Carlisle Companies Reports A Record First Quarter
18 April 2000
Carlisle Companies Reports A Record First Quarter
Business Editors
SYRACUSE, N.Y.--April 18, 2000--Carlisle
Companies Incorporated reported record first quarter net earnings of
$25.5 million or $.83 per share (diluted), an increase of 17% versus
first quarter 1999 earnings of $21.8 million or $.71 per share. Sales
of $434 million, a record for any quarter, were up 11% over the first
quarter 1999 sales of $390 million.
During the first quarter, the Company completed the acquisition of
DynAir, Inc., a Canadian manufacturer of duct supplies; and Damrow
Denmark and Damrow USA, global equipment suppliers to the cheese
industry. Since the close of the first quarter, the Company has
completed three more acquisitions; the Dura-Ware Company, a U.S.
manufacturer of commercial cookware and servingware; Extract
Technologies, a U.K. based biotech/pharmaceutical systems provider;
and the Tire and Wheel Consumer Products Division of Titan
International, Inc.
Stephen P. Munn, Carlisle's Chairman and CEO said, "Carlisle has
reported another record for first quarter sales and earnings. Sales
growth was driven by internal programs and acquisitions. Additionally,
our emphasis on operating efficiencies and cost control have enabled
us to generate earnings growth in excess of our sales growth. We
continue to implement our acquisition strategy with five acquisitions
completed since the first of the year. We are delighted with
yesterday's announcement of the purchase of the Tire and Wheel
Consumer Products Division of Titan. These acquisitions will have a
favorable impact on our results for 2000."
Carlisle is a diversified manufacturer of products serving
construction materials, industrial components, automotive components
and general industry markets.
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CARLISLE COMPANIES INCORPORATED
Financial Results
As of March 31, 2000
(In Millions, except per share data)
2000 1999 % Change
First Quarter
Sales $434.0 $390.0 11%
Net Earnings 25.5 21.8 17%
Basic E.P.S. .84 0.72 17%
Diluted E.P.S. .83 0.71 17%
2000 SEGMENT FINANCIAL DATA
(In Millions)
MARCH - QTR 2000 1999
-----------------------------------------------
EBIT EBIT
Sales EBIT %Sales Sales EBIT %Sales
----- ---- ------ ----- ---- ------
Construction Materials $87.6 $8.9 10.2% $76.3 $8.3 10.9%
Industrial Components 163.0 24.5 15.0% 145.1 20.4 14.1%
Automotive Components 83.4 7.2 8.6% 81.9 6.6 8.0%
General Industry /All
Other 100.0 8.6 8.6% 86.7 7.5 8.7%
------ ---- ------ ------ ----- -----
Subtotal 434.0 49.2 11.3% 390.0 42.8 11.0%
Corporate/Elims - (3.5) - - (2.7) -
------- ----- ----- ------ ----- -----
Total $434.0 $45.7 10.5% $390.0 $40.1 10.3%
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Discussion of Results
Summary
Carlisle Companies Incorporated reported record sales for any
quarter of $434 million, up 11% over 1999, and record first quarter
net earnings of $25.5 million or $0.83 per share (diluted), an
increase of 17% versus first quarter 1999 earnings of $21.8 million.
Strong sales over 1999 were led by Carlisle Tire & Wheel (Industrial
Components), Carlisle Systems & Equipment (General Industry), Carlisle
SynTec (Construction Materials) and Carlisle FoodService Products
(General Industry). Market share gains and expanded product line
offerings were the primary factors drawing sales.
Earnings growth resulted from the increased sales, as well as the
continued focus on cost reduction and efficiency improvement programs
across all operations. Additionally, through continued implementation
of tax savings strategies throughout the Company, the effective tax
rate has been further reduced from 38% to 37%. The impact of this
change is an additional $0.01 a share.
Construction Materials' sales of $88 million were up 16% over
1999 first quarter sales of $76 million. Sales to Carlisle SynTec's
domestic roofing markets were responsible for much of this increase.
Despite inclement winter weather conditions, Carlisle SynTec benefited
from strong EPDM rubber membrane sales as well as the continued growth
of the Company's thermoplastic polyolefin (TPO) membrane and
insulation product lines. Segment earnings for the quarter rose 7%
versus 1999 first quarter earnings of $8.3 million. This increase
reflects higher sales levels impacted by raw material price increases
and product mix. The need to recover cost increases experienced over
the last year resulted in the announcement of a price increase on EPDM
rubber membrane which took effect April 1, 2000. In February 2000, the
company acquired the assets of DynAir, Inc., a Canadian manufacturer
of duct supplies to the heating, ventilation and air conditioning
market. This acquisition will complement the product offerings of
Carlisle Coatings & Waterproofing's existing business.
Industrial Components' sales increased 12% to $163 million versus
1999 first quarter sales of $145 million. Carlisle Tire & Wheel
exhibited a strong performance as activity in the lawn and garden
markets commenced for the spring selling season. The brake and
friction businesses also reported improved first quarter sales with a
strong improvement in earnings over 1999. Healthy sales to original
equipment manufacturers in the Heavy Friction business and
strengthening demand in the haulage/mining markets combined with
margin improvement to generate the overall improvement in the friction
and brake businesses. Sales at Tensolite's specialty cable and cable
assembly businesses also increased, fueled by a broad customer base
and increased demand including a recovery in aerospace markets.
Segment earnings increased 20% to $24.5 million over the 1999 first
quarter. The earnings increase, beyond the rate of sales, is largely
attributable to cost reduction programs and efficiency programs.
Automotive Components' segment sales of $83 million, a record,
reflect steady demand as vehicle builds remained at record levels
throughout the quarter. Segment earnings of $7.2 million, grew 9% over
first quarter 1999 as a result of the Company's ability to adapt to
persistent high volumes, coupled with the continued reduction of
inefficiencies related to the high demand. Good progress is being made
in managing controllable assets, especially in reduced working capital
needs.
General Industry segment sales of $100 million showed a 15%
improvement over 1999 first quarter sales of $87 million. After
eliminating the results of the Perishable Cargo business, which was
divested during the first quarter of 1999, segment sales and earnings
were up 40% and 36%, respectively, over last year. Carlisle Systems &
Equipment was the primary driver behind this increase as Johnson Truck
Bodies, acquired in May of 1999, continued to experience strong demand
from the home delivery markets it serves. In April of this year, the
Company announced the acquisition of Extract Technologies Limited, a
leading biotech/pharmaceutical systems provider, headquartered in
Huddersfiled, England. The Company will merge Extract with Carlisle
Barrier Systems to comprise Carlisle Pharmaceutical Systems. Scherping
Systems, the Company's cheese processing systems business, has been
able to capitalize on the robust demands of the cheese/dairy industry
to contribute to both sales and earnings. In addition, in March 2000,
Scherping completed the acquisition of Damrow Denmark and Damrow USA,
global equipment suppliers to the cheese industry. The acquisition of
Damrow, coupled with the recent acquisition of Innovative Engineering
Ltd. of New Zealand, make Carlisle the leading global supplier of
cheese manufacturing systems. Trail King's specialty trailer business
continues to benefit from strong demand in the construction market,
but diesel fuel price increases have dampened sales of trailers to
commercial haulers. Carlisle FoodService experienced robust sales
gains for the quarter from improved international sales. In addition,
in April of this year, Carlisle FoodService completed the acquisition
of the Dura-Ware Company, a manufacturer of commercial cookware and
servingware for the foodservice and hospitality markets. Segment
earnings of $8.6 million, for the quarter, were up 15% over first
quarter 1999. The earnings increase was driven by the increase in
sales, particularly at Johnson Truck Bodies, as well as the
implementation of operational improvements at Carlisle Systems &
Equipment and Carlisle FoodService offset somewhat by softer margins
at Trail King and Carlisle Home Products.
Acquisitions
In the first quarter, Carlisle completed two acquisitions; Damrow
Denmark and Damrow USA, global equipment suppliers to the cheese
industry, and DynAir, Inc., a Canadian manufacturer of duct supplies
to the HVAC market. In addition, two acquisitions were completed in
early April; the Dura-Ware Company, a manufacturer of commercial
cookware and servingware for the foodservice and hospitality markets,
and Extract Technologies Limited, a leading biotech/pharmaceutical
systems provider, headquartered in Huddersfiled, England. On April 14,
the acquisition of the Tire and Wheel Consumer Products Division of
Titan International, Inc. was announced. The annualized rate of sales
of these acquisitions is approximately $175 million.
Cash Flows
Cash generated from operations for the first quarter was $21
million, attributable to improved earnings and higher depreciation and
amortization. For the first quarter 1999, cash generated from
operations and cash used in investing activities reflect the impact of
proceeds, net of a $39 million tax payment, from the divestiture of
the perishable cargo business.
Backlog
The consolidated backlog of $245 million at March 31, 2000
approximated March 31, 1999 levels. Stronger backlog positions have
been experienced at Tensolite and the Systems & Equipment businesses
with a slight decline at Carlisle SynTec and Trail King. The backlog
has not yet been adjusted for recently announced acquisitions.
Overall
Carlisle has reported another record for first quarter sales and
earnings. The focus on cost control and operational efficiencies
generate earnings growth in excess of sales growth. Strength in most
markets should result in good organic growth for the year.
Additionally, we are enthusiastic about opportunities for growth
through acquisitions as the year unfolds. Altogether, we anticipate
that 2000 will see the attainment of record milestones for Carlisle in
revenue and earnings as well as position Carlisle for even greater
returns to its shareholders.
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CARLISLE COMPANIES INCORPORATED
Comparative Balance Sheet
As of March 31,
(Dollars in Thousands)
%
2000 1999 Change
----------------------------------------------------------------------
Assets
Current Assets
Cash and cash equivalents $3,624 $23,305 -84.5%
Receivables 270,281 248,624 8.7%
Inventories 231,040 205,681 12.3%
Prepaid expenses and other 66,121 56,750 16.5%
----------------------------------------------------------------------
Total current assets 571,066 534,360 6.9%
----------------------------------------------------------------------
Property, plant and
equipment,
net 350,647 355,837 -1.5%
Other assets 193,631 176,845 9.5%
----------------------------------------------------------------------
Liabilities and
Shareholders' Equity
Current Liabilities
Short-term debt, including
current maturities $2,472 $1,749 41.3%
Accounts payable 113,823 116,195 -2.0%
Accrued expenses 139,708 166,751 -16.2%
----------------------------------------------------------------------
Total current
liabilities 256,003 284,695 -10.1%
----------------------------------------------------------------------
Long-term debt 281,379 281,823 -0.2%
Other liabilities 82,382 78,808 4.5%
Shareholders' equity 495,580 421,715 17.5%
----------------------------------------------------------------------
$1,115,344 $1,067,042 4.5%
============================
Supplemental Information 2000 1999
----------------------------------------------------------------------
Working capital $315,063 $249,665
Working capital turnover(a) 5.51 6.25
Net debt $280,227 $260,267
Net debt/Total
capitalization 36.1% 38.2%
(a) Quarterly sales annualized divided by March working capital
CARLISLE COMPANIES INCORPORATED
Comparative Statement of Earnings
For the period ended March 31,
(In Thousands, except for per share data)
First Quarter
2000 1999 % Change
----------------------------------------------------------------------
Net sales $434,018 $390,024 11.3%
----------------------------------------------------------------------
Cost and expenses:
Cost of goods sold 336,527 305,401 10.2%
Selling and administrative
expenses 48,922 42,945 13.9%
Research and development
expenses 4,092 3,925 4.3%
Gain on divestiture of
business ($16.6m),
net of other
charges ($15.9m) --- (685) ---
Other (income) & expense,
net (1,189) (1,679) -29.2%
----------------------------------------------------------------------
Earnings before interest
& income taxes 45,666 40,117 13.8%
Interest expense, net 5,179 4,657 11.2%
----------------------------------------------------------------------
Earnings before
income taxes 40,487 35,460 14.2%
Income taxes 15,028 13,652 10.1%
----------------------------------------------------------------------
Net earnings $25,459 $21,808 16.7%
% of Net Sales 5.9% 5.6%
Basic earnings per share $0.84 $0.72 16.7%
----------------------------------------------------------------------
Average shares outstanding
(000's) - basic 30,191 30,183
----------------------------------------------------------------------
Diluted earnings
per share $0.83 $0.71 16.9%
----------------------------------------------------------------------
Average shares outstanding
(000's) - diluted 30,526 30,639
----------------------------------------------------------------------
Dividends $5,443 $4,830
----------------------------------------------------------------------
Per share $0.18 $0.16 12.5%
----------------------------------------------------------------------
CARLISLE COMPANIES INCORPORATED
Comparative Statement of Cash Flows
For the nine month period ended March 31,
(In Thousands of Dollars)
First Quarter
2000 1999
----------------------------------------------------------------------
Operating activities
Net earnings $25,459 $21,808
Reconciliation of net
earnings to cash flows:
Depreciation and amortization 14,004 12,884
Working capital (19,223) 19,938
Other 547 1,112
----------------------------------------------------------------------
Net cash provided by operating
activities 20,787 55,742
----------------------------------------------------------------------
Investing activities
Capital expenditures (12,874) (14,638)
Acquisitions, net of cash (4,929) (10,584)
Proceeds from sale of property,
equipment and business 0 11,568
Other (3,265) 3,863
----------------------------------------------------------------------
Net cash used in
investing activities (21,068) (9,791)
----------------------------------------------------------------------
Financing activities
Net change in short-term debt 483 (29,285)
Proceeds from long-term debt 0 8,441
Reductions of long-term debt (365) (346)
Dividends (5,443) (4,830)
Purchases of treasury shares (1,187) (509)
----------------------------------------------------------------------
Net cash used in financing
activities (6,512) (26,529)
----------------------------------------------------------------------
Change in cash and cash
equivalents (6,793) 19,422
Cash and cash equivalents
Beginning of period 10,417 3,883
----------------------------------------------------------------------
End of period $3,624 $23,305
----------------------------------------------------------------------
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