Carlisle Companies Incorporated (NYSE:CSL) reported net sales
from continuing operations of $604.6 million for the quarter ended
September 30, 2009, a 27% decline from $832.5 million in the third
quarter of 2008. Sales were down across all segments, with organic
sales decreasing by 26% from the third quarter of the prior year.
The impact of foreign currency exchange rates on net sales was a
reduction of less than 1% in the third quarter of 2009.
Net income from continuing operations declined 11% to $45.0
million, or $0.73 per diluted share, in the third quarter 2009
compared with $50.6 million, or $0.83 per diluted share, in the
third quarter of 2008. 2009 net income was negatively impacted by
lower sales volume as well as restructuring expenses related to
previously announced plant consolidations. 2009 net income was
positively impacted by favorable raw material pricing, lower
operating expenses and efficiencies gained through the Carlisle
Operating System.
Comment
David A. Roberts, Chairman, President and CEO, said, “We
continue to improve our operating margins despite our challenging
end-markets. Although sales declined 27% in the third quarter, our
operating margins improved to 11.7% from 9.8% for the third quarter
2008. We were especially pleased with margins at our Construction
Materials and Applied Technologies segments. Within the
Construction Materials segment, operating margins increased to
17.7%, as compared to 13.6% for the same period last year, despite
a 24% decline in sales. Our Applied Technologies segment increased
their operating margin to 12.5%, as compared to 9.7% for the same
period last year, despite a 19% decline in sales.
“In addition to the margin improvements, we continued our strong
cash flow performance in the quarter generating $94.4 million of
cash from operations. We used our cash flow to fund the $33 million
acquisition of Jerrik, contribute $25 million to our pension fund,
and pay down the remaining $25 million portion of our short-term
debt.”
Roberts continued, “We are encouraged by the current acquisition
environment where we have found strategic opportunities as
evidenced by our recently announced acquisitions of Jerrik and
Electronic Cable Specialists, both in the Applied Technologies
segment. These types of bolt-on acquisitions, which expand our
product and engineering capabilities as well as introduce us to new
global and domestic markets, will continue to be the focus of our
acquisition efforts.
“For the full-year 2009, we continue to plan for an approximate
25% revenue decline as compared to 2008. Our goal is to exceed the
8.2% operating margin reported last year. Our plant restructuring
remains on track with expenses estimated at $22 million in 2009,
with savings of approximately $12 million in the current year.”
Roberts concluded by stating, “As we operate in these
challenging markets, we will continue to implement the Carlisle
Operating System, focusing on improving operating margins and
generating strong cash flow. Our balance sheet and available credit
lines position us to take advantage of additional acquisitions and
further invest in our businesses.”
Segment Results
Construction Materials: Third quarter 2009 net sales
declined 24% to $340.1 million from $448.1 million, and operating
income was $60.3 million compared to $60.8 million for the same
period in 2008. The decrease in sales was across all product lines
and is consistent with declines in the overall construction
industry. Despite the lower sales volume, operating margins
increased from 13.6% in the third quarter 2008 to 17.7% in the
third quarter of the current year. The improvement in margins was
due to the combination of favorable raw material costs, reduction
in selling and administration expenses and efficiency gains from
the Carlisle Operating System as well as continued improvements in
the operating performance at Insulfoam and the waterproofing
business.
Transportation Products: Third quarter 2009 net sales
declined 37% to $129.2 million from $205.2 million, and operating
income declined by 54% to $4.0 million from $8.7 million for the
same period in 2008. Sales were down in all markets in the
Transportation Products segment, with sales of trailers decreasing
64% from the prior year. Operating income was negatively impacted
by the combination of the lower sales volume as well as $4.1
million of restructuring costs from previously announced plant
consolidations. Operating income was positively impacted by cost
reductions and lower raw material pricing.
Applied Technologies: Third quarter 2009 net sales
declined 19% to $105.8 million from $131.2 million, and operating
income increased 3.9% to $13.2 million from $12.7 million for the
same period in 2008. The largest sales declines were in the
aerospace, test and measurement and core foodservice markets.
Despite the decline in sales, operating margins improved from 9.7%
in the third quarter 2008 to 12.5% in the current quarter. The
improvement in operating margins was primarily due to cost
reduction efforts implemented in late 2008 and early 2009 as well
as higher selling prices and efficiencies gained through the
Carlisle Operating System.
Specialty Products: Third quarter 2009 net sales declined
39% to $29.5 million from $48.0 million, and operating income
declined to $0.9 million from $8.2 million for the same period in
2008. The decrease in third quarter sales and operating income was
primarily attributable to weak sales in the agriculture and
construction markets in the off-highway brake business as well as
lower sales in the refrigerated truck body business.
Corporate
Expense
Corporate expense of $7.7 million for the third quarter of 2009
compared with $8.6 million for the third quarter 2008. The decrease
was primarily due to a reduction in overall operating costs for the
quarter.
Interest Expense,
Net
Net interest expense of $2.0 million for the third quarter 2009
compared with $6.1 million for the third quarter 2008. The decrease
was due to the reduction in outstanding debt during 2009.
Discontinued
Operations
Income from discontinued operations of $1.6 million for the
third quarter 2009 compared with a loss of $0.2 million for the
third quarter 2008. In April 2008, Carlisle announced plans to
dispose of Power Transmission and Motion Control. During the first
quarter of 2009, the Company made the decision to exit, rather than
sell, the on-highway friction and brake shoe business and dispose
of the assets as part of a planned dissolution. The disposition of
the friction and brake shoe assets has been substantially completed
with the sale of certain real estate remaining. The Power
Transmission business remains in discontinued operations and
continues to operate profitably and generate positive cash
flows.
Net Income
Net income for the third quarter 2009 was $46.6 million, or
$0.75 per diluted share, compared to net income of $50.4 million,
or $0.82 per diluted share, for the third quarter 2008. The
negative impact on net income from lower sales volume was partially
offset by favorable raw material prices and lower operating
expenses as well as efficiency gains from the Carlisle Operating
System during the third quarter of 2009.
Year-to-Date
Net sales of $1.73 billion for the nine months ended September
30, 2009 decreased 26% as compared with $2.35 billion for the same
period in 2008. Sales decreased across all segments. September 30,
2009 year-to-date income from continuing operations of $110.7
million, or $1.79 per diluted share, compared with income from
continuing operations of $135.7 million, or $2.21 per diluted
share, for the same period in 2008. 2009 operating income was
positively impacted by a $27.0 million gain from a fire insurance
recovery, selling price increases, favorable raw material pricing,
efficiencies gained through the Carlisle Operating System and
additional income contributed from the Carlyle acquisition. These
positive impacts were more than offset by lower sales volume as
well as restructuring expenses.
Net income for the nine months ended September 30, 2009 was
$108.7 million, or $1.76 per diluted share. Net income for the nine
months ended September 30, 2008 was $42.1 million, or $0.69 per
diluted share, and included after-tax impairment charges of $89.5
million, or $1.47 per diluted share, related to the power
transmission belt business and on-highway brake business. Both
businesses are reported in discontinued operations.
Cash flow provided by operations of $363.4 million for the nine
months ended September 30, 2009 compared with cash flow provided by
operations of $142.1 million for the same period in 2008. During
the first nine months of the year, debt was reduced by $234.6
million. Cash generated from working capital and other assets and
liabilities of $184.0 million for 2009 compared with cash used of
$54.8 million in 2008. 2009 cash flow provided by operations
includes $54.5 million of proceeds relating to the insurance
recovery from the fire at the Bowdon, Georgia facility. Cash used
in investing activities of $61.0 million in 2009 includes $33.0
million for the acquisition of Jerrik for the interconnect
technologies business. Cash used in investing activities was $346.0
million in 2008 and included cash used for acquisitions of $294.8
million for the purchases of Dinex for the foodservice business and
Carlyle for the interconnect technologies business. Capital
expenditures of $34.9 million in 2009 compared with $55.8 million
in 2008.
Conference Call and
Webcast
The Company will discuss third quarter 2009 results on a
conference call at 10:00 a.m. ET today. The call may be accessed
live at http://www.carlisle.com/investors/conference_call.html, or
the taped call may be listened to shortly following the live call
at the same website location.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements are based on management's current
expectations and are subject to uncertainty and changes in
circumstances. Actual results may differ materially from these
expectations due to changes in global economic, business,
competitive, market and regulatory factors. More detailed
information about these factors is contained in the Company's
filings with the Securities and Exchange Commission. The Company
undertakes no duty to update forward-looking statements.
About Carlisle
Companies
Carlisle is a diversified global manufacturing company
serving the construction materials, commercial roofing, specialty
tire and wheel, power transmission, heavy-duty brake and friction,
heavy-haul truck trailer, refrigerated truck body, foodservice,
aerospace, and test and measurement industries.
CARLISLE COMPANIES INCORPORATED Consolidated
Statement of Earnings For the periods ended September 30
(In millions, except share and per share amounts)
(Unaudited) Third Quarter Nine
Months 2009 2008 % Change
2009
2008 % Change Net sales
$ 604.6
$ 832.5 -27 %
$ 1,734.2
$ 2,347.9 -26 % Cost and expenses:
Cost of goods sold
462.3 668.4 -31 %
1,362.2 1,886.0 -28 % Selling and administrative expenses
66.6 79.1 -16 %
207.1 234.9 -12 % Research and
development expenses
3.2 3.2 0 %
9.9 9.8 1 % Gain
related to fire settlement
- - NM
(27.0 ) - NM
Other operating expenses
1.8 -
NM
9.9 -
NM Operating income
70.7 81.8
-14 %
172.1 217.2 -21 % Other non-operating income,
net
(0.8 ) (0.6 ) NM
- (1.4 ) NM Interest
expense, net
2.0 6.1
-67 %
7.0 15.3
-54 % Earnings before income taxes
69.5 76.3
-9 %
165.1 203.3 -19 % Income tax expense
24.5 25.7 -5 %
54.4 67.6 -20 %
Income from continuing operations
45.0
50.6 -11 %
110.7
135.7 -18 % Income (loss) from
discontinued operations
1.6 (0.2
) NM
(2.0 ) (93.6
) NM Net income
$ 46.6
$ 50.4 -8 %
$ 108.7
$ 42.1 158 %
Basic earnings (loss) per share
(1)
Continuing operations
$ 0.73 $ 0.83 -12 %
$
1.81 $ 2.22 -18 % Discontinued operations
0.03
- NM
(0.04
) (1.53 ) NM Basic earnings per
share $ 0.76 $ 0.83 -8 % $ 1.77
$ 0.69 157 %
Diluted earnings (loss) per share
(1)
Continuing operations
$ 0.73 $ 0.83 -12 %
$
1.79 $ 2.21 -19 % Discontinued operations
0.02
(0.01 ) NM
(0.03
) (1.52 ) NM Diluted earnings
per share $ 0.75 $ 0.82 -9 % $ 1.76
$ 0.69 155 % Average shares
outstanding - in thousands Basic
60,612
60,528
60,588
60,543 Diluted
61,237
60,805
61,153 60,826
Dividends
$ 9.8 $ 9.5
3 %
$ 28.8 $ 27.2
6 % Dividends per share
$ 0.160
$ 0.155 3 %
$ 0.470 $
0.445 6 % (1) Numerator for basic and diluted
EPS calculated based on "two class" method: Income from continuing
operations
$ 44.5 $ 50.2
$ 109.5 $ 134.5 Net income
$ 46.1 $ 50.0
$
107.5 $ 41.7 NM = Not Meaningful
CARLISLE COMPANIES INCORPORATED Segment Financial
Data For the periods ended September 30 (In
millions) (Unaudited)
Third Quarter Nine Months 2009 2008 %
Change
2009 2008 % Change
Net Sales
Construction Materials
$ 340.1 $ 448.1 -24 %
$
862.2 $ 1,171.8 -26 % Transportation Products
129.2
205.2 -37 %
470.8 691.0 -32 % Applied Technologies
105.8 131.2 -19 %
311.5 350.7 -11 % Specialty
Products
29.5 48.0 -39 %
89.7 134.4 -33 % Total Net Sales
$ 604.6 $ 832.5 -27 %
$
1,734.2 $ 2,347.9 -26 %
Operating Income Construction Materials
$
60.3 $ 60.8 -1 %
$ 116.7 $ 129.8 -10 %
Transportation Products
4.0 8.7 -54 %
44.9 53.7 -16 %
Applied Technologies
13.2 12.7 4 %
30.4 36.0 -16 %
Specialty Products
0.9 8.2 -89 %
5.9 21.7 -73 % Segment Operating
Income
78.4 90.4 -13 %
197.9 241.2 -18 % Corporate
(7.7 ) (8.6 ) 10 %
(25.8
) (24.0 ) -8 % Total Operating Income
$
70.7 $ 81.8 -14 %
$ 172.1
$ 217.2 -21 %
Operating Margins
Construction Materials
17.7 % 13.6 %
13.5
% 11.1 % Transportation Products
3.1 % 4.2 %
9.5 % 7.8 % Applied Technologies
12.5 %
9.7 %
9.8 % 10.3 % Specialty Products
3.1 % 17.1 %
6.6 %
16.1 % Segment Operating Margin
13.0 % 10.9 %
11.4 % 10.3 % Corporate
-1.3 %
-1.1 %
-1.5 % -1.0 % Total
Operating Margin
11.7 % 9.8 %
9.9 % 9.3 %
CARLISLE COMPANIES
INCORPORATED Comparative Condensed Consolidated Balance
Sheet (In millions) September 30,
December 31,
2009 2008
Assets
(Unaudited) Current Assets Cash and cash equivalents
$ 81.2 $ 42.7 Receivables
342.4 317.0
Inventories
299.8 424.2 Prepaid expenses and other
69.1 94.1 Current assets held for sale
46.5
90.1
Total current assets 839.0
968.1 Property, plant and equipment, net
444.1
470.7 Other assets
608.8 589.2 Non-current assets held for
sale
46.1 47.9
Total Assets
$ 1,938.0 $ 2,075.9
Liabilities and
Shareholders' Equity Current Liabilities Short-term
debt, including current maturities
$ - $ 127.0
Accounts payable
139.5 123.6 Accrued expenses
184.0
163.0 Current liabilities associated with assets held for sale
14.1 28.9
Total current
liabilities 337.6 442.5 Long-term
debt
156.7 273.3 Other liabilities
253.1 266.0
Shareholders' equity
1,190.6 1,094.1
Total Liabilities and Shareholders' Equity $
1,938.0 $ 2,075.9
CARLISLE COMPANIES INCORPORATED Comparative
Condensed Consolidated Statement of Cash Flows For the Nine
Months Ended September 30 (In millions)
(Unaudited) 2009 2008
Operating
activities Net income
$ 108.7 $ 42.1
Reconciliation of net income to operating cash flows: Depreciation
and amortization
50.8 53.3 Non-cash compensation
10.9
9.0 Loss on writedown of assets
10.6 124.3 Deferred taxes
3.1 (30.7 ) Change in working capital and other assets and
liabilities
184.0 (54.8 ) Other
(4.7 )
(1.1 )
Net cash provided by operating
activities 363.4 142.1
Investing activities Capital expenditures
(34.9 ) (55.8 ) Acquisitions, net of cash acquired
(33.0 ) (294.8 ) Proceeds from investments and
disposal of property and equipment
6.7 4.1 Other
0.2 0.5
Net cash used in
investing activities (61.0 )
(346.0 )
Financing activities Net change in short-term debt
and revolving credit lines
(234.6 ) 353.2 Reductions
of long-term debt
- (100.0 ) Dividends paid
(28.8
) (27.2 ) Excess tax benefits on share-based compensation
(0.2 ) - Treasury shares and stock options, net
(0.2 ) (1.7 ) Treasury share repurchases
- (4.8 )
Net cash (used in) provided
by financing activities (263.8 )
219.5
Effect of exchange rate changes on cash
(0.1 ) (2.3 )
Change in cash
and cash equivalents 38.5 13.3
Cash and cash
equivalents Beginning of period
42.7
88.4 End of period
$ 81.2
$ 101.7
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