SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13
[X] OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1994
------------------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13
[ ] OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM_________________TO_____________________
Commission file number 1-9278
-------------------------------------------------
CARLISLE COMPANIES INCORPORATED
- - - -----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 31-1168055
- - - ----------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
250 SOUTH CLINTON STREET, SUITE 201, SYRACUSE, NEW YORK 13202
- - - -----------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
315-474-2500
- - - ----------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No__
---
Shares of common stock outstanding at August 1, 1994 15,271,783
-----------------
Page 1 of 9
PART I. FINANCIAL INFORMATION
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Statements of Consolidated Earnings
Three Months and Six Months ended June 30, 1994 and 1993
(Dollars in thousands except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ ----------------
June 30, June 30, June 30, June 30,
1994 1993 1994 1993
------ ------ ------ ------
Net Sales $183,787 $160,785 $338,487 $299,205
Cost and expenses:
Cost of goods sold 136,541 118,832 251,774 222,078
Selling and administrative 26,808 26,232 51,751 48,522
Research and development 3,066 2,817 6,006 5,382
------- ------- ------- -------
166,415 147,881 309,531 275,982
------- ------- ------- -------
Operating profit 17,372 12,904 28,956 23,223
Other income (deductions):
Investment income 790 577 1,528 1,530
Interest expense (1,162) (1,062) (2,205) (2,362)
Other, net (297) (51) (405) (269)
------- ------- ------- -------
(669) (536) (1,082) (1,101)
------- ------- ------- -------
Earnings before income taxes 16,703 12,368 27,874 22,122
Income taxes 6,598 4,885 11,011 8,738
------- ------- ------- -------
Net earnings $ 10,105 $ 7,483 $ 16,863 $ 13,384
------- ------- ------- -------
------- ------- ------- -------
Average common shares outstanding 15,513 15,491 15,509 15,451
------- ------- ------- -------
Net earnings per share $ .65 $ .48 $ 1.09 $ .87
------- ------- ------- -------
------- ------- ------- -------
Dividends declared and
paid per share $ .18 $ .17 $ .35 $ .34
------- ------- ------- -------
------- ------- ------- -------
See accompanying notes to interim financial statements.
Page 2 of 9
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
June 30, 1994 and December 31, 1993
(Dollars in thousands except share amounts)
JUNE 30, DECEMBER 31,
1994 1993
------ ------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 53,340 $ 51,802
Receivables, less allowances of
$4,337 in 1994 and $3,906 in 1993 128,271 91,158
Inventories 69,110 64,976
Prepaid income taxes and expenses 24,049 28,743
------- -------
TOTAL CURRENT ASSETS 274,770 236,679
------- -------
PROPERTY, PLANT AND EQUIPMENT 329,003 318,794
Less accumulated depreciation 183,780 176,565
------- -------
NET PROPERTY,PLANT AND EQUIPMENT 145,223 142,229
------- -------
OTHER ASSETS
Patents and other intangibles 14,683 15,831
Investments and advances to affiliates 13,947 14,780
Receivables and other assets 3,901 7,889
Deferred income taxes 4,211 2,955
------- -------
TOTAL OTHER ASSETS 36,742 41,455
------- -------
$456,735 $420,363
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 45,173 28,681
Accrued expenses 71,828 63,524
------- -------
TOTAL CURRENT LIABILITIES 117,001 92,205
------- -------
LONG-TERM LIABILITIES
Long-term debt 59,498 59,548
Product warranties 47,532 46,803
Deferred compensation and other liabilities 1,267 1,284
------- -------
TOTAL LONG-TERM LIABILITIES 108,297 107,635
------- -------
STOCKHOLDERS' EQUITY:
Common stock, $1 par value. Authorized
25,000,000 shares; issued 19,665,312 shares 19,665 19,665
Additional paid-in capital 838 132
Retained earnings 270,322 258,956
Cost of shares in treasury (1994 - 4,390,563
shares; 1993 - 4,350,958 shares) (59,388) (58,230)
------- -------
TOTAL STOCKHOLDERS' EQUITY 231,437 220,523
------- -------
$456,735 $420,363
------- -------
------- -------
See accompanying notes to interim financial statements.
Page 3 of 9
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Statements of Consolidated Cash Flows
Six Months ended June 30, 1994 and 1993
(Dollars in thousands)
1994 1993
---- ----
OPERATING ACTIVITIES
Net earnings $16,863 $13,384
Reconciliation of net earnings to cash flows:
Depreciation 9,692 9,085
Amortization 1,318 646
Changes in assets and liabilities
excluding effects of acquisitions:
Current and long-term receivables (29,491) (35,220)
Inventories (4,135) (1,836)
Accounts payable & accrued expenses 18,847 23,984
Prepaid, deferred & current income taxes 4,490 (1,574)
Long-term liabilities 712 (5,197)
Other 2,743 1,107
Discontinued operations -- (249)
------- -------
21,039 4,130
------- -------
INVESTING ACTIVITIES
Capital expenditures (15,403) (15,124)
Acquisitions, net of cash -- (12,333)
Sales of property and equipment 1,772 --
Other 836 (262)
Discontinued operations -- 527
------- -------
(12,795) (27,192)
------- -------
FINANCING ACTIVITIES
Reductions of long-term debt (50) (12,050)
Dividends (5,497) (5,203)
Purchase of treasury shares (1,159) --
------- -------
(6,706) (17,253)
------- -------
CHANGE IN CASH AND CASH EQUIVALENTS 1,538 (40,315)
CASH AND CASH EQUIVALENTS
Beginning of period 51,802 90,605
------- -------
End of period $53,340 $50,290
------- -------
------- -------
See accompanying notes to interim financial statements.
Page 4 of 9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
Six Months Ended June 30, 1994 and 1993
(1) The accompanying unaudited condensed consolidated financial statements
include the accounts of Carlisle Companies Incorporated and its wholly-
owned subsidiaries (together, the "Company"). Intercompany transactions
and balances have been eliminated in consolidation. The unaudited condensed
consolidated financial statements have been prepared in accordance with
Article 10-01 of Regulation S-X of the Securities and Exchange Commission
and, as such, do not include all information required by generally accepted
accounting principles. However, in the opinion of the Company, these
financial statements contain all adjustments, consisting of only normal
recurring adjustments, necessary to present fairly the financial position
as of June 30, 1994 and December 31, 1993, the results of its operations
for the three months and the six months ended June 30, 1994 and 1993, and
its cash flows for the six months ended June 30, 1994 and 1993.
While the Company believes that the disclosures presented are adequate to
make the information not misleading, it is suggested that these financial
statements be read in conjunction with the financial statements and notes
included in the Company's 1993 Annual Report to Stockholders.
(2) The components of inventories are as follows:
JUNE 30, DECEMBER 31,
1994 1993
------ ------
(000)'S
First-in, first-out (FIFO) costs:
Finished goods $46,689 $43,714
Work in process 8,626 8,761
Raw materials 28,394 27,212
------ ------
83,709 79,687
Excess of FIFO cost over Last-in,
First-out (LIFO) inventory value (14,599) (14,711)
------ ------
LIFO inventory value $69,110 $64,976
------ ------
------ ------
(3) Net earnings per share of common stock are based on the weighted average
number of shares outstanding of 15,513,377 for the three months ended June
30, 1994 and 15,509,140 for the six months ended June 30, 1994, assuming
the exercise of dilutive stock options.
Page 5 of 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Carlisle Companies Incorporated reported record sales of $183.8 million and
record net earnings of $10.1 million, $0.65 a share, in the second quarter of
1994. The sales and net earnings achieved in the second quarter of 1994 are the
highest levels ever attained on a quarterly basis in the company's history.
Second quarter 1994 sales represent a 14% increase over sales of $160.8 million
in the second quarter of 1993. Net earnings improved by over 35% compared to
1993's second quarter earnings of $7.5 million, $0.48 a share. Exceptionally
strong performances within the company's construction materials segment combined
with improved results from each of the company's major operations for the record
results. Selling and administrative expenses were below 15% of sales for the
first time.
For the six months ended June 30, 1994, sales totalled $338.5 million compared
to $299.2 million in 1993, a 13% increase. Net earnings on a year to date basis
total $16.9 million, $1.09 a share, a 26% increase over 1993's earnings of $13.4
million, $0.87 a share. The record results to date reflect the continued
success of providing customers with good value while controlling administrative
and operating expense levels. These have combined with modest recoveries in the
construction and transportation markets to generate the company's strong results
to date in 1994.
Construction Materials segment sales increased 19% in the second quarter to
$75.4 million from $63.6 million in 1993. On a year to date basis, sales have
increased to $123.8 million for the segment compared to $107.5 million in 1993,
a 15% improvement. Once the severe weather conditions subsided in early 1994,
the domestic non-residential roofing market, particularly the replacement
market, has resumed the improvements seen over the past few years. Additional
market share gains through private labeling and aggressive sales programs have
contributed to the strong sales performance. Earnings for the segment in the
second quarter of 1994 increased an exceptional 72% over 1993's quarterly
earnings. For the first six months of 1994 segment earnings are up 53% when
compared to 1993. The very favorable earnings performance has been driven by
the higher sales volumes and the positive impact of overhead expense absorption
from higher production volumes. Administrative and operating expense levels
have also been well controlled driving expense ratios downward. Competitive
pressures continue to impact pricing levels, but aggressive marketing and
controlled spending resulted in a much improved earnings performance.
Transportation Products segment sales were $53.1 million in the second quarter
of 1994 bringing sales for the first six months of 1994 to $104.9 million, both
representing 13% increases over 1993. The improved domestic automotive market
in 1994, along with new product introductions, have resulted in increased sales
of the company's custom rubber and plastic products in 1994. The continued
strength in heavy truck and trailer build rates has meant higher levels of
friction products sales to original equipment manufacturers throughout the year.
Friction sales for industrial applications, as well as braking systems sales,
have also shown progress over prior year levels. The slowdown in aircraft build
rates has impacted aircraft wire sales so far in 1994, but the company continues
to maintain a strong position in this market. Segment earnings in 1994 have
improved 13% in the quarter and 14% for the year to date, compared to 1993.
Lower margins continue to impact this segment, reflecting the pricing actions
taken by automobile manufacturers in recent history and the available capacity
in heavy duty friction markets. Segment earnings in 1994 also reflect the
absorption of start-up expenses for the company's container manufacturing
operation. Overall, however, higher sales revenues, improved operational
productivity and expense reductions contributed to the solid earnings
improvement in 1994.
Page 6 of 9
General Industry segment sales in 1994 are up 10% in the second quarter and up
11% on a year to date basis. Second quarter sales were $55.3 million, bringing
sales for the six month period ended June 30, 1994 to $109.8 million. Segment
earnings in the second quarter of 1994 improved over last year by 8%, while
earnings for the year have improved by 9%. Specialty tires and wheels
operations continued its string of record performances through the second
quarter, improving sales by 19% over 1993. The higher sales resulted from
continued strong demand and aggressive sales efforts in the operations'
traditional lawn and garden markets, as well as increased volumes of golf car
and trailer tires. Margins continue to be squeezed due to competitive pressures
and efforts to gain market share. On the strength of higher sales volumes,
earnings are up over 20% in 1994 for these operations. Foodservice plastics
operations continue to reap the benefits of improved customer service and new
product introductions in reporting solid sales growth and strong earnings
improvement in 1994. Margins have improved on the strength of a more favorable
mix of products, along with increased manufacturing efficiencies. Expenses
related to the commercialization of proprietary technologies in electronic
materials and information storage management software offset some of the strong
performance of this segment.
Working capital was $157.8 million at June 30, 1994, compared to $148.6 million
at March 31, 1994 and $146.6 million a year ago. Cash balances improved by
$16.4 million in the quarter. High levels of activity in the quarter are
reflected in the higher receivable and payable balances at quarter end.
There are no trends, demands, commitments, events or uncertainties that will
result in or that are reasonably likely to result in the company's liquidity
increasing or decreasing in any material way nor are there any known material
trends, favorable or unfavorable in the company's capital resources.
Long-term debt remained at $59.5 million at June 30, 1994, equal with the
balance of last quarter and $2.5 million higher than last year. Debt, net of
cash, is $6.2 million at the end of the second quarter of 1994. In the third
quarter of 1994, the company intends to secure $8.0 million in low rate
industrial development bonds to finance equipment purchases for its container
manufacturing operations.
Carlisle's second quarter performance was boosted by a pick up in the shipment
of roofing systems following severe winter weather. Although the construction
materials segment will not have the same boost in the second half of 1994, it is
expected its strong performance will continue. Sales of transportation products
and lawn and garden tires typically slow seasonally in the third quarter.
Nevertheless, the company expects to overcome these seasonal factors and report
record earnings for 1994.
Page 7 of 9
PART II. OTHER INFORMATION
--------------------------
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Company's 1994 Annual Meeting of Shareholders was held on April 20,
1994.
(c) At the 1994 Annual Meeting of Shareholders, the election of four (4)
directors and certain amendments to the Company's Executive Incentive Program
were approved as follows:
For Against Withheld Nonvote
---------- --------- -------- --------
Magalen O. Bryant 20,047,497 - 110,460 -
Paul J. Choquette, Jr. 20,061,495 - 96,462 -
Stephen P. Munn 20,045,712 - 112,245 -
George L. Ohrstrom 20,031,478 - 126,479 -
Executive Incentive
Program 17,274,254 2,477,111 406,592 5,400
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: No exhibits are included for the quarter which this report on
Form 10-Q is filed.
(b) Report on Form 8-K: No reports on form 8-K were filed during the quarter
for which this report on Form 10-Q is filed.
Page 8 of 9
SIGNATURE
---------
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Carlisle Companies Incorporated
Date AUGUST 8, 1994 By
-------------------------------- -----------------------------
Dennis J. Hall
Executive Vice President,
Treasurer, and Chief
Financial Officer
Page 9 of 9