Slide 1: Fiscal Year 2014 3rd Quarter Earnings Call
Fiscal Year 2014 3rd Quarter Earnings Call April 24, 2014
Slide 2: Forward-Looking Statements
2 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
Slide 3: 3rd Quarter FY14 Summary
3rd Quarter FY14 Summary Bill Wulfsohn President and Chief Executive Officer 3
Slide 4: 3rd Quarter FY14 Summary
Q3 earnings significantly impacted by weather related expenses Large increase in energy costs due to temporary price spikes Excluding these unusual expenses, operating margins were up 120 basis points sequentially Specialty Alloys Operations (SAO) volume up 12% vs. Q2-14 Performance Engineered Produ
Slide 5: End-use market sales and trends
Aerospace & Defense 202.5 43% -6% +14% Tons were flat versus the prior year but higher sequentially Revenue per ton was down due to greater sales volume of structural component materials and continued demand weakness for nickel engine and fastener material Titanium fastener revenues up 25 percent ye
Slide 6: 3rd Quarter FY14 Financial Overview
Tony Thene Senior Vice President and Chief Financial Officer 6 3rd Quarter FY14 Financial Overview
Slide 7: 3rd Quarter FY14 Financial Overview
Q3 Net income of $30.6 million or $0.57 per share Includes approximately $8 million of additional weather related expenses Sales, excluding surcharge, of $467.2 million Aerospace and Energy comprised 59% of sales Operating margins (ex pension EID) increased sequentially by 120 basis points excluding
Slide 8: Income Statement Summary
Income Statement Summary Q3-14 includes approximately $8 million of weather related expenses 8 * Detailed schedule included in Non-GAAP Schedules in Appendix $ Millions, except pounds and per-share amounts Q3-13 Q2-14 Q3-14 Sequential Change Pounds ('000) 71,768 67,378 77,580 10,202 Net Sales 581.4
Slide 9: Free Cash Flow Summary
9 Free Cash Flow Summary The clerical accuracy of certain amounts may be impacted due to rounding. At cash flow generation inflection point – moving to positive FCF by Q4-14 $ Millions Q3-13 YTD Q1 Q2 Q3 Q3-14 YTD Net Income + Non-cash Items 273 76 69 76 221 Inventory (42) (47) (12) (1) (61) Other w
Slide 10: SAO Business Update
SAO Business Update Andy Ziolkowski Senior Vice President Commercial, Specialty Alloys Operations 10
Slide 11: SAO Segment Summary
Q3 Operating Results Q3 Business Highlights Q4-14 Outlook Operating income impacted by additional $8m of energy costs due to weather Excluding weather impact, operating margin was in line with Q2 Volume was up in all markets except Aerospace (which was flat) Aerospace and energy both had a weaker mi
Slide 12: PEP Business Update
PEP Business Update Gary Heasley Senior Vice President Performance Engineered Products 12
Slide 13: PEP Segment Summary
Q3 Operating Results Q3 Business Highlights Q4 -14 Outlook Sales improved across most businesses Increased demand for titanium fastener material Strong order activity through Distribution Improved demand for down-hole drilling tools Mix and operational improvements drive OI Increased rental revenue
Slide 14: Forward Outlook
Forward Outlook Bill Wulfsohn President and Chief Executive Officer 14
Slide 15: Athens Facility Update
15 Athens Facility Update Integrated Manufacturing Primary Melting supplied from Reading and Latrobe Technical support from all locations highly involved CRS employees operating all equipment Strong focus on automation and process control Great leverage potential across the entire system Constructio
Slide 16: 3rd Quarter FY14 Summary and Forward Outlook
3rd Quarter FY14 Summary 16 Q3 Highlights Q3 earnings significantly impacted by weather related expenses Large increase in energy costs due to temporary price spikes Excluding these unusual expenses, operating margins were up 120 basis points sequentially SAO volume up 12% vs. Q2 PEP drove operation
Slide 17: Appendix of Non-GAAP Schedules
Appendix of Non-GAAP Schedules 17
Slide 18: Non-GAAP Schedules: Operating Margin Excluding Surcharge and Pension
18 Preliminary Non-GAAP Unaudited Schedules (in millions) OPERATING MARGIN EXCLUDING SURCHARGE AND Three Months Ended Nine Months Ended PENSION EARNINGS, INTEREST AND DEFERRALS December 31, March 31, 2014 2013 2013 2014 2013 Net sales 566.3 $ 581.4 $ 503.5 $ 1,568.4 $ 1,659.9 $ Less: surcharge reven
Slide 19: Non-GAAP Schedules: Free Cash Flow
19 Preliminary Non-GAAP Unaudited Schedules (in millions) Three Months Ended Nine Months Ended March 31, FREE CASH FLOW 2014 2013 2014 2013 Net cash provided from operating activities 81.0 $ 26.5 $ 144.0 $ 9.3 $ Purchases of property, equipment and software (93.6) (83.6) (298.2) (201.1) Proceeds fro