Carlisle Companies Reports Second Quarter Earnings
CHARLOTTE, N.C.--July 15, 2002--Carlisle Companies Incorporated reported second quarter earnings of $24.7 million, or $.81 per share (diluted) on sales of $552 million.Earnings were up 49% over second quarter 2001 earnings of $16.6 million or $.54 per share (diluted) on a 13% increase in sales. A substantial portion of the increase in sales was attributable to the acquisition of Dayco Industrial Power Transmission in August 2001, and significant sales growth at Carlisle Tire & Wheel Company.
For the six month period ended June 30, 2002, sales of $1.0 billion were 6% above sales of $954 million realized in the first six months of 2001, primarily because of the acquisition of Dayco Industrial Power Transmission. Earnings in the first half of 2002 of $37.6 million, or $1.23 per share (diluted) exceeded earnings of $6.4 million or $.21 per share (diluted) in the first half of 2001. The first half 2001 net earnings included a $20.9 million after tax restructuring charge. After factoring out the effect of the restructuring charge, net earnings were $27.3 million or $0.90 per share (diluted) in the first six months 2001.
In accordance with SFAS 142, goodwill is no longer amortized. This change had a positive impact of $2.1 million, or $0.07 per share in the second quarter 2002, and $4.3 million, or $0.14 per share in the first half of 2002, compared to the corresponding periods a year ago.
Richmond McKinnish, Carlisle's President and CEO said, "The positive results achieved in the second quarter are proof that the aggressive cost-cutting and restructuring programs implemented over the last twelve to eighteen months will enable Carlisle to quickly profit from improved customer demand. We are confident that our commitment to be the low cost producer, differentiate our service and expand our product offerings will continue to achieve positive results. Assuming the economy continues to expand, we remain comfortable with our full year earnings guidance of $2.25 to $2.35 per share."
Segment Highlights
Industrial Components sales of $183 million increased 62% over second quarter 2001 as the result of the acquisition of Dayco Industrial Power Transmission, renamed Carlisle Power Transmission, in August 2001, and higher sales of lawn and garden products, ATV tires, and trailer tires and wheels by Carlisle Tire & Wheel Company. Second quarter operating earnings of $20.0 million were significantly higher than the $6.8 million realized in the second quarter 2001. Although the acquisition of Carlisle Power Transmission was accretive, Carlisle Tire & Wheel Company had a very strong second quarter due to increased production levels, aggressive cost reduction efforts and improved sales volume.
Construction Materials sales of $133 million in the second quarter were slightly above the 2001 second quarter sales of $130 million on increased volume of thermoplastic polyolefin (TPO) roofing membrane, FleeceBACK(TM) membrane, residential roofing tiles, and international sales. Operating earnings of $17.5 million were flat with the second quarter 2001.
Automotive Components operating earnings of $4.7 million were 10% above the $4.3 million realized in the second quarter 2002 on 6% lower sales. The improved operating margins were attributable to a significant restructuring effort and other cost reduction measures initiated at Carlisle Engineered Products.
Sales at Transportation Products of $36 million showed a slight improvement to the second quarter 2001. Operating earnings of $2.4 million in the second quarter were 85% above the $1.3 million realized in the second quarter 2001, as a result of cost reduction programs, increased production, and a favorable product mix.
Sales in the Specialty Products segment of $29 million were 11% below the $33 million realized in the second quarter 2001. As experienced in the first quarter 2002, the markets served by Carlisle Motion Control and Carlisle Industrial Brake & Friction remained soft throughout the second quarter. Class 8 tractor and trailer production remained low, and demand for off-highway brake products in the heavy construction and haulage markets was below 2001 levels. Second quarter operating earnings of $.8 million were 68% below the second quarter 2001 operating earnings of $2.5 million.
General Industry sales of $104 million in the second quarter 2002 were 4% below the second quarter 2001 of $108 million, and operating earnings of $1.8 million compared to $5.5 million in the second quarter 2001. Carlisle FoodService sales were 22% above the second quarter 2001. This improvement was offset, however, by a 20% reduction in sales at Tensolite, caused by continued weakness in the telecommunications and commercial airline markets, and by a 15% decrease at Carlisle Systems and Equipment. The $3.7 million decline in operating profits in this segment in the second quarter 2002 was caused primarily by the closing of Tensolite's Andover, MA plant.
Cash Flows
Cash flow from operations in the second quarter was $79 million, compared to $37 million in the second quarter 2001. For the six months ended June 30, 2002, cash generated from operations of $73 million was 30% above $56 million generated in the first half of 2001. This increase was primarily the result of higher earnings and improved working capital management. Inventory levels continue to be closely monitored with total inventories down $29.7 million (excluding acquisitions) from the second quarter 2001. Capital expenditures of $8.0 million in the second quarter were below $15.9 million in the second quarter 2001, as current year spending continues below 2001 levels.
Backlog
The June 30, 2002 backlog of $282 million is slightly lower than the June 30, 2001 backlog of $287 million due to reduced backlog at Tensolite and Carlisle Systems & Equipment. During the second quarter 2002, backlog increased 4% from the first quarter 2002 due to improved positions in the Construction Materials and Industrial Components segments.
Forward-Looking Statements
The forward-looking statements contained in this press release are made based on known events and circumstances at the time of publication, and as such, are subject in the future to unforeseen risks and uncertainties. We refer you to our most recent Form 10-Q filed in May, 2002, and in particular the discussion beginning on page 10 under the caption "Forward-Looking Statements," for important facts that may cause results to differ materially from the company's expectations. In accordance with the adoption of the Statement of Financial Accounting Standards No. 142, preliminary evaluations indicate there may be an impairment of goodwill, therefore, any earnings per share guidance is exclusive of a goodwill impairment charge. The company undertakes no duty to update forward-looking statements.
Carlisle is a diversified global manufacturing company serving the transportation, construction, commercial roofing, automotive, pharmaceutical, foodservice, data transmission, and specialty tire and wheel industries.
CARLISLE COMPANIES INCORPORATED
June 30, 2002
FINANCIAL RESULTS
(In millions, except per share data)
Second Quarter 2002 2001 % Change
---- ---- --------
Sales $552.3 $490.4 13%
Net Earnings 24.7 16.6 49%
Basic E.P.S. $0.81 $0.55 47%
Diluted E.P.S. $0.81 $0.54 50%
Six Months 2002 2001 % Change
---- ---- --------
Sales $1,007.4 $953.6 6%
Net Earnings 37.6 6.4 487%
Basic E.P.S. $1.24 $0.21 485%
Diluted E.P.S. $1.23 $0.21 487%
2002 SEGMENT FINANCIAL DATA
(In millions)
JUNE - QTR 2002 2001
--------------------- ---------------------
EBIT EBIT
% %
Sales EBIT(1) Sales Sales EBIT Sales
----- ------- ----- ----- ----- ------
Construction Materials $133.0 $17.5 13.2% $129.7 $17.5 13.5%
Industrial Components 183.3 20.0 10.9% 112.6 6.8 6.0%
Specialty Products 29.3 0.8 2.7% 32.8 2.5 7.6%
Automotive Components 67.0 4.7 7.0% 71.3 4.3 6.0%
Transportation Products 36.0 2.4 6.7% 35.6 1.3 3.6%
General Industry 103.7 1.8 1.7% 108.4 5.5 5.1%
------ ----- ------ -----
Subtotal 552.3 47.2 8.5% 490.4 37.9 7.7%
Corporate - (5.3) - - (4.0) -
------ ----- ------ -----
Total $552.3 $41.9 7.6% $490.4 $33.9 6.9%
(1) Under the provisions of SFAS 142, goodwill is no longer
amortized. This resulted in a positive impact to Earnings
Before Interest and Taxes (EBIT) as follows: Construction
Materials, $0.2 million; Industrial Components, $0.7 million;
Specialty Products, $0.1 million; Automotive Components, $0.5
million; Transportation Products, $0.4 million; General
Industry, $2.1 million; and Corporate, ($0.6 million)
JUNE -YTD 2002 2001
--------------------- ---------------------
Sales EBIT(2) Assets Sales EBIT Assets
----- ------- ------ ----- ---- ------
Construction Materials $217.9 $25.3 $249.1 $221.5 $26.4 $307.7
Industrial Components 341.8 36.8 500.3 250.9 23.4 355.4
Specialty Products 55.2 0.7 81.1 62.9 3.0 81.4
Automotive Components 129.8 8.8 120.5 140.2 6.8 135.1
Transportation Products 63.6 2.7 69.2 65.0 1.3 77.3
General Industry 199.1 2.6 342.9 213.0 6.1 380.9
------- ---- ------ ------ ----- --------
Subtotal 1,007.4 76.9 $1,363.1 953.6 67.0 $1,337.8
Corporate - (10.3) 78.1 - (40.9) 48.8
------- ----- -------- ------ ----- --------
Total $1,007.4 $66.6 $1,441.2 $953.6 $26.1 $1,386.6
-------- ----- -------- ------ ----- --------
(2) Under the provisions of SFAS 142, goodwill is no longer
amortized. This resulted in a positive impact to Earnings
Before Interest and Taxes (EBIT) as follows: Construction
Materials, $0.4 million; Industrial Components, $1.5 million;
Specialty Products, $0.1 million; Automotive Components, $1.0
million; Transportation Products, $0.8 million; General
Industry, $4.1 million; and Corporate, ($1.2 million)
CARLISLE COMPANIES INCORPORATED
Consolidated Statement of Earnings
----------------------------------
For the periods ended June 30
(In thousands except per share data)
Second Quarter
2002 2001 % Change
---- ---- --------
Net sales $552,283 $490,433 12.6%
Cost and expenses:
Cost of goods sold 451,011 399,790 12.8%
Selling and administrative expenses 53,577 52,521 2.0%
Research and development expenses 5,290 4,467 18.4%
Restructuring charges - - -
Other (income) & expense, net 534 (246) -317.1%
Earnings before interest & income taxes 41,871 33,901 23.5%
Interest expense, net 4,096 7,898 -48.1%
Earnings before income taxes 37,775 26,003 45.3%
Income taxes 13,032 9,411 38.5%
Net earnings $ 24,743 $ 16,592 49.1%
% of Net Sales 4.5% 3.4%
Basic earnings per share $ 0.81 $ 0.55 47.3%
Average shares
outstanding (000's) - basic 30,380 30,262
Diluted earnings per share $ 0.81 $ 0.54 50.0%
Average shares
outstanding (000's) - diluted 30,521 30,494
Dividends $6,384 $6,059
Per share $0.21 $0.20 5.0%
Six Months
2002 2001 % Change
---- ---- --------
Net sales $1,007,383 $953,591 5.6%
Cost and expenses:
Cost of goods sold 822,731 783,219 5.0%
Selling and administrative expenses 105,421 104,034 1.3%
Research and development expenses 10,449 8,472 23.3%
Restructuring charges - 32,811 -
Other (income) & expense, net 2,173 (1,090) -299.4%
Earnings before interest & income taxes 66,609 26,145 154.8%
Interest expense, net 9,244 16,112 -42.6%
Earnings before income taxes 57,365 10,033 471.8%
Income taxes 19,791 3,630 445.2%
Net earnings $ 37,574 $ 6,403 486.8%
% of Net Sales 3.7% 0.7%
Basic earnings per share $ 1.24 $ 0.21 490.5%
Average shares
outstanding (000's) - basic 30,337 30,259
Diluted earnings per share $ 1.23 $ 0.21 485.7%
Average shares
outstanding (000's) - diluted 30,483 30,499
Dividends $12,742 $12,106
Per share $ 0.42 $ 0.40 5.0%
CARLISLE COMPANIES INCORPORATED
Comparative Balance Sheet
As of June 30
(In thousands)
2002 2001
---------- ----------
Assets
Current Assets
Cash and cash equivalents $ 3,631 $ 9,225
Receivables 251,766 285,622
Inventories 240,191 247,489
Prepaid expenses and other 83,880 79,318
---------- ----------
Total current assets 579,468 621,654
---------- ----------
Property, plant and equipment, net 442,630 397,579
Other assets 419,125 367,393
---------- ----------
$1,441,223 $1,386,627
========== ==========
Liabilities and Shareholders' Equity
Current Liabilities
Short-term debt,
including current maturities $ 149,881 $ 107,480
Accounts payable 149,937 139,114
Accrued expenses 154,648 129,903
---------- ----------
Total current liabilities 454,466 376,497
---------- ----------
Long-term debt 287,184 382,199
Other liabilities 126,626 92,957
Shareholders' equity 572,947 534,974
---------- ----------
$1,441,223 $1,386,627
========== ==========
CARLISLE COMPANIES INCORPORATED
Comparative Consolidated Statement of Cash Flows
For the periods ended June 30
(In thousands)
Second Quarter Six Months
2002 2001 2002 2001
------ ------ ------ ------
Operating activities
Net earnings $24,743 $16,592 $37,573 $6,403
Reconciliation of net
earnings to cash flows:
Restructuring Charge - - - 24,650
(Gain) on property,
equipment and business, net 1,490 (8) 1,463 (8)
Depreciation and amortization 15,573 18,002 30,979 36,097
Working capital 34,467 2,226 2,329 (7,656)
Other 2,737 367 1,125 (3,365)
------- ------- ------- --------
Net cash provided
by operating activities 79,010 37,179 73,469 56,121
------- ------- ------- --------
Investing activities
Capital expenditures (8,012) (15,940) (18,769) (36,955)
Acquisitions, net of cash 249 - (777) (37,934)
Proceeds from sale of
property, equipment and business 328 261 375 6,635
Other (1,539) (1,480) (2,632) (4,699)
------- ------- ------- --------
Net cash used in
investing activities (8,974) (17,159) (21,803) (72,953)
------- ------- ------- --------
Financing activities
Net change in short-term debt
and revolving credit lines (23,868) (12,243) (13,019) 32,718
Proceeds from long-term debt - 903 - -
Reductions of long-term debt (40,420) - (40,833) (122)
Dividends (6,384) (6,059) (12,742) (12,106)
Treasury shares
and stock options, net 978 (2,723) 2,953 (3,400)
-------- ------- ------- --------
Net cash provided by
(used in) financing activities (69,694) (20,122) (63,641) 17,090
-------- ------- ------- --------
Change in cash
and cash equivalents 342 (102) (11,975) 258
Cash and cash equivalents
Beginning of period 3,289 9,327 15,606 8,967
---------- ------- ------- --------
End of period $ 3,631 $ 9,225 $ 3,631 $ 9,225
---------- ------- ------- --------