SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Carlisle Companies Incorporated (NYSE:CSL) reported record revenues of

$1,236.1 million for the second quarter of 2018, a 25.6% increase from

$983.9 million for the second quarter of 2017. Organic revenues grew

9.7%, acquired revenues contributed a total of 14.3% in the quarter,

foreign exchange had a positive impact of 0.7%, and adoption of the new

FASB revenue recognition standard had a positive impact of 0.9%.

Carlisle reported second quarter Operating Income of $159.7, an increase

of 9.2% from the second quarter of 2017 driven primarily by higher sales

volumes, price realization, contributions from acquisitions, and

continued operational improvements and cost savings from the Carlisle

Operating System. Operating Income performance was partially offset by

rising raw material, freight and labor-related costs, and unfavorable

product mix. In addition to the above Operating Income drivers,

Carlisle's diluted EPS was also impacted positively by a lower effective

tax rate and reduced share count in the quarter.



 

Three Months Ended June 30,

(in millions, except per share amounts)


2018

 

2017

Revenues


$

1,236.1



$

983.9

Operating income


$

159.7



$

146.3

Income from continuing operations, net of tax


$

114.7



$

94.7

Diluted EPS from continuing operations


$

1.87



$

1.46

Items affecting comparability (1)


$

0.10



$

0.09








 


(1) See schedule of Items Affecting Comparability in
the financial exhibits



All financial and percentage comparisons in the Company's second quarter

of 2018 reporting are made to the same quarter of the previous year,

unless otherwise stated.

Comment

D. Christian “Chris” Koch, President and Chief Executive Officer, said,

"We are pleased with Carlisle's record second quarter sales and diluted

EPS results. Carlisle experienced strong organic growth driven by

healthy U.S. commercial construction demand at our Carlisle Construction

Materials segment (CCM), robust commercial aircraft build rates at our

Carlisle Interconnect Technologies segment (CIT), strengthening of

Carlisle Brake & Friction's (CBF) off-highway vehicle markets, and

continued sequential Operating Income improvement at Carlisle Fluid

Technologies (CFT). We are very encouraged by CCM's ability to drive

meaningful price increases in the quarter, reflecting our price

discipline.

Progress and momentum continue to build on the deployment of Vision

2025. Consistent with our key strategic initiatives, in the quarter our

organic growth was almost double our goal of 5%; we made three small but

meaningful acquisitions: two metal roofing companies within the CCM

segment and a European aerospace engineering firm within CIT; and we

continued to return capital to shareholders, paying $22.5 million in

dividends and repurchasing approximately $111 million of Carlisle

shares. Additionally, recognizing the important contribution of all

employees to the success of Vision 2025, we announced a stock option

grant to U.S. employees, and a stock appreciation rights grant to

employees outside the U.S., giving the opportunity for all of our 14,000

global employees to be engaged in, and benefit from our success."

Segment Information

Carlisle Construction Materials (CCM) achieved record second

quarter revenues and Operating Income driven by strong U.S. commercial

construction demand in addition to continued progress on price

realization. Accella's revenue performance continued to meet our

expectations and integration activities are on track. CCM's

year-over-year operating margin decline was driven by higher raw

material, labor and freight costs, and dilution from the Accella

acquisition. Profitability of the legacy CCM business was similar to the

second quarter of 2017.


(in millions)

 

Three Months Ended June 30,

 


Acquisition
Effect



 


Price /
Volume Effect



 


Exchange
Rate Effect




2018

 

2017

 

Change $

 

Change %

Revenues


$

 

828.6



$

 

631.2



$

 

197.4



31.3%


22.3%


8.5%


0.5%

Operating income


$


141.4



$


129.1



$


12.3



9.5%







Operating margin percentage


17.1

%


20.5

%




-340bps







Items affecting comparability


$


0.7



$


0.3











We now expect CCM revenues to grow in the mid-twenty percent range in

2018, including contributions from acquisitions, with organic revenue

growth in the mid-to-high single digits.

Carlisle Interconnect Technologies (CIT) delivered record second

quarter revenues, driven largely by the Aerospace and Test &

Measurement markets, inclusive of Carlisle's adoption of the new revenue

recognition standard. Operating Income improved year-over-year driven by

higher volumes, savings from COS, and lower restructuring spend,

partially offset by foreign exchange pressure related to the Chinese

Renminbi and unfavorable product mix.


(in millions)

 

Three Months Ended June 30,

 


Acquisition
Effect



 


Price /
Volume Effect



 


Exchange
Rate Effect




2018

 

2017

 

Change $

 

Change %

Revenues


$

 

237.7



$

 

201.8



$

 

35.9



17.8%


0.1%


17.6%


0.1%

Operating income


$


27.5



$


20.2



$


7.3



36.1%







Operating margin percentage


11.6

%


10.0

%




+160bps







Items affecting comparability


$


1.9



$


5.6











We continue to expect CIT revenues to exceed ten percent growth in 2018.

Carlisle Brake & Friction (CBF) achieved strong organic

revenue growth in the second quarter of 2018, reflecting a continued

recovery in off-highway vehicle markets, especially key end markets of

Construction, Agriculture, and Mining. Operating Income growth was

largely driven by volume and price realization, partially offset by

costs associated with our Tulsa, Oklahoma to Medina, Ohio facility

consolidation, which is on track to be completed by year end.


(in millions)

 

Three Months Ended June 30,

 


Acquisition
Effect



 


Price /
Volume Effect



 


Exchange
Rate Effect




2018

 

2017

 

Change $

 

Change %

Revenues


$

 

96.5



$

 

79.9



$

 

16.6



20.8%


—%


17.7%


3.1%

Operating income


$


2.9



$


1.3



$


1.6



123.1%







Operating margin percentage


3.0

%


1.6

%




+140bps







Items affecting comparability


$


3.9



$


1.7











We continue to expect CBF revenues to grow in the mid-teens in 2018.

Carlisle Fluid Technologies (CFT) revenues in the second quarter

of 2018, excluding FX, increased slightly. Strong growth in Automotive

Refinish and General Industrial markets was offset by weakness in the

Transportation market. Operating Income benefited from previous actions

we have taken to drive efficiencies from our multiple facility

rationalization efforts, progress on vertical integration, and sourcing

initiatives.


(in millions)

 

Three Months Ended June 30,

 


Acquisition
Effect



 


Price /
Volume Effect



 


Exchange
Rate Effect




2018

 

2017

 

Change $

 

Change %

Revenues


$

 

73.3



$

 

71.0



$

 

2.3



3.2%


—%


0.4%


2.8%

Operating income


$


7.8



$


7.4



$


0.4



5.4%







Operating margin percentage


10.6

%


10.4

%




+20bps







Items affecting comparability


$


1.0



$


0.5











We continue to expect CFT revenues to grow mid-single digits in 2018.

Koch concluded by stating, “Following our strong second quarter

performance, we enter the second half of 2018 well-positioned to achieve

our growth and performance objectives. We continue to have a positive

outlook for 2018, bolstered by the strong commitment of our CCM team to

maintaining price discipline, our continued focus on improved

profitability at CFT, and the progress made on our restructuring

efforts. We now expect overall revenue growth in 2018 to be

approximately twenty percent. Favorably positioned with our ample

liquidity and strong balance sheet, we remain committed to pursuing

growth opportunities, both organically and through acquisitions, and

returning capital to shareholders. With Vision 2025 well underway, we

expect record results for Carlisle in 2018."

Cash Flow

Cash flow used in operations of $2.8 million for the six months ended

June 30, 2018, was $137.5 million lower than cash provided of $134.7

million for the prior year period.

Free cash flow (defined as cash provided by or used in operating

activities less capital expenditures, and comprised of continuing and

discontinued operations) was a use of $69.7 million for the six months

ended June 30, 2018, a decrease of $138.3 million versus the prior year.

The decrease in free cash flow was due to the timing of cash taxes paid

related to the sale of Carlisle FoodService Products and U.S. tax

reform. For the full year, excluding the effect of the sale of

FoodService Products, we expect free cash flow conversion to be

approximately 100%.

As of June 30, 2018, we had $762.4 million cash on hand and $1.0 billion

of availability under our revolving credit facility.

Conference Call and Webcast

The Company will discuss the second quarter of 2018 results on a

conference call at 5:00 p.m. ET today. The call may be accessed live by

going to the Investor Relations section of the Carlisle website (http://www.carlisle.com/investor-relations/events-and-webcasts/default.aspx),

or the taped call may be listened to shortly following the live call at

the same website location. A PowerPoint presentation will accompany the

call and can also be found on the Carlisle website.

Forward-Looking Statements

This press release contains forward-looking statements within the

meaning of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements generally use words such as “expect,”

“foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,”

“will,” “plans,” “forecast,” and similar expressions, and reflect our

expectations concerning the future. It is possible that our future

performance may differ materially from current expectations expressed in

these forward-looking statements, due to a variety of factors such as:

increasing price and product/service competition by foreign and domestic

competitors, including new entrants; technological developments and

changes; the ability to continue to introduce competitive new products

and services on a timely, cost-effective basis; our mix of

products/services; increases in raw material costs which cannot be

recovered in product pricing; domestic and foreign governmental and

public policy changes including environmental and industry regulations;

threats associated with and efforts to combat terrorism; protection and

validity of patent and other intellectual property rights; the

successful integration and identification of our strategic acquisitions;

the cyclical nature of our businesses; and the outcome of pending and

future litigation and governmental proceedings. In addition, such

statements could be affected by general industry and market conditions

and growth rates, the condition of the financial and credit markets, and

general domestic and international economic conditions including

interest rate and currency exchange rate fluctuations. Further, any

conflict in the international arena may adversely affect general market

conditions and our future performance. We refer you to the documents we

file from time to time with the Securities and Exchange Commission, such

as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of

these and other risks and uncertainties that could cause our actual

results to differ materially from our current expectations and from the

forward-looking statements contained in this press release. We undertake

no obligation to update any forward-looking statement.

Definitions of Organic Revenue and Free Cash

Flow

Organic revenue is defined as revenues excluding revenues from

acquisitions within the last twelve months, changes in foreign exchange

rates versus the U.S. Dollar, and the adoption of the new revenue

recognition standard.

Free Cash Flow is defined as Operating Cash Flows less Capital

Expenditures.

About Carlisle Companies Incorporated

Carlisle Companies Incorporated is a diversified, global portfolio of

niche brands and businesses with highly engineered and high margin

products. Carlisle is committed to generating superior shareholder

returns by combining a unique management style of decentralization,

entrepreneurial spirit, active M&A, and a balanced approach to capital

deployment, all with a culture of continuous improvement as embodied in

the Carlisle Operating System. Carlisle’s markets include: commercial

roofing, specialty polyurethane, agriculture, mining, construction,

aerospace, medical, defense, transportation, industrial, protective

coating and auto refinishing. Carlisle’s worldwide team of employees

generated $4.1 billion in revenues in 2017. Learn more about Carlisle at www.carlisle.com.



Carlisle Companies Incorporated



Unaudited Condensed Consolidated Statements of Income




 




Three Months Ended June 30,

(in millions except share and per share amounts)


2018

 

2017

Revenues


$

1,236.1



$

983.9






 

Cost of goods sold


903.9



697.4


Selling and administrative expenses


159.9



127.0


Research and development expenses


14.2



13.1


Other operating (income) expense, net


(1.6

)


0.1

 

Operating income


159.7



146.3


Interest expense, net


14.2



7.0


Other non-operating (income) expense, net


(0.7

)


(0.4

)

Income from continuing operations before income taxes


146.2



139.7


Provision for income taxes


31.5

 


45.0

 

Income from continuing operations


114.7



94.7






 

Discontinued operations:





(Loss) income before income taxes


(1.3

)


12.1


(Benefit) provision for income taxes


(0.3

)


4.5

 

(Loss) income from discontinued operations


(1.0

)


7.6

 

Net income


$

113.7

 


$

102.3

 





 

Basic earnings per share attributable to common shares:





Income from continuing operations


$

1.88



$

1.47


(Loss) income from discontinued operations


(0.02

)


0.12

 

Basic earnings per share


$

1.86

 


$

1.59

 





 

Diluted earnings per share attributable to common shares:





Income from continuing operations


$

1.87



$

1.46


(Loss) income from discontinued operations


(0.02

)


0.12

 

Diluted earnings per share


$

1.85

 


$

1.58

 





 

Average shares outstanding (in thousands):





Basic


60,641



63,746


Diluted


61,059



64,140






 

Dividends declared and paid per share


$

0.37



$

0.35



(1) Basic and diluted EPS calculated based on
"two-class" method of computing earnings per
share
using the following income attributable to common shares:



Income from continuing operations

 

$

114.0

 

 

$

93.6

Net income


$

113.0



$

101.1








 








 



Carlisle Companies Incorporated



Unaudited Segment Information




 


 




Three Months Ended June 30,


Increase / (Decrease)

(in millions, except percentages)


2018

 

2017


Amount

 

Percent

Revenues to Unaffiliated Customers


Carlisle Construction Materials


$

828.6



$

631.2



$

197.4



31.3

%

Carlisle Interconnect Technologies


237.7



201.8



35.9



17.8


Carlisle Fluid Technologies


73.3



71.0



2.3



3.2


Carlisle Brake & Friction


96.5

 


79.9

 


16.6

 


20.8


Total


$

1,236.1

 


$

983.9

 


$

252.2

 


25.6










 

Operating Income (Loss)


Carlisle Construction Materials


$

141.4



$

129.1



$

12.3



9.5

%

Carlisle Interconnect Technologies


27.5



20.2



7.3



36.1


Carlisle Fluid Technologies


7.8



7.4



0.4



5.4


Carlisle Brake & Friction


2.9

 


1.3

 


1.6

 


123.1


Segment Totals


179.6



158.0



21.6



13.7


Corporate and unallocated (1)


(19.9

)


(11.7

)


(8.2

)


(70.1

)

Total


$

159.7

 


$

146.3

 


$

13.4

 


9.2










 

Operating Margin Percentage


Carlisle Construction Materials


17.1

%


20.5

%





Carlisle Interconnect Technologies


11.6



10.0






Carlisle Fluid Technologies


10.6



10.4






Carlisle Brake & Friction


3.0



1.6






Total


12.9



14.9
















 


(1) Includes general corporate expenses and other
unallocated costs.



 

 

Carlisle Companies Incorporated

Unaudited Items Affecting

Comparability Information

Items affecting comparability include costs, and losses or gains related

to, among other things, growth and profitability improvement initiatives

and other events outside of core business operations (such as asset

impairments, exit and disposal and facility rationalization charges,

costs of and related to acquisitions, litigation costs, gains and losses

from and costs related to divestitures, and discrete tax items). Because

these items affect Carlisle's, or any particular operating segment's,

financial condition or results in a specific period in which they are

recognized, we believe it is appropriate to present the total of these

items to provide information regarding the comparability of results of

operations period to period.



 

Three Months Ended June 30,

(in millions, except per share amounts)


2018

 

2017

Impact to Operating Income

Exit and disposal costs


4.6



5.0

Other facility rationalization costs


2.7



3.1

Acquisition related costs:





Inventory step-up amortization


0.4





Other acquisition costs


0.5



0.4

Litigation costs


1.4





Gains from divestitures


(1.9

)




Total items affecting comparability


$

7.7

 


$

8.5





 

Impact to Diluted EPS from Continuing Operations (1)

Exit and disposal costs


0.05



0.06

Other facility rationalization costs


0.04



0.02

Acquisition related costs:





Inventory step-up amortization


0.01





Other acquisition costs


0.01



0.01

Litigation costs


0.02





Gains from divestitures


(0.03

)




Total items affecting comparability


$

0.10

 


$

0.09





 

Impact to Operating Income

Carlisle Construction Materials


$

0.7



$

0.3

Carlisle Interconnect Technologies


1.9



5.6

Carlisle Fluid Technologies


1.0



0.5

Carlisle Brake & Friction


3.9



1.7

Corporate


0.2

 


0.4

Total items affecting comparability


$

7.7

 


$

8.5





 

Impact to Diluted EPS from Continuing Operations (1)

Carlisle Construction Materials


$

0.01



$



Carlisle Interconnect Technologies


0.02



0.06

Carlisle Fluid Technologies


0.01





Carlisle Brake & Friction


0.05



0.02

Corporate


0.01

 


0.01

Total items affecting comparability


$

0.10

 


$

0.09








 


(1) Tax effect is based on the rate of the jurisdiction
where the expense is deductible or income is taxable.




Carlisle Companies Incorporated



Unaudited Condensed Consolidated Statements of Cash Flows




 




Six Months Ended June 30,

(in millions)


2018

 

2017

Net cash (used in) provided by operating activities


(2.8

)


134.7






 

Investing activities





Proceeds from sale of discontinued operation


754.6






Capital expenditures


(66.9

)


(66.1

)

Acquisitions, net of cash acquired


(19.3

)


(225.9

)

Other investing activities, net


5.7

 


0.1

 

Net cash provided by (used in) investing activities


674.1



(291.9

)





 

Financing activities





Proceeds from revolving credit facility






263.0


Repayments of revolving credit facility






(153.0

)

Repurchases of common stock


(235.7

)


(150.0

)

Dividends paid


(45.6

)


(45.8

)

Withholding tax paid related to stock-based compensation


(9.6

)


(8.1

)

Proceeds from exercise of stock options


5.0

 


3.5

 

Net cash used in financing activities


(285.9

)


(90.4

)





 

Effect of foreign currency exchange rate changes on cash and cash
equivalents




 


2.1

 





 

Change in cash and cash equivalents


385.4



(245.5

)

Change in cash and cash equivalents of discontinued operations


(1.3

)


(3.7

)

Cash and cash equivalents





Beginning of period


378.3

 


385.3

 

End of period


$

762.4

 


$

136.1

 









 









 



Carlisle Companies Incorporated



Selected Consolidated Balance Sheet Data




 


 


(in millions)



June 30, 2018





December 31, 2017



Cash and cash equivalents


762.4



378.3

Long-term debt


1,586.9



1,586.2

Total shareholders' equity


2,672.3



2,528.3

Contacts

Carlisle Companies Incorporated

Jim Giannakouros, 480-781-5135

Vice

President of Investor Relations