Slide 1: Carpenter Technology Corporation 4th Quarter Fiscal Year 2022 Earnings Call
July 28, 2022 CARPENTER TECHNOLOGY CORPORATION th 4 Quarter Fiscal Year 2022 Earnings Call 1
Slide 2: Cautionary Statement
Cautionary Statement 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 proj
Slide 3: 4th Quarter Fiscal Year 2022
th 4 QUARTER FISCAL YEAR 2022 Tony Thene | President and Chief Executive Officer 3
Slide 4: Safety is Our Highest Value
Safety is Our Highest Value Total Case Incident Rate (TCIR) 4 3.7 3.5 3.3 3 2.5 2.2 2.1 2.0 2 1.5 1.3 1.2 1.1 1.0 1 0.6 0.5 0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 © 2022 CRS Holdings Inc. All rights reserved. 4
Slide 5: Fourth Quarter Summary
Fourth Quarter Summary • Demand conditions across end-use markets remain solid: - Strong bookings drove backlog growth of 29% sequentially and 191% year-over-year - Continue to capture share & price gain through contract Strong Demand Across End- negotiations; base prices recently increased 12-15% o
Slide 6: Fourth Quarter End-Use Market Highlights
Fourth Quarter End-Use Market Highlights Q4-22 NET SALES MARKET EX. SURCHARGE % VS. Q4-21 VS. Q3-22 COMMENTS ($M)* • Global travel demand continues to improve, driven by recovery in air traffic $178.5 44% • Supply chain continues to ramp production, with high output increases targeted +8% +17% • Sig
Slide 7: Financial Overview and Business Update
th 4 QUARTER FISCAL YEAR 2022 FINANCIAL OVERVIEW AND BUSINESS UPDATE Tim Lain | Senior Vice President and Chief Financial Officer 7
Slide 8: Income Statement Summary
Income Statement Summary Performance reflects strengthening demand & increasing volumes YEAR-OVER- SEQUENTIAL $ millions, except pounds and per-share amounts Q4-22 Q4-21 Q3-22 YEAR CHANGE CHANGE Pounds (‘000) 51,760 47,968 49,740 3,792 2,020 Net Sales 563.8 421.6 489.0 142.2 74.8 Net Sales ex. Surch
Slide 9: SAO Segment Summary
SAO Segment Summary Q4 OPERATING RESULTS Q4-22 Q4-21 Q3-22 vs Q4-21 vs Q3-22 Pounds ('000) 51,626 47,712 49,872 3,914 1,754 Net Sales ($M) 484.9 361.5 418.0 123.4 66.9 Net Sales ex. Surcharge ($M)* 327.2 289.9 300.0 37.3 27.2 Operating Income (Loss) ($M) 30.0 (47.3) 5.8 77.3 24.2 Adjusted Operating
Slide 10: PEP Segment Summary
PEP Segment Summary Q4 OPERATING RESULTS Q4-22 Q4-21 Q3-22 vs Q4-21 vs Q3-22 Pounds ('000)* 2,808 2,912 2,706 (104) 102 Net Sales ($M) 95.8 77.5 88.4 18.3 7.4 Net Sales ex. Surcharge ($M) ** 92.9 75.6 86.4 17.3 6.5 Operating Income (Loss) ($M) 10.3 (2.3) 4.2 12.6 6.1 Adjusted Operating Income ($M) *
Slide 11: Free Cash Flow Summary
Free Cash Flow Summary Total liquidity remains healthy $ millions Q1-22 Q2-22 Q3-22 Q4-22 FY22 FY21 Net Income (Loss) + Non-Cash Items 11 (5) 21 59 86 29 Inventory (67) (43) 8 30 (72) 239 Working Capital / Other 9 (41) 6 19 (8) 2 Total Net Working Capital / Other (58) (84) 14 48 (80) 241 Pension Pla
Slide 12: Selected Fiscal Year 2023 Guidance
Selected Fiscal Year 2023 Guidance FY23 $ in millions FY22 ESTIMATE Depreciation and Amortization $131 ~$132 Capital Expenditures $91 ~$100 Required Minimum Pension Contributions $- $- Net Pension (Income) Expense ($7) ~$20 Interest Expense $45 ~$51 Effective Tax Rate 22% 22-24% © 2022 CRS Holdings
Slide 13: Closing Comments
th 4 QUARTER FISCAL YEAR 2022 CLOSING COMMENTS Tony Thene | President and Chief Executive Officer 13
Slide 14: Fourth Quarter Recap
Fourth Quarter Recap • Growing backlog, driven by strong bookings, with solid demand across end- use markets, especially in Aerospace, Defense and Medical applications • Ramping operations and deploying the Carpenter Operating model to maximize productivity across facilities, with improving margins
Slide 15: Underlying fundamentals and growth opportunities driving near-term and long-term outlook
Underlying fundamentals and growth opportunities driving near-term and long-term outlook Strong demand for core business driving Material solutions supporting megatrends Investing in new platforms to accelerate near-term growth for long-term growth growth MARKET OUTLOOK Accelerating recovery ramp dr
Slide 16: Appendix of Non-GAAP Schedules
APPENDIX OF NON-GAAP SCHEDULES 16
Slide 17: Non-GAAP Schedules
Non-GAAP Schedules Adjusted diluted earnings (loss) per share $ millions, except per-share amounts Q4-22 Q4-21 Q3-22 FY22 FY21 Diluted Earnings (Loss) per Share $0.05 ($1.18) ($0.16) ($1.01) ($4.76) Net Income (Loss) 2.6 (57.1) (7.5) (49.1) (229.6) Special Items, net of tax: LIFO decrement - 37.3 -
Slide 18: Non-GAAP Schedules
Non-GAAP Schedules Adjusted operating margin, excluding surcharge revenue and special items $ millions Q4-22 Q4-21 Q3-22 FY22 FY21 Net sales 563.8 421.6 489.0 1,836.3 1,475.6 Less: surcharge revenue 160.6 73.5 120.0 436.3 222.8 Net sales excluding surcharge revenue 403.2 348.1 369.0 1,400.0 1,252.8
Slide 19: Non-GAAP Schedules
Non-GAAP Schedules Adjusted segment operating margin, excluding surcharge revenue and special items SAO SAO SAO PEP PEP PEP $ millions Q4-22 Q4-21 Q3-22 Q4-22 Q4-21 Q3-22 Net sales 484.9 361.5 418.0 95.8 77.5 88.4 Less: surcharge revenue 157.7 71.6 118.0 2.9 1.9 2.0 Net sales excluding surcharge rev
Slide 20: Non-GAAP Schedules
Non-GAAP Schedules Free cash flow Q1-22 Q2-22 Q3-22 Q4-22 FY22 FY21 $ millions Net Cash (Used for) Provided from Operating Activities (47.0) (89.2) 35.3 106.9 6.0 250.0 Purchases of Property, Plant, Equipment and Software (14.4) (19.1) (25.1) (32.8) (91.3) (100.5) Proceeds from Disposals of Property
Slide 21: Your trusted partner in innovation.
Your trusted partner in innovation. Carpenter Technology Corporation (NYSE: CRS) is a global 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 mark