Carlisle Companies (NYSE: CSL) is a United States based company that manufactures products for the construction, transportation, and food service industries. Carlisle recorded nearly $3 billion in 2008 total revenues.
In 2008, the cost of Carlisle's raw materials increased by $142 million. The increase in raw materials prices during 2008 combined with increases in freight costs to increase the company's cost of goods sold by 6% in 2008. Furthermore, people began to eat at restaurants less in 2008 and cook at home more. This trend caused Carlisle to see a decrease in the sales volume of the foodservice goods produced by its Applied Technologies segment.
In 2007, a decrease in construction spending challenged Carlisle. As a result of decrease in construction spending the growth of Carlisle's Construction Materials revenue excluding the impact of acquisitions slowed from 25% in 2006 to 12% in 2007. Carlisle competes with other manufacturing companies such as Gibraltar Industries (ROCK), Titan International (TWI), Accuride (ACW) and Dover (DOV).
Carlisle is currently based in North Carolina. The company manufactures products in four different segments: Construction Materials, Transportation Products, Applied Technologies, and Specialty Products. Construction Materials produces roofing systems and other sealants. Transportation Products manufactures wheels, tires, and trailers. Applied Sciences makes foodservice products and electronic interconnects. Specialty Products manufactures brake pads and other products for off highway use. Carlisle competes mostly by striving to be a low cost provider in the industries it serves.
|Revenue and Income ($MM)||2008||2007||2006|
Between 2007 and 2008 total revenues increased by 11%, 3% of which was due to increased sales volume and price increases. The remainder of the revenue growth resulted from acquisitions made by the Construction Materials and Applied Technologies segments. During the same period, Operating Income decreased 13%. 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.
Between 2007 and 2008, Carlisle was forced to deal with $142 million worth of raw materials price increases. 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. 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.
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. 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.
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. As a result of the current economic conditions, the unit sales of the food service branch of the Applied Technologies segment have fallen. 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.
Carlisle and Key Competitors 2007
|Company||Total Revenues||Net Income||Net Profit Margin|
|Gibraltar Industries (ROCK)||1,312||13||1.0%|
|Titan International (TWI)||837||(7)||-0.9%|