Carpenter Technology Corporation (NYSE: CRS) (the “Company”) today
announced financial results for the fiscal third quarter ended
March 31, 2020. For the quarter, the Company reported net income of
$39.9 million, or $0.82 earnings per diluted share.“Our third
quarter results reflected solid execution in a challenging
environment due to the impact of the 737 MAX production halt as
well as the COVID-19 pandemic,” said Tony. R. Thene, President and
CEO of Carpenter Technology. “Our performance speaks largely to the
dedication of our employees who have
responded to an unprecedented situation with a
focused commitment to delivering for our customers while
also adopting enhanced safety measures. In response to COVID-19, we
moved quickly to develop and implement benchmark
safety protocols aimed at protecting our employees in a
rapidly changing environment.”“Looking ahead, visibility is limited
given the ongoing COVID-19 pandemic and its potential impact on
demand patterns across our end-use markets. We remain in close
contact with our customers and will continue working
alongside them to fulfill their material requirements. We
believe our financial position remains healthy and we are executing
targeted portfolio restructurings and cost reductions to drive
enhanced flexibility. While we cannot predict the duration of
COVID-19 and the total impact it will have on our business, we
remain fully committed to the safety of our employees and
continuing to serve as a critical supply chain partner for our
customers during this difficult time. Our long-term growth profile
remains solid as we are a key supplier of mission-critical
applications with strong customer relationships, a deep solutions
portfolio and established market leadership across a number of
attractive end-use markets.”
Savings Actions Initiated to Address COVID-19 and
Preserve Liquidity
COVID-19 related disruptions negatively impacted operating
income results by approximately $5.5 million in the third quarter
of fiscal year 2020. This impact is principally associated with
disruption in the ability to ship certain materials late in the
quarter as additional safety measures were implemented across the
Company’s facilities as well as certain customers who were unable
to accept deliveries due to shutdowns.
As the COVID-19 pandemic continues to impact global economic
conditions and near-term customer demand patterns, the Company has
taken several actions to initiate cost savings and preserve
liquidity. These actions include implementing temporary furloughs
for certain production and maintenance employees across facilities
based on planned production scheduling, implementing a global
hiring freeze and reducing planned capital expenditures for fiscal
year 2021 by approximately 25-30% from fiscal year 2020. The
Company also initiated actions to reduce working capital levels,
principally inventory, to align with anticipated customer demand
and expects that working capital represents a significant
opportunity for cash generation in the near-term.
In addition, the Company recently approved actions to exit the
downstream oil and gas (Amega West) business and idle two domestic
powder metals production facilities. As a result of the decisions
to close these facilities, the Company expects to save $15 million
to $20 million annually based on current run rates for these
businesses. The Company expects to record restructuring
charges including non-cash asset impairments, non-cash lease
termination costs and employee separation costs between $80 million
and $100 million before taxes, in the fourth quarter of fiscal year
2020.
The Company has identified additional actions to preserve and
manage cash and has plans to deploy those actions as deemed
necessary to respond to the evolving situation.
Total liquidity, including cash and available credit facility
borrowings, was $317.1 million at the end of the third quarter of
fiscal year 2020. This consisted of $93.0 million of cash and
$224.1 million of available borrowings under the Company’s credit
facility.
Financial Highlights
($ in
millions) |
|
Q3 |
|
Q3 |
|
Q2 |
|
|
|
|
FY2020 |
|
FY2019 |
|
FY2020 |
|
|
Net Sales |
$ |
585.4 |
|
$ |
609.9 |
|
|
|
$ |
573.0 |
|
|
|
|
Net Sales
Excluding Surcharge Revenue (a) |
$ |
495.0 |
|
$ |
503.0 |
|
|
|
$ |
471.2 |
|
|
|
|
Operating
Income |
$ |
58.7 |
|
$ |
73.2 |
|
|
|
$ |
55.0 |
|
|
|
|
Operating Income
Excluding Special Items (a) |
$ |
58.7 |
|
$ |
73.2 |
|
|
|
$ |
57.3 |
|
|
|
|
Net Income |
$ |
39.9 |
|
$ |
51.1 |
|
|
|
$ |
38.8 |
|
|
|
|
Cash Provided from
Operating Activities |
$ |
72.3 |
|
$ |
10.0 |
|
|
|
$ |
21.8 |
|
|
|
|
Free Cash Flow
(a) |
$ |
13.0 |
|
$ |
(37.0) |
|
|
|
$ |
(34.5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Non-GAAP financial measures explained in the
attached tables |
|
|
|
|
|
|
|
|
|
|
|
Net sales for the third quarter of fiscal year 2020 were $585.4
million compared with $609.9 million in the third quarter of fiscal
year 2019, a decrease of $24.5 million (4 percent), on 9 percent
lower volume. Net sales excluding surcharge were $495.0 million, a
decrease of $8.0 million (2 percent) from the same period a year
ago.
Operating income was $58.7 million in the recent third quarter
compared to $73.2 million in the same period last year. The results
for the third quarter of last year included an $11.4 million
insurance recovery benefit.
Cash provided from operating activities in the third quarter of
fiscal year 2020 was $72.3 million, compared to $10.0 million in
the same quarter last year. Free cash flow in the third quarter of
fiscal year 2020 was $13.0 million, compared to negative $37.0
million in the same quarter last year. The increases in
operating cash flow and free cash flow primarily reflect
improvements in working capital. Capital expenditures were $49.7
million in the third quarter of fiscal year 2020 compared to $49.0
million in the same quarter last year.
Conference Call and Webcast Presentation
Carpenter Technology will host a conference call and webcast
presentation today, April 30th at 10:00 a.m. ET, to discuss the
financial results of operations for the third 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 quarters ended
September 30, 2019 and December 31, 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;
(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; and (18) 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 INCOME(in millions, except per share
data)(Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
March 31, |
|
March 31, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
NET SALES |
|
$ |
585.4 |
|
|
$ |
609.9 |
|
|
$ |
1,743.8 |
|
|
$ |
1,738.8 |
|
Cost of sales |
|
475.9 |
|
|
486.7 |
|
|
1,409.0 |
|
|
1,416.9 |
|
Gross profit |
|
109.5 |
|
|
123.2 |
|
|
334.8 |
|
|
321.9 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
50.8 |
|
|
50.0 |
|
|
159.0 |
|
|
148.3 |
|
Restructuring charges |
|
— |
|
|
— |
|
|
2.3 |
|
|
— |
|
Operating income |
|
58.7 |
|
|
73.2 |
|
|
173.5 |
|
|
173.6 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(4.9 |
) |
|
(7.1 |
) |
|
(15.6 |
) |
|
(20.3 |
) |
Other (expense) income,
net |
|
(3.9 |
) |
|
1.9 |
|
|
(3.4 |
) |
|
0.1 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
49.9 |
|
|
68.0 |
|
|
154.5 |
|
|
153.4 |
|
Income tax expense |
|
10.0 |
|
|
16.9 |
|
|
34.6 |
|
|
35.3 |
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
39.9 |
|
|
$ |
51.1 |
|
|
$ |
119.9 |
|
|
$ |
118.1 |
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.82 |
|
|
$ |
1.06 |
|
|
$ |
2.47 |
|
|
$ |
2.45 |
|
Diluted |
|
$ |
0.82 |
|
|
$ |
1.05 |
|
|
$ |
2.46 |
|
|
$ |
2.43 |
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING: |
|
|
|
|
|
|
|
|
Basic |
|
48.1 |
|
|
47.7 |
|
|
48.0 |
|
|
47.7 |
|
Diluted |
|
48.3 |
|
|
48.1 |
|
|
48.4 |
|
|
48.1 |
|
|
|
|
|
|
|
|
|
|
PRELIMINARYCONSOLIDATED
STATEMENTS OF CASH FLOWS(in millions)(Unaudited)
|
|
Nine Months Ended |
|
|
March 31, |
|
|
2020 |
|
2019 |
OPERATING ACTIVITIES |
|
|
|
|
Net income |
|
$ |
119.9 |
|
|
$ |
118.1 |
|
Adjustments to reconcile net
income to net cash provided from operating activities: |
|
|
|
|
Depreciation and amortization |
|
92.2 |
|
|
90.9 |
|
Non-cash restructuring charges |
|
1.5 |
|
|
— |
|
Deferred income taxes |
|
7.0 |
|
|
7.0 |
|
Net pension expense |
|
11.5 |
|
|
8.7 |
|
Share-based compensation expense |
|
12.4 |
|
|
12.7 |
|
Net loss on disposals of property, plant and equipment and assets
held for sale |
|
— |
|
|
0.7 |
|
Gain on insurance
recovery |
|
— |
|
|
(11.4 |
) |
Changes in working capital and
other: |
|
|
|
|
Accounts receivable |
|
7.6 |
|
|
(12.1 |
) |
Inventories |
|
(85.2 |
) |
|
(168.3 |
) |
Other current assets |
|
(5.2 |
) |
|
7.6 |
|
Accounts payable |
|
(26.9 |
) |
|
36.6 |
|
Accrued liabilities |
|
(33.4 |
) |
|
(25.2 |
) |
Pension plan contributions |
|
(4.9 |
) |
|
(4.3 |
) |
Other postretirement plan contributions |
|
(2.7 |
) |
|
(2.5 |
) |
Other, net |
|
1.1 |
|
|
(1.3 |
) |
Net cash provided from operating activities |
|
94.9 |
|
|
57.2 |
|
INVESTING ACTIVITIES |
|
|
|
|
Purchases of property, plant,
equipment and software |
|
(144.0 |
) |
|
(130.7 |
) |
Proceeds from disposals of
property, plant and equipment and assets held for sale |
|
0.3 |
|
|
0.3 |
|
Acquisition of business, net
of cash acquired |
|
— |
|
|
(79.0 |
) |
Proceeds from sales and
maturities of marketable securities |
|
— |
|
|
2.9 |
|
Proceeds from insurance
recovery |
|
— |
|
|
11.4 |
|
Net cash used for investing activities |
|
(143.7 |
) |
|
(195.1 |
) |
FINANCING ACTIVITIES |
|
|
|
|
Credit agreement
borrowings |
|
331.1 |
|
|
163.9 |
|
Credit agreement
repayments |
|
(181.1 |
) |
|
(63.9 |
) |
Net change in short-term
credit agreement borrowings |
|
0.3 |
|
|
27.0 |
|
Dividends paid |
|
(29.1 |
) |
|
(28.9 |
) |
Proceeds from stock options
exercised |
|
4.3 |
|
|
3.7 |
|
Withholding tax payments on
share-based compensation awards |
|
(7.8 |
) |
|
(4.4 |
) |
Net cash provided from financing activities |
|
117.7 |
|
|
97.4 |
|
Effect of exchange rate
changes on cash and cash equivalents |
|
(2.9 |
) |
|
3.2 |
|
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS |
|
66.0 |
|
|
(37.3 |
) |
Cash and cash equivalents at
beginning of period |
|
27.0 |
|
|
56.2 |
|
Cash and cash equivalents at
end of period |
|
$ |
93.0 |
|
|
$ |
18.9 |
|
|
|
|
|
|
|
|
|
|
PRELIMINARYCONSOLIDATED
BALANCE SHEETS(in millions)(Unaudited)
|
|
March 31, |
|
June 30, |
|
|
2020 |
|
2019 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
93.0 |
|
|
$ |
27.0 |
|
Accounts receivable, net |
|
374.4 |
|
|
384.1 |
|
Inventories |
|
869.0 |
|
|
787.7 |
|
Other current assets |
|
40.7 |
|
|
37.4 |
|
Total current assets |
|
1,377.1 |
|
|
1,236.2 |
|
Property, plant and equipment,
net |
|
1,395.2 |
|
|
1,366.2 |
|
Goodwill |
|
325.1 |
|
|
326.4 |
|
Other intangibles, net |
|
61.2 |
|
|
67.2 |
|
Deferred income taxes |
|
3.8 |
|
|
4.2 |
|
Other assets |
|
267.0 |
|
|
187.6 |
|
Total assets |
|
$ |
3,429.4 |
|
|
$ |
3,187.8 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current liabilities: |
|
|
|
|
Short-term credit agreement borrowings |
|
$ |
170.0 |
|
|
$ |
19.7 |
|
Accounts payable |
|
209.6 |
|
|
238.7 |
|
Accrued liabilities |
|
136.4 |
|
|
157.6 |
|
Total current liabilities |
|
516.0 |
|
|
416.0 |
|
Long-term debt |
|
552.4 |
|
|
550.6 |
|
Accrued pension
liabilities |
|
359.7 |
|
|
371.2 |
|
Accrued postretirement
benefits |
|
122.8 |
|
|
122.1 |
|
Deferred income taxes |
|
151.5 |
|
|
142.7 |
|
Other liabilities |
|
108.5 |
|
|
65.1 |
|
Total liabilities |
|
1,810.9 |
|
|
1,667.7 |
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
Common stock |
|
280.1 |
|
|
279.0 |
|
Capital in excess of par
value |
|
325.7 |
|
|
320.4 |
|
Reinvested earnings |
|
1,696.1 |
|
|
1,605.3 |
|
Common stock in treasury, at
cost |
|
(328.1 |
) |
|
(332.8 |
) |
Accumulated other
comprehensive loss |
|
(355.3 |
) |
|
(351.8 |
) |
Total stockholders' equity |
|
1,618.5 |
|
|
1,520.1 |
|
Total liabilities and stockholders' equity |
|
$ |
3,429.4 |
|
|
$ |
3,187.8 |
|
|
|
|
|
|
|
|
|
|
PRELIMINARYSEGMENT
FINANCIAL DATA(in millions, except pounds
sold)(Unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
March 31, |
|
March 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Pounds sold (000): |
|
|
|
|
|
|
|
Specialty Alloys Operations |
59,052 |
|
|
65,296 |
|
|
175,660 |
|
|
189,678 |
|
Performance Engineered Products |
3,202 |
|
|
3,540 |
|
|
9,874 |
|
|
9,572 |
|
Intersegment |
(116 |
) |
|
(918 |
) |
|
(1,800 |
) |
|
(1,798 |
) |
Consolidated pounds sold |
62,138 |
|
|
67,918 |
|
|
183,734 |
|
|
197,452 |
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
Specialty Alloys Operations |
|
|
|
|
|
|
|
Net sales excluding surcharge |
$ |
398.8 |
|
|
$ |
393.3 |
|
|
$ |
1,174.5 |
|
|
$ |
1,111.0 |
|
Surcharge |
89.3 |
|
|
105.0 |
|
|
287.7 |
|
|
324.4 |
|
Specialty Alloys Operations net sales |
488.1 |
|
|
498.3 |
|
|
1,462.2 |
|
|
1,435.4 |
|
|
|
|
|
|
|
|
|
Performance Engineered Products |
|
|
|
|
|
|
|
Net sales excluding surcharge |
107.1 |
|
|
125.9 |
|
|
319.1 |
|
|
343.3 |
|
Surcharge |
1.5 |
|
|
2.8 |
|
|
4.9 |
|
|
10.1 |
|
Performance Engineered Products net sales |
108.6 |
|
|
128.7 |
|
|
324.0 |
|
|
353.4 |
|
|
|
|
|
|
|
|
|
Intersegment |
|
|
|
|
|
|
|
Net sales excluding surcharge |
(10.9 |
) |
|
(16.2 |
) |
|
(40.8 |
) |
|
(45.5 |
) |
Surcharge |
(0.4 |
) |
|
(0.9 |
) |
|
(1.6 |
) |
|
(4.5 |
) |
Intersegment net sales |
(11.3 |
) |
|
(17.1 |
) |
|
(42.4 |
) |
|
(50.0 |
) |
|
|
|
|
|
|
|
|
Consolidated net sales |
$ |
585.4 |
|
|
$ |
609.9 |
|
|
$ |
1,743.8 |
|
|
$ |
1,738.8 |
|
|
|
|
|
|
|
|
|
Operating Income (Loss): |
|
|
|
|
|
|
|
Specialty Alloys Operations |
$ |
76.4 |
|
|
$ |
73.6 |
|
|
$ |
233.7 |
|
|
$ |
195.3 |
|
Performance Engineered Products |
|
(0.3 |
) |
|
|
16.6 |
|
|
|
(2.0 |
) |
|
|
28.3 |
|
Corporate (including restructuring charges) |
|
(17.8 |
) |
|
|
(17.3 |
) |
|
|
(58.8 |
) |
|
|
(51.5 |
) |
Intersegment |
0.4 |
|
|
0.3 |
|
|
0.6 |
|
|
1.5 |
|
Consolidated operating income |
$ |
58.7 |
|
|
$ |
73.2 |
|
|
$ |
173.5 |
|
|
$ |
173.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company has two reportable segments, Specialty Alloys
Operations (“SAO”) and Performance Engineered Products (“PEP”).
The SAO segment is comprised of Carpenter Technology’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 |
|
Nine Months Ended |
|
|
March 31, |
|
March 31, |
ADJUSTED OPERATING MARGIN
EXCLUDINGSURCHARGE REVENUE AND SPECIAL ITEMS |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
585.4 |
|
|
$ |
609.9 |
|
|
$ |
1,743.8 |
|
|
$ |
1,738.8 |
|
Less: surcharge revenue |
|
90.4 |
|
|
106.9 |
|
|
291.0 |
|
|
330.0 |
|
Net sales excluding surcharge
revenue |
|
$ |
495.0 |
|
|
$ |
503.0 |
|
|
$ |
1,452.8 |
|
|
$ |
1,408.8 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
58.7 |
|
|
$ |
73.2 |
|
|
$ |
173.5 |
|
|
$ |
173.6 |
|
Special items: |
|
|
|
|
|
|
|
|
Restructuring
charges |
|
— |
|
|
— |
|
|
2.3 |
|
|
— |
|
Acquisition-related
costs |
|
— |
|
|
— |
|
|
— |
|
|
1.2 |
|
Operating income excluding
special items |
|
$ |
58.7 |
|
|
$ |
73.2 |
|
|
$ |
175.8 |
|
|
$ |
174.8 |
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
10.0 |
% |
|
12.0 |
% |
|
9.9 |
% |
|
10.0 |
% |
|
|
|
|
|
|
|
|
|
Adjusted operating margin
excluding surcharge revenue and special items |
|
11.9 |
% |
|
14.6 |
% |
|
12.1 |
% |
|
12.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 EXCLUDINGSPECIAL ITEMS |
|
IncomeBeforeIncomeTaxes |
|
IncomeTaxExpense |
|
NetIncome |
|
EarningsPerDilutedShare* |
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2020, as reported |
|
$ |
49.9 |
|
|
$ |
(10.0 |
) |
|
$ |
39.9 |
|
|
$ |
0.82 |
|
|
|
|
|
|
|
|
|
|
Special item: |
|
|
|
|
|
|
|
|
None reported |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
2020, as adjusted |
|
$ |
49.9 |
|
|
$ |
(10.0 |
) |
|
$ |
39.9 |
|
|
$ |
0.82 |
|
|
|
|
|
|
|
|
|
|
* Impact per
diluted share calculated using weighted average common shares
outstanding of 48.3 million for the three months ended March 31,
2020. |
ADJUSTED EARNINGS PER SHARE EXCLUDINGSPECIAL ITEMS |
|
IncomeBeforeIncomeTaxes |
|
IncomeTaxExpense |
|
NetIncome |
|
EarningsPerDilutedShare* |
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2019, as reported |
|
$ |
68.0 |
|
|
$ |
(16.9 |
) |
|
$ |
51.1 |
|
|
$ |
1.05 |
|
|
|
|
|
|
|
|
|
|
Special item: |
|
|
|
|
|
|
|
|
None reported |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
2019, as adjusted |
|
$ |
68.0 |
|
|
$ |
(16.9 |
) |
|
$ |
51.1 |
|
|
$ |
1.05 |
|
|
|
|
|
|
|
|
|
|
* Impact per
diluted share calculated using weighted average common shares
outstanding of 48.1 million for the three months ended March 31,
2019. |
ADJUSTED EARNINGS PER SHARE EXCLUDINGSPECIAL ITEMS |
|
IncomeBeforeIncomeTaxes |
|
IncomeTaxExpense |
|
NetIncome |
|
EarningsPerDilutedShare* |
|
|
|
|
|
|
|
|
|
Nine months ended March 31, 2020, as reported |
|
$ |
154.5 |
|
|
$ |
(34.6 |
) |
|
$ |
119.9 |
|
|
$ |
2.46 |
|
|
|
|
|
|
|
|
|
|
Special item: |
|
|
|
|
|
|
|
|
Restructuring charges |
|
2.3 |
|
|
(0.5 |
) |
|
1.8 |
|
|
0.04 |
|
|
|
|
|
|
|
|
|
|
Nine months ended March 31,
2020, as adjusted |
|
$ |
156.8 |
|
|
$ |
(35.1 |
) |
|
$ |
121.7 |
|
|
$ |
2.50 |
|
|
|
|
|
|
|
|
|
|
* Impact per
diluted share calculated using weighted average common shares
outstanding of 48.4 million for the nine months ended March 31,
2020. |
ADJUSTED EARNINGS PER SHARE EXCLUDINGSPECIAL ITEMS |
|
IncomeBeforeIncomeTaxes |
|
IncomeTaxExpense |
|
NetIncome |
|
EarningsPerDilutedShare* |
|
|
|
|
|
|
|
|
|
Nine months ended March 31, 2019, as reported |
|
$ |
153.4 |
|
|
$ |
(35.3 |
) |
|
$ |
118.1 |
|
|
$ |
2.43 |
|
|
|
|
|
|
|
|
|
|
Special item: |
|
|
|
|
|
|
|
|
Acquisition-related costs |
|
1.2 |
|
|
— |
|
|
1.2 |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
Nine months ended March 31,
2019, as adjusted |
|
$ |
154.6 |
|
|
$ |
(35.3 |
) |
|
$ |
119.3 |
|
|
$ |
2.46 |
|
|
|
|
|
|
|
|
|
|
* Impact per
diluted share calculated using weighted average common shares
outstanding of 48.1 million for the nine months ended March 31,
2019. |
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 |
|
Nine Months Ended |
|
|
March 31, |
|
March 31, |
FREE CASH FLOW |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
Net cash provided from operating activities |
|
$ |
72.3 |
|
|
$ |
10.0 |
|
|
$ |
94.9 |
|
|
$ |
57.2 |
|
Purchases of property, plant,
equipment and software |
|
(49.7 |
) |
|
(49.0 |
) |
|
(144.0 |
) |
|
(130.7 |
) |
Proceeds from disposals of
property, plant and equipment and assets held for sale |
|
0.1 |
|
|
0.2 |
|
|
0.3 |
|
|
0.3 |
|
Acquisition of business, net
of cash acquired |
|
— |
|
|
— |
|
|
— |
|
|
(79.0 |
) |
Proceeds from insurance
recovery |
|
— |
|
|
11.4 |
|
|
— |
|
|
11.4 |
|
Dividends paid |
|
(9.7 |
) |
|
(9.6 |
) |
|
(29.1 |
) |
|
(28.9 |
) |
|
|
|
|
|
|
|
|
|
Free cash flow |
|
$ |
13.0 |
|
|
$ |
(37.0 |
) |
|
$ |
(77.9 |
) |
|
$ |
(169.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
Nine Months Ended |
|
|
March 31, |
|
March 31, |
NET SALES BY END-USE
MARKET |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
End-Use Market Excluding
Surcharge Revenue: |
|
|
|
|
|
|
|
|
Aerospace and Defense |
|
$ |
293.4 |
|
|
$ |
273.8 |
|
|
$ |
858.3 |
|
|
$ |
747.6 |
|
Medical |
|
47.7 |
|
|
47.1 |
|
|
135.2 |
|
|
125.0 |
|
Transportation |
|
27.8 |
|
|
33.5 |
|
|
91.4 |
|
|
94.3 |
|
Energy |
|
28.8 |
|
|
40.8 |
|
|
88.7 |
|
|
114.7 |
|
Industrial and Consumer |
|
67.8 |
|
|
71.9 |
|
|
191.9 |
|
|
224.0 |
|
Distribution |
|
29.5 |
|
|
35.9 |
|
|
87.3 |
|
|
103.2 |
|
|
|
|
|
|
|
|
|
|
Total net sales excluding
surcharge revenue |
|
495.0 |
|
|
503.0 |
|
|
1,452.8 |
|
|
1,408.8 |
|
|
|
|
|
|
|
|
|
|
Surcharge revenue |
|
90.4 |
|
|
106.9 |
|
|
291.0 |
|
|
330.0 |
|
|
|
|
|
|
|
|
|
|
Total net sales |
|
$ |
585.4 |
|
|
$ |
609.9 |
|
|
$ |
1,743.8 |
|
|
$ |
1,738.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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