CARLISLE COMPANIES INC, 10-Q filed on 10/26/2010
Quarterly Report
Consolidated Statements of Earnings (USD $)
In Millions, except Per Share data
3 Months Ended
Sep. 30,
9 Months Ended
Sep. 30,
2010
2009
2010
2009
Net sales
$ 666 
$ 604 
$ 1,901 
$ 1,734 
Cost and expenses:
 
 
 
 
Cost of goods sold
522 
460 
1,502 
1,356 
Selling and administrative expenses
72 
65 
215 
203 
Research and development expenses
17 
12 
Gain related to fire settlement
 
 
 
(27)
Other (income) expense, net
(0)
(2)
Earnings before interest and income taxes
67 
74 
169 
184 
Interest expense, net
Income before income taxes
65 
72 
164 
177 
Income tax expense
18 
25 
56 
58 
Income from continuing operations, net of tax
47 
47 
109 
119 
Discontinued operations
 
 
 
 
Income (loss) from discontinued operations
(1)
(16)
Income tax expense (benefit)
(1)
(6)
Income (loss) from discontinued operations, net of tax
(1)
(11)
Net income
51 
47 
113 
109 
Basic earnings per share attributable to common shares
 
 
 
 
Income from continuing operations, net of tax (in dollars per share)
0.76 
0.77 
1.77 
1.95 
Income (loss) from discontinued operations, net of tax (in dollars per share)
0.06 
(0.01)
0.08 
(0.17)
Basic earnings per share (in dollars per share)
0.82 
0.76 
1.85 
1.78 
Diluted earnings per share attributable to common shares
 
 
 
 
Income from continuing operations, net of tax (in dollars per share)
0.75 
0.76 
1.75 
1.93 
Income (loss) from discontinued operations, net of tax (in dollars per share)
0.06 
(0.01)
0.08 
(0.17)
Diluted earnings per share (in dollars per share)
0.81 
0.75 
1.83 
1.76 
Dividends declared and paid per share (in dollars per share)
$ 0.17 
$ 0.16 
$ 0.49 
$ 0.47 
Consolidated Balance Sheets (USD $)
In Millions
Sep. 30, 2010
Dec. 31, 2009
Current assets:
 
 
Cash and cash equivalents
$ 115 
$ 96 
Receivables, less allowance of $9.2 in 2010 and $7.8 in 2009
396 
287 
Inventories
383 
338 
Deferred income taxes
43 
38 
Prepaid expenses and other current assets
25 
27 
Current assets held for sale
24 
13 
Total current assets
984 
800 
Property, plant and equipment, net of accumulated depreciation of $537.3 in 2010 and $505.9 in 2009
456 
461 
Other assets:
 
 
Goodwill, net
451 
462 
Other intangible assets, net
154 
163 
Investments and advances to affiliates
Other long-term assets
Non-current assets held for sale
22 
24 
Total other assets
632 
653 
TOTAL ASSETS
2,071 
1,914 
Current liabilities:
 
 
Accounts payable
181 
133 
Accrued expenses
149 
144 
Deferred revenue
19 
17 
Current liabilities associated with assets held for sale
10 
Total current liabilities
360 
301 
Long-term liabilities:
 
 
Long-term debt
156 
156 
Deferred revenue
118 
113 
Other long-term liabilities
119 
125 
Total long-term liabilities
393 
394 
Shareholders' equity:
 
 
Preferred stock, $1 par value per share. Authorized and unissued 5,000,000 shares
 
 
Common stock, $1 par value per share. Authorized 100,000,000 shares; 78,661,248 shares issued in 2010 and 2009; 60,985,810 outstanding in 2010 and 60,606,425 outstanding in 2009
79 
79 
Additional paid-in capital
89 
74 
Cost of shares of treasury - 17,675,438 shares in 2010 and 18,054,823 shares in 2009
(222)
(224)
Accumulated other comprehensive loss
(35)
(35)
Retained earnings
1,408 
1,324 
Total shareholders' equity
1,319 
1,219 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 2,071 
$ 1,914 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data
Sep. 30, 2010
Dec. 31, 2009
Consolidated Balance Sheets
 
 
Receivables, allowance (in dollars)
$ 9 
$ 8 
Property, plant and equipment, accumulated depreciation (in dollars)
537 
506 
Preferred stock, par value (in dollars per share)
Preferred stock authorized
5,000,000 
5,000,000 
Preferred stock unissued
5,000,000 
5,000,000 
Common stock, par value (in dollars per share)
$ 1 
$ 1 
Common stock authorized
100,000,000 
100,000,000 
Common stock issued
78,661,248 
78,661,248 
Common stock outstanding
60,985,810 
60,606,425 
Treasury shares
17,675,438 
18,054,823 
Consolidated Statements of Cash Flows (USD $)
In Millions
9 Months Ended
Sep. 30,
2010
2009
Operating activities
 
 
Net income
$ 113 
$ 109 
Reconciliation of net income to cash flows provided by operating activities:
 
 
Depreciation
45 
43 
Amortization
Non-cash compensation
10 
11 
Earnings in equity investments
 
(0)
Gain on sale of property and equipment, net
(4)
(1)
Loss on writedown of assets
 
11 
Gain on insurance settlements related to property, plant and equipment
 
(24)
Deferred taxes
(6)
Change in tax benefits from stock-based compensation
(2)
Foreign exchange (gain) loss
(1)
(2)
Changes in assets and liabilities, excluding effects of acquisitions and divestitures:
 
 
Current and long-term receivables
(115)
Inventories
(54)
163 
Accounts payable and accrued expenses
60 
(9)
Income taxes
42 
Long-term liabilities
(19)
Other operating activities
(1)
(2)
Net cash provided by operating activities
62 
333 
Investing activities
 
 
Capital expenditures
(47)
(35)
Acquisitions, net of cash
 
(33)
Proceeds from sale of property and equipment
Proceeds from insurance settlements related to property, plant and equipment
 
30 
Proceeds from sale of business
21 
 
Other investing activities
(0)
Net cash used in investing activities
(21)
(31)
Financing activities
 
 
Net change in short-term borrowings and revolving credit lines
 
(235)
Dividends
(30)
(29)
Treasury shares and stock options, net
(0)
Change in tax benefits from stock-based compensation
(0)
Net cash used in financing activities
(24)
(264)
Effect of exchange rate changes on cash
(0)
Change in cash and cash equivalents
19 
39 
Cash and cash equivalents
 
 
Beginning of period
96 
43 
End of period
$ 115 
$ 81 
Basis of Presentation
Basis of Presentation

Note 1 - Basis of Presentation

 

The accompanying unaudited consolidated financial statements have been prepared by Carlisle Companies Incorporated (the “Company” or “Carlisle”) in accordance and consistent with the accounting policies stated in the Company’s 2009 Annual Report on Form 10-K and should be read in conjunction with the consolidated financial statements in Part II, Item 8 of the Company’s 2009 Annual Report on Form 10-K.  The unaudited consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States and, of necessity, include normal recurring adjustments and some amounts that are based upon management estimates and judgments.  Actual results could differ from current estimates.  The unaudited consolidated financial statements include assets, liabilities, revenues, and expenses of all majority-owned subsidiaries.  Intercompany transactions and balances are eliminated in consolidation.

Reclassifications and Revisions
Reclassifications and Revisions

Note 2 — Reclassifications and Revisions

 

Certain reclassifications and revisions have been made to prior period information either to conform to the current year presentation or to reflect a change in presentation as follows:

 

·                  The Unaudited Consolidated Statement of Cash flows for the first nine months of 2009 has been revised to reflect the classification as an investing cash inflow of $30 million of proceeds received from the Company’s insurance carriers related to destroyed property, plant and equipment as a result of the fire that occurred at the Company’s tire and wheel plant in Bowdon, GA that was previously classified in net cash provided by operating activities.  The amounts previously presented for cash provided by operating activities for first nine months of 2009 was $363.4 million and cash used in investing cash flows was $61.0 million.  The revised amount for net cash provided by operating activities is $333.4 million and the revised amount for cash used in investing activities is $31.0 million.  See Note 4 for further discussion of the Bowdon, GA plant fire.

 

·                  The Unaudited Consolidated Statements of Earnings for the third quarter and first nine months of 2009 have been revised to reflect the presentation of Earnings before interest and income taxes (“EBIT”).

 

·                  The Unaudited Consolidated Statements of Earnings for the third quarter and first nine months of 2009 have been revised to reflect the reclassification of the power transmission product line from discontinued operations to continuing operations and to reflect the classification of the refrigerated truck bodies business and specialty trailer businesses as discontinued operations. The Consolidated Balance Sheet as of December 31, 2009 reflects the classification of the assets and associated liabilities of the specialty trailer business as held for sale consistent with the presentation at September 30, 2010.  See Note 9 for additional information regarding discontinued operations and assets held for sale.

 

·                  The segment disclosures for the third quarter and first nine months of 2009 in Note 15 have been revised to reflect the formation in the fourth quarter of 2009 of the Engineered Transportation Solutions segment that combined the previous tire and wheel, industrial brake and friction and the power transmission product lines; the classification of the power transmission product line as a continuing operation and its associated assets as held and used; the classification of the refrigerated truck bodies business and specialty trailer businesses as discontinued operations; and the use of EBIT as the measure of segment profitability.

New Accounting Pronouncements
New Accounting Pronouncements

Note 3 —New Accounting Pronouncements

 

New accounting standards adopted

 

There were no new accounting standards adopted in the first nine months of 2010 and 2009.

 

New accounting standards issued but not yet adopted

 

There are currently no accounting standards that have been issued that are expected to have a significant impact on the Company’s financial position, results of operations and cash flows upon adoption.

Fire Gain
Fire Gain

Note 4 - Fire Gain

 

On November 16, 2008, a fire occurred at the tire and wheel plant in Bowdon, GA, and as a result the building and the majority of the machinery, equipment, records and other assets were destroyed. In order to service customers, partial operations were initiated at a facility in Heflin, AL, and some production was transferred to other tire and wheel plants or outsourced to third parties.

 

In the fourth quarter of 2008, while the Company was negotiating its claim, a pretax loss was recorded representing the deductible of $0.1 million. The net result of fire-related transactions in the first quarter of 2009 was a $2.5 million pretax gain, which included a $2.6 million pretax gain on the settlement of the inventory claim which was the difference between $8.9 million, representing the loss on inventory recorded in the fourth quarter of 2008 for which a receivable was recorded at December 31, 2008, and $11.5 million of cash proceeds received from the insurance carriers to settle the inventory claim in the first quarter of 2009. Total payments of $13.5 million were received from the insurance carriers in the first quarter of 2009.

 

The net result of fire-related transactions in the second quarter of 2009 was a $24.5 million pretax gain on the settlement of all other claims and that amount was reported as Gain related to fire settlement. This gain was the difference between the $41.0 million of cash proceeds received from the insurance carriers in settlement of all outstanding claims and the $11.2 million insurance claims receivable balance at March 31, 2009 included in Prepaid expenses and other current assets for a portion of the expected insurance reimbursements plus $5.3 million, representing fire-related cost in the second quarter of 2009.

 

From January 1, 2009 through June 30, 2009 cash proceeds of $54.5 million were received from the insurance carriers. Losses and cost incurred from November 16, 2008 through June 30, 2009 of $27.6 million included $8.9 million of inventory; $5.7 million of building, machinery, equipment and other assets; and $13.0 million of fire-related cost. The $26.9 million pretax gain from November 16, 2008 through June 30, 2009 was the difference between cash proceeds of $54.5 million and the losses of $27.6 million. On a quarterly basis, a loss of $0.1 million was recorded in the fourth quarter of 2008, a gain of $2.5 million was recorded in the first quarter of 2009, and a gain of $24.5 million was recorded in the second quarter of 2009.

 

A minimal amount of fire-related scrap was sold in the third quarter of 2009. Since all insurance claims due to this fire were settled with the carriers no additional insurance proceeds are anticipated.

Borrowings
Borrowings

Note 5 - Borrowings

 

At September 30, 2010, the fair value of the Company’s par value $150 million, 6.125% senior notes due 2016, using Level 2 inputs, is approximately $173 million. The fair value of the Company’s senior notes is based on current market interest rates and the Company’s estimated credit spread available for financings with similar terms and maturities.

Fair Value Measurements
Fair Value Measurements

Note 6 -Fair Value Measurements

 

Recurring Fair Value Measurements

 

The fair value of the Company’s assets and liabilities measured at fair value on a recurring basis were as follows:

 

 

 

Balance at
September 30,

 

Quoted Prices in
Active Markets
for Identical
Assets

 

Significant
Other
Observable
Inputs

 

Significant
Unobservable
Inputs

 

In millions

 

2010

 

Level 1

 

Level 2

 

Level 3

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

114.8

 

$

114.8

 

$

 

$

 

 

Nonrecurring Fair Value Measurements

 

For the third quarter and first nine months of 2010 there were no nonrecurring fair value measurements.

 

For the third quarter and first nine months of 2009, the Company measured certain non-financial assets at fair value on a nonrecurring basis.  These measurements were primarily the result of management’s decision to consolidate certain manufacturing facilities within the Engineered Transportation Solutions, Specialty Products and Interconnect Technologies segments. Refer to Note 19 for further information regarding exit and disposal activity. The following table depicts the non-recurring fair value measurements discussed below by asset category and the level within the fair value hierarchy in which the related assumptions were derived.

 

 

 

Balance at
September 30,

 

Quoted Prices in
Active Markets
for Identical
Assets

 

Significant
Other
Observable
Inputs

 

Significant
Unobservable
Inputs

 

Total
Gains

 

In millions

 

2009

 

Level 1

 

Level 2

 

Level 3

 

(Losses)

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-lived assets held for sale

 

$

1.8

 

$

 

$

1.6

 

$

0.2

 

$

(3.8

)

Long-lived assets held and used

 

1.1

 

 

 

1.1

 

(7.2

)

Other intangible assets

 

 

 

 

 

(0.4

)

 

 

 

 

 

 

 

 

 

 

$

(11.4

)

 

In the third quarter of 2009, the Company measured certain non-financial assets at fair value on a nonrecurring basis within the Construction Materials segment, resulting in a total impairment charge of $1.6 million, which was included in other (income) expense, net. These measurements were based on fair value determination of certain long-lived assets within a specialized segment of its commercial roofing operations using Level 3 inputs.  Intangible assets consisting of a licensing agreement with a carrying amount of $0.4 million were written down to a fair value of zero, resulting in an impairment charge of $0.4 million, based on management’s determination of the usefulness of the technology underlying the license agreement in the current market. In addition, certain property, plant and equipment with a carrying value of $2.3 million were written down to a fair value of $1.1 million, resulting in an impairment charge of $1.2 million.  The determination was based upon management’s evaluation of future cash flows from this production equipment and net realizable value.

 

For the first nine months of 2009, the Company measured other non-financial assets at fair value on a nonrecurring basis as follows:

 

·                  Within the tire and wheel product line of the Engineered Transportation Solutions segment, property, plant and equipment relating to facilities in Carlisle, PA, Heflin, AL and Buji, China with a carrying amount of $2.8 million were written down to a fair value of zero, resulting in an impairment charge of $2.8 million, which was included in other (income) expense, net for the first nine months of 2009.  This fair value measurement of the impaired assets was based on Level 3 inputs.  The Level 3 inputs reflected management’s determination that impaired leasehold improvements assets could not be transferred upon consolidation of operations into the new facility in Jackson, TN.  In addition, it was management’s determination that machinery and equipment subject to the impairment charge was estimated to have zero net realizable value based on current utility.  Also, during the first nine months of 2009, within the tire and wheel product line of the Engineered Transportation Solutions segment, property, plant and equipment with a carrying amount of $2.9 million were written down to a fair value of zero, resulting in an impairment charge of $2.9 million, which was included in other (income) expense, net. The fair value determination was based upon Level 3 inputs reflecting management’s determination of the net realizable value of the assets. Such assets primarily reflected leasehold improvements in its Buji, China operations that could not be transferred upon consolidation of production into Meizhou, China.

 

·                  Within discontinued operations related to the Company’s specialty trailer business, property, plant and equipment relating to the closure of its facility in Brookville, PA classified as held for sale as of September 30, 2009 with a carrying amount of $5.6 million were written down to a fair value of $1.8 million, resulting in a pre-tax impairment charge of $3.8 million, which has been included in discontinued operations, net of tax for the first nine months of 2009.  A fair value measurement of $1.6 million for land, building and leasehold improvements, which resulted in a pre-tax impairment charge of $3.3 million, was based on Level 2 inputs.  The land and building were subsequently sold in the first half of 2010 for $2.7 million resulting in a pre-tax gain of $1.1 million that is included in discontinued operations, net of tax for first nine months of 2010.  A fair value measurement of $0.2 million for machinery and equipment, which resulted in a $0.5 million pre-tax impairment charge that is included in discontinued operations, net of tax, was based on Level 3 inputs reflecting management’s determination of the net realizable value of the assets.

 

·                  Within the Interconnect Technologies segment, property consisting of leasehold improvements with a carrying amount of $0.3 million was written down to a fair value of zero, resulting in an impairment charge of $0.3 million which was included in other operating expense for the third quarter of 2009.  The fair value measurement was based upon Level 3 inputs which reflected management’s determination that the leasehold improvements in the Company’s Kent, WA facility would not have any transferrable value upon consolidation of operating activities into another Company facility in Tukwila, WA.

Stock-Based Compensation
Stock-Based Compensation

Note 7— Stock-Based Compensation

 

During the third quarter and first nine months of 2010 and 2009, the Company expensed stock-based compensation awards under the 2004 Executive Incentive Program and the 2005 Nonemployee Director Equity Plan. A detailed description of the awards under these plans is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

 

Stock-Based Compensation Expense

 

Compensation expense recorded for all of the Company’s share-based compensation plans during the third quarter and first nine months of 2010 and 2009 was as follows:

 

 

 

Third Quarter

 

First Nine Months

 

(in millions, except per share amounts)

 

2010

 

2009

 

2010

 

2009

 

Pre-tax compensation expense

 

$

3.2

 

$

3.5

 

$

10.4

 

$

11.4

 

 

 

 

 

 

 

 

 

 

 

After-tax compensation expense

 

$

2.1

 

$

2.3

 

$

6.8

 

$

7.4

 

 

 

 

 

 

 

 

 

 

 

Impact on diluted EPS

 

$

0.03

 

$

0.04

 

$

0.11

 

$

0.12

 

 

Grants

 

In the first quarter of 2010 the Company awarded 590,020 stock options, 101,785 restricted stock awards and 101,785 performance share awards with an aggregate fair value of approximately $14.3 million to be expensed over the requisite service period for each award which generally equals the stated vesting period.

 

The grant date fair value of the 2010 stock options with a three-year graded vesting condition was estimated under the Black-Scholes-Merton formula using the following weighted-average assumptions:

 

Expected dividend yield

 

1.87

%

Expected life in years

 

5.75

 

Expected volatility

 

32.7

%

Risk-free interest rate

 

2.65

%

 

The Company initially granted performance shares in the first quarter of 2010.  The performance shares vest based on the employee rendering three years of service to the Company, and the attainment of a market condition over the performance period, which is based on the Company’s relative total shareholder return versus the S&P Midcap 400 Index® over a pre-determined time period as determined by the Compensation Committee of the Board of Directors.  The grant date fair value of the 2010 performance shares was estimated using a Monte-Carlo simulation approach.  Such approach entails the use of assumptions regarding the future performance of the Company’s stock and those of the peer group of companies.  Those assumptions include expected volatility, risk-free interest rates, correlation coefficients and dividend reinvestment.  Dividends accrue on the performance shares during the performance period and are to be paid in cash based upon the number of awards ultimately earned.

 

There were no significant grants of stock-based compensation awarded in the second or third quarters of 2010.

Acquisitions
Acquisitions

Note 8—Acquisitions

 

On October 1, 2009, the Company acquired the remaining 51% interest in Japan Power Brake, Inc. (“JPB”), a leading provider of high performance braking solutions for off-highway equipment, primarily in the mining and construction industries in Japan, for a purchase price of approximately $4.2 million. JPB is located in Atsugi, Japan and is under the management direction of the Engineered Transportation Solutions segment. The purchase price included an allocation of $0.9 million to other intangible assets reflecting a non-compete agreement with a useful life of 10 years. The remaining purchase price was allocated to current assets; property, plant and equipment; and current liabilities.

 

On October 1, 2009, the Company acquired 100% of the equity of Electronic Cable Specialists (“ECS”), a leading provider of electrical and structural products and services for the aviation, medical and industrial markets, for a purchase price of approximately $42.4 million. The acquisition of ECS expands Carlisle’s product and system reach into additional avionics applications and strengthens Carlisle’s engineering and design capabilities. ECS is located in Franklin, WI and is under the management direction of the Interconnect Technologies segment. The purchase price allocation resulted in current assets of $15.1 million; property, plant and equipment of $1.9 million; goodwill of $13.5 million; identified intangible assets of $14.5 million; and non-interest bearing current liabilities of $2.6 million. Of the $14.5 million of acquired intangible assets, $2.6 million was assigned to trade names that are not subject to amortization, $4.5 million was assigned to customer relationships with a determinable useful life of 17 years, and the remaining $7.4 million was assigned to other intangible assets with a weighted average useful life of 14.7 years. The goodwill from this acquisition is deductible for tax purposes.

 

On September 18, 2009, the Company acquired the assets of Jerrik, Inc. (“Jerrik”), a recognized leader in the design and manufacture of highly engineered military and aerospace filtered connectors, for approximately $33 million. The acquisition expands the Company’s range of products serving the defense and aerospace markets.  Jerrik is located in Tempe, AZ and is under the management direction of the Interconnect Technologies segment. The purchase price allocation resulted in current assets of $7.9 million; property, plant and equipment of $1.8 million; goodwill of $13.7 million; identified intangible assets of $10.8 million; and current liabilities of $1.2 million. Of the $10.8 million of acquired intangible assets, $0.2 million was assigned to trade names with determinable useful life of 2 years, $7.1 million was assigned to customer relationships with a determinable useful life of 18 years, and the remaining $3.5 million was assigned to other intangible assets with a weighted average useful life of 18.1 years. The goodwill from this acquisition is deductible for tax purposes.

 

The revenues and earnings for the third quarter and first nine months of 2009 of the above acquisitions when combined with those of the Company were not materially different than the reported results of each respective prior period.

Discontinued Operations and Assets Held for Sale
Discontinued Operations and Assets Held for Sale

Note 9—Discontinued Operations and Assets Held for Sale

 

On October 4, 2010, as part of its commitment to concentrate on its core businesses, the Company sold its specialty trailer business for cash proceeds of $35 million.  The final purchase price is subject to a working capital adjustment and the potential to receive an additional $5 million in proceeds based on future earnings.  The Company expects to record a gain on sale of $6.3 million in the fourth quarter of 2010.  Additional gains or losses on sale may be recorded in future periods based upon proceeds received from the Company’s share of any future earnings and the result of the final working capital adjustment.  The assets and associated liabilities of this business met the criteria for classification as held for sale as of September 30, 2010 and as a result the related results of operations have been classified as discontinued for all periods presented in the Unaudited Consolidated Statements of Earnings.  See Note 2 for further information regarding reclassifications and revisions.

 

On February 2, 2010, the Company sold all of the interest in its refrigerated truck bodies business for $20.3 million.  In July, 2010, additional proceeds of $0.3 million were received representing a working capital adjustment.  Including the working capital adjustment, the sale resulted in a gain of $1.9 million, which is reported in discontinued operations.  The final purchase price is subject to certain indemnifications made to the buyer, which could reduce the gain in subsequent periods.  The Company does not believe any such adjustments will result in a material change to the purchase price.

 

In the second quarter of 2008, the Company announced its decision to pursue disposition of its on-highway friction and brake shoe business.  During the first quarter of 2009, the Company made the decision to exit, rather than sell, the on-highway friction and brake shoe business and dispose of the assets as part of a planned dissolution.

 

In the second quarter of 2007, the Company announced plans to exit the custom thermoset products molding operation (“thermoset molding operation”). The disposition of the thermoset molding operation was completed in 2008.

 

Total assets held for sale were as follows:

 

 

 

September 30,

 

December 31,

 

In millions

 

2010

 

2009

 

Assets held for sale:

 

 

 

 

 

Specialty trailer business

 

$

42.6

 

$

34.9

 

Tire and wheel business

 

1.2

 

 

On-highway friction and brake shoe business

 

0.3

 

0.3

 

Thermoset molding operation

 

1.6

 

1.6

 

Total assets held for sale

 

$

45.7

 

$

36.8

 

 

 

 

 

 

 

Liabilities associated with assets held for sale:

 

 

 

 

 

Specialty trailer business

 

$

9.7

 

$

7.6

 

Total liabilities associated with assets held for sale

 

$

9.7

 

$

7.6

 

 

The assets held for sale by the tire and wheel business relate to land and building from its Long Beach, California facility, the operations of which were consolidated into its Ontario, California facility in 2009.

 

At September 30, 2010, the remaining assets of the on-highway friction and brake shoe business and those of the thermoset molding operation consisted of the land and building formerly occupied by the operation.

 

The major classes of assets and liabilities held for sale included in the Company’s Consolidated Balance Sheets were as follows:

 

 

 

September 30,

 

December 31,

 

In millions

 

2010

 

2009

 

Assets held for sale:

 

 

 

 

 

Receivables

 

$

11.4

 

$

5.4

 

Inventories

 

11.8

 

7.5

 

Prepaid expenses and other current assets

 

0.3

 

0.2

 

Total current assets held for sale

 

23.5

 

13.1

 

 

 

 

 

 

 

Property, plant and equipment, net

 

$

22.2

 

$

23.7

 

Other long term assets

 

 

 

Total non-current assets held for sale

 

22.2

 

23.7

 

Total assets held for sale

 

$

45.7

 

$

36.8

 

 

 

 

 

 

 

Liabilities associated with assets held for sale:

 

 

 

 

 

Accounts payable

 

$

5.2

 

$

3.0

 

Accrued expenses

 

4.5

 

4.6

 

Total liabilities associated with assets held for sale

 

$

9.7

 

$

7.6

 

 

Net sales and income (loss) before income taxes from discontinued operations were as follows:

 

 

 

Third Quarter

 

First Nine Months

 

In millions

 

2010

 

2009

 

2010

 

2009

 

Net sales:

 

 

 

 

 

 

 

 

 

Specialty trailer business

 

$

32.1

 

$

17.0

 

$

68.6

 

$

55.4

 

Refrigerated truck bodies business

 

 

11.5

 

$

4.6

 

$

35.0

 

On-highway friction and brake shoe business

 

 

2.8

 

 

19.9

 

Net sales from discontinued operations

 

$

32.1

 

$

31.3

 

$

73.2

 

$

110.3

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations:

 

 

 

 

 

 

 

 

 

Specialty trailer business

 

$

5.6

 

$

(1.2

)

$

5.5

 

$

(7.3

)

Refrigerated truck bodies business

 

0.4

 

0.7

 

$

0.5

 

$

2.8

 

On-highway friction and brake shoe business

 

(0.2

)

(0.2

)

1.4

 

(12.0

)

Thermoset molding operation

 

 

 

 

(0.1

)

Automotive components

 

(0.1

)

(0.2

)

 

(0.3

)

Systems and equipment

 

(0.1

)

(0.2

)

(0.5

)

0.6

 

Income (loss) before income taxes from discontinued operations

 

$

5.6

 

$

(1.1

)

$

6.9

 

$

(16.3

)

 

Results of the on-highway friction and brake shoe business for the nine months ended September 30, 2010 included a $2.1 million pretax gain on the sale of property.

 

Results for the first nine months of 2009 included $6.8 million of pre-tax expenses related to the planned dissolution of the on-highway friction and brake shoe business, including an inventory write-down of $3.4 million, property, plant and equipment impairment costs of $0.8 million, severance costs of $1.8 million and $0.8 million of contract termination costs.

Inventories
Inventories

Note 10 — Inventories

 

The Company is a diversified manufacturer comprised of multiple domestic and foreign operations manufacturing different products.  The First-in, First-out (“FIFO”) method is used to value inventories.

 

The components of inventories as of September 30, 2010 and December 31, 2009 were as follows:

 

 

 

September 30,

 

December 31,

 

In millions

 

2010

 

2009

 

Finished goods

 

$

237.6

 

$

204.1

 

Work-in-process

 

31.3

 

28.3

 

Raw materials

 

119.0

 

115.2

 

Reserves and variances - net

 

(5.4

)

(9.3

)

Inventories

 

$

382.5

 

$

338.3

 

Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets

Note 11— Goodwill and Other Intangible Assets

 

The changes in the carrying amount of goodwill as of September 30, 2010 were as follows:

 

 

 

Construction

 

Engineered

 

Interconnect

 

FoodService

 

Disc.

 

 

 

In millions

 

Materials

 

Trans. Solutions

 

Technologies

 

Products

 

Ops

 

Total

 

Balance at January 1, 2010 *

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

$

86.7

 

$

170.5

 

$

188.9

 

$

60.4

 

$

58.6

 

$

565.1

 

Accumulated impairment losses

 

 

(55.5

)

 

 

(47.4

)

(102.9

)

 

 

86.7

 

115.0

 

188.9

 

60.4

 

11.2

 

462.2

 

Goodwill written off related to sale of Business Unit

 

 

 

 

 

(11.2

)

(11.2

)

Currency translation

 

(0.4

)

 

 

 

 

(0.4

)

Goodwill

 

86.3

 

170.5

 

188.9

 

60.4

 

47.4

 

553.5

 

Accumulated impairment losses

 

 

(55.5

)

 

 

(47.4

)

(102.9

)

Balance at September 30, 2010

 

$

86.3

 

$

115.0

 

$

188.9

 

$

60.4

 

$

 

$

450.6

 

 


* January 1, 2010 figures have been restated to reflect the reclassification of the refrigerated truck bodies business and the specialty trailer business to discontinued operations.

 

The Company’s other intangible assets at September 30, 2010 were as follows:

 

 

 

Acquired

 

Accumulated

 

Net Book

 

In millions

 

Cost

 

Amortization

 

Value

 

Assets subject to amortization:

 

 

 

 

 

 

 

Patents

 

$

8.9

 

$

(7.9

)

$

1.0

 

Customer Relationships

 

147.5

 

(30.6

)

116.9

 

Other

 

20.4

 

(5.4

)

15.0

 

Assets not subject to amortization:

 

 

 

 

 

 

 

Trade names

 

20.9

 

 

20.9

 

Other intangible assets, net

 

$

197.7

 

$

(43.9

)

$

153.8

 

 

Estimated amortization expense for the remainder of 2010 and the next four years is as follows: $2.9 million remaining in 2010, $11.6 million in 2011, $10.4 million in 2012, $9.4 million in 2013 and $9.1 million in 2014.

 

The net book value of the Company’s other intangible assets by reportable segment are as follows:

 

 

 

September 30,

 

December 31,

 

In millions

 

2010

 

2009

 

 

 

 

 

 

 

Construction Materials

 

$

16.7

 

$

17.5

 

Engineered Transportation Solutions

 

5.0

 

6.7

 

Interconnect Technologies

 

90.4

 

94.7

 

FoodService Products

 

41.7

 

44.0

 

Total

 

$

153.8

 

$

162.9

 

Retirement Plans and Other Post-retirement Benefits
Retirement Plans and Other Post-retirement Benefits

Note 12—Retirement Plans and Other Post-retirement Benefits

 

Components of net periodic benefit cost were as follows:

 

 

 

Pension and Other Post-retirement Benefits

 

 

 

Third Quarter

 

First Nine Months

 

In millions

 

2010

 

2009

 

2010

 

2009

 

Service costs - benefits earned during the quarter

 

$

1.3

 

$

1.2

 

$

3.8

 

$

3.5

 

Discretionary contribution

 

0.1

 

0.1

 

0.3

 

0.3

 

Interest cost on benefits earned in prior years

 

2.4

 

2.6

 

7.1

 

7.9

 

Expected return on plan assets

 

(3.1

)

(3.1

)

(9.5

)

(9.2

)

Amortization of:

 

 

 

 

 

 

 

 

 

Unrecognized net actuarial loss

 

0.6

 

0.4

 

1.9

 

0.9

 

Prior service costs

 

(0.1

)

(0.1

)

0.1

 

(0.1

)

Net periodic benefit costs

 

$

1.2

 

$

1.1

 

$

3.7

 

$

3.3

 

 

The Company made contributions of $1.0 million to the pension plans during the third quarter of 2010.  The Company expects to contribute approximately $4.0 million to the pension plans in 2010.

 

The Company maintains defined contribution plans to which it has contributed $7.0 million during the first nine months of 2010.  Full year contributions are expected to approximate $9.4 million.

Other Long-Term Liabilities
Other Long-Term Liabilities

Note 13—Other Long-Term Liabilities

 

The components of other long-term liabilities were as follows:

 

 

 

September 30,

 

December 31,

 

In millions

 

2010

 

2009

 

Deferred taxes and other tax liabilities

 

$

99.4

 

$

103.2

 

Pension and other post-retirement obligations

 

15.4

 

16.8

 

Long-term warranty obligations

 

0.6

 

1.4

 

Other

 

3.8

 

3.7

 

Other long-term liabilities

 

$

119.2

 

$

125.1

 

Commitments and Contingencies
Commitments and Contingencies

Note 14—Commitments and Contingencies

 

Extended Product Warranties

 

The Company offers various warranty programs on its installed roofing systems, braking products, aerospace cables and assemblies, truck trailers and foodservice equipment. The change in the Company’s aggregate product warranty liabilities were as follows:

 

 

 

September  30,

 

In millions

 

2010

 

2009

 

Balance as of beginning of year

 

$

7.3

 

$

7.2

 

Liabilities held for and disposed of by sale

 

(1.0

)

(0.4

)

Current year provision

 

6.5

 

7.0

 

Current year claims

 

(8.1

)

(7.8

)

Balance as of current period end

 

$

4.7

 

$

6.0

 

 

The amount of extended product warranty revenues recognized was $4.2 million for the third quarter of both 2010 and 2009 and $12.0 million and $11.8 million for the first nine months of 2010 and 2009, respectively.

 

ETS U.S. Customs Matter

 

The Company received written correspondence from the U. S. Immigration and Customs Enforcement Office of Investigations (“ICE”) dated March 11, 2010 indicating that it initiated an investigation relating to the classification of certain rubber tires imported by its tire and wheel operation within the Engineered Transportation Solutions segment since 2004.  The Company responded to ICE’s inquiry and, on August 19, 2010, ICE informed the Company that it had terminated its investigation.  The Company continues to work separately with U. S. Customs and Border Protection to properly classify its products.

 

At this time, the Company cannot predict or determine the amount of additional duties and/or civil fines or penalties, if any, owed as a result of this classification effort.  In the opinion of management, the ultimate outcome of such actions will not have a material adverse effect on the consolidated financial position of the Company.

Segment Information
Segment Information

Note 15 - Segment Information

 

The Company manages and reports its results under the following segments:

 

·                  Construction Materials: the “construction materials” business;

·                  Engineered Transportation Solutions:  the “tire and wheel”, “industrial brake and friction”, and “power transmission belt” product lines;

·                  Interconnect Technologies: the “interconnect technologies” business;

·                  Foodservice Products: the “foodservice products” business; and

 

Sales, EBIT, and assets of continuing operations by reportable segment are included in the following summary:

 

Third Quarter

 

 

 

2010

 

2009 (2)

 

In millions

 

Sales(1)

 

EBIT

 

Sales(1)

 

EBIT

 

Construction Materials

 

$

354.8

 

$

54.1

 

$

340.1

 

$

60.4

 

Engineered Transportation Solutions

 

186.0

 

8.4

 

158.3

 

7.6

 

Interconnect Technologies

 

61.4

 

8.2

 

43.1

 

4.9

 

FoodService Products

 

63.7

 

6.3

 

62.7

 

8.4

 

Total Segments

 

665.9

 

77.0

 

604.2

 

81.3

 

Corporate

 

 

(10.5

)

 

(7.3

)

Total

 

$

665.9

 

$

66.5

 

$

604.2

 

$

74.0

 

 

First Nine Months

 

 

 

2010

 

2009 (2)

 

In millions

 

Sales(1)

 

EBIT

 

Assets

 

Sales(1)

 

EBIT

 

Assets

 

Construction Materials

 

$

917.1

 

$

124.8

 

$

649.7

 

$

862.2

 

$

116.5

 

639.5

 

Engineered Transportation Solutions

 

616.4

 

31.2

 

643.6

 

560.1

 

62.8

 

563.7

 

Interconnect Technologies

 

185.6

 

22.0

 

396.5

 

126.1

 

11.7

 

346.2

 

FoodService Products

 

181.7

 

19.0

 

216.1

 

185.4

 

18.4

 

220.1

 

Total Segments

 

1,900.8

 

197.0

 

1,905.9

 

1,733.8

 

209.4

 

1,769.5

 

Corporate

 

 

(27.7

)

120.9

 

 

(25.1

)

129.7

 

Total

 

$

1,900.8

 

$

169.3

 

$

2,026.8

 

$

1,733.8

 

$

184.3

 

$

1,899.2

 

 


(1) Excludes intersegment sales

(2) Prior year information has been revised as discussed in Note 2 to the Unaudited Consolidated Financial Statements

 

A reconciliation of assets reported above to total assets as presented on the Company’s Consolidated Balance Sheets is as follows:

 

 

 

September 30,

 

 

 

2010

 

Assets per table above

 

$

2,026.8

 

Assets held for sale of discontinued operations

 

44.5

 

Total Assets per Consolidated Balance Sheet

 

$

2,071.3

 

Income Taxes
Income Taxes

Note 16 - Income Taxes

 

The effective income tax rate on continuing operations for the third quarter of 2010 was 28.1% compared to an effective income tax rate of 34.6% for the third quarter of 2009.  The effective tax rate was lower during the third quarter of 2010 primarily as a result of recognition of discrete items including adjustments to a prior year return and lower taxes on certain foreign jurisdictions.

 

The effective income tax rate on continuing operations for the first nine months of 2010 was 33.8% compared to an effective income tax rate of 32.8% for first nine months of 2009.  The variation in the effective income tax rate during the nine months is attributable to an increase in the tax rate imposed on offshore earnings and sunset of favorable US tax provisions.

 

The total gross liability for uncertain tax positions at September 30, 2010, was $14.6 million, down from $17.8 million at December 31, 2009.  The $3.2 million decrease in the accrual was primarily due to a resolution of an audit issue.  The Company classifies and reports interest and penalties associated with uncertain tax positions as Income tax expense on the Consolidated Statements of Earnings, and as other long-term liabilities on the Consolidated Balance Sheets.  The total amount of interest and penalties accrued at September 30, 2010, was $3.2 million.  The entire balance accrued for uncertain tax positions at September 30, 2010, if recognized, would affect the Company’s effective tax rate.

Earnings Per Share
Earnings Per Share

Note 17 - Earnings Per Share

 

The following reflects the Income from continuing operations and share data used in the basic and diluted earnings per share computations using the two-class method:

 

 

 

Third Quarter

 

First Nine Months

 

In millions, except share and per share amounts

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

46.8

 

$

47.1

 

$

108.7

 

$

119.2

 

Less: dividends declared - common stock outstanding, unvested restricted shares and restricted share units

 

(10.4

)

(9.8

)

(30.1

)

(28.8

)

Undistributed earnings

 

36.4

 

37.3

 

78.6

 

90.4

 

Percent allocated to common shareholders (1)

 

98.9

%

98.9

%

98.9

%

98.9

%

 

 

36.0

 

36.9

 

77.7

 

89.4

 

Add: dividends declared - common stock

 

10.3

 

9.7

 

29.8

 

28.5

 

Numerator for basic and diluted EPS

 

$

46.3

 

$

46.6

 

$

107.5

 

$

117.9

 

 

 

 

 

 

 

 

 

 

 

Denominator (in thousands):

 

 

 

 

 

 

 

 

 

Denominator for basic EPS: weighted-average common shares outstanding

 

60,980

 

60,612

 

60,885

 

60,588

 

Effect of dilutive securities:

 

 

 

 

 

 

 

 

 

Performance awards

 

101

 

 

101

 

 

Stock options

 

446

 

625

 

653

 

565

 

Denominator for diluted EPS: adjusted weighted average common shares outstanding and assumed conversion

 

61,527

 

61,237

 

61,639

 

61,153

 

 

 

 

 

 

 

 

 

 

 

Per share income from continuing operations:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.76

 

$

0.77

 

$

1.77

 

$

1.95

 

Diluted

 

$

0.75

 

$

0.76

 

$

1.75

 

$

1.93

 

 


(1)            Basic weighted-average common shares outstanding

 

60,980

 

60,612

 

60,885

 

60,588

 

Basic weighted-average common shares outstanding, unvested restricted shares expected to vest and restricted share units

 

61,657

 

61,278

 

61,562

 

61,266

 

Percent allocated to common shareholders

 

98.9

%

98.9

%

98.9

%

98.9

%

 

To calculate earnings per share for the Income (loss) from discontinued operations and for Net income, the denominator for both basic and diluted earnings per share is the same as used in the above table.  The Income (loss) from discontinued operations and Net income were as follows:

 

 

 

Third Quarter

 

First Nine Months

 

In millions

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations attributable to common shareholders for basic and diluted earnings per share

 

$

3.7

 

$

(0.5

)

$

4.7

 

$

(10.5

)

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders for basic and diluted earnings per share

 

$

50.0

 

$

46.1

 

$

112.2

 

$

107.4

 

 

In the third quarter and first nine months of 2010, options to purchase 2,341,792 and 718,000 underlying shares of common stock, respectively, were excluded from the computation of diluted earnings per share because the average market price for the period exceeded the options’ related exercise prices.

 

In the third quarter and first nine months of 2009, options to purchase 2,258,310 and 2,472,310 underlying shares of common stock, respectively, were excluded from the computation of diluted earnings per share because the average market price for the period exceeded the options’ related exercise prices.

Comprehensive Income
Comprehensive Income

Note 18 - Comprehensive Income

 

Total comprehensive income consisted of the following:

 

 

 

Third Quarter

 

First Nine Months

 

In millions

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

50.5

 

$

46.6

 

$

113.4

 

$

108.7

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Foreign currency translation, net of tax

 

5.2

 

1.6

 

(1.0

)

6.1

 

Accrued post-retirement benefit liability, net of tax

 

0.4

 

0.1

 

1.1

 

0.4

 

Loss on hedging activities, net of tax

 

(0.1

)

(0.1

)

(0.2

)

(0.3

)

Other comprehensive income (loss):

 

5.5

 

1.6

 

(0.1

)

6.2

 

Comprehensive income

 

$

56.0

 

$

48.2

 

$

113.3

 

$

114.9

 

 

Loss on hedging activities, net of tax included in Other comprehensive income (loss) for the third quarter and first nine months of 2010 represented the amortization of a $5.6 million ($3.5 million, net of tax) gain in Accumulated other comprehensive loss resulting from the termination of treasury lock contracts on August 15, 2006.  At September 30, 2010, the Company had a remaining unamortized gain of $3.3 million ($2.1 million, net of tax) which is reflected in Accumulated other comprehensive loss on the Company’s Consolidated Balance Sheets. Approximately $0.2 million ($0.1 million, net of tax) is expected to be amortized to reduce Interest expense, net during the remainder of 2010.

Exit and Disposal Activities
Exit and Disposal Activities

Note 19 - Exit and Disposal Activities

 

Results for the third quarter and first nine months of 2009 have been revised to reflect the change in segment disclosures as discussed in Note 2.  The following table represents the effect of exit and disposal activities related to continuing operations on the Company’s Consolidated Statements of Earnings for the third quarter and first nine months of 2010 and 2009, respectively:

 

 

 

Third Quarter

 

First Nine Months

 

In millions

 

2010

 

2009

 

2010

 

2009

 

Cost of goods sold

 

$

3.3

 

$

3.0

 

$

9.4

 

$

5.5

 

Selling and administrative expenses

 

0.1

 

 

0.7

 

1.2

 

Research and development expenses

 

 

 

0.2

 

 

Other operating expense

 

 

0.2

 

 

6.2

 

Total exit and disposal costs

 

$

3.4

 

$

3.2

 

$

10.3

 

$

12.9

 

 

Exit and disposal activities by type of charge were as follows:

 

 

 

Third Quarter

 

First Nine Months

 

In millions

 

2010

 

2009

 

2010

 

2009

 

Termination benefits

 

$

0.6

 

$

2.0

 

$

3.8

 

$

3.4

 

Contract termination costs

 

 

(0.2

)

 

0.8

 

Fixed asset impairment

 

 

0.2

 

 

6.2

 

Other associated costs

 

2.8

 

1.2

 

6.5

 

2.5

 

Total exit and disposal costs

 

$

3.4

 

$

3.2

 

$

10.3

 

$

12.9

 

 

Exit and disposal accrual activities for the first nine months of 2010 were as follows:

 

In millions

 

Severance
Costs

 

Contract
Termination
Costs

 

Other
Associated
Costs

 

Total

 

Balance at December 31, 2009

 

$

3.5

 

$

0.2

 

$

2.2

 

$

5.9

 

2010 charges to expense and adjustments

 

3.8

 

 

6.5

 

10.3

 

2010 usage

 

(2.6

)

(0.2

)

(8.0

)

(10.8

)

Balance at September 30, 2010

 

$

4.7

 

$

 

$

0.7

 

$

5.4

 

 

Exit and disposal activities by segment were as follows:

 

 

 

Third Quarter

 

First Nine Months

 

In millions

 

2010

 

2009

 

2010

 

2009

 

Total by segment

 

 

 

 

 

 

 

 

 

Engineered Transportation Solutions

 

$

3.3

 

$

3.4

 

$

9.2

 

$

11.8

 

Interconnect Technologies

 

0.1

 

(0.2

)

1.1

 

0.6

 

Total segment costs

 

3.4

 

3.2

 

10.3

 

12.4

 

Corporate

 

 

 

 

0.5

 

Total exit and disposal costs

 

$

3.4

 

$

3.2

 

$

10.3

 

$

12.9

 

 

Engineered Transportation Solutions — During the first nine months of 2010, the Company had two consolidation projects underway within the Engineered Transportation Solutions segment in its continuing efforts to reduce costs and streamline its operations.  Descriptions of these projects are set forth below:

 

·                  In the third quarter of 2009, the Company announced plans to consolidate its tire manufacturing operations in Heflin, AL, Carlisle, PA, and portions of Buji, China into a new facility in Jackson, TN purchased in the third quarter of 2009. The consolidation of the U.S. tire manufacturing operations into Jackson, TN is expected to be substantially completed by the end of 2010 with further consolidation of the Buji, China operations and remaining component production in Carlisle, PA into Jackson, TN to be completed by the first quarter of 2011.

 

·                  In the fourth quarter of 2009, the Company announced plans to close its friction product manufacturing facility in Logansport, IN and to consolidate operations into its locations in Hangzhou, China and Bloomington, IN.  This consolidation is expected to be completed by the end of 2010.

 

The Company expects the total cost of these consolidation projects will be approximately $25.7 million, of which $17.7 million has been incurred through September 30, 2010, and $5.9 million is expected to be incurred in the remainder of 2010. An additional $2.1 million is expected to be incurred in the first quarter of 2011 related to final transfer and disposition of operations primarily for the consolidation of tire operations into Jackson, TN as noted above. The Company recorded $9.2 million of expense during the first nine months of 2010 primarily consisting of employee termination costs and other relocation costs. Amounts expected to be incurred in the remainder of 2010 relate to employee termination and other costs associated with the relocation of employees and equipment.

 

Included in Accrued expenses at September 30, 2010 was $5.4 million related to unpaid severance, moving and relocation and other costs for the above projects as well as other consolidation projects completed in 2009.

 

During the third quarter and first nine months of 2009, the Company recorded $3.4 million and $11.8 million in exit and disposal costs, respectively, including $5.9 million in fixed asset impairment charges for plant restructurings in the first nine months of 2009.

 

Interconnect Technologies — In the fourth quarter of 2009, in efforts to reduce costs and streamline operations, the Company announced that it would consolidate its Vancouver, WA facility into its facilities in Long Beach, CA, Tukwila, WA, and Dongguan, China and close its Vancouver facility. This consolidation was completed during the third quarter of 2010.

 

The total cost of this consolidation project was $4.2 million, of which $1.1 million of expense was incurred during the first nine months of 2010 primarily consisting of employee termination costs and other relocation costs.

 

As of September 30, 2010, the liability for unpaid exit and disposal costs related to the consolidation of the Vancouver, WA facility was not material.

Subsequent Events
Subsequent Events

Note 20 — Subsequent Events

 

On October 15, 2010, the Company announced the signing of a definitive agreement to acquire Hawk Corporation, a leading worldwide supplier of friction materials for brakes, clutches and transmissions, for $50.00 per share in an all-cash transaction.  The total cash consideration to be paid for the outstanding shares of Hawk Corporation is expected to be approximately $413 million.  The transaction will be funded with cash on hand and the Company’s existing revolving credit facility.  The Company expects the acquisition to close in the fourth quarter of 2010.

Document and Entity Information
9 Months Ended
Sep. 30, 2010
Oct. 21, 2010
Document and Entity Information
 
 
Entity Registrant Name
CARLISLE COMPANIES INC 
 
Entity Central Index Key
0000790051 
 
Document Type
10-Q 
 
Document Period End Date
2010-09-30 
 
Amendment Flag
FALSE 
 
Current Fiscal Year End Date
12/31 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
60,985,910 
Document Fiscal Year Focus
2010 
 
Document Fiscal Period Focus
Q3