Reported Earnings Per Share of $0.63;
Excluding Special Items, Adjusted Earnings Per Share
of $0.60
Carpenter Technology Corporation (NYSE:CRS) (the “Company”) today
announced financial results for the fiscal third quarter ended
March 31, 2018. The Company reported net income of $30.2
million, or $0.63 earnings per diluted share. Excluding special
items, adjusted earnings per diluted share was $0.60 in the
quarter.
“Our third quarter results highlight the continued momentum in
our business as we successfully execute our strategy to capitalize
on rising market demand trends across our portfolio, unlock
incremental capacity through the Carpenter Operating Model, and
strategically invest in our business to drive long-term,
sustainable growth,” said Tony Thene, Carpenter’s President and
CEO. “Our commercial team is making additional progress
penetrating our end-use markets, and we are gaining market share
from current and new customers who recognize the value of our
high-end specialty alloys and solutions-focused approach.”
“We drove sequential revenue gains across all of our end-use
markets during the third quarter, with three delivering double
digit growth. We are continuing to benefit from solid demand
in our Aerospace and Defense end-use market, where we generated
healthy sequential growth across all sub-markets. We are also
seeing positive momentum from the ongoing recovery in the oil &
gas sub-market and continued strong demand for our titanium
solutions in the Medical end-use market.”
“As we add to our growing backlog and gain market share, we
remain focused on driving continual improvement in our
manufacturing processes through the implementation of the Carpenter
Operating Model. We also continue to invest for the long-term by
strengthening our capabilities in core growth areas including
additive manufacturing. The acquisition of CalRAM provides direct
entry into the rapidly expanding part production segment of the
additive manufacturing value chain and builds upon our existing
metallurgical processing and materials expertise. The
combination of CalRAM’s production capabilities and our existing
additive manufacturing assets, will allow us to provide customers
the optimal solution consisting of the right part made with the
right material to meet their demanding application needs. The
investments we are making in advanced solutions like additive
manufacturing and soft magnetics are integral to delivering the
critical applications that will define the future of our industry
and secure our long-term growth trajectory.”
Financial Highlights
($ in
millions) |
|
Q3 |
|
Q3 |
|
Q2 |
|
|
|
FY2018 |
|
FY2017 |
|
FY2018 |
|
Net
Sales |
$ |
572.2 |
|
$ |
473.6 |
|
|
$ |
487.8 |
|
|
|
Net Sales
Excluding Surcharge (a) |
$ |
472.5 |
|
$ |
412.9 |
|
|
$ |
415.5 |
|
|
|
Operating
Income |
$ |
45.2 |
|
$ |
35.8 |
|
|
$ |
40.8 |
|
|
|
Operating
Income Excluding Pension EID (a) |
$ |
45.7 |
|
$ |
41.4 |
|
|
$ |
41.3 |
|
|
|
Net
Income |
$ |
30.2 |
|
$ |
20.7 |
|
|
$ |
92.1 |
|
|
|
Cash
Provided from Operating Activities |
$ |
73.4 |
|
$ |
61.7 |
|
|
$ |
24.7 |
|
|
|
Free Cash
Flow (a) |
$ |
34.5 |
|
$ |
6.1 |
|
|
$ |
(10.7 |
) |
|
|
- Non-GAAP financial measure explained in attached schedules
|
|
|
|
|
|
Net sales for the third quarter of fiscal year 2018 were $572.2
million compared with $473.6 million in the third quarter of fiscal
year 2017, an increase of $98.6 million (or 20.8 percent), on 8.9
percent higher volume. Net sales excluding surcharge were
$472.5 million, an increase of $59.6 million (or 14.4 percent) from
the same period a year ago.
Operating income was $45.2 million compared to $35.8 million in
the prior year period. Operating income—excluding pension earnings,
interest and deferrals (EID)—was $45.7 million, compared to $41.4
million in the prior year period. These results primarily
reflect stronger market conditions driving increased product demand
compared to the same quarter a year ago.
Cash provided from operating activities in the third quarter of
fiscal year 2018 was $73.4 million, compared to $61.7 million in
the same quarter last year. The increase in operating cash
flow was primarily related to the reduction in inventory in the
current quarter of $40.5 million compared with an inventory
increase of $14.9 million in the same quarter a year ago. The
inventory reduction was partially offset by increasing accounts
receivable driven by higher sales in the current quarter.
Free cash flow in the third quarter of fiscal year 2018 was
$34.5 million, compared to $6.1 million in the same quarter last
year. Capital expenditures were $25.2 million in the third quarter
of fiscal year 2018 compared to $18.0 million in the same quarter
last year.
Total liquidity, including cash and available revolver balance,
was $440.8 million at the end of the third quarter of fiscal year
2018. This consisted of $46.8 million of cash and $394.0
million of available borrowings under the Company’s credit
facility.
Conference Call and Webcast Presentation
Carpenter will host a conference call and webcast presentation
today, April 26th at 10:00 a.m. ET, to discuss the financial
results of operations for the third quarter of fiscal year 2018.
Please dial +1 412-317-9259 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.
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,
nickel and cobalt based superalloys, 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 powder technology capabilities support a
range of next-generation products and manufacturing techniques,
including additive manufacturing and 3D Printing. Information about
Carpenter can be found at www.cartech.com.
Forward-Looking StatementsThis 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 report on Form 10-K for the year ended June 30, 2017,
Form 10-Q for the quarters ended September 30, 2017 and December
31, 2017, and the exhibits attached to those filings. 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, operating
income, cost savings and reductions, qualifications, 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; and (15) fluctuations in oil and gas
prices and production. 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 (the “Securities Act”), 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
INCOME |
(in millions, except per share data) |
(Unaudited) |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
March 31, |
|
March 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
NET SALES |
|
$ |
572.2 |
|
|
$ |
473.6 |
|
|
$ |
1,539.7 |
|
|
$ |
1,289.9 |
|
Cost of sales |
|
476.2 |
|
|
390.5 |
|
|
1,272.4 |
|
|
1,098.3 |
|
Gross profit |
|
96.0 |
|
|
83.1 |
|
|
267.3 |
|
|
191.6 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
50.8 |
|
|
47.3 |
|
|
139.6 |
|
|
139.0 |
|
Operating income |
|
45.2 |
|
|
35.8 |
|
|
127.7 |
|
|
52.6 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(7.5 |
) |
|
(7.7 |
) |
|
(22.0 |
) |
|
(22.5 |
) |
Other income, net |
|
— |
|
|
1.0 |
|
|
0.9 |
|
|
2.0 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
37.7 |
|
|
29.1 |
|
|
106.6 |
|
|
32.1 |
|
Income tax expense
(benefit) |
|
7.5 |
|
|
8.4 |
|
|
(39.1 |
) |
|
10.6 |
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
30.2 |
|
|
$ |
20.7 |
|
|
$ |
145.7 |
|
|
$ |
21.5 |
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.63 |
|
|
$ |
0.44 |
|
|
$ |
3.06 |
|
|
$ |
0.45 |
|
Diluted |
|
$ |
0.63 |
|
|
$ |
0.44 |
|
|
$ |
3.04 |
|
|
$ |
0.45 |
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
Basic |
|
47.2 |
|
|
47.0 |
|
|
47.2 |
|
|
47.0 |
|
Diluted |
|
47.7 |
|
|
47.1 |
|
|
47.5 |
|
|
47.1 |
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share |
|
$ |
0.18 |
|
|
$ |
0.18 |
|
|
$ |
0.54 |
|
|
$ |
0.54 |
|
|
PRELIMINARY |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in millions) |
(Unaudited) |
|
|
|
Nine Months Ended |
|
|
March 31, |
|
|
2018 |
|
2017 |
OPERATING
ACTIVITIES: |
|
|
|
|
Net income |
|
$ |
145.7 |
|
|
$ |
21.5 |
|
Adjustments to
reconcile net income to net cash provided from operating
activities: |
|
|
|
|
Depreciation and amortization |
|
87.2 |
|
|
88.8 |
|
Deferred
income taxes |
|
(68.9 |
) |
|
37.4 |
|
Net
pension expense |
|
10.6 |
|
|
39.7 |
|
Share-based compensation expense |
|
12.8 |
|
|
10.0 |
|
Net loss
on disposals of property and equipment and assets held for
sale |
|
2.0 |
|
|
2.2 |
|
Changes in working
capital and other: |
|
|
|
|
Accounts
receivable |
|
(54.4 |
) |
|
(15.0 |
) |
Inventories |
|
(41.1 |
) |
|
(89.0 |
) |
Other
current assets |
|
(15.6 |
) |
|
3.6 |
|
Accounts
payable |
|
16.9 |
|
|
40.6 |
|
Accrued
liabilities |
|
5.5 |
|
|
4.9 |
|
Pension
plan contributions |
|
(5.7 |
) |
|
(100.0 |
) |
Other
postretirement plan contributions |
|
(2.5 |
) |
|
(2.4 |
) |
Other,
net |
|
(1.8 |
) |
|
(6.0 |
) |
Net cash
provided from operating activities |
|
90.7 |
|
|
36.3 |
|
INVESTING
ACTIVITIES: |
|
|
|
|
Purchases of property,
equipment and software |
|
(80.9 |
) |
|
(63.1 |
) |
Proceeds from disposals
of property and equipment and assets held for sale |
|
2.0 |
|
|
— |
|
Acquisition of
businesses |
|
(13.3 |
) |
|
(35.3 |
) |
Proceeds from note
receivable from the sale of equity method investment |
|
6.3 |
|
|
6.3 |
|
Net cash
used for investing activities |
|
(85.9 |
) |
|
(92.1 |
) |
FINANCING
ACTIVITIES: |
|
|
|
|
Credit agreement
borrowings |
|
— |
|
|
122.1 |
|
Credit agreement
repayments |
|
— |
|
|
(122.1 |
) |
Net change in
short-term credit agreement borrowings |
|
— |
|
|
14.2 |
|
Dividends paid |
|
(25.8 |
) |
|
(25.6 |
) |
Payments of debt issue
costs |
|
— |
|
|
(1.4 |
) |
Tax benefits on
share-based compensation |
|
— |
|
|
0.4 |
|
Proceeds from stock
options exercised |
|
4.5 |
|
|
2.2 |
|
Withholding tax
payments on share-based compensation awards |
|
(0.9 |
) |
|
(0.8 |
) |
Net cash
used for financing activities |
|
(22.2 |
) |
|
(11.0 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
(2.1 |
) |
|
1.4 |
|
DECREASE IN CASH AND
CASH EQUIVALENTS |
|
(19.5 |
) |
|
(65.4 |
) |
Cash and cash
equivalents at beginning of period |
|
66.3 |
|
|
82.0 |
|
Cash and cash
equivalents at end of period |
|
$ |
46.8 |
|
|
$ |
16.6 |
|
|
PRELIMINARY |
CONSOLIDATED BALANCE SHEETS |
(in millions) |
(Unaudited) |
|
|
|
March 31, |
|
June 30, |
|
|
2018 |
|
2017 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
46.8 |
|
|
$ |
66.3 |
|
Accounts
receivable, net |
|
349.3 |
|
|
290.4 |
|
Inventories |
|
732.6 |
|
|
690.4 |
|
Other
current assets |
|
62.6 |
|
|
46.5 |
|
Total
current assets |
|
1,191.3 |
|
|
1,093.6 |
|
Property, plant and
equipment, net |
|
1,295.6 |
|
|
1,316.8 |
|
Goodwill |
|
273.7 |
|
|
263.4 |
|
Other intangibles,
net |
|
59.9 |
|
|
64.9 |
|
Deferred income
taxes |
|
5.6 |
|
|
7.6 |
|
Other assets |
|
165.8 |
|
|
131.8 |
|
Total
assets |
|
$ |
2,991.9 |
|
|
$ |
2,878.1 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current
liabilities: |
|
|
|
|
Current
portion of long-term debt |
|
$ |
55.0 |
|
|
$ |
55.0 |
|
Accounts
payable |
|
217.7 |
|
|
201.1 |
|
Accrued
liabilities |
|
128.4 |
|
|
139.9 |
|
Total
current liabilities |
|
401.1 |
|
|
396.0 |
|
Long-term debt, net of
current portion |
|
546.3 |
|
|
550.0 |
|
Accrued pension
liabilities |
|
367.0 |
|
|
378.3 |
|
Accrued postretirement
benefits |
|
124.0 |
|
|
122.6 |
|
Deferred income
taxes |
|
130.8 |
|
|
184.8 |
|
Other liabilities |
|
51.6 |
|
|
47.8 |
|
Total
liabilities |
|
1,620.8 |
|
|
1,679.5 |
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
|
Common stock |
|
277.4 |
|
|
276.7 |
|
Capital in excess of
par value |
|
299.8 |
|
|
284.8 |
|
Reinvested
earnings |
|
1,441.7 |
|
|
1,321.8 |
|
Common stock in
treasury, at cost |
|
(339.8 |
) |
|
(341.6 |
) |
Accumulated other
comprehensive loss |
|
(308.0 |
) |
|
(343.1 |
) |
Total
stockholders' equity |
|
1,371.1 |
|
|
1,198.6 |
|
Total
liabilities and stockholders' equity |
|
$ |
2,991.9 |
|
|
$ |
2,878.1 |
|
|
PRELIMINARY |
SEGMENT FINANCIAL DATA |
(in millions, except pounds sold) |
(Unaudited) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
March 31, |
|
March 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Pounds sold (000): |
|
|
|
|
|
|
|
Specialty
Alloys Operations |
66,866 |
|
|
61,006 |
|
|
188,136 |
|
|
164,682 |
|
Performance Engineered Products |
2,946 |
|
|
2,840 |
|
|
9,754 |
|
|
7,604 |
|
Intersegment |
(914 |
) |
|
(576 |
) |
|
(5,382 |
) |
|
(1,550 |
) |
Consolidated pounds sold |
68,898 |
|
|
63,270 |
|
|
192,508 |
|
|
170,736 |
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
Specialty
Alloys Operations |
|
|
|
|
|
|
|
Net sales
excluding surcharge |
$ |
381.3 |
|
|
$ |
322.4 |
|
|
$ |
1,038.7 |
|
|
$ |
876.4 |
|
Surcharge |
101.1 |
|
|
60.9 |
|
|
246.9 |
|
|
170.6 |
|
Specialty
Alloys Operations net sales |
482.4 |
|
|
383.3 |
|
|
1,285.6 |
|
|
1,047.0 |
|
|
|
|
|
|
|
|
|
Performance Engineered Products |
|
|
|
|
|
|
|
Net sales
excluding surcharge |
107.5 |
|
|
98.5 |
|
|
312.6 |
|
|
259.7 |
|
Surcharge |
0.4 |
|
|
0.2 |
|
|
0.8 |
|
|
0.7 |
|
Performance Engineered Products net sales |
107.9 |
|
|
98.7 |
|
|
313.4 |
|
|
260.4 |
|
|
|
|
|
|
|
|
|
Intersegment |
|
|
|
|
|
|
|
Net sales
excluding surcharge |
(16.3 |
) |
|
(8.0 |
) |
|
(53.5 |
) |
|
(16.6 |
) |
Surcharge |
(1.8 |
) |
|
(0.4 |
) |
|
(5.8 |
) |
|
(0.9 |
) |
Intersegment net sales |
(18.1 |
) |
|
(8.4 |
) |
|
(59.3 |
) |
|
(17.5 |
) |
|
|
|
|
|
|
|
|
Consolidated net sales |
$ |
572.2 |
|
|
$ |
473.6 |
|
|
$ |
1,539.7 |
|
|
$ |
1,289.9 |
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
Specialty
Alloys Operations |
$ |
58.0 |
|
|
$ |
51.9 |
|
|
$ |
158.3 |
|
|
$ |
112.6 |
|
Performance Engineered Products |
5.4 |
|
|
4.7 |
|
|
18.1 |
|
|
2.7 |
|
Corporate
costs |
(18.0 |
) |
|
(15.8 |
) |
|
(44.9 |
) |
|
(45.6 |
) |
Pension
earnings, interest and deferrals |
(0.5 |
) |
|
(5.6 |
) |
|
(1.6 |
) |
|
(18.2 |
) |
Intersegment |
0.3 |
|
|
0.6 |
|
|
(2.2 |
) |
|
1.1 |
|
Consolidated operating income |
$ |
45.2 |
|
|
$ |
35.8 |
|
|
$ |
127.7 |
|
|
$ |
52.6 |
|
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,
Pennsylvania and surrounding areas as well as 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 CalRAM 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.
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
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 |
|
Nine Months Ended |
AND SPECIAL ITEMS |
|
March 31, |
|
March 31, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
572.2 |
|
|
$ |
473.6 |
|
|
$ |
1,539.7 |
|
|
$ |
1,289.9 |
|
Less: surcharge |
|
99.7 |
|
|
60.7 |
|
|
241.9 |
|
|
170.4 |
|
Net sales excluding
surcharge |
|
$ |
472.5 |
|
|
$ |
412.9 |
|
|
$ |
1,297.8 |
|
|
$ |
1,119.5 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
45.2 |
|
|
$ |
35.8 |
|
|
$ |
127.7 |
|
|
$ |
52.6 |
|
Pension earnings,
interest and deferrals |
|
0.5 |
|
|
5.6 |
|
|
1.6 |
|
|
18.2 |
|
Operating income
excluding pension earnings, interest and deferrals |
|
45.7 |
|
|
41.4 |
|
|
129.3 |
|
|
70.8 |
|
|
|
|
|
|
|
|
|
|
Special items: |
|
|
|
|
|
|
|
|
Pension curtailment
charge |
|
— |
|
|
— |
|
|
— |
|
|
0.5 |
|
Operating income
excluding pension earnings, interest and deferrals and special
items |
|
$ |
45.7 |
|
|
$ |
41.4 |
|
|
$ |
129.3 |
|
|
$ |
71.3 |
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
7.9 |
% |
|
7.6 |
% |
|
8.3 |
% |
|
4.1 |
% |
|
|
|
|
|
|
|
|
|
Operating margin
excluding surcharge, pension earnings, interest and deferrals and
special items |
|
9.7 |
% |
|
10.0 |
% |
|
10.0 |
% |
|
6.4 |
% |
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 the 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 EARNINGS PER
SHARE EXCLUDING SPECIAL ITEMS |
|
IncomeBeforeIncomeTaxes |
|
IncomeTaxExpense |
|
NetIncome |
|
EarningsPerDilutedShare* |
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2018, as reported |
|
$ |
37.7 |
|
|
$ |
(7.5 |
) |
|
$ |
30.2 |
|
|
$ |
0.63 |
|
|
|
|
|
|
|
|
|
|
Special items: |
|
|
|
|
|
|
|
|
Impact of
US tax reform and other legislative changes |
|
— |
|
|
(1.6 |
) |
|
(1.6 |
) |
|
(0.03 |
) |
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2018, as adjusted |
|
$ |
37.7 |
|
|
$ |
(9.1 |
) |
|
$ |
28.6 |
|
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
* Impact
per diluted share calculated using weighted average common shares
outstanding of 47.7 million for the three months ended March 31,
2018. |
|
ADJUSTED EARNINGS PER
SHARE EXCLUDING SPECIAL ITEMS |
|
IncomeBeforeIncomeTaxes |
|
IncomeTaxExpense |
|
NetIncome |
|
EarningsPerDilutedShare* |
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2017, as reported |
|
$ |
29.1 |
|
|
$ |
(8.4 |
) |
|
$ |
20.7 |
|
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
|
Special items: |
|
|
|
|
|
|
|
|
None
reported |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31, 2017, as adjusted |
|
$ |
29.1 |
|
|
$ |
(8.4 |
) |
|
$ |
20.7 |
|
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
|
* Impact
per diluted share calculated using weighted average common shares
outstanding of 47.1 million for the three months ended March 31,
2017. |
|
ADJUSTED EARNINGS PER
SHARE EXCLUDING SPECIAL ITEMS |
|
IncomeBeforeIncomeTaxes |
|
IncomeTaxBenefit(Expense) |
|
NetIncome |
|
EarningsPerDilutedShare** |
|
|
|
|
|
|
|
|
|
Nine months ended March
31, 2018, as reported |
|
$ |
106.6 |
|
|
$ |
39.1 |
|
|
$ |
145.7 |
|
|
$ |
3.04 |
|
|
|
|
|
|
|
|
|
|
Special items: |
|
|
|
|
|
|
|
|
Impact of US tax
reform and other legislative changes |
|
— |
|
|
(67.6 |
) |
|
(67.6 |
) |
|
(1.41 |
) |
|
|
|
|
|
|
|
|
|
Nine months ended March
31, 2018, as adjusted |
|
$ |
106.6 |
|
|
$ |
(28.5 |
) |
|
$ |
78.1 |
|
|
$ |
1.63 |
|
|
|
|
|
|
|
|
|
|
** Impact
per diluted share calculated using weighted average common shares
outstanding of 47.5 million for the nine months ended March 31,
2018. |
|
ADJUSTED EARNINGS PER
SHARE EXCLUDING SPECIAL ITEMS |
|
IncomeBeforeIncome Taxes |
|
IncomeTax(Expense)Benefit |
|
NetIncome |
|
EarningsPerDilutedShare** |
|
|
|
|
|
|
|
|
|
Nine months ended March
31, 2017, as reported |
|
$ |
32.1 |
|
|
$ |
(10.6 |
) |
|
$ |
21.5 |
|
|
$ |
0.45 |
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
Nine months ended March
31, 2017, as adjusted |
|
$ |
32.6 |
|
|
$ |
(8.6 |
) |
|
$ |
24.0 |
|
|
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
* Discrete
income tax charge recorded 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 47.1 million for the nine months ended March 31,
2017. |
Management believes that earnings per share adjusted to exclude
the impact of the 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 |
|
Nine Months Ended |
|
|
March 31, |
|
March 31, |
FREE CASH FLOW |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Net cash provided from
operating activities |
|
$ |
73.4 |
|
|
$ |
61.7 |
|
|
$ |
90.7 |
|
|
$ |
36.3 |
|
Purchases of property,
equipment and software |
|
(25.2 |
) |
|
(18.0 |
) |
|
(80.9 |
) |
|
(63.1 |
) |
Proceeds from disposals
of property and equipment and assets held for sale |
|
1.9 |
|
|
— |
|
|
2.0 |
|
|
— |
|
Acquisition of
businesses |
|
(13.3 |
) |
|
(35.3 |
) |
|
(13.3 |
) |
|
(35.3 |
) |
Proceeds from note
receivable from the sale of equity method investment |
|
6.3 |
|
|
6.3 |
|
|
6.3 |
|
|
6.3 |
|
Dividends paid |
|
(8.6 |
) |
|
(8.6 |
) |
|
(25.8 |
) |
|
(25.6 |
) |
|
|
|
|
|
|
|
|
|
Free cash flow |
|
$ |
34.5 |
|
|
$ |
6.1 |
|
|
$ |
(21.0 |
) |
|
$ |
(81.4 |
) |
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 |
|
Nine Months Ended |
|
|
March 31, |
|
March 31, |
NET SALES BY END-USE
MARKET |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
End-Use Market
Excluding Surcharge: |
|
|
|
|
|
|
|
|
Aerospace
and Defense |
|
$ |
260.5 |
|
|
$ |
214.0 |
|
|
$ |
696.5 |
|
|
$ |
586.3 |
|
Energy |
|
33.3 |
|
|
36.6 |
|
|
91.0 |
|
|
89.5 |
|
Transportation |
|
33.9 |
|
|
31.3 |
|
|
94.2 |
|
|
90.5 |
|
Medical |
|
37.6 |
|
|
31.6 |
|
|
108.2 |
|
|
79.7 |
|
Industrial and Consumer |
|
72.2 |
|
|
66.7 |
|
|
214.0 |
|
|
185.2 |
|
Distribution |
|
35.0 |
|
|
32.7 |
|
|
93.9 |
|
|
88.3 |
|
|
|
|
|
|
|
|
|
|
Total net sales
excluding surcharge |
|
472.5 |
|
|
412.9 |
|
|
1,297.8 |
|
|
1,119.5 |
|
|
|
|
|
|
|
|
|
|
Surcharge |
|
99.7 |
|
|
60.7 |
|
|
241.9 |
|
|
170.4 |
|
|
|
|
|
|
|
|
|
|
Total net sales |
|
$ |
572.2 |
|
|
$ |
473.6 |
|
|
$ |
1,539.7 |
|
|
$ |
1,289.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media Inquiries:
William J. Rudolph, Jr. +1
610-208-3892 wrudolph@cartech.com |
|
|
|
|
|
|
Investor Inquiries:Brad
Edwards The Plunkett Group+1
212-739-6740brad@theplunkettgroup.com |
Carpenter Technology (NYSE:CRS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Carpenter Technology (NYSE:CRS)
Historical Stock Chart
From Apr 2023 to Apr 2024