Carlisle Companies Reports Record Quarterly and Six Month Sales and Earnings

Business Wire, July 15, 2004

CHARLOTTE, N.C. -- Carlisle Companies Incorporated (NYSE:CSL) reported earnings of $39.2 million, or $1.25 per diluted share from continuing operations in the second quarter 2004, compared to $28.8 million or $0.94 per diluted share from continuing operations in the second quarter 2003. Net earnings of $37.4 million, or $1.19 per diluted share, were 31% above the second quarter 2003 and included $1.8 million or $0.06 per diluted share of losses from discontinued operations. Net earnings for the second quarter 2003 were $28.6 million or $0.93 per diluted share, which included $0.2 million or $0.01 per diluted share of earnings from discontinued operations.

Net sales of $640.7 million in the second quarter were 17% over second quarter 2003 net sales of $545.8 million. Carlisle set net sales and net earnings records for the quarter and the first six months of the year. Organic net sales growth of $93.3 million or 17% in the second quarter 2004 accounted for significantly all of the increase over the second quarter 2003 and included $2.9 million of favorable changes in foreign currency rates. The impact of foreign currency rates on net earnings was negligible. The growth in net sales was primarily attributable to the Construction Materials, General Industry and Industrial Components segments. Acquisitions contributed $4.7 million of the growth in the second quarter 2004 net sales, partially offset by $3.1 million in divestitures.

Net sales of $1.19 billion for the six month period ended June 30, 2004 were 18% above the first six months 2003 net sales of $1.01 billion. Earnings of $64.2 million, or $2.05 per diluted share from continuing operations in the first half of 2004, compared to $45.9 million or $1.50 per diluted share from continuing operations in the first half of 2003. Net earnings in the first half of 2004 of $61.1 million or $1.95 per diluted share were 34% above the same period in 2003 and included $3.1 million in losses from discontinued operations compared to $45.6 million or $1.49 per diluted share realized in the first six months of 2003, which included $0.3 million or $0.01 per diluted share in losses from discontinued operations.

Earnings from continuing operations in the second quarter 2004 included a $0.01 per diluted share charge related to plant closure and severance costs, compared to a $0.03 per diluted share charge in the second quarter 2003. Earnings from continuing operations for the first half of 2004 included a $0.06 per diluted share charge for plant closure and severance costs, compared to a $0.04 per diluted share charge in the first half of 2003.

Richmond McKinnish, Carlisle's President and CEO said, "Our strong organic sales growth in the second quarter is very encouraging, however, we were somewhat disappointed in our earnings performance. Although we have been able to obtain selling price increases in many of the markets we serve, we have been unable to fully offset the continuing steep rise in raw material costs during the quarter. Actions are underway to obtain future selling price increases. In spite of the raw material challenge, we are confident that Carlisle will continue to experience earnings improvement in the second half of the year and are therefore increasing guidance for continuing operations to $3.50 to $3.60 per diluted share."

Acquisitions

On June 30, 2004, Carlisle announced the acquisition of the specialty tire and wheel business of Trintex Corporation, North America's leading manufacturer of semi-pneumatic tires and wheels for the lawn and garden and industrial markets. Trintex sales in 2003 were approximately $33 million. Trintex's positive addition to Carlisle's portfolio extends our product line offering to the specialty tire and wheel markets. This acquisition is included in the Industrial Components segment as part of Carlisle Tire & Wheel's operations.

Second Quarter Segment Results

The following segment discussion excludes the impact of discontinued operations.

Industrial Components net sales in the second quarter 2004 of $195.5 million were 13% above $172.6 million in the second quarter 2003. Second quarter 2004 net sales at Carlisle Tire & Wheel Company were 13% above the second quarter 2003 as a result of increased sales across all product lines, with most of the increase attributable to sales of ATV tires and wheels, styled wheels and commercial lawn care products. Power Transmission net sales were 13% above the second quarter 2003 with most of the sales improvement in the lawn and grounds care, agricultural, recreational and international sales markets. Second quarter 2004 earnings before interest and income taxes ("EBIT") of $21.9 million were 9% above $20.1 million in the second quarter 2003. The earnings results were disappointing and reflect the increases for steel in the wheel business and oil-based commodities used in the tire manufacturing process. Selling price increases have been implemented at Carlisle Tire & Wheel, but the financial impact of the increases has not been sufficient to fully offset the continuing rise in raw material costs occurring in the global economy.