2nd Quarter 2011 Earnings Call Presentation
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Transcript of 2nd Quarter 2011 Earnings Call Presentation
Carlisle Companies Earnings Callp g2nd Quarter June 30, 2011
Forward Looking Statements
During the course of this presentation we may make projections or other
g
During the course of this presentation, we may make projections or otherforward-looking statements within the meaning of the Private SecuritiesLitigation Reform Act of 1995.
We wish to caution you that such statements reflect only our currentexpectations, and that actual events or results may differ materially dueto changes in global economic business competitive market andto changes in global economic, business, competitive, market andregulatory factors.
More detailed information about these factors is contained in thedocuments that the Company files from time to time with the Securitiesand Exchange Commission. We undertake no obligation to update suchprojections or such forward-looking statements in the future.projections or such forward looking statements in the future.
2
Highlights of Q2 2011 Net sales up 27% Organic up 14%
g g Q
Financial Summary Organic up 14% Growth led by Brake & Friction,
Construction Materials and Interconnect Technologies
In Millions, except per share amounts Q2 '11 Q2 '10 ∆
Net Sales 870.8$ 687.6$ 27%
Earnings Before Interest andTechnologies $84 million from Hawk acquisition, 12%
EBIT Margin of 9.8%, up 50 bpsM i f H k 18 7%
Earnings Before Interest and Income Taxes (EBIT) 85.4 64.0 33%
EBIT Margin 9.8% 9.3% 50 bps
Income from Continuing Operations, Net of Tax 55.3 38.8 43%
Margin for Hawk was 18.7% Continued earnings pressure from raw
material increases
Continuing Operations Diluted Earnings per Share 0.87$ 0.62$ 40%
Continuing Operations EPS of $0.87, up 40%
Announced agreement to acquire PDT in Announced agreement to acquire PDT in Germany
Continued sales and earnings improvement despite raw material impact
3
Outstanding performance from Hawk / Brake & Friction segment
Sales Bridgeg
$870.8900
1,000Organic +14.1%
+12.1% +0.4%
Volume +9.8%
$687.6700
800
Millions +4.3%
500
600$ in
Organic by SegmentConstruction 19%Transportation 6%Brake & Friction 33%Interconnect 15%
300
400
' i l / h / '
Interconnect 15%FoodService 3%
Q2 '10 Price Volume / Oth Acq F/X Q2 '11
27% Sales Growth: 14% Organic, 12% Acquisition
4
Margin Bridgeg g
Q2 '10 RawMat Price Volume COS Acq Other Op Q2 '11
9.8%9.3%0.9%
‐4.6%10.0%
12.0%Q2 10 Raw Mat Price Volume COS Acq Other Op Q2 11
‐1.6%0.9%
1.1%
1.5%
3.2%
6 0%
8.0%
argi
n
4.0%
6.0%
EBIT
M
EBIT $64 0 Million EBIT $85 4 Million0.0%
2.0%
Hawk acquisition continues to add marginff COS
EBIT - $64.0 Million EBIT - $85.4 Million33%
5
Raw material increases offset by volume, price and COS
C li l C t ti M t i lCarlisle Construction MaterialsQ2 2011 Results
19% sales growth
Reroofing demand still high
Selling price added 2 5%$345.8
$412.0
40.0%
45.0%
50.0%
$350
$400
$45019%
Selling price added 2.5%
EBIT increased 6% from $51.3M in 2010 to $54.2M in 2011
25.0%
30.0%
35.0%
$250
$300
$350
Mill
ions
Negative $19 million impact from raw materials over prior year
35% increase in EPDM Rubber14.8%
13.2%
10 0%
15.0%
20.0%
25.0%
$100
$150
$200
$ in
M
24% increase in Carbon Black
10% increase in TPO Resin
I t f t i l ti ll ff t b
0.0%
5.0%
10.0%
$0
$50
Q2 '10 Q2 '11 Impact of raw material partially offset by
organic growth and COS
Strong reroofing market
Sales Margin
6
g gSome selling price realization; Increases announced for Q3
Carlisle Transportation ProductsQ2 2011 Results
Sales growth of 6% Selling price increase of $18M, 9% Higher demand in Agriculture and $192.0 $204.3 3.5%
3.5%
$200
$250
6%
Power Sports Offset by lower demand in OPE and
Construction3 4%
3.4%$150
$200
illio
ns
EBIT margin unchanged Production inefficiencies at Jackson
offset savings from restructuring expense and plant consolidation
3.3% 3.3%
3 3%
3.3%
3.4%
$50
$100
$ in
Mi
expense and plant consolidation Raw material cost increases recovered by
selling price Natural Rubber up 44%
3.2%
3.3%
$0
$50
Q2 '10 Q2 '11
Continued raw material increases mitigated by selling price
Natural Rubber up 44% Synthetic Rubber up 52% Sales Margin
7
New plant inefficiencies impacting results
Carlisle Brake & FrictionQ2 2011 Results
$119.4
$120
$140 Hawk contributed $83.5 million to Net
Sales and $15.6 million to EBIT 18 7% margin
$80
$100
$120
lions
18.7% margin Organic sales growth of 33% driven by
demand in global Agriculture, Construction and Mining
356%
$26.2
16.2%
$40
$60
$ in
MilConstruction and Mining
510 bps increase in EBIT margin Hawk driver of margin
improvement11.1%
$0
$20
Q2 '10 Q2 '11
improvement Demand conditions favorable due to
commodity prices and infrastructure growth in developing markets
Sales Hawk Margin
g p g
Record performance for Hawk and core braking business
8
p gOutlook continues to be favorable
Carlisle Interconnect TechnologiesQ2 2011 Results
Sales growth 15% 20% growth in Aerospace from legacy
Boeing programs and in-flight $62.4
$71.7
25.0%
30.0%
$70
$8015%
g p g gentertainment
8% growth in Military sales Boeing 787 program ramping up
16.3%
15 0%
20.0%
$40
$50
$60
illio
ns
g p g p g p
95% increase in EBIT and 670 bps margin improvement
9.6%
5 0%
10.0%
15.0%
$20
$30
$40
$ in
M
COS added 250 bps to margin
Plant consolidation and restructuring savings added 130 bps
0.0%
5.0%
$0
$10
Q2 '10 Q2 '11g pSales Margin
9
Outstanding sales performance and EBIT leverage
C li l F dS i P d tCarlisle FoodService ProductsQ2 2011 Results
Sales growth 4% (organic growth 3%)
Selling price added 3%
Foodservice sales up 11%
$61.2 $63.4
25.0%
30.0%
$60
$704%
Foodservice sales up 11% overall despite flat industry trend
Healthcare sales down 9% 15.0%
20.0%
$40
$50
Mill
ions
EBIT margin decline from 10.3% to 8.4%
Selling price increases were
10.3%8.4%
5 0%
10.0%$20
$30
$ in
M
Selling price increases were more than offset by higher raw material and freight costs 0.0%
5.0%
$0
$10
Q2 '10 Q2 '11
Growth in foodservice market
Sales Margin
10
Higher raw material and freight costs mitigated by selling price
Strong Balance SheetgDebt Maturity Schedule
In millions
$369$400
$500
Available Under
In millions
Cash on Hand of $99M
Revolving Credit Facility
$300
$400 Revolver at 6/30/11
Revolving Credit Facility availability of $369M
Acquisition of PDT in Germany for €80 to be funded with cash
$200Senior Notes $249M
for €80 to be funded with cash on hand and revolver
Debt to Cap ratio of 26%
LC, $31
Drawn, $100
$0
$100IRB & Other
Senior Notes $149M
$249M Debt to EBITDA of 1.5
$0
2012 2016 2018 2020
Well-positioned for further investment in acquisitions, new
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product development and capital expenditures
Cash Flow by Quartery Q
$40
$50
$20
$30
ions
$10
$0
$10
$ in
Mill
-$30
-$20
-$10
Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11
Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11
Operating Cash Flow Capital Expenditures Free Cash Flow
Cash flow impacted by sales growth; 81% global growth in Q2 with Hawk
Q2 10 Q3 10 Q4 10 Q1 11 Q2 11Operating Cash Flow $37.4 $41.9 $45.0 ($0.3) $14.0Capital Expenditures (23.2) (15.2) (17.8) (16.9) (16.9)Free Cash Flow 14.2 26.7 27.2 (17.2) (2.9)
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Cash flow impacted by sales growth; 81% global growth in Q2 with Hawk
Working Capital as a % of Net Sales32.0%
28.0%
30.0%
26.0%
24.0%
Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '1120.0%
22.0%
Working Capital reflects average of quarter ending Receivables plus Inventory less Accounts Payable. % of Net Sales calculated using average Working Capital over annualized year-to-date Net Sales.
M i ki it l hi h l l
Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11WC as a % of Net Sales 30.4% 26.4% 25.1% 24.9% 23.5% 21.4% 21.6% 22.0% 23.4% 21.7%
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Managing working capital on higher sales volume
Q & AQ
14
Carlisle 2011 Outlook
Sales growth from Hawk & PDT acquisitions and segment Sales growth from Hawk & PDT acquisitions and segment organic growth totaling mid-twenty percent range
Continued margin improvement, primarily from Brake & Friction and Interconnect Technologies
Cash conversion expected to be greater than 100% for the year (Ratio of Free Cash Flow before Dividends to Net Income)( )
Corporate Expense - $41M
Depreciation & Amortization - $93M Depreciation & Amortization $93M
Interest Expense - $21M
Tax Rate – 33% Tax Rate – 33%
Capital Expenditures - $75M
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