 2,652
Net earnings $ 95,794 84,866 70,666 55,680 44,081 35,568
Basic earnings per share $ 3.18 2.81 2.34 1.84 1.43 1.17
Diluted earnings per share $ 3.13 2.77 2.28 1.80 1.41 1.15
FINANCIAL POSITION
Net working capital $ 300,660 223,188 191,450 175,285 153,709 164,669
Property, plant and equipment, net $ 349,451 354,769 294,165 264,238 193,134 158,238
Total assets $1,080,662 1,022,852 861,216 742,463 542,423 485,283
Long-term debt $ 281,744 273,521 209,642 191,167 72,725 69,148
% of total capitalization 37.1 40.2 37.5 38.3 21.0 21.8
Shareholders' equity $ 478,133 405,435 347,253 307,608 273,257 247,850
OTHER DATA
Average shares outstanding - basic 30,166 30,179 30,235 30,281 30,759 30,519
Average shares outstanding - diluted 30,635 30,674 31,025 30,953 31,266 30,960
Dividends paid $ 20,511 18,105 15,868 14,129 12,928 11,605
Per share $ 0.680 0.600 0.525 0.465 0.420 0.380
Capital expenditures $ 47,839 95,970 59,531 34,990 37,467 31,082
Depreciation & amortization $ 47,414 45,221 38,755 29,758 23,230 21,940
Shareholders of record 2,546 2,443 2,068 2,145 2,054 2,350
</TABLE>
All share and per share amounts have been restated to reflect the
two-for-one stock split on January 15, 1997.
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.
11
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Carlisle Companies Incorporated reported sales of $1.611 billion in
1999, up 6%, or $94 million, from 1998 sales of $1.518 billion. The primary
contributing factor to this increase was generated through product line
expansion and market share gains. In addition, we completed several
complementary acquisitions in 1998 and 1999. In 1998, sales increased 20% or
$257 million, as a result of internal growth as well as acquisitions made in
1998 and the full year impact of those acquisitions completed in 1997.
Net earnings in 1999 were $95.8 million, or $3.13 per share, a 13%
increase over 1998 net earnings of $84.9 million, or $2.77 per share. Net
earnings, in 1998, increased 20%, reflecting not only the increased sales
levels, but also cost reductions.
In January 1999, Carlisle exited its Perishable Cargo business, which
impacts the year-to-year comparisons of operating results. After adjusting for
the effect of this divestiture, pro-forma sales and net earnings increased 10%
and 17%, respectively. The quarterly pro-forma results are shown in Table 1
below.
TABLE 1
<TABLE>
<CAPTION>
Pro-Forma
Sales ($ millions) Without
As reported Perishable Cargo Operation
1999 1998 % change 1999 1998 % change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
First Quarter $ 390.0 $ 363.1 7% $ 375.8 $ 347.0 8%
Second Quarter $ 425.8 $ 395.6 8% $ 425.8 $ 380.1 12%
Third Quarter $ 400.9 $ 378.0 6% $ 400.9 $ 357.3 12%
Fourth Quarter $ 394.6 $ 380.8 4% $ 394.6 $ 361.8 9%
------- ------- -- ------- ------- --
Total $1,611.3 $1,517.5 6% $1,597.1 $1,446.2 10%
</TABLE>
<TABLE>
<CAPTION>
Net Earnings ($ millions) Pro-Forma
Without
As reported Perishable Cargo Operation
----------- --------------------------
1999 1998 % change 1999 1998 % change
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
First Quarter $21.8 $19.0 15% $21.0 $18.2 15%
Second Quarter $28.0 $24.6 14% $27.8 $23.5 18%
Third Quarter $24.7 $22.3 11% $24.5 $21.2 16%
Fourth Quarter $21.3 $19.0 12% $21.1 $17.9 18%
----- ----- --- ----- ----- ---
Total $95.8 $84.9 13% $94.4 $80.8 17%
</TABLE>
Sales and net earnings in 1999 mark the eighth consecutive year of
year-to-year improvements. Approximately 70% of this year's growth came from the
combination of market growth, product line extensions, market share gains and
cost reductions. The strong rebound in the automotive market, the expansion of
sales of insulation and thermoplastic polyolefin (TPO) roofing membrane, as well
as strong growth in our specialty tire and wheel, systems and equipment, and
foodservices businesses are the primary contributors to our 1999 sales increase.
Improved operational efficiencies at several operations, along with sales
increases, account for the increased earnings from internal operations.
Continuing progress was made on the program to improve the profitability of
assets employed in the business.
The effective tax rate was reduced from 39.5% to 38.4%. This reduction
was the result of the implementation of various state tax strategies initiated
over the last two years.
During 1999, we completed five complementary acquisitions. We
purchased: (1) Global Manufacturing, a manufacturer of stamped steel wheels for
industrial and recreational applications and styled steel wheels for the
automotive aftermarket (2) Johnson Truck Bodies, a manufacturer of fiber glass
custom truck bodies for the delivery of food products to stores and homes, (3)
Innovative Engineering Limited, an engineering and equipment supplier of cheese
making systems, (4) Marko International, Inc., a supplier of table coverings,
table skirtings and other accessories for the foodservice market, and (5) the
custom steel wheel business of Cragar Industries, Inc., which produces and
markets CRAGAR brand custom steel wheels to the automotive aftermarket.
12
<PAGE>
Four acquisitions were completed in 1998: (1) Vermont Electromagnetics
and (2) Quality Microwave Interconnects, Inc., both manufacturers of specialty
cable assemblies and connectors, (3) Industrial Tire Products, Inc., a
distributor of industrial and recreational tire and wheel assemblies, and (4)
Hardcast Europe BV, a Dutch manufacturer of adhesive and sealant products for
the construction market.
OPERATING SEGMENTS
CONSTRUCTION MATERIALS
Segment sales grew 9% in 1999 to $405 million, an increase of $33
million over 1998 sales of $372 million. This sales growth resulted from the
expansion of insulation and thermoplastic polyolefin (TPO) shipments to the
roofing systems market by Carlisle SynTec. Carlisle Coatings & Waterproofing
experienced higher sales driven by its tape and sealant products. In 1998,
segment sales increased 17% from 1997 sales of $317 million as a result of
increased market share and new products.
Segment earnings were up 10% in 1999 to $58 million, reflecting
increased sales levels, improved operational performance and favorable warranty
experience, partially offset by the absorption of increased raw material costs
and changes in product mix. Also, during 1999, Carlisle SynTec successfully
implemented an integrated company-wide information system, which will further
improve the efficiencies of this segment. The 1998 segment earnings of $53
million were up 8% over 1997 segment earnings of $49 million, primarily due to
increased sales.
Return on assets improved from 24% to 25% as a result of both increased
asset efficiency and profit margins.
INDUSTRIAL COMPONENTS
Segment sales were $528 million in 1999, a 3% increase over 1998 sales
of $511 million. The primary cause of the increase was the growth of new
customers and new products in the specialty tire and wheel business of Carlisle
Tire & Wheel, as well as acquisitions that were completed in 1999 and 1998.
Decreased customer requirements for aerospace bulk cable negatively impacted
Tensolite's sales. Sales at Motion Control Industries and Carlisle Industrial
Brake & Friction were down in 1999, due to lower demand in the heavy duty
friction aftermarket and off-highway industrial brakes for mining and
agricultural applications. In 1998, segment sales increased 29% over 1997 sales
of $397 million. The primary cause of this increase was the growth of tire and
wheel assemblies, especially to the aftermarket, increased shipment of high
performance wire to aircraft manufacturers, and the acquisition of two high
speed data cable assembly companies.
Segment earnings increased 8% to $66 million in 1999. The main factors
in the increase were product line extension and operational improvements at our
specialty tire and wheel businesses. Offsetting these improvements were lower
earnings at our specialty wire and cable business and Carlisle Industrial Brake
& Friction due to less robust markets. In 1998, segment earnings of $61 million
increased 29% over 1997 segment earnings of $47 million. This earnings growth
was consistent with the increase in sales. Return on assets in 1999 increased to
20% from 19% in 1998.
AUTOMOTIVE COMPONENTS
In 1999, segment sales increased 16% to $314 million over 1998 sales of
$272 million. This growth was the result of a very strong automotive and light
truck market coupled with new product introductions. Segment sales were up 13%
in 1998, over 1997 sales of $241 million. This increase was due to product line
extensions, which were offset by the effects of the General Motors (GM) strike.
Segment earnings of $21 million represent an increase of 20% over 1998
segment earnings of $18 million. Earnings in 1999 increased due to the impact of
the GM strike in 1998 as well as improved product mix. In the fourth quarter,
this business was streamlined and an unprofitable operation eliminated. Earnings
in 1998 decreased 5% from the 1997 level of $19 million due primarily to the
inefficiencies generated by the rapid ramp-up of production for new programs
interrupted by the GM strike in 1998. Return on assets improved from 8% in 1998
to 10% in 1999 as asset efficiency increased and profit margins improved.
13
<PAGE>
GENERAL INDUSTRY (ALL OTHER)
The General Industry (All Other) segment sales of $364 million were
flat with 1998 sales of $363 million. On a pro-forma basis, excluding the effect
of the perishable cargo divestiture in January 1999, sales increased 20% over
1998. Sales and earnings at Carlisle Systems & Equipment account for much of
this pro-forma increase, due to the acquisition of Johnson Truck Bodies as well
as internal growth. Carlisle Transportation Products' sales were up over 1998
primarily due to a strong highway construction market. Higher sales were
recorded in our foodservice business due to product line expansions in both
international and domestic markets. Carlisle FoodService Products completed the
significant upgrade of a new customer service system, as well as opening two new
distribution facilities. Segment sales in 1998 were up 19% over 1997 sales of
$306 million. This increase was related to higher sales of specialty trailers to
construction markets, plastic permanentware to the foodservice industry and
refrigerated containers to the shipping industry.
Segment earnings of $40 million increased 6% over 1998 segment earnings
of $38 million. Pro-forma earnings grew 26%, after excluding the perishable
cargo business, reflecting primarily the increase in sales in this segment.
Earnings in 1998 were up 27% over 1997 earnings of $30 million. This growth was
due to the general increase in sales, improved manufacturing efficiencies and
increased share of the leasing market in our perishable cargo business. Return
on assets increased to 15.4% in 1999, from 14.5% in 1998, as a result of
improved profit margins.
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
22.7% of sales in 1997 to 21.6% in 1998, and increased to 22.2% in 1999. The
decline from 1997 to 1998 largely reflects the competitive marketplace and
changing mix in Carlisle's total sales. In 1999, improved operational
efficiency, as well as improved product mix, accounted for the higher margin
rate.
SELLING AND ADMINISTRATIVE COSTS, expressed as a percent of sales,
declined from 11.4% in 1997 to 10.6% in 1998, but increased to 10.8% in 1999,
reflecting the continued emphasis on cost control throughout all operations and
lower cost structures in Carlisle's overall businesses.
TOTAL COSTS, which include raw material, manufacturing, selling,
general and administrative costs, expressed as a percentage of total sales, have
remained fairly consistent, decreasing slightly in 1999 to 89.6% of sales from
90.0% of sales in 1998 and 89.9% of sales in 1997. The improvement in this total
cost relationship in 1999 was due to improved operating efficiencies. The 1998
decline from 1997's level of 89.9% percent of sales was due to operational
improvements offset by the GM strike and the change in product mix in the
construction materials operations.
INTEREST EXPENSE, NET decreased to $19.2 million in 1999 from $19.7
million in 1998, due to the lower debt levels maintained throughout the year.
Planned capital expenditures and acquisitions were financed through internally
generated cash flows.
OTHER, NET decreased to $6.1 million in 1999 due to the reduction of
the Company's ownership in its leasing joint venture.
INCOME TAXES, for financial reporting purposes, decreased in 1999 to an
effective tax rate of 38.4%, compared to 39.5% in 1998 and 1997. This reduction
was the outcome of the implementation of various state tax strategies developed
in previous years.
RECEIVABLES, of $245 million, reflect an increase of 9% over the 1998
level of $225 million. This increase was in line with the sales growth. The 1998
level of receivables represented a 22% increase over 1997 levels and was
primarily the result of higher December sales.
INVENTORIES, valued primarily by the last-in, first-out (LIFO) method,
were $219 million at year-end 1999, a 13% increase over the 1998 year-end level
of $194 million. The increase in inventory at year-end was primarily due to
higher
14
<PAGE>
inventory at specialty tire and wheel and roofing operations in preparation for
the spring selling season, as well as from acquisitions made during the current
year. The 1998 inventory level increased 7% over 1997, due primarily to
acquisitions made during the year.
CAPITAL EXPENDITURES totaled $48 million in 1999, a significant
reduction from the $96 million incurred in 1998. The 1999 level was more
consistent with previous levels, which reflects a normalized level of capital
spending. The 1998 increase was primarily attributable to investments in
production capacity in Mexico, expanded warehousing and distribution facilities
for our foodservice operation, increased production capacity for tire and wheel
assemblies, specialty trailer products, high speed data wire and cable
assemblies, and plant and equipment to manufacture insulation and TPO roofing
membranes.
LIQUIDITY, CAPITAL RESOURCES AND ENVIRONMENTAL
CASH FLOWS provided by operating activities increased $39 million to
$136 million in 1999 from $97 million in 1998. Cash used in investing activities
was $86 million versus $133 million in 1998, a decrease of $47 million. This
decrease was attributable to cash received from the divestiture of the
perishable cargo business, net of a $39 million tax payment, as well as a
reduction in the level of capital expenditures. The net cash used in financing
activities in 1999 was $44 million versus cash provided of $38 million in 1998.
The 1999 amount reflects the repayment of short-term borrowings, outstanding at
the end of 1998, and dividend payments. The net cash provided by financing
activities in 1998, of $38 million, reflects the net increase in debt after the
early payment of higher cost debt and stock repurchases.
Carlisle has a $125 million revolving credit facility available for
acquisitions and general corporate purposes. In May 1998, Carlisle issued to the
public $100 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 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 material charges
relating to environmental matters in 1999 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. These investments are
expected to assist Carlisle in improving its operational ratios. With respect to
the remaining information systems, as well as the Company's embedded technology,
the Company adopted a program (involving both internal personnel and third-party
consultants) of (i) assessment, (ii) remediation, and (iii) authentication. The
Company has completed the assessment phase, the remediation phase, and the
authentication phase, which included simulated testing in a Year 2000
environment. The Company will continue testing its systems throughout the first
quarter of 2000. The cost to the Company, of completing these efforts did not
exceed $750,000.
Carlisle has maintained a formal communication program with its
significant suppliers and large customers, which it will conclude in the first
quarter of 2000. As part of this program, Carlisle has, and will continue to (1)
evaluate the supplier's year 2000 compliance plans and state of readiness and
(2) determine whether a year 2000-related event will impede the ability of a
particular supplier to continue to provide goods and services. Contingency plans
were adopted for any significant supplier that did not provide an appropriate
and timely response to Carlisle or if the results of a risk assessment
identified a business process at risk of a Year 2000 failure.
There were no disruptions to Carlisle businesses as a result of the
changeover to the Year 2000. However, there can be no guarantee that Year 2000
failures experienced by third parties during the first quarter of 2000 would not
have a material adverse effect on the Company's financial condition or
operations.
15
<PAGE>
BACKLOG AND FUTURE OUTLOOK
BACKLOG was $228 million at December 31, 1999 compared to $247 million
(excluding Carlisle perishable cargo backlog of $15 million) in 1998. Higher
backlog at Carlisle Systems & Equipment and Carlisle FoodService reflects the
strong market penetration achieved by these businesses. Automotive Components
backlog was down from December 1998 due to the high demand in the fourth quarter
1998, created by the GM strike. Also, Construction Materials backlog was down
due to reporting enhancements made in conjunction with the implementation of new
business software.
The elimination of capacity limitations, through significant capital
expenditures in 1998 and the continued implementation of lean manufacturing
systems, allowed more rapid response to customer needs and contributed to
backlog reductions in several businesses. Reduced aerospace wire demand is
reflected in the lower backlog.
We continue to concentrate on our longstanding operating principles of:
targeted market leadership; growth from within; lean organizational structure;
low cost, decentralized operations; and strategic acquisitions to achieve our
sales and earnings growth objectives. As we move ahead, we are confident that
adherence to these principles will bring continued operating success. With a
growing market and a commitment to constant increased operating efficiency, 2000
should prove to be another strong year for Carlisle.
16
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
CONSOLIDATED STATEMENT OF EARNINGS
For the years ended December 31. In thousands except per share data.
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net sales $1,611,256 $1,517,494 $1,260,550
---------- ---------- ----------
Cost and expenses:
Cost of goods sold 1,254,267 1,189,379 974,089
Selling and administrative expenses 173,375 160,366 143,246
Research and development expenses 15,761 16,178 15,824
Gain on divestiture of business ($16.6m),
net of other charges ($15.9m) 685 -- --
Other income & expense 6,099 8,414 4,723
---------- ---------- ----------
Earnings before interest & income taxes 174,637 159,985 132,114
Interest expense, net 19,154 19,716 15,330
---------- ---------- ----------
Earnings before income taxes 155,483 140,269 116,784
Income taxes 59,689 55,403 46,118
---------- ---------- ----------
Net earnings $95,794 $84,866 $70,666
========== ========== ==========
Average shares outstanding - basic 30,166 30,179 30,235
Basic earnings per share $3.18 $2.81 $2.34
Average shares outstanding - diluted 30,635 30,674 31,025
Diluted earnings per share $3.13 $2.77 $2.28
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
17
<PAGE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In thousands except share data)
<TABLE>
<CAPTION>
ADDITIONAL CUMULATIVE COST OF
COMMON PAID-IN RETAINED TRANSLATION SHARES
STOCK CAPITAL EARNINGS ADJUSTMENT IN TREASURY
<S> <C> <C> <C> <C> <C>
Balance at December 31,1996 $39,331 $ 480 $ 348,558 $ 105 ($ 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)
Translation adjustment -- -- -- (1,688) --
------------------------------------------------------------------
Balance at December 31,1997 39,331 1,830 403,356 (1,583) (95,681)
Net earnings -- -- 84,866 -- --
Cash dividends - $0.60 per share -- -- (18,105) -- --
Exercise of stock options & other -- 2,371 -- -- 3,309
Purchase of 283,598 treasury shares -- -- -- -- (14,372)
Translation adjustment -- -- -- 113 --
------------------------------------------------------------------
Balance at December 31, 1998 39,331 4,201 470,117 (1,470) (106,744)
Net earnings -- -- 95,794 -- --
Cash dividends - $0.68 per share -- -- (20,511) -- --
Exercise of stock options & other -- 1,370 4 -- 616
Purchase of 103,208 treasury shares -- -- -- -- (4,387)
Translation adjustment -- -- -- (188) --
------------------------------------------------------------------
Balance at December 31, 1999 $39,331 $5,571 $ 545,404 ($1,658) ($110,515)
------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
18
<PAGE>
CONSOLIDATED BALANCE SHEET
As of December 31. In thousands except share data.
<TABLE>
<CAPTION>
1999 1998
----- ----
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 10,417 $ 3,883
Receivables, less allowances of $4,963 in 1999 and $4,864 in 1998 245,120 225,348
Inventories 219,270 193,650
Deferred income taxes 32,108 26,040
Prepaid expenses and other 34,123 29,604
----------- -----------
TOTAL CURRENT ASSETS 541,038 478,525
----------- -----------
PROPERTY, PLANT AND EQUIPMENT, NET 349,451 354,769
----------- -----------
OTHER ASSETS
Patents, goodwill and other intangibles 157,967 139,744
Investments and advances to affiliates 14,321 34,892
Receivables and other assets 17,885 14,922
----------- -----------
TOTAL OTHER ASSETS 190,173 189,558
----------- -----------
$ 1,080,662 $ 1,022,852
CURRENT LIABILITIES
Short-term debt, including current maturities $ 1,989 $ 31,241
Accounts payable 106,283 101,859
Accrued expenses 132,106 122,237
----------- -----------
TOTAL CURRENT LIABILITIES 240,378 255,337
----------- -----------
LONG-TERM LIABILITIES
Long-term debt 281,744 273,521
Product warranties 79,858 75,084
Other liabilities 549 13,475
----------- -----------
TOTAL LONG-TERM LIABILITIES 362,151 362,080
----------- -----------
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 5,571 4,201
Cumulative transition adjustments (1,658) (1,470)
Retained earnings 545,404 470,117
Cost of shares in treasury - 9,203,095 shares in 1999 and 9,152,167 (110,515) (106,744)
shares in 1998 ----------- -----------
TOTAL SHAREHOLDERS' EQUITY 478,133 405,435
----------- -----------
$ 1,080,662 $ 1,022,852
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
19
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
For the years ended December 31. In thousands.
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 95,794 $ 84,866 $ 70,666
Reconciliation of net earnings to cash flows:
Depreciation 39,832 37,617 32,477
Amortization 7,582 7,604 6,278
(Gain)/Loss on sales of property, equipment and business (1,777) (3,156) (993)
Changes in assets and liabilities, excluding effects of acquisitions
and divestitures:
Current and long-term receivables (18,622) (43,786) (19,659)
Inventories (13,471) (10,526) (31,118)
Accounts payable and accrued expenses 4,440 25,450 9,245
Prepaid, deferred and current income taxes 15,761 (7,568) 10,887
Long-term liabilities 4,585 5,217 3,279
Other 1,969 1,086 1,924
--------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 136,093 96,804 82,986
--------- --------- ---------
INVESTING ACTIVITIES
Capital expenditures (47,839) (95,970) (59,531)
Acquisitions, net of cash (42,393) (31,577) (45,380)
Proceeds from sale of property, equipment and business 17,157 11,344 15,815
Other (12,544) (16,761) (4,090)
--------- --------- ---------
NET CASH USED IN INVESTING ACTIVITIES (85,619) (132,964) (93,186)
--------- --------- ---------
FINANCING ACTIVITIES
Net proceeds from short-term debt (29,285) 15,827 13,458
Proceeds from long-term debt 10,000 104,235 150,000
Reductions of long-term debt (1,744) (49,274) (125,860)
Dividends (20,511) (18,105) (15,868)
Purchases of treasury shares (2,400) (14,372) (18,110)
--------- --------- ---------
NET CASH (USED IN)/ PROVIDED BY FINANCING ACTIVITIES (43,940) 38,311 3,620
--------- --------- ---------
CHANGE IN CASH AND CASH EQUIVALENTS 6,534 2,151 (6,580)
CASH AND CASH EQUIVALENTS
Beginning of year 3,883 1,732 8,312
--------- --------- ---------
End of year $ 10,417 $ 3,883 $ 1,732
========= ========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
20
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Carlisle Companies Incorporated and Subsidiaries
SUMMARY OF ACCOUNTING POLICIES
BASIS OF CONSOLIDATION.
The consolidated financial statements include the accounts of the
Company and its subsidiaries. Investments in affiliates where the Company does
not have majority control, none of which are significant, are accounted for
under the equity method. 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 $6.6
million and $4.3 million at December 31, 1999 and 1998, respectively (net of
accumulated amortization of $16.5 million and $16.3 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 $151.3 million and $135.4 million at December
31, 1999 and 1998, respectively (net of accumulated amortization of $19.8
million and $13.6 million, respectively), and is amortized on a straight line
basis over various periods not exceeding 30 years. The Company evaluates the
carrying value of goodwill and other intangible assets if facts and
circumstances suggest that they may be impaired. Impairments would be recognized
when the expected future operating cash flows derived from such intangible
assets is less than their carrying value.
21
<PAGE>
PRODUCT WARRANTIES.
The Company offers warranties on the sales of certain of its products
and records an accrual for estimated future claims. Such accruals are based upon
historical experience and management's estimate of the level of future claims.
LEASES.
The Company is obligated under various noncancelable operating leases
for certain facilities and equipment. Rent expense was $8.4 million, $6.6
million and $5.4 million, in 1999, 1998 and 1997, respectively. Future minimum
payments under various noncancelable operating leases in each of the next five
years are approximately $7.6 million in 2000, $6.8 million in 2001, $6.0 million
in 2002, $5.2 million in 2003 and $4.5 million in 2004.
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 1999 presentation.
OPERATIONAL RESTRUCTURING AND IMPAIRMENT OF ASSETS.
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 pre-tax 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 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 pre-tax 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
22
<PAGE>
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 undiscounted cash flows.
The net effect of the above items is reflected under the caption "gain
on divestiture of business, net of other charges" on the face of the Company's
Consolidated Statement of Earnings.
INVENTORIES
The components of inventories are:
<TABLE>
<CAPTION>
IN THOUSANDS 1999 1998
---- ----
<S> <C> <C>
FIFO cost (approximates current costs):
Finished goods $ 132,719 $ 113,852
Work in process 27,052 24,665
Raw materials 70,735 68,979
--------- ---------
$ 230,506 $ 207,496
Excess of FIFO cost over LIFO value (11,236) (13,846)
--------- ---------
$ 219,270 $ 193,650
========= =========
</TABLE>
PROPERTY, PLANT & EQUIPMENT
The components of property, plant and equipment are:
<TABLE>
<CAPTION>
IN THOUSANDS 1999 1998
---- ----
<S> <C> <C>
Land $ 5,640 $ 6,936
Buildings & leasehold improvements 149,924 142,525
Machinery & equipment 473,662 436,222
Projects in progress 28,859 44,890
--------- ---------
$ 658,085 $ 630,573
Accumulated depreciation (308,634) (275,804)
--------- ---------
$ 349,451 $ 354,769
========= =========
</TABLE>
BORROWINGS
Long-term debt includes:
<TABLE>
<CAPTION>
IN THOUSANDS 1999 1998
---- ----
<S> <C> <C>
6.70% senior notes due 2008 $ 100,000 $ 100,000
7.25% senior notes due 2007 150,000 150,000
Industrial Development and Revenue Bonds due
through 2018 26,595 16,645
Other, including capital lease obligations 7,138 8,832
--------- ---------
$ 283,733 $ 275,477
Less current maturities (1,989) (1,956)
--------- ---------
$ 281,744 $ 273,521
========= =========
</TABLE>
23
<PAGE>
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.
The Company has a $125 million revolving credit facility with various
banks. As of December 31, 1999, $125 million was available under this facility.
The Company has available unsecured lines of credit from banks of $40 million,
of which $40 million was available as of December 31, 1999.
At December 31, 1999, letters of credit amounting to $22.1 million were
outstanding, primarily to provide security under insurance arrangements and
certain borrowings.
The weighted average interest rates on the revenue bonds for 1999 and
1998 were 4.6% and 4.3%, respectively.
The debt facilities contain various restrictive covenants and
limitations, all of which were complied with in 1999 and 1998. The industrial
development and revenue bonds are collateralized by the facilities and equipment
acquired through the proceeds of the related bond issuances. On January 1, 1999,
the Company secured a $10 million Industrial Development Revenue Bond due
December 31, 2018 at LIBOR +.4%.
Cash payments for interest were $19.1 million in 1999, $21.3 million in
1998, and $12.3 million in 1997.
Interest expense, net is shown net of interest income of $2.6 million
in 1999, $3.0 million in 1998, and $1.2 million in 1997.
The aggregate amount of long-term debt maturing in each of the next
five years is approximately $2.0 million in 2000, $2.2 million in 2001, $1.2
million in 2002, $3.8 million in 2003, $1.3 million in 2004 and $273.2 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
the acquisition.
SHAREHOLDERS' EQUITY
The Company has a Shareholders' Rights Agreement that is designed to
protect shareholder investment values. A dividend distribution of one Preferred
Stock Purchase Right for each outstanding share of the Company's common stock
was declared, payable to shareholders of record on March 3, 1989. The Rights
will become exercisable under certain circumstances, including the acquisition
of 25% of the Company's common stock, or 40% of the voting power, in which case
all rights holders except the acquiror may purchase the Company's common stock
at a 50% discount. If the Company is acquired in a merger or other business
combination, and the Rights have not been redeemed, rights holders may purchase
the acquiror's shares at a 50% discount. On August 7, 1996, the Company amended
the Shareholders' Rights Agreement to, among other things, extend the term of
the Rights until August 6, 2006.
Common shareholders of record on May 30, 1986 are entitled to five
votes per share. Common stock acquired subsequent to that date entitles the
holder to one vote per share until held four years, after which time the holder
is entitled to five votes.
In April 1999, the shareholders approved an increase in the number of
authorized common shares of the Company from 50 million shares to 100 million
shares.
EMPLOYEE STOCK OPTIONS & INCENTIVE PLAN
24
<PAGE>
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, 1999, 15,699 nonvested shares were outstanding and
2,158,798 shares were available for issuance under the Company's restricted
stock plan.
The activity under the stock option plan is as follows:
<TABLE>
<CAPTION>
Weighted
Average
Number Exercise
of Shares Price
<S> <C> <C>
Outstanding at December 31, 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
Options granted 430,500 38.35
Options exercised (40,316) 16.69
---------
Outstanding at December 31, 1999 1,917,017 $26.84
---------
---------
Available for grant at December 31, 1999 4,682
</TABLE>
The following tables summarize information about stock options
outstanding as of December 31, 1999:
Options Outstanding:
<TABLE>
<CAPTION>
Number Weighted
Range of Outstanding Weighted Average Average
Exercise Prices at 12/31/99 Remaining Years Exercise Price
--------------- ----------- --------------- --------------
<S> <C> <C> <C>
$ 8.10-9.78 150,657 1.7 $9.11
12.32-17.25 239,528 3.5 14.41
17.32-19.63 222,000 5.1 17.71
19.88-29.50 634,332 6.5 23.68
32.75-48.38 670,500 9.1 41.27
---------
1,917,017
=========
</TABLE>
Options Exercisable:
<TABLE>
<CAPTION>
Number
Range of Exercisable Weighted Average
Exercise Prices at 12/31/99 Exercise Price
--------------- ----------- --------------
<S> <C> <C>
$ 8.10-9.78 150,657 $9.11
12.32-17.25 239,528 14.41
17.32-19.63 222,000 17.71
19.88-29.50 634,332 23.68
32.75-48.38 303,833 42.64
---------
1,550,350
=========
</TABLE>
At December 31, 1998, 1,296,166 options were exercisable at a weighted
average price of $20.12.
25
<PAGE>
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 1999, 1998 and 1997, would
have been approximately $2.5 million or $.08 per share, $1.7 million or $.06 per
share and $1.5 million or $.05 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 1.70 percent in 1999, 1.20
percent in 1998 and 1.75 percent in 1997; an expected life of 7 years; expected
volatility of 33.2 percent in 1999, 25.6 percent in 1998 and 24.0 percent in
1997; and risk-free interest rate of 5.5 percent in 1999, 5.5 percent in 1998
and 6.0 percent in 1997. The weighted-average fair value of those stock options
granted in 1999, 1998 and 1997 was $14.66, $16.35, and $9.61, 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.
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:
IN THOUSANDS
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Benefit obligation at beginning
of year $ 107,879 $ 99,551
Service cost 5,848 5,258
Interest cost 7,633 7,113
Amendments 532 702
Actuarial (gain) loss (6,748) 2,972
Benefits paid (7,019) (7,717)
--------- ---------
Benefit obligation at end of year $ 108,125 $ 107,879
========= =========
</TABLE>
The change in plan assets:
IN THOUSANDS
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Fair value of plan assets at
beginning of year $ 114,465 $ 104,015
Actual return on plan assets 1,114 17,098
Company contribution 1,499 1,069
Benefits paid (7,019) (7,717)
--------- ---------
Fair value of plan assets at end of year $ 110,059 $ 114,465
========= =========
</TABLE>
Reconciliation of the accrued benefit cost recognized in the financial
statements:
<TABLE>
<CAPTION>
IN THOUSANDS 1999 1998
---- ----
<S> <C> <C>
Funded status $ 2,250 $ 6,586
Unrecognized net actuarial loss (14,640) (15,321)
Unrecognized prior service cost (2,979) (3,363)
Unrecognized transition asset (2,213) (2,901)
--------- ---------
Accrued benefit cost $ (17,582) $ (14,999)
========= =========
</TABLE>
26
<PAGE>
Components of net periodic benefit cost at December 31:
IN THOUSANDS
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Service cost $ 5,848 $ 5,258 $ 4,366
Interest cost 7,633 7,113 6,734
Expected return on plan assets (8,689) (8,014) (6,968)
Net amortization and deferral (393) (381) (512)
------- ------- -------
Net periodic benefit cost $ 4,399 $ 3,976 $ 3,620
======= ======= =======
</TABLE>
The projected benefit obligation was determined using an assumed
discount rate of 7.75% in 1999, 7.00% in 1998, and 7.25% in 1997. The assumed
rate of compensation increase was 4.5% in 1999, 4% in 1998 and 1997; and the
expected rate of return on plan assets was 9.25% in 1999 and 1998, and 8.75% in
1997. The 1999 pension plan disclosures were determined using a September 30
measurement date.
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, $4.9 million and $4.7
million, in 1999, 1998 and 1997, 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 1999, 1998 and 1997. The present
value of the Company's obligation under these plans is not significant.
INCOME TAXES
The provision for income taxes was as follows:
<TABLE>
<CAPTION>
IN THOUSANDS 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Currently payable
Federal $ 77,425 $ 38,496 $ 39,262
State, local and other 7,472 8,340 8,242
-------- -------- --------
$ 84,897 $ 46,836 $ 47,504
======== ======== ========
Deferred liability (benefit)
Federal $(23,166) $ 5,572 $ (1,363)
State, local and other (2,042) 2,995 (23)
-------- -------- --------
$(25,208) $ 8,567 $ (1,386)
-------- -------- --------
Total provision $ 59,689 $ 55,403 $ 46,118
======== ======== ========
</TABLE>
Deferred tax assets (liabilities) are comprised of the following at
December 31:
<TABLE>
<CAPTION>
IN THOUSANDS 1999 1998
---- ----
<S> <C> <C>
Product warranty $ 42,007 $ 46,047
Inventory reserves 4,099 3,495
Doubtful receivables 1,608 3,742
Employee benefits 12,024 11,799
Other, net 9,256 11,879
-------- --------
Deferred assets $ 68,994 $ 76,962
-------- --------
Depreciation (24,659) (55,473)
Other, net (2,229) (4,591)
-------- --------
Deferred liabilities (26,888) (60,064)
-------- --------
Net deferred tax asset $ 42,106 $ 16,898
======== ========
</TABLE>
27
<PAGE>
No valuation allowance is required for the deferred tax assets based on
the Company's past tax payments and estimated future taxable income.
A reconciliation of taxes computed at the statutory rate with the tax
provision is as follows:
<TABLE>
<CAPTION>
IN THOUSANDS 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Federal income taxes at statutory rate $54,419 $49,095 $40,875
State income taxes, net of federal income tax benefit 4,043 5,798 3,842
Other, net 1,227 510 1,401
------- ------- -------
$59,689 $55,403 $46,118
======= ======= =======
Effective income tax rate 38.4% 39.5% 39.5%
</TABLE>
Cash payments for income taxes were $84.9 million, $58.7 million and
$30.7 million in 1999, 1998 and 1997, respectively.
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 fleece back sheeting used predominantly on non-residential
flat roofs and related roofing accessories, including flashings, fasteners,
sealing tapes, coatings and waterproofings. The markets served include new
construction, re-roofing and maintenance of low slope roofs, water containment,
HVAC sealants, and coatings and waterproofings.
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 specialty 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.
GENERAL INDUSTRY (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,
refrigerated fiberglass truck bodies and perishable cargo container leasing.
Customers include foodservice distributors, restaurants, dairy product
processors and distributors, heavy equipment and truck dealers, home delivery
distributors, 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.
28
<PAGE>
Financial information for operations by reportable business segment is
included in the following summary:
<TABLE>
<CAPTION>
Earnings before Depreciation
Interest & and Capital
IN THOUSANDS Sales Income taxes Assets Amortization Spending
----- ------------ ------ ------------ --------
<S> <C> <C> <C> <C> <C>
1999
Construction Materials $ 405,387 $ 58,195 $ 229,905 $ 7,149 $ 9,045
Industrial Components 527,902 66,001 333,401 16,942 17,000
Automotive Components 314,246 21,212 209,653 10,873 10,526
General Industry (All Other 363,721 40,429 262,435 11,646 10,880
Corporate -- (11,200) 45,268 804 388
----------------------------------------------------------------------------------
$1,611,256 $ 174,637 $1,080,662 $47,414 $47,839
----------------------------------------------------------------------------------
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
General Industry (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
General Industry (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
----------------------------------------------------------------------------------
</TABLE>
29
<PAGE>
QUARTERLY FINANCIAL DATA
Unaudited
IN THOUSANDS EXCEPT PER SHARE DATA
<TABLE>
<CAPTION>
First Second Third Fourth Year
----- ------ ----- ------ ----
<S> <C> <C> <C> <C> <C>
1999
Net sales $390,024 425,813 400,855 394,564 $1,611,256
Gross margin $84,623 98,101 89,927 84,338 $356,989
Operating expenses $46,870 48,300 46,425 47,541 $189,136
Net earnings $21,808 27,998 24,676 21,312 $95,794
Basic earnings per share $0.72 0.93 0.82 0.71 $3.18
Diluted earnings per share $0.71 0.91 0.81 0.70 $3.13
Dividends per share $0.1600 0.1600 0.1800 0.1800 $0.6800
Stock price:
High $52 15/16 49 9/16 51 5/16 43 1/8
Low $41 42 1/4 37 7/16 30 5/8
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
</TABLE>
30
<PAGE>
Report of Independent Public Accountants
To the Board of Directors of Carlisle Companies Incorporated:
We have audited the accompanying consolidated balance sheets of Carlisle
Companies Incorporated (a Delaware corporation) and subsidiaries as of December
31, 1999 and 1998, and the related consolidated statements of earnings,
shareholders' equity and cash flows for each of the three years in the period
ended December 31, 1999. 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
as of December 31, 1999 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999, in
conformity with generally accepted accounting principles.
New York, New York
January 25, 2000
31
<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 57 Chief Executive Officer September, 1988 to date
since September, 1988;
Chairman of the Board
since January, 1994; and
President from September,
1988 to February, 1995.
Dennis J. Hall 58 Chief Operating Officer August, 1989 to date
and Vice Chairman since
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 44 Vice President, Corporate July, 1989 to date
Development since August, 1997;
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 48 Vice President and Chief April, 1991 to date
Financial Officer from March,
1999; President of Walker
Stainless Equipment Company from
October, 1995 to March, 1999; and Vice
President, Planning & Administration
from April, 1991 to October, 1995.
Richmond D. McKinnish 50 Executive Vice President from August, 1974 to date
March, 1999 and President of
Carlisle Tire & Wheel Company
since January, 1991.
Steven J. Ford 40 Vice President, Secretary and General July, 1995 to date
Counsel since July, 1995. Formerly an
Associate with Bond, Schoeneck & King,
Syracuse, NY.
</TABLE>
32
<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, 2000.
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, 2000.
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, 2000.
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, 1999, 1998
and 1997
Consolidated Statement of Shareholders' Equity, years ended
December 31, 1999, 1998 and 1997
Consolidated Balance Sheet, December 31, 1999 and 1998
Consolidated Statement of Cash Flows, years ended December 31, 1999,
1998 and 1997
Notes to Consolidated Financial Statements
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.******
(3.3) Certificate of Amendment of the Restated Certificate of
Incorporation dated April 29, 1999.
33
<PAGE>
(4) Shareholders' Rights Agreement, February 8, 1989.*
(4.1) Amendment to Shareholders' Rights Agreement, dated August 7,
1996.*****
(4.2) Trust Indenture.*******
(10.1) Executive Incentive Program.**
(10.2) Amendment to Executive Incentive Program.********
(10.3) 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.***
(10.4) Summary Plan Description of Carlisle Companies Incorporated
Director Retirement Program, effective November 6, 1991.***
(10.5) Nonemployee Director Stock Option Plan
(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, 1999 and for the
twelve months ended December 31 1999.
* 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.
******* Filed as an Exhibit to the Company's registration statement on
Form S-3 (No. 333- 16785) and incorporated herein by
reference.
******** Filed with the Company's definitive proxy statement dated
March 9, 1998 and incorporated herein by reference.
No reports on Form 8-K were filed during the last quarter of the
period covered by this report.
34
<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/ MAGALEN C. WEBERT
- ----------------------------------- ------------------------------
Stephen P. Munn, Chief Magalen C. Webert, 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, 2000
35
<PAGE>
CARLISLE COMPANIES INCORPORATED
COMMISSION FILE NUMBER 1-9278
FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1999
EXHIBIT LIST
(3.3) Certificate of Amendment of the Restated Certificate of Incorporation.
(10.4) Nonemployee Directors Stock Option Plan
(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, 1999 and for the twelve
months ended December 31, 1999
36
<PAGE>
Exhibit 3.3
CERTIFICATE OF AMENDMENT
OF THE
RESTATED CERTIFICATE OF INCORPORATION
OF
CARLISLE COMPANIES INCORPORATED
It is hereby certified that:
1. The name of the corporation is Carlisle Companies Incorporated (the
"Corporation").
2. The Restated Certificate of Incorporation of the Corporation is
hereby amended by striking out in its entirety Paragraph A of Article FOURTH and
restating said Paragraph as follows:
FOURTH: A. The total number of shares of stock which the
Corporation shall have authority to issue is One Hundred and
Five Million (105,000,000) shares, divided into two (2)
classes as follows:
(i) One Hundred Million (100,000,000) shares, each to be of
the par value of one dollar ($1.00), and to be designated as
Common Stock; and,
(ii) Five Million (5,000,000) shares, each to be of the par
value of one dollar ($1.00), and to be designated as Preferred
Stock."
3. The amendment of the Restated Certificate of Incorporation herein
certified has been duly adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Stephen P. Munn, its Chairman and Chief Executive Officer and attested
by Steven J. Ford, its Secretary, this 29th day of April, 1999.
CARLISLE COMPANIES INCORPORATED
By: /s/ STEVEN P. MUNN
------------------------------------
Stephen P. Munn,
Chairman and Chief Executive Officer
ATTEST:
/s/ STEVEN J. FORD
- -------------------------
Steven J. Ford, Secretary
<PAGE>
Exhibit 10.4
CARLISLE COMPANIES INCORPORATED
NONEMPLOYEE DIRECTORS
STOCK OPTION PLAN
(Effective as of December 1, 1999)
1. PURPOSE. The Carlisle Companies Incorporated Nonemployee
Directors Stock Option Plan (the "Plan") is intended to advance the interests of
Carlisle Companies Incorporated (the "Company") and its stockholders by
attracting, retaining and motivating the performance of nonemployee Directors
(each a "Nonemployee Director") of the Company, and to encourage and enable
Nonemployee Directors to acquire and retain a proprietary interest in the
Company by ownership of its stock.
2. ADMINISTRATION.
(a) Subject to the express provisions of the Plan, the Board
of Directors of the Company (the "Board") shall have discretionary authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the details and provisions of each Stock Option
Agreement (as defined in Section 7 of the Plan), and to make all determinations
necessary or advisable in the administration of the Plan. All such actions and
determinations by the Board shall be conclusively binding for all purposes and
upon all persons. Notwithstanding the foregoing or anything elsewhere in the
Plan, with respect to any Option granted under the Plan, the Board shall have no
discretionary authority to determine the number of shares of the Company's
common stock (the "Carlisle Shares") covered by such Option, the option price
for the Carlisle Shares or the date of grant, all such determinations occurring
automatically pursuant to Section 5(b) of the Plan. The Board shall not be
liable for any action or determination made in good faith with respect to the
Plan, any Option or any Stock Option Agreement entered into hereunder.
(b) "Option" means an option to purchase Carlisle Shares
granted under the Plan.
3. NUMBER OF CARLISLE SHARES SUBJECT TO PLAN. Subject to
adjustment pursuant to the provisions of Section 4 of the Plan, the maximum
number of Carlisle Shares which may be issued and sold hereunder shall be
200,000 and all such Shares must be held in the Company's treasury. Carlisle
Shares covered by an Option that shall have been exercised shall not again be
available for an Option grant. If an Option shall terminate for any reason
without being wholly exercised, the number of Carlisle Shares to which such
Option termination relates shall again be available for grant.
4. ANTIDILUTION. In the event of a reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger or
consolidation, or the sale, conveyance, lease or other transfer by the Company
of all or substantially all of its property, or any other change in the
corporate structure or shares of the Company, pursuant to any of which events
the then outstanding Carlisle Shares are split up or combined, or are changed
into, become exchangeable at the holder's election for, or entitle the holder
thereof to, other shares of stock, or in the case of any other transaction
described in Section 424(a) of the Internal Revenue Code of 1986, as amended
(the "Code"), the Board may proportionately change the number and kind of shares
(including by substitution of shares of another corporation) subject to the
Options and/or the option price of such shares in the manner that it may deem to
be equitable and appropriate.
5. OPTION GRANTS.
(a) Effective December 1, 1999 and as authorized by resolution
of the Board, the Company grants each Nonemployee Director serving at such time
an Option to purchase 5,000 Carlisle Shares at an option price of $35.1875, the
closing price on the New York Stock Exchange ("NYSE") of the Carlisle Shares on
December 1, 1999.
(b) Commencing in 2001 and each year thereafter for the
duration of the Plan, on the date of the Company's February Board of Directors'
meeting for the applicable year (or such other date as the Board shall
determine), the Company shall grant each Nonemployee Director serving at such
time an Option to purchase 1,000 Carlisle Shares at an option price equal to the
closing price on the NYSE of the Carlisle Shares on the date of such
<PAGE>
meeting; PROVIDED, HOWEVER, that each such grant shall be conditioned upon the
Company's net earnings for the immediately preceding calendar year equaling or
exceeding the net earnings set forth in the approved Operating Plan for such
year.
6. VESTING; TERM OF OPTIONS.
(a) Each Option shall vest and become exercisable as follows:
(i) one-third (1/3) on the date of grant, (ii) an additional one-third (1/3) on
the one year anniversary of the date of grant, and (iii) the remaining one-third
(1/3) on the second anniversary of the date of grant, PROVIDED that the
Nonemployee Director to whom such Option was granted remains a Nonemployee
Director on those dates. In addition, all Options granted to a Nonemployee
Director whose term as a Director ends as a result of the death, Permanent or
Total Disability (as defined in Section 10(b) of the Plan) or a Change in
Control (as defined in Section 10(c) of the Plan) shall vest and become
exercisable immediately upon the expiration of his or her term.
(b) Notwithstanding anything elsewhere in the Plan to the
contrary, an unexercised Option shall expire on the day immediately preceding
the ten year anniversary of grant (the "Expiration Date").
7. STOCK OPTION AGREEMENT. The Company and each Nonemployee
Director granted an Option hereunder (the "Optionee") shall enter into a stock
option agreement (the "Stock Option Agreement") which shall set forth such terms
and conditions of the Option as may be determined by the Board to be consistent
with the Plan, and which may include additional provisions and restrictions that
are not inconsistent with the Plan.
8. OPTION EXERCISE. A vested Option may be exercised in whole or
in part at any time (but in respect to whole Carlisle Shares only) within the
period permitted for the exercise thereof, and shall be exercised by written
notice of intent to exercise the Option for a specified number of Carlisle
Shares delivered to the Company at its principal office, and payment in full of
the option price for the specified number of Carlisle Shares. The option price
shall be payable in cash.
9. TRANSFERABILITY OF OPTIONS. All Options shall be
nontransferable except (i) upon the Optionee's death, by the Optionee's will or
the laws of descent and distribution or (ii) on a case-by-case basis as may be
approved by the Board in its discretion.
10. TERMINATION OF SERVICE.
(a) If an Optionee's service as a member of the Board shall
terminate as a result of death, all non-vested Options shall vest and become
exercisable and the executor or administration of the estate of the decedent, or
the person or persons to whom an Option shall have been validly transferred
pursuant to will or the laws of descent and distribution, shall exercise all
outstanding Options by the earlier of (i) twelve months from the date of
termination, or (ii) the Expiration Date. Any Options not so exercised shall be
forfeited.
(b) If an Optionee's service as a member of the Board shall
terminate as a result of his Permanent and Total Disability, all non-vested
Options shall vest and become exercisable and the Optionee (or in the case of an
Optionee who is legally incapacitated, his guardian or legal representative)
shall exercise all outstanding Options by the earlier of (i) twelve months from
the date of termination, or (ii) the Expiration Date. All Options not so
exercised shall be forfeited. "Permanent and Total Disability" means the
inability of an Optionee to perform his duties as a member of the Board by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months.
(c) If an Optionee's service as a member of the Board shall
terminate in connection with a Change in Control of the Company, all non-vested
Options shall vest and become exercisable and the Optionee shall exercise all
outstanding Options by the earlier of (i) twelve months from the date of
termination, or (ii) the Expiration Date. All Options not so exercised shall be
forfeited.
For purposes of this Plan, the following definitions
shall apply:
"Change in Control" shall occur in the event: (i) any
Person shall become directly or indirectly, the Beneficial Owner of securities
of the Company representing fifty percent (50%) or more of the combined
<PAGE>
voting power of the Company's then outstanding securities for the election of
directors or fifty percent (50%) or more of the Company's then outstanding
shares of common stock, or (ii) any Person commences a tender offer pursuant to
Regulation 14D promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, or any successor provision thereto, which, if
successful, would result in such Person becoming the Beneficial Owner of fifty
percent (50%) or more of the combined voting power of the Company's then
outstanding securities for the election of directors or fifty percent (50%) or
more of the Company's then outstanding shares of commons stock.
"Affiliate" and "Associate" shall have the meanings
of such terms under Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934;
"Beneficial Owner" shall have the meaning given such
term under Rule 13d-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934;
"Person" shall mean and include any individual,
corporation, partnership or other person or entity and any Group and all
Affiliates and Associates of any such individual, corporation, partnership, or
other person or entity or Group;
"Group" shall mean persons and entities that act in
concert as described in Section 14(d)(2) of the Securities Exchange Act of 1934
(other than the Company or any subsidiary thereof and other than any
profit-sharing employee stock ownership or any other employee benefit plan of
the Company or such subsidiary, or any trustee of or fiduciary with respect to
any such plan when acting in any such capacity and other than any executive
officer of the Company).
(d) If an Optionee's service as a member of the Board shall
terminate for any reason other than death, Permanent and Total Disability,
Change in Control or removal for cause, all non-vested Options shall remain
non-vested and the Optionee shall exercise each previously vested Option by the
earlier of (i) ninety days from the date of termination, or (ii) the Expiration
Date. Any Option not so exercised shall be forfeited.
(e) If an Optionee shall be removed from the Board for cause,
the Optionee's right to exercise any unexercised portion of his Options shall
immediately terminate and all rights thereunder shall cease. An Optionee shall
be considered to have been removed for "cause" when he or she shall have been
removed from the Board by the stockholders of the Company for cause in
accordance with applicable state law and the Restated Certificate of
Incorporation of the Company.
11. ISSUANCE OF CERTIFICATES. The Company shall issue a stock
certificate in the name of the Optionee (or other person exercising the Option
in accordance with the provisions of the Plan) for the Carlisle Shares purchased
by exercise of an Option as soon as practicable after due exercise and payment
of the option price for such Carlisle Shares.
12. TERMINATION; AMENDMENT. The Plan shall continue until
terminated by the Board. The Board may at any time amend or modify the Plan;
PROVIDED, HOWEVER, that the Board may not act more than once every six months to
amend the provisions of the Plan relating to the determination of the number of
Carlisle Shares subject to a particular Option, the option price or the date of
grant of any Option under the Plan. Notwithstanding the foregoing, no amendment
or modification of the Plan shall in any manner affect any Option previously
granted without the consent of the Optionee.
13. MISCELLANEOUS.
(a) Nothing in the Plan, in the grant of any Option or in any
Stock Option Agreement shall confer upon any Nonemployee Director the right to
continued service as a member of the Board.
(b) An Optionee or the permitted transferee of an Option shall
have no rights as a shareholder with respect to any Carlisle Shares subject to
Option prior to the purchase of the Carlisle Shares by exercise of the Option.
Nothing contained in the Plan or in the Stock Option Agreement shall create an
obligation on the part of the Company to repurchase any Carlisle Shares acquired
hereunder.
(c) The Plan shall be binding upon the Company, its successors
and assigns, and the Optionee, his executor , administrator and permitted
transferees.
<PAGE>
(d) Whenever used herein, nouns in the singular shall include
the plural, and the masculine pronoun shall include the feminine gender.
(e) If any provision of the Plan or any Stock Option Agreement
shall be determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable and
enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.
(f) The validity and construction of the Plan and the Stock
Option Agreements shall be governed by the laws of the State of New York.
<PAGE>
Exhibit 12
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's ratio of earnings to fixed
charges for periods indicated:
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges 7.41 5.19 6.06 7.47 8.70
</TABLE>
For purposes of computing the ratio of earnings to fixed charges,
earnings are defined as earnings before income taxes plus fixed charges. Fixed
charges consist of interest expense (including capitalized interest) and the
portion of rental expense that is representative of the interest factor (deemed
to be one-third of minimum operating lease rentals). The earnings to fixed
charges calculation reflects the Company's proportionate share of income,
expense and fixed charges attributable to the Company's investment in
majority-owned unconsolidated subsidiaries and joint ventures.
<PAGE>
Exhibit 21
CARLISLE COMPANIES INCORPORATED
Subsidiaries of the Registrant
<TABLE>
<CAPTION>
Jurisdiction of
Incorporation
--------------
<S> <C>
Carlisle Companies Incorporated (Registrant) Delaware
Subsidiaries:
Carlisle Corporation -
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 venture (49% ownership)
One wholly-owned domestic subsidiary
Tensolite Company Delaware
Trail King Industries, Inc. South Dakota
Walker Stainless Equipment Company, Inc. Delaware
Johnson Truck Bodies, Inc. Delaware
</TABLE>
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 10-K, into the Company's
previously filed Registration Statement File Nos. 33-28052, 33-56737, 33-66932,
33-56735, 33-57113, 33-66934 and 333-16785.
Arthur Andersen LLP
/s/ Arthur Andersen LLP
New York, New York
March 9, 2000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains Summary Financial information extracted from the
Financial Statements of Carlisle Companies Incorporated for the twelve month
period ending December 31, 1999, and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 10,417
<SECURITIES> 0
<RECEIVABLES> 250,083
<ALLOWANCES> 4,963
<INVENTORY> 219,270
<CURRENT-ASSETS> 541,038
<PP&E> 658,085
<DEPRECIATION> 308,634
<TOTAL-ASSETS> 1,080,662
<CURRENT-LIABILITIES> 240,378
<BONDS> 281,744
0
0
<COMMON> 39,331
<OTHER-SE> 438,802
<TOTAL-LIABILITY-AND-EQUITY> 1,080,662
<SALES> 1,611,256
<TOTAL-REVENUES> 1,611,256
<CGS> 1,254,267
<TOTAL-COSTS> 1,443,403
<OTHER-EXPENSES> (6,784)
<LOSS-PROVISION> 1,134
<INTEREST-EXPENSE> 19,154
<INCOME-PRETAX> 155,483
<INCOME-TAX> 59,689
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 95,794
<EPS-BASIC> 3.18
<EPS-DILUTED> 3.13
</TABLE>
