Carlisle Companies Incorporated (NYSE:CSL) today announced its
financial results for the three month period ended June 30,
2019.
- Second quarter revenue increased 6.4% year-over-year to a
record $1.3 billion
- Operating income reached a record $207.2 million, an
increase of 29.7% year-over-year
- Repurchased 550,000 shares, totaling $75 million
- CCM revenue increased 10.4% (4.7% organic) year-over-year
despite above average rainfall in parts of North America
Second Quarter 2019
Revenue of $1.31 billion increased 6.4% from $1.24 billion in
the second quarter of 2019. Organic revenue grew 2.3% (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 4.7% in the quarter. Changes in foreign exchange rates had
a negative (0.6%) impact on revenues.
Operating income of $207.2 million was up 29.7% from the second
quarter of 2018. Operating income performance was driven by
price/cost realization, lower restructuring, higher sales volume
and contributions from the Carlisle Operating System (COS),
partially offset by wage inflation and acquisition costs.
In addition to the factors driving operating income improvement,
diluted EPS from continuing operations benefited from a lower tax
rate and lower share count. Diluted EPS for the quarter included
$0.06 of restructuring, facility rationalization, and acquisition
related costs, and $0.09 of discrete tax benefits.
CEO Comment
Chris Koch, President and Chief Executive Officer, said, “We are
pleased with Carlisle's record second quarter sales and diluted EPS
results. These results demonstrate our continued progress towards
our Vision 2025 goals of: $8 billion in revenues, 20% operating
income, and 15% ROIC.
Second quarter results were driven by: strong execution,
continued solid demand at CCM and CIT, price discipline across all
four segments, and efficiencies gained from COS. We continue to see
a healthy backdrop in demand for both new construction and
replacement products across the building envelope within CCM, while
robust commercial aircraft build rates continue at CIT. Combined
with price/cost dynamics and efficiencies gained from prior year
restructuring efforts, we leveraged these positives into solid
incremental margins. Additionally in the second quarter, CBF
continued to execute well on its margin expansion goals driven by
increased efficiencies at its Medina, OH facility.
During the second quarter, global macro uncertainties, including
unresolved trade negotiations, Brexit, a general slowing of
industrial capital spending, and severe weather in North America
challenged the global Carlisle team. Despite these challenges, the
team continued to drive sales and operating income improvements
under Vision 2025 initiatives.
We also continued to work an active M&A pipeline, broadening
our scope and scale of product offerings as demonstrated by our
second quarter acquisition of MicroConnex, which adds key sensor
and and micro-flex circuit technology within CIT's Medical
Technologies platform, and the acquisitions of Hosco Fittings,
Integrated Dispense Solutions, and Shinhang to establish a Sealants
and Adhesives platform within CFT.
We remain committed to a balanced capital deployment strategy:
investing in organic growth, closing on several acquisitions, and
returning capital to shareholders during the quarter, paying $75.0
million in share repurchases and $22.9 million in dividends."
Second Quarter 2019 Segment
Highlights
Carlisle Construction Materials (CCM)
- Revenues of $915.0 million, up 10.4% (organic +4.7%)
year-over-year, were driven by continued strength in U.S.
commercial roofing demand, new product introductions and
contributions from acquisitions, despite challenging weather that
reduced available roofing days to contractors.
- Operating income was $182.5 million, up 29.1% year-over-year.
Operating margin of 19.9%, a 280 basis point improvement, benefited
from positive volume leverage, price/cost realization, savings and
benefits from COS, and contributions from acquisitions, partially
offset by wage inflation and foreign exchange headwinds.
- Items affecting comparability were costs of $0.2 million versus
$0.7 million in the second quarter of 2018.
- We continue to expect CCM to achieve low-double digit revenue
growth in 2019.
Carlisle Interconnect Technologies (CIT)
- Revenues of $245.4 million, up 3.2% (+2.2% organic)
year-over-year were driven by strength in Aerospace, Medical and
Space/Defense markets.
- Operating income was $35.9 million, up 30.5% year-over-year.
Operating margin of 14.6%, a 300 basis point improvement, benefited
from higher volumes, price realization, and savings and benefits
from COS, partially offset by wage inflation and acquisition
costs.
- Items affecting comparability were costs of $2.4 million versus
$1.9 million in the second quarter of 2018.
- We continue to expect CIT to achieve mid-to-high single digit
revenue growth in 2019.
Carlisle Fluid Technologies (CFT)
- Revenues of $67.3 million, down 8.2% (-11.7% organic)
year-over-year, reflected volume declines across all end markets,
particularly in the global automotive sector, partially offset by
acquisitions and price realization.
- Operating income was $3.3 million, down 57.7% year-over-year.
Operating margin of 4.9%, a 570 basis point decline, reflected
impacts from lower volumes, wage inflation and acquisition related
charges, partially offset by price realization, lower restructuring
costs and savings and benefits from COS.
- Items affecting comparability were costs of $1.3 million versus
$1.0 million in the second quarter of 2018.
- We continue to expect CFT to achieve mid-single digit revenue
growth in 2019.
Carlisle Brake & Friction (CBF)
- Revenues of $87.1 million, down 9.7% (-7.0% organic)
year-over-year, reflected difficult year-over-year comparisons
(2Q18 organic revenue +17.7%) in off-highway vehicle end markets,
and foreign currency translation headwinds, partially offset by
price realization.
- Operating income was $8.3 million, up 186.2% year-over-year.
Operating margin of 9.5%, a 650 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,
wage inflation and foreign exchange headwinds.
- Items affecting comparability were costs of $0.5 million versus
$3.9 million in the second quarter of 2018.
- We now expect CBF revenues to be down mid-single digits in
2019.
Cash Flow
Free cash flow (defined as cash provided by operating activities
less capital expenditures, and comprised of continuing and
discontinued operations) was $156.1 million for the first six
months ended June 30, 2019, an increase of $225.8 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 three months ended June 30, 2019, we redeployed our
free cash flow towards acquisitions, the repurchase of Carlisle
common stock for $75.0 million and $22.9 million in dividends paid.
As of June 30, 2019, we had $422.0 million of cash and $1 billion
of availability under our revolving credit facility.
Table 1. Revenue Breakdown
Three Months Ended June 30,
2019
CCM
CIT
CFT
CBF
Change in Organic Revenues
4.7
%
2.2
%
(11.7
)%
(7.0
)%
Net Impact from Acquisitions
6.1
%
1.6
%
5.9
%
—
%
Impact from FX
(0.4
)%
(0.6
)%
(2.4
)%
(2.7
)%
Change in Revenues
10.4
%
3.2
%
(8.2
)%
(9.7
)%
Conference Call and
Webcast
The Company will discuss second 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.
Carlisle Companies
Incorporated Unaudited Condensed Consolidated Statements of
Income
Three Months Ended June
30,
Six Months Ended June
30,
(in millions except per share amounts)
2019
2018
2019
2018
Revenues
$
1,314.8
$
1,236.1
$
2,386.7
$
2,220.8
Cost of goods sold
920.6
903.9
1,703.9
1,639.2
Selling and administrative expenses
172.3
159.9
336.5
308.5
Research and development expenses
15.4
14.2
29.8
28.1
Other operating (income) expense, net
(0.7
)
(1.6
)
(5.4
)
(9.4
)
Operating income
207.2
159.7
321.9
254.4
Interest expense, net
14.7
14.2
28.4
28.7
Other non-operating (income) expense,
net
(0.6
)
(0.7
)
(1.0
)
1.2
Income from continuing operations before
income taxes
193.1
146.2
294.5
224.5
Provision for income taxes
40.1
31.5
64.1
51.9
Income from continuing operations
153.0
114.7
230.4
172.6
Discontinued operations:
(Loss) income before income taxes
—
(1.3
)
—
297.7
Provision for (benefit from) income
taxes
0.1
(0.3
)
(1.9
)
47.0
(Loss) income from discontinued
operations
(0.1
)
(1.0
)
1.9
250.7
Net income
$
152.9
$
113.7
$
232.3
$
423.3
Basic earnings per share attributable to
common shares:
Income from continuing operations
$
2.68
$
1.88
$
4.01
$
2.80
(Loss) income from discontinued
operations
—
(0.02
)
0.03
4.07
Basic earnings per share
$
2.68
$
1.86
$
4.04
$
6.87
Diluted earnings per share attributable to
common shares:
Income from continuing operations
$
2.65
$
1.87
$
3.98
$
2.78
(Loss) income from discontinued
operations
—
(0.02
)
0.03
4.04
Diluted earnings per share
$
2.65
$
1.85
$
4.01
$
6.82
Average shares outstanding (in
thousands):
Basic
56,960
60,641
57,246
61,159
Diluted
57,566
61,059
57,730
61,593
Dividends declared and paid per share
$
0.40
$
0.37
$
0.80
$
0.74
(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
$
152.6
$
114.0
$
229.7
$
171.4
Net income
152.5
113.0
231.6
420.4
Carlisle Companies
Incorporated Unaudited Segment Information
Three Months Ended June
30,
Increase
(Decrease)
Six Months Ended June
30,
Increase (Decrease)
(in millions, except percentages)
2019
2018
Amount
Percent
2019
2018
Amount
Percent
Revenues
Carlisle Construction Materials
$
915.0
$
828.6
$
86.4
10.4
%
$
1,586.1
$
1,427.2
$
158.9
11.1
%
Carlisle Interconnect Technologies
245.4
237.7
7.7
3.2
%
491.8
462.0
29.8
6.5
%
Carlisle Fluid Technologies
67.3
73.3
(6.0
)
(8.2
)%
130.4
136.8
(6.4
)
(4.7
)%
Carlisle Brake & Friction
87.1
96.5
(9.4
)
(9.7
)%
178.4
194.8
(16.4
)
(8.4
)%
Total
$
1,314.8
$
1,236.1
$
78.7
6.4
%
$
2,386.7
$
2,220.8
$
165.9
7.5
%
Operating Income (Loss)
Carlisle Construction Materials
$
182.5
$
141.4
$
41.1
29.1
%
$
275.4
$
217.2
$
58.2
26.8
%
Carlisle Interconnect Technologies
35.9
27.5
8.4
30.5
%
66.5
54.7
11.8
21.6
%
Carlisle Fluid Technologies
3.3
7.8
(4.5
)
(57.7
)%
9.7
13.5
(3.8
)
(28.1
)%
Carlisle Brake & Friction
8.3
2.9
5.4
186.2
%
14.8
7.4
7.4
100.0
%
Segment Totals
230.0
179.6
50.4
28.1
%
366.4
292.8
73.6
25.1
%
Corporate and unallocated (1)
(22.8
)
(19.9
)
(2.9
)
14.6
%
(44.5
)
(38.4
)
(6.1
)
15.9
%
Total
$
207.2
$
159.7
$
47.5
29.7
%
$
321.9
$
254.4
$
67.5
26.5
%
Operating Margin Percentage
Carlisle Construction Materials
19.9
%
17.1
%
280 bps
17.4
%
15.2
%
220 bps
Carlisle Interconnect Technologies
14.6
%
11.6
%
300 bps
13.5
%
11.8
%
170 bps
Carlisle Fluid Technologies
4.9
%
10.6
%
(570) bps
7.4
%
9.9
%
(250) bps
Carlisle Brake & Friction
9.5
%
3.0
%
650 bps
8.3
%
3.8
%
450 bps
Total
15.8
%
12.9
%
290 bps
13.5
%
11.5
%
200 bps
Depreciation and Amortization
Carlisle Construction Materials
$
23.2
$
19.5
$
3.7
19.0
%
$
45.8
$
38.6
$
7.2
18.7
%
Carlisle Interconnect Technologies
15.7
14.7
1.0
6.8
%
30.2
29.3
0.9
3.1
%
Carlisle Fluid Technologies
6.0
6.0
—
—
%
11.7
11.4
0.3
2.6
%
Carlisle Brake & Friction
5.5
5.4
0.1
1.9
%
10.9
11.5
(0.6
)
(5.2
)%
Corporate and unallocated (1)
0.7
0.7
—
—
%
1.5
1.4
0.1
7.1
%
Total
$
51.1
$
46.3
$
4.8
10.4
%
$
100.1
$
92.2
$
7.9
8.6
%
- 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, 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 Ended June
30,
Six Months Ended June
30,
(in millions, except per share
amounts)
2019
2018
2019
2018
Impact to Operating Income
Exit and disposal costs
$
1.5
$
4.6
$
8.3
$
7.7
Other facility rationalization costs
0.9
2.7
2.3
4.9
Acquisition related costs:
Inventory step-up amortization
0.7
0.4
1.2
0.4
Other acquisition costs
1.4
0.5
2.9
1.6
Litigation costs
—
1.4
—
1.4
Gains from contingent consideration
—
—
(3.0
)
—
Gains from divestitures
—
(1.9
)
—
(3.9
)
Total
$
4.5
$
7.7
$
11.7
$
12.1
Impact to Diluted EPS from Continuing
Operations (1)
Exit and disposal costs
$
0.02
$
0.05
$
0.11
$
0.09
Other facility rationalization costs
0.01
0.04
0.03
0.06
Acquisition related costs:
Inventory step-up amortization
0.01
0.01
0.01
0.01
Other acquisition costs
0.02
0.01
0.04
0.02
Litigation costs
—
0.02
—
0.02
Gains from contingent consideration
—
—
(0.05
)
—
Gains from divestitures
—
(0.03
)
—
(0.05
)
Discrete tax items
(0.09
)
(0.07
)
(0.09
)
(0.06
)
Total
$
(0.03
)
$
0.03
$
0.05
$
0.09
Impact to Operating Income
Carlisle Construction Materials
$
0.2
$
0.7
$
1.8
$
(1.1
)
Carlisle Interconnect Technologies
2.4
1.9
7.3
4.5
Carlisle Fluid Technologies
1.3
1.0
0.4
1.5
Carlisle Brake & Friction
0.5
3.9
1.8
5.9
Corporate
0.1
0.2
0.4
1.3
Total
$
4.5
$
7.7
$
11.7
$
12.1
Impact to Diluted EPS from Continuing
Operations (1)
Carlisle Construction Materials
$
—
$
0.01
$
0.02
$
(0.01
)
Carlisle Interconnect Technologies
0.03
0.02
0.10
0.05
Carlisle Fluid Technologies
0.02
0.01
—
0.02
Carlisle Brake & Friction
0.01
0.05
0.02
0.07
Corporate
(0.09
)
(0.06
)
(0.09
)
(0.04
)
Total
$
(0.03
)
$
0.03
$
0.05
$
0.09
- 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
Six Months Ended June
30,
(in millions)
2019
2018
Net cash provided by operating
activities
$
197.1
$
(2.8
)
Investing activities:
Acquisitions, net of cash acquired
(272.0
)
(19.3
)
Capital expenditures
(41.0
)
(66.9
)
Proceeds from sale of discontinued
operation
—
754.6
Other investing activities, net
1.1
5.7
Net cash (used in) provided by investing
activities
(311.9
)
674.1
Financing activities:
Repurchase of common stock
(232.1
)
(235.7
)
Dividends paid
(46.2
)
(45.6
)
Proceeds from exercise of stock
options
20.5
5.0
Withholding tax paid related to
stock-based compensation
(9.3
)
(9.6
)
Other financing activities, net
(0.1
)
—
Net cash used in financing activities
(267.2
)
(285.9
)
Effect of foreign currency exchange rate
changes on cash and cash equivalents
0.4
—
Change in cash and cash equivalents
(381.6
)
385.4
Less: change in cash and cash equivalents
of discontinued operations
—
1.3
Beginning of period
803.6
378.3
End of period
$
422.0
$
762.4
Carlisle Companies
Incorporated Unaudited Selected Consolidated Balance Sheet
Data
(in millions)
June 30, 2019
December 31, 2018
Cash and cash equivalents
$
422.0
$
803.6
Long-term debt
1,589.4
1,587.8
Total shareholders' equity
2,583.2
2,597.4
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190723005896/en/
Jim Giannakouros, CFA Vice President of Investor Relations and
FP&A jgiannakouros@carlisle.com
Carlisle Companies (NYSE:CSL)
Historical Stock Chart
From Feb 2024 to Mar 2024
Carlisle Companies (NYSE:CSL)
Historical Stock Chart
From Mar 2023 to Mar 2024