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Carlisle Companies Reports Record Income from Continuing Operations of $103.6 million and Record EBIT Margin of 16.6% in the Third Quarter 2015

October 21, 2015

Reports $1.56 Earnings Per Share from Continuing Operations for the Third Quarter 2015, a 19% Increase Over the Prior Year

CHARLOTTE, N.C.--(BUSINESS WIRE)-- Carlisle Companies Incorporated (NYSE:CSL) reported net sales from continuing operations of $973.1 million for the quarter ended September 30, 2015, a 7.6% increase from $904.1 million in the third quarter 2014. Net sales from the acquisition of the Finishing Brands business, which now constitutes the Carlisle Fluid Technologies (CFT) segment, contributed 7.5% to net sales in the third quarter. Net sales from the acquisition of LHi Technology (LHi), reported in the Carlisle Interconnect Technologies (CIT) segment, contributed 2.9% to net sales. Organic net sales (defined as net sales excluding sales from acquisitions within the last twelve months, as well as the impact of changes in foreign exchange rates versus the U.S. Dollar) declined by 1.0%. Fluctuations from foreign exchange had a negative impact to net sales of 1.8%.

Income from continuing operations in the third quarter 2015 increased 20% to a record $103.6 million, compared with $86.3 million in the third quarter 2014, reflecting lower raw material costs, savings from the Carlisle Operating System and contribution from acquisitions. These positive impacts were partially offset by lower selling price and foreign exchange fluctuations. On a per share basis, income from continuing operations in the third quarter 2015 increased 19% to $1.56 per diluted share, from $1.31 per diluted share in the prior year.

All financial and percentage comparisons in our third quarter reporting are made to the same quarter of the previous year, unless otherwise stated. On April 1, 2015, the Company completed the acquisition of the Finishing Brands business. Beginning in the second quarter 2015, the Company added a reportable segment, Carlisle Fluid Technologies, to reflect the acquisition of Finishing Brands. This press release also includes a comparison of three and nine months ended September 30, 2015 to 2014 selected financial results on a pro forma basis for Carlisle and the CFT segment, which assumes the acquisition of Finishing Brands had occurred on January 1, 2014. For selected pro forma information and reconciliation to the reported GAAP amounts, refer to the financial exhibits.

Comment

David A. Roberts, Chairman and Chief Executive Officer, said, “We achieved record performance in the third quarter for EBIT (earnings before interest and income taxes), EBIT margin and net earnings. In addition, performance improved significantly from the second quarter at our two most recent acquisitions, Carlisle Fluid Technologies and LHi. Our organic net sales decreased 1.0% for the quarter. Despite slightly lower organic net sales, we achieved 21% growth in EBIT and our EBIT margin increased 180 basis points to a record high of 16.6%.

“At Carlisle Construction Materials (CCM), we remained resolute in maintaining selling price in the commercial roofing market. Partly as a result, CCM net sales in the third quarter were lower organically by 1.2%. Despite the lower sales, CCM’s EBIT performance was excellent in the third quarter. EBIT grew 19% and EBIT margin expanded 380 basis points to a record high 20.3%, reflecting lower raw material costs, savings from the Carlisle Operating System and the non-recurrence of plant startup costs. While our net sales results were lower in the third quarter than previously expected, we remain positive about the strength and outlook for the commercial roofing market. For the full year, we expect low-to-mid single digit net sales growth and record EBIT and EBIT margin at CCM.

“Carlisle Interconnect Technologies’ (CIT) net sales grew 23% during the quarter, reflecting 16% growth from the acquisition of LHi and organic net sales growth of 7.4%. CIT continued its excellent track record in the aerospace market as net sales grew 8% despite contractual selling price reductions. CIT’s EBIT margin of 20.4% was outstanding. Also impressive was the EBIT margin contribution from the LHi medical acquisition of 13.1%, a 480 basis point increase from its margin contribution in the second quarter. We continue to expect record performance from CIT for the full year.

“Net sales at Carlisle Fluid Technologies (CFT) were $67.9 million in the third quarter. Sequentially, CFT’s sales reflect a 10% increase over net sales in the second quarter of 2015. CFT achieved an impressive EBIT margin of 14.9% in the third quarter which includes approximately 630 basis points of acquisition related amortization expense. The quarter’s strong performance is evidence of the significant potential of this segment. As previously announced, Barry Holt was appointed President of CFT. Barry brings with him the leadership and industry experience to solidify CFT as another strong growth platform for Carlisle.

“At Carlisle Brake & Friction (CBF), we continue to experience new lows in our key markets due to the continued global economic slowdown. Net sales at CBF declined 21% in the third quarter, consisting of a 16% decline in volume and a 4.8% decline due to foreign exchange. CBF’s EBIT was only marginally positive in the third quarter due to the significant sales decline as well as $1.1 million in severance charges. We believe we have seen the bottom of this cycle but do not see signs of recovery in the near term. As recently announced, Ted Messmer was appointed President of CBF, bringing with him extensive leadership experience.

“Carlisle FoodService Products’ (CFS) results were slightly higher in the third quarter in both net sales and EBIT reflecting growth in our foodservice and janitorial/sanitation markets. EBIT margin for the quarter was 12.4%, a 30 basis point improvement over the prior year.

“We generated $189 million in free cash flow in the third quarter and ended the quarter with $354 million cash on hand. Year-to-date we’ve returned $111 million in capital to shareholders through dividends and share repurchases.”

Roberts concluded by stating, “We continue to expect 2015 to be an outstanding year for Carlisle with the establishment of the CFT segment and record results at CCM and CIT. We now expect organic net sales growth to be in the low-to-mid single digit percent range. We expect EBIT and EBIT margin improvement primarily from continued favorable raw material conditions, savings from the Carlisle Operating System, and sales growth leverage. Capital expenditures are expected to be between $70 million and $80 million in 2015. We remain favorably positioned with our liquidity and strong balance sheet to continue to pursue growth opportunities both organically and through acquisitions, while returning value to shareholders.”

Segment Results for Third Quarter 2015

Carlisle Construction Materials (CCM): Net sales in the third quarter 2015 declined 3.2% to $570.1 million, reflecting a 2.0% negative impact due to foreign exchange fluctuations and a decline in organic net sales of 1.2%. CCM’s organic net sales decline reflected slightly lower selling price and flat volume. CCM’s EBIT margin rose 380 basis points to 20.3%, primarily reflecting lower raw material costs, savings from the Carlisle Operating System and the non-recurrence of plant startup expenses of $2.0 million in the prior year. These positive impacts were partially offset by lower selling price, unfavorable changes in mix and the negative impact from foreign exchange fluctuations.

Carlisle Interconnect Technologies (CIT): Net sales in the third quarter 2015 grew 23% to $202.3 million, reflecting acquisition growth of 16% and organic growth of 7.4%. Net sales in CIT’s aerospace market were up 8%. Net sales to the military market were up 10%. Net sales into the test and measurement market were flat reflecting timing of orders from larger customers. Net sales to the industrial market were down 20%. The acquisition of LHi in the medical market contributed $25.9 million in net sales and $3.4 million in EBIT. CIT’s EBIT margin of 20.4% remained relatively level with the prior year, despite the impact of lower selling price from contractual reductions and the dilutive impact of LHi on EBIT margin. These negative impacts were offset by higher organic net sales volume, savings from the Carlisle Operating System and favorable changes in mix.

Carlisle Fluid Technologies (CFT): Net sales in the third quarter 2015 were $67.9 million. On a pro forma basis, net sales in the third quarter grew 2.6% versus pro forma net sales in the prior year, primarily reflecting 9.7% organic net sales growth partially offset by a 7.1% negative impact due to foreign currency fluctuations. On a pro forma basis, CFT’s EBIT margin for the third quarter of 2015 increased 250 basis points to 14.9% from the prior period due primarily to higher selling price, net sales volume growth and favorable changes in mix. Included in CFT’s EBIT for the third quarter 2015 was $0.4 million in severance expense.

Carlisle Brake & Friction (CBF): Net sales in the third quarter of 2015 declined 21% to $70.7 million, comprised of 16% lower organic net sales and a 4.8% negative impact on net sales from foreign exchange rate fluctuations. Net sales in the construction market declined by 29%. Net sales in the agriculture and mining markets declined by 16% and 24%, respectively. CBF’s EBIT margin during the third quarter decreased 610 basis points to 0.7%, primarily due to lower sales volume and the negative impact of foreign exchange. Included in CBF’s EBIT in the third quarter was $1.1 million in severance related expense.

Carlisle FoodService Products (CFS): Net sales in the third quarter 2015 grew 1.3% to $62.1 million. Net sales in the foodservice and janitorial/sanitation markets grew by 2% and 5%, respectively. Net sales in the healthcare market declined by 2%. CFS’ EBIT margin during the quarter grew 30 basis points to 12.4% on lower raw material costs and operating efficiencies, partially offset by lower selling price related to incentives.

Corporate Expense

The $2.8 million increase in Corporate expense in the third quarter 2015 included increased spending on incentive payouts related to the Carlisle Operating System.

Cash Flow

Cash flow provided from operations of $352.9 million for the nine months ended September 30, 2015 was $188.2 million higher than cash provided of $164.7 million for the prior year period primarily due to higher net earnings and lower usage of cash for working capital in 2015 versus the prior period. For the first nine months of 2015, average working capital (defined as the average of the quarter-end balances, excluding current year acquisitions, of receivables, plus inventory less accounts payable) as a percentage of annualized sales (defined as year-to-date net sales from continuing operations, excluding current year acquisitions, calculated on an annualized basis) increased to 18.3%, as compared to 17.7% for the prior year.

Free cash flow (defined as cash provided by operating activities less capital expenditures, and comprised of continuing and discontinued operations) was $304.2 million for the first nine months of 2015, an increase of $232.6 million versus the prior year. The increase in free cash flow was primarily attributable to increased cash provided from operations and lower capital expenditures in the first nine months of 2015 versus the prior year.

Net cash used in investing activities of $647.5 million for the nine months ended September 30, 2015 included $598.9 million used for the acquisition of Finishing Brands, net of cash acquired. Total cash used for the acquisition of Finishing Brands includes a final working capital adjustment of $21.1 million that was paid to the seller in the third quarter of 2015.

During the first nine months of 2015, the Company repurchased 591,062 shares under our share repurchase program. The Company increased its dividend by 20% during the third quarter 2015, reflecting the 39th year of consecutive dividend increases.

Conference Call and Webcast

The Company will discuss third quarter 2015 results on a conference call at 8:00 a.m. ET today. The call may be accessed live by going to the Investor Relations section of the Carlisle website (http://www.carlisle.com/investor-relations/events-and-webcasts/default.aspx), or the taped call may be listened to shortly following the live call at the same website location. A PowerPoint presentation will accompany the call and can be found on the Carlisle website as well.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally use words such as “expect,” “foresee,” “anticipate,” “believe,” “project,” “should,” “estimate,” “will,” “plans,” “forecast,” and similar expressions, and reflect our expectations concerning the future. It is possible that our future performance may differ materially from current expectations expressed in these forward-looking statements, due to a variety of factors such as: increasing price and product/service competition by foreign and domestic competitors, including new entrants; technological developments and changes; the ability to continue to introduce competitive new products and services on a timely, cost-effective basis; our mix of products/services; increases in raw material costs which cannot be recovered in product pricing; domestic and foreign governmental and public policy changes including environmental and industry regulations; threats associated with and efforts to combat terrorism; protection and validity of patent and other intellectual property rights; the successful integration and identification of our strategic acquisitions; the cyclical nature of our businesses; and the outcome of pending and future litigation and governmental proceedings. In addition, such statements could be affected by general industry and market conditions and growth rates, the condition of the financial and credit markets, and general domestic and international economic conditions including interest rate and currency exchange rate fluctuations. Further, any conflict in the international arena may adversely affect general market conditions and our future performance. We refer you to the documents we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this press release. We undertake no obligation to update any forward-looking statement.

About Carlisle Companies Incorporated

Carlisle Companies Incorporated is a global diversified company that designs, manufactures and markets a wide range of products that serve a broad range of niche markets including commercial roofing, energy, agriculture, mining, construction, aerospace and defense electronics, medical technology, foodservice, healthcare, sanitary maintenance, transportation, general industrial, protective coating, wood, specialty and auto refinishing. Through our group of decentralized operating companies led by entrepreneurial management teams, we bring innovative product solutions to solve the challenges facing our customers. Our worldwide team of employees, who generated $3.2 billion in net sales in 2014, is focused on continuously improving the value of the Carlisle brand by developing the best products, ensuring the highest quality and providing unequaled customer service in the many industries we serve. Learn more about Carlisle at www.carlisle.com.

 
Carlisle Companies Incorporated
Unaudited Condensed Consolidated Statements of Earnings
       

   

 


 

 









Three Months Ended September 30,
Nine Months Ended September 30,

(in millions except share and per share amounts)

 

2015


2014

2015
2014



















 

Net Sales


$ 973.1
$ 904.1

$ 2,667.0
$ 2,414.0



















 


Cost and expenses:

















Cost of goods sold



677.6

667.0


1,913.1

1,790.2



Selling and administrative expenses



121.7

94.4


345.4

282.0



Research and development expenses



11.3

8.6


31.0

25.0



Other expense (income), net


  0.7
  0.1

  1.3
  (2.5)



















 

Earnings before interest and income taxes



161.8

134.0


376.2

319.3



















 


Interest expense, net


  8.7
  7.7

  25.6
  23.8

Earnings before income taxes from continuing operations


153.1

126.3


350.6

295.5



















 


Income tax expense


  49.5
  40.0

  112.7
  97.1

Income from continuing operations



103.6

86.3


237.9

198.4



















 


Discontinued operations

















Loss before income taxes



-

(0.6)


-

(1.7)



Income tax benefit


  -
  (1.6)

  -
  (1.7)


Income from discontinued operations


  -
  1.0

  -
  -

Net income


$ 103.6
$ 87.3

$ 237.9
$ 198.4



















 

Basic earnings per share attributable to common shares(1)















Income from continuing operations


$ 1.59
$ 1.34

$ 3.64
$ 3.07



Income from discontinued operations


  -
  0.01

  -

-




Basic earnings per share


$ 1.59
$ 1.35

$ 3.64
$ 3.07



















 

Diluted earnings per share attributable to common shares(1)















Income from continuing operations


$ 1.56
$ 1.31

$ 3.58
$ 3.01



Income from discontinued operations


  -
  0.01

  -

-




Diluted earnings per share


$ 1.56
$ 1.32

$ 3.58
$ 3.01



















 

Average shares outstanding - in thousands

















Basic


  64,970
  64,149

  64,952
  64,043



Diluted


  65,987
  65,447

  66,052
  65,315



















 

Dividends declared and paid


$ 19.6
$ 16.2

$ 52.7
$ 45.0

Dividends declared and paid per share


$ 0.30
$ 0.25

$ 0.80
$ 0.69



















 

(1) Numerator for basic and diluted EPS calculated based on "two-class" method of computing earnings per share:



















 



Income from continuing operations


$ 103.1
$ 85.7

$ 236.3
$ 196.8



Net income


$ 103.1
$ 86.7

$ 236.3
$ 196.8


















 
 
Carlisle Companies Incorporated
Unaudited Segment Information
   
     
 
 

 

 




 




 







Three Months Ended
Increase
Nine Months Ended Increase






September 30,
(Decrease)
September 30,
(Decrease)

(in millions, except percentages)


 

 

2015


 

2014


Amount
Percent
2015
2014
Amount
Percent  





























 

Net Sales























































 


Carlisle Construction Materials


$
570.1
$ 589.1
$ (19.0)
(3.2) % $ 1,519.0
$ 1,472.2
$ 46.8
3.2 %


Carlisle Interconnect Technologies




202.3

164.4

37.9
23.1


595.0

477.5

117.5
24.6


Carlisle Fluid Technologies




67.9

-

67.9
-


129.6

-

129.6
-


Carlisle Brake & Friction




70.7

89.3

(18.6)
(20.8)


242.1

279.1

(37.0)
(13.3)


Carlisle FoodService Products


 
62.1
  61.3
  0.8
1.3  
  181.3
  185.2
  (3.9)
(2.1)  


Total


$
973.1
$ 904.1
$ 69.0
7.6 % $ 2,667.0
$ 2,414.0
$ 253.0
10.5 %





























 

Earnings Before Interest and Income Taxes























































 


Carlisle Construction Materials


$
115.5
$ 97.0
$ 18.5
19.1 % $ 264.3
$ 210.0
$ 54.3
25.9 %


Carlisle Interconnect Technologies




41.2

33.9

7.3
21.5


111.8

98.7

13.1
13.3


Carlisle Fluid Technologies




10.1

-

10.1
-


9.1

-

9.1
-


Carlisle Brake & Friction




0.5

6.1

(5.6)
(91.8)


16.8

26.1

(9.3)
(35.6)


Carlisle FoodService Products




7.7

7.4

0.3
4.1


20.3

22.9

(2.6)
(11.4)


Corporate


 
(13.2)
  (10.4)
  (2.8)
(26.9)  
  (46.1)
  (38.4)
  (7.7)
(20.1)  


Total


$
161.8
$ 134.0
$ 27.8
20.7 % $ 376.2
$ 319.3
$ 56.9
17.8 %





























 

EBIT Margins























































 


Carlisle Construction Materials




20.3
% 16.5
%





17.4
% 14.3 %





Carlisle Interconnect Technologies




20.4

20.6







18.8

20.7







Carlisle Fluid Technologies




14.9

-







7.0

-







Carlisle Brake & Friction




0.7

6.8







6.9

9.4







Carlisle FoodService Products




12.4

12.1







11.2

12.4







Corporate




(1.4)

(1.2)







(1.7)

(1.6)







Total




16.6
% 14.8
%





14.1
% 13.2 %































 
 
Carlisle Companies Incorporated
Unaudited Pro Forma Segment Information1

   



 

 

 



 

 

 

 






Three Months Ended
Increase

Nine Months Ended

Increase





September 30,
(Decrease)

September 30,

(Decrease)  





2015

2014

Amount
Percent  

2015

2014

Amount
Percent  





























 
Net Sales

























































 
Carlisle Construction Materials


$ 570.1 $
589.1 $
(19.0)

(3.2) % $
1,519.0 $
1,472.2 $
46.8

3.2 %
Carlisle Interconnect Technologies



202.3

164.4

37.9

23.1



595.0

477.5

117.5

24.6
Carlisle Fluid Technologies



67.9

66.2

1.7

2.6



190.8

200.9

(10.1)

(5.0)
Carlisle Brake & Friction



70.7

89.3

(18.6)

(20.8)



242.1

279.1

(37.0)

(13.3)
Carlisle FoodService Products


  62.1  
61.3  
0.8

1.3  
 
181.3  
185.2  
(3.9)

(2.1)  
Total


$ 973.1 $
970.3 $
2.8

0.3 % $
2,728.2 $
2,614.9 $
113.3

4.3 %





























 
Earnings Before Interest and Income Taxes





















































 
Carlisle Construction Materials


$ 115.5 $
97.0 $
18.5

19.1 % $
264.3 $
210.0 $
54.3

25.9 %
Carlisle Interconnect Technologies



41.2

33.9

7.3

21.5



111.8

98.7

13.1

13.3
Carlisle Fluid Technologies



10.1

8.2

1.9

23.2



26.4

16.6

9.8

59.0
Carlisle Brake & Friction



0.5

6.1

(5.6)

(91.8)



16.8

26.1

(9.3)

(35.6)
Carlisle FoodService Products



7.7

7.4

0.3

4.1



20.3

22.9

(2.6)

(11.4)
Corporate


  (13.2)  
(10.4)  
(2.8)

(26.9)  
 
(44.8)  
(39.8)  
(5.0)

(12.6)  
Total


$ 161.8 $
142.2 $
19.6

13.8 % $
394.8 $
334.5 $
60.3

18.0 %





























 
EBIT Margins

























































 
Carlisle Construction Materials



20.3 %
16.5 %








17.4 %
14.3 %





Carlisle Interconnect Technologies
20.4

20.6









18.8

20.7






Carlisle Fluid Technologies



14.9

12.4









13.8

8.3






Carlisle Brake & Friction



0.7

6.8









6.9

9.4






Carlisle FoodService Products



12.4

12.1









11.2

12.4






Corporate



(1.4)

(1.1)









(1.6)

(1.5)






Total



16.6 %
14.7 %








14.5 %
12.8 %


































 
1 See the last page of the financial exhibits for a reconciliation of the pro forma net sales and EBIT reported above.
 
 
Carlisle Companies Incorporated
Condensed Consolidated Balance Sheets
     
   


 







September 30,
December 31,

(in millions except share and per share amounts)

2015

2014







(Unaudited)




Assets








Current assets:









Cash and cash equivalents

$ 354.4

$ 730.8


Receivables, net of allowance of $5.0 in 2015 and $4.8 in 2014


600.8


439.2


Inventories


383.8


339.1


Deferred income taxes


35.2


35.4


Prepaid expenses and other current assets

  52.2

  67.0



Total current assets

  1,426.4

  1,611.5











 

Property, plant, and equipment, net of accumulated depreciation

  580.0

  547.3











 

Other assets:









Goodwill, net


1,137.2


964.5


Other intangible assets, net


906.1


611.7


Other long-term assets

  25.9

  23.7



Total other assets


2,069.2


1,599.9






   

   



TOTAL ASSETS

$ 4,075.6

$ 3,758.7











 

Liabilities and Shareholders' Equity








Current liabilities:









Short-term debt, including current maturities

$ 149.9

$ -


Accounts payable


267.5


198.0


Accrued expenses


216.9


176.3


Deferred revenue

  27.3

  17.9



Total current liabilities

  661.6

  392.2











 

Long-term liabilities:









Long-term debt


598.7


749.8


Deferred revenue


155.9


151.1


Other long-term liabilities

  295.3

  260.6



Total long-term liabilities

  1,049.9

  1,161.5











 

Shareholders' equity:









Preferred stock, $1 par value per share. Authorized and unissued 5,000,000 shares


-


-


Common stock, $1 par value per share. Authorized 200,000,000 shares;










78,661,248 shares issued; 64,855,456 outstanding in 2015 and 64,691,059










outstanding in 2014


78.7


78.7


Additional paid-in capital


284.9


247.8


Deferred compensation equity


8.4


6.0


Cost of shares in treasury - 13,578,670 shares in 2015 and 13,723,201










shares in 2014


(250.1)


(200.1)


Accumulated other comprehensive loss


(77.4)


(61.8)


Retained earnings

  2,319.6

  2,134.4



Total shareholders' equity


2,364.1


2,205.0






   

   



TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$ 4,075.6

$ 3,758.7











 
 
Carlisle Companies Incorporated
Unaudited Condensed Consolidated Statements of Cash Flows
       
  Nine Months Ended September 30,

(in millions)
2015   2014










 

Operating activities







Net income
$ 237.9
$ 198.4


Reconciliation of net income to cash flows provided by operating activities:








Depreciation

54.6

47.4



Amortization

40.8

28.4



Non-cash compensation, net of tax benefit

1.0

10.3



(Gain) loss on sale of property and equipment, net

0.4

(1.9)



Deferred taxes

2.3

(0.7)



Foreign exchange (gain) loss

0.2

(0.3)



Changes in assets and liabilities, excluding effects of acquisitions and divestitures:







Receivables

(108.3)

(152.5)




Inventories

(6.5)

(38.1)




Prepaid expenses and other assets

0.6

(2.4)




Accounts payable

49.4

57.8




Accrued expenses and deferred revenues

77.4

16.0




Long-term liabilities

1.9

3.1



Other operating activities
  1.2
  (0.8)



Net cash provided by operating activities
  352.9
  164.7










 

Investing activities







Capital expenditures

(48.7)

(93.1)


Acquisitions, net of cash

(598.9)

-


Proceeds from sale of property and equipment

0.1

2.7


Proceeds from sale of business
  -
  9.7



Net cash used in investing activities
  (647.5)
  (80.7)










 

Financing activities







Repayments of long-term debt

(1.5)

-


Dividends

(52.7)

(45.0)


Proceeds from issuance of treasury shares and stock options

35.2

12.7


Repurchases of common stock
  (57.9)
  -



Net cash used in financing activities
  (78.3)
  (32.3)










 

Effect of foreign currency exchange rate changes on cash and cash equivalents
  (3.5)
  (1.1)

Change in cash and cash equivalents

(376.4)

50.6

Cash and cash equivalents







Beginning of period
  730.8
  754.5


End of period
$ 354.4
$ 805.1








 
 
Carlisle Companies Incorporated
Unaudited Reconciliation of Reported Amounts to Pro Forma Amounts
 
The pro forma net sales, EBIT, and EBIT margin of (1) Carlisle Companies and Finishing Brands combined and (2) the CFT segment inclusive of Finishing Brands are provided in this earnings release because management of the Company believes that the pro forma financial information provides investors with additional information regarding trends in the financial performance of the Finishing Brands business in the periods presented in the earnings release, particularly those related to changes in net sales attributable to foreign exchange fluctuations and changes in prices, and its impact on the EBIT results of the Company as well as the CFT segment.
   

 
 
 
 
The information provided in the Unaudited Pro Forma Segment Information reflects the net sales, EBIT, and EBIT margin of (1) Carlisle Companies and Finishing Brands Combined and (2) the CFT Segment on a pro forma basis under the requirements of US GAAP in ASC 805. The Company will also disclose the Company's and Finishing Brands' combined pro forma financial information in its US GAAP financial statement footnotes under Item 1 of the third quarter 2015 Form 10Q.











 
The pro forma financial information presented below, as required under ASC 805, assumes the acquisition of Finishing Brands was consummated on January 1, 2014 and therefore net sales and EBIT of Finishing Brands have been combined with those of the Company in the periods prior to April 1, 2015, the date of the acquisition, and have been adjusted under the ASC 805 requirements.











 
Accordingly, certain non-recurring costs related to the valuation of inventory at fair value and other costs associated with the acquisition, primarily professional fees, have been removed from the results of the first nine months of 2015 and included in those of the first nine months of 2014. Also, the periods from January 1, 2014 to March 31, 2015 include incremental amortization and depreciation related to the measurement of intangible assets and property, plant and equipment at fair value. The pro forma financial information may not necessarily be indicative of future results.
 





Three Months Ended
Nine Months Ended
Carlisle Companies and Finishing Brands Combined Pro Forma Results
September 30,
September 30,





2015
2014
2015
2014











 
Reported Carlisle Companies Net Sales
$ 973.1
$ 904.1
$ 2,667.0
$ 2,414.0
Historical Net Sales of Finishing Brands not included in CSL historical Net Sales
-
66.2
61.2
200.9
Carlisle Companies and Finishing Brands Combined Pro Forma Net Sales
$ 973.1
$ 970.3
$ 2,728.2
$ 2,614.9











 
Reported Carlisle Companies EBIT
$ 161.8
$ 134.0
$ 376.2
$ 319.3
Historical EBIT of Finishing Brands not included in CSL historical EBIT
-
12.4
10.0
38.6
Increase in amortization expense related to technology-based intangibles
-
(1.3)
(1.3)
(4.0)
Decrease in depreciation expense related to property, plant and equipment
-
0.2
0.2
0.6
Increase in amortization expense related to customer-based intangibles
-
(3.1)
(3.1)
(9.3)
Decrease/(increase) in product cost related acquired inventory
-
-
8.6
(8.6)
Decrease/(increase) in acquisition-related costs
-
-
4.2
(2.1)
Carlisle Companies and Finishing Brands Combined Pro Forma EBIT
$ 161.8
$ 142.2
$ 394.8
$ 334.5











 
Reported Carlisle Companies EBIT Margin
16.6%
14.8%
14.1%
13.2%
Carlisle Companies and Finishing Brands Combined Pro Forma EBIT Margin
16.6%
14.7%
14.5%
12.8%











 











 





Three Months Ended
Nine Months Ended
CFT Segment Pro Forma Results
September 30,
September 30,





2015
2014
2015
2014











 
Reported Segment Net Sales
$ 67.9
$ -
$ 129.6
$ -
Historical Net Sales of Finishing Brands not included in CSL historical Net Sales
-
66.2
61.2
200.9
CFT Pro Forma Net Sales

$ 67.9
$ 66.2
$ 190.8
$ 200.9











 
Reported Segment EBIT

$ 10.1
$ -
$ 9.1
$ -
Historical EBIT of Finishing Brands not included in CSL historical EBIT
-
12.4
10.0
38.6
Increase in amortization expense related to technology-based intangibles
-
(1.3)
(1.3)
(4.0)
Decrease in depreciation expense related to property, plant and equipment
-
0.2
0.2
0.6
Increase in amortization expense related to customer-based intangibles
-
(3.1)
(3.1)
(9.3)
Decrease/(increase) in product cost related acquired inventory
-
-
8.6
(8.6)
Decrease/(increase) in acquisition-related costs
-
-
2.9
(0.7)
CFT Segment Pro Forma EBIT
$ 10.1
$ 8.2
$ 26.4
$ 16.6











 
Reported CFT Segment EBIT Margin
14.9%
-
7.0%
-
CFT Segment Pro Forma EBIT Margin
14.9%
12.4%
13.8%
8.3%








 

Source: Carlisle Companies Incorporated

Carlisle Companies Incorporated

Steven J. Ford, 704-501-1100

Vice President & Chief Financial Officer

www.carlisle.com

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