Carlisle Companies Incorporated (NYSE:CSL) today announced its
financial results for the three month period ended March 31,
2019.
- First quarter revenue increased 8.9%
to a record $1.1 billion, of that 5.9% was organic
- Operating income reached a record
$114.7 million, an increase of 21.1% year-over-year
- Diluted EPS from continuing
operations for the quarter included $0.08 of restructuring,
facility rationalization, and acquisition related costs
- Repurchased 1.4 million shares for
$157.1 million in the quarter
First Quarter 2019
Revenues of $1.1 billion increased 8.9% from $984.7 million in
the first quarter of 2019. Organic revenue grew 5.9% (organic
revenue defined as revenue excluding acquired revenues within the
last twelve months and the impact of changes in foreign exchange
rates versus the U.S. Dollar). Acquired revenues contributed a
total of 3.9% in the quarter. Changes in foreign exchange rates had
a negative (0.9%) impact on revenues.
Operating income of $114.7 million was up 21.1% from the first
quarter of 2018. Operating income performance was driven by higher
sales volume, price realization, and contributions from the
Carlisle Operating System (COS), partially offset by increases in
labor-related costs, unfavorable mix, and higher restructuring at
Carlisle Interconnect Technologies (CIT).
In addition to the factors driving operating income improvement,
diluted EPS from continuing operations was beneficially impacted by
lower taxes and share count.
During the first quarter of 2019, Carlisle completed the
acquisition of Petersen Aluminum Corporation, a manufacturer of
high-quality architectural metal products, and subsequently on
April 1, 2019, acquired MicroConnex, a manufacturer of highly
engineered microminiature flex circuits and sensors.
Carlisle repurchased 1.4 million shares of common stock for
$157.1 million in the first quarter.
Comment
Chris Koch, President and Chief Executive Officer, said, “Our
record results in the first quarter reflected: continued healthy
demand across many of our key end markets, price discipline,
efficiencies gained from COS, contributions from acquisitions, and
solid execution of our operating plans by Carlisle's employees
around the globe. Building on the solid momentum we gained during
the fourth quarter of 2018, we drove record first quarter revenues,
operating income, and diluted EPS. We also continue to gain
traction on the key objectives of Vision 2025, including:
- Achieving 5.9% organic revenue growth,
in excess of our long-term growth target of 5%
- Leveraging revenue growth to deliver a
21% increase in operating income
- Maintaining strong price discipline
across businesses, leading to positive price realization at all
four segments
- Delivering cost savings of 1.3% of
sales through COS, within our targeted range of 1-2%
- Utilizing our strong cash flow and
balance sheet to deploy over $180 million into share repurchases
and dividends paid, now totaling almost $1.1 billion since the
beginning of 2017
- Continuing to reshape the portfolio and
build out our capabilities by acquiring Petersen Aluminum
Corporation within CCM, and on April 1, 2019, MicroConnex within
CIT
We are pleased with the strong start to 2019 and are optimistic
about both our near and long-term prospects for growth despite
persistent uncertainties around the China trade negotiations and
Brexit.
We remain focused on executing Vision 2025 objectives: exceeding
5% organic growth, utilizing COS to deliver efficiencies and
operating leverage, building scale with synergistic acquisitions,
continuing to invest in exceptional talent, and deploying over $3
billion into capital expenditures, share repurchases and
dividends."
First Quarter 2019 Segment
Highlights
Carlisle Construction Materials (CCM)
- Revenues of $671.1 million, up 12.1%
(organic +6.3%) year-over-year, were driven by continued strength
in U.S. roofing demand, growth in Europe, new product introductions
and contributions from acquisitions, despite challenging weather
that reduced available roofing days to contractors.
- Operating income was $92.9 million, up
22.6% year-over-year. Operating margin of 13.8%, a 110 basis point
improvement, benefited from price/cost realization, savings and
benefits from COS, and operational improvements, offset by higher
labor and acquisition related costs.
- Items affecting comparability were
costs of $1.6 million versus income of $1.8 million in the first
quarter of 2018.
- We now expect CCM to achieve low-double
digit revenue growth in 2019, vs. up high-single to low-double
digits prior.
Carlisle Interconnect Technologies (CIT)
- Revenues of $246.4 million, up 9.9%
(+10.0% organic) year-over-year were driven by strength in
Aerospace, Test & Measurement, and Space/Defense.
- Operating income was $30.6 million, up
12.5% year-over-year. Operating margin of 12.4%, a 30 basis point
improvement, benefited from higher volumes, price/cost realization,
and savings and benefits from COS, partially offset by higher
restructuring and labor charges, and unfavorable mix.
- Items affecting comparability were
costs of $4.9 million versus $2.6 million in the first quarter of
2018.
- We now expect CIT to achieve
mid-to-high single digit revenue growth in 2019, vs. up mid-single
digits prior.
Carlisle Fluid Technologies (CFT)
- Revenues of $63.1 million, down 0.6%
(+2.2% organic) year-over-year, reflected strength in standard
products in Automotive Refinish and General Industrial markets,
partially offset by softer Transportation sales in China and
foreign currency translation headwinds.
- Operating income was $6.4 million, up
12.3% year-over-year. Operating margin of 10.1%, a 110 basis point
improvement, demonstrates CFT's continued execution of their plans
to improve the margin profile of the business. Margins benefited
from higher volumes, savings and benefits from COS, and price/cost
realization, partially offset by raw material inflation, higher
labor-related and restructuring charges.
- Items affecting comparability were
income of $0.9 million versus costs of $0.5 million in the first
quarter of 2018.
- We continue to expect CFT to achieve
mid-single digit revenue growth in 2019.
Carlisle Brake & Friction (CBF)
- Revenues of $91.3 million, down 7.1%
(-3.8% organic) year-over-year, reflected difficult year-over-year
comparisons (Q1 2018 organic revenue +28.5% y-o-y) in off-highway
vehicle end markets, and foreign currency translation headwinds,
partially offset by price realization and share gains.
- Operating income was $6.5 million, up
44.4% year-over-year. Operating margin of 7.1%, a 250 basis point
improvement, was driven by efficiencies gained by the Tulsa,
Oklahoma to Medina, Ohio plant consolidation, lower restructuring
costs, price realization, and savings and benefits from COS,
partially offset by lower volumes and higher labor-related and raw
material costs.
- Items affecting comparability were
costs of $1.3 million versus $2.0 million in the first quarter of
2018.
- We now expect CBF revenues to be flat
in 2019, vs. up low-single-digits prior.
Cash Flow
Free cash flow (defined as cash provided by operating activities
less capital expenditures, and comprised of continuing and
discontinued operations) was $86.5 million for the first three
months ended March 31, 2019, an increase of $95.8 million versus
the prior year. The increase in free cash flow was primarily
attributable to higher cash earnings, more efficient usage of
working capital, and lower capital expenditures.
During the first three months ended March 31, 2019, we
redeployed our free cash flow towards the acquisitions of Petersen
Aluminum Corporation, the repurchase of Carlisle common stock for
$157.1 million and $23.3 million in dividends paid. As of
March 31, 2019, we had $516.6 million of cash and $1 billion
of availability under our revolving credit facility.
Table 1. Revenue Breakdown
Three Months EndedMarch 31, 2019 CCM
CIT CFT
CBF Change in Organic Revenues 6.3 % 10.0 % 2.2 % (3.8 )%
Net Impact from Acquisitions 6.3 % 0.2 % — % — % Impact from FX
(0.5 )% (0.3 )% (2.8 )% (3.3 )% Change in Revenues 12.1 % 9.9 %
(0.6 )% (7.1 )%
Conference Call and
Webcast
The Company will discuss first quarter 2019 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
(http://www.carlisle.com/investor-relations/events-and-webcasts/default.aspx),
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. 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: 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, global
portfolio of niche brands and businesses that manufactures highly
engineered products and solutions for our customers. Carlisle is
committed to generating superior shareholder returns by combining a
unique management style of decentralization, entrepreneurial
spirit, active M&A, and a balanced approach to capital
deployment, all with a culture of continuous improvement as
embodied in the Carlisle Operating System. Carlisle’s markets
include: commercial roofing, specialty polyurethane, aerospace,
medical, defense, transportation, industrial, protective coating,
auto refinishing, agriculture, mining, and construction. Carlisle’s
worldwide team of employees generated $4.5 billion in revenues in
2018. Learn more about Carlisle at
www.carlisle.com.
Three Months EndedMarch 31, (in
millions except per share amounts)
2019 2018
Revenues $ 1,071.9 $ 984.7 Cost of goods sold 783.3
735.3 Selling and administrative expenses 164.2 148.6 Research and
development expenses 14.4 13.9 Other operating (income) expense,
net (4.7
)
(7.8 ) Operating income 114.7 94.7 Interest expense, net 13.7 14.5
Other non-operating (income) expense, net (0.4
)
1.9 Income from continuing operations before income taxes
101.4 78.3 Provision for income taxes 24.0 20.4
Income from continuing operations 77.4 57.9 Discontinued
operations: Income before income taxes — 299.0 (Benefit) provision
for income taxes (2.0
)
47.3 Income from discontinued operations 2.0 251.7
Net income $ 79.4 $ 309.6 Basic
earnings per share attributable to common shares: Income from
continuing operations $ 1.34 $ 0.93 Income from discontinued
operations 0.03 4.05 Basic earnings per share $ 1.37
$ 4.98 Diluted earnings per share attributable
to common shares: Income from continuing operations $ 1.33 $ 0.92
Income from discontinued operations 0.03 4.02 Diluted
earnings per share $ 1.36 $ 4.94 Average
shares outstanding (in thousands): Basic 57,547 61,684
Diluted 57,870 62,164 Dividends
declared and paid per share $ 0.40 $ 0.37
(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 $ 77.1 $ 57.3 Net income 79.1
307.3
Carlisle
Companies Incorporated
Unaudited Segment Information
Three Months EndedMarch 31,
Increase(Decrease) (in millions, except percentages)
2019 2018 Amount
Percent Revenues Carlisle Construction Materials $
671.1 $ 598.6 $ 72.5 12.1 % Carlisle Interconnect Technologies
246.4 224.3 22.1 9.9 % Carlisle Fluid Technologies 63.1 63.5 (0.4 )
(0.6 )% Carlisle Brake & Friction 91.3 98.3 (7.0
) (7.1 )% Total $ 1,071.9 $ 984.7 $ 87.2 8.9 %
Operating Income (Loss) Carlisle Construction
Materials $ 92.9 $ 75.8 $ 17.1 22.6 % Carlisle Interconnect
Technologies 30.6 27.2 3.4 12.5 % Carlisle Fluid Technologies 6.4
5.7 0.7 12.3 % Carlisle Brake & Friction 6.5 4.5
2.0 44.4 % Segment Totals 136.4 113.2 23.2 20.5 % Corporate
and unallocated (1) (21.7 ) (18.5 ) (3.2 ) (17.3 )% Total $ 114.7
$ 94.7 $ 20.0 21.1 %
Operating
Margin Percentage Carlisle Construction Materials 13.8 % 12.7 %
110 bps Carlisle Interconnect Technologies 12.4 % 12.1 % 30 bps
Carlisle Fluid Technologies 10.1 % 9.0 % 110 bps Carlisle Brake
& Friction 7.1 % 4.6 % 250 bps Total 10.7 % 9.6 % 110 bps
Depreciation and Amortization Carlisle Construction
Materials $ 22.6 $ 19.1 $ 3.5 18.3 % Carlisle Interconnect
Technologies 14.5 14.6 (0.1 ) (0.7 )% Carlisle Fluid Technologies
5.7 5.4 0.3 5.6 % Carlisle Brake & Friction 5.4 6.1 (0.7 )
(11.5 )% Corporate and unallocated (1) 0.8 0.7 0.1
14.3 % Total $ 49.0 $ 45.9 $ 3.1 6.8 %
(1) Includes general corporate expenses and other
unallocated costs.
Carlisle Companies IncorporatedUnaudited
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, litigation settlement costs, gains and losses from
and costs related to divestitures, and discrete tax items). Because
these items affect Carlisle's, 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 EndedMarch 31, (in
millions, except per share amounts)
2019
2018 Impact to Operating Income Exit and disposal
costs $ 6.8 $ 3.1 Other facility rationalization costs 1.4 2.2
Acquisition related costs: Inventory step-up amortization 0.5 —
Other acquisition costs 1.5 1.1 Gains from contingent consideration
(3.0 ) — Gains from divestitures — (2.0 ) Total $ 7.2
$ 4.4
Impact to Diluted EPS from Continuing
Operations (1) Exit and disposal costs $ 0.09 $ 0.04
Other facility rationalization costs 0.02 0.02 Acquisition related
costs: Inventory step-up amortization — — Other acquisition costs
0.02 0.01 Gains from contingent consideration (0.05 ) — Gains from
divestitures — (0.02 ) Total $ 0.08 $ 0.05
Impact to Operating Income Carlisle Construction
Materials $ 1.6 $ (1.8 ) Carlisle Interconnect Technologies 4.9 2.6
Carlisle Fluid Technologies (0.9 ) 0.5 Carlisle Brake &
Friction 1.3 2.0 Corporate 0.3 1.1 Total $ 7.2
$ 4.4
Impact to Diluted EPS from Continuing
Operations (1) Carlisle Construction Materials $ 0.02 $
(0.02 ) Carlisle Interconnect Technologies 0.06 0.03 Carlisle Fluid
Technologies (0.02 ) 0.01 Carlisle Brake & Friction 0.02 0.02
Corporate — 0.01 Total $ 0.08 $ 0.05
(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
Three Months EndedMarch 31, (in millions)
2019 2018 Net cash provided by
operating activities $ 109.8 $ 33.2 Investing activities:
Acquisitions, net of cash acquired (202.0 ) (0.7 ) Capital
expenditures (23.3 ) (42.5 ) Proceeds from sale of discontinued
operation — 754.6 Other investing activities, net 0.9 3.6
Net cash (used in) provided by investing activities (224.4 )
715.0 Financing activities: Repurchase of common stock
(157.1 ) (122.0 ) Dividends paid (23.3 ) (23.1 ) Proceeds from
exercise of stock options 10.6 1.7 Withholding tax paid related to
stock-based compensation (3.3 ) (4.6 ) Net cash used in financing
activities (173.1 ) (148.0 ) Effect of foreign currency
exchange rate changes on cash and cash equivalents 0.7 1.9
Change in cash and cash equivalents (287.0 ) 602.1
Less: change in cash and cash equivalents of discontinued
operations — 1.3 Beginning of period 803.6 378.3 End
of period $ 516.6 $ 979.1
Carlisle Companies Incorporated
Unaudited Selected Consolidated Balance
Sheet Data
(in millions)
March 31,2019 December
31,2018 Cash and cash equivalents $ 516.6 $ 803.6
Long-term debt 1,588.5 1,587.8 Total shareholders' equity 2,524.7
2,597.4
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190423005873/en/
Jim Giannakouros, CFAVice President of Investor Relations and
FP&Ajgiannakouros@carlisle.com
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