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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended DECEMBER 31, 1995
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________ to _________
Commission file number 1-9278
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CARLISLE COMPANIES INCORPORATED
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 31-1168055
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization identification no.)
250 SOUTH CLINTON STREET, SUITE 201, SYRACUSE, NEW YORK 13202-1258
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (315) 474-2500
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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
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COMMON STOCK, $1 PAR VALUE NEW YORK STOCK EXCHANGE
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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. [ ]
Aggregate market value of voting common stock held
by non-affiliates at February 26, 1996 $586,268,263
Shares of common stock outstanding at February 26, 1996 15,124,009
Portions of the definitive Proxy Statement for the Annual Meeting of
Shareholders on April 22, 1996 are incorporated by reference in Part III.
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 for
industry, primarily of rubber, plastics and metal content. Its products include
both components used by other companies in the manufacture of capital and
consumer goods and those for the aftermarket. The Company is the leading
producer, or among the leading producers, of many of its lines.
Sales of the Company's products are reported by distribution to the following
three industry segments: Construction Materials, Transportation Products and
General Industry. The principal products produced and services rendered in each
of the industry segments include:
CONSTRUCTION MATERIALS--elastomeric membranes, metal roofing components,
adhesives and related products for roofing systems and water barrier
applications and outdoor recreation tiles;
TRANSPORTATION PRODUCTS--custom manufactured rubber and plastic products for the
automotive market, brake linings and pads for heavy duty trucks, trailers and
off-road vehicles, specialty friction products, brakes and actuation systems for
construction equipment, refrigerated containers, insulated wire products,
specialized lowbed transport trailers and specialized dump bodies and trailers;
GENERAL INDUSTRY--molded plastic foodservice products, small pneumatic tires,
stamped and roll-formed wheels, medical monitoring devices, insulated wire
products and stainless steel in-plant processing equipment.
2
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):
1995 1994 1993
---- ---- ----
Construction Materials $ 308.3 $ 288.6 $ 247.6
Transportation Products 278.9 200.2 177.0
General Industry 235.3 203.9 186.7
-------- -------- --------
Total $ 822.5 $ 692.7 $ 611.3
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. Inasmuch as some of the Company's customers are other
manufacturers of relatively significant size, marketing methods in 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, transportation products and general industry segments.
The Company believes, though, that energy sources are secure and sufficient
quantities of raw materials can be obtained through normal sources to avoid
interruption of production in 1996.
Patents, trademarks and licenses held by the Company generally are not
considered significant to the successful conduct of most of the segments'
businesses.
In each industry segment, the Company is engaged in businesses, and its products
serve markets, which generally are highly competitive. Product lines serving
most markets tend to be price competitive; all lines compete not only on
pricing, but also on service and product performance. No industry segment is
dependent upon a single customer, or a few customers, the loss of any one or
more of which would have a material adverse effect on the segment.
Order Backlog, believed to be firm, was $160.7 million at December 31, 1995 and
$103.9 million at December 31, 1994. Although the majority of the increase is
related to operations acquired in 1995, strong backlog positions were evident in
all major operations within the construction materials and transportation
products segments, as well as specialty tires and wheels operations. Backlog
levels for the
3
Company's high performance wire products were more than 100% higher than a year
ago.
Research and Development expenses increased to $12.3 million in 1995 compared to
$11.9 million in 1994 and $11.2 million in 1993. Friction and braking systems
operations incurred the largest increase in expenses, as a number of new product
introductions and test programs were ongoing during the year. Custom plastics
and rubber operations also incurred additional product development expenses
through their equipment acquisitions and plant alignment initiatives in 1995.
The divestiture and closure of certain operations, which were part of the
general industry segment in 1994, partially offset the increase in research and
development expenses.
The average number of persons employed by the Company during 1995 was 5,750
compared to 4,800 in 1994.
The businesses of the construction materials and transportation products
industry segments are not seasonal in nature. Within the general industry
segment, distribution of lawn and garden products generally reach peak sales
volume during the first two quarters of the year.
In 1995, the Company completed four acquisitions. In April, the Company
acquired the assets of Thunderline Corporation, a producer of rubber parts for
the automotive industry. In June, the Company acquired by merger Trail King
Industries, Inc., the leading manufacturer of specialized lowbed trailers used
in the transportation of construction equipment. In September, the Company
acquired the assets of Ti-Brook, Inc. and Ti-Brook South, Inc., manufacturers of
a variety of specialized dump bodies and trailers. In October, the Company
acquired Walker Stainless Equipment Company, Inc. and two related corporations,
manufacturers of transportation trailers for liquid food products and in-plant
processing equipment. These acquisitions will add principally to the Company's
transportation products segment.
4
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, operating profit or loss and identifiable
assets by industry segments for the last three fiscal years, the nature and
effect of the restatement of such information as a result of changes made in the
way the Company's products or services are grouped into industry segments and
the principal products in each segment is as follows:
(In thousands) 1995 1994 1993
-------- -------- --------
Sales to Unaffiliated Customers(1)
Construction Materials 308,327 288,533 247,573
Transportation Products 278,867 200,213 177,005
General Industry 235,340 203,904 186,692
Operating Profit or Loss
Construction Materials 36,676 35,066 25,496
Transportation Products 20,241 13,497 11,622
General Industry 29,627 21,391 18,904
Interest, net (4,055) (1,670) (1,152)
Corporate(2) (9,631) (9,493) (7,958)
Identifiable Assets
Construction Materials 169,476 155,383 139,990
Transportation Products 210,700 122,031 109,523
General Industry 143,606 105,482 90,534
Corporate(3) 18,641 102,387 80,316
(1) Intersegment sales or transfers are not material.
(2) Includes general corporate and idle property expenses.
(3) Consists primarily of cash and cash equivalents, facilities, and other
invested assets.
5
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, 1995:
- -----------------------------------------------------------------------------------------------------------------------
O - OFFICE APPROXIMATE
PRINCIPAL PRODUCT M - MANUFACTURING OWNED FLOOR SPACE
OR ACTIVITY W - WAREHOUSING LOCATION OR LEASED (SQ. FT.) ACREAGE
- -----------------------------------------------------------------------------------------------------------------------
Corporate headquarters O Syracuse, NY Leased to 2005* 15,500 -
- -----------------------------------------------------------------------------------------------------------------------
Elastomeric membranes, O,M,W Carlisle, PA Owned 413,000 79
metal roofing components O,M,W Greenville, IL Owned 165,400 35
and related roofing O,M Stafford, TX Owned 108,500 8
products O,M Jemison, AL Owned 40,900 8
O,M Lodi, CA Leased to 1995 41,800 -
O,M Tualatin, OR Leased to 1995 59,900 5
O,M Stafford, TX Leased to 1995 56,840 3
O,M,W Fontana, CA Leased to 2001* 76,500 -
O,M,W Sapulpa, OK Owned 34,000 3
O,M,W Wylie, TX Owned 44,000 6
O,W Brussels, Belgium Leased to 1996* 2,100 -
O,W Mississauga, Ont. Leased to 1996* 25,000 1
O Akron, OH Leased to 1996* 9,600 -
--------- ---
1,077,540 148
- -----------------------------------------------------------------------------------------------------------------------
Small pneumatic tires O,M,W Carlisle, PA Owned 465,900 29
and tubes; stamped and O,M,W Aiken, SC Owned 220,500 23
roll-formed wheels O,M,W Port Fortin, Owned 174,404 -
Trinidad
O,M,W Shenzhen, China Leased to 1999* 75,000 5
--------- ---
935,804 57
- -----------------------------------------------------------------------------------------------------------------------
Molded plastics products O,M,W Oklahoma City, OK Owned 147,000 8
for commercial food W Oklahoma City, OK Leased to 1996* 166,000 -
service O,M,W Fredonia, WI Owned 192,500 12
O,M,W Sparta, WI Owned 41,100 3
O Northbrook, IL Leased to 1997* 7,300 -
--------- ---
553,900 23
- -----------------------------------------------------------------------------------------------------------------------
Custom-manufactured O,M,W Middlefield, OH Owned 200,600 28
rubber and plastics O,M,W Crestline, OH Owned 173,000 40
products O,M,W Canton, OH Owned 87,800 17
O,M,W Lake City, PA Owned 103,000 30
O,M,W Trenton, SC Owned 67,700 10
M Belleville, MI Owned 46,000 -
O Chardon, OH Leased to 1998* 7,500 -
--------- ---
685,600 125
- -----------------------------------------------------------------------------------------------------------------------
Brake lining for trucks O,M,W Ridgway, PA Owned 117,350 15
and trailers; brakes and O,M,W Fredericksburg, VA Owned 90,000 30
actuation systems; O,M,W Logansport, IN Owned 112,000 50
friction products O,M,W Bloomington, IN Owned 250,000 21
O,M Brantford, Ont. Leased to 1999* 24,000 1
O,M,W Zevenaar, Holland Owned 26,000 1
--------- ---
619,350 118
- -----------------------------------------------------------------------------------------------------------------------
Specialized lowbed trailers for O,M,W Mitchell, SD Owned 242,730 36
construction and commercial O,M,W Brookville, PA Owned 66,640 15
markets O,M,W Green Pond, AL Owned 37,860 14
--------- ---
347,230 65
6
- -----------------------------------------------------------------------------------------------------------------------
Liquid transport tanks and O,M,W New Lisbon, WI Owned 188,604 31
in-plant processing equipment O,M,W Elroy, WI Owned 84,020 7
O,M,W Tavares, FL Leased to 1998* 54,000 18
--------- ---
326,624 56
- -----------------------------------------------------------------------------------------------------------------------
High- and medium- O,M,W St. Augustine, FL Owned 166,750 17
temperature insulated
wire and cable
- -----------------------------------------------------------------------------------------------------------------------
Refrigerated marine O,M Green Cove Springs, Leased to 2003* 100,000 8
containers FL
- -----------------------------------------------------------------------------------------------------------------------
Recording and monitoring devices O,M,W Burnsville, MN Leased to 1999* 14,700 2
4,842,998 619
--------- ---
--------- ---
* Lease provides for renewal
Total plant space of 4,842,998 sq. ft. is used for
Owned Leased Total
--------- ------- ---------
Office 341,403 100,744 442,147
Manufacturing 2,775,934 341,840 3,117,774
Warehousing 1,166,377 116,700 1,283,077
--------- ------- ---------
4,283,714 559,284 4,842,998
--------- ------- ---------
--------- ------- ---------
As of December 31, 1995, the Company owned an additional facility. It is
related to a wire and cable business sold in early 1988 and totals 120,000
square feet. The facility is being held for sale. An additional 399,000 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
In connection with the Trail King acquisition, the Company knowingly assumed the
liabilities of the former Trail King relating to the case UNITED STATES OF
AMERICA V. TRAIL KING INDUSTRIES, INC., Case No. 94-4238, filed October 20, 1994
in the United States District Court, District of South Dakota. The case
involves allegations by the Environmental Protection Agency that the former
Trial King violated certain reporting requirements of the Clean Water Act. The
Company has taken appropriate remedial action and believes that Trail King is
now operating in full compliance with the Clean Water Act and the regulations
thereunder. While it is difficult to estimate the future
7
cost of this litigation, the Company believes that it has established adequate
reserves and that the matter will not have a material adverse impact on
operating results and financial position.
Except as described in the preceding paragraph, as of December 31, 1995, 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.
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, 1995, there were 2,054 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 1995 and 1994 were as follows:
First Second Third Fourth
------- ------- ------- -------
1995
- ----
Dividends per share $ .20 $ .20 $ .22 $ .22
Stock Price
High $37.00 $40.38 $42.38 $43.63
Low $34.50 $36.38 $38.50 $39.88
1994
- ----
Dividends per share $ .18 $ .18 $ .20 $ .20
Stock Price
High $35.25 $34.63 $35.38 $36.13
Low $30.25 $31.25 $31.25 $31.38
8
ITEM 6. SELECTED FINANCIAL DATA.
(In thousands except
per share data) 1995 1994 1993 1992 1991(1)
-------- -------- -------- -------- -------
SUMMARY OF OPERATIONS
Net Sales $822,534 692,650 611,270 528,052 500,771
Net earnings from
continuing operations $ 44,081 35,568 28,378 24,228 6,554
Per share $ 2.82 2.30 1.83 1.58 0.43
Net earnings (loss) from
discontinued operations $ - - - 471 (14,989)
Per share(2) $ - - - 0.03 (0.98)
Net earnings (loss) $ 44,081 35,568 28,378 24,699 (8,435)
Per share(2) $ 2.82 2.30 1.83 1.61 (0.55)
FINANCIAL POSITION
Total assets $542,423 485,283 420,363 383,250 324,720
Long-term debt $ 72,725 69,148 59,548 69,098 48,623
OTHER DATA
Dividends paid $ 12,928 11,605 10,705 10,076 9,597
Per share(2) $ .84 .76 0.70 0.66 0.63
(1) In 1991, the operational restructuring of the Company resulted in certain
of its business units being accounted for as discontinued operations.
The information presented above reflects the activities and balances of
continuing operations, unless otherwise noted.
(2) All share and per share amounts have been restated to reflect a two-for-one
stock split on June 1, 1993.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The Company achieved record sales and earnings in 1995. Sales in 1995 were
$822.5 million, an increase of 19% over 1994's sales of $692.7 million. Net
earnings increased to $44.1 million, or $2.82 a share, a 24% increase over
1994's earnings of $35.6 million, or $2.30 a share. Each of the Company's three
operating segments recorded improvements over the strong operating results
reported a year ago. While raw material cost increases and operational start-up
costs affected gross margins during 1995, the Company was successful in
controlling selling and administrative expenses allowing for improvement in
overall operating margins.
9
During 1995, the Company completed four acquisitions, adding principally to its
transportation products segment. In April, the Company acquired the assets of
Thunderline, a producer of rubber parts for the automotive industry. The
acquisition added new products and customers to the Company's custom-molded
plastics and rubber parts operations, as well as the ability to manufacture and
market silicone rubber components. In June, the Company completed the
acquisition of Trail King Industries, the leading manufacturer of specialized
lowbed trailers used in the transportation of construction equipment and in
other commercial applications. In early September, Trail King finalized the
complementary acquisition of Ti-Brook, Inc. and Ti-Brook South, Inc., which
design, manufacture and distribute a variety of specialized dump bodies and
trailers used in the transportation of coal, palletized loads, refuse, and other
products. In October, the Company acquired Walker Stainless Equipment, Inc., a
leading supplier of transportation trailers for liquid food products. Walker
also designs and manufactures in-plant processing equipment for the food,
pharmaceutical and chemical industries. The four acquisitions should generate
approximately $140 million in sales in 1996.
SALES in 1995 of $822.5 million were $129.8 million higher than 1994's sales of
$692.7 million, a 19% increase. Sales in 1993 were $611.3 million. A summary
of sales by operating segment is presented below.
1995 1994 1993
------ ------ ------
Construction Materials $308.3 $288.6 $247.6
Transportation Products $278.9 $200.2 $177.0
General Industry $235.3 $203.9 $186.7
------ ------ ------
Total $822.5 $692.7 $611.3
NET EARNINGS increased 24% to a record $44.1 million, or $2.82 a share, in 1995.
This compares to total net earnings of $35.6 million, or $2.30 a share, in 1994
and $28.4 million, or $1.83 a share in 1993. Strong performances by each of the
Company's major operations produced the record earnings in 1995.
Earnings by operating segment, before income tax, interest, and corporate
expense, are summarized below.
1995 1994 1993
----- ----- -----
Construction Materials $36.7 $35.1 $25.5
Transportation Products $20.2 $13.5 $11.6
General Industry $29.6 $21.4 $18.9
----- ----- -----
Total $86.5 $70.0 $56.0
10
CONSTRUCTION MATERIALS segment sales increased 7% in 1995 to $308.3 million
compared to $288.6 million in 1994. Domestic non-residential roofing sales
accounted for the increase, as 5% more square feet of roofing membrane was
shipped in 1995 versus 1994. International operations were restructured in late
1995 after continued disappointing performance in most non-domestic markets. In
addition, poor results from the Company's metal roofing business led to the
decision to sell its West Coast operations and re-focus its efforts on eastern
and midwestern markets. Segment earnings in 1995 increased 5% over 1994's
excellent results, to $36.7 million. Margins were unfavorably impacted by
increased sales of lower margin items and raw material cost increases which were
unable to be passed along to customers. However, the operations were able to
maintain comparable profitability, despite continued pricing pressure, through
effective cost control and productivity improvements. Selling and
administrative expenses in 1995, as a ratio to sales, decreased nearly 5%
compared to 1994.
TRANSPORTATION PRODUCTS segment sales reached $278.9 million in 1995, a 39%
increase over 1994. Although sales from operations acquired in 1995 generated
the majority of the growth, every operation in the segment recorded sales gains.
Segment earnings improved an outstanding 50% in 1995 over 1994, while absorbing
the first-year financial results experienced at the Company's container
manufacturing operation. Despite a weaker domestic automotive market in 1995
versus 1994, new products and additional capacity combined for an increase of
over 12% in sales from the Company's custom-molded and extruded plastics and
rubber parts operations. Custom plastics and rubber operations achieved a 15%
earnings improvement while absorbing nearly $1.0 million of non-recurring plant
realignment and equipment movement costs in 1995. Heavy duty friction sales to
truck and trailer manufacturers declined slightly in 1995 compared to a very
strong 1994, as build levels began to slow in the second half of the year.
Aftermarket sales were consistent with the prior year as very competitive
pricing persisted. Industrial friction and brake products operations both
experienced solid sales growth in 1995, from continued penetration in
international markets and new product offerings. Overall, earnings from friction
and brake products operations improved over 25% from 1994. Efficiency gains and
increased absorption accounted for most of the improvement. In addition, 1994's
results were adversely impacted by the closure of brake products' Brazilian
operations. Specialized trailers and dump body operations acquired in 1995
performed at expectations. Sales of high-performance aircraft wire increased
nearly 15% over 1994, returning to 1993 levels. Earnings results continued to
progress closer to acceptable returns due to the operations renewed focus on
manufacturing processes. The Company's refrigerated container leasing joint
venture continued to increase its market penetration and earnings in 1995.
11
GENERAL INDUSTRY segment sales increased $31.4 million to $235.3 million in 1995
compared to 1994, a 15% improvement. The segment sales comparisons were
unfavorably impacted in 1995 compared to 1994 by approximately $6.7 million due
to the divestitures of DSI, NETstor, and Vistatech. Segment earnings increased
39% in 1995 versus 1994. The operations which were divested or closed prior to
the start of 1995 incurred losses of $3.1 million in 1994. Another record
performance by the Company's specialty tires and wheels operations in 1995
resulted in sales increases of nearly $10 million compared to 1994. Increased
revenues were due to continued market share gains in lawn and garden, trailer
and golf car equipment. Replacement sales also increased in 1995, an area where
improvements are again expected in 1996. Specialty tires and wheels operations
posted a 14% earnings improvement over 1994's results. Capacity gains and
production improvements at the operations manufacturing site in China helped
offset higher raw material costs, resulting in margins consistent with 1994.
Foodservice operations benefitted from increased market penetration and expanded
product offerings through its strong distribution network, to achieve record
sales and earnings results for 1995. Domestic and international growth combined
to increase sales by 28% over 1994. Improvements in operating expense ratios
offset a small decline in gross margins, contributing to overall earnings
improvement of 27% over 1994. The Company's December, 1994 acquisition of
Sparta Brush contributed positively to both sales and earnings gains in
foodservice operations. Sales and earnings of high speed data wire and cable
products showed strong improvements in 1995. In addition, strong backlog levels
existed at year-end. New product offerings, combined with effective cost
containment programs, generated positive results at the Company's medical
monitoring devices operation.
GROSS MARGINS as a percent of sales were 24.0% in 1995 compared to 25.5% in 1994
and 25.9% in 1993. Globally depressed selling prices and higher than
anticipated material costs in the first year of production at the Company's
container manufacturing operation, as well as acquisitions of lower gross margin
businesses, resulted in the decline in margins in 1995. Across most operations,
and particularly those in the construction materials segment, raw material costs
rose in 1995, but only limited success was achieved in passing these increased
costs through to customers. However, higher production volumes allowed
manufacturing expenses to be more effectively absorbed, resulting in consistent
gross margins at most operations in 1995.
SELLING AND ADMINISTRATIVE expenses declined as a percent of sales to 13.3% in
1995, from 14.9% in 1994 and 16.1% in 1993. The strong performance in
controlling expenses was evidenced by the fact that selling and administrative
expenses rose only $6.2 million to support the 1995 sales increase of $129.8
million. All major operations reported lower expense ratios reflecting the
continuation of
12
aggressive cost containment programs. Acquisitions of operations in 1995 with
comparably lower-cost selling and administrative expense structures also
contributed to the improved ratios.
RESEARCH AND DEVELOPMENT expenses increased to $12.3 million in 1995 compared to
$11.9 million in 1994 and $11.2 million in 1993. Friction and braking systems
operations incurred the largest increase in expenses, as a number of new product
introductions and test programs were ongoing during the year. Custom plastics
and rubber operations also incurred additional product development expenses
through equipment acquisition and plant realignment initiatives in 1995. The
divestiture and closure of certain operations, which were part of the general
industry segment in 1994, partially offset the increase in research and
development expenses.
INTEREST EXPENSE was $6.1 million in 1995, compared to $4.6 million in 1994 and
$4.3 million in 1993. In June of 1995, the Company assumed $3.8 million of
long-term debt related to the acquisition of Trail King. Also, in the second
half of 1994, the Company secured $8.0 million of low rate industrial
development bonds to finance equipment purchases for its container manufacturing
operation. These actions along with higher interest rates in 1995, contributed
to the higher interest expense for the year.
INCOME TAXES were computed for financial statement purposes at 39.5% in 1995,
the same rate used in 1994 and 1993. The increase in the corporate federal tax
rate legislated in 1993 is reflected in each year's income tax rates for the
Company. An analysis of income taxes for each year is presented in the Notes to
Consolidated Financial Statements.
ORDER BACKLOG was $160.7 million at December 31, 1995 and $103.9 million at
December 31, 1994. Although the majority of the increase is related to
operations acquired in 1995, stronger backlog positions were evident at all
major operations within the construction materials and transportation products
segments, as well as specialty tires and wheels operations. Backlog levels for
the Company's high performance wire products were more than 100% higher than a
year ago.
ACCOUNTS RECEIVABLE were $126.6 million at year end 1995 compared to $99.4
million at the end of 1994. Higher fourth quarter sales revenue at each of the
Company's major operations accounted for slightly more than half of the higher
receivable balances, with acquisitions made in 1995 accounting for the remainder
of the increase, or approximately $12.9 million. Receivables continue to be
aggressively managed across the Company, as the average number of days accounts
receivable remained outstanding declined 7% from the prior year.
INVENTORIES valued primarily by the last-in, first-out (LIFO) method were $121.7
million at December 31, 1995 compared to $74.9 million at
13
December 31, 1994. Nearly 65% of the $46.8 million increase relates to
acquisitions made in 1995. The remainder of the increase in year-end
inventories is attributable to general industry segment and container
manufacturing operations. Specialty tires and wheels operations account for
$7.7 million of the Company's increased inventory levels at year-end, reflecting
strong demand and backlog as well as the operations' efforts to be more
responsive to its markets, which are cyclically stronger in the first half of
the year. Foodservice plastics operations also recorded higher inventory levels
at the end of 1995, further strengthening its ability to effectively fill
customers' orders while adding to its product offerings.
WORKING CAPITAL was $153.7 million at December 31, 1995 and $164.7 million at
December 31, 1994. Cash balances decreased $67.8 million at year end 1995
versus 1994 due principally to the Company's active acquisition program.
Increased end of year sales and production activity is reflected in both
receivables and inventory balances, as well as current liabilities at December
31, 1995.
CAPITAL EXPENDITURES totaled $37.5 million in 1995 and $31.1 million in 1994.
Construction materials operations nearly completed a new, state-of-the-art,
rubber mixing system. Actual production is planned to begin in February 1996
with full production expected by April 1, 1996. The new system will allow for
significant capacity increases and improve raw material and production
efficiencies. Other significant projects in 1995 included the purchase of
additional molds and assets to expand specialty tires and wheels operations in
China, expansion of molding production capabilities at custom plastics and
rubber operations, and the purchase of presses and molds to increase capacity
and product availability for foodservice plastics operations. In 1994, the
major components of capital spending were the purchase of machinery and
equipment for the Company's container manufacturing operation, and the purchase
of manufacturing equipment to establish specialty tires and wheels operations in
China.
CASH FLOWS provided by operating activities were $55.7 million in 1995 compared
to $72.6 million in 1994. Planned increases in inventory quantity levels,
principally in the general industry segment, resulted in a decrease in operating
cash at year-end. Investing activities, primarily Company acquisitions and
capital expenditures, increased in 1995 to $100.7 million versus $38.8 million
in 1994. The Company purchased $9.4 million of treasury stock and paid out
$12.9 million in dividends in 1995. In 1994, the Company obtained $8.0 million
in long-term financing, purchased $10.9 million of treasury stock and paid out
$11.6 million in dividends. In addition, $11.0 million of treasury stock was
issued for the acquisition of the Sparta Brush Company. The Company's primary
liquidity and capital sources are its operations, bank lines of credit and long-
term borrowings. The Company continues to have substantial borrowing capacity
and financial flexibility.
14
The Company recognizes the importance of its responsibilities toward matters of
environmental concern. Programs are in place to monitor and test facilities and
surrounding environments, as well as to recycle materials where practical. The
Company has not incurred any material charges relating to environmental matters
in 1995 or prior years, and none are anticipated in the foreseeable future.
THE 1996 OUTLOOK is good. In all major markets the Company's competitive
position is sound. Continuation of the attention to fundamental practices of
cost control, quality improvement, product development, and customer service,
combined with the acquisition of businesses that strive to adhere to these
operating principles, should result in a year of solid performance.
Non-residential roofing markets, long dominated by repair and replacement
demand, should see an improving new construction roofing market with favorable
interest rates.
In the transportation markets, lower interest rates should provide for stable
automobile demand, while success in broadening the Company's base of customers
for custom-molded plastics and rubber products should result in another year of
improved performance. While a decline in demand by original equipment customers
of friction products is expected, an increase in demand for aftermarket products
should result. A fair domestic market outlook combined with improving
international markets should provide the opportunity for strong performance.
Solid full-year results are expected from the Company's specialty trailer
operations. Acquired facilities in the northeast and southeast are expected to
result in additional penetration of eastern U.S. markets for steel deck
trailers. A steady improvement in the high performance wire and cable business
is expected as gains in market share continue, derived from superior product
advantages. Continuing productivity gains and strong demand should result in
strong growth in the Company's refrigerated container business. Continuation of
an aggressive market penetration approach should result in another year of
improvement in performance at the Company's refrigerated container leasing joint
venture.
The Company's leading position in specialty tires and wheels is expected to
result in another record year supported by increased production capacity at its
manufacturing site in China. Foodservice operations are expected to improve
upon 1995's record results through additional product offerings and enhanced
penetration of international markets. Strong demand for stainless steel in-
plant processing equipment is expected in 1996, combined with various
operational improvements at these operations, should produce solid financial
results.
15
Overall, the outlook for 1996 and beyond is good. The order backlog is strong
and financial resources are secure. A tapering down of economic activity in
domestic markets should not prevent the Company from producing improved results.
The variety of markets served and growing international activities should
sustain the Company's growth momentum.
16
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
CONSOLIDATED STATEMENT OF EARNINGS
FOR YEARS ENDED DECEMBER 31
(In thousands except per share data)
1995 1994 1993
--------- --------- ---------
Net sales $822,534 $692,650 $611,270
--------- --------- ---------
Cost and expenses:
Cost of goods sold 624,860 516,282 452,792
Selling and administrative
expenses 109,236 102,992 98,449
Research and development
expenses 12,339 11,933 11,165
--------- --------- ---------
746,435 631,207 562,406
--------- --------- ---------
Other income (deductions):
Investment income 2,020 2,977 3,158
Interest expense (6,075) (4,647) (4,310)
Other, net 814 (982) (800)
--------- --------- ---------
(3,241) (2,652) (1,952)
--------- --------- ---------
Earnings before income taxes 72,858 58,791 46,912
Income taxes 28,777 23,223 18,534
--------- --------- ---------
Net earnings $ 44,081 $ 35,568 $ 28,378
--------- --------- ---------
--------- --------- ---------
Average shares and equivalents 15,633 15,480 15,478
Net earnings per share: $ 2.82 $ 2.30 $ 1.83
--------- --------- ---------
See accompanying Notes to Consolidated Financial Statements.
17
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In thousands except per share data)
Additional Cost of
Common Paid-in Retained Shares in
Stock Capital Earnings Treasury
-------- --------- --------- ---------
Balance at
December 31, 1992 $ 9,833 $ 1,436 $249,529 $(56,596)
Net earnings - - 28,378 -
Cash dividends - $0.70
a share- - (10,705) -
Exercise of stock
options & other - 282 - 351
Two-for-one stock split 9,832 (1,586) (8,246) -
Purchase of 64,734
treasury shares - - - (1,985)
-------------------------------------------------------
Balance at
December 31, 1993 $19,665 $ 132 $258,956 $(58,230)
Net earnings - - 35,568 -
Cash dividends - $0.76
a share - - (11,605) -
Exercise of stock
options & other - 7,826 - 6,442
Purchase of 328,741
treasury shares - - - (10,904)
-------------------------------------------------------
Balance at
December 31, 1994 $19,665 $ 7,958 $282,919 $(62,692)
Net earnings - - 44,081 -
Cash dividends - $0.84
a share - - (12,928) -
Exercise of stock
options & other - 1,358 - 2,344
Purchase of 248,308
treasury shares - - - (9,448)
-------------------------------------------------------
Balance at
December 31, 1995 $19,665 $ 9,316 $314,072 $(69,796)
See accompanying Notes to Consolidated Financial Statements.
18
CONSOLIDATED BALANCE SHEET
AT DECEMBER 31
(In thousands except per 1995 1994
share data) ------ ------
ASSETS
Current assets
Cash and cash equivalents $ 3,198 $ 70,972
Receivables, less allowances of $3,721 in
1995 and $3,835 in 1994 126,610 99,412
Inventories 121,736 74,937
Deferred income taxes 18,127 17,041
Prepaid expenses and other 12,273 10,881
--------- ---------
Total current assets 281,944 273,243
--------- ---------
Property, plant and equipment,
net 193,134 158,238
--------- ---------
Other assets
Patents and other intangibles 37,080 18,373
Investments and advances to affiliates 11,223 19,009
Receivables and other assets 10,866 10,951
Deferred income taxes 8,176 5,469
--------- ---------
Total other assets 67,345 53,802
--------- ---------
$542,423 $485,283
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 45,194 $ 34,123
Accrued expenses 83,041 74,451
--------- ---------
Total current liabilities 128,235 108,574
--------- ---------
Long-term liabilities
Long-term debt 72,725 69,148
Product warranties 65,851 57,981
Deferred compensation and other liabilities 2,355 1,730
--------- ---------
Total long-term liabilities 140,931 128,859
--------- ---------
Shareholders' equity
Preferred stock, $1 par value. Authorized
and unissued 5,000,000 shares
Common stock, $1 par value. Authorized
25,000,000 shares; issued 19,665,312
shares 19,665 19,665
Additional paid-in capital 9,316 7,958
Retained earnings 314,072 282,919
Cost of shares in treasury - 4,346,474
shares in 1995 and 4,252,782 shares
in 1994 (69,796) (62,692)
--------- ---------
Total shareholders' equity 273,257 247,850
--------- ---------
$542,423 $485,283
--------- ---------
--------- ---------
See accompanying Notes to Consolidated Financial Statements.
19
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR YEARS ENDED DECEMBER 31
(In thousands)
1995 1994 1993
--------- --------- ---------
Operating Activities
Net earnings $ 44,081 $ 35,568 $ 28,378
Reconciliation of net earnings
to cash flows:
Depreciation 20,331 18,322 18,125
Amortization 2,899 3,618 2,563
Loss on sales of property,
equipment and business 570 108 25
Changes in assets and liabilities
excluding effects of acquisitions
and divestitures:
Current and long-term receivables (8,616) (8,558) (15,107)
Inventories (17,324) (7,572) (5,792)
Accounts payable and accrued expenses 1,928 13,763 14,284
Prepaid, deferred and current income
taxes (993) 1,270 (4,293)
Long-term liabilities 7,429 13,302 (1,621)
Other 5,398 2,755 (3,770)
--------- --------- ---------
Net cash provided by operating
activities 55,703 72,576 32,792
--------- --------- ---------
Investing Activities
Capital expenditures (37,467) (31,082) (28,490)
Acquisitions, net of cash (67,006) (8,417) (15,701)
Sales of property, equipment and business 2,794 4,881 921
Other 1,014 (4,229) (6,085)
--------- --------- ---------
Net cash used in
investing activities (100,665) (38,847) (49,355)
--------- --------- ---------
Financing Activities
Proceeds from long-term debt -- 8,000 2,500
Reductions of long-term debt (436) (50) (12,050)
Dividends (12,928) (11,605) (10,705)
Purchases of treasury shares ( 9,448) (10,904) (1,985)
--------- --------- ---------
Net cash used in
financing activities (22,812) (14,559) (22,240)
--------- --------- ---------
Change in cash and cash equivalents (67,774) 19,170 (38,803)
Cash and cash equivalents
Beginning of year 70,972 51,802 90,605
--------- --------- ---------
End of year $ 3,198 $ 70,972 $ 51,802
--------- --------- ---------
--------- --------- ---------
See accompanying Notes to Consolidated Financial Statements.
20
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 majority control, none of which are significant, are
accounted for on the equity method. All material intercompany transactions and
accounts have been eliminated.
REVENUE RECOGNITION. The Company recognizes revenues from product sales upon
shipment to the customer. The substantial majority of the Company's product
sales are 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.
CASH AND CASH EQUIVALENTS. The Company generally considers securities with a
remaining maturity of three months or less when acquired to be cash equivalents.
Cash and cash equivalents are stated at cost, which approximates market value.
INVENTORIES. Inventories are valued at lower of cost or market. Cost for
inventories is determined for a majority of the Company's inventories 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 assigned 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 AND OTHER INTANGIBLES. Patents and other intangibles, recorded at cost,
amounted to $8.1 million and $10.1 million at December 31, 1995 and 1994,
respectively (net of accumulated amortization of $11.0 million and $7.8 million,
respectively), and are amortized over their remaining lives averaging five
years. Goodwill, representing the excess of acquisition cost over the fair
value of specifically identifiable assets acquired, was $29.0 million and $8.2
million at December 31, 1995 and 1994, respectively (net of accumulated
amortization of $1.1 million and $0.6 million,
21
respectively), and is amortized on a straight-line basis over various periods
not exceeding 40 years.
PRODUCT WARRANTIES. The Company offers warranties on the sales of certain of
its products and maintains reserves to provide for estimated future claims.
Such reserves are established based upon historical experience and management's
estimate of the level of future claims.
LEASES. The Company is obligated under various noncancelable operating leases
for certain facilities and equipment. Rent expense was $2.8 million, $2.6
million, and $2.3 million, in 1995, 1994 and 1993, respectively.
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 it is more likely than not that some portion or all of a deferred
tax asset will not be realized, a valuation allowance is recognized.
NET EARNINGS PER SHARE. Net earnings per share of common stock are based on the
weighted average number of common shares and common equivalent shares
outstanding during the period, assuming the
exercise of stock options.
FAIR VALUE OF FINANCIAL INSTRUMENTS. The estimated fair market values of the
Company's financial instruments approximate their recorded values.
RECLASSIFICATIONS. Certain reclassifications have been made to prior years'
information to conform to 1995 presentation.
INVENTORIES
The components of inventories are:
IN THOUSANDS
1995 1994
--------- ---------
FIFO cost (approximates current costs):
Finished goods $ 65,995 $ 47,885
Work in process 15,016 9,192
Raw materials 56,810 30,622
--------- ---------
$137,821 $ 87,699
Excess of FIFO cost over LIFO value (16,085) (12,762)
--------- ---------
$121,736 $74,937
22
PROPERTY, PLANT & EQUIPMENT
The components of property, plant and equipment are:
IN THOUSANDS
1995 1994
--------- ---------
Land $ 5,283 $ 4,750
Buildings & leasehold improvements 97,725 88,218
Machinery & equipment 272,718 241,069
Projects in progress 17,836 7,908
--------- ---------
393,562 341,945
Accumulated depreciation (200,428) (183,707)
--------- ---------
$193,134 $158,238
BORROWINGS
Long-term debt includes:
IN THOUSANDS
1995 1994
--------- ---------
8.09% senior notes due 1998-2002 $ 48,000 $ 48,000
Industrial Development and Revenue
Bonds due through 2014 21,760 19,000
Other, including capital lease
obligations 3,732 2,568
--------- ---------
$ 73,492 $ 69,568
Less current maturities ( 767) ( 420)
--------- ---------
$72,725 $69,148
The weighted average interest rates on the revenue bonds for 1995 and 1994 were
4.4% and 3.1%, respectively.
The debt facilities contain various restrictive covenants and limitations, all
of which were complied with in 1995 and 1994. The industrial development and
revenue bonds are collateralized by the facilities and equipment acquired
through the proceeds of the related bond issuances.
23
Cash payments for interest were $5.9 million in 1995, $4.4 million in 1994, and
$4.9 million in 1993.
At December 31, 1995, the Company had available unsecured lines of credit from
banks of $40 million.
At December 31, 1995, letters of credit amounting to $27.1 million were
outstanding, primarily to provide security under insurance arrangements and
certain borrowings.
The aggregate amount of long-term debt maturing in each of the next five years
is approximately $0.8 million in 1996 and 1997, and $10.1 million in 1998
through 2000.
ACQUISITIONS
Acquisitions completed by the Company in the last three years include: 1995-
Trail King Industries, Inc., a manufacturer of specialized trailers used in the
transportation of construction equipment, Ti-Brook, Inc., a manufacturer of a
variety of dump bodies and trailers, Walker Stainless Equipment Company, a
manufacturer of stainless steel equipment, and Thunderline Corporation, a
designer and manufacturer of custom molded rubber parts utilized for the
automobile industry; 1994-Sparta Brush Company, a manufacturer of specialized
brushes and cleaning tools, and the coatings and waterproofing business of
Quaker Construction Products, Inc.; 1993-ECI Building Components, Inc., a metal
roofing manufacturer and Goodyear Tire & Rubber Company's Roofing System
Division, a distributor and seller of non-residential roofing systems.
These acquisitions were completed for cash, assumptions of debt, and issuance of
stock aggregating approximately $137.9 million and have been accounted for as
purchases. The Sparta Brush Company acquisition included the issuance of
treasury shares amounting to $11.0 million.
Results of operations, 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
acquisition.
SHAREHOLDERS' EQUITY
On April 20, 1993, the Company's Board of Directors authorized a two-for-one
stock split which was issued on June 1, 1993, to shareholders of record on May
11, 1993. The split resulted in the issuance of 9,832,656 new shares of common
stock and the reissuance of 2,175,479 shares of common stock held in treasury.
All references in the financial statements to average number of shares
outstanding and related prices, per share amounts, and stock option plan data
have been restated to reflect the split.
24
The Company has a Stockholders' Rights Plan which is designed to protect
stockholder 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 stockholders 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 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.
Common stockholders 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.
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 who are not eligible to receive cash or
restricted stock awards.
In 1995, 16,196 shares of restricted stock were issued and 4,537 shares were
surrendered under the terms of the Program. At December 31, 1995 an additional
542,242 shares of the Company's common stock was available for issuance as
restricted stock.
The activity under the stock options plan is as follows:
Number Option
of Shares Prices
--------- -------------
Outstanding at December 31, 1992 386,514 $13.88-19.57
Options granted 293,775 24.63-30.75
Options exercised ( 7,030) 13.88-19.56
Options surrendered ( 12,900) 19.56-24.63
---------
Outstanding at December 31, 1993 660,359 $16.13-30.75
Options granted 100,500 32.50-34.50
Options exercised (119,790) 16.13-24.63
Options surrendered ( 14,433) 24.63
---------
Outstanding at December 31, 1994 626,636 $16.13-34.50
Options granted 221,000 34.63-41.63
Options exercised (105,738) 16.81-24.63
25
Options surrendered ( 2,399) 24.63
---------
Outstanding at December 31, 1995 739,499 $16.13-41.63
---------
---------
Exercisable at December 31, 1995 558,663 $16.13-41.63
---------
---------
Available for grant at December 31, 1995 321,130
---------
---------
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.
Pension expense includes:
IN THOUSANDS
1995 1994 1993
------- ------- -------
Service cost $2,335 $2,498 $2,396
Interest cost on projected
benefit obligation 5,682 5,037 5,053
Actual return on plan assets (5,982) (5,757) (8,617)
Net amortization and deferral (38) (57) 2,944
------- ------- -------
Total pension expense $1,997 $1,721 $1,776
The funded status of the plans at December 31 was:
IN THOUSANDS
1995 1994
-------- --------
Actuarial present value of Vested
accumulated benefit obligation:
Vested $67,529 $55,728
Non-vested 1,127 1,140
-------- --------
$68,656 $56,868
-------- --------
-------- --------
Plan assets at fair value $81,035 $68,992
Projected benefit obligation (80,304) (66,242)
-------- --------
Plan assets in excess of projected
benefit obligation 731 2,750
Unamortized transition asset ( 4,969) ( 5,658)
Unrecognized prior service costs 5,198 5,657
Unrecognized net gains ( 8,080) ( 7,341)
-------- --------
Accrued pension expense $( 7,120) $( 4,592)
-------- --------
-------- --------
The projected benefit obligation was determined using an assumed discount rate
of 7.75% in 1995, 8.25% in 1994, and 7.75% in 1993. The
26
assumed rate of compensation increase was 4.5% and the expected rate of return
on plan assets was 8.75% in 1995, 1994 and 1993.
Additionally, the Company maintains a retirement savings plan covering
substantially all employees other than those employees under collective
bargaining agreements. Plan expense was $2.7 million, $2.6 million, and $2.5
million, in 1995, 1994 and 1993, respectively.
The Company also has a limited number of unfunded post-retirement benefit
programs. The post-retirement benefit expense for the Company, inclusive of the
components of service costs, interest costs and the amortization of the
unrecognized transition obligation, was approximately $0.6 million ($0.4 million
after tax) during 1995, 1994 and 1993.
27
INCOME TAXES
The provision for income taxes was as follows:
IN THOUSANDS
1995 1994 1993
-------- -------- --------
Currently payable
Federal $24,828 $18,276 $15,981
State, local and other 7,742 8,046 4,272
-------- -------- --------
$32,570 $26,322 $20,253
-------- -------- --------
-------- -------- --------
Deferred (benefit)
Federal $(3,563) $( 839) $(1,588)
State, local and other ( 230) (2,260) ( 131)
-------- -------- --------
$(3,793) $(3,099) $(1,719)
-------- -------- --------
Total Provision $28,777 $23,223 $18,534
-------- -------- --------
-------- -------- --------
Deferred tax assets (liabilities) are comprised of the following at December 31:
IN THOUSANDS
1995 1994
---------- ----------
Product warranty $ 31,191 $ 26,737
Inventory reserves 1,944 1,822
Doubtful receivables 1,728 1,748
Employee benefits 6,489 5,162
Asset write-downs and
relocation expense --- 1,386
Other, net 8,834 8,684
---------- ----------
Deferred assets $ 50,186 $ 45,539
---------- ----------
Depreciation $(22,732) $(21,433)
Other, net ( 1,151) ( 1,596)
---------- ----------
Deferred liabilities $(23,883) $(23,029)
---------- ----------
Net deferred tax assets $ 26,303 $ 22,510
---------- ----------
---------- ----------
No valuation allowance is required for the deferred tax assets based on the
Company's past tax payments and estimated future taxable income.
28
A reconciliation of taxes computed at the statutory rate with the tax provision
is as follows:
IN THOUSANDS
1995 1994 1993
-------- -------- ---------
Federal income taxes
at statutory rate $25,500 $20,577 $ 16,419
State income taxes, net of
federal income tax benefit 2,706 2,881 2,051
Other, net 571 ( 235) 64
-------- -------- ---------
$28,777 $23,223 $ 18,534
Effective income tax rate 39.5% 39.5% 39.5%
Cash payments for income taxes were $28.7 million, $22.3 million and $23.6
million in 1995, 1994 and 1993, respectively.
29
SEGMENT INFORMATION
The Company's operations are classified into the following business segments:
CONSTRUCTION MATERIALS--elastomeric membranes, metal roofing components,
adhesives and related products for roofing systems and water barrier
applications and outdoor recreation tiles.
TRANSPORTATION PRODUCTS--custom manufactured rubber and plastic products for the
automotive market, brake linings and pads for heavy duty trucks, trailers and
off-road vehicles, specialty friction products, brakes and actuation systems for
construction equipment, refrigerated containers, insulated wire products,
specialized lowbed transport trailers and specialized dump bodies and trailers.
GENERAL INDUSTRY--molded plastic foodservice products, small pneumatic tires,
stamped and roll-formed wheels, medical monitoring devices, insulated wire
products and stainless steel in-plant processing equipment.
CORPORATE--includes general corporate and idle property expenses. Corporate
assets consist primarily of cash and cash equivalents, facilities, and other
invested assets.
Financial information for operations by reportable business segment is included
in the following summary:
(In thousands)
Earnings
Before Deprec.
Income & Capital
Sales Taxes Assets Amort. Spending
--------- --------- --------- --------- ---------
1995
- ----
Construction Materials $308,327 $ 36,676 $169,476 $ 5,810 $ 9,622
Transportation Products 278,867 20,241 210,700 10,046 14,175
General Industry 235,340 29,627 143,606 7,347 13,404
Interest, net -- (4,055) -- -- --
Corporate -- (9,631) 18,641 27 266
--------- --------- --------- --------- ---------
$822,534 $ 72,858 $542,423 $ 23,230 $ 37,467
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
1994
- ----
Construction Materials $288,533 $ 35,066 $155,383 $ 5,886 $ 3,166
Transportation Products 200,213 13,497 122,031 8,906 16,403
General Industry 203,904 21,391 105,482 6,296 11,214
Interest, net -- (1,670) -- -- --
Corporate -- (9,493) 102,387 852 299
--------- --------- --------- --------- ---------
$692,650 $ 58,791 $485,283 $ 21,940 $ 31,082
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
30
Earnings
Before Deprec.
Income & Capital
Sales Taxes Assets Amort. Spending
--------- --------- --------- --------- ---------
1993
- ----
Construction Materials $247,573 $ 25,496 $139,990 $ 5,762 $ 3,474
Transportation Products 177,005 11,622 109,523 7,220 10,887
General Industry 186,692 18,904 90,534 6,864 9,074
Interest, net -- (1,152) -- -- --
Corporate -- (7,958) 80,316 842 5,055
--------- --------- --------- --------- ---------
$611,270 $ 46,912 $420,363 $ 20,688 $ 28,490
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
QUARTERLY FINANCIAL DATA
(In thousands except per share
data) (unaudited)
First Second Third Fourth Year
---------- -------- -------- -------- ---------
1995
- ----
Net sales $ 187,972 200,802 216,551 217,209 $822,534
Gross margin $ 44,443 50,223 52,792 50,216 $197,674
Operating expenses $ 30,039 28,727 31,017 31,792 $121,575
Net earnings $ 8,561 12,416 12,528 10,576 $ 44,081
Net earnings per share: $ 0.55 0.79 0.80 0.68 $ 2.82
Dividends per share: $ 0.20 0.20 0.22 0.22 $ 0.84
Stock price:
High $ 37 40 3/8 42 3/8 43 6/8
Low $ 34 1/2 36 3/8 38 1/2 39 7/8
1994
- ----
Net sales $ 154,700 183,767 184,131 170,032 $692,650
Gross margin $ 39,467 47,246 47,790 41,865 $176,368
Operating expenses $ 27,883 29,874 29,765 27,403 $114,925
Net earnings $ 6,758 10,105 10,235 8,470 $ 35,568
Net earnings per share: $ 0.44 0.65 0.66 0.55 $ 2.30
Dividends per share: $ 0.18 0.18 0.20 0.20 $ 0.76
Stock price:
High $ 35 1/4 34 5/8 35 3/8 36 1/8
Low $ 30 1/4 31 1/4 31 1/4 31 3/8
31
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
Carlisle Companies Incorporated:
We have audited the accompanying consolidated balance sheets of Carlisle
Companies Incorporated and subsidiaries as of December 31, 1995 and 1994 and the
related consolidated statements of earnings, shareholders' equity, and cash
flows for the years then ended. These financial statements and the
supplementary notes referred to below are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements and supplementary notes based on our audits. The
consolidated financial statements of Carlisle Companies Incorporated and
subsidiaries as of December 31, 1993 were audited by other auditors whose report
dated February 2, 1994 expressed an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
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
and subsidiaries as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for the years then ended, in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplementary notes to the consolidated
financial statements listed in Item 14 are presented for purposes of complying
with the Securities and Exchange Commission's rules and are not part of the
basic financial statements. These supplementary notes have been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly state in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
Arthur Andersen LLP
/s/ Arthur Andersen LLP
New York, New York
January 29, 1996
32
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Carlisle Companies Incorporated:
We have audited the accompanying consolidated balance sheet of Carlisle
Companies Incorporated and subsidiaries as of December 31, 1993, and the related
consolidated statements of earnings, shareholders' equity, and cash flows for
the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Carlisle Companies
Incorporated and subsidiaries as of December 31, 1993, and the results of their
operations and their cash flows for the year ended December 31, 1993, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
Syracuse, New York
February 2, 1994
33
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 of December 31, 1995, 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 53 Chief Executive Officer September, 1988
since September, 1988, to date
and Chairman of the
Board since January,
1994, and President from
September, 1988 to
February, 1995, of the
Company.
Dennis J. Hall 54 President, since February, August, 1989
1995, and Executive Vice to date
President, Treasurer and Chief
Financial Officer, from
August, 1989 to February,
1995, of the Company.
John W. Altmeyer 37 Vice President, Corporate August, 1989
Development of the to date
Company.
Scott C. Selbach 40 Vice President, Europe, July, 1989
since August, 1995, and to date
Vice President, Secretary
and General Counsel, from
July 1989 to July, 1995,
of the Company.
Steven J. Ford 36 Vice President, Secretary and July, 1995
General Counsel, of the Company to date
since July, 1995. Previously
an associate with Bond,
Schoeneck & King, Syracuse, NY.
34
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 15, 1996.
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 15, 1996.
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 15, 1996.
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 Statement of Earnings, years ended December 31, 1995,
1994 and 1993
Consolidated Statement of Shareholders' Equity, years ended December
31, 1995, 1994 and 1993
Consolidated Balance Sheet, December 31, 1995 and 1994
Consolidated Statement of Cash Flows, years ended December 31, 1995,
1994 and 1993
Notes to Consolidated Financial Statements
Financial statement supplementary notes applicable to the filing of this report
are as follows:
Page
1. Other current liabilities 39
35
All other schedules are omitted because the required information is inapplicable
or the information is presented in the financial statements or related notes.
Exhibits applicable to the filing of this report are as follows:
(3) By-laws of the Company *
(3.1) Restated Certificate of Incorporation as amended April 22,
1991****
(4) Shareholders' Rights Agreement, February 8, 1989.*
(10.1) Executive Incentive Program.**
(10.2) 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.***
(10.3) Summary Plan Description of Carlisle Companies Incorporated
Director Retirement Program, effective November 6, 1991.***
(21) Subsidiaries of the Registrant.
(23) Consent of Independent Public Accountants.
(27) Financial Data Schedule as of December 31, 1995 and for the
twelve months ended December 31 1995.
* 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.
** Filed with the Company's definitive proxy statement dated March
9, 1994 and incorporated herein by reference.
*** 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.
**** 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.
No reports on Form 8-K were filed during the last quarter of the period covered
by this report.
The Company will furnish to the Commission upon request its long-term debt
instruments not listed in this Item.
36
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, President and a Director
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/ Stephen P. Munn /s/ Magalen O. Bryant
Stephen P. Munn, Chairman Magalen O. Bryant, Director
Chief Executive Officer
and a Director
(Principal Executive Officer) /s/ Donald G. Calder
/s/ Robert J. Ryan Donald G. Calder, Director
Robert J. Ryan,
Vice President, Treasurer /s/ Paul J. Choquette, Jr.
and Chief Financial Officer
(Principal Financial Officer) Paul J. Choquette, Jr., Director
/s/ Scott A. Kingsley
/s/ Henry J. Forrest
Scott A. Kingsley
Controller Henry J. Forrest, Director
(Principal Accounting Officer)
/s/ David G. Thomas
David G. Thomas, Director
March 15, 1996
37
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
SUPPLEMENTARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
Note 1. OTHER CURRENT LIABILITIES - Other current liabilities at December 31
consist of the following:
(000's)
1995 1994
------- ------
Employee compensation and benefits $21,044 16,038
Product warranties 27,675 26,639
Insurance 7,727 7,433
Other accrued expenses 26,595 24,341
------- ------
83,041 74,451
------- ------
------- ------
38
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Carlisle Companies Incorporated
Under date of February 2, 1994, we reported on the consolidated balance sheet of
Carlisle Companies Incorporated and subsidiaries as of December 31, 1993, and
the related consolidated statements of earnings, stockholders' equity, and cash
flows for the year then ended as contained in the annual report on Form 10-K for
the year ended December 31, 1993. In connection with our audit of the
aforementioned consolidated financial statements, we also have audited the
related supplementary notes and financial statement schedules as listed in Item
14 of the Form 10-K. These supplementary notes and financial statement
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these supplementary notes and
financial statement schedules based on our audits.
In our opinion, such supplementary notes and financial statement schedules, when
considered in relation to the basic consolidated financial statements taken as a
whole, present fairly, in all material respects, the information set forth
therein.
KPMG Peat Marwick LLP
/S/ KPMG Peat Marwick LLP
Syracuse, New York
March 11, 1996
39
CARLISLE COMPANIES INCORPORATED
COMMISSION FILE NUMBER 1-9278
FORM 10-K
FOR FISCAL YEAR ENDED DECEMBER 31, 1995
EXHIBIT LIST
Page
(21) Subsidiaries of the Registrant 41
(23) Consent of Independent Public Accountants 42
(23.1) Independent Auditors' Consent 43
(27) Financial Data Schedule as of
December 31, 1995 and for the twelve
months ended December 31, 1995 44
40