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, 1997
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 inits 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
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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 August 1, 1997 30,154,116
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PART I. FINANCIAL INFORMATION
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Statement of Earnings
Three Months and Six Months ended June 30, 1997 and 1996
(Dollars in thousands except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
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JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997 1996 1997 1996
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Net Sales........................................................ $ 337,372 $ 262,315 $ 625,191 $ 487,435
Cost and expenses:
Cost of goods sold............................................. 260,660 197,831 484,887 370,581
Selling and administrative..................................... 35,016 32,233 69,480 62,927
Research and development....................................... 3,909 3,040 7,764 6,078
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299,585 233,104 562,131 439,586
Operating profit................................................. 37,787 29,211 63,060 47,849
Other income (deductions):
Investment income.............................................. 336 96 582 205
Interest expense............................................... (4,289) (2,427) (8,270) (4,099)
Other, net..................................................... 920 350 1,608 913
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(3,033) (1,981) (6,080) (2,981)
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Earnings before income taxes..................................... 34,754 27,230 56,980 44,868
Income taxes..................................................... 13,774 10,789 22,579 17,788
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Net earnings..................................................... $ 20,980 $ 16,441 $ 34,401 $ 27,080
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Average common shares outstanding................................ 30,907 30,932 31,018 30,856
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Net earnings per share:.......................................... $ 0.68 $ 0.53 $ 1.11 $ 0.88
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Dividends declared and
paid per share................................................. $ .1225 $ .1100 $ .2450 $ .2200
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See accompanying notes to interim financial statements.
2
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
June 30, 1997 and December 31, 1996
(Dollars in thousands except share amounts)
JUNE 30, DEC. 31,
1997 1996
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ASSETS
Current assets
Cash and cash equivalents............................................................... $ 17,999 $ 8,312
Receivables, less allowances of $4,396 in 1997 and $4,097 in 1996....................... 200,984 158,463
Inventories............................................................................. 140,899 137,092
Deferred income taxes................................................................... 25,236 25,036
Prepaid expenses and other.............................................................. 24,163 17,030
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Total current assets.................................................................. 409,281 345,933
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Property, plant and equipment............................................................. 503,367 483,013
Less accumulated depreciation........................................................... 233,278 218,775
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Net property, plant and equipment..................................................... 270,089 264,238
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Other assets
Patents and other intangibles........................................................... 108,540 108,648
Investments and advances to affiliates.................................................. 13,867 11,976
Receivables and other assets............................................................ 10,023 9,854
Deferred income taxes................................................................... 2,831 1,814
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Total other assets.................................................................... 135,261 132,292
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$ 814,631 $ 742,463
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable........................................................................ $ 89,437 $ 74,338
Accrued expenses........................................................................ 112,693 96,310
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Total current liabilities............................................................. 202,130 170,648
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Long-term liabilities
Long-term debt.......................................................................... 218,938 191,167
Product warranties...................................................................... 71,563 71,478
Deferred compensation and other liabilities............................................. 661 1,667
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Total long-term liabilities........................................................... 291,162 264,312
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Shareholders' equity:
Common stock, $1 par value. Authorized 50,000,000 shares; issued 39,330,624 shares...... 39,331 39,331
Additional paid-in capital.............................................................. 1,084 480
Retained earnings....................................................................... 375,532 348,558
Cost of shares in treasury (1997--9,176,463 shares; 1996--8,979,300 shares)............. (94,608) (80,866)
Total shareholders' equity............................................................ 321,339 307,503
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$ 814,631 $ 742,463
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See accompanying notes to interim financial statements.
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CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Statements of Consolidated Cash Flows
Six Months ended June 30, 1997 and 1996
(Dollars in thousands)
1997 1996
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Operating Activities
Net earnings............................................................................. $ 34,401 $ 27,080
Reconciliation of net earnings to cash flows:
Depreciation........................................................................... 16,693 12,646
Amortization........................................................................... 3,000 2,343
Changes in assets and liabilities, excluding
effects of acquisitions and sale of business:
Current & long-term receivables.................................................... (47,601) (25,379)
Inventories........................................................................ (5,052) 2,955
Accounts payable & accrued expenses................................................ 18,190 10,608
Prepaid, deferred & current income taxes........................................... 8,621 12
Long-term liabilities.............................................................. (2,812) 30
Other.............................................................................. 604 1,591
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26,044 31,886
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Investing Activities
Capital expenditures..................................................................... (21,895) (14,886)
Acquisitions, net of cash................................................................ (4,082) (37,493)
Sales of property, equipment & business.................................................. 5,895 1,383
Other.................................................................................... -- (155)
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(20,082) (51,151)
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Financing Activities
Proceeds from short-term borrowings...................................................... -- 35,000
Proceeds from long-term debt............................................................. 152,647 --
Reductions of long-term debt............................................................. (124,871) (1,889)
Dividends................................................................................ (7,427) (6,655)
Purchases of treasury shares............................................................. (16,624) (8,741)
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3,725 17,715
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Change in cash and cash equivalents........................................................ 9,687 (1,550)
Cash and cash equivalents
Beginning of period...................................................................... 8,312 3,198
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End of period............................................................................ $ 17,999 $ 1,648
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See accompanying notes to interim financial statements.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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Three and six Months Ended June 30, 1997 and 1996
(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, 1997 and December 31, 1996, the results of its operations
for the three months and the six months ended June 30, 1997 and 1996,
and its cash flows for the six months ended June 30, 1997 and 1996.
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 1996 Annual Report to
Shareholders.
(2) The components of inventories are as follows:
JUNE 30, DEC. 31,
1997 1996
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(000)'S
First-in, first-out (FIFO) costs:
Finished goods............................................... $ 79,065 $ 82,253
Work in process.............................................. 14,482 17,574
Raw materials................................................ 62,094 51,872
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$ 155,641 $ 151,699
Excess of FIFO cost over Last-in,
First-out (LIFO) inventory value............................... (14,742) (14,607)
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LIFO inventory value........................................... $ 140,899 $ 137,092
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(3) Net earnings per share of common stock are based on the weighted average
number of shares outstanding of 30,906,928 for the three months ended
June 30, 1997 and 31,018,019 for the six months ended June 30, 1997
assuming the exercise of dilutive stock options.
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Management's Discussion and Analysis of
Financial Condition and Results of Operations
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We are pleased to report second quarter 1997 sales of $337.4 million,
earnings of $21.0 million and earnings per share of $.68 a share. These
results establish an all-time record performance for Carlisle. Second quarter
1997 sales increased 29% over 1996 sales of $262.3 million. Earnings improved
28% compared to 1996 second quarter earnings of $16.4 million, or $.53 a
share. For the six months ended June 30, 1997, sales totaled $625.2 million
compared to $487.4 million in 1996, a 28% increase. Year-to-date earnings
were $34.4 million or $1.11 a share, a 27% increase over 1996 earnings of
$27.1 million or $0.88 a share. The Company's second quarter results were
driven by continued record performances from the transportation products and
general industry segments, combined with another strong quarter from the
construction materials segment.
Construction Materials second quarter segment sales, after eliminating the
sales of Carlisle's engineered metal roofing business, which was sold in
February 1997, increased 7% over 1996 levels while segment earnings increased
13%. On a year-to-date basis, sales increased 2% to $144.6 million from
$142.3 million in 1996. The Company's new fleeceback roofing product line was
a positive contributor to these results.
Sales in the Transportation Products segment increased to $139.4 million in
the second quarter of 1997, a 55% increase over 1996 sales of $90.1 million.
Segment earnings improved 54% over 1996. For the six months ended June 30,
1997, segment sales increased 51% to $262.9 million while segment earnings
improved 45% over 1996 levels. The Company's automotive engineered plastics
operations, aided by its 1996 expansion, contributed significantly to the
increase in sales and net earnings for the second quarter and year-to-date
despite sporadic strikes among the Big 3 auto-makers. The Company's wire
operations continue to set new records in sales and earnings in aircraft wire
which serves the strong aerospace market.The specialized transportation
trailer operations continue to report strong sales reflecting increased
market share. The Company's refrigerated container leasing joint venture
continues to report strong earnings growth, partially offsetting losses at
the manufacturing level. Record sales in the Company's industrial friction
and aftermarket partially offset the on-going negative impact of the
strengthening U.S. dollar against the European currency and margin erosion in
certain aftermarket channels in the heavy friction business. The acquisition
of Overland Brakes, Inc., a spring brake manufacturer, which integrates well
with the Company's heavy-friction products business, was completed April 30,
1997.
General Industry segment sales were up 28% in the second quarter to $110.7
million from $86.3 million in 1996. Segment earnings in the quarter increased
23% over 1996. On a year-to-date basis, sales increased 27% and earnings
increased 28%. Sales in the Company's speciality tire and wheel operations
continue to be strong. Additionally, in June of 1997, the Company completed
the acquisition of the assets of The Neilson Wheel Company, a producer and
marketer of tire and wheel assemblies to industrial and lawn and garden OE
suppliers. The Company has also agreed to acquire the assets of The City
Machine and Wheel Company, a manufacturer and seller of stamped steel wheels
to customers in Canada and the United States. This acquisition was completed
in July of 1997.
6
Foodservice operations increased sales 24% in the quarter over 1996 levels
while increased efficiencies at Sparta Brush added considerably to its 30%
improvement in earnings. The Company's stainless steel in-plant processing
equipment operation continues to report improved sales and earnings.
Working Capital was $207.1 million at June 30, 1997 compared to $203.3
million at March 31, 1997 and $135.2 at June 30, 1996.
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.
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PART II. OTHER INFORMATION
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The Company's 1997 Annual Meeting of Shareholders was held on April 21,
1997.
(b) At the 1997 Annual Meeting of Shareholders, the election of four
directors were approved as follows:
Director FOR AGAINST WITHHELD NON-VOTE
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Magalen O. Bryant.................................................. 36,753,521 -- 2,621,017 --
Paul J. Choquette, Jr.............................................. 36.763,764 -- 2,610,774 --
Stephen P. Munn.................................................... 36,779,257 -- 2,595,281 --
George L. Ohrstrom, Jr............................................. 36,753,556 -- 2,620,982 --
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits applicable to the filing of this report are as follows:
(12) Ratio of Earnings to Fixed Charges.
(27) Financial Data Schedule as of June 30, 1997 and for the six
months ended June 30, 1997.
(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.
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SIGNATURE
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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 11, 1997 By /s/ Robert J. Ryan, Jr.
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Robert J. Ryan, Jr.
Vice President, Treasurer
and Chief Financial Officer
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