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 MARCH 31, 1996 ------------------------------------------ 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 May 1, 1996 15,126,018 ---------------------------- Page 1 of 9
PART I. FINANCIAL INFORMATION <TABLE> <CAPTION> CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES Condensed Consolidated Statement of Earnings Three Months ended March 31, 1996 and 1995 (Dollars in thousands except per share amounts) 1996 1995 --------- -------- <S> <C> <C> Net Sales $225,121 $187,972 Cost and expenses: Cost of goods sold 172,750 143,529 Selling and administrative expenses 30,694 27,190 Research and development expenses 3,039 2,849 --------- -------- 206,483 173,568 --------- -------- Operating profit 18,638 14,404 Other income (deductions): Investment income 109 891 Interest expense ( 1,671) ( 1,431) Other, net 562 293 --------- -------- ( 1,000) ( 247) --------- -------- Earnings before income taxes 17,638 14,157 Income taxes 6,999 5,596 --------- -------- Net earnings $ 10,639 $ 8,561 --------- -------- --------- -------- Average common shares outstanding 15,389 15,619 --------- -------- Net earnings per share: $ 0.69 $ .55 --------- -------- --------- -------- Dividends declared and paid per share $ .22 $ .20 --------- -------- --------- -------- </TABLE> See accompanying notes to interim financial statements. Page 2 of 9
<TABLE> <CAPTION> CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES Condensed Consolidated Balance Sheets March 31, 1996 and December 31, 1995 (Dollars in thousands except share amounts) MARCH 31, DECEMBER 31, 1996 1995 --------- ----------- <S> <C> <C> ASSETS CURRENT ASSETS Cash and cash equivalents $ 4,486 $ 3,198 Receivables, less allowances of $4,040 in 1996 and $3,721 in 1995 145,511 126,610 Inventories 127,901 121,736 Deferred income taxes 17,767 18,127 Prepaid expenses and other 9,421 12,273 --------- ---------- TOTAL CURRENT ASSETS 305,086 281,944 --------- ---------- PROPERTY, PLANT AND EQUIPMENT 411,726 393,562 Less accumulated depreciation 203,327 200,428 --------- ---------- NET PROPERTY, PLANT AND EQUIPMENT 208,399 193,134 --------- ---------- OTHER ASSETS Patents and other intangibles 53,296 37,080 Investments and advances to affiliates 10,894 11,223 Receivables and other assets 10,751 10,866 Deferred income taxes 9,471 8,176 --------- ---------- TOTAL OTHER ASSETS 84,412 67,345 --------- ---------- $ 597,897 $ 542,423 --------- ---------- --------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Short-term borrowings $ 48,814 $ -- Accounts payable 49,041 45,194 Accrued expenses 82,252 83,041 --------- ---------- TOTAL CURRENT LIABILITIES 180,107 128,235 --------- ---------- LONG-TERM LIABILITIES Long-term debt 76,452 72,725 Product warranties 67,941 65,851 Deferred compensation and other liabilities 1,080 2,355 --------- ---------- TOTAL LONG-TERM LIABILITIES 145,473 140,931 --------- ---------- 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 10,032 9,316 Retained earnings 321,384 314,072 Cost of shares in treasury (1996 - 4,539,100 shares; 1995 - 4,291,507 shares) ( 78,764) ( 69,796) --------- ---------- TOTAL STOCKHOLDERS' EQUITY 272,317 273,257 --------- ---------- $ 597,897 $ 542,423 --------- ---------- --------- ---------- </TABLE> See accompanying notes to interim financial statements. Page 3 of 9
<TABLE> <CAPTION> CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES Condensed Statements of Consolidated Cash Flows Three Months ended March 31, 1996 and 1995 (Dollars in thousands) 1996 1995 -------- ------- <S> <C> <C> OPERATING ACTIVITIES Net earnings $10,639 $ 8,561 Reconciliation of net earnings to cash flows: Depreciation 6,142 5,283 Amortization 1,036 738 Changes in assets and liabilities, excluding effects of acquisitions: Current and long-term receivables (10,136) (22,752) Inventories ( 175) ( 3,174) Accounts payable and accrued expenses ( 4,739) 2,702 Prepaid, deferred and current income taxes 3,511 3,648 Long-term liabilities ( 259) 1,286 Other 1,984 884 -------- ------- 8,003 ( 2,824) -------- ------- INVESTING ACTIVITIES Capital expenditures ( 5,776) ( 6,960) Acquisitions, net of cash (37,493) ( 5,243) Sales of property, equipment & business 2,016 -- Other ( 355) 8,966 -------- ------- (41,608) ( 3,237) -------- ------- FINANCING ACTIVITIES Proceeds from short-term borrowings 48,814 -- Reductions of long-term debt ( 1,853) ( 50) Dividends ( 3,327) ( 3,081) Purchases of treasury shares ( 8,741) ( 2,857) -------- ------- 34,893 ( 5,988) -------- ------- Change in cash and cash equivalents 1,288 (12,049) CASH AND CASH EQUIVALENTS Beginning of period 3,198 70,972 -------- ------- End of period $ 4,486 $58,923 -------- ------- -------- ------- </TABLE> See accompanying notes to interim financial statements. Page 4 of 9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Three Months Ended March 31, 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 March 31, 1996 and December 31, 1995, the results of its operations for the three months ended March 31, 1996 and 1995, and its cash flows for the three months ended March 31, 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: <TABLE> <CAPTION> 3/31/96 (000'S) 12/31/95 -------- -------- <S> <C> <C> First-in, first-out (FIFO) costs: Finished goods $ 77,191 $ 65,995 Work in process 20,117 15,016 Raw materials 46,653 56,810 -------- -------- $143,961 $137,821 Excess of FIFO cost over Last-in, First-out (LIFO) inventory value 16,060 16,085 -------- -------- LIFO inventory value $127,901 $121,736 -------- -------- -------- -------- </TABLE> (3) Net earnings per share of common stock are based on the weighted average number of shares outstanding of 15,389,025 for the three months ended March 31, 1996 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 first quarter sales of $225.1 million and net earnings of $10.6 million, or $0.69 a share. This record first quarter sales performance marks the 13th consecutive quarter-over-quarter improvement in revenue and the 17th consecutive quarter-over-quarter improvement in net earnings. Record performance from operations within the Transportation Products and General Industry segments, fueled by the Company's acquisition strategies, accounted for the significant improvement. Transportation Products segment sales increased to $83.5 million in the first quarter of 1996, a 46% increase over 1995 sales of $57.0 million. Segment earnings improved 66% over last year. Segment results benefitted significantly from the inclusion of the specialized transportation trailer operations acquired in mid and late 1995. Facility expansions and improvements continued in the first quarter at these operations, in support of strategies to expand market share through new product lines and broader market coverage. Braking systems operations had a strong first quarter both domestically and in Europe. Heavy duty friction products experienced reduced sales to original equipment manufacturers, consistent with lower truck and trailer build levels in 1996. Conversely, increased aftermarket demand has become apparent. The UAW strike at General Motors limited first quarter sales and earnings at the Company's custom rubber and plastics operations to levels comparable with 1995. Aircraft wire sales improved with the overall improvement in the aircraft industry. Stable raw material pricing and various process initiatives resulted in continued progress at the Company's refrigerated container manufacturing operation. The Company's refrigerated container leasing joint venture provided solid earnings growth and is well positioned to capitalize on strong worldwide demand for temperature sensitive cargo. General Industry segment sales were 29% higher in the first quarter of 1996 versus 1995. Segment earnings improved 31% over last year. In March, specialty tires and wheels operations acquired Intero, Inc. and Unique Wheel, Inc., leading manufacturers of steel and aluminum wheels and rims sold to OEM trailer customers and the automotive aftermarket. Subsequent to the acquisitions, specialty tires and wheels operations changed its name to Carlisle Tire & Wheel Company supporting the Company's expanding strategy to provide a specialty tire and wheel assembly to key original equipment markets. Specialty tire and wheel operations reported improved performance over 1995, including better than expected results from its new acquisitions. In March, the Company's foodservice operations changed its name from Continental/SiLite International to Carlisle FoodService Products, Incorporated a simpler name that identifies the markets it serves as well as enhances its identity and association with the excellent name recognition and market awareness of Carlisle. FoodService operations finished the first quarter strongly, led by a 14% sales improvement at its Sparta Brush operation. Restricted by severe winter weather, Construction Materials segment first quarter sales and earnings were 13% and 11% lower, respectively, than Page 6 of 9
1995's record results. Indications of strengthening demand and improved spring weather conditions are expected to result in a strong second quarter performance and produce six-month results modestly improved over last year. In February, the Company acquired the manufacturing assets and fleece-back sheeting technology of Insulfoam, Inc. The Company will also benefit from the acquired technology in producing a dust-free sheet of EPDM roofing membrane. In March, the Company sold the assets of its West Coast engineered metal roofing operation in an attempt to rationalize its product line and better focus its product and marketing plans. Working capital balances at March 31, 1996 totaled $125.0 million compared to $153.7 million at December 31, 1995 and $175.3 million at March 31, 1995. Cash and cash equivalents decreased $54.4 million and short-term borrowings increased $48.8 million from a year ago, due principally to $140.8 million of combined business and capital equipment acquisitions in the last twelve months. 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 increased $3.7 million in the quarter, due principally to future amounts payable as part of the acquisition of Insulfoam, Inc. Long-term debt at March 31, 1996 is approximately 22% of Carlisle's total long-term capital. In April, the Company secured an additional $100 million revolving credit facility with a group of domestic and international banks, further enhancing its financial flexibility. The record first quarter results reflect the depth and breadth of Carlisle, and the effect of our growth strategies. Acquisitions contributed impressively to the record quarterly results. We are optimistic that the favorable performance recorded in the first quarter will continue for the year. 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 March 31, 1996 and for the three months ended March 31, 1996. (b) Report on Form 8-K: No reports on Form 8-K were filed during the quarter for which this report on Form 10Q 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 May 13, 1996 By /s/Dennis J. Hall --------------------------- --------------------------- Dennis J. Hall President Page 9 of 9