Carlisle Companies Incorporated (NYSE:CSL) today announced its
fourth quarter 2020 financial results.
- Reported consolidated fourth quarter revenue of $1.1
billion, with CCM quarterly sales turning positive on a
year-over-year basis
- CCM reported record fourth quarter operating margin of 20.4%
led by higher year-over-year sales volumes, continued benefits from
pricing resolve and raw material cost containment
- Delivered $697 million of operating cash flow and $601
million of free cash flow in 2020, similar levels to 2019, despite
lower sales year-over-year
- Share repurchases continued in the fourth quarter, totaling
3 million shares for $382 million for the full year
Comments from Chris Koch, Chairman,
President and Chief Executive Officer
"As we close 2020, we are reminded of the lives lost due to
COVID-19 around the world and of the pandemic's significant impact
on Carlisle's employees, suppliers and our customers. I am
heartened that Carlisle employees persevered and rallied around
each other and their communities, all the while continuing to
demonstrate the value of the Carlisle Experience to our customers.
While the pandemic made 2020 a unique and challenging year for
businesses across the globe, I am extremely proud of how Carlisle's
employees prioritized safety and civility in their personal
interactions. We must continue to navigate this pandemic
responsibly and with balance, ensuring that the health and safety
of our employees is a top priority. However, we must also meet
customers' expectations and continue to give our employees the
opportunity to provide for their families and support the
communities in which they live.
2020 demonstrated yet again the exceptional and sustainable
earnings power of the Carlisle business model, our proven ability
to weather significant downturns and our laser focus on our
long-term strategic objectives. CCM once again drove the majority
of positives in Carlisle's fourth quarter results, supported by
strong re-roofing trends, continued price discipline and superb
management of raw material costs. CCM also made significant strides
in integrating and improving our newer platforms of Architectural
Metals and Polyurethanes. CCM's sustainable cash generating
abilities, combined with the Carlisle Experience that has been
developed over many years and recently elevated by our
best-in-class, dedicated and accomplished global team, provide
Carlisle with the financial and strategic flexibility that supports
our conviction in achieving Vision 2025.
While CCM generated most of our earnings in 2020, our other
business platforms made important improvements despite being
impacted significantly in a challenging year. CIT delivered results
in line with our expectations in a year of record declines in the
aerospace industry by focusing on delivering new products to
increase our content per plane, rightsizing its manufacturing
footprint, further integrating its Medical platform and continuing
to invest in our Test & Measurement and Sensors businesses. CFT
exceeded expectations in the fourth quarter, leveraging a focus on
execution while introducing exciting, innovative new products.
Finally, CBF enters 2021 looking to benefit from our recent
restructuring activities and with solid end-market tailwinds in
core markets of Construction, Mining and Agriculture, further
reinforced by an improved outlook for dealer inventory
replenishment after reductions in the last several years.
As we build on the momentum in our core markets entering 2021,
we also see significant opportunities to drive revenue and earnings
growth as we accelerate through the recovery. We continue to invest
in CCM Europe evidenced by new regional leadership, expansion of
our world-class facility in Waltershausen, Germany and several new
product introductions for 2021. Within our Architectural Metals
platform, we have set plans in motion for three new locations in
underserved regions around the U.S. while making progress
consolidating our teams to drive commercial synergies and
operational efficiencies. Our Polyurethane business is delivering
sustainable growth by providing products and solutions with
unmatched energy efficiency in both residential and commercial
applications. Additionally, the Polyurethane team, collaborating
with CFT engineering, has introduced an industry-first integrated
spray foam insulation equipment solution (IntelliSpray) which
optimizes productivity and material savings when used with CCM's
complete portfolio of open and closed cell products.
Our ESG efforts are gaining momentum. We continue to increase
the diversity of both senior leadership and our Board of Directors.
In 2020, we recycled and repurposed over 75 million pounds of used
automotive tires, diverting them from landfills. We also repurposed
over 6,000 tons of scrap EPDM back into the production process. We
continue to optimize our facilities, finishing 2020 with over 20%
of our global manufacturing footprint re-lamped for LED lighting
and motion controls, and 18 of our 89 plants ISO14001 certified.
Finally, innovative CCM products help to enable the sustainable
building envelope, reducing energy costs and minimizing GHG
emissions.
We remain balanced in our capital deployment approach. We are
increasing capital expenditures considerably in 2021 to drive
future growth. Continuing to manage an active M&A pipeline, we
are focused on synergistic businesses that complement our highest
returning businesses. Finally, we will remain active in returning
capital to shareholders - notably, we raised our dividend in 2020
for the 44th consecutive year, and returned $495 million to
shareholders in the form of share repurchases and dividends.
Vision 2025 gave us clear direction and consistency of mission
during the tumultuous year of 2020, and will continue to guide our
efforts as we accelerate into the recovery in 2021."
Fourth Quarter 2020
Revenue of $1.06 billion decreased 7.0% from $1.14 billion in
the fourth quarter of 2019. Organic revenue declined 9.0% (organic
revenue defined as revenue excluding acquired revenues within the
last 12 months and the impact of changes in foreign exchange rates
versus the U.S. Dollar). Acquired revenues contributed a total of
1.4% in the quarter. Changes in foreign exchange rates had a
positive 0.6% impact on revenues.
Operating income of $111.8 million decreased 20.9% from the
fourth quarter of 2019. Operating income performance was impacted
primarily by volume declines, acquisitions and wage inflation,
partially offset by lower raw material costs, lower operating
expenses and contributions from COS.
Fourth Quarter 2020 Segment
Highlights
Carlisle Construction Materials (CCM)
- Revenues of $760.8 million, up 0.9% (+0.6% organic)
year-over-year, were driven by improving U.S. commercial roofing
demand and polyurethanes.
- Operating income was $155.0 million, up 21.5% year-over-year.
Operating margin of 20.4%, a 350 basis point improvement, was
driven by favorable raw material pricing, savings from COS, lower
SG&A and increased volume, partially offset by price and wage
inflation.
- Items affecting comparability were costs of $0.1 million versus
benefits of $0.4 million in the fourth quarter of 2019.
Carlisle Interconnect Technologies (CIT)
- Revenues of $154.6 million, down 35.4% (-40.3% organic)
year-over-year, were negatively impacted by a significant decline
in orders from Aerospace customers, partially offset by
acquisitions.
- Operating loss was $13.3 million. Operating margin of -8.6%,
was affected by lower volumes, wage and raw material inflation,
partially offset by savings from COS and lower operating
expenses.
- Items affecting comparability were costs of $9.5 million versus
costs of $6.9 million in the fourth quarter of 2019.
Carlisle Fluid Technologies (CFT)
- Revenues of $72.9 million, down 8.3% (-16.1% organic)
year-over-year, reflected volume declines, particularly in the
General Industrial markets, partially offset by acquisitions and
price.
- Operating income was $3.3 million. Operating margin of 4.5%
reflected lower volumes, higher restructuring costs and wage and
raw material inflation, partially offset by price, savings from COS
and lower SG&A.
- Items affecting comparability were costs of $1.7 million versus
benefits of $0.6 million in the fourth quarter of 2019.
Carlisle Brake & Friction (CBF)
- Revenues of $75.8 million, up 5.4% (+2.8% organic)
year-over-year, reflected improved demand in Construction and
Agricultural off-highway vehicle end markets.
- Operating income was $0.8 million. Operating margin of 1.1% was
impacted by unfavorable mix, higher restructuring costs and wage
inflation, partially offset by savings from COS.
- Items affecting comparability were costs of $0.9 million versus
costs of $0.5 million in the fourth quarter of 2019.
Cash Flow
Free cash flow (defined as cash provided by operating activities
less capital expenditures, and comprised of continuing and
discontinued operations) was $601.2 million for the twelve months
ended December, 31 2020, a decrease of $14.0 million versus the
prior year. Our priorities for the use of cash are to invest in
growth and performance improvement opportunities for our existing
businesses through capital expenditures, complete strategic
acquisitions that meet return criteria and return value to
shareholders through dividend payments and share repurchases.
During the three months ended December 31, 2020, we redeployed
our free cash flow towards $40.7 million in share repurchases and
$27.9 million in dividends paid. As of December 31, 2020, we had
$902.2 million of cash and $1.0 billion of availability under our
revolving credit facility.
2020 Full Year
Koch continued, "2020 was a year of significant accomplishments,
despite the challenges of operating during a pandemic. Entering
2021, we are optimistic that we can build on our positive momentum,
accelerate into the global recovery and deliver on Vision 2025. We
will continue to benefit from the strength of the Carlisle business
model, and enhance our strong earnings power by investing in our
exceptional management teams and high-ROIC businesses. We will
continue to deploy capital into strategic acquisitions, share
repurchases and dividends, all the while maintaining our commitment
to delivering returns on invested capital in excess of 15% and,
ultimately, driving to $15 of earnings per share."
Table 1. Revenue Breakdown
Three Months Ended
December 31, 2020
CSL
CCM
CIT
CFT
CBF
Change in Organic Revenues
(9.0
)
%
0.6
%
(40.3
)
%
(16.1
)
%
2.8
%
Net Impact from Acquisitions
1.4
%
—
%
4.8
%
5.0
%
—
%
Impact from FX
0.6
%
0.3
%
0.1
%
2.8
%
2.6
%
Change in Revenues
(7.0
)
%
0.9
%
(35.4
)
%
(8.3
)
%
5.4
%
EPS referenced in this release is from continuing operations
unless otherwise noted.
Conference Call and
Webcast
The Company will discuss fourth quarter 2020 results on a
conference call at 5:00 p.m. ET today. The call may be accessed
live by going to the Investor Relations section of the Carlisle
website, or the taped call may be listened to shortly following the
live call at the same website location. A PowerPoint presentation
will accompany the call and can be found on the Carlisle website as
well.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding the potential or expected
impacts of the global coronavirus (COVID-19) pandemic.
Forward-looking statements generally use words such as “expect,”
“foresee,” “anticipate,” “believe,” “project,” “should,”
“estimate,” “will,” “plans,” “forecast,” and similar expressions,
and reflect our expectations concerning the future. It is possible
that our future performance may differ materially from current
expectations expressed in these forward-looking statements, due to
a variety of factors such as: risks from the global coronavirus
(COVID-19) pandemic including, for example, expectations regarding
the impact of the coronavirus (COVID-19) on our businesses,
including on customer demand, supply chains and distribution
systems, production, our ability to maintain appropriate labor
levels, our ability to ship products to our customers, our future
results or our full-year financial outlook, increasing price and
product/service competition by foreign and domestic competitors,
including new entrants; technological developments and changes; the
ability to continue to introduce competitive new products and
services on a timely, cost-effective basis; our mix of
products/services; increases in raw material costs which cannot be
recovered in product pricing; domestic and foreign governmental and
public policy changes including environmental and industry
regulations; threats associated with and efforts to combat
terrorism; protection and validity of patent and other intellectual
property rights; the successful integration and identification of
our strategic acquisitions; the cyclical nature of our businesses;
and the outcome of pending and future litigation and governmental
proceedings. In addition, such statements could be affected by
general industry and market conditions and growth rates, the
condition of the financial and credit markets, and general domestic
and international economic conditions including interest rate and
currency exchange rate fluctuations. Further, any conflict in the
international arena may adversely affect general market conditions
and our future performance. We refer you to the documents we file
from time to time with the Securities and Exchange Commission, such
as our reports on Form 10-K, Form 10-Q and Form 8-K, for a
discussion of these and other risks and uncertainties that could
cause our actual results to differ materially from our current
expectations and from the forward-looking statements contained in
this press release. We undertake no obligation to update any
forward-looking statement.
About Carlisle Companies
Incorporated
Carlisle Companies Incorporated is a diversified industrial
company with a global portfolio of niche brands that delivers
energy efficient and highly engineered products and solutions for
its customers. Driven by our strategic plan, Vision 2025, Carlisle
is committed to generating superior shareholder returns by
investing in high-ROIC businesses and maintaining a balanced
capital deployment approach including investments in our
businesses, strategic acquisitions, share repurchases and continued
dividend increases. Carlisle is headquartered in Phoenix, Arizona.
Its worldwide team of employees generated $4.2 billion in revenues
in 2020. Learn more about Carlisle at www.carlisle.com.
Carlisle Companies
Incorporated
Unaudited Consolidated Statements
of Income
Three Months Ended
December 31,
Twelve Months Ended
December 31,
(in millions, except per share
amounts)
2020
2019
2020
2019
Revenues
$
1,064.1
$
1,144.3
$
4,245.2
$
4,811.6
Cost of goods sold
771.6
835.6
3,062.8
3,439.9
Selling and administrative expenses
164.2
155.6
641.5
667.1
Research and development expenses
12.6
15.9
54.8
60.9
Other operating expense (income), net
3.9
(4.1
)
2.5
(10.5
)
Operating income
111.8
141.3
483.6
654.2
Interest expense, net
18.9
16.5
76.6
66.1
Loss on extinguishment of debt
—
—
8.8
—
Interest income
(0.8
)
(1.7
)
(4.8
)
(7.9
)
Other non-operating expense, net
2.0
2.9
1.7
0.7
Income from continuing operations before
income taxes
91.7
123.6
401.3
595.3
Provision for income taxes
7.0
19.6
77.1
121.6
Income from continuing operations
84.7
104.0
324.2
473.7
Discontinued operations:
Loss before income taxes
(5.4
)
—
(5.4
)
(1.8
)
(Benefit from) provision for income
taxes
(1.3
)
1.4
(1.3
)
(0.9
)
Loss from discontinued operations
(4.1
)
(1.4
)
(4.1
)
(0.9
)
Net income
$
80.6
$
102.6
$
320.1
$
472.8
Basic earnings per share attributable to
common shares:
Income from continuing operations(1)
$
1.59
$
1.84
$
5.93
$
8.30
Loss from discontinued operations
(0.08
)
(0.03
)
(0.08
)
(0.02
)
Basic earnings per share
$
1.51
$
1.81
$
5.85
$
8.28
Diluted earnings per share attributable to
common shares:
Income from continuing operations(1)
$
1.57
$
1.81
$
5.88
$
8.21
Loss from discontinued operations
(0.08
)
(0.03
)
(0.08
)
(0.02
)
Diluted earnings per share
$
1.49
$
1.78
$
5.80
$
8.19
Average shares outstanding:
Basic
53.2
56.4
54.5
56.9
Diluted
53.8
57.2
55.0
57.5
Dividends declared and paid per share
$
0.525
$
0.50
$
2.05
$
1.80
(1) Basic and diluted EPS calculated based
on "two-class" method of computing earnings per share using the
following income attributable to common shareholders:
Income from continuing operations
$
84.5
$
103.8
$
323.1
$
472.4
Net income
80.4
102.4
319.0
471.5
Carlisle Companies
Incorporated
Unaudited Segment Information
Three Months Ended
December 31,
Increase
(Decrease)
Twelve Months Ended
December 31,
Increase
(Decrease)
(in millions, except percentages)
2020
2019
Amount
Percent
2020
2019
Amount
Percent
Revenues
Carlisle Construction Materials
$
760.8
$
753.7
$
7.1
0.9
%
$
2,995.6
$
3,233.3
$
(237.7
)
(7.4
)%
Carlisle Interconnect Technologies
154.6
239.2
(84.6
)
(35.4
)%
731.6
972.9
(241.3
)
(24.8
)%
Carlisle Fluid Technologies
72.9
79.5
(6.6
)
(8.3
)%
242.7
278.4
(35.7
)
(12.8
)%
Carlisle Brake & Friction
75.8
71.9
3.9
5.4
%
275.3
327.0
(51.7
)
(15.8
)%
Total
$
1,064.1
$
1,144.3
$
(80.2
)
(7.0
)%
$
4,245.2
$
4,811.6
$
(566.4
)
(11.8
)%
Operating Income (Loss)
Carlisle Construction Materials
$
155.0
$
127.6
$
27.4
21.5
%
$
581.6
$
576.0
$
5.6
1.0
%
Carlisle Interconnect Technologies
(13.3
)
29.1
(42.4
)
(145.7
)%
(2.1
)
131.6
(133.7
)
(101.6
)%
Carlisle Fluid Technologies
3.3
10.1
(6.8
)
(67.3
)%
5.3
24.0
(18.7
)
(77.9
)%
Carlisle Brake & Friction
0.8
0.8
—
—
%
(3.7
)
21.3
(25.0
)
(117.4
)%
Segment Totals
145.8
167.6
(21.8
)
(13.0
)%
581.1
752.9
(171.8
)
(22.8
)%
Corporate and unallocated (1)
(34.0
)
(26.3
)
(7.7
)
29.3
%
(97.5
)
(98.7
)
1.2
(1.2
)%
Total
$
111.8
$
141.3
$
(29.5
)
(20.9
)%
$
483.6
$
654.2
$
(170.6
)
(26.1
)%
Operating Margin Percentage
Carlisle Construction Materials
20.4
%
16.9
%
350 bps
19.4
%
17.8
%
160 bps
Carlisle Interconnect Technologies
(8.6
)
%
12.2
%
(2080) bps
(0.3
)
%
13.5
%
(1380) bps
Carlisle Fluid Technologies
4.5
%
12.7
%
(820) bps
2.2
%
8.6
%
(640) bps
Carlisle Brake & Friction
1.1
%
1.1
%
— bps
(1.3
)
%
6.5
%
(780) bps
Total
10.5
%
12.3
%
(180) bps
11.4
%
13.6
%
(220) bps
Depreciation and Amortization
Carlisle Construction Materials
$
23.8
$
24.7
$
(0.9
)
(3.6
)%
$
98.0
$
93.9
$
4.1
4.4
%
Carlisle Interconnect Technologies
19.1
17.1
2.0
11.7
%
77.5
63.0
14.5
23.0
%
Carlisle Fluid Technologies
6.0
6.2
(0.2
)
(3.2
)%
23.4
24.1
(0.7
)
(2.9
)%
Carlisle Brake & Friction
5.2
5.5
(0.3
)
(5.5
)%
21.5
21.7
(0.2
)
(0.9
)%
Corporate and unallocated (1)
1.1
0.5
0.6
120.0
%
3.8
2.7
1.1
40.7
%
Total
$
55.2
$
54.0
$
1.2
2.2
%
$
224.2
$
205.4
$
18.8
9.2
%
(1) Includes general corporate expenses
and other unallocated costs.
Carlisle Companies Incorporated
Unaudited Items Affecting Comparability Information
Items affecting comparability include costs, and losses or gains
related to, among other things, growth and profitability
improvement initiatives and other events outside of core business
operations (such as asset impairments, exit and disposal and
facility rationalization charges, costs of and related to
acquisitions, idle capacity and labor costs, net of subsidies,
losses on debt extinguishment, litigation settlement costs,
insurance settlements, gains and losses from and costs related to
divestitures, and non-comparable tax items). Because these items
affect our, or any particular operating segment's, financial
condition or results in a specific period in which they are
recognized, we believe it is appropriate to present the total of
these items to provide information regarding the comparability of
results of operations period to period.
Three Months Ended
December 31,
Twelve Months Ended
December 31,
(in millions, except per share
amounts)
2020
2019
2020
2019
Impact to Operating Income
Exit and disposal costs
$
5.9
$
3.6
$
24.5
$
13.7
Other facility rationalization costs
0.1
2.2
2.1
5.7
Acquisition related costs:
Inventory step-up amortization
0.3
0.9
0.7
3.1
Other acquisition costs
(2.0)
2.0
3.7
8.3
Idle capacity and labor costs, net of
subsidies
0.8
—
8.8
—
Impairment charges
6.0
—
6.0
—
Gains from insurance recoveries
(0.7)
—
(0.7)
—
Gains from contingent consideration
—
(2.0)
—
(5.0)
Gains from divestitures
—
(2.1)
(0.8)
(2.1)
Total
$
10.4
$
4.6
$
44.3
$
23.7
Impact to Diluted EPS from Continuing
Operations (1)
Exit and disposal costs
$
0.08
$
0.05
$
0.34
$
0.18
Other facility rationalization costs
—
0.03
0.03
0.08
Acquisition related costs:
Inventory step-up amortization
0.01
0.01
0.01
0.04
Other acquisition costs
(0.03)
0.04
0.05
0.12
Idle capacity and labor costs, net of
subsidies
0.02
—
0.12
—
Impairment charges
0.08
—
0.08
—
Gains from insurance recoveries
(0.01)
—
(0.01)
—
Gains from contingent consideration
—
(0.03)
—
(0.09)
Gains from divestitures
(0.04)
(0.03)
(0.05)
(0.02)
Loss on early extinguishment of debt
—
—
0.12
—
Indemnification losses
—
—
0.06
—
Tax items
(0.20)
(0.10)
(0.31)
(0.23)
Total
$
(0.09)
$
(0.03)
$
0.44
$
0.08
Impact to Operating Income
Carlisle Construction Materials
$
0.1
$
(0.4)
$
3.3
$
2.2
Carlisle Interconnect Technologies
9.5
6.9
26.7
16.7
Carlisle Fluid Technologies
1.7
(0.6)
4.2
0.8
Carlisle Brake & Friction
0.9
0.5
6.7
2.8
Corporate
(1.8)
(1.8)
3.4
1.2
Total
$
10.4
$
4.6
$
44.3
$
23.7
Impact to Diluted EPS from Continuing
Operations (1)
Carlisle Construction Materials
$
—
$
—
$
0.10
$
0.04
Carlisle Interconnect Technologies
0.14
0.10
0.37
0.22
Carlisle Fluid Technologies
(0.02)
(0.02)
0.02
(0.01)
Carlisle Brake & Friction
0.01
0.01
0.09
0.04
Corporate
(0.22)
(0.12)
(0.14)
(0.21)
Total
$
(0.09)
$
(0.03)
$
0.44
$
0.08
(1) Tax effect is based on the rate of the
jurisdiction where the expense is deductible or income is
taxable.
Carlisle Companies
Incorporated
Unaudited Condensed Consolidated
Statements of Cash Flows
Twelve Months Ended
December 31,
(in millions)
2020
2019
Net cash provided by operating
activities
$
696.7
$
703.1
Investing activities:
Capital expenditures
(95.5
)
(88.9
)
Acquisitions, net of cash acquired
(35.4
)
(616.4
)
Other investing activities, net
8.3
10.4
Net cash used in investing activities
(122.6
)
(694.9
)
Financing activities:
Borrowings from revolving credit
facility
500.0
—
Repayments of revolving credit
facility
(500.0
)
—
Proceeds from notes
740.7
—
Repayments of notes
(258.5
)
—
Repurchase of common stock
(382.4
)
(382.1
)
Dividends paid
(112.4
)
(102.9
)
Financing costs
(24.2
)
—
Proceeds from exercise of stock
options
21.3
37.0
Withholding tax paid related to
stock-based compensation
(8.3
)
(10.4
)
Other financing activities, net
(0.9
)
(2.8
)
Net cash used in financing activities
(24.7
)
(461.2
)
Effect of foreign currency exchange rate
changes on cash and cash equivalents
1.6
0.6
Change in cash and cash equivalents
551.0
(452.4
)
Beginning of period
351.2
803.6
End of period
$
902.2
$
351.2
Carlisle Companies
Incorporated
Unaudited Selected Consolidated
Balance Sheet Data
(in millions)
December 31,
2020
December 31,
2019
Cash and cash equivalents
$
902.2
$
351.2
Long-term debt, including current
portion
2,081.3
1,591.6
Total shareholders' equity
2,537.7
2,642.8
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210204005976/en/
Jim Giannakouros, CFA Vice President of Investor Relations (480)
781-5135 jgiannakouros@carlisle.com
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