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Carlisle Companies (NYSE: CSL) is a United States based company that manufactures products for the construction, transportation, and food service industries.[1] Carlisle recorded nearly $3 billion in 2008 total revenues.[1]

In 2008, the cost of Carlisle's raw materials increased by $142 million.[2] The increase in raw materials prices during 2008 combined with increases in freight costs to increase the company's cost of goods sold by 6% in 2008.[3] Furthermore, people began to eat at restaurants less in 2008 and cook at home more.[4] This trend caused Carlisle to see a decrease in the sales volume of the foodservice goods produced by its Applied Technologies segment.[5]

In 2007, a decrease in construction spending challenged Carlisle.[6] As a result of decrease in construction spending the growth of Carlisle's Construction Materials revenue excluding the impact of acquisitions slowed from 25% in 2006 to 12% in 2007.[7] Carlisle competes with other manufacturing companies such as Gibraltar Industries (ROCK), Titan International (TWI), Accuride (ACW) and Dover (DOV).

Business Overview

Carlisle is currently based in North Carolina.[8] The company manufactures products in four different segments: Construction Materials, Transportation Products, Applied Technologies, and Specialty Products.[8] Construction Materials produces roofing systems and other sealants.[3] Transportation Products manufactures wheels, tires, and trailers.[9] Applied Sciences makes foodservice products and electronic interconnects.[10] Specialty Products manufactures brake pads and other products for off highway use.[11] Carlisle competes mostly by striving to be a low cost provider in the industries it serves.[8]

Business and Financial Metrics

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CSL 2008 Revenues by Geography[12]
Revenue and Income[13][14][1][12] ($MM) 2008 2007 2006
Construction Materials 1,742 1,365 1,111
Transportation Products 861 854 808
Applied Technologies 464 300 270
Speciality Products 174 157 165
Total Revenues 2,971 2,676 2,353
Operating Income 245 281 270
Net Income 56 216 217

Between 2007 and 2008 total revenues increased by 11%, 3% of which was due to increased sales volume and price increases.[3] The remainder of the revenue growth resulted from acquisitions made by the Construction Materials and Applied Technologies segments.[3] During the same period, Operating Income decreased 13%.[3] The majority of this decrease was due to higher raw materials costs resulting in smaller gross margin in the Construction Materials segment and higher overhead costs in the Transportation Products segment.[3]

Business Segments

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CSL 2008 Revenues by Segment[12]
  • Construction Materials (54% of Revenues, 54% of Segment Operating Income) manufactures and sells rubber and thermoplastic (TPO) roofing systems as well as rigid foam roofing insulation designed to increases the energy efficiency of homes and businesses.[15] Construction Materials also sells PVC roofing membranes manufactured by third party suppliers.[15] In addition to its roofing products, Construction Materials manufactures and sells spray on waterproofing membranes and heating ventilation and air-conditioning (HVAC) duct sealants.[15] Construction Materials products are sold through a network of sales representatives and distributors to commercial and residential contractors.[15] The company's Construction Materials compete with those produced by Gibraltar Industries (ROCK).
  • Transportation Products (27% of Revenues, 18% of Segment Operating Income) manufactures wheels and tires as well as construction, material hauling, specialized and commercial trailers.[9] The segement's wheel and tire business manufactures tires for trailers and non-automotive applications. It also produces stamped steel wheels.[9] These wheels and tires are used on vehicles such as riding lawnmowers and ATVs.[9] Commercial trailers are used for over-road hauling and general freight.[9] Transportation Products sells its trailers to dealers as well as directly to rental companies, construction companies and other customers.[9] Carlisle's Transportation Products compete with those produced by companies like Accuride (ACW).
  • Applied Technologies (14% of Revenues, 17% of Segment Operating Income) manufactures foodservice products and electronic interconnects.[10] The segments foodservice products include table coverings, cookware, and cleaning items such as industrial mops and brooms.[10] Most of these items are sold to restaurants, hotels, hospitals, and similar facilities.[10] Applied Technologies electronic interconnects business manufactures high performance wire, cable, and connectors for the aerospace and defense industries.[10]
  • Specialty Products (5% of Revenues, 10% of Segment Operating Income) manufactures brake products for off-highway vehicles.[11] The segment's brake products include complete braking systems and friction products for mining, construction, agricultural and industrial equipment.[11] Carlisle's Specialty Products are sold directly to OEMs.[11] Carlisle's Specialty Products compete with those produced by companies like Dover (DOV).

Key Trends and Forces

Increases in the price of raw materials increase Carlisle's cost of goods sold during 2008

Between 2007 and 2008, Carlisle was forced to deal with $142 million worth of raw materials price increases.[2] The company was able to offset about 80% of these cost increases through increased efficiency. However, the increases in raw materials prices combined with higher freight costs to increase the company's cost of goods sold by roughly 6% in 2008.[3] As a result of the increased cost of goods sold from higher raw materials and freight costs and increased costs related to acquisitions, Carlisle's operating income decreased from 10.5% in 2007 to 8.2% of sales in 2008.

Decreased spending on new home construction results in slowed revenue growth for Carlisle

When spending on new home construction drops, so does spending on construction equipment and supplies resulting in slowed revenue growth for Carlisle. On the other hand, when spending on new home construction increases, spending on construction supplies increases resulting in faster revenue growth for Carlisle. Between April 2007 and April 2008, total construction spending fell 4%, with a 20% decrease in residential construction spending.[6] Carlisle began to feel the effects of decreasing new home construction spending in 2007 when the growth of their Construction Materials revenue excluding the impact of acquisitions slowed from 25% in 2006 to 12% in 2007.[7]

Fewer numbers of people dining out in 2008 results in lower operating margins for Carlisle's Applied Technologies segment in Q4 2008

According to the San Francisco Chronicle, a January 2008 poll shows that 54% of people who regularly eat at restaurants are eating out less and cooking at home more due to the slowing economy.[4] As a result of the current economic conditions, the unit sales of the food service branch of the Applied Technologies segment have fallen.[5] The decrease in food service sales was primarily responsible for the decrease in Applied Technologies operating margins from over 13% in Q4 2007 to about 9% in Q4 2008.[5]

Key Competitors

  • Dover (DOV) manufactures industrial products such as airplane engine components, automobile components, backhoes, concrete demolition tools, speciality trailers and other goods.[16] The company also manufactures coding systems for ATMs and product identification as well as fluid management systems.[16] Dover's speciality trailers compete with those produced by Carlisle's Transportation Products segment.
  • Gibraltar Industries (ROCK) manufactures building products for commercial and home roofing, HVAC and structural applications as well as cold rolled strip steel, metal powders and other processed metal products.[17] The companies building products compete with those produced by Carlisle's Construction Materials segment.
  • Titan International (TWI) manufactures wheels and tires for off-highway vehicles used for construction, earthmoving, agricultural and consumer applications.[18] The company's wheels and tires compete with those manufactured by Carlisle's Transportation Products division.
  • Accuride (ACW) manufactures wheels and tires for commercial trucks, truck body parts, truck chassis parts and seats as well as brake drums and pads for heavy duty trucks.[19] The company's break products compete with those produced by Carlisle's Specialty Products segment.

Carlisle and Key Competitors 2007

Company Total Revenues Net Income Net Profit Margin
Carlisle 2,876 216 7.5%
Dover (DOV) 7,226 661 9.1%
Gibraltar Industries (ROCK) 1,312 13 1.0%
Titan International (TWI) 837 (7)-0.9%
Accuride (ACW) 1,014 (9)-0.9%


  1. 1.0 1.1 1.2 CSL 2008 10-K Item 6: Selected Financial Data, pg 15
  2. 2.0 2.1 Seeking Alpha: Carlisle Companies, Inc. Q4 2008 Earnings Call Transcript, pg 1
  3. 3.0 3.1 3.2 3.3 3.4 3.5 3.6 CSL 2008 10-K Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations 2008 compared to 2007, pgs 17-19
  4. 4.0 4.1 San Francisco Chronicle: Are People Eating Out Less Often?
  5. 5.0 5.1 5.2 Seeking Alpha: Carlisle Companies, Inc. Q4 2008 Earnings Call Transcript
  6. 6.0 6.1 Value of Construction Put in Place - Seasonally Adjusted Annual Rate
  7. 7.0 7.1 CSL 2007 10-K Item 7: Construction Materials, pg 21
  8. 8.0 8.1 8.2 CSL 2008 10-K Item 1: Business, pgs 1-2
  9. 9.0 9.1 9.2 9.3 9.4 9.5 CSL 2008 10-K Item 1: Transportation Products, pgs 4-5
  10. 10.0 10.1 10.2 10.3 10.4 CSL 2009 10-K Item 1: Applied Technologies, pg 5-6
  11. 11.0 11.1 11.2 11.3 CSL 2008 10-K Item 1: Specialty Products, pg 6-7
  12. 12.0 12.1 12.2 CSL 2008 10-K Item 8, Note 17: Commitments and Contingencies, pgs 71-72
  13. CSL 2007 10-K Item 8: Segment Financial Data, pg 76
  14. CSL 2008 10-K Item 6: Selected Financial Data, pg 14
  15. 15.0 15.1 15.2 15.3 CSL 2008 10-K Item 1: Construction Materials, pg 3
  16. 16.0 16.1 Google Finance: DOV
  17. Google Finance: ROCK
  18. Google Finance: TWI
  19. Google Finance: ACW
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