Carpenter Technology Corporation (NYSE: CRS) (the “Company”) today
announced financial results for the fiscal second quarter ended
December 31, 2019. For the quarter, the Company reported net income
of $38.8 million, or $0.79 earnings per diluted share. Excluding
special items, adjusted earnings per diluted share was $0.83 in the
quarter.
“Our second quarter results reflect a continuation of our
consistent year-over-year earnings growth, backlog expansion and
record operating performance at SAO,” said Tony Thene, Carpenter
Technology’s President and CEO. “Operating income at SAO
reached its highest level on record as we continue to drive a
richer product mix by prioritizing higher-value solutions across
our end-use markets. In addition, customer activity at our Athens
facility remains high and we received four Vendor Approved Process
(VAP) approvals this quarter.”
“The second quarter marked our 12th consecutive quarter of
year-over-year sales growth and backlog growth. We generated
double-digit year-over-year revenue growth in the Aerospace and
Defense end-use market as our leading solutions, sub-market
diversity and participation on practically all major industry
platforms continue to drive strong performance. In addition,
sales in the Medical end-use market increased double digits
compared to last year as demand for our high-value solutions
remains high.”
“In the near-term, we are actively evaluating and executing on
opportunities to mitigate the impact of the Boeing 737 MAX supply
chain disruption. We believe we can partially mitigate the impact
to our business through our broad sub-market participation and by
leveraging our diverse portfolio of leading applications across
other attractive end-use markets.”
“Longer-term, we continue to place strategic emphasis on
advancing our leadership in emerging technologies and best
positioning Carpenter Technology for sustainable growth. We
recently opened our Emerging Technology Center on our Athens campus
and customer collaborations around additive manufacturing are
accelerating. The construction of our hot strip mill on our Reading
campus remains on target and will enable us to further capitalize
on our soft magnetics solutions portfolio and the anticipated
growth associated with expanding electrification initiatives across
multiple markets. The strategic investments we are making for the
future of our industry are critical to strengthening our position
as a solutions provider and driving long-term success for our
diverse base of customers.”
Financial Highlights
($ in
millions) |
|
Q2 |
|
Q2 |
|
Q1 |
|
|
|
|
FY2020 |
|
FY2019 |
|
FY2020 |
|
|
Net Sales |
$ |
573.0 |
|
|
$ |
556.5 |
|
|
|
$ |
585.4 |
|
|
|
|
Net Sales
Excluding Surcharge Revenue (a) |
$ |
471.2 |
|
|
$ |
449.4 |
|
|
|
$ |
486.6 |
|
|
|
|
Operating
Income |
$ |
55.0 |
|
|
$ |
55.4 |
|
|
|
$ |
59.8 |
|
|
|
|
Operating Income
Excluding Special Items (a) |
$ |
57.3 |
|
|
$ |
56.6 |
|
|
|
$ |
59.8 |
|
|
|
|
Net Income |
$ |
38.8 |
|
|
$ |
35.5 |
|
|
|
$ |
41.2 |
|
|
|
|
Cash Provided from
Operating Activities |
$ |
21.8 |
|
|
$ |
37.8 |
|
|
|
$ |
0.7 |
|
|
|
|
Free Cash Flow
(a) |
$ |
(34.5 |
) |
|
$ |
(90.9 |
) |
|
|
$ |
(56.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(a) Non-GAAP financial measures explained in the
attached tables |
|
|
|
|
|
|
|
Net sales for the second quarter of fiscal year 2020 were $573.0
million compared with $556.5 million in the second quarter of
fiscal year 2019, an increase of $16.5 million (3 percent), on 7
percent lower volume. Net sales excluding surcharge were $471.2
million, an increase of $21.8 million (5 percent) from the same
period a year ago.
Operating income was $55.0 million compared to $55.4 million.
These results primarily reflect stronger product mix across all
end-use markets, partially offset by higher spending in key growth
areas.
Cash provided from operating activities in the second quarter of
fiscal year 2020 was $21.8 million, compared to $37.8 million in
the same quarter last year. The decrease in operating cash flow
primarily reflects additional working capital investments partially
offset by higher income levels. Free cash flow in the second
quarter of fiscal year 2020 was negative $34.5 million, compared to
negative $90.9 million in the same quarter last year. The
improvement in free cash flow was primarily due to the fact that
the second quarter of last year included the acquisition of LPW
Technology Ltd. (LPW), which was partially offset in the current
quarter by higher capital expenditures and additional working
capital investments. Capital expenditures were $46.7 million in the
second quarter of fiscal year 2020 compared to $40.1 million in the
same quarter last year.
Total liquidity, including cash and available revolver balance,
was $305.1 million at the end of the second quarter of fiscal year
2020. This consisted of $29.9 million of cash and $275.2 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, January 30th at 10:00 a.m. ET, to discuss the
financial results of operations for the second quarter of fiscal
year 2020. 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 soon 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,
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, 2019, Form 10-Q for the quarter
ended September 30, 2019, 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;
and (16) uncertainty regarding the return to service of the Boeing
737 MAX aircraft and related supply chain disruption. 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 INCOME(in millions, except per share
data)(Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
December 31, |
|
December 31, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
NET SALES |
|
$ |
573.0 |
|
|
$ |
556.5 |
|
|
$ |
1,158.4 |
|
|
$ |
1,128.9 |
|
Cost of sales |
|
460.4 |
|
|
449.5 |
|
|
933.1 |
|
|
930.2 |
|
Gross profit |
|
112.6 |
|
|
107.0 |
|
|
225.3 |
|
|
198.7 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
55.3 |
|
|
51.6 |
|
|
108.2 |
|
|
98.3 |
|
Restructuring charges |
|
2.3 |
|
|
— |
|
|
2.3 |
|
|
— |
|
Operating income |
|
55.0 |
|
|
55.4 |
|
|
114.8 |
|
|
100.4 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(5.3 |
) |
|
(7.0 |
) |
|
(10.7 |
) |
|
(13.2 |
) |
Other income (expense),
net |
|
0.8 |
|
|
(3.2 |
) |
|
0.5 |
|
|
(1.7 |
) |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
50.5 |
|
|
45.2 |
|
|
104.6 |
|
|
85.5 |
|
Income tax expense |
|
11.7 |
|
|
9.7 |
|
|
24.6 |
|
|
18.5 |
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
38.8 |
|
|
$ |
35.5 |
|
|
$ |
80.0 |
|
|
$ |
67.0 |
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.80 |
|
|
$ |
0.73 |
|
|
$ |
1.65 |
|
|
$ |
1.39 |
|
Diluted |
|
$ |
0.79 |
|
|
$ |
0.73 |
|
|
$ |
1.64 |
|
|
$ |
1.38 |
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING: |
|
|
|
|
|
|
|
|
Basic |
|
48.1 |
|
|
47.7 |
|
|
48.0 |
|
|
47.7 |
|
Diluted |
|
48.5 |
|
|
48.0 |
|
|
48.4 |
|
|
48.1 |
|
|
|
|
|
|
|
|
|
|
PRELIMINARYCONSOLIDATED
STATEMENTS OF CASH FLOWS(in millions)(Unaudited)
|
|
Six Months Ended |
|
|
December 31, |
|
|
2019 |
|
2018 |
OPERATING ACTIVITIES: |
|
|
|
|
Net income |
|
$ |
80.0 |
|
|
$ |
67.0 |
|
Adjustments to reconcile net
income to net cash provided from operating activities: |
|
|
|
|
Depreciation and amortization |
|
61.0 |
|
|
60.1 |
|
Non-cash restructuring charges |
|
1.5 |
|
|
— |
|
Deferred income taxes |
|
5.5 |
|
|
4.9 |
|
Net pension expense |
|
7.6 |
|
|
5.8 |
|
Share-based compensation expense |
|
8.5 |
|
|
8.1 |
|
Net loss on disposals of property, plant and equipment and assets
held for sale |
|
0.1 |
|
|
0.1 |
|
Changes in working capital and
other: |
|
|
|
|
Accounts receivable |
|
5.0 |
|
|
39.4 |
|
Inventories |
|
(108.2 |
) |
|
(150.9 |
) |
Other current assets |
|
(12.9 |
) |
|
(8.0 |
) |
Accounts payable |
|
(1.0 |
) |
|
52.8 |
|
Accrued liabilities |
|
(17.1 |
) |
|
(28.0 |
) |
Pension plan contributions |
|
(3.6 |
) |
|
(3.3 |
) |
Other postretirement plan contributions |
|
(1.6 |
) |
|
(1.5 |
) |
Other, net |
|
(2.2 |
) |
|
0.7 |
|
Net cash provided from operating activities |
|
22.6 |
|
|
47.2 |
|
INVESTING ACTIVITIES: |
|
|
|
|
Purchases of property, plant,
equipment and software |
|
(94.3 |
) |
|
(81.7 |
) |
Proceeds from disposals of
property, plant and equipment and assets held for sale |
|
0.1 |
|
|
0.1 |
|
Acquisition of business, net
of cash acquired |
|
— |
|
|
(79.0 |
) |
Proceeds from sales and
maturities of marketable securities |
|
— |
|
|
2.9 |
|
Net cash used for investing activities |
|
(94.2 |
) |
|
(157.7 |
) |
FINANCING ACTIVITIES: |
|
|
|
|
Credit agreement
borrowings |
|
114.6 |
|
|
122.2 |
|
Credit agreement
repayments |
|
(45.7 |
) |
|
(42.2 |
) |
Net change in short-term
credit agreement borrowings |
|
30.3 |
|
|
20.6 |
|
Dividends paid |
|
(19.4 |
) |
|
(19.3 |
) |
Proceeds from stock options
exercised |
|
4.2 |
|
|
3.6 |
|
Withholding tax payments on
share-based compensation awards |
|
(7.7 |
) |
|
(4.3 |
) |
Net cash provided from financing activities |
|
76.3 |
|
|
80.6 |
|
Effect of exchange rate
changes on cash and cash equivalents |
|
(1.8 |
) |
|
2.2 |
|
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS |
|
2.9 |
|
|
(27.7 |
) |
Cash and cash equivalents at
beginning of period |
|
27.0 |
|
|
56.2 |
|
Cash and cash equivalents at
end of period |
|
$ |
29.9 |
|
|
$ |
28.5 |
|
|
PRELIMINARYCONSOLIDATED
BALANCE SHEETS(in millions)(Unaudited)
|
|
December 31, |
|
June 30, |
|
|
2019 |
|
2019 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
29.9 |
|
|
$ |
27.0 |
|
Accounts receivable, net |
|
378.3 |
|
|
384.1 |
|
Inventories |
|
896.6 |
|
|
787.7 |
|
Other current assets |
|
52.9 |
|
|
37.4 |
|
Total current assets |
|
1,357.7 |
|
|
1,236.2 |
|
Property, plant and equipment,
net |
|
1,385.8 |
|
|
1,366.2 |
|
Goodwill |
|
328.9 |
|
|
326.4 |
|
Other intangibles, net |
|
63.8 |
|
|
67.2 |
|
Deferred income taxes |
|
4.1 |
|
|
4.2 |
|
Other assets |
|
263.3 |
|
|
187.6 |
|
Total assets |
|
$ |
3,403.6 |
|
|
$ |
3,187.8 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current liabilities: |
|
|
|
|
Short-term credit agreement borrowings |
|
$ |
118.9 |
|
|
$ |
19.7 |
|
Accounts payable |
|
233.9 |
|
|
238.7 |
|
Accrued liabilities |
|
146.6 |
|
|
157.6 |
|
Total current liabilities |
|
499.4 |
|
|
416.0 |
|
Long-term debt |
|
550.6 |
|
|
550.6 |
|
Accrued pension
liabilities |
|
363.4 |
|
|
371.2 |
|
Accrued postretirement
benefits |
|
122.8 |
|
|
122.1 |
|
Deferred income taxes |
|
151.8 |
|
|
142.7 |
|
Other liabilities |
|
112.2 |
|
|
65.1 |
|
Total liabilities |
|
1,800.2 |
|
|
1,667.7 |
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
Common stock |
|
280.1 |
|
|
279.0 |
|
Capital in excess of par
value |
|
322.1 |
|
|
320.4 |
|
Reinvested earnings |
|
1,665.9 |
|
|
1,605.3 |
|
Common stock in treasury, at
cost |
|
(328.4 |
) |
|
(332.8 |
) |
Accumulated other
comprehensive loss |
|
(336.3 |
) |
|
(351.8 |
) |
Total stockholders' equity |
|
1,603.4 |
|
|
1,520.1 |
|
Total liabilities and stockholders' equity |
|
$ |
3,403.6 |
|
|
$ |
3,187.8 |
|
|
PRELIMINARYSEGMENT
FINANCIAL DATA(in millions, except pounds
sold)(Unaudited)
|
Three Months Ended |
|
Six Months Ended |
|
December 31, |
|
December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Pounds sold (000): |
|
|
|
|
|
|
|
Specialty Alloys Operations |
56,564 |
|
|
61,668 |
|
|
116,606 |
|
|
124,382 |
|
Performance Engineered Products |
3,424 |
|
|
3,300 |
|
|
6,674 |
|
|
6,032 |
|
Intersegment |
(690 |
) |
|
(1,050 |
) |
|
(1,684 |
) |
|
(880 |
) |
Consolidated pounds sold |
59,298 |
|
|
63,918 |
|
|
121,596 |
|
|
129,534 |
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
Specialty Alloys Operations |
|
|
|
|
|
|
|
Net sales excluding surcharge |
$ |
382.5 |
|
|
$ |
356.2 |
|
|
$ |
775.7 |
|
|
$ |
717.7 |
|
Surcharge |
100.5 |
|
|
105.4 |
|
|
198.4 |
|
|
219.4 |
|
Specialty Alloys Operations net sales |
483.0 |
|
|
461.6 |
|
|
974.1 |
|
|
937.1 |
|
|
|
|
|
|
|
|
|
Performance Engineered Products |
|
|
|
|
|
|
|
Net sales excluding surcharge |
104.1 |
|
|
109.4 |
|
|
212.0 |
|
|
217.4 |
|
Surcharge |
1.9 |
|
|
3.5 |
|
|
3.4 |
|
|
7.2 |
|
Performance Engineered Products net sales |
106.0 |
|
|
112.9 |
|
|
215.4 |
|
|
224.6 |
|
|
|
|
|
|
|
|
|
Intersegment |
|
|
|
|
|
|
|
Net sales excluding surcharge |
(15.4 |
) |
|
(16.2 |
) |
|
(29.9 |
) |
|
(29.3 |
) |
Surcharge |
(0.6 |
) |
|
(1.8 |
) |
|
(1.2 |
) |
|
(3.5 |
) |
Intersegment net sales |
(16.0 |
) |
|
(18.0 |
) |
|
(31.1 |
) |
|
(32.8 |
) |
|
|
|
|
|
|
|
|
Consolidated net sales |
$ |
573.0 |
|
|
$ |
556.5 |
|
|
$ |
1,158.4 |
|
|
$ |
1,128.9 |
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
Specialty Alloys Operations |
$ |
76.3 |
|
|
$ |
69.0 |
|
|
$ |
157.3 |
|
|
$ |
121.7 |
|
Performance Engineered Products |
0.4 |
|
|
4.4 |
|
|
(1.7 |
) |
|
11.7 |
|
Corporate costs (including restructuring) |
(21.9 |
) |
|
(18.4 |
) |
|
(41.0 |
) |
|
(34.2 |
) |
Intersegment |
0.2 |
|
|
0.4 |
|
|
0.2 |
|
|
1.2 |
|
Consolidated operating income |
$ |
55.0 |
|
|
$ |
55.4 |
|
|
$ |
114.8 |
|
|
$ |
100.4 |
|
|
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 Carpenter Additive (Additive) business and the
Latrobe and Mexico distribution businesses. Effective July 1, 2019,
the Company's LPW, CalRAM and Powder business in Alabama and West
Virginia were combined into the Carpenter Additive business. 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, CPP 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)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
December 31, |
|
December 31, |
ADJUSTED OPERATING MARGIN
EXCLUDING SURCHARGE REVENUE AND SPECIAL ITEMS |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
573.0 |
|
|
$ |
556.5 |
|
|
$ |
1,158.4 |
|
|
$ |
1,128.9 |
|
Less: surcharge revenue |
|
101.8 |
|
|
107.1 |
|
|
200.6 |
|
|
223.1 |
|
Net sales excluding surcharge
revenue |
|
$ |
471.2 |
|
|
$ |
449.4 |
|
|
$ |
957.8 |
|
|
$ |
905.8 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
55.0 |
|
|
$ |
55.4 |
|
|
$ |
114.8 |
|
|
$ |
100.4 |
|
Special items: |
|
|
|
|
|
|
|
|
Restructuring
charges |
|
2.3 |
|
|
— |
|
|
2.3 |
|
|
— |
|
Acquisition-related
costs |
|
— |
|
|
1.2 |
|
|
— |
|
|
1.2 |
|
Operating income excluding
special items |
|
$ |
57.3 |
|
|
$ |
56.6 |
|
|
$ |
117.1 |
|
|
$ |
101.6 |
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
9.6 |
% |
|
10.0 |
% |
|
9.9 |
% |
|
8.9 |
% |
|
|
|
|
|
|
|
|
|
Adjusted operating margin
excluding surcharge revenue and special items |
|
12.2 |
% |
|
12.6 |
% |
|
12.2 |
% |
|
11.2 |
% |
|
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
special items from operating margin is helpful in analyzing our
operating performance, 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 December
31, 2019, as reported |
|
$ |
50.5 |
|
|
$ |
(11.7 |
) |
|
$ |
38.8 |
|
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
Special item: |
|
|
|
|
|
|
|
|
Restructuring charges |
|
2.3 |
|
|
(0.5 |
) |
|
1.8 |
|
|
0.04 |
|
|
|
|
|
|
|
|
|
|
Three months ended December
31, 2019, as adjusted |
|
$ |
52.8 |
|
|
$ |
(12.2 |
) |
|
$ |
40.6 |
|
|
$ |
0.83 |
|
|
|
|
|
|
|
|
|
|
* Impact per
diluted share calculated using weighted average common shares
outstanding of 48.5 million for the three months ended December 31,
2019. |
ADJUSTED EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS |
|
Income Before Income Taxes |
|
Income Tax Expense |
|
Net Income |
|
Earnings Per Diluted Share* |
|
|
|
|
|
|
|
|
|
Three months ended December
31, 2018, as reported |
|
$ |
45.2 |
|
|
$ |
(9.7 |
) |
|
$ |
35.5 |
|
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
|
Special item: |
|
|
|
|
|
|
|
|
Acquisition-related costs |
|
1.2 |
|
|
— |
|
|
1.2 |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
Three months ended December
31, 2018, as adjusted |
|
$ |
46.4 |
|
|
$ |
(9.7 |
) |
|
$ |
36.7 |
|
|
$ |
0.76 |
|
|
|
|
|
|
|
|
|
|
* Impact per
diluted share calculated using weighted average common shares
outstanding of 48.0 million for the three months ended December 31,
2018. |
ADJUSTED EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS |
|
Income Before Income Taxes |
|
Income Tax Expense |
|
Net Income |
|
Earnings Per Diluted Share* |
|
|
|
|
|
|
|
|
|
Six months ended December 31,
2019, as reported |
|
$ |
104.6 |
|
|
$ |
(24.6 |
) |
|
$ |
80.0 |
|
|
$ |
1.64 |
|
|
|
|
|
|
|
|
|
|
Special item: |
|
|
|
|
|
|
|
|
Restructuring charges |
|
2.3 |
|
|
(0.5 |
) |
|
1.8 |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
Six months ended December 31,
2019, as adjusted |
|
$ |
106.9 |
|
|
$ |
(25.1 |
) |
|
$ |
81.8 |
|
|
$ |
1.67 |
|
|
|
|
|
|
|
|
|
|
* Impact per
diluted share calculated using weighted average common shares
outstanding of 48.4 million for the six months ended December 31,
2019. |
ADJUSTED EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS |
|
Income Before Income Taxes |
|
Income Tax Expense |
|
Net Income |
|
Earnings Per Diluted Share* |
|
|
|
|
|
|
|
|
|
Six months ended December 31,
2018, as reported |
|
$ |
85.5 |
|
|
$ |
(18.5 |
) |
|
$ |
67.0 |
|
|
$ |
1.38 |
|
|
|
|
|
|
|
|
|
|
Special item: |
|
|
|
|
|
|
|
|
Acquisition-related costs |
|
1.2 |
|
|
— |
|
|
1.2 |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
Six months ended December 31,
2018, as adjusted |
|
$ |
86.7 |
|
|
$ |
(18.5 |
) |
|
$ |
68.2 |
|
|
$ |
1.41 |
|
|
|
|
|
|
|
|
|
|
* Impact per
diluted share calculated using weighted average common shares
outstanding of 48.1 million for the six months ended December 31,
2018. |
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 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 |
|
Six Months Ended |
|
|
December 31, |
|
December 31, |
FREE CASH FLOW |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Net cash provided from
operating activities |
|
$ |
21.8 |
|
|
$ |
37.8 |
|
|
$ |
22.6 |
|
|
$ |
47.2 |
|
Purchases of property, plant,
equipment and software |
|
(46.7 |
) |
|
(40.1 |
) |
|
(94.3 |
) |
|
(81.7 |
) |
Proceeds from disposals of
property, plant and equipment and assets held for sale |
|
0.1 |
|
|
0.1 |
|
|
0.1 |
|
|
0.1 |
|
Acquisition of business, net
of cash acquired |
|
— |
|
|
(79.0 |
) |
|
— |
|
|
(79.0 |
) |
Dividends paid |
|
(9.7 |
) |
|
(9.7 |
) |
|
(19.4 |
) |
|
(19.3 |
) |
|
|
|
|
|
|
|
|
|
Free cash flow |
|
$ |
(34.5 |
) |
|
$ |
(90.9 |
) |
|
$ |
(91.0 |
) |
|
$ |
(132.7 |
) |
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.
PRELIMINARYSUPPLEMENTAL
SCHEDULE(in millions)(Unaudited)
|
|
Three Months Ended |
|
Six Months Ended |
|
|
December 31, |
|
December 31, |
NET SALES BY END-USE
MARKET |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
End-Use Market Excluding
Surcharge Revenue: |
|
|
|
|
|
|
|
|
Aerospace and Defense |
|
$ |
278.8 |
|
|
$ |
234.1 |
|
|
$ |
564.9 |
|
|
$ |
473.8 |
|
Medical |
|
43.5 |
|
|
38.4 |
|
|
87.5 |
|
|
78.0 |
|
Transportation |
|
30.6 |
|
|
29.4 |
|
|
63.6 |
|
|
60.8 |
|
Energy |
|
26.9 |
|
|
36.4 |
|
|
59.9 |
|
|
73.9 |
|
Industrial and Consumer |
|
63.9 |
|
|
77.6 |
|
|
124.1 |
|
|
152.1 |
|
Distribution |
|
27.5 |
|
|
33.5 |
|
|
57.8 |
|
|
67.2 |
|
|
|
|
|
|
|
|
|
|
Total net sales excluding
surcharge revenue |
|
471.2 |
|
|
449.4 |
|
|
957.8 |
|
|
905.8 |
|
|
|
|
|
|
|
|
|
|
Surcharge revenue |
|
101.8 |
|
|
107.1 |
|
|
200.6 |
|
|
223.1 |
|
|
|
|
|
|
|
|
|
|
Total net sales |
|
$ |
573.0 |
|
|
$ |
556.5 |
|
|
$ |
1,158.4 |
|
|
$ |
1,128.9 |
|
|
|
|
Media Inquiries: |
|
Investor Inquiries: |
Heather Beardsley |
|
The Plunkett Group |
+1 610-208-2278 |
|
Brad Edwards |
hbeardsley@cartech.com |
|
+1 212-739-6740 |
|
|
brad@theplunkettgroup.com |
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