Carpenter Technology Announces Press Outage at Reading Facility and Provides Updated Second Quarter Fiscal Year 2022 Outlook
December 20 2021 - 10:45AM
Carpenter Technology Corporation (NYSE: CRS) (the “Company”) today
announced an unplanned outage of its 4500 ton press at its Reading,
PA facility due to a mechanical failure. The press is a piece of
highly specialized equipment that is critical to producing
materials for Aerospace and select other end-market applications.
With the majority of the necessary spare parts already on-hand, the
repairs are currently expected to take 45 to 60 days to complete.
In addition, certain planned maintenance activities for the balance
of the year have been pulled forward to be performed during this
outage. These activities are expected to eliminate 14 days of
planned maintenance downtime for the press for the balance of the
current fiscal year.
“The press outage has created some near-term challenges for our
business,” said Tony R. Thene, President and CEO. “In response, we
have moved quickly to address the situation and through careful
planning and execution are confident we can rapidly bring the press
online and ensure its continuous operation for the anticipated
Aerospace ramp and rising demand levels across our other end-use
markets. In the meantime, we are working closely with affected
customers to minimize the impact to their operations.”
Based on the near-term challenges associated with the press
outage, in addition to cost inflation pressures, labor shortages
and the ongoing challenges from COVID-19 isolations across certain
key work centers, the Company currently expects its Specialty
Alloys (SAO) segment to deliver an operating loss of $20 to $22
million in the second quarter of fiscal year 2022.
The Company’s Performance Engineered Products (PEP) segment
continues to benefit from improving demand conditions and is
expected to generate operating income in the range of $1 to $2
million in the second quarter of fiscal year 2022.
Based on preliminary estimates subject to finalization, the
Company currently expects adjusted operating loss to be in the
range of ($32) to ($35) million and adjusted loss per
share to be in the range of ($0.60) to ($0.65).
“While the press outage at Reading and macro challenges are
headwinds to our near-term outlook, we remain confident in our
long-term growth profile given our critical supply chain position
and the improving demand patterns across our end-use markets,” Mr.
Thene added. “Our order booking rates continue to increase compared
to last year which is driving further backlog growth. Our
commercial backlog is currently up 25% sequentially and 90%
compared to the second quarter a year ago. This backlog growth
speaks to our strong customer relationships and the highly
specialized nature of the solutions we provide and places us on
solid ground for accelerated growth over the long-term.”
About Carpenter Technology
Carpenter Technology Corporation is a recognized leader in
high-performance specialty alloy-based materials and process
solutions for critical applications in the aerospace, defense,
transportation, energy, industrial, medical, and consumer
electronics markets. Founded in 1889, Carpenter Technology has
evolved to become a pioneer in premium specialty alloys, including
titanium, nickel, and cobalt, as well as alloys specifically
engineered for additive manufacturing (AM) processes and soft
magnetics applications. Carpenter Technology has expanded its AM
capabilities to provide a complete “end-to-end” solution to
accelerate materials innovation and streamline parts production.
More information about Carpenter Technology can be found at
www.carpentertechnology.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 Technology’s filings with the Securities
and Exchange Commission, including its report on Form 10-K for the
year ended June 30, 2021 and Form 10-Q for the quarter ended
September 30, 2021 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, medical, transportation, energy, industrial and
consumer, or other influences on Carpenter Technology’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 Technology 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 effect of government trade
actions; (7) the valuation of the assets and liabilities in
Carpenter Technology’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 Technology, 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 Technology’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;
(16) uncertainty regarding the return to service of the Boeing 737
MAX aircraft and the related supply chain disruption; (17)
potential impacts of the COVID-19 pandemic on our operations,
financial results and financial position; (18) our efforts and
efforts by governmental authorities to mitigate the COVID-19
pandemic, such as travel bans, shelter in place orders and business
closures, and the related impact on resource allocations and
manufacturing and supply chains; (19) our status as a “critical”,
“essential” or “life-sustaining” business in light of COVID-19
business closure laws, orders and guidance being challenged by a
governmental body or other applicable authority; (20) our ability
to execute our business continuity, operational, budget and fiscal
plans in light of the COVID-19 pandemic; (21) our ability to
successfully carry out restructuring and business exit activities
on the expected terms and timelines. and (22) our ability to
successfully complete equipment repair activities on the expected
terms and timelines. Any of these factors could have an adverse
and/or fluctuating effect on Carpenter Technology’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 Technology undertakes no obligation
to update or revise any forward-looking statements.
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Media Inquiries: |
Investor Inquiries: |
Heather Beardsley |
The Plunkett Group |
+1 610-208-2278 |
Brad Edwards |
hbeardsley@cartech.com |
+1 914-582-4187 |
|
brad@theplunkettgroup.com |
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