Carpenter Technology Corporation · NYSE:CRS
Carpenter Technology — Q3 FY2020 Earnings Presentation
20 slides from Carpenter Technology's earnings presentation, May 1, 2020
Slide 1: 3rd Quarter Fiscal Year 2020 Earnings Call
3rd Quarter Fiscal Year 2020 Earnings Call April 30, 2020 Carpenter Technology Corporation Exhibit 99.1
Slide 2: Cautionary Statement: Forward-Looking Statements
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: 3rd Quarter Fiscal Year 2020 - Tony Thene, President and CEO
3rd Quarter Fiscal Year 2020 Tony Thene President and Chief Executive Officer
Slide 4: Safety is Our Highest Value
Safety is Our Highest Value Total Case Incident Rate (TCIR) FY20 YTD
Slide 5: Protecting Our Employees Remains Priority for COVID-19 Response
Protecting Our Employees Remains Priority for COVID-19 Response Took immediate actions in line with guidance from health officials: Required remote working where business activities allow for it Hired additional medical professionals with established hotline Restricted visitors and enhanced delivery
Slide 6: Strong Performance Driven by Manufacturing and Commercial Execution
Strong Performance Driven by Manufacturing and Commercial Execution; Focused on Cost Management and Driving Enhanced Financial Flexibility 3rd Quarter Summary Ability to operate safely under adverse pandemic conditions is a strategic advantage Results driven by focused execution in a challenging env
Slide 7: Sales by End-Use Market
Aerospace and Defense $293.4 59% +7% +5% Strong shipments in quarter despite 737 MAX slowdown Reduced near-term demand due to COVID-19 pandemic Customers focused on firm backlogs as they adjust near-term production Medical $47.7 10% +1% +10% Long-term procedures growth remains consistent at low to m
Slide 8: 3rd Quarter Financial Overview and Business Update
3rd Quarter Financial Overview and Business Update Tim Lain Vice President and Chief Financial Officer
Slide 9: Strong operating income performance despite COVID-19 impact
Strong operating income performance despite COVID-19 impact Income Statement Summary * Detailed schedule included in Non-GAAP Schedules in Appendix $ Millions, except pounds and per-share amounts Q3-19 Q2-20 Q3-20 Year-Over-Year Change Sequential Change Pounds ('000) 67918 59298 62138 -5780 2840 Net
Slide 10: SAO Segment Summary
SAO Segment Summary Q3 Operating Results Q3 Business Results Q4-20 Outlook Short-term impacts from 737 MAX partially mitigated by broad aerospace solutions portfolio Facilities remained operational; COVID-19 impacts late in quarter affected customer shipments and productivity Carpenter Operating Mod
Slide 11: PEP Segment Summary
PEP Segment Summary Q3 Operating Results Q3 Business Results Q4-20 Outlook COVID-19 impacted productivity and shipments late in quarter; facilities remained operational Operating and market demand momentum for Titanium products in Aerospace and Medical Oil & gas business continues to be impacted by
Slide 12: Seasonal inventory build in H1-20, planned reduction in H2-20 underway
Seasonal inventory build in H1-20, planned inventory reduction in H2-20 underway Free Cash Flow Summary The clerical accuracy of certain amounts may be impacted due to rounding * Detailed schedule included in Non-GAAP Schedules in Appendix $ Millions FY11 YTD FY19 Q1-20 Q2-20 Q3-20 YTD FY20 Net Inco
Slide 13: Capital Structure Provides Flexibility
Capital Structure Provides Flexibility Total liquidity remains healthy, with plans to provide additional liquidity support via cash generation from working capital Planning to reduce capital expenditures in FY21 with completion of several key strategic growth projects in FY20 Initiated plans to exit
Slide 14: 3rd Quarter Fiscal Year 2020 Closing Comments
3rd Quarter Fiscal Year 2020 Closing Comments Tony Thene President and Chief Executive Officer
Slide 15: Near Term Uncertain but Strong Foundation for Sustainable Long Term
Near Term Uncertain but Strong Foundation for Sustainable Long Term Participation in practically all major OEM engine/aircraft platforms Strong relationships with key supply chain participants Expansive solutions portfolio across multiple attractive sub-markets Leadership Position in Aerospace and D
Slide 16: Closing Comments: Strategic Emphasis on Employee Safety and Operations
Strategic Emphasis Centered on Employee Safety and Actively Managing Operations; Supply Chain Position and Long-Term Sustainable Growth Profile Remain Intact Closing Comments Primary focus placed on safeguarding of employees, facilities and customers Strong commercial and manufacturing execution in
Slide 17: Appendix of Non-GAAP Schedules
Appendix of Non-GAAP Schedules
Slide 18: Non-GAAP Schedules: Adjusted Diluted Earnings Per Share
Non-GAAP Schedules (Unaudited) Adjusted Diluted Earnings Per Share $ Millions except per share amounts Q3-19 Q2-20 Q3-20 FY17 Diluted Earnings per Share $1.05 $0.79 $0.82 47 Net Income 51.1 38.799999999999997 39.9 $0.99 Special Items: Restructuring charges 0 1.8 0 0 Special Items 0 1.8 0 0 Net Incom
Slide 19: Non-GAAP Schedules: Adjusted Operating Margin Excluding Surcharge
Non-GAAP Schedules (Unaudited) Adjusted Operating Margin Excluding Surcharge Revenue and Special Items $ Millions Q3-19 Q2-20 Q3-20 Net sales 609.9 573 585.4 Less: surcharge revenue 106.9 101.8 90.4 Net Sales Excluding Surcharge Revenue 503 471.2 495 Operating Income 73.2 55 58.7 Special Items: Rest
Slide 20: Non-GAAP Schedules: Free Cash Flow
Non-GAAP Schedules (Unaudited) Free Cash Flow $ Millions Q3-19 Q3-17 Q2-20 Q3-20 YTD FY19 YTD FY20 Net cash provided from operating activities 10 61.3 21.8 72.3 57.2 94.9 Purchases of property, plant, equipment and software -49 -18 -46.7 -49.7 -,130.69999999999999 -,144 Proceeds from disposals of pr
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