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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2000
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
COMMISSION FILE NUMBER 1-9278
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CARLISLE COMPANIES INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 31-1168055
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
250 SOUTH CLINTON STREET, SUITE 201,
SYRACUSE, NEW YORK 13202-1258 (315) 474-2500
(Address of principal executive office, including (Telephone Number)
zip code)
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Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
Common stock, $1 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of February 26, 2001, 30,256,898 shares of common stock of the registrant
were outstanding; the aggregate market value of the shares of common stock of
the registrant held by non-affiliates was approximately $1,008,835,834 based
upon the closing price of the common stock on the New York Stock Exchange on
February 26, 2001.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive Proxy Statement for the Annual Meeting of
Shareholders to be held on April 20, 2001 are incorporated by reference in
Part III.
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PART I
ITEM 1. BUSINESS.
Carlisle Companies Incorporated was incorporated in 1986 in Delaware as a
holding company for Carlisle Corporation, whose operations began in 1917, and
its wholly-owned subsidiaries. Unless the context of this report otherwise
requires, the words "Company" and "registrant" refer to Carlisle Companies
Incorporated and its wholly-owned subsidiaries and any divisions or subsidiaries
they may have. The Company's diversified manufacturing operations are conducted
through its subsidiaries.
The Company manufactures and distributes a wide variety of products across a
broad range of industries, including, among others, roofing, construction,
trucking, automotive, foodservice, industrial equipment, lawn and garden and
aircraft manufacturing. The Company markets its products both as a component
supplier to original equipment manufacturers ("OEMs"), as well as directly to
end users.
Sales of the Company's products are reported by distribution to the
following four industry segments: Construction Materials, Industrial Components,
Automotive Components and General Industry (All Other). The principal products,
services and markets or customers served in each of the industry segments
include:
CONSTRUCTION MATERIALS. The principal products of this segment are rubber,
plastic and FleeceBACK-TM- sheeting used predominantly on non-residential flat
roofs and related roofing accessories, including flashings, fasteners, sealing
tapes, coatings and waterproofings. The markets served include new construction,
re-roofing and maintenance of low slope roofs, water containment, HVAC sealants,
and coatings and waterproofings.
INDUSTRIAL COMPONENTS. The principal products of this segment are small
bias-ply rubber tires, stamped and roll-formed wheels, heavy duty friction and
braking systems for truck and off-highway equipment, high grade aerospace wire,
specialty electronic cable, cable assemblies and interconnects. Customers
include golf car manufacturers, power equipment manufacturers, boat and utility
trailer manufacturers, truck OEMs, heavy equipment and truck dealers and
aftermarket distributors, aerospace OEMs, and electronic and communications
equipment manufacturers.
AUTOMOTIVE COMPONENTS. The principal products of this segment are highly
engineered rubber and plastic components for Tier I suppliers and other
manufacturers in the automotive market.
GENERAL INDUSTRY (ALL OTHER). The principal products of this segment
include commercial and institutional plastic foodservice permanentware and
catering equipment, fiber glass and composite material trays and dishes,
commercial cookware and servingware, ceramic tableware, specialty rubber and
plastic cleaning brushes, stainless steel processing and containment equipment
and their related process control systems, specialty trailers and standard and
custom-built high payload trailers and dump bodies, refrigerated fiberglass
truck bodies, perishable cargo container leasing, cheese and whey processing
equipment. Customers include food service distributors, restaurants, food,
dairy, beverage and pharmaceutical processors and distributors, heavy equipment
and truck dealers, shipping lines, commercial haulers and cheese processors.
1
The amount of total revenue contributed by the products or services in each
industry segment for each of the last three fiscal years is as follows (in
millions):
2000 1999 1998
-------- -------- --------
Construction Materials...................................... $ 407.0 $ 405.4 $ 371.5
Industrial Components....................................... 641.7 527.9 510.8
Automotive Components....................................... 302.4 314.3 272.0
General Industry--All Other................................. 420.0 363.7 363.2
-------- -------- --------
Total....................................................... $1,771.1 $1,611.3 $1,517.5
======== ======== ========
In each industry segment, the Company's products are generally distributed
either by Company-employed field sales personnel or manufacturers'
representatives. In a few instances, distribution is through dealers and
independent distributors. Since many of the Company's customers are OEMs,
marketing methods and certain operations are designed to accommodate the
requirements of a small group of high-volume producer-customers.
In each industry segment, satisfactory supplies of raw materials and
adequate sources of energy essential for operation of the Company's businesses
have generally been available to date. Uncertain economic conditions, however,
could cause shortages of some basic materials, particularly those which are
petroleum derivatives (plastic resins, synthetic rubber, etc.) and used in the
Construction Materials, Industrial Components, Automotive Components and General
Industry (All Other) segments. The Company believes that energy sources are
secure and sufficient quantities of raw materials can be obtained through normal
sources to avoid interruption of production in 2001.
The Company owns or holds the right to use a variety of patents, trademarks,
licenses, inventions, trade secrets and other intellectual property rights
which, in the aggregate, are considered significant to the successful conduct of
each of the Company's four industry segments. The Company has adopted a variety
of measures and programs to ensure the continued validity and enforceability of
its various intellectual property rights.
In each industry segment, the Company is engaged in businesses, and its
products serve markets, that generally are highly competitive. Product lines
serving most markets tend to be price competitive and all lines also compete on
service and product performance. Except for Automotive Components, no industry
segment is dependent upon a single customer, or a few customers, the loss of
which would have a material adverse effect on the segment. Sales to its largest
customer represented 30.1% of total Automotive Components segment sales in 2000.
Order Backlog was $266.3 million at December 31, 2000, $228.0 million at
December 31, 1999, and $262.1 million at December 31, 1998.
Research and Development expenses were $16.5 million in 2000 compared to
$15.8 million in 1999, and $16.2 million in 1998.
The Company employs approximately 11,710 persons on a full-time basis.
The businesses of the Construction Materials, Automotive Components and
General Industry (All Other) segments are generally not seasonal in nature.
Within the Industrial Components segment, distribution of lawn and garden
products generally reach peak sales volume during the first two quarters of the
year. The businesses of all four segments are affected by the state of the
general economy.
In 2000, the Company completed the following ten acquisitions: (i)
DynAir, Inc., a Canadian manufacturer of duct supplies,
(ii) Tuchenhagen--Damrow, LLC and Kolding Gruppen A/S, global equipment
suppliers to the cheese industry, (iii) Dura-Ware Co. of America, Inc., a
manufacturer of
2
commercial cookware and servingware, (iv) Extract Technology Limited, a UK based
biotech/ pharmaceutical systems provider, (v) Consumer Tire & Wheel Division of
Titan International, Inc., expanding product offerings to the lawn and garden
markets, (vi) Process Controls Engineering, a designer of control systems for
the cheese industry, (vii) UniTrek Corporation, a manufacturer of microwave and
radio frequency cable assemblies, (viii) Bontech A/S, a Danish designer of spray
dryers and fluid bed dryers for the dairy industry, (ix) Zimmer Corporation, a
supplier of cheese and whey processing equipment and design services, and
(x) Red River Manufacturing, a specialty trailer manufacturer. In addition, the
Company completed the following joint ventures: (i) Icopal A/S, Europe's leading
commercial roofing systems provider, (ii) Moodyparts, a distributor of spare
parts for processing equipment, and (iii) Carlisle Beijing, a Chinese
manufacturer of membrane roofing and waterproofing products.
In each industry segment, the Company's compliance with Federal, state and
local provisions which have been enacted or adopted regulating the discharge of
materials into the environment or otherwise relating to the protection of the
environment is not anticipated to have a material effect upon the capital
expenditures, earnings or the financial and competitive position of the Company
or its divisions and subsidiaries.
Information on the Company's revenues, earnings and identifiable assets by
industry segment for the last three fiscal years is as follows:
2000 1999 1998
-------- -------- --------
(IN THOUSANDS)
Sales to Unaffiliated Customers(1)
Construction Materials.................................... $407,039 $405,387 $371,547
Industrial Components..................................... 641,669 527,902 510,780
Automotive Components..................................... 302,355 314,246 271,955
General Industry (All Other).............................. 420,004 363,721 363,212
Earnings before interest and income taxes
Construction Materials.................................... $ 57,528 $ 58,195 $ 53,030
Industrial Components..................................... 76,101 66,001 61,261
Automotive Components..................................... 21,396 21,212 17,638
General Industry (All Other).............................. 37,071 40,429 38,166
Corporate(2).............................................. (13,213) (11,200) (10,110)
Identifiable Assets
Construction Materials.................................... $258,558 $229,905 $218,045
Industrial Components..................................... 494,953 333,401 319,519
Automotive Components..................................... 139,225 209,653 213,900
General Industry (All Other).............................. 337,209 262,435 262,393
Corporate(3).............................................. 75,734 45,268 8,995
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(1) Intersegment sales or transfers are not material.
(2) Includes general corporate expenses.
(3) Consists primarily of cash and cash equivalents, facilities, and other
invested assets.
ITEM 2. PROPERTIES
The following table sets forth certain information with respect to the
principal properties and plants of the Company as of December 31, 2000:
O-OFFICE APPROXIMATE
M-MANUFACTURING FLOOR SPACE APPROXIMATE
PRINCIPAL PRODUCT OR ACTIVITY W-WAREHOUSING LOCATION OWNED OR LEASED (SQ. FT.) ACREAGE
----------------------------- --------------- ------------------------- ------------------------- ----------- -----------
Corporate headquarters O Syracuse, NY Leased to 2005 15,500 --
O,M,W Zevenaar, Holland Owned 26,000 1
---------- ---
41,500 1
========== ===
Elastomeric membranes and O,M,W Carlisle, PA Owned 557,474 79
related roofing products O,M,W Greenville, IL Owned 165,430 35
O,M,W Sapulpa, OK Owned 34,503 --
O,M,W Wylie, TX Owned 44,000 6
O,M,W Senatobia, MS Owned 54,500 --
Bloemedalerweg, Leased to 2004
O,M,W Netherlands 175,000 --
Bloemedalerweg, Leased to 2004
W Netherlands 30,000 --
O Denver, CO Leased to 2001 484 --
O Mississauga, Canada Leased to 2002 1,860 --
O Portland, ME Leased to 2002 5,205 --
O Sutton Courtney, UK Leased to 2003 1,000 --
W Greenville, IL Leased to 2003 40,000 --
O Akron, OH Leased to 2001 9,600 --
W Greenville, IL Leased to 2000 25,500 --
M Kingston, NY Leased to 2000 50,000 --
W Carlisle, PA Leased to 2001 49,600 --
O Bloomsburg, PA Leased to 2002 500 --
M Franklin Park, IL Leased to 2004 265,000 --
M Kingston, NY Leased to 2004 168,000 --
O Plano, TX Leased to 2004 4,063 --
O Sewickley, PA Leased to 2000 470 --
O Chicago, IL Leased to 2000 400 --
O,M,W Fontana, CA Leased to 2001 72,587 --
O East Granby, CT Leased to 2001 400
O,W Kennesaw, GA Leased to 2002 10,720 --
---------- ---
1,766,296 120
========== ===
Small pneumatic tires and O,M,W Carlisle, PA Owned 640,609 31
tubes; stamped and O,M,W Aiken, SC Owned 420,500 18
Point Fortin, Trinidad, Owned
roll-formed wheels O,M,W W.I. 167,604 --
O,M,W Long Beach, CA Owned 60,000 3
O,M,W Clinton, TN Owned 335,000 102
O,M,W Slinger, WI Owned 144,000 --
M,W Trinidad Owned 155,332 --
O Trinidad Owned 12,272 --
M Milwaukee, WI Owned 99,000 --
O,M,W Ontario, CA Owned 60,000 --
W Spokane, WA Leased to 2000 16,000 --
W Clinton, TN Leased to 2000 25,000 --
W Los Angeles, CA Leased to 2000 8,000 --
M Stow, OH Leased to 2000 20,000 5
O,M,W Lenexa, KS Leased to 2001 112,900 6
O,W Mansfield, TX Leased to 2001 38,160 --
W Slinger, WI Leased to 2001 20,400 --
W Perrysburg, OH Leased to 2002 64,300 --
W Villa Rica, GA Leased to 2002 43,000 --
W Winnepeg, Manitoba Leased to 2002 48,800 --
W Saskatoon, Saskatchewan Leased to 2002 30,200 --
M Los Angeles, CA Leased to 2003 21,000 --
W Los Angeles, CA Leased to 2003 16,800 1
M Los Angeles, CA Leased to 2003 20,515 2
O Los Angeles, CA Leased to 2003 10,000 --
W Lakeland, FL Leased to 2003 18,750 --
W Carson, CA Leased to 2003 84,044 --
O,M,W Ontario, CA Leased to 2003 87,143 --
W Greenwood, SC Leased to 2003 120,000 19
4
O-OFFICE APPROXIMATE
M-MANUFACTURING FLOOR SPACE APPROXIMATE
PRINCIPAL PRODUCT OR ACTIVITY W-WAREHOUSING LOCATION OWNED OR LEASED (SQ. FT.) ACREAGE
----------------------------- --------------- ------------------------- ------------------------- ----------- -----------
W Springfield, TN Leased to 2004 56,000 --
W Montreal, Canada Leased to 2004 27,000 --
W Mt. Pleasant, TX Leased to 2005 14,000
W Waterloo, Ontario Leased to 2007 69,000 --
---------- ---
3,065,329 187
========== ===
Molded plastics products M Oklahoma City, OK Owned 146,985 8
for commercial food O,W,M Sparta, WI Owned 40,000 3
service; ceramic tableware O,W,M Fredonia, WI Owned 209,425 11
O,M Zanesville, OH Owned 125,600 16
O Des Plaines, IL Leased to 2001 1,462 --
M Erie, PA Leased to 2002 69,647 --
M Chihauhua, Mexico Leased to 2004 55,401 8
M Chicago, IL Leased to 2004 15,992 --
W Zanesville, OH Leased to 2004 70,800 10
W Oklahoma City, OK Leased to 2005 282,600 --
O,W Charlotte, NC Leased to 2009 210,560 --
---------- ---
1,228,472 56
========== ===
Custom-manufactured rubber M Middlefield, OH Owned 200,581 28
and plastics products, M Crestline, OH Owned 233,400 40
including precision-molded M Canton, OH Owned 87,845 17
engine components and M Lake City, PA Owned 100,000 30
blow-molded bumper beams M Trenton, SC Owned 67,695 10
M Belleville, MI Owned 76,000 5
M Erie, PA Owned 95,800 15
M Lapeer, MI Owned 96,300 6
M Tuscaloosa, Al Owned 67,376 15
W Canton, OH Leased to 2000 31,840 --
M,W Ashtabula, OH Leased to 2000 30,000 --
W Tuscaloosa, AL Leased to 2001 40,000 --
W Johnston, SC Leased to 2001 8,000 --
W Edgefield, SC Leased to 2001 14,400 --
W Trenton, SC Leased to 2001 19,000 --
O Livonia, MI Leased to 2002 10,987 --
M,W Erie, PA Leased to 2004 142,000 --
O Chardon, OH Leased to 2004 8,033 --
M Chihuahua, MX Leased to 2004 50,000 8
---------- ---
1,379,257 174
========== ===
Brake lining for trucks and O,M Ridgeway, PA Owned 117,300 7
Heavy duty equipment Fredericksburg, VA Owned
trailers; O,M 90,042 27
friction products; brakes and O Charlottesville, VA Owned 25,000 4
Actuation systems O,M,W Logansport, IN Owned 112,200 47
O,M,W Bloomington, IN Owned 250,000 21
M,W Stockton, CA Leased to 2000 27,600 2
W Lancaster, PA Leased to 2002 39,000 2
O,M Brantford, Ontario Leased to 2002 50,000 2
M,W Pittsburg, KS Leased to 2004 30,000 3
M,W Nampa, ID Leased to 2007 106,400 5
---------- ---
847,542 120
========== ===
Specialized lowbed trailers O,M Mitchell, SD Owned 290,000 36
for construction and O,M Brookville, PA Owned 156,000 22
commercial markets O,M Green Pond, AL Owned 49,860 14
O,M West Fargo, SD Leased to 2007 90,000 10
---------- ---
585,860 82
========== ===
5
O-OFFICE APPROXIMATE
M-MANUFACTURING FLOOR SPACE APPROXIMATE
PRINCIPAL PRODUCT OR ACTIVITY W-WAREHOUSING LOCATION OWNED OR LEASED (SQ. FT.) ACREAGE
----------------------------- --------------- ------------------------- ------------------------- ----------- -----------
Liquid Transport tanks O,M,W New Lisbon, WI Owned 252,850 31
and in-plant processing O,M,W Elroy, WI Owned 84,300 7
equipment O,M,W Huddersfield, England Owned 50,000 2
O,W Franklin, NJ Owned 3,500 2
O,M,W Winsted, MN Owned 85,066 7
O Ryttermarken, Denmark Owned 5,360 --
O Visalia, CA Leased to 2001 1,800 --
W Fond du Lac, WI Leased to 2001 90,000 --
O Ripon, CA Leased to 2001 1,200 --
O Australia Leased to 2001 1,000 --
O Shropshire, England Leased to 2002 1,500 --
O Kolding, Denmark Leased to 2002 5,000 --
O,M,W Rice Lake, WI Leased to 2002 135,000 5
O,M,W Tavares, FL Leased to 2002 74,000 12
O Hamilton, New Zealand Leased to 2002 3,400 --
O,M,W Aylesford, England Leased to 2004 14,000 1
O,M,W Shanghai, China Leased to 2004 74,000 3
O Columbia, MD Leased to 2005 5,535 --
O,M,W Huddersfield, England Leased to 2008 8,000 1
O Fond du Lac, WI Leased to 2010 7,082 --
---------- ---
902,593 71
========== ===
High- and medium- O,M,W St. Augustine, FL Owned 166,750 17
temperature insulated O,M,W Andover, MA Leased to 2010 64,000 --
wire and cable O,M,W Essex Junction, VT Leased to 2004 46,000 --
O,M,W Vancouver, WA Leased to 2002 31,525
---------- ---
308,275 17
---------- ---
10,125,124 757
========== ===
Total plant space of 10,125,124 sq. ft. is used for:
OWNED LEASED TOTAL
--------- --------- ----------
Office..................................................... 42,632 96,481 139,113
Manufacturing.............................................. 1,270,982 735,555 2,006,537
Warehousing................................................ 0 1,402,034 1,402,034
Combined................................................... 4,947,845 1,629,595 6,577,440
--------- --------- ----------
6,261,459 3,863,665 10,125,124
========= ========= ==========
As of December 31, 2000, an additional 658,707 sq. ft. is leased by the
Company, under various agreements, principally for warehousing and distribution.
All of the manufacturing and most of the office and warehousing space is of
masonry and steel construction and most are equipped with automatic sprinkler
systems. Approximately one-third of the owned office, manufacturing and
warehousing space has been constructed within the last twenty years; the
remaining buildings are from twenty to seventy years old and have been
maintained in good condition.
ITEM 3. LEGAL PROCEEDINGS
As of December 31, 2000, other than ordinary routine litigation incidental
to the business, which is being handled in the ordinary course of business,
neither the Company nor any of its subsidiaries is a party to, nor are any of
their properties subject to any material pending legal proceedings, nor are any
such proceedings known to be contemplated by governmental authorities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
6
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.
The Company's common stock is traded on the New York Stock Exchange. As of
December 31, 2000, there were 2,396 shareholders of record.
Quarterly cash dividends paid and the high and low prices of the Company's
stock on the New York Stock Exchange in 2000 and 1999 were as follows:
FIRST SECOND THIRD FOURTH
-------- -------- -------- --------
2000
Dividends per share.................................. $.1800 $.1800 $.2000 $.2000
Stock Price
High............................................... $ 40 7/16 $ 49 3/4 $ 49 7/16 $ 44 5/8
Low................................................ $ 31 3/16 $ 38 7/8 $ 40 1/8 $ 36 13/16
1999
Dividends per share.................................. $.1600 $.1600 $.1800 $.1800
Stock Price
High............................................... $ 52 15/16 $ 49 9/16 $ 51 5/16 $ 43 1/8
Low................................................ $ 41 $ 42 1/4 $ 37 7/16 $ 30 5/8
ITEM 6. SELECTED FINANCIAL DATA.
In thousands except per share data.
2000 1999 1998 1997 1996 1995
---------- --------- --------- --------- --------- --------
SUMMARY OF OPERATIONS
Net sales............................ $1,771,067 1,611,256 1,517,494 1,260,550 1,017,495 822,534
Gross margin......................... 368,384 356,989 328,115 286,461 237,698 197,674
Selling & administrative expenses.... 176,484 173,375 160,366 143,246 128,676 109,236
Research & development............... 16,463 15,762 16,178 15,824 11,900 12,339
Interest and other (income)/expenses,
net................................ 24,572 12,369 11,302 10,607 5,082 3,241
Net earnings......................... 96,180 95,794 84,866 70,666 55,680 44,081
Basic earnings per share........... 3.18 3.18 2.81 2.34 1.84 1.43
Diluted earnings per share......... 3.14 3.13 2.77 2.28 1.80 1.41
FINANCIAL POSITION
Net working capital.................. 176,529 300,660 223,188 191,450 175,285 153,709
Property, plant and equipment, net... 402,614 349,451 354,769 294,165 264,238 193,134
Total assets......................... 1,305,679 1,080,662 1,022,852 861,216 742,463 542,423
Long-term debt....................... 281,864 281,744 273,521 209,642 191,167 72,725
% of total capitalization........ 45.4 37.2 42.9 40.3 38.4 21.2
Shareholders' equity................. 547,879 478,133 405,435 347,253 307,608 273,257
OTHER DATA
Average shares outstanding--basic.... 30,239 30,166 30,179 30,235 30,281 30,759
Average shares
outstanding--diluted............... 30,599 30,635 30,674 31,025 30,953 31,266
Dividends paid....................... 22,989 20,511 18,105 15,868 14,129 12,928
Per share.......................... 0.760 0.680 0.600 0.525 0.465 0.420
Capital expenditures................. 59,419 47,839 95,970 59,531 34,990 37,467
Depreciation & amortization.......... 59,549 47,414 45,221 38,755 29,758 23,230
Shareholders of record............... 2,396 2,546 2,443 2,068 2,145 2,054
7
All share and per share amounts have been restated to reflect the
two-for-one stock split on January 15, 1997.
Earnings per share amounts prior to 1997 have been restated to comply with
Statement of Financial Accounting Standards No. 128, "Earnings Per Share".
See the Notes to Consolidated Financial Statements.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Carlisle Companies Incorporated reported sales of $1.771 billion in 2000, up
10%, or $160 million, from 1999 sales of $1.611 billion. Acquisitions were the
primary contributor to the year-over-year sales increase. Sales volume at many
Carlisle companies was affected by the reduction in customer demand in the
fourth quarter. In 1999, sales increased 6% or $94 million, as a result of
internal growth, driven by product line expansion and market share gains, as
well as the effect of acquisitions completed in 1999 and the full year impact of
acquisitions completed in 1998.
Net earnings in 2000 were $96.2 million, or $3.14 per share, compared to
1999 net earnings of $95.8 million, or $3.13 per share. As the fourth quarter
unfolded, the rapid economic slowdown, seen throughout the manufacturing
community, was reflected in the sales and operating earnings of many Carlisle
companies. Margin pressures caused by competitive pricing and increased material
costs also affected earnings. Net earnings in 1999 increased 13%, due to
increased sales levels coupled with operational improvements made throughout the
Company.
The disappointing fourth quarter, caused by steep declines in demand,
diluted improvements made at many Carlisle companies throughout the year. What
started as a very promising year, with demand in excess of capacity at some
facilities, took a drastic turn in the fourth quarter. A downturn in many
original equipment markets occurred without a corresponding increase in the
aftermarket, events that normally do not coincide. Market prices dropped as
competitors fought to retain volume in declining markets. This, coupled with
upward pressure on costs, brought margins down. Yet, with few exceptions,
Carlisle's companies maintained competitively strong leadership positions in
each of their major markets.
To further sharpen Carlisle's competitive capability, management has taken
action to increase efficiency and reduce costs by announcing the closure of two
plants, six regional support offices and other staff reductions. The expense
associated with these actions resulted in a pretax charge to operations of
$3.7 million in the fourth quarter. It is expected that this charge will result
in a benefit in 2001 equivalent to the charge.
Approximately 96% of this year's sales growth came from acquisitions
completed in 2000 and the full year impact of 1999 acquisitions. During 2000,
Carlisle completed a record ten acquisitions and established three joint
ventures. These acquisitions were: (1) DynAir, Inc., a Canadian manufacturer of
duct supplies, (2) Tuchenhagen-Damrow, LLC and Kolding Gruppen A/S, global
equipment suppliers to the cheese industry, (3) Dura-Ware Co. of America, Inc.,
a manufacturer of commercial cookware and servingware, (4) Extract Technology
Limited, a U.K. based biotech/pharmaceutical systems provider, (5) Consumer Tire
and Wheel Division of Titan International, Inc., expanding product offerings to
the lawn and garden markets, (6) Process Controls Engineering, a designer of
control systems for the cheese industry, (7) UniTrek Corporation, a manufacturer
of microwave and radio frequency cable assemblies, (8) Bontech A/S, a Danish
designer of spray dryers and fluid bed dryers for the dairy industry,
(9) Zimmer Corporation, a supplier of cheese and whey processing equipment, and
(10) Red River Manufacturing, a specialty trailer manufacturer. In addition, the
Company completed the following joint ventures: (1) Icopal A/S, Europe's leading
commercial roofing systems provider, (2) Moodyparts, a distributor of spare
parts for processing equipment, and (3) Carlisle Beijing, a Chinese manufacturer
of membrane roofing and waterproofing products.
8
Five acquisitions were completed in 1999. Carlisle purchased: (1) Global
Manufacturing, a manufacturer of stamped steel wheels for industrial and
recreational applications and styled steel wheels for the automotive
aftermarket, (2) Johnson Truck Bodies, a manufacturer of fiberglass custom truck
bodies for the delivery of food products to stores and homes, (3) Innovative
Engineering Limited, an engineering and equipment supplier of cheese making
systems, (4) Marko International, Inc., a supplier of table coverings, table
skirtings and other accessories for the foodservice market, and (5) the custom
steel wheel business of Cragar Industries, Inc., which produces and markets
Cragar brand custom steel wheels to the automotive aftermarket.
OPERATING SEGMENTS
CONSTRUCTION MATERIALS
Segment sales of $407 million in 2000 were flat over 1999 sales of
$405 million. The relatively soft commercial roofing market experienced in 2000,
as compared to 1999, stunted sales growth in this segment. Although sales of
thermoplastic polyolefin (TPO) membrane and insulation increased year-over-year,
a soft domestic roofing market, further slowed by the cold, wet weather
experienced in the fourth quarter of 2000, coupled with a change in product mix,
reduced sales. Carlisle Coatings & Waterproofing experienced higher sales driven
by its adhesive tape and sealant products. In 1999, segment sales increased 9%
from 1998 sales of $372 million as a result of the expansion of its insulation
and TPO products.
Segment earnings were down slightly in 2000 to $57.5 million, from
$58.2 million in 1999. The continuing trend of raw material price increases, the
inability to pass those increases on to our customers, as well as the change in
product mix, negatively impacted earnings this year, despite the continuing
trend of favorable warranty claims experience. In 1999 segment earnings were up
10% over 1998 earnings of $53.0 million, reflecting increased sales levels,
improved operational performance and favorable warranty experience. The
improvement in earnings was partially offset by the absorption of increased raw
material costs and changes in product mix.
INDUSTRIAL COMPONENTS
Segment sales of $642 million for 2000 surpassed 1999 sales of $528 million
by 22%. Two acquisitions completed during the year by Carlisle Tire & Wheel and
Tensolite fueled much of this segment's sales growth. Tensolite's
diversification into cable assembly and high performance interconnects has
brought this company into the forefront of the communications technology market
and has helped to expand its customer base and markets served. Carlisle Tire &
Wheel's acquisition of the Consumer Tire and Wheel Division of Titan
International has increased its sales through further expansion of its product
line and customer base. The Company's off-highway and industrial brake and
friction businesses saw a sales improvement in 2000, primarily in the industrial
aftermarket product lines. In 1999, segment sales increased 3% over 1998 sales
of $511 million. This increase was due to growth of new customers and new
products in the specialty tire and wheel business of Carlisle Tire & Wheel, but
was dampened by lower demand for aerospace bulk cable, heavy duty friction to
the aftermarket and off-highway industrial brakes.
Segment earnings increased 15% to $76.1 million over 1999 earnings of
$66.0 million. Earnings improvements at Carlisle Tire & Wheel driven by the
Cragar and Titan acquisitions were reduced by the impact of higher material and
utility costs, coupled with expansion and integration costs. Carlisle Industrial
Brake & Friction had a positive comparison to 1999 resulting from the successful
implementation of productivity improvements and cost reduction programs.
Tensolite's cable assembly operations also made a positive contribution to this
segment's earnings in 2000. Tensolite has consolidated and upgraded its cable
assembly operations in order to strengthen its manufacturing capabilities and
flexibility as it prepares for future growth. Motion Control, the off-highway
business, was impacted by lower demand compounded by competitive pricing and
higher material costs. Segment
9
earnings increased 8% in 1999 from $61.3 million in 1998. Factors leading to the
increase were product line extension and operational improvements at Carlisle
Tire & Wheel. Offsetting these improvements were lower earnings at Tensolite and
Carlisle Industrial Brake & Friction due to less robust markets.
AUTOMOTIVE COMPONENTS
Segment sales for Automotive Components were down 4% in 2000 to
$302 million, from $314 million in 1999. This segment experienced an overall
reduction in production build rates throughout 2000 coming off 1999's record
pace, with heavier reductions noted in the fourth quarter of this year. In 1999,
segment sales were up 16% over 1998 sales of $272 million, as a result of a very
strong automotive and light truck market.
Segment earnings of $21.4 million were slightly above 1999 segment earnings
of $21.2 million. Earnings in this segment were up 12% through September 30th,
2000 as a result of operational improvements and efficiencies gained. However,
the reduction in industry demand in the fourth quarter and the corresponding
impact on sales offset the improvement made throughout the year. Earnings in
1999 increased due to the release of production backlog following the resolution
of the GM strike in 1998 as well as improved product mix. Return on assets and
free cash flow both improved significantly in this segment.
GENERAL INDUSTRY (ALL OTHER)
The General Industry segment sales of $420 million exceeded 1999 sales by
15%. Acquisitions completed at each of the businesses in this segment during the
year were principally responsible for the segment's sales growth. Carlisle
Systems & Equipment expanded its reach of isolation systems for the
pharmaceutical industry and cheese processing equipment for the dairy products
industry and has become a leader in these respective niches. The sales gains at
Carlisle Transportation Products, due to the acquisition of Red River and
increased demand at the tank trailer business, were more than offset by the
decline in demand at the Trail King specialty trailer operations. This decline
was caused by the ongoing softness in the transportation markets as a result of
rising fuel costs. Acquisitions completed during the year at Carlisle
FoodService offset lower sales of the core foodservice business. Segment sales
of $364 million in 1999 were flat with 1998 sales of $363 million. On a
pro-forma basis, excluding the effect of the perishable cargo divestiture in
January 1999, sales increased 20% over 1998. Sales and earnings at Carlisle
Systems & Equipment account for much of this pro-forma increase, due to the
acquisition of Johnson Truck Bodies as well as internal growth. Carlisle
Transportation Products sales were up over 1998 primarily due to a strong
highway construction market. Higher sales were recorded in our foodservice
business due to product line expansions in both international and domestic
markets.
Segment earnings of $37.1 million were down 8% over 1999. Margin pressures
at Carlisle FoodService and sales declines at Carlisle Transportation Products
and Systems & Equipment's Johnson Truck Bodies, offset the earnings increases
from the acquisitions in the other Carlisle Systems & Equipment businesses.
Carlisle FoodService struggled throughout the second half of the year to fight
off increased raw material and freight costs. Price increases were implemented
late in 2000 and should improve margins in 2001, but could not offset the cost
increases already absorbed this year. Earnings at Carlisle Transportation
Products' specialty trailer operations were negatively impacted by lower
productivity as a result of the sales decline in each of its markets. Rising
fuel costs reduced demand for new equipment particularly in the commercial
trailer markets. Segment earnings of $40.4 million in 1999 increased 6% over
1998 segment earnings of $38.2 million. Pro-forma earnings grew 26%, after
excluding the perishable cargo business, which was divested in January of 1999,
reflecting primarily the increase in sales in this segment.
10
FINANCIAL RESULTS
GROSS MARGIN, expressed as a percent of sales, represents the difference
between net sales and cost of goods sold. These margins increased from 21.6% in
1998, to 22.2% in 1999, but declined to 20.8% in 2000. In 1999, improved
operational efficiency, as well as improved product mix, accounted for the
higher margin rate. The decline from 1999 to 2000 reflects the competitive
marketplace, higher raw material prices coupled with the reduced demand during
the fourth quarter of this year.
SELLING AND ADMINISTRATIVE COSTS, expressed as a percent of sales, of 10.6%
in 1998, 10.8% in 1999, and 10.0% in 2000, reflect the continued emphasis on
cost control throughout all operations and lower cost structures in Carlisle's
overall businesses.
TOTAL COSTS, which include raw material, manufacturing, selling, general and
administrative, and research and development costs expressed as a percentage of
total sales, have remained fairly consistent, at 90.1% in 2000, 89.6% in 1999
and 90.0% in 1998. Through the third quarter of 2000, total costs, as a
percentage of sales were 88.9%, a .3 point improvement over the same period
of 1999. The increase in total costs in 2000 was driven by raw material price
increases, compounded by declining market demand in the fourth quarter. The
improvement in the total cost relationship in 1999 was due to improved
operating efficiencies.
INTEREST EXPENSE, NET increased to $28.0 million in 2000 from $19.2 million
in 1999, due to higher debt levels throughout the year, as a result of the
completion of a record number of acquisitions, during the year. Strong
internally generated cash flows financed planned capital expenditures and some
of the acquisition spending.
INCOME TAXES, for financial reporting purposes, decreased in 2000 to an
effective tax rate of 36.2% compared to 38.4% in 1999, and 39.5% in 1998. The
successful implementation of various foreign and state tax strategies was
responsible for much of this improvement.
RECEIVABLES, of $214 million reflect a decrease over the 1999 level of
$245 million. The sales decline experienced in the fourth quarter, as well as a
focus on reducing days sales outstanding, was responsible for the improvement.
The 1999 level of receivables represented a 9% increase over 1998 levels and was
in line with the sales growth for that year.
INVENTORIES, valued primarily by the last-in, first-out (LIFO) method, were
$277 million at year-end 2000, a 27% increase over the 1999 year-end level of
$219 million. The increase in inventory at year-end was primarily due to higher
inventory at Carlisle Tire & Wheel in preparation for the spring selling season,
and at Carlisle FoodService as a result of acquisitions made during the current
year. In 1999, the increase in inventory over 1998 was also due to seasonal
demands and the impact of acquisitions.
CAPITAL EXPENDITURES totaled $59 million in 2000, up from $48 million in
1999. Investments were made in production capacity in China and Trinidad for
tire and wheel assemblies, as well as plant and equipment to manufacture TPO
roofing membranes, specialty trailers and processing equipment.
LIQUIDITY, CAPITAL RESOURCES AND ENVIRONMENTAL
CASH FLOWS provided by operating activities were $125 million in 2000
compared to $136 million in 1999. The decrease is due to higher working capital
at the end of 2000 partially offset by an increase in depreciation and
amortization. Cash used in investing activities was $272 million versus
$86 million in 1999, an increase of $186 million. This increase was attributable
to the unprecedented level of acquisition spending during the year of
$209 million versus $42 million in 1999. In addition, in 1999, cash used in
investing activities was offset by the proceeds, net of tax, from the
divestiture of the perishable cargo business. The net cash provided by financing
activities in 2000 was $146 million versus a use of cash of $44 million in 1999.
In 2000, short-term borrowings were used to finance acquisitions
11
made during the year. The net cash used in financing activities in 1999 reflects
the repayment of short-term borrowings.
In June of 2000, Carlisle replaced its $125 million revolving credit
facility with new $350 million credit facilities. These facilities are
available for investments in acquisitions and general corporate purposes. The
Company's primary sources of liquidity and capital are cash flows from
operations and borrowing capacity. Carlisle continues to maintain substantial
flexibility to meet anticipated needs for liquidity and investment
opportunities.
Carlisle management recognizes the importance of the Company's
responsibilities toward matters of environmental concern. Programs are in place
to monitor and test facilities and surrounding environments and, where
practical, to recycle materials. Carlisle has not incurred material charges
relating to environmental matters in 2000 or in prior years, and none are
currently anticipated.
BACKLOG AND FUTURE OUTLOOK
BACKLOG was $266 million at December 31, 2000 compared to $228 million in
1999. Higher backlog at Carlisle Tire & Wheel, Tensolite and Carlisle Systems &
Equipment reflect the strong market penetration achieved by these businesses
through internal efforts and the acquisition of key market niches. Automotive
Components backlog was down from December 1999 levels due to the decline in
demand in the fourth quarter 2000, and the anticipated slowing of the automotive
build rates, particularly in the first quarter of 2001.
With the onset of 2001 management is pleased to announce three recently
completed acquisitions by Carlisle Process Systems: Bontech Engineering A/S,
in Denmark; Scheffers, Division of Siersema BV and Stork Friesland BV, both in
the Netherlands. Each of these companies strengthen Carlisle's position in
evaporation and drying systems for the food and dairy processing industries.
Additionally, Carlisle SynTec has announced a letter of intent to acquire
EcoStar, Inc., a manufacturer of synthetic roofing tiles for the residential and
commercial steep slope roofing markets.
There is opportunity in this changed economic environment. The companies we
have acquired in 2000 and those announced in 2001, bring new products, customers
and markets to Carlisle's portfolio. Although we believe the first half of the
year will be a challenge, our competitive position is strong and we are
optimistic about the opportunities for growth and leadership in our markets. We
have made strides toward achieving our objective of increased global presence in
industries that are attractive to us. Our longstanding operating principles of:
targeted market leadership; growth from within; lean organizational structure;
low cost, decentralized operations; and strategic acquisitions to achieve our
sales and earnings growth objectives, have enabled us to show positive results
year-over-year despite the market conditions we face. As we move into 2001, we
are confident that these principles will continue to result in operating success
for Carlisle.
12
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE YEARS ENDED DECEMBER 31
(IN THOUSANDS EXCEPT PER SHARE DATA)
2000 1999 1998
---------- ---------- ----------
Net sales................................................ $1,771,067 $1,611,256 $1,517,494
---------- ---------- ----------
Cost and expenses:
Cost of goods sold..................................... 1,402,683 1,254,267 1,189,379
Selling and administrative expenses.................... 176,484 173,375 160,366
Research and development expenses...................... 16,463 15,761 16,178
Gain on divestiture of business ($16.6m),
net of other charges ($15.9m)........................ -- (685) --
Other (income) & expense............................... (3,446) (6,099) (8,414)
---------- ---------- ----------
Earnings before interest & income taxes.................. 178,883 174,637 159,985
Interest expense, net.................................. 28,018 19,154 19,716
---------- ---------- ----------
Earnings before income taxes............................. 150,865 155,483 140,269
Income taxes............................................. 54,685 59,689 55,403
---------- ---------- ----------
Net earnings............................................. $ 96,180 $ 95,794 $ 84,866
========== ========== ==========
Average shares outstanding--basic........................ 30,239 30,166 30,179
Basic earnings per share................................. $ 3.18 $ 3.18 $ 2.81
Average shares outstanding--diluted...................... 30,599 30,635 30,674
Diluted earnings per share............................... $ 3.14 $ 3.13 $ 2.77
See accompanying Notes to Consolidated Financial Statements.
13
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS EXCEPT SHARE DATA)
ADDITIONAL CUMULATIVE COST OF
COMMON PAID-IN RETAINED TRANSLATION SHARES
STOCK CAPITAL EARNINGS ADJUSTMENT IN TREASURY
-------- ---------- -------- ----------- -----------
Balance at December 31,1997............... $39,331 $ 1,830 $403,356 $(1,583) $ (95,681)
Net earnings............................ -- -- 84,866 -- --
Cash dividends--$0.60 per share......... -- -- (18,105) -- --
Exercise of stock options & other....... -- 2,371 -- -- 3,309
Purchase of 283,598 treasury shares..... -- -- -- -- (14,372)
Translation adjustment.................. -- -- -- 113 --
------- ------- -------- ------- ---------
Balance at December 31, 1998.............. 39,331 4,201 470,117 (1,470) (106,744)
Net earnings............................ -- -- 95,794 -- --
Cash dividends--$0.68 per share......... -- -- (20,511) -- --
Exercise of stock options & other....... -- 1,370 4 -- 616
Purchase of 103,208 treasury shares..... -- -- -- -- (4,387)
Translation adjustment.................. -- -- -- (188) --
------- ------- -------- ------- ---------
Balance at December 31, 1999.............. 39,331 5,571 545,404 (1,658) (110,515)
Net earnings............................ -- -- 96,180 -- --
Cash dividends--$0.76 per share......... -- -- (22,989) -- --
Exercise of stock options & other....... -- 4,697 -- -- 4,627
Purchase of 255,612 treasury shares..... -- -- -- -- (9,803)
Translation adjustment.................. -- -- -- (2,966) --
------- ------- -------- ------- ---------
Balance at December 31, 2000.............. $39,331 $10,268 $618,595 $(4,624) $(115,691)
======= ======= ======== ======= =========
See accompanying Notes to Consolidated Financial Statements.
14
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31
(IN THOUSANDS EXCEPT SHARE DATA)
2000 1999
---------- ----------
ASSETS
Current assets
Cash and cash equivalents................................. $ 8,967 $ 10,417
Receivables, less allowances of $5,688 in 2000 and $4,963
in 1999................................................. 213,656 245,120
Inventories............................................... 277,455 219,270
Deferred income taxes..................................... 22,344 32,108
Prepaid expenses and other................................ 54,055 34,123
---------- ----------
TOTAL CURRENT ASSETS.................................... 576,477 541,038
---------- ----------
PROPERTY, PLANT AND EQUIPMENT, NET.......................... 402,614 349,451
---------- ----------
OTHER ASSETS
Patents, goodwill and other intangibles................... 251,670 157,967
Investments and advances to affiliates.................... 66,350 14,321
Receivables and other assets.............................. 8,568 17,885
---------- ----------
TOTAL OTHER ASSETS...................................... 326,588 190,173
---------- ----------
$1,305,679 $1,080,662
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term debt, including current maturities............. $ 173,762 $ 1,989
Accounts payable.......................................... 108,484 106,283
Accrued expenses.......................................... 117,702 132,106
---------- ----------
TOTAL CURRENT LIABILITIES............................... 399,948 240,378
---------- ----------
LONG-TERM LIABILITIES
Long-term debt............................................ 281,864 281,744
Product warranties........................................ 72,789 79,858
Other liabilities......................................... 3,199 549
---------- ----------
TOTAL LONG-TERM LIABILITIES............................. 357,852 362,151
---------- ----------
SHAREHOLDERS' EQUITY
Preferred stock, $1 par value. Authorized and unissued
5,000,000 shares
Common stock, $1 par value. Authorized 100,000,000 shares;
issued 39,330,624 shares................................ 39,331 39,331
Additional paid-in capital................................ 10,268 5,571
Cumulative translation adjustment......................... (4,624) (1,658)
Retained earnings......................................... 618,595 545,404
Cost of shares in treasury--9,079,356 shares in 2000 and
9,203,095 shares in 1999................................ (115,691) (110,515)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY.............................. 547,879 478,133
---------- ----------
$1,305,679 $1,080,662
========== ==========
See accompanying Notes to Consolidated Financial Statements.
15
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
(IN THOUSANDS)
2000 1999 1998
--------- -------- ---------
OPERATING ACTIVITIES
Net earnings.............................................. $ 96,180 $ 95,794 $ 84,866
Reconciliation of net earnings to cash flows:
Depreciation............................................ 48,346 39,832 37,617
Amortization............................................ 11,203 7,582 7,604
(Gain)/Loss on sales of property, equipment and
business.............................................. 2,871 (1,777) (3,156)
Changes in assets and liabilities, excluding effects of
acquisitions and divestitures:
Current and long-term receivables..................... 30,119 (18,622) (43,786)
Inventories........................................... (36,984) (13,471) (10,526)
Accounts payable and accrued expenses................. (32,988) 4,440 25,450
Prepaid, deferred and current income taxes............ 16,913 15,761 (7,568)
Long-term liabilities................................. (7,731) 4,585 5,217
Other................................................. (2,803) 1,969 1,086
--------- -------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES............... 125,126 136,093 96,804
--------- -------- ---------
INVESTING ACTIVITIES
Capital expenditures...................................... (59,419) (47,839) (95,970)
Acquisitions, net of cash................................. (209,454) (42,393) (31,577)
Proceeds from sale of property, equipment and business.... 782 17,157 11,344
Other..................................................... (4,174) (12,544) (16,761)
--------- -------- ---------
NET CASH USED IN INVESTING ACTIVITIES................... (272,265) (85,619) (132,964)
--------- -------- ---------
FINANCING ACTIVITIES
Net proceeds from short-term debt......................... 171,773 (29,285) 15,827
Proceeds from long-term debt.............................. -- 10,000 104,235
Reductions of long-term debt.............................. (2,616) (1,744) (49,274)
Dividends................................................. (22,989) (20,511) (18,105)
Treasury shares and stock options, net.................... (479) (2,400) (14,372)
--------- -------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES..... 145,689 (43,940) 38,311
--------- -------- ---------
CHANGE IN CASH AND CASH EQUIVALENTS......................... (1,450) 6,534 2,151
CASH AND CASH EQUIVALENTS
Beginning of year......................................... 10,417 3,883 1,732
--------- -------- ---------
End of year............................................... $ 8,967 $ 10,417 $ 3,883
========= ======== =========
See accompanying Notes to Consolidated Financial Statements.
16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
SUMMARY OF ACCOUNTING POLICIES
BASIS OF CONSOLIDATION.
The consolidated financial statements include the accounts of the Company
and its subsidiaries. Investments in affiliates where the Company does not have
control are accounted for under the equity method. Equity income related to such
investments is recorded in Other (income) & expense. All material intercompany
transactions and accounts have been eliminated.
REVENUE RECOGNITION.
The substantial majority of the consolidated revenues are recognized by the
Company upon shipment of products to the customer. The Company's product sales
are predominantly to customers in the United States.
USE OF ESTIMATES.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS.
Debt securities with a remaining maturity of three months or less when
acquired are cash equivalents. Cash and cash equivalents are stated at cost,
which approximates market value.
INVENTORIES.
Inventories are valued at the lower of cost or market. Cost for a majority
of the Company's inventories is determined by the last-in, first-out (LIFO)
method with the remainder determined by the first-in, first-out (FIFO) method.
PROPERTY, PLANT AND EQUIPMENT.
Property, plant and equipment are stated at cost. Costs allocated to
property, plant and equipment of acquired companies are based on estimated fair
value at the date of acquisition. Depreciation is principally computed on the
straight line basis over the estimated useful lives of the assets. Asset lives
are 20 to 40 years for buildings, 5 to 15 years for machinery and equipment and
3 to 10 years for leasehold improvements.
PATENTS, GOODWILL AND OTHER INTANGIBLES.
Patents and other intangibles, recorded at cost, amounted to $1.5 million
and $6.6 million at December 31, 2000 and 1999, respectively (net of accumulated
amortization of $17.2 million and $16.5 million, respectively), and are
amortized over their remaining lives, which average five years. Goodwill,
representing the excess of acquisition cost over the fair value of specifically
identifiable assets acquired, was $250.2 million and $151.3 million at
December 31, 2000 and 1999, respectively (net of accumulated amortization of
$29.7 million and $19.8 million, respectively), and is amortized on a straight
line basis over various periods not exceeding 30 years. The Company evaluates
the carrying
17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
value of goodwill and other intangible assets if facts and circumstances suggest
that they may be impaired. Impairments would be recognized when the expected
future operating cash flows derived from such intangible assets is less than
their carrying value.
PRODUCT WARRANTIES.
The Company offers warranties on the sales of certain of its products and
records an accrual for estimated future claims. Such accruals are based upon
historical experience and management's estimate of the level of future claims.
INCOME TAXES.
Deferred tax assets and liabilities are recognized for the future tax
consequences of the differences between financial statement carrying amounts of
assets and liabilities and their respective tax bases. These balances are
measured using enacted tax rates expected to apply to taxable income in the
years in which such temporary differences are expected to be recovered or
settled. If a portion or all of a deferred tax asset is not expected to be
realized, a valuation allowance is recognized.
EARNINGS PER SHARE.
Earnings per share is determined in accordance with STATEMENT OF FINANCIAL
ACCOUNTING STANDARDS (SFAS) No. 128, "Earnings per Share".Basic earnings per
share excludes the dilutive effect of options, warrants, and convertible
securities. Diluted earnings per share gives effect to all dilutive securities
that were outstanding during the period. The only difference between basic and
diluted earnings per share of the Company is the effect of dilutive stock
options.
FOREIGN CURRENCY TRANSLATION.
The Company has determined that the local currency is the functional
currency for its subsidiaries outside the United States. Assets and liabilities
of these operations are translated at the exchange rate in effect at each
year-end. Income statement accounts are translated at the average rate of
exchange prevailing during the year. Translation adjustments arising from the
use of differing exchange rates from period to period are included as a
component of shareholders' equity. Gains and losses from foreign currency
transactions are included in net income for the period.
OTHER COMPREHENSIVE INCOME.
A statement of comprehensive income has not been presented because, aside
from changes in cumulative translation adjustments, the components of
comprehensive income are not significant. The changes in cumulative translation
adjustment are presented in the Consolidated Statements of Shareholders' Equity.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES.
Effective January 1, 2001, the Company will implement SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". This statement
standardizes the accounting for derivatives and hedging activities and requires
that all derivatives be recognized in the statement of financial position as
either assets or liabilities at fair value. Changes in the fair value of
derivatives that do not meet the hedge accounting criteria are to be reported in
earnings. Implementation of this pronouncement will not have a material effect
since the Company has not utilized derivative financial instruments or entered
into hedging transactions.
18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
RECLASSIFICATIONS.
Certain reclassifications have been made to prior years' information to
conform to the 2000 presentation.
INVENTORIES
The components of inventories are:
2000 1999
IN THOUSANDS -------- --------
FIFO cost (approximates current costs):
Finished goods............................................ $175,861 $132,719
Work in process........................................... 31,687 27,052
Raw materials............................................. 82,694 70,735
-------- --------
$290,242 $230,506
Excess of FIFO cost over LIFO value......................... (12,787) (11,236)
-------- --------
$277,455 $219,270
======== ========
PROPERTY, PLANT & EQUIPMENT
The components of property, plant and equipment are:
2000 1999
IN THOUSANDS -------- --------
Land........................................................ $ 7,371 $ 5,640
Buildings & leasehold improvements.......................... 174,804 149,924
Machinery & equipment....................................... 522,281 473,662
Projects in progress........................................ 38,753 28,859
-------- --------
$743,209 $658,085
Accumulated depreciation.................................... (340,595) (308,634)
-------- --------
$402,614 $349,451
======== ========
BORROWINGS
Long-term debt includes:
2000 1999
IN THOUSANDS -------- --------
6.70% senior notes due 2008................................. $100,000 $100,000
7.25% senior notes due 2007................................. 150,000 150,000
Industrial Development and Revenue Bonds due through 2018... 26,540 26,595
Other, including capital lease obligations.................. 7,603 7,138
-------- --------
$284,143 $283,733
Less current maturities..................................... (2,279) (1,989)
-------- --------
$281,864 $281,744
======== ========
On June 30, 2000, the Company replaced its $125 million revolving credit
facility, expiring April 30, 2001, with new syndicated revolving credit
facilities, which provide for borrowings up to
19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
$350 million. These facilities consist of a $150 million three-year facility and
a $200 million 364-day facility. As of December 31, 2000, $171 million was
outstanding under these facilities. The Company has available unsecured lines of
credit from banks of $40 million, all of which was available as of December 31,
2000.
At December 31, 2000, letters of credit amounting to $29.7 million were
outstanding, primarily to provide security under insurance arrangements and
certain borrowings.
Under the Company's various debt and credit facilities, the Company is
required to maintain various restrictive covenants and limitations, including
certain net worth and cash flow ratios, all of which were complied with in 2000
and 1999.
The industrial development and revenue bonds are collateralized by the
facilities and equipment acquired through the proceeds of the related bond
issuances. On January 1, 1999, the Company secured a $10 million Industrial
Development Revenue Bond due December 31, 2018.
The weighted average interest rates on the revenue bonds for 2000 and 1999
were 5.7% and 4.6%, respectively.
Cash payments for interest were $28.2 million in 2000, $19.1 million in 1999
and $21.3 million in 1998.
Interest expense, net is shown net of interest income of $3.5 million in
2000, $2.6 million in 1999 and $3.0 million in 1998.
The aggregate amount of long-term debt maturing in each of the next five
years is approximately $2.3 million in 2001, $1.5 million in 2002, $3.9 million
in 2003, $1.4 million in 2004, $1.5 million in 2005 and $273.5 million
thereafter.
The estimated fair market values of the Company's financial instruments
approximate their recorded values.
ACQUISITIONS
In each of the last three years, the Company has completed various
acquisitions, all of which have been accounted for as purchases. Results of
operations for these acquisitions, which have been included in the consolidated
financial statements since their respective acquisition dates, did not have a
material effect on consolidated operating results of the Company in the years of
the acquisition.
The Company has completed several acquisitions during the year and has
tentatively considered the carrying value of the acquired assets to approximate
their fair value, with all of the excess of those acquisition costs being
attributable to goodwill. The Company is in the process of fully evaluating the
assets acquired and, as a result, the purchase price allocation among the
tangible and intangible assets acquired and their useful lives may change.
SHAREHOLDERS' EQUITY
The Company has a Shareholders' Rights Agreement that is designed to protect
shareholder investment values. A dividend distribution of one Preferred Stock
Purchase Right for each outstanding share of the Company's common stock was
declared, payable to shareholders of record on March 3, 1989. The Rights will
become exercisable under certain circumstances, including the acquisition of 25%
of the Company's common stock, or 40% of the voting power, in which case all
rights holders except the acquiror may purchase the Company's common stock at a
50% discount. If the Company is
20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
acquired in a merger or other business combination, and the Rights have not been
redeemed, rights holders may purchase the acquiror's shares at a 50% discount.
On August 7, 1996, the Company amended the Shareholders' Rights Agreement to,
among other things, extend the term of the Rights until August 6, 2006.
Common shareholders of record on May 30, 1986 are entitled to five votes per
share. Common stock acquired subsequent to that date entitles the holder to one
vote per share until held four years, after which time the holder is entitled to
five votes.
In April 1999, the shareholders approved an increase in the number of
authorized common shares of the company from 50 million shares to 100 million
shares.
EMPLOYEE STOCK OPTIONS & INCENTIVE PLAN
The Company maintains an Executive Incentive Program for executives and
certain other employees of the Company and its operating divisions and
subsidiaries. The Program contains a plan, for those who are eligible, to
receive cash bonuses and/or shares of restricted stock. The Program also has a
stock option plan available to certain employees.
At December 31, 2000, under the Company's restricted stock plan, 10,683
nonvested shares were outstanding and 2,148,380 shares were available for
issuance.
The activity under the stock option plan is as follows:
WEIGHTED
AVERAGE
NUMBER EXERCISE
OF SHARES PRICE
--------- --------
Outstanding at December 31, 1997............................ 1,570,246 $18.52
Options granted............................................. 239,000 46.56
Options exercised........................................... (282,413) 16.32
---------
Outstanding at December 31, 1998............................ 1,526,833 $23.32
Options granted............................................. 430,500 38.35
Options exercised........................................... (40,316) 16.69
---------
Outstanding at December 31, 1999............................ 1,917,017 $26.84
Options granted............................................. 2,000 31.56
Options exercised........................................... (367,407) 17.33
Options cancelled........................................... (29,600) 23.84
---------
Outstanding at December 31, 2000............................ 1,522,010 $29.20
=========
Available for grant at December 31, 2000.................... 1,034,282
21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
The following tables summarize information about stock options outstanding
as of December 31, 2000:
Options Outstanding:
NUMBER WEIGHTED
RANGE OF OUTSTANDING WEIGHTED AVERAGE AVERAGE
EXERCISE PRICES AT 12/31/00 REMAINING YEARS EXERCISE PRICE
--------------- ----------- ---------------- --------------
$ 8.10- 9.78 48,132 1.0 $ 9.67
12.32-17.25 203,046 2.5 14.52
17.32-19.63 137,000 4.1 17.57
19.88-29.50 476,332 5.5 23.97
32.75-48.38 657,500 8.1 41.38
---------
1,522,010
=========
Options Exercisable:
NUMBER
RANGE OF OUTSTANDING WEIGHTED AVERAGE
EXERCISE PRICES AT 12/31/00 REMAINING YEARS
--------------- ----------- ----------------
$ 8.10- 9.78 48,132 $ 9.67
12.32-17.25 203,046 14.52
17.32-19.63 137,000 17.57
19.88-29.50 476,332 23.97
32.75-48.38 327,667 46.24
---------
1,192,177
=========
At December 31, 1999, 1,450,350 options were exercisable at a weighted
average price of $22.90.
In accordance with the provisions of SFAS No. 123, "Accounting for
Stock-Based Compensation", the Company applies APB Opinion 25 and related
interpretations in accounting for its stock compensation plans and, accordingly,
does not recognize compensation cost for its stock option plan. If the Company
had elected to recognize compensation cost based on the fair value of the
options granted at grant date as prescribed by SFAS No. 123, the pro-forma
effect on net earnings and earnings per share, in 2000, 1999 and 1998, would
have been approximately $2.1 million or $.07 per share, $2.5 million or $.08 per
share and $1.7 million or $.06 per share, respectively. Pursuant to the
transition provisions of SFAS No. 123, the pro-forma effect includes only the
vested portion of options granted in and after 1995. Options vest over a three
year period. Compensation cost was estimated using the Black-Scholes model with
the following assumptions: expected dividend yield of 2.22 percent in 2000,
1.70 percent in 1999 and 1.20 percent in 1998; an expected life of 7 years;
expected volatility of 38.7 percent in 2000, 33.2 percent in 1999 and
25.6 percent in 1998; and risk-free interest rate of 5.9 percent in 2000,
5.5 percent in 1999 and 1998. The weighted-average fair value of those stock
options granted in 2000, 1999 and 1998 was $12.70, $14.66 and $16.35,
respectively.
RETIREMENT PLANS
The Company maintains defined benefit retirement plans for the majority of
its employees. Benefits are based primarily on years of service and earnings of
the employee. Plan assets consist primarily of publicly-listed common stocks and
corporate bonds.
22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
The change in projected benefit obligation:
2000 1999
IN THOUSANDS -------- --------
Benefit obligation at beginning of year..................... $108,125 $107,879
Service cost................................................ 5,289 5,848
Interest cost............................................... 8,024 7,633
Amendments.................................................. 152 532
Actuarial gain.............................................. (802) (6,748)
Benefits paid............................................... (9,818) (7,019)
-------- --------
Benefit obligation at end of year........................... $110,970 $108,125
======== ========
The change in plan assets:
2000 1999
IN THOUSANDS -------- --------
Fair value of plan assets at beginning of year.............. $110,059 $114,465
Actual return on plan assets................................ 10,945 1,114
Company contributions....................................... 2,123 1,815
Benefits paid............................................... (9,818) (7,019)
-------- --------
Fair value of plan assets at end of year.................... $113,309 $110,375
======== ========
Reconciliation of the accrued benefit cost recognized in the financial
statements:
2000 1999
IN THOUSANDS -------- --------
Funded status............................................... $ 2,339 $ 2,250
Unrecognized net actuarial gain............................. (16,944) (14,640)
Unrecognized prior service cost............................. (2,871) (2,979)
Unrecognized transition asset............................... (1,521) (2,213)
-------- --------
Accrued benefit cost........................................ $(18,997) $(17,582)
======== ========
Components of net periodic benefit cost at December 31:
2000 1999 1998
IN THOUSANDS -------- -------- --------
Service cost................................................ $5,289 $5,848 $5,258
Interest cost............................................... 8,024 7,633 7,113
Expected return on plan assets.............................. (9,379) (8,689) (8,014)
Net amortization and deferral............................... (712) (393) (381)
------ ------ ------
Net periodic benefit cost................................... $3,222 $4,399 $3,976
====== ====== ======
The projected benefit obligation was determined using an assumed discount
rate of 7.75% in 2000 and 1999 and 7.00% in 1998. The assumed rate of
compensation increase was 4.5% in 2000 and 1999 and 4.0% in 1998; and the
expected rate of return on plan assets was 9.25% in 2000, 1999 and 1998. The
2000 and 1999 pension plan disclosures were determined using a September 30
measurement date.
Additionally, the Company maintains a retirement savings plan covering
substantially all employees other than those employees under collective
bargaining agreements. Plan expense was $5.6 million, $4.9 million and
$4.9 million, in 2000, 1999 and 1998, respectively.
23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
The Company also has a limited number of unfunded post-retirement benefit
programs for which the expense, inclusive of the components of service costs,
interest costs and the amortization of the unrecognized transition obligation,
was approximately $0.4 million in 2000, 1999 and 1998. The present value of the
Company's obligation under these plans is not significant.
INCOME TAXES
The provision for income taxes was as follows:
2000 1999 1998
IN THOUSANDS -------- -------- --------
Currently payable
Federal................................................... $37,884 $ 77,425 $38,496
State, local and other.................................... 7,498 7,472 8,340
------- -------- -------
$45,382 $ 84,897 $46,836
------- -------- -------
Deferred liability (benefit)
Federal................................................... $ 8,555 $(23,166) $ 5,572
State, local and other.................................... 748 (2,042) 2,995
------- -------- -------
$ 9,303 $(25,208) $ 8,567
------- -------- -------
Total provision............................................. $54,685 $ 59,689 $55,403
======= ======== =======
Deferred tax assets (liabilities) are comprised of the following at
December 31:
2000 1999
IN THOUSANDS -------- --------
Product warranty............................................ $ 37,766 $ 42,007
Inventory reserves.......................................... 885 4,099
Doubtful receivables........................................ 1,410 1,608
Employee benefits........................................... 6,799 12,024
Other, net.................................................. 15,343 9,256
-------- --------
Deferred assets............................................. $ 62,203 $ 68,994
-------- --------
Depreciation................................................ (32,452) (24,659)
Amortization................................................ (6,575) (2,229)
-------- --------
Deferred liabilities........................................ $(39,027) $(26,888)
-------- --------
Net deferred tax assets..................................... $ 23,176 $ 42,106
======== ========
No valuation allowance is required for the deferred tax assets based on the
Company's past tax payments and estimated future taxable income.
A reconciliation of taxes computed at the statutory rate to the tax
provision is as follows:
2000 1999 1998
IN THOUSANDS -------- -------- --------
Federal income taxes at statutory rate...................... $52,803 $54,419 $49,095
State income taxes, net of federal income tax benefit....... 4,390 4,043 5,798
Other, net.................................................. (2,508) 1,227 510
------- ------- -------
$54,685 $59,689 $55,403
======= ======= =======
Effective income tax rate................................... 36.2% 38.4% 39.5%
24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Cash payments for income taxes were $49.9 million, $84.9 million and
$58.7 million in 2000, 1999 and 1998, respectively.
The Company has not provided for U.S. taxes payable on accumulated
undistributed foreign earnings of certain subsidiaries since these amounts are
permanently reinvested.
COMMITMENTS AND CONTINGENCIES
The Company is obligated under various noncancelable operating leases for
certain facilities and equipment. Rent expense was $9.9 million, $8.4 million,
and $6.6 million, in 2000, 1999, and 1998, respectively. Future minimum payments
under various noncancelable operating leases in each of the next five years are
approximately $12.0 million in 2001, $8.5 million in 2002, $7.1 million in 2003,
$6.9 million in 2004 and $6.2 million in 2005.
The Company may be involved in various legal actions from time to time
arising in the normal course of business. In the opinion of management, there
are no matters outstanding that would have a material adverse effect on the
consolidated financial position or results of operations of the Company.
OPERATIONAL RESTRUCTURING AND IMPAIRMENT OF ASSETS
In January 1999, the Company announced the reduction of its interest in its
perishable cargo business, consisting of its container leasing joint venture and
container manufacturing operations. On January 28, 1999 the Company sold 85% of
its interest in its leasing joint venture. In connection with the reduction in
the Company's interest in the leasing joint venture, the Company suspended
operations at its container manufacturing facility. As a result, the Company
recognized a pre-tax gain of $16.6 million in the first quarter of 1999. These
operations are associated with the Company's General Industry (All Other)
segment.
In conjunction with the implementation of the 1999 business plan, the
Company completed certain product line realignments, manufacturing improvements
and facility relocations and upgrades at its operating businesses resulting in
certain assets that are no longer required or will be reallocated. In the first
quarter of 1999, the Company recognized a $15.9 million pre-tax charge related
to these assets. Approximately 75% of this charge related to machinery and
equipment primarily associated with the foodservice, roofing, tire and wheel and
automotive components manufacturing operations, with the remainder related to
goodwill and other intangible assets associated with acquisitions made in prior
years. The amount of the write-down of machinery and equipment was determined to
be the excess of the recorded values over the estimated fair values. The fair
values were determined using estimated market values or projected future cash
flows, whichever was deemed appropriate. The charge related to the intangible
assets was determined as the excess of the recorded value over the projected
future cash flows.
The net effect of the above items is reflected under the caption "gain on
divestiture of business, net of other charges" on the face of the Company's
Consolidated Statements of Earnings.
SEGMENT INFORMATION
The Company's reportable segments have been organized around differences in
products and services, and operating segments have been aggregated. The
accounting policies of the segments are the same as those described in the
summary of significant accounting policies. The chief operating decision
25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
maker evaluates segment performance by earnings before interest and income
taxes. The Company's operations are classified into the following segments:
CONSTRUCTION MATERIALS--the principal products of this segment are rubber,
plastic and fleece back sheeting used predominantly on non-residential flat
roofs and related roofing accessories, including flashings, fasteners, sealing
tapes, coatings and waterproofings. The markets served include new construction,
re-roofing and maintenance of low slope roofs, water containment, HVAC sealants,
and coatings and waterproofings.
INDUSTRIAL COMPONENTS--the principal products of this segment are small
bias-ply rubber tires, stamped and roll-formed wheels, heavy duty friction and
braking systems for truck and off-highway equipment, high grade aerospace wire,
specialty electronic cable, cable assemblies and interconnects. Customers
include golf car manufacturers, power equipment manufacturers, boat and utility
trailer manufacturers, truck OEMs, heavy equipment and truck dealers and
aftermarket distributors, aerospace OEMs, and electronic and communications
equipment manufacturers.
AUTOMOTIVE COMPONENTS--the principal products of this segment are highly
engineered rubber and plastic components for Tier I suppliers and other
manufacturers in the automotive market.
GENERAL INDUSTRY (ALL OTHER)--the principal products of this segment include
commercial and institutional plastic foodservice permanentware and catering
equipment, fiberglass and composite material trays and dishes, commercial
cookware and servingware, ceramic tableware, specialty rubber and plastic
cleaning brushes, stainless steel processing and containment equipment and their
related process control systems, specialty trailers and standard and
custom-built high payload trailers and dump bodies, refrigerated fiberglass
truck bodies and perishable cargo container leasing. Customers include
foodservice distributors, restaurants, food, dairy, beverage and pharmaceutical
processors and distributors, heavy equipment and truck dealers, shipping lines
and commercial haulers.
CORPORATE--includes general corporate expenses. Corporate assets consist
primarily of cash and cash equivalents, facilities, and other invested assets.
26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Financial information for operations by reportable business segment is
included in the following summary:
EARNINGS BEFORE DEPRECIATION
INTEREST & AND CAPITAL
SALES INCOME TAXES ASSETS AMORTIZATION SPENDING
IN THOUSANDS ---------- --------------- ---------- ------------ --------
2000
Construction Materials........... $ 407,039 $ 57,528 $ 258,558 $ 7,677 $10,968
Industrial Components............ 641,669 76,101 494,953 23,046 25,275
Automotive Components............ 302,355 21,396 139,225 12,048 8,649
General Industry (All other)..... 420,004 37,071 337,209 15,491 14,180
Corporate........................ -- (13,213) 75,734 1,287 347
---------- -------- ---------- ------- -------
$1,771,067 $178,883 $1,305,679 $59,549 $59,419
========== ======== ========== ======= =======
1999
Construction Materials........... $ 405,387 $ 58,195 $ 229,905 $ 7,149 $ 9,045
Industrial Components............ 527,902 66,001 333,401 16,942 17,000
Automotive Components............ 314,246 21,212 209,653 10,873 10,526
General Industry (All other)..... 363,721 40,429 262,435 11,646 10,880
Corporate........................ -- (11,200) 45,268 804 388
---------- -------- ---------- ------- -------
$1,611,256 $174,637 $1,080,662 $47,414 $47,839
========== ======== ========== ======= =======
1998
Construction Materials........... $ 371,547 $ 53,030 $ 218,045 $ 7,439 $12,849
Industrial Components............ 510,780 61,261 319,519 15,270 33,540
Automotive Components............ 271,955 17,638 213,900 10,005 27,442
General Industry (All other)..... 363,212 38,166 262,393 11,590 21,749
Corporate........................ -- (10,110) 8,995 917 390
---------- -------- ---------- ------- -------
$1,517,494 $159,985 $1,022,852 $45,221 $95,970
========== ======== ========== ======= =======
27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
QUARTERLY FINANCIAL DATA
UNAUDITED
IN THOUSANDS EXCEPT PER SHARE DATA
FIRST SECOND THIRD FOURTH YEAR
-------- -------- -------- -------- ----------
2000
Net sales........................... $434,018 $479,430 $444,368 $413,251 $1,771,067
Gross margin........................ 97,491 107,536 95,801 67,556 368,384
Operating expenses.................. 53,014 50,602 46,735 42,596 192,947
Net earnings........................ 25,459 31,940 28,210 10,571 96,180
Basic earnings per share............ 0.84 1.06 0.93 0.35 3.18
Diluted earnings per share.......... 0.83 1.04 0.92 0.35 3.14
Dividends per share................. 0.18 0.18 0.20 0.20 0.76
Stock price:
High.............................. 40 7/16 49 3/4 49 7/16 44 5/8
Low............................... 31 3/16 38 7/8 40 1/8 36 13/16
1999
Net sales........................... $390,024 $425,813 $400,855 $394,564 $1,611,256
Gross margin........................ 84,623 98,101 89,927 84,338 356,989
Operating expenses.................. 46,870 48,300 46,425 47,541 189,136
Net earnings........................ 21,808 27,998 24,676 21,312 95,794
Basic earnings per share............ 0.72 0.93 0.82 0.71 3.18
Diluted earnings per share.......... 0.71 0.91 0.81 0.70 3.13
Dividends per share................. 0.16 0.16 0.18 0.18 0.68
Stock price:
High.............................. 52 15/16 49 9/16 51 5/16 43 1/8
Low............................... 41 42 1/4 37 7/16 30 5/8
28
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Carlisle Companies Incorporated:
We have audited the accompanying consolidated balance sheets of Carlisle
Companies Incorporated (a Delaware corporation) and subsidiaries as of
December 31, 2000 and 1999, and the related consolidated statements of
earnings, shareholders' equity and cash flows for each of the three years in
the period ended December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Carlisle
Companies Incorporated as of December 31, 2000 and 1999, and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States.
/s/ Arthur Andersen, LLP
New York, New York
January 30, 2001
29
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth certain information relating to each
executive officer of the Company, as furnished to the Company by the executive
officers. Except as otherwise indicated each executive officer has had the same
principal occupation or employment during the past five years.
NAME AGE POSITIONS WITH COMPANY PERIOD OF SERVICE
- ---- -------- --------------------------------------- -----------------------
Stephen P. Munn...... 58 Chairman of the Board since January, September, 1988 to date
1994; Chief Executive Officer from
September, 1988 to February, 2001, and
President from September, 1988 to
February, 1995.
Dennis J. Hall....... 59 Vice Chairman since March, 1999; August, 1989 to date
President from February, 1995 to March,
1999; and Executive Vice President,
Treasurer and Chief Financial Officer
from August, 1989 to February, 1995.
Richmond D. 51 Chief Executive Officer since February, August, 1974 to date
McKinnish............ 2001; President, since March, 2000;
Executive Vice President from March,
1999 to March 2000 and President of
Carlisle Tire & Wheel Company from
January, 1991 to March, 1999.
Scott C. Selbach..... 45 Vice President, Corporate Development July, 1989 to date
since August, 1997; Vice President,
Europe from August, 1995 to August,
1997; and Vice President, Secretary and
General Counsel from July, 1989 to
August, 1995.
Steven J. Ford....... 41 Vice President, Secretary and General July, 1995 to date
Counsel since July, 1995.
The officers have been elected to serve at the pleasure of the Board of
Directors of the Company. There are no family relationships between any of the
above officers, and there is no arrangement or understanding between any officer
and any other person pursuant to which he was selected an officer.
Information required by Item 10 with respect to directors of the Company is
incorporated by reference to the Company's definitive proxy statement filed with
the Securities and Exchange Commission on March 9, 2001.
ITEM 11. EXECUTIVE COMPENSATION.
Information required by Item 11 is incorporated by reference to the
Company's definitive proxy statement filed with the Securities and Exchange
Commission on March 9, 2001.
30
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information required by Item 12 is incorporated by reference to the
Company's definitive proxy statement filed with the Securities and Exchange
Commission on March 9, 2001.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not applicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
Financial statements required by Item 8 are as follows:
Consolidated Statements of Earnings, years ended December 31, 2000, 1999 and
1998
Consolidated Statements of Shareholders' Equity, years ended December 31,
2000, 1999 and 1998
Consolidated Balance Sheets, December 31, 2000 and 1999
Consolidated Statements of Cash Flows, years ended December 31, 2000, 1999
and 1998
Notes to Consolidated Financial Statements
Exhibits applicable to the filing of this report are as follows:
(3) By-laws of the Company.(a)
(3.1) Certificate of Amendment of Restated Certificate of
Incorporation dated April 22, 1991.(d)
(3.2) Certificate of Amendment of the Restated Certificate of
Incorporation dated December 20, 1996.(f)
(3.3) Certificate of Amendment of the Restated Certificate of
Incorporation dated April 29, 1999.(i)
(4) Shareholders' Rights Agreement, February 8, 1989.(a)
(4.1) Amendment to Shareholders' Rights Agreement, dated August 7,
1996.(e)
(4.2) Trust Indenture.(g)
(10.1) Executive Incentive Program.(b)
(10.2) Amendment to Executive Incentive Program.(h)
(10.3) Representative copy of Executive Severance Agreement, dated
December 19, 1990, between the Company and certain
individuals, including the five most highly compensated
executive officers of the Company.(c)
(10.4) Summary Plan Description of Carlisle Companies Incorporated
Director Retirement Program, effective November 6, 1991.(c)
(10.5) Nonemployee Director Stock Option Plan.(i)
(12) Ratio of Earnings to Fixed Charges.
(21) Subsidiaries of the Registrant.
(23) Consent of Independent Public Accountants.
- ------------------------
(a) Filed as an Exhibit to the Company's annual report on Form 10-K for the year
ended December 31, 1988 and incorporated herein by reference.
(b) Filed with the Company's definitive proxy statement dated March 9, 1994 and
incorporated herein by reference.
(c) Filed as an Exhibit to the Company's annual report on Form 10-K for the year
ended December 31, 1990 and incorporated herein by reference.
31
(d) Filed as an Exhibit to the Company's annual report on Form 10-K for the year
ended December 31, 1991 and incorporated herein by reference.
(e) Filed as an Exhibit to Form 8-A/A filed on August 9, 1996 and incorporated
herein by reference.
(f) Filed as an Exhibit to the Company's annual report on Form 10-K for the year
ended December 31, 1996 and incorporated herein by reference.
(g) Filed as an Exhibit to the Company's registration statement on Form S-3
(No. 333-16785) and incorporated herein by reference.
(h) Filed with the Company's definitive proxy statement dated March 9, 1998 and
incorporated herein by reference.
(i) Filed as an Exhibit to the Company's annual report on Form 10-K for the year
ended December 31, 1999 and incorporated herein by reference.
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
32
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
CARLISLE COMPANIES INCORPORATED
/s/ DENNIS J. HALL
--------------------------------------
By: Dennis J. Hall, Vice Chairman of
the Board
of Directors
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
/s/ RICHMOND D. MCKINNISH /s/ MAGALEN C. WEBERT
- ------------------------------------------- -------------------------------------------
Richmond D. McKinnish, President, Chief Magalen C. Webert, Director
Executive Officer and a Director (Principal
Executive Officer)
/s/ DENNIS J. HALL /s/ DONALD G. CALDER
- ------------------------------------------- -------------------------------------------
Dennis J. Hall, Vice Chairman of the Board Donald G. Calder, Director
of Directors (Principal Financial Officer
and Principal Accounting Officer)
/s/ STEPHEN P. MUNN /s/ PAUL J. CHOQUETTE, JR.
- ------------------------------------------- -------------------------------------------
Stephen P. Munn, Chairman of the Board of Paul J. Choquette, Jr., Director
Directors
/s/ G. FITZGERALD OHRSTROM /s/ PETER L.A. JAMIESON
- ------------------------------------------- -------------------------------------------
G. FitzGerald Ohrstrom, Director Peter L.A. Jamieson, Director
/s/ ROBIN W. STERNBERGH
-------------------------------------------
Robin W. Sternbergh, Director
March 9, 2001
33
CARLISLE COMPANIES INCORPORATED
COMMISSION FILE NUMBER 1-9278
FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 2000
EXHIBIT LIST
(12) Ratio of Earnings to Fixed Charges
(21) Subsidiaries of the Registrant
(23) Consent of Independent Public Accountants
34