Continued Execution of the Carpenter Operating
Model; Extending Rollout Across Entire Operations
Carpenter Technology Corporation (NYSE:CRS) (the “Company”) today
announced financial results for the quarter ended September 30,
2016. The Company reported a net loss of $6.2 million or
$0.13 loss per diluted share. Excluding special items, adjusted
loss per diluted share was $0.08 in the quarter. Net sales for the
first quarter of fiscal year 2017 were $389.0 million compared with
$455.6 million in the first quarter of fiscal year 2016, a decrease
of $66.6 million (or 15 percent), on 7 percent lower volume.
Net sales excluding surcharge were $339.8 million, a decrease
of $45.3 million (or 12 percent) from the same period a year ago.
“Our first quarter results were significantly
impacted by lower sales driven primarily by volatility and
uncertainty in specific Aerospace end-use sub-markets, the
moderating global Transportation end-use market and the ongoing
weakness in Energy,” said Tony Thene, Carpenter's President and
CEO. “The industry wide and macro-economic challenges we are facing
magnified the impacts of our historical sequential seasonality
declines and drove volume lower than we had anticipated. The lower
sequential sales, even with a modest mix improvement and continued
cost savings, resulted in a $29 million reduction in pre-tax
income, most of which is related to the lower Aerospace and Defense
sales, as compared with the fourth quarter of fiscal year
2016.”
“The Aerospace market is presenting challenges for
the overall industry given the transition that is taking place and
its impact across various sub-markets. The new engine platform
builds are starting to ramp-up and we see strong demand in this
sub-market. However, we are experiencing a new level of
market uncertainty across other Aerospace sub-markets driven by
reductions in program specific build rates and ongoing supply chain
inventory reduction and consolidation. Given the market
uncertainty, recent order patterns within our fastener, structural
and aerospace distribution sub-markets, which tend to be more
transactional in nature, have been below expectations. While this
presents a challenging environment, we continue to believe in our
long-term growth potential in the Aerospace end-use market given
its underlying fundamentals, our participation across the new
engine platforms and the strength of our total Aerospace product
portfolio. We remain well positioned to benefit as the industry
navigates the current transition and broader market demand
recovers."
Mr. Thene concluded, "Moving forward, we will
continue to actively manage our business given the industry
headwinds we are experiencing across some of our end-use markets.
This includes further implementing the Carpenter Operating Model,
which produced significant savings in fiscal year 2016 and is now
being rolled out across all our facilities as we remain highly
focused on improving operating efficiency and reducing our
operating costs. Our most recent action was the freeze of our
largest defined benefit pension plan which is expected to result in
approximately $50 million of annual run rate net cost savings.
We believe that the benefits of this ongoing momentum on
operating efficiencies together with the further implementation of
the Carpenter Operating Model will be enhanced as market demand
recovers. Although several of our end-use markets are
challenged and we will be influenced by them, we will be relentless
in our cost management and product expansion across adjacent
markets and applications. This mindset, combined with the potential
of our Athens facility, powder business and other growth
opportunities, positions Carpenter for long-term sustainable
growth.”
Financial Highlights
($ in
millions) |
|
Q1 |
|
|
|
Q1 |
|
|
|
Q4 |
|
|
|
FY2017 |
|
|
|
FY2016 |
|
|
|
FY2016 |
|
Net
Sales |
$ |
|
389.0 |
|
|
|
|
$ |
455.6 |
|
|
|
|
$ |
457.7 |
|
|
Net Sales
Excluding Surcharge (a) |
$ |
|
339.8 |
|
|
|
|
$ |
385.1 |
|
|
|
|
$ |
405.7 |
|
|
Operating
Income |
$ |
|
1.4 |
|
|
|
|
$ |
24.8 |
|
|
|
|
$ |
29.2 |
|
|
Operating
Income Excluding Pension EID and Special Items (a) |
$ |
|
9.0 |
|
|
|
|
$ |
32.6 |
|
|
|
|
$ |
36.1 |
|
|
Net (Loss)
Income |
$ |
|
(6.2 |
) |
|
|
|
$ |
8.9 |
|
|
|
|
$ |
14.9 |
|
|
Cash
Provided from Operating Activities |
$ |
|
3.9 |
|
|
|
|
$ |
41.5 |
|
|
|
|
$ |
119.7 |
|
|
Free Cash
Flow (a) |
$ |
|
(31.2 |
) |
|
|
|
$ |
6.6 |
|
|
|
|
$ |
83.2 |
|
|
(a) Non-GAAP
financial measure explained in the attached schedules |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income was $1.4 million, a decrease of
$23.4 million from the first quarter of the prior year. Operating
income—excluding pension earnings, interest and deferrals (EID) and
special items—was $9.0 million, compared to $32.6 million in the
prior year period. These results primarily reflect lower
volume across our end-use markets, particularly in Aerospace &
Defense combined with an overall weaker product mix in the current
first quarter as compared with the same quarter a year ago.
The net loss in the quarter includes a $2.1 million
income tax charge, or $0.04 per diluted share, associated with
reduced tax benefits claimed in prior years as a result of the
Company’s decision to make a $100 million voluntary pension plan
contribution to its largest defined benefit pension plan in October
2016.
Cash flow from operating activities in the first
quarter of fiscal 2017 was $3.9 million, compared to $41.5 million
in the same quarter last year. Free cash flow in the first
quarter of fiscal year 2017 was negative $31.2 million, compared to
positive free cash flow of $6.6 million in the same quarter last
year. Capital expenditures were $26.6 million in the first
quarter of fiscal year 2017.
Total liquidity, including cash and available
revolver balance, was $545.1 million at the end of the first
quarter. This consisted of $50.9 million of cash and $494.2
million of available borrowing under the Company’s credit
facility.
Conference Call and Webcast
Presentation
Carpenter will host a conference call and webcast
presentation today, October 27th at 10:00 a.m. ET, to discuss the
financial results and operations for the first quarter of fiscal
2017. Please dial +1 412-317-6789 for access to the live
conference call. Access to the live webcast will be available
at Carpenter’s website (http://www.cartech.com), and a replay will
soon be made available at http://www.cartech.com. Presentation
materials used during this conference call will be available for
viewing and download at http://www.cartech.com. An audio replay of
the conference call can be accessed by dialing +1 412-317-0088 and
using passcode 10094461. The audio replay will be available for one
week.
Non-GAAP Financial Measures
This press release includes discussions of
financial measures that have not been determined in accordance with
U.S. Generally Accepted Accounting Principles (GAAP). A
reconciliation of the non-GAAP financial measures to their most
directly comparable financial measures prepared in accordance with
GAAP, accompanied by reasons why the Company believes the non-GAAP
measures are important, are included in the attached schedules.
About Carpenter Technology
Carpenter Technology Corporation is a leading
producer and distributor of premium specialty alloys, including
titanium alloys, powder metals, stainless steels, alloy steels and
tool steels. Carpenter’s high-performance materials and
advanced process solutions are an integral part of critical
applications used within the aerospace, transportation, medical and
energy markets, among other markets. Building on its history
of innovation, Carpenter’s superalloy powder technologies support a
range of next-generation products and manufacturing techniques,
including additive manufacturing or 3D Printing. Information
about Carpenter can be found at www.cartech.com.
Forward-Looking Statements
This presentation contains forward-looking
statements within the meaning of the Private Securities Litigation
Act of 1995. These forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ from
those projected, anticipated or implied. The most significant of
these uncertainties are described in Carpenter’s filings with the
Securities and Exchange Commission, including its annual report on
Form 10-K for the year ended June 30, 2016 and the exhibits
attached to that filing. They include but are not limited to: (1)
the cyclical nature of the specialty materials business and certain
end-use markets, including aerospace, defense, industrial,
transportation, consumer, medical and energy, or other influences
on Carpenter’s business such as new competitors, the consolidation
of competitors, customers and suppliers, or the transfer of
manufacturing capacity from the United States to foreign countries;
(2) the ability of Carpenter to achieve cash generation, growth,
earnings, profitability, cost savings and reductions, productivity
improvements or process changes; (3) the ability to recoup
increases in the cost of energy, raw materials, freight or other
factors; (4) domestic and foreign excess manufacturing capacity for
certain metals; (5) fluctuations in currency exchange rates; (6)
the degree of success of government trade actions; (7) the
valuation of the assets and liabilities in Carpenter’s pension
trusts and the accounting for pension plans; (8) possible labor
disputes or work stoppages; (9) the potential that our customers
may substitute alternate materials or adopt different manufacturing
practices that replace or limit the suitability of our products;
(10) the ability to successfully acquire and integrate
acquisitions; (11) the availability of credit facilities to
Carpenter, its customers or other members of the supply chain; (12)
the ability to obtain energy or raw materials, especially from
suppliers located in countries that may be subject to unstable
political or economic conditions; (13) Carpenter’s manufacturing
processes are dependent upon highly specialized equipment located
primarily in facilities in Reading and Latrobe, Pennsylvania and
Athens, Alabama for which there may be limited alternatives if
there are significant equipment failures or a catastrophic event;
(14) the ability to hire and retain key personnel, including
members of the executive management team, management, metallurgists
and other skilled personnel; (15) fluctuations in oil and gas
prices and production; and (16) the success of actions taken to
reduce costs associated with retirement and pension plans. Any of
these factors could have an adverse and/or fluctuating effect on
Carpenter’s results of operations. The forward-looking statements
in this document are intended to be subject to the safe harbor
protection provided by Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Carpenter undertakes no obligation to update or revise
any forward-looking statements.
PRELIMINARY |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(in millions, except per share data) |
(Unaudited) |
|
|
|
Three Months Ended |
|
|
September 30, |
|
|
2016 |
|
2015 |
|
|
|
|
|
NET SALES |
|
$ |
389.0 |
|
|
$ |
455.6 |
|
Cost of sales |
|
343.0 |
|
|
387.0 |
|
Gross profit |
|
46.0 |
|
|
68.6 |
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
44.6 |
|
|
43.4 |
|
Restructuring
charges |
|
— |
|
|
0.4 |
|
Operating income |
|
1.4 |
|
|
24.8 |
|
|
|
|
|
|
Interest expense |
|
(7.3 |
) |
|
(6.6 |
) |
Other income (expense),
net |
|
0.6 |
|
|
(2.1 |
) |
|
|
|
|
|
(Loss) income before
income taxes |
|
(5.3 |
) |
|
16.1 |
|
Income tax expense |
|
0.9 |
|
|
7.2 |
|
|
|
|
|
|
NET (LOSS) INCOME |
|
$ |
(6.2 |
) |
|
$ |
8.9 |
|
|
|
|
|
|
(LOSS) EARNINGS PER
COMMON SHARE: |
|
|
|
|
Basic |
|
$ |
(0.13 |
) |
|
$ |
0.18 |
|
Diluted |
|
$ |
(0.13 |
) |
|
$ |
0.18 |
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING: |
|
|
|
|
Basic |
|
46.9 |
|
|
49.7 |
|
Diluted |
|
46.9 |
|
|
49.9 |
|
|
|
|
|
|
Cash dividends per
common share |
|
$ |
0.18 |
|
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
|
PRELIMINARY |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in millions) |
(Unaudited) |
|
|
|
Three Months Ended |
|
|
September 30, |
|
|
2016 |
|
2015 |
OPERATING
ACTIVITIES: |
|
|
|
|
Net (loss) income |
|
$ |
(6.2 |
) |
|
$ |
8.9 |
|
Adjustments to
reconcile net (loss) income to net cash provided from operating
activities: |
|
|
|
|
Depreciation and amortization |
|
28.9 |
|
|
29.9 |
|
Deferred income taxes |
|
37.5 |
|
|
(1.0 |
) |
Net pension expense |
|
16.8 |
|
|
13.4 |
|
Stock-based compensation
expense |
|
3.0 |
|
|
2.7 |
|
Net loss on disposals of property
and equipment |
|
0.1 |
|
|
0.1 |
|
Changes in working
capital and other: |
|
|
|
|
Accounts receivable |
|
13.2 |
|
|
24.4 |
|
Inventories |
|
(33.5 |
) |
|
(33.0 |
) |
Other current assets |
|
(44.6 |
) |
|
(4.8 |
) |
Accounts payable |
|
(0.7 |
) |
|
2.5 |
|
Accrued liabilities |
|
(10.7 |
) |
|
(1.6 |
) |
Other postretirement plan
contributions |
|
(1.4 |
) |
|
(3.4 |
) |
Other, net |
|
1.5 |
|
|
3.4 |
|
Net cash provided from operating
activities |
|
3.9 |
|
|
41.5 |
|
|
|
|
|
|
INVESTING
ACTIVITIES: |
|
|
|
|
Purchases of property,
equipment and software |
|
(26.6 |
) |
|
(29.9 |
) |
Other |
|
— |
|
|
4.0 |
|
Net cash used for investing
activities |
|
(26.6 |
) |
|
(25.9 |
) |
|
|
|
|
|
FINANCING
ACTIVITIES: |
|
|
|
|
Dividends paid |
|
(8.5 |
) |
|
(9.0 |
) |
Purchases of treasury
stock |
|
— |
|
|
(45.9 |
) |
Payments on seller
financed debt related to purchase of software |
|
— |
|
|
(1.2 |
) |
Proceeds from stock
options exercised |
|
0.3 |
|
|
0.1 |
|
Net cash used for financing
activities |
|
(8.2 |
) |
|
(56.0 |
) |
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
(0.2 |
) |
|
1.0 |
|
|
|
|
|
|
DECREASE IN CASH AND
CASH EQUIVALENTS |
|
(31.1 |
) |
|
(39.4 |
) |
Cash and cash
equivalents at beginning of period |
|
82.0 |
|
|
70.0 |
|
|
|
|
|
|
Cash and cash
equivalents at end of period |
|
$ |
50.9 |
|
|
$ |
30.6 |
|
|
|
|
|
|
|
|
|
|
PRELIMINARY |
CONSOLIDATED BALANCE SHEETS |
(in millions) |
(Unaudited) |
|
|
|
September 30, |
|
June 30, |
|
|
2016 |
|
2016 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
50.9 |
|
|
$ |
82.0 |
|
Accounts receivable, net |
|
240.7 |
|
|
253.6 |
|
Inventories |
|
661.6 |
|
|
628.7 |
|
Other current assets |
|
89.9 |
|
|
46.4 |
|
Total current assets |
|
1,043.1 |
|
|
1,010.7 |
|
Property, plant and
equipment, net |
|
1,338.1 |
|
|
1,351.4 |
|
Goodwill |
|
244.8 |
|
|
244.8 |
|
Other intangibles,
net |
|
61.6 |
|
|
63.2 |
|
Deferred income
taxes |
|
7.6 |
|
|
8.2 |
|
Other assets |
|
118.9 |
|
|
116.0 |
|
Total assets |
|
$ |
2,814.1 |
|
|
$ |
2,794.3 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
153.5 |
|
|
$ |
159.6 |
|
Accrued liabilities |
|
110.8 |
|
|
139.2 |
|
Total current liabilities |
|
264.3 |
|
|
298.8 |
|
Long-term debt |
|
609.6 |
|
|
611.3 |
|
Accrued pension
liabilities |
|
501.7 |
|
|
509.3 |
|
Accrued postretirement
benefits |
|
116.7 |
|
|
116.6 |
|
Deferred income
taxes |
|
156.8 |
|
|
102.4 |
|
Other liabilities |
|
44.1 |
|
|
51.0 |
|
Total liabilities |
|
1,693.2 |
|
|
1,689.4 |
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
|
Common stock |
|
276.3 |
|
|
276.3 |
|
Capital in excess of
par value |
|
276.4 |
|
|
273.5 |
|
Reinvested
earnings |
|
1,294.2 |
|
|
1,308.9 |
|
Common stock in
treasury, at cost |
|
(343.6 |
) |
|
(343.9 |
) |
Accumulated other
comprehensive loss |
|
(382.4 |
) |
|
(409.9 |
) |
Total stockholders' equity |
|
1,120.9 |
|
|
1,104.9 |
|
Total liabilities and stockholders'
equity |
|
$ |
2,814.1 |
|
|
$ |
2,794.3 |
|
|
|
|
|
|
|
|
|
|
PRELIMINARY |
SEGMENT FINANCIAL DATA |
(in millions, except pounds sold) |
(Unaudited) |
|
|
Three Months Ended |
|
September 30, |
|
2016 |
|
2015 |
Pounds sold (000): |
|
|
|
Specialty Alloys Operations |
52,360 |
|
|
56,814 |
|
Performance Engineered
Products |
2,414 |
|
|
2,956 |
|
Intersegment |
(594 |
) |
|
(1,348 |
) |
Consolidated pounds sold |
54,180 |
|
|
58,422 |
|
|
|
|
|
Net sales: |
|
|
|
Specialty Alloys Operations |
|
|
|
Net sales excluding surcharge |
$ |
266.0 |
|
|
$ |
301.6 |
|
Surcharge |
49.1 |
|
|
71.0 |
|
Specialty Alloys Operations net
sales |
315.1 |
|
|
372.6 |
|
|
|
|
|
Performance Engineered
Products |
|
|
|
Net sales excluding surcharge |
78.3 |
|
|
91.4 |
|
Surcharge |
0.2 |
|
|
0.1 |
|
Performance Engineered Products net
sales |
78.5 |
|
|
91.5 |
|
|
|
|
|
Intersegment |
|
|
|
Net sales excluding surcharge |
(4.5 |
) |
|
(7.9 |
) |
Surcharge |
(0.1 |
) |
|
(0.6 |
) |
Intersegment net sales |
(4.6 |
) |
|
(8.5 |
) |
|
|
|
|
Consolidated net sales |
$ |
389.0 |
|
|
$ |
455.6 |
|
|
|
|
|
Operating income
(loss): |
|
|
|
Specialty Alloys Operations |
$ |
25.0 |
|
|
$ |
41.1 |
|
Performance Engineered
Products |
(2.8 |
) |
|
(0.4 |
) |
Corporate costs |
(13.8 |
) |
|
(12.0 |
) |
Pension earnings, interest and
deferrals |
(7.1 |
) |
|
(4.8 |
) |
Intersegment |
0.1 |
|
|
0.9 |
|
Consolidated operating income |
$ |
1.4 |
|
|
$ |
24.8 |
|
|
|
|
|
|
|
|
|
The Company has two reportable segments, Specialty
Alloys Operations (“SAO”) and Performance Engineered Products
(“PEP”).
The SAO segment is comprised of Carpenter's major
premium alloy and stainless steel manufacturing operations.
This includes operations performed at mills primarily in Reading
and Latrobe and surrounding areas in Pennsylvania, South Carolina
and Alabama.
The PEP segment is comprised of the Company’s
differentiated operations. This segment includes the Dynamet
titanium business, the Carpenter Powder Products (CPP) business,
the Amega West business, the Specialty Steel Supply business, and
the Latrobe and Mexico distribution businesses. The businesses in
the PEP segment are managed with an entrepreneurial structure to
promote flexibility and agility to quickly respond to market
dynamics. It is our belief this model will ultimately drive
overall revenue and profit growth. The pounds sold data above
for the PEP segment includes only the Dynamet and CPP
businesses.
The corporate costs are comprised of executive and
director compensation, and other corporate facilities and
administrative expenses not allocated to the segments. Also
included are items that management considers not representative of
ongoing operations, such as restructuring and asset impairment
charges, goodwill impairment and other specifically-identified
income or expense items.
The service cost component of net pension expense,
which represents the estimated cost of future pension liabilities
earned associated with active employees, is included in the
operating results of the business segments. The residual net
pension expense, or pension earnings, interest and deferrals
(pension EID), is comprised of the expected return on plan assets,
interest costs on the projected benefit obligations of the plans,
and amortization of actuarial gains and losses and prior service
costs and is included under the heading "Pension earnings, interest
and deferrals".
PRELIMINARY |
NON-GAAP FINANCIAL MEASURES |
(in millions, except per share data) |
(Unaudited) |
|
OPERATING MARGIN
EXCLUDING SURCHARGE, |
|
|
|
|
PENSION EARNINGS,
INTEREST AND DEFERRALS |
|
Three Months Ended |
AND SPECIAL ITEMS |
|
September 30, |
|
|
2016 |
|
2015 |
|
|
|
|
|
Net sales |
|
$ |
389.0 |
|
|
$ |
455.6 |
|
Less: surcharge |
|
49.2 |
|
|
70.5 |
|
Consolidated net sales
excluding surcharge |
|
$ |
339.8 |
|
|
$ |
385.1 |
|
|
|
|
|
|
Operating income |
|
$ |
1.4 |
|
|
$ |
24.8 |
|
Pension earnings,
interest and deferrals |
|
7.1 |
|
|
4.8 |
|
Operating income
excluding pension earnings, interest and deferrals |
|
8.5 |
|
|
29.6 |
|
|
|
|
|
|
Special items: |
|
|
|
|
Pension curtailment charge |
|
0.5 |
|
|
— |
|
Restructuring charges |
|
— |
|
|
0.4 |
|
Consulting costs |
|
— |
|
|
2.6 |
|
|
|
|
|
|
|
|
Operating income
excluding pension earnings, interest and deferrals and special
items |
|
$ |
9.0 |
|
|
$ |
32.6 |
|
|
|
|
|
|
Operating margin |
|
0.4 |
% |
|
5.4 |
% |
|
|
|
|
|
Operating margin
excluding surcharge, pension earnings, interest and deferrals and
special items |
|
2.6 |
% |
|
8.5 |
% |
|
|
|
|
|
|
|
Management believes that removing the impacts of
raw material surcharge from operating margin provides a more
consistent basis for comparing results of operations from period to
period, thereby permitting management to evaluate performance and
investors to make decisions based on the ongoing operations of the
Company. In addition, management believes that excluding the impact
of pension earnings, interest and deferrals, which may be volatile
due to changes in the financial markets, is helpful in analyzing
the true operating performance of the Company. Management also
believes that removing the impact of restructuring charges and
other special items is helpful in analyzing the operating
performance of the Company, as these costs are not indicative of
ongoing operating performance. Management uses its results
excluding these amounts to evaluate its operating performance and
to discuss its business with investment institutions, the Company’s
board of directors and others.
ADJUSTED (LOSS)
EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS |
|
Loss Before Income Taxes |
|
Income Tax (Expense) Benefit |
|
Net (Loss) Income |
|
(Loss) Earnings Per Diluted Share** |
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2016, as reported |
|
$ |
(5.3 |
) |
|
$ |
(0.9 |
) |
|
$ |
(6.2 |
) |
|
$ |
(0.13 |
) |
|
|
|
|
|
|
|
|
|
Special items: |
|
|
|
|
|
|
|
|
Pension curtailment charge |
|
0.5 |
|
|
(0.1 |
) |
|
0.4 |
|
|
0.01 |
|
Income tax item* |
|
— |
|
|
2.1 |
|
|
2.1 |
|
|
0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total impact of special
items |
|
0.5 |
|
|
2.0 |
|
|
2.5 |
|
|
0.05 |
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2016, as adjusted |
|
$ |
(4.8 |
) |
|
$ |
1.1 |
|
|
$ |
(3.7 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
|
* Discrete
income tax charge recorded during the three months ended September
30, 2016 as a result of reduced tax benefits claimed in prior years
in connection with the Company's decision to make a $100 million
voluntary pension contribution in October 2016. |
** Impact
per diluted share calculated using weighted average common shares
outstanding of 46.9 million for the three months ended September
30, 2016. |
|
ADJUSTED EARNINGS PER
SHARE EXCLUDING SPECIAL ITEMS |
|
Income Before Income Taxes |
|
Income Tax (Expense) Benefit |
|
Net Income |
|
Earnings Per Diluted Share** |
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2015, as reported |
|
$ |
16.1 |
|
|
$ |
(7.2 |
) |
|
$ |
8.9 |
|
|
$ |
0.18 |
|
|
|
|
|
|
|
|
|
|
Special items: |
|
|
|
|
|
|
|
|
Restructuring charges |
|
0.4 |
|
|
(0.1 |
) |
|
0.3 |
|
|
0.01 |
|
Consulting costs |
|
2.6 |
|
|
(0.9 |
) |
|
1.7 |
|
|
0.03 |
|
Income tax item* |
|
— |
|
|
2.0 |
|
|
2.0 |
|
|
0.04 |
|
Total impact of special
items |
|
3.0 |
|
|
1.0 |
|
|
4.0 |
|
|
0.08 |
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2015, as adjusted |
|
$ |
19.1 |
|
|
$ |
(6.2 |
) |
|
$ |
12.9 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
* Discrete
income tax charge recorded during the three months ended September
30, 2015 as a result of a decision to sell equity method investment
in India. |
** Impact
per diluted share calculated using weighted average common shares
outstanding of 49.9 million for the three months ended September
30, 2015. |
|
Management believes that earnings per share
adjusted to exclude the impact of restructuring charges and special
items is helpful in analyzing the operating performance of the
Company, as these costs are not indicative of ongoing operating
performance. Management uses its results excluding these amounts to
evaluate its operating performance and to discuss its business with
investment institutions, the Company’s board of directors and
others.
|
|
Three Months Ended |
|
|
September 30, |
FREE CASH FLOW |
|
2016 |
|
2015 |
|
|
|
|
|
Net cash provided from
operating activities |
|
$ |
3.9 |
|
|
$ |
41.5 |
|
Purchases of property,
equipment and software |
|
(26.6 |
) |
|
(29.9 |
) |
Other |
|
— |
|
|
4.0 |
|
Dividends paid |
|
(8.5 |
) |
|
(9.0 |
) |
|
|
|
|
|
Free cash flow |
|
$ |
(31.2 |
) |
|
$ |
6.6 |
|
|
|
|
|
|
|
|
|
|
Management believes that the free cash flow measure
provides useful information to investors regarding our financial
condition because it is a measure of cash generated which
management evaluates for alternative uses.
PRELIMINARY |
SUPPLEMENTAL SCHEDULES |
(in millions) |
(Unaudited) |
|
|
|
Three Months Ended |
|
|
September 30, |
NET SALES BY END-USE
MARKET |
|
2016 |
|
2015 |
End-Use Market
Excluding Surcharge: |
|
|
|
|
Aerospace and Defense |
|
$ |
173.3 |
|
|
$ |
193.9 |
|
Energy |
|
25.7 |
|
|
32.6 |
|
Transportation |
|
30.6 |
|
|
35.7 |
|
Medical |
|
23.0 |
|
|
26.4 |
|
Industrial and Consumer |
|
59.3 |
|
|
66.7 |
|
Distribution |
|
27.9 |
|
|
29.8 |
|
|
|
|
|
|
Consolidated net sales
excluding surcharge |
|
339.8 |
|
|
385.1 |
|
|
|
|
|
|
Surcharge |
|
49.2 |
|
|
70.5 |
|
|
|
|
|
|
Consolidated net
sales |
|
$ |
389.0 |
|
|
$ |
455.6 |
|
|
|
|
|
|
|
|
|
|
In fiscal year 2016 in connection with our
commercial organization realignment, we changed the manner in which
sales are classified by end-use market so that we could better
evaluate our sales results from period to period. All prior period
amounts have been reclassified to conform to the current
presentation.
Media Inquiries:
William J. Rudolph, Jr.
+1 610-208-3892
wrudolph@cartech.com
Investor Inquiries:
Brad Edwards
Brainerd Communicators
+1 212-986-6667
edwards@braincomm.com
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