Carpenter Technology Corporation (NYSE: CRS) (the “Company”) today
announced financial results for the fiscal fourth quarter and year
ended June 30, 2022. For the quarter, the Company reported net
income of $2.6 million, or $0.05 earnings per diluted share.
Excluding special items, adjusted earnings per share was $0.00 for
the fourth quarter.
“Our fourth quarter results marked a successful end to the year
and place us on strong ground to deliver accelerated growth in
fiscal year 2023,” said Tony Thene, Carpenter Technology’s
President and CEO. “The quarter saw us return to a positive EPS as
both the Specialty Alloy Operations (“SAO”) and Performance
Engineered Products (“PEP”) segments outperformed our expectations.
We also continued to expand our backlog across our end-use markets
and secured another price increase on our transactional business as
overall demand conditions across our end-use markets remain
strong.”
“In the fourth quarter, our backlog grew by 29 percent on a
sequential basis and 191 percent year-over-year. We also generated
positive free cash flow of $65 million and finished the fiscal year
with total liquidity of $448 million. The fourth quarter’s
operating income results were driven by double digit sequential
revenue growth in the Aerospace and Defense and Medical end-use
markets.”
“Fiscal year 2022 proved to be a challenging but successful
year. We navigated through an unforeseen outage of our Reading
Press, continued COVID-19 isolations, a difficult hiring
environment, and other supply chain challenges. But in addressing
each of them, I believe we are emerging from it stronger and
well-positioned for growth.”
“Looking ahead, we expect to see continued growth across our
end-use markets, especially in Aerospace, Defense and Medical
applications, where customers are still ramping to pre-pandemic
levels. To capitalize on the demand in our core business, we are
focused on achieving additional productivity and capacity gains
through the Carpenter Operating Model. Further, our strong position
in our core business is supported by our capabilities in key
emerging areas including electrification and additive manufacturing
that further support our long-term growth profile. We believe the
continued execution of our strategy will drive sustainable
long-term value creation for our customers and shareholders.”
Financial Highlights
| |
|
Q4 |
|
Q4 |
|
YTD |
|
YTD |
| ($ in
millions except per share amounts) |
|
FY2022 |
|
FY2021 |
|
FY2022 |
|
FY2021 |
|
Net sales |
|
$ |
563.8 |
|
$ |
421.6 |
|
|
$ |
1,836.3 |
|
|
$ |
1,475.6 |
|
| Net sales excluding surcharge
(a) |
|
$ |
403.2 |
|
$ |
348.1 |
|
|
$ |
1,400.0 |
|
|
$ |
1,252.8 |
|
| Operating income (loss) |
|
$ |
24.6 |
|
$ |
(70.7 |
) |
|
$ |
(24.9 |
) |
|
$ |
(248.6 |
) |
| Adjusted operating income
(loss) excluding special items (a) |
|
$ |
14.9 |
|
$ |
(12.5 |
) |
|
$ |
(34.0 |
) |
|
$ |
(105.5 |
) |
| Net income (loss) |
|
$ |
2.6 |
|
$ |
(57.1 |
) |
|
$ |
(49.1 |
) |
|
$ |
(229.6 |
) |
| Earnings (loss) per share |
|
$ |
0.05 |
|
$ |
(1.18 |
) |
|
$ |
(1.01 |
) |
|
$ |
(4.76 |
) |
| Adjusted earnings (loss) per
share (a) |
|
$ |
0.00 |
|
$ |
(0.28 |
) |
|
$ |
(1.06 |
) |
|
$ |
(2.01 |
) |
| Net cash provided from
operating activities |
|
$ |
106.9 |
|
$ |
74.5 |
|
|
$ |
6.0 |
|
|
$ |
250.0 |
|
| Free cash flow (a) |
|
$ |
64.6 |
|
$ |
42.6 |
|
|
$ |
(122.3 |
) |
|
$ |
132.0 |
|
| |
|
|
|
|
|
|
|
|
| (a) non-GAAP
financial measures explained in the attached tables |
|
|
Net sales for the fourth quarter of fiscal year 2022 were $563.8
million compared with $421.6 million in the fourth quarter of
fiscal year 2021, an increase of $142.2 million (or 34 percent), on
8 percent higher volume. Net sales excluding surcharge were $403.2
million, an increase of $55.1 million (or 16 percent) from the same
period a year ago.
Operating income for the fourth quarter of fiscal year 2022 was
$24.6 million compared to operating loss of $70.7 million in the
prior year period. Adjusted to exclude special items, operating
income was $14.9 million in the recent fourth quarter compared to
adjusted operating loss of $12.5 million in the same period a year
ago. The improvement in operating income is primarily the result of
increased shipments as activity levels continued to ramp to meet
improving market conditions in key end-use markets compared to the
prior year period.
Earnings per share for the fourth quarter of fiscal year 2022
was $0.05 per share, or $0.00 per share when excluding special
items, compared to a loss of $1.18 per share, or loss of $0.28 per
share when excluding special items, in the prior year fourth
quarter. The increase in adjusted earnings per share is the result
of higher operating income partially offset by higher interest
costs.
The special items in the current quarter include $0.6 million of
COVID-19 costs, a $2.4 million charge related to a historical
environmental obligation, and $6.0 million of debt extinguishment
costs related to the Company’s recent bond refinancing, offset by a
$12.7 million benefit related to employee retention credits to be
claimed against certain employment taxes. Both the COVID-19 costs
and the employment tax credits are included in the reported segment
results with $10.0 million of net benefit included in the current
quarter’s SAO segment operating income and $2.1 million net benefit
included in the current quarter’s PEP segment operating income.
Cash provided from operating activities in the fourth quarter of
fiscal year 2022 was $106.9 million, compared to $74.5 million in
the same quarter last year. The increase in operating cash flow
primarily reflects higher earnings and certain income tax refunds
received related to prior years. These benefits were partially
offset by increased accounts receivable as a result of higher sales
during the quarter. Free cash flow in the fourth quarter of fiscal
year 2022 was $64.6 million, compared to $42.6 million in the
same quarter last year. The increase in free cash flow was
primarily due to higher cash from operating activities in the
current quarter. Capital expenditures were $32.8 million in the
fourth quarter of fiscal year 2022 compared to $22.1 million in the
same quarter last year.
Total liquidity, including cash and available revolver balance,
was $448.3 million at the end of fiscal year 2022. This consisted
of $154.2 million of cash and $294.1 million of available
borrowings under the Company’s credit facility.
Conference Call and Webcast Presentation
Carpenter Technology will host a conference call and webcast
presentation today, July 28th at 10:00 a.m. ET, to discuss the
financial results of operations for the fourth quarter and full
fiscal year 2022. Please dial +1 412-317-9259 for access to the
live conference call. Access to the live webcast will be available
at Carpenter Technology’s website
(http://www.carpentertechnology.com), and a replay will be made
available at http://www.carpentertechnology.com. Presentation
materials used during this conference call will be available for
viewing and download at http://www.carpentertechnology.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 recognized leader in
high-performance specialty alloy-based materials and process
solutions for critical applications in the aerospace, defense,
medical, transportation, energy, industrial 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, Form 10-Q for the quarters ended
September 30, 2021, December 31, 2021 and March 31, 2022 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 ability to execute our
business continuity, operational, budget and fiscal plans in light
of the COVID-19 pandemic; and (20) our ability to successfully
carry out restructuring and business exit 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.
PRELIMINARYCONSOLIDATED
STATEMENTS OF OPERATIONS(in millions, except per share
data)(Unaudited)
| |
|
Three Months Ended |
|
Year Ended |
| |
|
June 30, |
|
June 30, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| |
|
|
|
|
|
|
|
|
| Net sales |
|
$ |
563.8 |
|
|
$ |
421.6 |
|
|
$ |
1,836.3 |
|
|
$ |
1,475.6 |
|
| Cost of sales |
|
|
491.8 |
|
|
|
441.3 |
|
|
|
1,686.5 |
|
|
|
1,470.4 |
|
| Cost of sales - inventory
write-downs from restructuring |
|
|
— |
|
|
|
1.6 |
|
|
|
— |
|
|
|
4.2 |
|
| Gross profit (loss) |
|
|
72.0 |
|
|
|
(21.3 |
) |
|
|
149.8 |
|
|
|
1.0 |
|
| |
|
|
|
|
|
|
|
|
| Selling, general and
administrative expenses |
|
|
47.4 |
|
|
|
47.9 |
|
|
|
174.7 |
|
|
|
180.2 |
|
| Restructuring and asset
impairment charges |
|
|
— |
|
|
|
1.5 |
|
|
|
— |
|
|
|
16.6 |
|
| Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
52.8 |
|
| Operating income (loss) |
|
|
24.6 |
|
|
|
(70.7 |
) |
|
|
(24.9 |
) |
|
|
(248.6 |
) |
| |
|
|
|
|
|
|
|
|
| Interest expense, net |
|
|
13.4 |
|
|
|
9.2 |
|
|
|
44.9 |
|
|
|
32.7 |
|
| Debt extinguishment losses,
net |
|
|
6.0 |
|
|
|
— |
|
|
|
6.0 |
|
|
|
8.2 |
|
| Other (income) expense,
net |
|
|
(0.2 |
) |
|
|
(0.9 |
) |
|
|
(12.7 |
) |
|
|
8.4 |
|
| |
|
|
|
|
|
|
|
|
| Income (loss) before income
taxes |
|
|
5.4 |
|
|
|
(79.0 |
) |
|
|
(63.1 |
) |
|
|
(297.9 |
) |
| Income tax expense
(benefit) |
|
|
2.8 |
|
|
|
(21.9 |
) |
|
|
(14.0 |
) |
|
|
(68.3 |
) |
| |
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
2.6 |
|
|
$ |
(57.1 |
) |
|
$ |
(49.1 |
) |
|
$ |
(229.6 |
) |
| |
|
|
|
|
|
|
|
|
| EARNINGS (LOSS) PER COMMON
SHARE: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.05 |
|
|
$ |
(1.18 |
) |
|
$ |
(1.01 |
) |
|
$ |
(4.76 |
) |
|
Diluted |
|
$ |
0.05 |
|
|
$ |
(1.18 |
) |
|
$ |
(1.01 |
) |
|
$ |
(4.76 |
) |
| |
|
|
|
|
|
|
|
|
| WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
48.6 |
|
|
|
48.4 |
|
|
|
48.5 |
|
|
|
48.3 |
|
|
Diluted |
|
|
48.7 |
|
|
|
48.4 |
|
|
|
48.5 |
|
|
|
48.3 |
|
| |
|
|
|
|
|
|
|
|
| Cash dividends per common
share |
|
$ |
0.20 |
|
|
$ |
0.20 |
|
|
$ |
0.80 |
|
|
$ |
0.80 |
|
PRELIMINARYCONSOLIDATED
STATEMENTS OF CASH FLOWS(in millions)(Unaudited)
| |
|
Year Ended |
| |
|
June 30, |
|
|
|
|
2022 |
|
|
|
2021 |
|
| OPERATING
ACTIVITIES |
|
|
|
|
|
Net loss |
|
$ |
(49.1 |
) |
|
$ |
(229.6 |
) |
|
Adjustments to reconcile net loss to net cash provided from
operating activities: |
|
|
|
|
|
Depreciation and amortization |
|
|
131.4 |
|
|
|
123.6 |
|
|
Goodwill impairment charge |
|
|
— |
|
|
|
52.8 |
|
|
LIFO decrement |
|
|
— |
|
|
|
52.2 |
|
|
Non-cash inventory write-downs from restructuring |
|
|
— |
|
|
|
4.2 |
|
|
Acquisition-related contingent liability release |
|
|
(4.7 |
) |
|
|
— |
|
|
Non-cash restructuring and asset impairment charges |
|
|
— |
|
|
|
16.2 |
|
|
Debt extinguishment losses, net |
|
|
6.0 |
|
|
|
8.2 |
|
|
Deferred income taxes |
|
|
(3.1 |
) |
|
|
(33.6 |
) |
|
Net pension (income) expense |
|
|
(7.3 |
) |
|
|
24.6 |
|
|
Share-based compensation expense |
|
|
10.8 |
|
|
|
10.4 |
|
|
Net loss on disposal of property, plant, and equipment and assets
held for sale |
|
|
2.0 |
|
|
|
0.3 |
|
|
Changes in working capital and other: |
|
|
|
|
|
Accounts receivable |
|
|
(79.0 |
) |
|
|
(14.9 |
) |
|
Inventories |
|
|
(71.9 |
) |
|
|
238.5 |
|
|
Other current assets |
|
|
8.3 |
|
|
|
(33.9 |
) |
|
Accounts payable |
|
|
95.7 |
|
|
|
22.4 |
|
|
Accrued liabilities |
|
|
(24.5 |
) |
|
|
33.8 |
|
|
Pension plan contributions |
|
|
(0.7 |
) |
|
|
(19.9 |
) |
|
Other postretirement plan contributions |
|
|
(1.7 |
) |
|
|
(2.7 |
) |
|
Other, net |
|
|
(6.2 |
) |
|
|
(2.6 |
) |
|
Net cash provided from operating activities |
|
|
6.0 |
|
|
|
250.0 |
|
| INVESTING
ACTIVITIES |
|
|
|
|
|
Purchases of property, plant, equipment and software |
|
|
(91.3 |
) |
|
|
(100.5 |
) |
|
Proceeds from disposals of property, plant and equipment and assets
held for sale |
|
|
2.2 |
|
|
|
1.6 |
|
|
Proceeds from divestiture of business |
|
|
— |
|
|
|
20.0 |
|
|
Net cash used for investing activities |
|
|
(89.1 |
) |
|
|
(78.9 |
) |
| FINANCING
ACTIVITIES |
|
|
|
|
|
Net change in short-term credit agreement borrowings |
|
|
— |
|
|
|
(170.0 |
) |
|
Proceeds from issuance of long-term debt, net of offering
costs |
|
|
296.6 |
|
|
|
395.5 |
|
|
Payments on long-term debt |
|
|
(300.0 |
) |
|
|
(250.0 |
) |
|
Payments for debt extinguishment costs, net |
|
|
(6.0 |
) |
|
|
(8.2 |
) |
|
Payments for debt issue costs |
|
|
(0.8 |
) |
|
|
(2.5 |
) |
|
Dividends paid |
|
|
(39.2 |
) |
|
|
(39.1 |
) |
|
Proceeds from stock options exercised |
|
|
— |
|
|
|
0.5 |
|
|
Withholding tax payments on share-based compensation awards |
|
|
(3.4 |
) |
|
|
(2.3 |
) |
|
Net cash used for financing activities |
|
|
(52.8 |
) |
|
|
(76.1 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
2.7 |
|
|
|
(0.7 |
) |
| (DECREASE) INCREASE IN
CASH AND CASH EQUIVALENTS |
|
|
(133.2 |
) |
|
|
94.3 |
|
|
Cash and cash equivalents at beginning of year |
|
|
287.4 |
|
|
|
193.1 |
|
|
Cash and cash equivalents at end of year |
|
$ |
154.2 |
|
|
$ |
287.4 |
|
PRELIMINARYCONSOLIDATED
BALANCE SHEETS(in millions)(Unaudited)
| |
|
June 30, |
|
|
|
|
2022 |
|
|
|
2021 |
|
| ASSETS |
|
|
|
|
| Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
154.2 |
|
|
$ |
287.4 |
|
|
Accounts receivable, net |
|
|
382.3 |
|
|
|
308.7 |
|
|
Inventories |
|
|
496.1 |
|
|
|
425.7 |
|
|
Other current assets |
|
|
86.8 |
|
|
|
95.6 |
|
|
Total current assets |
|
|
1,119.4 |
|
|
|
1,117.4 |
|
| Property, plant and equipment,
net |
|
|
1,420.8 |
|
|
|
1,457.5 |
|
| Goodwill |
|
|
241.4 |
|
|
|
241.4 |
|
| Other intangibles, net |
|
|
35.2 |
|
|
|
43.1 |
|
| Deferred income taxes |
|
|
5.7 |
|
|
|
5.3 |
|
| Other assets |
|
|
109.8 |
|
|
|
106.5 |
|
|
Total assets |
|
$ |
2,932.3 |
|
|
$ |
2,971.2 |
|
| |
|
|
|
|
| LIABILITIES |
|
|
|
|
| Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
242.1 |
|
|
$ |
142.4 |
|
|
Accrued liabilities |
|
|
133.5 |
|
|
|
163.9 |
|
|
Total current liabilities |
|
|
375.6 |
|
|
|
306.3 |
|
| |
|
|
|
|
| Long-term debt |
|
|
691.8 |
|
|
|
694.5 |
|
| Accrued pension
liabilities |
|
|
196.6 |
|
|
|
222.6 |
|
| Accrued postretirement
benefits |
|
|
77.4 |
|
|
|
98.6 |
|
| Deferred income taxes |
|
|
162.4 |
|
|
|
156.9 |
|
| Other liabilities |
|
|
98.0 |
|
|
|
100.0 |
|
|
Total liabilities |
|
|
1,601.8 |
|
|
|
1,578.9 |
|
| |
|
|
|
|
| STOCKHOLDERS' EQUITY |
|
|
|
|
| Common stock |
|
|
280.1 |
|
|
|
280.1 |
|
| Capital in excess of par
value |
|
|
320.3 |
|
|
|
322.6 |
|
| Reinvested earnings |
|
|
1,211.0 |
|
|
|
1,299.3 |
|
| Common stock in treasury |
|
|
(307.4 |
) |
|
|
(317.4 |
) |
| Accumulated other
comprehensive loss |
|
|
(173.5 |
) |
|
|
(192.3 |
) |
|
Total stockholders' equity |
|
|
1,330.5 |
|
|
|
1,392.3 |
|
|
Total liabilities and stockholders' equity |
|
$ |
2,932.3 |
|
|
$ |
2,971.2 |
|
PRELIMINARYSEGMENT
FINANCIAL DATA(in millions, except pounds
sold)(Unaudited)
| |
Three Months Ended |
|
Year Ended |
| |
June 30, |
|
June 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| Pounds sold (000): |
|
|
|
|
|
|
|
|
Specialty Alloys Operations |
|
51,626 |
|
|
|
47,712 |
|
|
|
187,754 |
|
|
|
166,942 |
|
|
Performance Engineered Products |
|
2,808 |
|
|
|
2,912 |
|
|
|
10,662 |
|
|
|
7,936 |
|
|
Intersegment |
|
(2,674 |
) |
|
|
(2,656 |
) |
|
|
(10,304 |
) |
|
|
(5,172 |
) |
|
Consolidated pounds sold |
|
51,760 |
|
|
|
47,968 |
|
|
|
188,112 |
|
|
|
169,706 |
|
| |
|
|
|
|
|
|
|
| Net sales: |
|
|
|
|
|
|
|
|
Specialty Alloys Operations |
|
|
|
|
|
|
|
|
Net sales excluding surcharge |
$ |
327.2 |
|
|
$ |
289.9 |
|
|
$ |
1,137.1 |
|
|
$ |
1,042.8 |
|
|
Surcharge |
|
157.7 |
|
|
|
71.6 |
|
|
|
428.5 |
|
|
|
219.4 |
|
|
Specialty Alloys Operations net sales |
|
484.9 |
|
|
|
361.5 |
|
|
|
1,565.6 |
|
|
|
1,262.2 |
|
| |
|
|
|
|
|
|
|
|
Performance Engineered Products |
|
|
|
|
|
|
|
|
Net sales excluding surcharge |
|
92.9 |
|
|
|
75.6 |
|
|
|
336.7 |
|
|
|
255.9 |
|
|
Surcharge |
|
2.9 |
|
|
|
1.9 |
|
|
|
7.8 |
|
|
|
3.9 |
|
|
Performance Engineered Products net sales |
|
95.8 |
|
|
|
77.5 |
|
|
|
344.5 |
|
|
|
259.8 |
|
| |
|
|
|
|
|
|
|
|
Intersegment |
|
|
|
|
|
|
|
|
Net sales excluding surcharge |
|
(16.9 |
) |
|
|
(17.4 |
) |
|
|
(73.8 |
) |
|
|
(45.9 |
) |
|
Surcharge |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.5 |
) |
|
Intersegment net sales |
|
(16.9 |
) |
|
|
(17.4 |
) |
|
|
(73.8 |
) |
|
|
(46.4 |
) |
| |
|
|
|
|
|
|
|
|
Consolidated net sales |
$ |
563.8 |
|
|
$ |
421.6 |
|
|
$ |
1,836.3 |
|
|
$ |
1,475.6 |
|
| |
|
|
|
|
|
|
|
| Operating income (loss): |
|
|
|
|
|
|
|
|
Specialty Alloys Operations |
$ |
30.0 |
|
|
$ |
(47.3 |
) |
|
$ |
9.6 |
|
|
$ |
(87.4 |
) |
|
Performance Engineered Products |
|
10.3 |
|
|
|
(2.3 |
) |
|
|
18.1 |
|
|
|
(16.5 |
) |
|
Corporate (including restructuring and asset impairment
charges) |
|
(15.5 |
) |
|
|
(20.8 |
) |
|
|
(52.8 |
) |
|
|
(144.3 |
) |
|
Intersegment |
|
(0.2 |
) |
|
|
(0.3 |
) |
|
|
0.2 |
|
|
|
(0.4 |
) |
|
Consolidated operating income (loss) |
$ |
24.6 |
|
|
$ |
(70.7 |
) |
|
$ |
(24.9 |
) |
|
$ |
(248.6 |
) |
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 Additive business and the Latrobe and Mexico
distribution businesses. Effective July 1, 2020, the Company's
Carpenter Powder Products business was merged into the Carpenter
Additive business. The Amega West business was also part of the PEP
segment however the business was divested during the quarter ended
September 30, 2020. 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 Additive 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
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 in other (income) expense, net.
PRELIMINARYNON-GAAP
FINANCIAL MEASURES(in millions, except per share
data)(Unaudited)
| ADJUSTED OPERATING MARGIN
EXCLUDING |
|
|
|
|
|
|
|
|
| SURCHARGE REVENUE AND SPECIAL
ITEMS |
|
Three Months Ended |
|
Year Ended |
| |
|
June 30, |
|
June 30, |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| |
|
|
|
|
|
|
|
|
| Net sales |
|
$ |
563.8 |
|
|
$ |
421.6 |
|
|
$ |
1,836.3 |
|
|
$ |
1,475.6 |
|
| Less: surcharge revenue |
|
|
160.6 |
|
|
|
73.5 |
|
|
|
436.3 |
|
|
|
222.8 |
|
| Net sales excluding surcharge
revenue |
|
$ |
403.2 |
|
|
$ |
348.1 |
|
|
$ |
1,400.0 |
|
|
$ |
1,252.8 |
|
| |
|
|
|
|
|
|
|
|
| Operating income (loss) |
|
$ |
24.6 |
|
|
$ |
(70.7 |
) |
|
$ |
(24.9 |
) |
|
$ |
(248.6 |
) |
| |
|
|
|
|
|
|
|
|
| Special items: |
|
|
|
|
|
|
|
|
|
LIFO decrement |
|
|
— |
|
|
|
52.2 |
|
|
|
— |
|
|
|
52.2 |
|
|
COVID-19 costs |
|
|
0.6 |
|
|
|
2.9 |
|
|
|
5.9 |
|
|
|
17.3 |
|
|
COVID-19 employee retention credits |
|
|
(12.7 |
) |
|
|
— |
|
|
|
(12.7 |
) |
|
|
— |
|
|
Inventory write-downs from restructuring |
|
|
— |
|
|
|
1.6 |
|
|
|
— |
|
|
|
4.2 |
|
|
Acquisition-related contingent liability release |
|
|
— |
|
|
|
— |
|
|
|
(4.7 |
) |
|
|
— |
|
|
Environmental site charge |
|
|
2.4 |
|
|
|
— |
|
|
|
2.4 |
|
|
|
— |
|
|
Restructuring and asset impairment charges |
|
|
— |
|
|
|
1.5 |
|
|
|
— |
|
|
|
16.6 |
|
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
52.8 |
|
| Operating income (loss)
excluding special items |
|
$ |
14.9 |
|
|
$ |
(12.5 |
) |
|
$ |
(34.0 |
) |
|
$ |
(105.5 |
) |
| |
|
|
|
|
|
|
|
|
| Operating margin |
|
|
4.4 |
% |
|
(16.8) % |
|
(1.4) % |
|
(16.8) % |
| |
|
|
|
|
|
|
|
|
| Adjusted operating margin
excluding surcharge revenue and special items |
|
|
3.7 |
% |
|
(3.6) % |
|
(2.4) % |
|
(8.4) % |
Management believes that removing the impact 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 special
items from operating margin is helpful in analyzing the operating
performance of the Company, as these items 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 |
|
Income Before Income Taxes |
|
Income Tax Expense |
|
Net Income |
|
Earnings Per Diluted Share* |
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2022, as reported |
|
$ |
5.4 |
|
|
$ |
(2.8 |
) |
|
$ |
2.6 |
|
|
$ |
0.05 |
|
| |
|
|
|
|
|
|
|
|
| Special items: |
|
|
|
|
|
|
|
|
|
COVID-19 costs |
|
|
0.6 |
|
|
|
— |
|
|
|
0.6 |
|
|
|
0.01 |
|
|
COVID-19 employee retention credits |
|
|
(12.7 |
) |
|
|
2.8 |
|
|
|
(9.9 |
) |
|
|
(0.20 |
) |
|
Debt extinguishment losses, net |
|
|
6.0 |
|
|
|
(1.3 |
) |
|
|
4.7 |
|
|
|
0.10 |
|
|
Environmental site charge |
|
|
2.4 |
|
|
|
(0.5 |
) |
|
|
1.9 |
|
|
|
0.04 |
|
| Total impact of special
items |
|
|
(3.7 |
) |
|
|
1.0 |
|
|
|
(2.7 |
) |
|
|
(0.05 |
) |
| |
|
|
|
|
|
|
|
|
| Three months ended June 30,
2022, as adjusted |
|
$ |
1.7 |
|
|
$ |
(1.8 |
) |
|
$ |
(0.1 |
) |
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
| * Impact per
diluted share calculated using weighted average common shares
outstanding of 48.7 million for the three months ended June 30,
2022. |
|
ADJUSTED LOSS PER SHARE EXCLUDING SPECIAL ITEMS |
|
Loss Before Income Taxes |
|
Income Tax Benefit |
|
Net Loss |
|
Loss Per Diluted Share* |
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, 2021, as reported |
|
$ |
(79.0 |
) |
|
$ |
21.9 |
|
|
$ |
(57.1 |
) |
|
$ |
(1.18 |
) |
| |
|
|
|
|
|
|
|
|
| Special items: |
|
|
|
|
|
|
|
|
|
LIFO decrement |
|
|
52.2 |
|
|
|
(14.9 |
) |
|
|
37.3 |
|
|
|
0.77 |
|
|
COVID-19 costs |
|
|
2.9 |
|
|
|
(0.8 |
) |
|
|
2.1 |
|
|
|
0.04 |
|
|
Inventory write-downs from restructuring |
|
|
1.6 |
|
|
|
(0.4 |
) |
|
|
1.2 |
|
|
|
0.03 |
|
|
Restructuring and asset impairment charges |
|
|
1.5 |
|
|
|
(0.4 |
) |
|
|
1.1 |
|
|
|
0.02 |
|
|
Pension settlement charges |
|
|
2.5 |
|
|
|
(0.6 |
) |
|
|
1.9 |
|
|
|
0.04 |
|
| Total impact of special
items |
|
|
60.7 |
|
|
|
(17.1 |
) |
|
|
43.6 |
|
|
|
0.90 |
|
| |
|
|
|
|
|
|
|
|
| Three months ended June 30,
2021, as adjusted |
|
$ |
(18.3 |
) |
|
$ |
4.8 |
|
|
$ |
(13.5 |
) |
|
$ |
(0.28 |
) |
| |
|
|
|
|
|
|
|
|
| * Impact per
diluted share calculated using weighted average common shares
outstanding of 48.4 million for the three months ended June 30,
2021. |
|
ADJUSTED LOSS PER SHARE EXCLUDING SPECIAL ITEMS |
|
Loss Before Income Taxes |
|
Income Tax Benefit |
|
Net Loss |
|
Loss Per Diluted Share* |
|
|
|
|
|
|
|
|
|
|
|
Year ended June 30, 2022, as reported |
|
$ |
(63.1 |
) |
|
$ |
14.0 |
|
|
$ |
(49.1 |
) |
|
$ |
(1.01 |
) |
| |
|
|
|
|
|
|
|
|
| Special items: |
|
|
|
|
|
|
|
|
|
COVID-19 costs |
|
|
5.9 |
|
|
|
(1.3 |
) |
|
|
4.6 |
|
|
|
0.08 |
|
|
COVID-19 employee retention credits |
|
|
(12.7 |
) |
|
|
2.8 |
|
|
|
(9.9 |
) |
|
|
(0.20 |
) |
|
Acquisition-related contingent liability release |
|
|
(4.7 |
) |
|
|
1.1 |
|
|
|
(3.6 |
) |
|
|
(0.07 |
) |
|
Environmental site charge |
|
|
2.4 |
|
|
|
(0.5 |
) |
|
|
1.9 |
|
|
|
0.04 |
|
|
Debt extinguishment losses, net |
|
|
6.0 |
|
|
|
(1.3 |
) |
|
|
4.7 |
|
|
|
0.10 |
|
| Total impact of special
items |
|
|
(3.1 |
) |
|
|
0.8 |
|
|
|
(2.3 |
) |
|
|
(0.05 |
) |
| |
|
|
|
|
|
|
|
|
| Year ended June 30, 2022, as
adjusted |
|
$ |
(66.2 |
) |
|
$ |
14.8 |
|
|
$ |
(51.4 |
) |
|
$ |
(1.06 |
) |
| |
|
|
|
|
|
|
|
|
| * Impact per
diluted share calculated using weighted average common shares
outstanding of 48.5 million for the year ended June 30, 2022. |
|
ADJUSTED LOSS PER SHARE EXCLUDING SPECIAL ITEMS |
|
Loss Before Income Taxes |
|
Income Tax Benefit |
|
Net Loss |
|
Loss Per Diluted Share* |
|
|
|
|
|
|
|
|
|
|
|
Year ended June 30, 2021, as reported |
|
$ |
(297.9 |
) |
|
$ |
68.3 |
|
|
$ |
(229.6 |
) |
|
$ |
(4.76 |
) |
| |
|
|
|
|
|
|
|
|
| Special Items: |
|
|
|
|
|
|
|
|
|
LIFO decrement |
|
|
52.2 |
|
|
|
(14.9 |
) |
|
|
37.3 |
|
|
|
0.77 |
|
|
COVID-19 costs |
|
|
17.3 |
|
|
|
(5.0 |
) |
|
|
12.3 |
|
|
|
0.25 |
|
|
Inventory write-downs from restructuring |
|
|
4.2 |
|
|
|
(1.0 |
) |
|
|
3.2 |
|
|
|
0.07 |
|
|
Restructuring and asset impairment charges |
|
|
16.6 |
|
|
|
(4.0 |
) |
|
|
12.6 |
|
|
|
0.26 |
|
|
Goodwill impairment |
|
|
52.8 |
|
|
|
(0.1 |
) |
|
|
52.7 |
|
|
|
1.09 |
|
|
Debt extinguishment losses, net |
|
|
8.2 |
|
|
|
(2.0 |
) |
|
|
6.2 |
|
|
|
0.13 |
|
|
Pension settlement charges |
|
|
11.4 |
|
|
|
(2.8 |
) |
|
|
8.6 |
|
|
|
0.18 |
|
| Total impact of special
items |
|
|
162.7 |
|
|
|
(29.8 |
) |
|
|
132.9 |
|
|
|
2.75 |
|
| |
|
|
|
|
|
|
|
|
| Year ended June 30, 2021, as
adjusted |
|
$ |
(135.2 |
) |
|
$ |
38.5 |
|
|
$ |
(96.7 |
) |
|
$ |
(2.01 |
) |
| |
|
|
|
|
|
|
|
|
| * Impact per
diluted share calculated using weighted average common shares
outstanding of 48.3 million for the year ended June 30, 2021. |
Management believes that (loss) earnings per share adjusted to
exclude the impact of special items is helpful in analyzing the
operating performance of the Company, as these items 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 |
|
Year Ended |
| |
|
June 30, |
|
June 30, |
|
FREE CASH FLOW |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| |
|
|
|
|
|
|
|
|
| Net cash provided from
operating activities |
|
$ |
106.9 |
|
|
$ |
74.5 |
|
|
$ |
6.0 |
|
|
$ |
250.0 |
|
| Purchases of property, plant,
equipment and software |
|
|
(32.8 |
) |
|
|
(22.1 |
) |
|
|
(91.3 |
) |
|
|
(100.5 |
) |
| Proceeds from disposals of
property, plant and equipment and assets held for sale |
|
|
0.3 |
|
|
|
— |
|
|
|
2.2 |
|
|
|
1.6 |
|
| Proceeds from divestiture of
business |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20.0 |
|
| Dividends paid |
|
|
(9.8 |
) |
|
|
(9.8 |
) |
|
|
(39.2 |
) |
|
|
(39.1 |
) |
| |
|
|
|
|
|
|
|
|
| Free cash flow |
|
$ |
64.6 |
|
|
$ |
42.6 |
|
|
$ |
(122.3 |
) |
|
$ |
132.0 |
|
Management believes that the free cash flow measure provides
useful information to investors regarding the Company's financial
condition because it is a measure of cash generated which
management evaluates for alternative uses.
PRELIMINARYSUPPLEMENTAL
SCHEDULES(in millions)(Unaudited)
| |
Three Months Ended |
|
Year Ended |
| |
June 30, |
|
June 30, |
|
NET SALES BY END-USE MARKET |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| |
|
|
|
|
|
|
|
| End-Use Market Excluding
Surcharge Revenue: |
|
|
|
|
|
|
|
|
Aerospace and Defense |
$ |
178.5 |
|
|
$ |
165.5 |
|
|
$ |
599.6 |
|
|
$ |
598.8 |
|
|
Medical |
|
53.7 |
|
|
|
38.1 |
|
|
|
177.2 |
|
|
|
128.2 |
|
|
Transportation |
|
32.9 |
|
|
|
36.5 |
|
|
|
125.2 |
|
|
|
115.9 |
|
|
Energy |
|
21.0 |
|
|
|
13.4 |
|
|
|
76.3 |
|
|
|
70.5 |
|
|
Industrial and Consumer |
|
82.4 |
|
|
|
67.8 |
|
|
|
297.2 |
|
|
|
243.1 |
|
|
Distribution |
|
34.7 |
|
|
|
26.8 |
|
|
|
124.5 |
|
|
|
96.3 |
|
| Total net sales excluding
surcharge revenue |
|
403.2 |
|
|
|
348.1 |
|
|
|
1,400.0 |
|
|
|
1,252.8 |
|
| |
|
|
|
|
|
|
|
| Surcharge revenue |
|
160.6 |
|
|
|
73.5 |
|
|
|
436.3 |
|
|
|
222.8 |
|
| |
|
|
|
|
|
|
|
| Total net sales |
$ |
563.8 |
|
|
$ |
421.6 |
|
|
$ |
1,836.3 |
|
|
$ |
1,475.6 |
|
|
Media Inquiries:Heather Beardsley+1
610-208-2278hbeardsley@cartech.com |
|
Investor Inquiries:The Plunkett GroupBrad Edwards+1
914-582-4187brad@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
