Exhibit 99.1
NEWS RELEASE
Carlisle Companies Reports Record Fourth Quarter and Full Year Income from Continuing Operations, Declares a Stock Split and Provides Record Guidance for 2007
CHARLOTTE, NORTH CAROLINA, February 8, 2007… Carlisle Companies Incorporated (NYSE:CSL) reported income from continuing operations of $39.6 million, or $1.27 per diluted share, for the quarter ended December 31, 2006, an increase of 48% above income of $26.7 million, or $0.87 per diluted share, for the same period 2005. Income from continuing operations increased 33% for the year ended December 31, 2006 at $177.3 million, or $5.70 per diluted share, compared to $133.7 million, or $4.30 per diluted share, for 2005. “Our results reflect continued improvements in most of our businesses,” said Richmond McKinnish, Carlisle President and CEO. “Our guidance for income from continuing operations for the full year 2007 is in the range of $6.35 to $6.50 per diluted share.”
Mr. McKinnish also noted “As a sign of continued confidence in Carlisle’s ability to grow its businesses and create shareholder value, the Carlisle Board of Directors has approved a two-for-one stock split of the Company’s common stock.” One additional share will be issued on March 19, 2007 for each share of Carlisle common stock held by stockholders of record as of the close of business on March 7, 2007. Trading will begin on a split-adjusted basis on March 20, 2007.
Net sales of $611.5 million from continuing operations in the fourth quarter 2006 were up $78.1 million, or an increase of 15%, as compared to net sales of $533.4 million for the fourth quarter 2005. Organic growth in the Company’s construction materials, specialty trailer, and wire and cable businesses contributed to the fourth quarter 2006 organic sales growth rate of 14%. The impact of changes in foreign currency exchange rates was insignificant to sales growth.
Net sales of $2.57 billion for the year ended 2006 increased 17% over 2005 net sales of $2.21 billion. Strong organic growth in most of Carlisle’s businesses, especially in the Company’s construction materials business, contributed $321.6 million representing an organic sales growth rate of 15% for 2006. Acquisitions in the Company’s braking business contributed $35.7 million of the sales growth, and changes in foreign currency exchange rates accounted for the remaining $8.3 million.
Carlisle manages its businesses under the three operating groups, Construction Materials, Industrial Components and Diversified Components. Financial results are presented in five financial reporting segments. The Diversified Components group contains three of the five financial reporting segments: Specialty Products segment, which contains the braking business; the Transportation Products segment, which contains the specialty trailer business; and the General Industry segment (“All Other” segment), which contains the wire and cable, foodservice and refrigerated truck bodies businesses.
Construction Materials: Net sales of $278.6 million in the fourth quarter of 2006 were 21% above $231.1 million of net sales in the fourth quarter of 2005 primarily due to higher membrane and insulation volumes. Fourth quarter 2006 earnings before interest and income taxes (“EBIT”) of $39.3 million was 10% above fourth quarter 2005 EBIT of $35.8 million. EBIT margin for Construction Materials declined in the fourth quarter 2006 compared to 2005 primarily due to higher raw material costs and rebate programs. Segment EBIT for the quarters ended December 31, 2006 and 2005 included earnings related to the Company’s equity share of income at its European roofing joint venture, Icopal, of $3.9 million and $1.9 million, respectively.
Net sales of $1.1 billion for the full year 2006 were 28% above 2005 with volume growth across all product lines accounting for approximately 94% of the increase. Full year 2006 EBIT of $170.7 million was 30% above 2005 EBIT of $131.8 million. Segment EBIT for the years ended December 31, 2006 and 2005 included earnings from Icopal of $6.0 million and $2.5 million, respectively.
Industrial Components: Net sales of $161.6 million for the three months ended December 31, 2006 increased 6% compared with net sales of $152.1 million for the same period in 2005. EBIT of $8.5 million in the fourth quarter of 2006 was 52% above EBIT of $5.6 million reported in the same quarter of 2005 on increased selling prices and production efficiencies. Full year 2006 net sales were $764.5 million compared with net sales of $747.9 million for the full year 2005. EBIT of $60.4 million for 2006 compared favorably with EBIT of $55.3 million for 2005.
Specialty Products: The Company’s braking business recorded net sales of $42.9 million for the three months ended December 31, 2006 compared with $41.9 million for the same period 2005. Net sales for the braking businesses for the full year 2006 of $187.6 million increased 23% over 2005 primarily due to acquisitions transacted during the last half of 2005. The braking business reported an operating loss of $1.6 million for the fourth quarter 2006 compared to EBIT of $5.0 million for the fourth quarter 2005. Full year 2006 EBIT of $11.4 million compared negatively with 2005 EBIT of $13.6 million. Charges associated with the Company’s integration of the acquisitions and manufacturing inefficiencies contributed to the decline in EBIT for both the fourth quarter and full year 2006 compared with 2005.
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Transportation Products: Strong sales in construction, material hauling and specialized trailers contributed to both sales and earnings growth for the Company’s specialty trailer business. Fourth quarter 2006 net sales of $45.4 million increased 22% over the same period 2005. Fourth quarter 2006 EBIT of $6.8 million was 39% higher than EBIT of $4.9 million in the fourth quarter 2005. Net sales of $183.0 million for the year ended December 31, 2006 increased 18% over 2005, and EBIT for the full year 2006 was $30.4 million compared to $21.2 million for 2005, an increase of 43%.
General Industry: Net sales of $83.0 million in the fourth quarter of 2006 were 17% above net sales of $71.2 million in the fourth quarter of 2005 while EBIT in the fourth quarter of 2006 of $10.2 million compared with EBIT of $1.1 million for the same period of 2005. Full year 2006 net sales of $326.2 million increased 14% over full year 2005. EBIT for 2006 of $31.1 million compared with 2005 EBIT of $17.7 million, an increase of 76%. The wire and cable, foodservice and refrigerated truck body businesses all experienced favorable comparisons to the prior year.
Discontinued Operations
Income from discontinued operations for the fourth quarter 2006 of $40.3 million, or $1.30 per diluted share, compared with a loss for the fourth quarter 2005 of $3.0 million, or $0.10 per diluted share. The fourth quarter 2006 income included an after-tax gain of $34.6 million on the sale of the Carlisle Systems & Equipment businesses, which included Carlisle Process Systems and the Walker Group. Income from discontinued operations for the full year 2006 was $38.4 million, or $1.23 per diluted share, as compared to losses from discontinued operations for the full year 2005 of $27.3 million, or $0.88 per diluted share.
Net Income
Net income for the fourth quarter ended December 31, 2006 of $79.9 million, or $2.57 per diluted share, compared to net income in the fourth quarter 2005 of $23.7 million, or $0.77 per diluted share. Net income for the full year 2006 of $215.7 million, or $6.93 per diluted share, compared to net income for 2005 of $106.4 million, or $3.42 per diluted share. The increase in net income was due primarily to the improved income from continuing operations, a decrease in the Company’s effective tax rate and the gain on the sale of the Carlisle Systems & Equipment businesses. Please refer to the consolidated statement of earnings and the schedule of supplemental financial information included herein for additional detail on the Company’s fourth quarter and full year earnings results.
Cash Flow
In August 2006, Carlisle issued $150.0 million in ten-year notes at an interest rate of 6.125% in anticipation of the Company’s 7.25% $150.0 million notes maturing January 2007. Prior to the redemption of the 7.25% notes on January 15, 2007, the
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August 2006 note proceeds were utilized to reduce shorter-term borrowings and the Company’s utilization of its receivable securitization facility. Cash provided by operating activities of $19.9 million for the year ended December 31, 2006 included a reduction in operating cash flow of $137.9 million caused by the reduction in the utilization of the securitization facility. Operating cash flow in 2006 also reflects a planned inventory build of approximately $74.1 million in anticipation of strong demand during the first half of 2007. Please refer to the supplemental cash flow schedule included herein for further detail on the Company’s operating cash flow.
Cash provided by investing activities was $11.1 million in 2006 and included $99.5 million, net of transaction costs, in proceeds for the sale of the Carlisle Systems and Equipment businesses. These proceeds were partially offset by capital expenditures of $95.5 million for 2006. Capital expenditures were $108.2 million for 2005, and the Construction Materials segment represented the majority of capital expenditures for both 2006 and 2005. Cash used for investing activities of $144.4 million in 2005 included $67.3 million to fund two brake business acquisitions for the Specialty Products segment. Cash provided by financing activities of $74.5 million in 2006 compared to cash used by financing activities of $51.2 million in 2005. As previously discussed, the year-over-year change in financing cash flow is partially due to the notes issued in August 2006. The Company also used approximately $46.0 million in 2005 to purchase 0.7 million shares of its common stock.
Conference Call and Webcast
The Company will discuss fourth quarter 2006 results on a conference call for investors on Thursday, February 8, 2007 at 11:00 a.m. Eastern. The call may be accessed live at http://www.carlisle.com/investors/conference_call.html, or the taped call may be listened to shortly following the live call at the same website location until February 22, 2007. A PowerPoint presentation will also be available for viewing and/or printing at the same website location.
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Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global economic, business, competitive, market and regulatory factors. More detailed information about these factors is contained in the Company’s filings with the Securities and Exchange Commission. The Company undertakes no duty to update forward-looking statements.
Carlisle is a diversified global manufacturing company serving the construction materials, commercial roofing, specialty tire and wheel, power transmission, heavy-duty brake and friction, heavy-haul truck trailer, foodservice, and data transmission industries.
CONTACT: | | Carol P. Lowe |
| | Vice President and Chief Financial Officer |
| | Carlisle Companies Incorporated |
| | (704) 501-1100 |
| | http://www.carlisle.com |
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