CCM reported 22.0% operating margin despite a sales decline of approximately 8%
CIT responded quickly to the downturn with restructuring and diversification efforts, which partially offset global aerospace market declines
Reported EPS of
Carlisle repurchased 1.2 million shares for
Comments from
'As we enter the fourth quarter of 2020 and our 10th month of operating in this COVID-19 pandemic, I am grateful for the dedication and commitment of all Carlisle's employees to our customers, our company, our communities and to each other. Our continued efforts to stay focused on serving our essential customers and protecting each other are actions of which we all should be proud, and ones we know will assure the future long-term growth and prosperity of Carlisle. There is no question that it is the Carlisle team's hard work, dedication and perseverance that has sustained us through a challenging 2020, and it will be that same unyielding spirit that will help us deliver on Vision 2025.
Despite the many challenges facing Carlisle and the global economy in 2020, Vision 2025 remains very much intact. The Vision 2025 roadmap delivers
As a reminder, the foundational pillars of Vision 2025 include:
Drive organic growth in excess of 5%.
Utilize the Carlisle Operating System (COS) consistently to reduce costs 1-2% of sales, driving operating leverage.
Build scale with synergistic acquisitions.
Continue to invest in and develop exceptional talent.
Deploy over
While the COVID-19 pandemic has affected our near-term results, we are confident our proactive approach will allow us to accelerate through the recovery by: further improving the efficiency of our businesses through COS, continuing to make the investments necessary to deliver a world-class Carlisle Experience, and ensuring we maintain the discipline and rigor in our capital allocation process. Taken together, these actions will result in Carlisle achieving our Vision 2025 goal of
Third Quarter Results
Third quarter results were led again by CCM, which delivered a 5% year-over-year improvement in operating income despite an 8% decline in revenue. Notably, there was sequential improvement through the third quarter with September sales ending slightly positive year-over-year for the first time since the pandemic began. Recently announced price increases by the major CCM competitors and improving demand trends in the industry are positive signs as we move into the fourth quarter and 2021. These strong signals are coupled with significant long-term positive re-roofing projections, CCM's consistent price leadership, efficiencies gained from COS and our ability to deliver world-class service through the Carlisle Experience. We continue to be extremely pleased with CCM's ability to generate cash and deliver operating income in excess of 20% in our core commercial roofing business even during challenging times. When taken with the sequential improvements in the third quarter in sales, we are cautiously optimistic about the fourth quarter and early 2021.
At CIT, we continue to experience the effects of a record global decline in commercial aerospace production and the accompanying ripple effects through the supply chain. That said, we do see signs of an improving outlook. Some positive news includes: the European regulatory body has approved the 737Max-8 aircraft for a return to flying; Airbus announced in early October that it had delivered 57 aircraft in September, up from an April low of 14;
CIT's Medical Technologies platform continued to be a positive in the third quarter driven by robust demand for COVID-19 related patient monitoring equipment, which was partially offset by the reduction in elective surgeries and hospital capital spending. We continue to seek opportunistic acquisition opportunities to complement our existing product suite, driving to an improved balance of market exposures at CIT.
CFT delivered positive sequential results despite being our most global business and the most exposed to the pandemic. Operating income improved 5% year-over-year driven by positive price realization, improved operational execution and new product introductions, including our recently launched market differentiated fluid handling system for spray foam in spite of a sales decline of 5%. We expect this positive trend of sequential growth to continue as we move through the fourth quarter. The team is executing and gaining traction on initiatives to deliver improved quality and delivery to enhance our customers' experience. We are confident the multitude of actions we continue to drive will leverage nicely as we move into early 2021.
CBF delivered significantly improved sales results sequentially, down 9% in the third quarter compared to down over 30% in the second quarter of 2020. Market conditions are stabilizing but the unfortunate reality is that demand for global off-highway vehicles is still weak. Another contributing factor to CBF's results is, similar to CIT, its exposure to a decimated aerospace industry into which it supplies high margin metallic and carbon aircraft braking products. Given the actions taken over the past several years, its strong market position, and traction on new technology introductions, we expect CBF to favorably leverage any improvements in volume as its markets recover post-pandemic.
From a core financial position, Carlisle's disciplined and conservative approach to the balance sheet and capital deployment, coupled with our strong cash flow, position the company well to accelerate through the recovery. In addition to funding Vision 2025, we remain focused on maintaining our financial and strategic flexibility which gives us the ability to continue to simultaneously fund organic growth, increase our dividend consistently, seek synergistic acquisitions, primarily within the construction products and medical technologies space, and opportunistically repurchase shares. Some specific points that highlight Carlisle's strong financial position:
As of
We increased our dividend 5% on
We repurchased 1.2 million shares in the third quarter for
We also continue to work an active M&A pipeline and are focused on investing in our highest returning businesses to drive value creation for shareholders.
We enter the fourth quarter of 2020 confident in our ability to accelerate though this recovery and deliver on Vision 2025. Needless to say, the uncertainties remaining around the pandemic, including the length and severity of the economic downturn, continued tension with
Third Quarter 2020
Revenue of
Operating income of
Third Quarter 2020 Segment Highlights
Carlisle Construction Materials (CCM)
Revenues of
Operating income was
Items affecting comparability were costs of
Revenues of
Operating loss was
Items affecting comparability were costs of
Revenues of
Operating income was
Items affecting comparability were costs of
Revenues of
Operating income was
Items affecting comparability were costs of
Cash Flow
Free cash flow (defined as cash provided by operating activities less capital expenditures, and comprised of continuing and discontinued operations) was
During the three months ended
Table 1. Revenue Breakdown: See details at:
https://www.carlisle.com/investors/news/press-release-details/2020/Carlisle-Companies-Reports-Third-Quarter-Diluted-Earnings-per-Share-of-1.87/default.aspx
Vice President of Investor Relations and FP&A
(480) 781-5135
jgiannakouros@carlisle.com
Source:
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