Carlisle Companies Reports First Quarter Earnings
Carlisle Companies Incorporated announced its first quarter 2021 financial results.
–Reported consolidated first quarter revenue of $1.0 billion, flat to first quarter 2020
–First quarter diluted EPS of $0.97; adjusted diluted EPS of $1.47
–Share repurchases continued in the first quarter, totaling 984 thousand shares for $150 million
–CCM delivered strong year-over-year sales growth of 6.3%
–Announced $60 million investment in a new Polyiso Insulation facility
Comments from Chris Koch, Chairman, President and Chief Executive Officer
“Reflecting on the past twelve months of uncertainty, I take great pride in how the Carlisle team handled the immediate threats born out of the COVID-19 pandemic, ensuring that strict health and safety protocols were in place and followed, which has led to a low infection rate at Carlisle across the globe. This reaction enabled an early, proactive focus on positioning our businesses for an economic rebound, with Vision 2025 providing the clear direction and consistency of mission to guide our efforts. We will leverage this momentum as we accelerate into the recovery in 2021 and beyond. One year removed from the pandemic’s initial impact, we believe we are a stronger company and are well positioned to meet our center-led Vision 2025 objectives, supported by confidence in the fundamentals of our businesses and our commitment to our customers through the Carlisle Experience.
Due to strength in our CCM, CFT, and CBF businesses, our consolidated first quarter revenue was flat, while adjusted EPS declined year-over-year given lower profitability at CIT driven by the well-publicized impact of the COVID pandemic on the commercial aerospace industry. The first quarter of 2021 demonstrated yet again Carlisle’s ability to navigate varying economic cycles while delivering strong financial performance. We continued to execute on our long-term strategies, including: maintaining the highest standards in providing the Carlisle Experience to our customers, investing in high-return projects to drive organic growth across our core platforms, working an active pipeline of acquisition targets, returning capital to shareholders in the form of share repurchases and dividends, continuing on our ESG journey, and demonstrating the exceptional and sustainable earnings power of the Carlisle business model.
CCM continues to benefit from the strong re-roofing cycle in the United States. In the first quarter, CCM delivered mid-single digit growth, demonstrating the continued resilience of this demand. Energy-efficient building envelope products and solutions for nonresidential buildings are non-discretionary and can only be deferred for so long. This is highlighted by the inclement weather experienced in North America in February only temporarily impacting sales at CCM, with March volumes more than offsetting during the quarter.
On April 20th, Carlisle announced plans to invest more than $60 million to build an innovative, state-of-the-art manufacturing facility in Sikeston, Missouri. Consistent with Carlisle’s strategy to invest in high-returning businesses, the plant will support organic growth initiatives and also create jobs for the city of Sikeston and surrounding communities. The building will be constructed in accordance with the latest advances in LEED building and ESG principles. Additionally, we expect that this central location will both reduce the carbon footprint of CCM’s supply chain and improve material lead times for customers in this region where the use of insulation in the building envelope is steadily increasing. At this new facility, CCM will manufacture energy-efficient polyiso insulation, which not only lowers energy costs for building owners and operators, but also helps reduce a building’s GHG emissions.
While CCM generated most of our earnings in the first quarter of 2021, our smaller businesses exhibited significant progress. CIT’s results were in line with subdued expectations given the ongoing disruption in the commercial aerospace market. Given improving leading indicators, which include expanding vaccine rollout, increasing numbers of domestic travelers, growing aircraft manufacturers’ backlogs, and improvements in CIT’s order book, we believe CIT is positioned for sequential improvement going forward. Taken together with the improving backlog in our Medical Technologies business, we are optimistic CIT will return to growth in the second half of 2021.
CFT delivered improved revenue and operating income performance in the quarter driven by a commitment to new product introductions, price discipline and integrating our newer platforms. With end markets strengthening, especially general industrial, the team continues to execute on Vision 2025 initiatives and focus on enhancing our customers’ experience.
At CBF, the significant actions taken to improve the business over the past few years are yielding expected results. In addition to these actions, demand for off-highway vehicles and equipment, especially in Agricultural and Construction markets, is helping to drive CBF’s recovery. CBF has leveraged this volume growth to deliver positive and accelerating earnings. As a result, we are optimistic that 2021 will prove to be an inflection year for CBF as it emerges from a multi-year down cycle. Additionally, we view any future infrastructure legislation in the U.S. as another positive driver for CBF.
I am also pleased that our ESG efforts continue to gain momentum. We recently published our 2020 Sustainability Report in conjunction with the launch of a new, award-winning ESG focused website. These launches collectively share details of Carlisle’s century-long journey and provide a deeper look into the socially responsible approach we undertake to create value for all stakeholders, including customers, employees, suppliers, shareholders and the communities in which we operate. Additionally, our Sustainability team, along with CCM, held our inaugural ‘Innovation for Sustainable Building’ seminar in March in which over 200 stakeholders participated.
We remain balanced in our capital deployment approach, investing in our businesses, repurchasing $150M of shares and maintaining our dividend payments during the quarter. Our M&A pipeline has strengthened over the past several months, and we expect to be active in augmenting our core businesses with synergistic acquisitions.
Vision 2025 continues to provide Carlisle clear direction. We have stayed the course on our strategy throughout the past year and have regained positive momentum across all segments. We are now well positioned to accelerate through the recovery.”
First Quarter 2021
Revenue of $1.03 billion was flat year-over-year. Organic revenue declined 1.4% (organic revenue defined as revenue excluding acquired revenues within the last 12 months and the impact of changes in foreign exchange rates versus the U.S. Dollar). Acquired revenues contributed a total of 0.4% in the quarter. Changes in foreign exchange rates had a positive 0.9% impact on revenues.
Operating income for the first quarter of $89.5 million decreased 12.9% from $102.7 million in the first quarter of 2020. Net income for the first quarter of $52.2 million decreased 15.5% from $61.8 million in the first quarter of 2020. Adjusted EBITDA for the first quarter of 2021 of $148.2 million decreased 11.4% from $167.2 million in the first quarter of 2020.
Diluted EPS for the first quarter of $0.97 decreased 11.0% from $1.09 in the first quarter of 2020. Adjusted diluted EPS for the first quarter of $1.47 decreased 12.0% from $1.67 in the first quarter of 2020. The decline in EPS reflects lower operating results at CIT and higher corporate expense, partially offset by strength at CCM, CFT, CBF and share repurchases.
First Quarter 2021 Segment Highlights
Carlisle Construction Materials (CCM)
–Revenues of $719.3 million, up 6.3% (+5.7% organic) year-over-year, were driven by strength of U.S. commercial roofing demand, our Architectural Metals platform and growth in Europe.
–Operating income was $121.3 million, up 12.6% year-over-year. Operating margin of 16.9%, a 100 basis point improvement, was driven by higher volumes, lower operating expenses and savings from COS, partially offset by raw material and wage inflation.
–Adjusted EBITDA was $144.8 million, up 9.0% year-over-year, reflecting an adjusted EBITDA margin of 20.1%, a 50 basis point improvement.
–We now expect full year sales to be up low double digits.
Carlisle Interconnect Technologies (CIT)
–Revenues of $155.8 million, down 30.6% (-31.5% organic) year-over-year, were negatively impacted by a significant decline in orders from aerospace customers, partially offset by improving demand for medical products.
–Operating loss was $10.7 million. Operating margin of -6.9%, was affected by lower volumes, unfavorable mix and wage and raw material inflation, partially offset by savings from COS and lower operating expenses.
–Adjusted EBITDA was $11.0 million, down 72.3% year-over-year, reflecting an adjusted EBITDA margin of 7.1%, a 1,060 basis point decline.
–We continue to expect full year sales to be down mid-single to high-single digits.
Carlisle Fluid Technologies (CFT)
–Revenues of $65.8 million, up 12.9% (+5.3% organic) year-over-year, reflected strength in general industrial markets, price and acquisitions, partially offset by weakness in transportation markets.
–Operating income was $4.3 million. Operating margin of 6.5% reflected higher volumes, price, savings from COS and lower operating expenses, partially offset by wage and raw material inflation.
–Adjusted EBITDA was $10.2 million, down 18.4% year-over-year, reflecting an adjusted EBITDA margin of 15.5%, a 590 basis point decline.
–We continue to expect full year sales to be up low double digits.
Carlisle Brake & Friction (CBF)
–Revenues of $88.1 million, up 24.1% (+20.4% organic) year-over-year, reflected improved demand in Construction and Agricultural off-highway vehicle end markets.
–Operating income was $6.1 million. Operating margin of 6.9% was driven by increased volume, lower restructuring and savings from COS, partially offset by unfavorable mix and raw material inflation.
–Adjusted EBITDA was $11.7 million, up 125.0% year-over-year, reflecting an adjusted EBITDA margin of 13.3%, a 600 basis point improvement.
–We now expect full year sales to be up over thirty percent.
Operating cash flow for the three months ended March 31, 2021 was $67.6 million, an increase of $14.4 million versus the prior year. Free cash flow (defined as cash provided by operating activities less capital expenditures, and comprised of continuing and discontinued operations) was $47.6 million for the three months ended March, 31 2021, an increase of $17.2 million versus the prior year. Our priorities for the use of cash are to invest in growth and performance improvement opportunities for our existing businesses through capital expenditures, complete strategic acquisitions that meet return criteria and return value to shareholders through dividend payments and share repurchases.
During the three months ended March 31, 2021, we deployed $150.0 million in share repurchases and $28.4 million in dividends paid. As of March 31, 2021, we had $767.2 million of cash and $1.0 billion of availability under our revolving credit facility.
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About Carlisle Companies Incorporated
Carlisle Companies Incorporated is a diversified industrial company with a global portfolio of niche brands that delivers energy efficient and highly engineered products and solutions for its customers. Driven by our strategic plan, Vision 2025, Carlisle is committed to generating superior shareholder returns by investing in high-ROIC businesses and maintaining a balanced capital deployment approach, including investments in our businesses, strategic acquisitions, share repurchases and continued dividend increases. Carlisle is headquartered in Scottsdale, Arizona. Its worldwide team of employees generated $4.2 billion in revenues in 2020.
Jim Giannakouros – Vice President of Investor Relations & FP&A – firstname.lastname@example.org – (480) 781-5135
Source: Carlisle Companies Incorporated