Carlisle Companies Incorporated (NYSE:CSL) reported net sales
from continuing operations of $555.2 million for the quarter ended
December 31, 2009, a 15% decline from $651.2 million in the fourth
quarter of 2008. Sales were down across all segments, with organic
sales decreasing by 17% from the fourth quarter of the prior year.
The Interconnect Technologies segment’s acquisitions of Jerrik and
Electronic Cable Specialists and the Engineered Transportation
Solutions segment’s acquisition of Japan Power Brake contributed
$14.6 million of sales in the fourth quarter. The impact of foreign
currency exchange rates on net sales was an increase of less than
1% in the fourth quarter of 2009.
Income from continuing operations increased 131% to $35.6
million, or $0.57 per diluted share, in the fourth quarter 2009
compared with $15.4 million, or $0.25 per diluted share, in the
fourth quarter 2008. 2009 income was positively impacted by
favorable raw material pricing, lower interest expense as well as
efficiencies gained through the Carlisle Operating System. Fourth
quarter 2009 net income also includes the release of a $19.6
million deferred tax accrual, previously provided with respect to
un-repatriated earnings. The Company has now identified appropriate
long-term uses for these earnings outside the United States. 2009
fourth quarter net income was negatively impacted by lower sales
volume, lower pricing and restructuring expenses related to plant
consolidations.
Comment
David A. Roberts, Chairman, President and CEO, said, “We
expected 2009 to be challenging but were committed to improving our
margins. Despite a sales decline of 23% for the full-year, we were
able to improve our EBIT (Earnings Before Interest and Income
Taxes) margin to 8.7% in 2009. Our management teams did an
excellent job managing through difficult market conditions by
cutting costs to match revenue levels, while continuing to invest
in their businesses for the long-term. We were especially pleased
with margins in our Construction Materials and FoodService Products
segments. The Construction Materials segment increased their EBIT
margin to 13.8%, as compared to 10.3% for the same period last
year, despite a 24% decline in sales. Our FoodService Products
segment increased their EBIT margin to 10.1%, as compared to 7.8%
for the same period last year, despite an 8% decline in sales.
“In addition to the margin improvements, we continued our strong
cash flow performance generating $447 million of cash flow from
operations during the year. We used a portion of our cash flow to
fund the Jerrik, Electronic Cable Specialists and Japan Power Brake
acquisitions and to contribute $53 million to our pension fund.
Additionally, our strong cash flow allowed us to reduce our
outstanding debt by $235 million during 2009, which contributed to
the $19 million reduction in 2009 interest expense.”
Roberts continued, “Yesterday, we completed the sale of Johnson
Truck Bodies, our refrigerated truck body business with 2009 annual
sales of $51.5 million. Although profitable, Johnson Truck Bodies
was not one of our growth platforms. We anticipate recognizing a
small gain in the first quarter of 2010 as a result of this
disposition. Also, at year-end we completed the sale of EcoStar,
our residential roofing tile business with 2009 sales of $17
million, to more fully focus on the product lines in our
Construction Materials segment that serve non-residential
markets.”
Roberts also said, “As recently announced, we decided to retain
and fully integrate our power transmission belt business with our
tire and wheel business. We also combined our industrial brake and
friction business with our tire and wheel, and belt businesses to
form one fully integrated strategic operating unit, Carlisle
Engineered Transportation Solutions, strengthening our position
with major global agriculture and construction equipment
manufacturers and creating opportunities to leverage synergies and
best practices.
“Consistent with our lean focus and company-wide implementation
of the Carlisle Operating System, we simplified our management
structure by eliminating the Group President layer of management.
As a result of this change and the integration of our tire and
wheel, industrial brake and friction, and power transmission belt
businesses, we realigned our segments during the fourth quarter as
follows:
- Carlisle Construction
Materials
- Carlisle Engineered
Transportation Solutions, which includes the tire and wheel,
industrial brake and friction, and power transmission belt product
lines
- Carlisle Interconnect
Technologies
- Carlisle FoodService
Products
- Carlisle Specialty
Products, which includes Trail King and Johnson Truck Bodies
(Johnson Truck Bodies is included in the Specialty Products segment
for 2009 reporting purposes; however, in 2010, Johnson Truck Bodies
will be reported in Discontinued Operations through the date of
disposition.)
Our 2009 segment results and disclosures have been adjusted to
reflect the new segment structure.”
Roberts concluded by stating, “For the full-year 2010, we are
planning for modest revenue growth and continued improvement in our
EBIT margins. During 2009, we made significant progress with our
implementation of the Carlisle Operating System with every
organization embracing the lean processes that are the foundation
of the system’s philosophy. Our employees not only enthusiastically
welcomed the idea of making our manufacturing operations more
productive, but went to work streamlining our back office, new
product development and other non-manufacturing activities. The
Carlisle Operating System will be a key driver in enabling us to
achieve our long-term goals.”
Segment Results
Construction Materials: Fourth quarter 2009 net sales
declined 12% to $263.7 million from $300.5 million, and EBIT
increased 82% to $38.7 from $21.3 million for the same period in
2008. The decrease in sales was across all major product lines and
is consistent with declines in the overall non-residential
construction industry. Despite the lower sales volume, the EBIT
margin more than doubled from 7.1% in the fourth quarter 2008 to
14.7% in the fourth quarter of the current year. The improvement in
margin was due to the combination of favorable raw material costs
and efficiency gains from the Carlisle Operating System. These
improvements more than offset the impact from the sales volume
decrease and selling price decreases that occurred in the fourth
quarter of 2009 as compared to the same period in 2008. Fourth
quarter 2008 operating results included a $5.9 million
restructuring charge related to the Insulfoam business.
Engineered Transportation Solutions: Fourth quarter 2009
net sales declined 18% to $148.0 million from $179.8 million, and
an EBIT loss of $8.6 million compared to an EBIT loss of $2.2
million for the same period in 2008. Sales were down in all markets
in this segment with the most significant declines in the
agriculture and construction markets. EBIT was negatively impacted
by lower sales volume, and restructuring and impairment charges of
$12.8 million, including $6.7 million attributable to the
integration of the power transmission belt business with the tire
and wheel, and industrial brake and friction businesses. Lower raw
materials pricing and savings realized from the Carlisle Operating
System had a favorable impact on EBIT in the fourth quarter of
2009.
Interconnect Technologies: Fourth quarter 2009 net sales
increased 6.3% to $54.4 million from $51.2 million, and EBIT
declined to $2.6 million from $7.5 million for the same period in
2008. The positive sales impact from the acquisitions of Jerrik and
Electronic Cable Specialists was partially offset by a 14% decline
in organic sales in the quarter. The decline in EBIT was due to a
combination of the organic sales decline and a $3.1 million
restructuring charge related to plant consolidations announced in
the fourth quarter of 2009.
FoodService Products: Fourth quarter 2009 net sales
declined 6.4% to $58.2 million from $62.2 million, and EBIT
increased to $6.3 million from $2.8 million for the same period in
2008. Sales declined across all product lines; however, the decline
was at a more moderate rate than previous quarters. Despite the
decline in sales, the EBIT margin more than doubled from 4.5% in
the fourth quarter 2008 to 10.8% in the current quarter. The
improvement in margin was primarily due to the combination of
favorable raw material costs and efficiency gains from the Carlisle
Operating System. In addition, fourth quarter 2008 operating
results included a $2.2 million restructuring charge related to
plant consolidations.
Specialty Products: Fourth quarter 2009 net sales
declined 46% to $30.9 million from $57.5 million, and EBIT was a
loss of $0.7 million as compared to a positive EBIT of $7.9 million
for the same period in 2008. The decrease in fourth quarter 2009
sales and EBIT was primarily attributable to weak sales in the
specialty trailer market.
Corporate
Expense
Corporate expense of $11.4 million for the fourth quarter of
2009 compared with $9.4 million for the fourth quarter 2008. The
increase was due to higher management restructuring costs and
medical expenses incurred in the fourth quarter 2009 as compared to
the same period of the prior year.
Interest Expense,
Net
Net interest expense of $1.9 million for the fourth quarter 2009
compared with $12.3 million for the fourth quarter 2008. Interest
expense in the fourth quarter 2008 included a $7.3 million pre-tax
charge for the termination of a treasury lock. Also contributing to
the year-over-year decrease in interest expense was the reduction
of outstanding debt during 2009.
Income Tax
Expense
Income tax benefit from continuing operations was $10.6 million
for the fourth quarter 2009, compared to income tax expense of $0.2
million for the same period in 2008. The tax benefit resulted from
the release in the fourth quarter 2009 of a $19.6 million deferred
tax accrual.
Net Income
Net income for the fourth quarter 2009 was $35.9 million, or
$0.58 per diluted share, compared to net income of $13.7 million,
or $0.22 per diluted share for the fourth quarter 2008. Net income
was positively impacted by a favorable tax adjustment, favorable
raw material prices and lower interest expense as well as
efficiency gains from the Carlisle Operating System during the
fourth quarter of 2009. These positive impacts to income were
partially offset by lower sales volume, plant restructuring charges
and lower selling prices.
Year-to-Date
Net sales of $2,379.5 million for the year ended December 31,
2009 decreased 23% as compared with $3,110.1 million for the same
period in 2008. Sales decreased across all segments.
Full-year 2009 EBIT of $206.9 million increased 11% from $186.6
million in the prior year. 2009 EBIT was positively impacted by
selling price increases, favorable raw material pricing,
efficiencies gained through the Carlisle Operating System and a
$27.0 million gain from a fire insurance settlement. These positive
impacts were offset by lower sales volume and restructuring
expenses. 2008 results included an impairment charge on goodwill
and certain other assets of Carlisle Power Transmission of $68.6
million.
Net income for the year ended December 31, 2009 was $144.6
million, or $2.34 per diluted share. Net income for the year ended
December 31, 2008 was $55.8 million, or $0.91 per diluted share,
and included after-tax impairment charges of $45.3 million, or
$0.74 per diluted share, related to the on-highway brake business,
which is reported in discontinued operations, and $44.2 million, or
$0.73 per diluted share from the previously noted impairment charge
on the assets of Carlisle Power Transmission. 2009 net income
included the reversal of a $19.6 million deferred tax accrual.
Cash Flow
Cash flow provided from operations of $447.2 million for the
year ended December 31, 2009 is a 63% increase over 2008 and is the
third consecutive year for establishing a new record for the
Company. During 2009, outstanding debt was reduced by $235.4
million. Cash generated from working capital and other assets and
liabilities of $195.1 million for 2009 compared with cash generated
of $25.6 million in 2008. 2009 cash flow provided from operations
includes $54.5 million of proceeds relating to the insurance
settlement from the fire at the tire and wheel facility in Bowdon,
Georgia. Cash used in investing activities of $119.5 million in
2009 includes $80.8 million primarily for the acquisitions of
Jerrik and Electronic Cable Specialists in the Interconnect
Technologies segment. Cash used in investing activities was $354.2
million in 2008 and included cash used for acquisitions of $290.7
million for the purchase of Dinex in the FoodService Products
segment and Carlyle in the Interconnect Technologies segment.
Capital expenditures of $48.2 million in 2009 compared with $68.0
million in 2008.
Conference Call and
Webcast
The Company will discuss fourth quarter 2009 results on a
conference call at 10:00 a.m. ET today. The call may be accessed
live by going to the Investor Relations section of the Carlisle
website (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, foodservice, aerospace, and test and
measurement industries.
CARLISLE COMPANIES INCORPORATED Consolidated
Statement of Earnings For the periods ended December 31
(In millions, except share and per share amounts)
(Unaudited) Fourth Quarter Twelve
Months 2009 2008 % Change
2009 2008 %
Change Net sales
$ 555.2 $ 651.2 -15 %
$
2,379.5
$ 3,110.1 -23 % Cost and expenses: Cost of goods sold
440.0
539.5 -18 %
1,875.6 2,516.8 -25 % Selling and administrative
expenses
75.1 73.3 2 %
289.0 316.3 -9 % Research and
development expenses
4.2 3.8 11 %
16.6 16.2 2 % Gain
related to fire settlement
- - NM
(27.0 ) - NM
Goodwill impairment
- - NM
- 55.5 NM Other expense,
net
9.0 6.7 34 %
18.4 18.7 -2 % Earnings before
interest and income taxes
26.9 27.9 -4 %
206.9 186.6
11 % Interest expense, net
1.9 12.3
-85 %
9.0 27.7 -68 %
Earnings before income taxes
25.0 15.6 60 %
197.9 158.9 25 % Income tax (benefit) expense
(10.6 ) 0.2 NM
46.1
45.3 2 % Income from continuing
operations
35.6 15.4 131 %
151.8 113.6 34 % Income
(loss) from discontinued operations
0.3
(1.7 ) NM
(7.2 ) (57.8 ) NM Net
income
$ 35.9 $ 13.7 162 %
$
144.6 $ 55.8 159 %
Basic earnings (loss) per share
(1)
Continuing operations
$ 0.58 $ 0.25 132 %
$
2.48 $ 1.86 33 % Discontinued operations
0.01
(0.03 ) NM
(0.12 ) (0.95
) NM Basic earnings per share
$ 0.59 $ 0.22
168 %
$ 2.36 $ 0.91 159 %
Diluted earnings (loss) per share
(1)
Continuing operations
$ 0.57 $ 0.25 128 %
$
2.45 $ 1.85 32 % Discontinued operations
0.01
(0.03 ) NM
(0.11 ) (0.94
) NM Diluted earnings per share
$ 0.58 $ 0.22
164 %
$ 2.34 $ 0.91 157 %
Average shares outstanding - in thousands Basic
60,640 60,532
60,601
60,541 Diluted
61,340
60,877
61,234 60,848
Dividends
$ 9.8 $ 9.4 4 %
$ 38.6 $ 36.6 5 % Dividends per share
$ 0.160 $ 0.155 3 %
$
0.630 $ 0.600 5 %
(1) Numerator for basic and
diluted EPS calculated based on "two class" method of computing
earnings per share:
Income from continuing operations
$ 35.2
$ 15.3
$ 150.1 $ 112.7
Net income
$ 35.5 $ 13.6
$
143.0 $ 55.3 NM = Not Meaningful
* 2008 figures have been restated to reflect the reclassification
of Carlisle Power Transmission from discontinued operations to
continuing operations.
CARLISLE COMPANIES
INCORPORATED Segment Financial Data For the periods
ended December 31 (In millions)
(Unaudited)
Fourth Quarter Twelve Months
2009
2008
% Change
2009
2008
% Change
Net Sales Construction
Materials
$ 263.7 $ 300.5 -12 %
$
1,125.9 $ 1,472.3 -24 % Engineered Transportation Solutions
148.0 179.8 -18 %
708.1 928.2 -24 % Interconnect
Technologies
54.4 51.2 6 %
180.5 197.9 -9 %
FoodService Products
58.2 62.2 -6 %
243.6 266.2 -8 %
Specialty Products
30.9 57.5 -46
%
121.4 245.5 -51 % Total Net
Sales
$ 555.2 $ 651.2 -15 %
$
2,379.5 $ 3,110.1 -23 %
Earnings Before Interest and Income Taxes (EBIT)
Construction Materials
$ 38.7 $ 21.3 82 %
$
155.2 $ 151.1 3 % Engineered Transportation Solutions
(8.6 ) (2.2 ) -291 %
54.2 (12.9 ) 520 %
Interconnect Technologies
2.6 7.5 -65 %
14.3 25.2 -43
% FoodService Products
6.3 2.8 125 %
24.7 20.7 19 %
Specialty Products
(0.7 ) 7.9
-109 %
(5.0 ) 33.5 -115 %
Segment EBIT
38.3 37.3 3 %
243.4 217.6 12 % Corporate
(11.4 ) (9.4 ) -21 %
(36.5 ) (31.0 ) -18 % Total EBIT
$
26.9 $ 27.9 -4 %
$ 206.9
$ 186.6 11 %
EBIT Margins
Construction Materials
14.7 % 7.1 %
13.8
% 10.3 % Engineered Transportation Solutions
-5.8
% -1.2 %
7.7 % -1.4 % Interconnect
Technologies
4.8 % 14.6 %
7.9 % 12.7 %
FoodService Products
10.8 % 4.5 %
10.1
% 7.8 % Specialty Products
-2.3 %
13.7 %
-4.1 % 13.6 % Segment
EBIT Margin
6.9 % 5.7 %
10.2 % 7.0 %
Corporate
-2.1 % -1.4 %
-1.5 % -1.0 % Total EBIT Margin
4.8 % 4.3 %
8.7 %
6.0 %
CARLISLE COMPANIES INCORPORATED Comparative
Condensed Consolidated Balance Sheet (In millions)
December 31, December 31,
2009 2008
Assets (Unaudited) Current Assets Cash and
cash equivalents
$ 96.3 $ 42.7 Receivables
292.5 331.2 Inventories
345.8 468.5 Prepaid expenses
and other
65.2 94.9 Current assets held for sale
- 30.8
Total current assets
799.8 968.1 Property, plant and equipment, net
482.6 513.3 Other assets
629.8 589.2 Non-current
assets held for sale
1.9 5.3
Total
Assets $ 1,914.1 $ 2,075.9
Liabilities
and Shareholders' Equity Current Liabilities Short-term
debt, including current maturities
$ - $ 127.0
Accounts payable
135.7 128.7 Accrued expenses
165.4
166.3 Current liabilities associated with assets held for sale
- 20.5
Total current liabilities
301.1 442.5 Long-term debt
156.1 273.3 Other
liabilities
238.3 266.0 Shareholders' equity
1,218.6 1,094.1
Total Liabilities and
Shareholders' Equity $ 1,914.1 $ 2,075.9 *
2008 figures have been restated to reflect the reclassification of
Power Transmission as "held and used" from "held for sale."
CARLISLE COMPANIES INCORPORATED Comparative Condensed
Consolidated Statement of Cash Flows For the Twelve Months
Ended December 31 (In millions) (Unaudited)
2009 2008
Operating activities Net income
$ 144.6 $ 55.8 Reconciliation of net income to
operating cash flows: Depreciation and amortization
67.5
69.0 Non-cash compensation
13.9 12.0 Loss on writedown of
assets
20.9 131.8 Deferred taxes
8.3 (22.4 ) Change
in working capital and other assets and liabilities
195.1
25.6 Other
(3.1 ) 2.4
Net
cash provided by operating activities 447.2
274.2
Investing activities Capital
expenditures
(48.2 ) (68.0 ) Acquisitions, net of
cash acquired
(80.8 ) (290.7 ) Proceeds from
investments and disposal of property and equipment
9.2 4.1
Other
0.3 0.4
Net cash used
in investing activities (119.5 )
(354.2 )
Financing activities Net change in short-term debt
and revolving credit lines
(235.4 ) 178.4 Reductions
of long-term debt
- (100.0 ) Dividends paid
(38.6
) (36.6 ) Excess tax benefits on share-based compensation
0.1 0.1 Treasury shares and stock options, net
1.0
(1.9 ) Treasury share repurchases
(1.3 )
(4.8 )
Net cash (used in) provided by financing
activities (274.2 ) 35.2
Effect of exchange rate changes on cash 0.1
(0.9 )
Change in cash and cash equivalents
53.6 (45.7 )
Cash and cash equivalents Beginning of
period
42.7 88.4 End of period
$ 96.3 $ 42.7
CARLISLE
COMPANIES INCORPORATED Schedule of Significant Items
Fourth Quarter 2009 Significant
Items
Engineered Construction Transportation
Interconnect FoodService Specialty (pre-tax
amounts, in millions)
Materials Solutions
Technologies Products Products
Corporate Total Asset impairment charges $ - $
(8.5 ) $ (1.8 ) $ - $ - $ - $ (10.3 ) Restructuring charges
- (4.3 ) (1.3 ) - (0.5 )
(0.9 ) (7.0 )
Total -
(12.8 ) (3.1 ) - (0.5 )
(0.9 ) (17.3 )
Fourth Quarter 2008 Significant
Items
Engineered Construction Transportation
Interconnect FoodService Specialty (pre-tax
amounts, in millions)
Materials Solutions
Technologies Products Products
Corporate Total Asset impairment charges $
(4.3 ) $ - $ - $ (1.5 ) $ - $ - $ (5.8 ) Restructuring charges (1.6
) (0.8 ) - (0.7 ) - - (3.1 ) Treasury-lock termination -
- - - -
(7.3 ) (7.3 )
Total (5.9
) (0.8 ) - (2.2 ) -
(7.3 ) (16.2 )
Year-to-Date 2009 Significant
Items
Engineered Construction Transportation
Interconnect FoodService Specialty (pre-tax
amounts, in millions)
Materials Solutions
Technologies Products Products
Corporate Total Asset impairment charges $
(1.6 ) $ (14.4 ) $ (2.1 ) $ - $ (3.8 ) $ - $ (21.9 ) Restructuring
charges - (10.3 ) (1.6 ) - (1.2 ) (3.2 ) (16.3 ) Gain related to
fire settlement - 27.0 -
- - - 27.0
Total $ (1.6 ) $ 2.3 $ (3.7 ) $ - $
(5.0 ) $ (3.2 ) $ (11.2 )
Year-to-Date 2008 Significant
Items
Engineered Construction Transportation
Interconnect FoodService Specialty (pre-tax
amounts, in millions)
Materials Solutions
Technologies Products Products
Corporate Total Goodwill impairment charges $
- $ (55.5 ) - $ - $ - $ - $ (55.5 ) Asset impairment charges (4.3 )
(13.1 ) - (1.5 ) - - (18.9 ) Restructuring charges (1.6 ) (0.8 ) -
(0.7 ) - - (3.1 ) Treasury-lock termination -
- - - -
(7.7 ) (7.7 )
Total $ (5.9 ) $ (69.4 ) $ -
$ (2.2 ) $ - $ (7.7 ) $ (85.2 )
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