Carlisle Companies Reports a 29% Increase in First Quarter Income from Continuing Operations on Record First Quarter Sales

Business Wire,  April 14, 2005  

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CHARLOTTE, N.C. -- Carlisle Companies Incorporated (NYSE:CSL) reported income from continuing operations of $30.1 million, or $0.96 per diluted share for the quarter ended March 31, 2005, compared to $23.3 million or $0.75 per diluted share for the quarter ended March 31, 2004.

Net sales of $592.3 million in the first three months of 2005 were $89.1 million, or 18%, higher than net sales of $503.2 million recognized in the first three months of 2004. Organic sales contributed $79.1 million, or 16%, to the growth over the prior year, of which $2.3 million related to the favorable impact of changes in foreign exchange rates. Organic growth was primarily attributable to the Construction Materials and Industrial Components segments. Acquisitions contributed $10.0 million to the year-over-year increase in net sales.

Richmond McKinnish, Carlisle's President and CEO commented, "We are satisfied with the 29% year-over-year improvement in income from continuing operations. Though our key markets remain strong and our outlook for improved pricing and margins is positive, we must temper our optimism. Uncertainties surrounding future costs of oil-based commodities and certain chemicals as well as the impact of rising interest rates require that we maintain our 2005 guidance of $4.10 to $4.25 per diluted share for income from continuing operations."

Segment Results

The following segment discussion excludes the impact of discontinued operations.

Industrial Components: Net sales for the three months ended March 31, 2005 of $222.0 million increased 16% over $192.2 million reported in the same period of 2004. Most of the increase was attributed to growth in the tire and wheel business in the commercial power equipment and lawn care, ATV, and replacement supply chains. The acquisition of Trintex in June of 2004 accounted for approximately one-third of the sales improvement over the prior year. Earnings before interest and income taxes ("EBIT" or "earnings") of $24.7 million were 9% above $22.7 million in the first quarter of 2004. Positive earnings related to Trintex were offset by unfavorable product mix, unabsorbed overhead on lower demand for high speed and styled wheel products as well as increased warehousing and freight costs.

Construction Materials: Net sales of $171.5 million in the first quarter were 40% above the first quarter 2004 net sales of $122.8 million driven by a combination of strong demand across most product lines and higher pricing implemented to offset corresponding increases in raw material costs. First quarter 2005 EBIT of $14.6 million was significantly higher than the first quarter 2004 EBIT of $6.6 million due primarily to the increases in sales volume and favorable product mix. Segment earnings also reflect a pre-tax loss of $4.2 million for the first quarter 2005 related to the Company's equity share in the European roofing joint venture, Icopal. This loss compares to a $4.1 million loss in the first quarter 2004.

Transportation Products: Net sales of $40.2 million in the first quarter 2005 were 23% above first quarter 2004 net sales of $32.6 million. First quarter EBIT of $3.9 million was significantly above $0.9 million for the first quarter 2004. The improvement in net sales was the result of higher shipments of large construction trailers, pneumatic bulk tanks and construction live-bottom trailers. The increase in earnings reflects strong demand, favorable product mix, selling price increases and improved absorption of fixed overhead costs.

Specialty Products: Net sales of $37.6 million were 18% above $31.8 million in the first quarter 2004 on higher sales of braking systems for off-highway and industrial equipment as well as increased demand for on-highway heavy friction and relined brake shoes. First quarter 2005 EBIT of $3.9 million was 63% higher than first quarter 2004 EBIT of $2.4 million, primarily a result of improved demand, selling price increases and manufacturing efficiencies.

General Industry: Net sales of $121.0 million in the first quarter were below net sales of $123.8 million in the first quarter 2004. Segment EBIT of $8.6 million for the first three months of 2005 was 11% below $9.7 million in 2004. A slight increase in net sales at Tensolite was offset by declines at Carlisle FoodService and Johnson Truck Bodies. The decline at Carlisle FoodService reflects lower sanitary maintenance product sales. Johnson Truck Bodies net sales fell below 2004 levels due to reduced demand for insulated temperature-controlled truck bodies and trailers. Net sales for Carlisle Systems and Equipment, which includes Carlisle Process Systems, Carlisle Walker Stainless and CPS Pharma, were flat as compared with the first quarter 2004. Earnings improvements at Tensolite were more than offset by a year-over-year decline in earnings for Carlisle Systems and Equipment, Carlisle FoodService and Johnson Truck Bodies.

Discontinued Operations

Losses from discontinued operations, net of tax, in the first quarter 2005 were $1.8 million compared to income of $0.4 million in the first quarter 2004. Current assets held for sale as of March 31, 2005 increased by $43.7 million over 2004 year-end, reflecting an increase in receivables as the Company's discontinued automotive components business is no longer participating in the securitization program. The Company is actively engaged in the disposition of the automotive components operations and expects to complete the disposition in 2005.