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 SEPTEMBER 30, 1996
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OR
TRANSITION REPORT PURSUANT TO SECTION 13
[ ] OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-9278
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CARLISLE COMPANIES INCORPORATED
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(Exact name of registrant as specified in its charter)
DELAWARE 31-1168055
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
250 SOUTH CLINTON STREET, SUITE 201, SYRACUSE, NEW YORK 13202
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(Address of principal executive offices) (Zip code)
315-474-2500
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(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
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Shares of common stock outstanding at November 1, 1996 15,175,662
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Page 1 of 9
PART I. FINANCIAL INFORMATION
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statement of Earnings
Three Months and Nine Months ended September 30, 1996 and 1995
(Dollars in thousands except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
------------------ -----------------
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1996 1995 1996 1995
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Net Sales $ 252,603 $ 216,551 $ 740,039 $ 605,325
Cost and expenses:
Cost of goods sold 189,965 163,759 560,547 457,867
Selling and administrative 32,519 27,840 95,446 80,965
Research and development 3,032 3,177 9,110 8,818
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225,516 194,776 665,103 547,650
Operating profit 27,087 21,775 74,936 57,675
Other income (deductions):
Investment income 247 461 452 1,999
Interest expense (1,888) (1,544) (5,987) (4,491)
Other, net 176 60 1,088 285
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(1,466) (1,023) (4,447) (2,207)
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Earnings before income taxes 25,621 20,752 70,489 55,468
Income taxes 10,160 8,224 27,948 21,963
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Net earnings $ 15,461 $ 12,528 $ 42,541 $ 33,505
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Average common shares outstanding 15,490 15,634 15,447 15,629
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Net earnings per share: $ 1.00 $ .80 $ 2.75 $ 2.14
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Dividends declared and
paid per share $ .245 $ .220 $ .685 $ .620
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See accompanying notes to interim financial statements.
Page 2 of 9
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30, 1996 and December 31, 1995
(Dollars in thousands except share amounts)
SEPT. 30, DEC. 31,
1996 1995
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ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 7,671 $ 3,198
Receivables, less allowances of $4,200 in
1996 and $3,721 in 1995 157,635 126,610
Inventories 133,302 121,736
Deferred income taxes 17,860 18,127
Prepaid expenses and other 10,617 12,273
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TOTAL CURRENT ASSETS 327,085 281,944
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PROPERTY, PLANT AND EQUIPMENT 429,328 393,562
Less accumulated depreciation 213,626 200,428
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NET PROPERTY, PLANT AND EQUIPMENT 215,702 193,134
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OTHER ASSETS
Patents and other intangibles 61,867 37,080
Investments and advances to affiliates 11,363 11,223
Receivables and other assets 10,273 10,866
Deferred income taxes 12,581 8,176
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TOTAL OTHER ASSETS 96,084 67,345
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$638,871 $542,423
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 55,989 $ --
Accounts payable 51,225 45,194
Accrued expenses 96,672 83,041
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TOTAL CURRENT LIABILITIES 203,886 128,235
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LONG-TERM LIABILITIES
Long-term debt 67,269 72,725
Product warranties 71,246 65,851
Deferred compensation and other liabilities 1,023 2,355
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TOTAL LONG-TERM LIABILITIES 139,538 140,931
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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 10,092 9,316
Retained earnings 346,236 314,072
Cost of shares in treasury (1996 - 4,562,429
shares; 1995 - 4,291,507 shares) (80,546) (69,796)
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TOTAL STOCKHOLDERS' EQUITY 295,447 273,257
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$638,871 $542,423
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See accompanying notes to interim financial statements.
Page 3 of 9
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Statements of Consolidated Cash Flows
Nine Months ended September 30, 1996 and 1995
(Dollars in thousands)
1996 1995
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OPERATING ACTIVITIES
Net earnings $42,541 $33,505
Reconciliation of net earnings to cash flows:
Depreciation 19,196 15,909
Amortization 2,896 2,482
Changes in assets and liabilities, excluding
effects of acquisitions and sale of business:
Current & long-term receivables (19,579) (26,841)
Inventories (3,760) (13,628)
Accounts payable & accrued expenses 14,516 5,203
Prepaid, deferred & current income taxes (2,853) 280
Long-term liabilities 2,519 5,118
Other 2,419 3,311
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57,895 25,339
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INVESTING ACTIVITIES
Capital expenditures (26,061) (26,271)
Acquisitions, net of cash (53,437) (40,719)
Sales of property, equipment & business 4,159 2,307
Other (155) 2,812
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(75,494) (61,871)
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FINANCING ACTIVITIES
Proceeds from short-term borrowings 55,989 --
Reductions of long-term debt (11,590) (140)
Dividends (10,376) (9,538)
Purchases of treasury shares (11,951) (5,871)
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22,072 (15,549)
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CHANGE IN CASH AND CASH EQUIVALENTS 4,473 (52,081)
CASH AND CASH EQUIVALENTS
Beginning of period 3,198 70,972
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End of period $ 7,671 $18,891
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See accompanying notes to interim financial statements.
Page 4 of 9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Nine and Three Months Ended September 30, 1996 and 1995
(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 September 30, 1996 and December 31,
1995, the results of its operations for the three months and the nine
months ended September 30, 1996 and 1995, and its cash flows for the
nine months ended September 30, 1996 and 1995.
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 1995 Annual Report to Stockholders.
(2) The components of inventories are as follows:
SEPT. 30, DEC. 31,
1996 1995
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(000)'S
First-in, first-out (FIFO) costs:
Finished goods $ 78,838 $ 65,995
Work in process 16,163 15,016
Raw materials 54,175 56,810
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$149,176 $137,821
Excess of FIFO cost over Last-in,
First-out (LIFO) inventory value (15,874) (16,085)
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LIFO inventory value $133,302 $121,736
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(3) Net earnings per share of common stock are based on the weighted average
number of shares outstanding of 15,490,053 for the three months ended
September 30, 1996 and 15,448,408 for the nine months ended September 30,
1996 assuming the exercise of dilutive stock options.
Page 5 of 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We are pleased to report that the third quarter of 1996 was a record
performance, marking the 19th consecutive quarter-over-quarter improvement in
earnings. Third quarter sales of $252.6 million represent a 17% increase
over sales of $216.6 million in the third quarter of 1995. Net earnings of
$15.5 million, or $1.00 a share, is an increase of 24% over 1995's earnings
of $12.5 million, or $0.80 a share. For the nine months ended September 30,
1996, sales totalled $740.0 million, a 22% increase over 1995. Net earnings
on a year-to-date basis were $42.5 million, or $2.75 a share, a 27% increase
over 1995's earnings of $33.5 million, or $2.14 a share. An all-time record
performance from the construction materials segment and the continuation of
favorable results from operations within the transportation products and
general industry segments contributed to the record third quarter results.
CONSTRUCTION MATERIALS segment's sales of $98.2 million and earnings of $15.2
million in the third quarter of 1996 are the highest levels ever achieved in
the Company's history. The quarterly sales performance was 11% above 1995,
while segment earnings improved an impressive 24%. Year-to-date 1996 sales
have increased 4% over 1995, and segment earnings are up 17%. A continued
favorable product mix and cost reduction strategies resulted in the favorable
earnings performance.
TRANSPORTATION PRODUCTS segment sales increased 11% in the third quarter to
$83.1 million from $74.9 million in 1995. Segment earnings in the quarter
improved 24% over 1995. For the nine months ended September 30, sales
increased 29% over 1995, to $256.7 million, and earnings improved 47%, to
$21.7 million. Heavy duty friction products' and custom rubber and plastics'
operations reported favorable performances and the specialized transportation
trailer operations acquired in 1995 continue to add to segment results.
GENERAL INDUSTRY segment sales were 35% higher in the third quarter of 1996
versus 1995, totalling $71.3 million. Segment earnings improved 21% over
last year. On a year-to-date basis, segment sales were $242.7 million, a 38%
increase over 1995, while segment earnings have improved 34%. Positive
results from the acquired operations in steel wheels and rims and stainless
steel in-plant processing equipment more than offset the recent softness
experienced in the lawn and garden industry.
Working Capital was $123.2 million at September 30, 1996, compared to $135.2
million at June 30, 1996 and $157.7 million a year ago. Cash flows from
operations for the nine months ended September 30, 1996 totalled $57.9
million, more than double the amount generated during the comparable period
in 1995. Long-term debt stands at $67.3 million at September 30, 1996, while
short-term borrowings reached $56.0 million.
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.
Page 6 of 9
ACQUISITIONS
At the end of August, the Company's Walker Stainless Equipment Company
completed the acquisition of Scherping Systems and Controls, a leading
supplier of cheese processing systems and equipment for the dairy industry.
The acquisition will result in increased capabilities in fabrication and
design, enhancing both companies' abilities to service their markets.
On October 4, the Company completed the acquisition of the Engineered
Plastics Division (EPD) of Hoover Universal, a subsidiary of Johnson
Controls, Inc. EPD's products include precision-molded engine components and
blow-molded bumper beams that are supplied to most major automakers in North
America. The acquisition enhances and extends the Company's component
supplier strategy, which involves providing full design, engineering and
production services to companies supplying complete systems to the automotive
OEMs. EPD has been combined with the Company's custom rubber and plastics
operation, Geauga Company, also a supplier of components to the automotive
industry, and renamed Carlisle Engineered Products.
On October 11, the Company acquired Hartstone, Inc., a leading designer and
manufacturer of ceramic tableware, cookware, and decorative kitchenware.
Hartstone has the capability to add to Carlisle's broad product offering to
the foodservice industry.
THE COMPANY'S BOARD OF DIRECTORS HAS APPROVED A TWO-FOR-ONE SPLIT OF ITS
COMMON STOCK, SUBJECT TO SHAREHOLDER APPROVAL OF AN INCREASE IN THE
AUTHORIZED NUMBER OF SHARES. MANAGEMENT INTENDS TO MAIL A PROXY STATEMENT ON
OR ABOUT NOVEMBER 15, 1996, REQUESTING SHAREHOLDER APPROVAL.
Page 7 of 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits applicable to the filing of this report are as follows:
(27) Financial Data Schedule as of September 30, 1996 and for the
nine months ended September 30, 1996.
(b) Report on Form 8-K
On August 13, 1996, a Form 8-K was filed to announce the amendment of
the Shareholders' Rights Agreement, adopted on February 8, 1989 to,
among other things, reset the purchase price of a Right and extend
the term of the Rights Agreement until August 6, 2006.
On October 17, 1996, a Form 8-K was filed to announce the acquisition
by the Company of substantially all of the assets comprising the
Engineered Plastics Division of Hoover Universal, Inc., a subsidiary
of Johnson Controls, Inc.
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 November 11, 1996 By /s/ Robert J. Ryan, Jr.
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Robert J. Ryan, Jr.
Vice President, Treasurer and Chief Financial Officer
Page 9 of 9