Carpenter Technology Corporation (NYSE: CRS) (the “Company”) today
announced financial results for the fiscal fourth quarter and year
ended June 30, 2019. For the quarter, the Company reported net
income of $48.9 million, or $1.00 earnings per diluted share.
“The fourth quarter marked the end to a successful year as we
generated our strongest quarterly operating income performance
since fiscal year 2013,” said Tony Thene, Carpenter Technology’s
President and CEO. “Key highlights of the quarter include SAO
delivering 20.4% adjusted operating margin, positive total company
free cash flow of $115.8 million, and our 12th consecutive quarter
of year-over-year backlog growth. The fourth quarter’s operating
income results were driven by a continued strong product mix as we
generated double digit sequential and year-over-year revenue growth
in the Aerospace and Defense end-use market given our sub-market
diversity and broad platform exposure. Also, growth in the
Medical end-use market remained robust as we continued to benefit
from our direct customer relationships with leading OEMs and
increasing demand for our high-value titanium solutions.”
“Our fiscal year 2019 performance demonstrates the value of
strong execution of our commercial and manufacturing strategies
which drove consistent year-over-year revenue and earnings growth
in the Aerospace and Defense and Medical end-use markets. During
the year, we made significant progress on obtaining the necessary
Aerospace qualifications for our Athens facility. We also continued
to look to the future and took innovative steps to strengthen our
leadership position through targeted investments in key emerging
technologies. This past year we significantly advanced our additive
manufacturing platform by adding powder lifecycle management
solutions through the acquisition of LPW Technology Ltd. In
addition, the expansion of our soft magnetics capabilities remains
on track as we seek to capitalize on the disruptive impact of
electrification across multiple end-use markets.”
“Looking ahead, we are focused on advancing our solutions
approach, capturing additional productivity and capacity gains
through the Carpenter Operating Model, and investing in the future
of our industry and our end-use markets. We believe the further
execution of our strategy will enhance our long-term growth
potential and drive sustainable long-term value creation for our
customers and shareholders.”
Financial Highlights
($ in
millions) |
|
Q4 |
|
Q4 |
|
Q3 |
|
YTD |
|
YTD |
|
|
FY2019 |
|
FY2018 |
|
FY2019 |
|
FY2019 |
|
FY2018 |
Net Sales |
$ |
641.4 |
|
$ |
618.0 |
|
|
$ |
609.9 |
|
|
|
$ |
2,380.2 |
|
|
$ |
2,157.7 |
Net Sales
Excluding Surcharge (a) |
$ |
533.3 |
|
$ |
494.5 |
|
|
$ |
503.0 |
|
|
|
$ |
1,942.1 |
|
|
$ |
1,792.3 |
Operating
Income |
$ |
67.9 |
|
$ |
60.0 |
|
|
$ |
73.2 |
|
|
|
$ |
241.4 |
|
|
$ |
189.3 |
Adjusted Operating
Income Excluding Special Items (a) |
$ |
67.9 |
|
$ |
60.0 |
|
|
$ |
73.2 |
|
|
|
$ |
242.6 |
|
|
$ |
189.3 |
Net Income |
$ |
48.9 |
|
$ |
42.8 |
|
|
$ |
51.1 |
|
|
|
$ |
167.0 |
|
|
$ |
188.5 |
Cash Provided from
Operating Activities |
$ |
175.1 |
|
$ |
118.5 |
|
|
$ |
10.0 |
|
|
|
$ |
232.4 |
|
|
$ |
209.2 |
Free Cash Flow
(a) |
$ |
115.8 |
|
$ |
55.9 |
|
|
$ |
(37.0 |
) |
|
|
$ |
(53.7 |
) |
|
$ |
34.7 |
|
|
|
|
|
|
|
|
|
|
|
|
(a) non-GAAP
financial measures explained in the attached tables |
|
|
|
Net sales for the fourth quarter of fiscal year 2019 were $641.4
million compared with $618.0 million in the fourth quarter of
fiscal year 2018, an increase of $23.4 million (4 percent), on 4
percent lower volume. Net sales excluding surcharge were $533.3
million, an increase of $38.8 million (8 percent) from the same
period a year ago.
Operating income was $67.9 million compared to $60.0 million in
the prior year period. These results primarily reflect strong
commercial execution and improved market conditions in key end-use
markets compared to the prior year period.
Cash provided from operating activities in the fourth quarter of
fiscal year 2019 was $175.1 million, compared to $118.5 million in
the same quarter last year. The increase in operating cash flow
primarily reflects a reduction in inventory coupled with higher
sales during the quarter. Free cash flow in the fourth quarter of
fiscal year 2019 was $115.8 million, compared to $55.9
million in the same quarter last year. The increase in free
cash flow was primarily due to higher cash from operating
activities in the quarter. Capital expenditures were $49.7 million
in the fourth quarter of fiscal year 2019 compared to $54.0 million
in the same quarter last year.
Total liquidity, including cash and available revolver balance,
was $401.3 million at the end of the fourth quarter of fiscal year
2019. This consisted of $27.0 million of cash and $374.3 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, August 1st at 10:00 a.m. ET, to discuss the
financial results of operations for the fourth quarter and full
fiscal year 2019. 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, 2018, Form 10-Q for the quarters ended
September 30, 2018, December 31, 2018 and March 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,
industrial, transportation, consumer, medical, and energy, 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; and (15) fluctuations in oil and gas prices and
production. 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 |
|
Year Ended |
|
|
June 30, |
|
June 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
NET SALES |
|
$ |
641.4 |
|
|
$ |
618.0 |
|
|
$ |
2,380.2 |
|
|
$ |
2,157.7 |
|
Cost of sales |
|
518.5 |
|
|
503.1 |
|
|
1,935.4 |
|
|
1,775.4 |
|
Gross profit |
|
122.9 |
|
|
114.9 |
|
|
444.8 |
|
|
382.3 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
55.0 |
|
|
54.9 |
|
|
203.4 |
|
|
193.0 |
|
Operating income |
|
67.9 |
|
|
60.0 |
|
|
241.4 |
|
|
189.3 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(5.7 |
) |
|
(6.4 |
) |
|
(26.0 |
) |
|
(28.3 |
) |
Other income (expense),
net |
|
0.4 |
|
|
(0.1 |
) |
|
0.6 |
|
|
(0.8 |
) |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
62.6 |
|
|
53.5 |
|
|
216.0 |
|
|
160.2 |
|
Income tax expense
(benefit) |
|
13.7 |
|
|
10.7 |
|
|
49.0 |
|
|
(28.3 |
) |
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
48.9 |
|
|
$ |
42.8 |
|
|
$ |
167.0 |
|
|
$ |
188.5 |
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.01 |
|
|
$ |
0.90 |
|
|
$ |
3.46 |
|
|
$ |
3.96 |
|
Diluted |
|
$ |
1.00 |
|
|
$ |
0.88 |
|
|
$ |
3.43 |
|
|
$ |
3.92 |
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING: |
|
|
|
|
|
|
|
|
Basic |
|
47.7 |
|
|
47.4 |
|
|
47.7 |
|
|
47.2 |
|
Diluted |
|
48.1 |
|
|
48.0 |
|
|
48.1 |
|
|
47.6 |
|
|
|
|
|
|
|
|
|
|
Cash dividends per common
share |
|
$ |
0.20 |
|
|
$ |
0.18 |
|
|
$ |
0.80 |
|
|
$ |
0.72 |
|
PRELIMINARYCONSOLIDATED
STATEMENTS OF CASH FLOWS(in millions)(Unaudited)
|
|
Year Ended |
|
|
June 30, |
|
|
2019 |
|
2018 |
OPERATING ACTIVITIES: |
|
|
|
|
Net income |
|
$ |
167.0 |
|
|
$ |
188.5 |
|
Adjustments to reconcile net
income to net cash provided from operating activities: |
|
|
|
|
Depreciation and amortization |
|
121.5 |
|
|
116.6 |
|
Deferred income taxes |
|
16.5 |
|
|
(61.1 |
) |
Net pension expense |
|
11.6 |
|
|
14.2 |
|
Share-based compensation expense |
|
17.6 |
|
|
17.6 |
|
Net loss on disposals of property, plant and equipment and assets
held for sale |
|
1.2 |
|
|
2.5 |
|
Gain on insurance recovery |
|
(11.4 |
) |
|
— |
|
Changes in working capital and
other: |
|
|
|
|
Accounts receivable |
|
(5.3 |
) |
|
(86.8 |
) |
Inventories |
|
(94.0 |
) |
|
0.4 |
|
Other current assets |
|
6.8 |
|
|
(9.6 |
) |
Accounts payable |
|
20.1 |
|
|
10.7 |
|
Accrued liabilities |
|
(4.9 |
) |
|
28.7 |
|
Pension plan contributions |
|
(5.5 |
) |
|
(6.7 |
) |
Other postretirement plan contributions |
|
(3.1 |
) |
|
(3.4 |
) |
Other, net |
|
(5.7 |
) |
|
(2.4 |
) |
Net cash provided from operating activities |
|
232.4 |
|
|
209.2 |
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
Purchases of property, plant,
equipment and software |
|
(180.3 |
) |
|
(135.0 |
) |
Acquisition of businesses, net
of cash acquired |
|
(79.0 |
) |
|
(13.3 |
) |
Proceeds from disposals of
property, plant and equipment and assets held for sale |
|
0.4 |
|
|
1.9 |
|
Proceeds from insurance
recovery |
|
11.4 |
|
|
— |
|
Proceeds from note receivable
from sale of equity method investment |
|
— |
|
|
6.3 |
|
Proceeds from sales and
maturities of marketable securities |
|
2.9 |
|
|
0.7 |
|
Net cash used for investing activities |
|
(244.6 |
) |
|
(139.4 |
) |
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
Credit agreement
borrowings |
|
163.9 |
|
|
— |
|
Credit agreement
repayments |
|
(163.9 |
) |
|
— |
|
Net change in short-term
credit agreement borrowings |
|
19.7 |
|
|
— |
|
Dividends paid |
|
(38.6 |
) |
|
(34.4 |
) |
Payments on long-term
debt |
|
— |
|
|
(55.0 |
) |
Proceeds from stock options
exercised |
|
3.9 |
|
|
12.9 |
|
Withholding tax payments on
share-based compensation awards |
|
(4.4 |
) |
|
(2.4 |
) |
Net cash used for financing activities |
|
(19.4 |
) |
|
(78.9 |
) |
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
2.4 |
|
|
(1.0 |
) |
|
|
|
|
|
DECREASE IN CASH AND CASH
EQUIVALENTS |
|
(29.2 |
) |
|
(10.1 |
) |
Cash and cash equivalents at
beginning of period |
|
56.2 |
|
|
66.3 |
|
|
|
|
|
|
Cash and cash equivalents at
end of period |
|
$ |
27.0 |
|
|
$ |
56.2 |
|
PRELIMINARYCONSOLIDATED
BALANCE SHEETS(in millions)(Unaudited)
|
|
June 30, |
|
|
2019 |
|
2018 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
27.0 |
|
|
$ |
56.2 |
|
Accounts receivable, net |
|
384.1 |
|
|
378.5 |
|
Inventories |
|
787.7 |
|
|
689.2 |
|
Other current assets |
|
37.4 |
|
|
54.9 |
|
Total current assets |
|
1,236.2 |
|
|
1,178.8 |
|
Property, plant and equipment,
net |
|
1,366.2 |
|
|
1,313.4 |
|
Goodwill |
|
326.4 |
|
|
268.7 |
|
Other intangibles, net |
|
67.2 |
|
|
63.3 |
|
Deferred income taxes |
|
4.2 |
|
|
4.3 |
|
Other assets |
|
187.6 |
|
|
178.5 |
|
Total assets |
|
$ |
3,187.8 |
|
|
$ |
3,007.0 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current liabilities: |
|
|
|
|
Short-term credit agreement borrowings |
|
$ |
19.7 |
|
|
$ |
— |
|
Accounts payable |
|
238.7 |
|
|
214.7 |
|
Accrued liabilities |
|
157.6 |
|
|
148.6 |
|
Total current liabilities |
|
416.0 |
|
|
363.3 |
|
|
|
|
|
|
Long-term debt |
|
550.6 |
|
|
545.7 |
|
Accrued pension liabilities |
|
371.2 |
|
|
288.8 |
|
Accrued postretirement
benefits |
|
122.1 |
|
|
108.2 |
|
Deferred income taxes |
|
142.7 |
|
|
161.6 |
|
Other liabilities |
|
65.1 |
|
|
53.5 |
|
Total liabilities |
|
1,667.7 |
|
|
1,521.1 |
|
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
Common stock |
|
279.0 |
|
|
278.6 |
|
Capital in excess of par
value |
|
320.4 |
|
|
310.0 |
|
Reinvested earnings |
|
1,605.3 |
|
|
1,475.9 |
|
Common stock in treasury, at
cost |
|
(332.8 |
) |
|
(338.8 |
) |
Accumulated other
comprehensive loss |
|
(351.8 |
) |
|
(239.8 |
) |
Total stockholders' equity |
|
1,520.1 |
|
|
1,485.9 |
|
Total liabilities and stockholders' equity |
|
$ |
3,187.8 |
|
|
$ |
3,007.0 |
|
PRELIMINARYSEGMENT
FINANCIAL DATA(in millions, except pounds
sold)(Unaudited)
|
Three Months Ended |
|
Year Ended |
|
June 30, |
|
June 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Pounds sold (000): |
|
|
|
|
|
|
|
Specialty Alloys Operations |
66,682 |
|
|
70,190 |
|
|
256,360 |
|
|
258,326 |
|
Performance Engineered Products |
4,180 |
|
|
2,636 |
|
|
13,752 |
|
|
12,388 |
|
Intersegment |
(778 |
) |
|
288 |
|
|
(2,576 |
) |
|
(5,094 |
) |
Consolidated pounds sold |
70,084 |
|
|
73,114 |
|
|
267,536 |
|
|
265,620 |
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
Specialty Alloys Operations |
|
|
|
|
|
|
|
Net sales excluding surcharge |
$ |
425.6 |
|
|
$ |
395.3 |
|
|
$ |
1,536.6 |
|
|
$ |
1,434.1 |
|
Surcharge |
106.4 |
|
|
123.0 |
|
|
430.7 |
|
|
369.7 |
|
Specialty Alloys Operations net sales |
532.0 |
|
|
518.3 |
|
|
1,967.3 |
|
|
1,803.8 |
|
|
|
|
|
|
|
|
|
Performance Engineered Products |
|
|
|
|
|
|
|
Net sales excluding surcharge |
123.7 |
|
|
113.7 |
|
|
467.0 |
|
|
426.3 |
|
Surcharge |
2.7 |
|
|
2.6 |
|
|
12.8 |
|
|
3.4 |
|
Performance Engineered Products net sales |
126.4 |
|
|
116.3 |
|
|
479.8 |
|
|
429.7 |
|
|
|
|
|
|
|
|
|
Intersegment |
|
|
|
|
|
|
|
Net sales excluding surcharge |
(16.0 |
) |
|
(14.5 |
) |
|
(61.5 |
) |
|
(68.1 |
) |
Surcharge |
(1.0 |
) |
|
(2.1 |
) |
|
(5.4 |
) |
|
(7.7 |
) |
Intersegment net sales |
(17.0 |
) |
|
(16.6 |
) |
|
(66.9 |
) |
|
(75.8 |
) |
|
|
|
|
|
|
|
|
Consolidated net sales |
$ |
641.4 |
|
|
$ |
618.0 |
|
|
$ |
2,380.2 |
|
|
$ |
2,157.7 |
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
Specialty Alloys Operations |
$ |
86.9 |
|
|
$ |
74.1 |
|
|
$ |
282.2 |
|
|
$ |
232.4 |
|
Performance Engineered Products |
1.7 |
|
|
7.9 |
|
|
30.0 |
|
|
26.1 |
|
Corporate costs |
(21.1 |
) |
|
(21.5 |
) |
|
(72.7 |
) |
|
(66.4 |
) |
Intersegment |
0.4 |
|
|
(0.5 |
) |
|
1.9 |
|
|
(2.8 |
) |
Consolidated operating income |
$ |
67.9 |
|
|
$ |
60.0 |
|
|
$ |
241.4 |
|
|
$ |
189.3 |
|
The Company has two reportable segments, Specialty Alloys
Operations (“SAO”) and Performance Engineered Products (“PEP”).
The SAO segment is comprised of Carpenter's major premium alloy
and stainless steel manufacturing operations. This includes
operations performed at mills primarily in Reading and Latrobe,
Pennsylvania and surrounding areas as well as South Carolina and
Alabama.
The PEP segment is comprised of the Company’s differentiated
operations. This segment includes the Dynamet titanium business,
the Carpenter Powder Products (CPP) business, the Amega West
business, the CalRAM business, the LPW Technology Ltd. (LPW)
business and the Latrobe and Mexico distribution businesses. The
businesses in the PEP segment are managed with an entrepreneurial
structure to promote flexibility and agility to quickly respond to
market dynamics. It is our belief this model will ultimately
drive overall revenue and profit growth. The pounds sold data
above for the PEP segment includes only the Dynamet, CPP and LPW
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 AND SPECIAL ITEMS |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
June 30, |
|
June 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
641.4 |
|
|
$ |
618.0 |
|
|
$ |
2,380.2 |
|
|
$ |
2,157.7 |
|
Less: surcharge revenue |
|
108.1 |
|
|
123.5 |
|
|
438.1 |
|
|
365.4 |
|
Net sales excluding
surcharge |
|
$ |
533.3 |
|
|
$ |
494.5 |
|
|
$ |
1,942.1 |
|
|
$ |
1,792.3 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
67.9 |
|
|
$ |
60.0 |
|
|
$ |
241.4 |
|
|
$ |
189.3 |
|
|
|
|
|
|
|
|
|
|
Special items: |
|
|
|
|
|
|
|
|
Acquisition-related costs |
|
— |
|
|
— |
|
|
1.2 |
|
|
— |
|
Operating income excluding
special items |
|
$ |
67.9 |
|
|
$ |
60.0 |
|
|
$ |
242.6 |
|
|
$ |
189.3 |
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
10.6 |
% |
|
9.7 |
% |
|
10.1 |
% |
|
8.8 |
% |
|
|
|
|
|
|
|
|
|
Adjusted operating margin
excluding surcharge and special items |
|
12.7 |
% |
|
12.1 |
% |
|
12.5 |
% |
|
10.6 |
% |
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 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, 2019, as reported |
|
$ |
62.6 |
|
|
$ |
(13.7 |
) |
|
$ |
48.9 |
|
|
$ |
1.00 |
|
|
|
|
|
|
|
|
|
|
Special items: |
|
|
|
|
|
|
|
|
None reported |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
2019, as adjusted |
|
$ |
62.6 |
|
|
$ |
(13.7 |
) |
|
$ |
48.9 |
|
|
$ |
1.00 |
|
|
|
|
|
|
|
|
|
|
* Impact per
diluted share calculated using weighted average common shares
outstanding of 48.1 million for the three months ended June 30,
2019. |
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, 2018, as reported |
|
$ |
53.5 |
|
|
$ |
(10.7 |
) |
|
$ |
42.8 |
|
|
$ |
0.88 |
|
|
|
|
|
|
|
|
|
|
Special items: |
|
|
|
|
|
|
|
|
Impact of U.S. tax reform and other legislative changes |
|
— |
|
|
(0.7 |
) |
|
(0.7 |
) |
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
Three months ended June 30,
2018, as adjusted |
|
$ |
53.5 |
|
|
$ |
(11.4 |
) |
|
$ |
42.1 |
|
|
$ |
0.87 |
|
|
|
|
|
|
|
|
|
|
* Impact per
diluted share calculated using weighted average common shares
outstanding of 48.0 million for the three months ended June 30,
2018. |
ADJUSTED EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS |
|
Income Before Income Taxes |
|
Income Tax Expense |
|
Net Income |
|
Earnings Per Diluted Share* |
|
|
|
|
|
|
|
|
|
Year ended June 30, 2019, as reported |
|
$ |
216.0 |
|
|
$ |
(49.0 |
) |
|
$ |
167.0 |
|
|
$ |
3.43 |
|
|
|
|
|
|
|
|
|
|
Special items: |
|
|
|
|
|
|
|
|
Acquisition-related costs |
|
1.2 |
|
|
— |
|
|
1.2 |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
Year ended June 30, 2019, as
adjusted |
|
$ |
217.2 |
|
|
$ |
(49.0 |
) |
|
$ |
168.2 |
|
|
$ |
3.46 |
|
|
|
|
|
|
|
|
|
|
* Impact per
diluted share calculated using weighted average common shares
outstanding of 48.1 million for the year ended June 30, 2019. |
ADJUSTED EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS |
|
Income Before Income Taxes |
|
Income Tax Benefit (Expense) |
|
Net Income |
|
Earnings Per Diluted Share* |
|
|
|
|
|
|
|
|
|
Year ended June 30, 2018, as reported |
|
$ |
160.2 |
|
|
$ |
28.3 |
|
|
$ |
188.5 |
|
|
$ |
3.92 |
|
|
|
|
|
|
|
|
|
|
Special Items: |
|
|
|
|
|
|
|
|
Impact of U.S. tax reform and other legislative changes |
|
— |
|
|
(68.3 |
) |
|
(68.3 |
) |
|
(1.42 |
) |
|
|
|
|
|
|
|
|
|
Year ended June 30, 2018, as
adjusted |
|
$ |
160.2 |
|
|
$ |
(40.0 |
) |
|
$ |
120.2 |
|
|
$ |
2.50 |
|
|
|
|
|
|
|
|
|
|
* Impact per diluted
share calculated using weighted average common shares outstanding
of 47.6 million for the year ended June 30, 2018. |
Management believes that 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 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Net cash provided from operating activities |
|
$ |
175.1 |
|
|
$ |
118.5 |
|
|
$ |
232.4 |
|
|
$ |
209.2 |
|
Purchases of property, plant,
equipment and software |
|
(49.7 |
) |
|
(54.0 |
) |
|
(180.3 |
) |
|
(135.0 |
) |
Acquisition of businesses, net
of cash acquired |
|
— |
|
|
— |
|
|
(79.0 |
) |
|
(13.3 |
) |
Proceeds from disposals of
property, plant and equipment and assets held for sale |
|
0.1 |
|
|
— |
|
|
0.4 |
|
|
1.9 |
|
Proceeds from note receivable
from sale of equity method investment |
|
— |
|
|
— |
|
|
— |
|
|
6.3 |
|
Proceeds from insurance
recovery |
|
— |
|
|
— |
|
|
11.4 |
|
|
— |
|
Dividends paid |
|
(9.7 |
) |
|
(8.6 |
) |
|
(38.6 |
) |
|
(34.4 |
) |
|
|
|
|
|
|
|
|
|
Free cash flow |
|
$ |
115.8 |
|
|
$ |
55.9 |
|
|
$ |
(53.7 |
) |
|
$ |
34.7 |
|
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
SCHEDULES(in millions)(Unaudited)
|
Three Months Ended |
|
Year Ended |
|
June 30, |
|
June 30, |
NET SALES BY END-USE
MARKET |
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
End-Use Market Excluding
Surcharge: |
|
|
|
|
|
|
|
Aerospace and Defense |
$ |
303.9 |
|
|
$ |
260.7 |
|
|
$ |
1,051.5 |
|
|
$ |
957.1 |
|
Medical |
51.2 |
|
|
41.1 |
|
|
176.3 |
|
|
149.3 |
|
Energy |
39.6 |
|
|
40.2 |
|
|
154.3 |
|
|
131.3 |
|
Transportation |
32.3 |
|
|
33.7 |
|
|
126.6 |
|
|
127.9 |
|
Industrial and Consumer |
74.5 |
|
|
81.9 |
|
|
298.5 |
|
|
295.9 |
|
Distribution |
31.8 |
|
|
36.9 |
|
|
134.9 |
|
|
130.8 |
|
|
|
|
|
|
|
|
|
Total net sales excluding
surcharge |
533.3 |
|
|
494.5 |
|
|
1,942.1 |
|
|
1,792.3 |
|
|
|
|
|
|
|
|
|
Surcharge revenue |
108.1 |
|
|
123.5 |
|
|
438.1 |
|
|
365.4 |
|
|
|
|
|
|
|
|
|
Total net sales |
$ |
641.4 |
|
|
$ |
618.0 |
|
|
$ |
2,380.2 |
|
|
$ |
2,157.7 |
|
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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