Carlisle Integrates Accella
SCOTTSDALE, Ariz.–(BUSINESS WIRE)–Carlisle Companies Incorporated (NYSE:CSL) reported record revenues of $984.7 million for the first quarter of 2018, a 27.2% increase from $774.0 million for the first quarter of 2017. Organic revenues grew 8.8%, acquired revenues contributed a total of 15.5% in the quarter, foreign exchange had a positive impact of 1.5%, and adoption of the new FASB revenue recognition standard had a positive impact of 1.4%.
Diluted EPS from continuing operations improved primarily due to higher sales volume of +$0.11, savings from the Carlisle Operating System (COS) of +$0.12, and a lower effective tax rate due to U.S. tax reform of +$0.10. Partially offsetting this performance was raw material and freight cost inflation of -$0.15 primarily at Carlisle Construction Materials (CCM) and higher interest expense of -$0.08.
|Three Months Ended March 31,|
|(in millions, except per share amounts)||2018||2017|
|Income from continuing operations, net of tax||$||57.9||$||57.9|
|Diluted EPS from continuing operations||$||0.92||$||0.88|
|Items affecting comparability (1)||$||0.05||$||0.08|
|See schedule of Items Affecting Comparability in the financial exhibits|
All financial and percentage comparisons in the Company’s first quarter of 2018 reporting are made to the same quarter of the previous year, unless otherwise stated.
D. Christian “Chris” Koch, President and Chief Executive Officer, said, “We are pleased with Carlisle’s solid first quarter results in light of the challenging raw material environment. Carlisle experienced strong organic growth resulting in record first quarter revenues. Our Operating Income performance was driven by savings from the restructuring and facility rationalization actions taken across our business in 2017, and continued operational improvements and cost savings from the Carlisle Operating System. This performance was offset by rising freight and raw material costs at CCM.
For the past year, Carlisle has expended significant effort and capital to integrate our acquisitions, optimize our global footprint, and drive efficiencies in our businesses. In the first quarter, we saw significant positive signs that those investments are paying off: Accella remains on track for stated synergies, Carlisle Fluid Technologies (CFT) is seeing the benefits of plant closures, Carlisle Interconnect Technologies (CIT) continues to see strong SatCom and Aerospace revenue and income growth, and Carlisle Brake & Friction (CBF) is showing improved leverage as we emerge from the downturn in their end markets. Additionally, and equally important, we experienced slight but meaningful positive price realization in our CCM core markets.
After closing out our 100th anniversary in 2017, the first quarter saw us launch Vision 2025, the cornerstone of our next one hundred years. In Vision 2025, we seek to drive above-market organic growth, build scale in our core businesses by pursuing synergistic acquisitions, further leverage our COS culture to drive efficiencies through all business processes, continue to return cash to shareholders, and invest in attracting, developing, and retaining exceptional talent in order to achieve $8 billion of revenue, 20% operating income, and 15% ROIC. In the first quarter of 2018, we took the first steps in achieving this vision by: delivering organic growth of 8.8%, paying $23.1 million in dividends, repurchasing approximately $129 million of Carlisle shares, increasing R&D spend by 16%, and optimizing our portfolio by completing the divestiture of Carlisle FoodService Products for $750 million. As 2018 continues, we are well-positioned to take advantage of strong global markets and improving fundamentals in our businesses.”
Carlisle Construction Materials (CCM) achieved record first quarter revenues despite harsh winter conditions in much of the United States. Accella’s revenue performance met our expectations and integration activities are on track. CCM’s year-over-year operating income decline was due to approximately $11 million of increased raw material and freight costs, in line with our stated expectations for the quarter.
|(in millions)||Three Months Ended March 31,||
|2018||2017||Change $||Change %|
|Operating margin percentage||12.7||%||18.1||%|
|Items affecting comparability||$||(1.8||)||$||0.6|
We now expect CCM revenues to grow in the low twenty percent range in 2018, including contributions from acquisitions, with organic revenue growth in the mid-single digits.