Carpenter Technology Corporation · NYSE:CRS
Carpenter Technology — Q3 FY2018 Earnings Presentation
19 slides from Carpenter Technology's earnings presentation, Apr 27, 2018
Slide 1: 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 2: 3rd Quarter Fiscal Year 2018 Summary
Tony Thene President and Chief Executive Officer 3rd Quarter Fiscal Year 2018 Summary
Slide 3: Safety is Our Highest Priority
Safety is Our Highest Priority 4.8 3.9 3.5 3.9 3.7 3.3 2.1 2.2 2.0 1.1 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 YTD Total Case Incident Rate (TCIR)
Slide 4: 3rd Quarter Summary
3rd Quarter Summary Solutions-Based Commercial Approach Driving Market Share Gains and Generating Backlog Growth; Continuing to Invest in Next-Generation Capabilities Strong execution drove reported EPS of $0.63, adjusted EPS of $0.60 – best third quarter operating income since FY14 All end-use mark
Slide 5: Q3-18 End-Use Market Highlights
Q3-18 End-Use Market Highlights Aerospace and Defense 260.5 55% +22% +18% Strong year-over-year (YoY) performance driven by engine, avionics and distribution sub-markets Positive sequential demand across all sub-markets Engine demand remains strong with double digit sequential and YoY growth Fastene
Slide 6: 3rd Quarter Financial Overview and Business Update
Damon Audia Senior Vice President and Chief Financial Officer 3rd Quarter Financial Overview and Business Update
Slide 7: Income Statement Summary
Strong execution contributed to best Q3 operating income performance since Q3-14 Income Statement Summary *Detailed schedule included in Non-GAAP Schedules in Appendix Pounds ('000) Net Sales Sales ex. Surcharge * Gross Profit Selling, General and Administrative Expenses Operating Income Operating I
Slide 8: Free Cash Flow Summary
Strong free cash flow driven by earnings and inventory reductions 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 ok ok $ Millions YTD FY17 Q1-18 Q2-18 Q3-18 YTD FY18 FY13 FY14 Net Income +
Slide 9: Capital Structure Enhances Growth Opportunities
Liquidity of $441 million ($47 million of cash and $394 million of available borrowings under revolving credit facility) No significant required pension plan contributions until fiscal year 2022 Maturities of $55 million in Q4-18; no other debt maturities until fiscal year 2022 Capital Structure Enh
Slide 10: SAO Segment Summary
SAO Segment Summary Q3 Operating Results Q3 Business Results Q4-18 Outlook Strong volume growth driven by solutions-focused strategy and higher demand across all end-use markets Backlog increased on sequential and year-over-year basis Carpenter Operating Model delivering manufacturing improvements a
Slide 11: PEP Segment Summary
PEP Segment Summary Q3 Operating Results Q3 Business Results Q4-18 Outlook Strong demand for titanium products in Medical end-use markets Solid performance by non-fire related businesses Oil & gas activity increasing; third consecutive profitable quarter at Amega West Continued strong demand for tit
Slide 12: Closing Comments
Tony Thene President and Chief Executive Officer 3rd Quarter Fiscal Year 2018 Closing Comments
Slide 13: Evolution to True Solutions Provider
Evolution to True Solutions Provider Puris Acquisition Meltless Titanium Powder Emerging Technology Center End-to-end additive manufacturing solutions portfolio Leader in powder-bed fusion additive manufacturing (AM) metal printing services Direct connection with rapidly expanding customer base Excl
Slide 14: Closing Comments
Closing Comments Expanding our Role as an Irreplaceable Supply Chain Partner and Building Foundation for Sustainable Long-Term Growth Continued solid financial performance driven by solutions-focused commercial approach combined with operations execution Strong commercial execution capturing market
Slide 15: Appendix of Non-GAAP Schedules
Appendix of Non-GAAP Schedules
Slide 16: Non-GAAP Schedules: Adjusted Diluted Earnings per Share
Non-GAAP Schedules (Unaudited) Adjusted Diluted Earnings per Share 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. Managem
Slide 17: Non-GAAP Schedules: Operating Margin Excluding Surcharge and Pension EID
Non-GAAP Schedules (Unaudited) Operating Margin Excluding Surcharge Revenue and Pension Earnings, Interest and Deferrals (“Pension EID”) Management believes that removing the impacts of raw material surcharge from operating margin provides a more consistent basis for comparing results of operations
Slide 18: Non-GAAP Schedules: Free Cash Flow
Non-GAAP Schedules (Unaudited) Free Cash Flow 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. Q3-17 Q2-18 Q3-18 YTD FY17 YTD FY18
Slide 19: Non-GAAP Schedules: Free Cash Flow
i Non-GAAP Schedules (Unaudited) Free Cash Flow Q3-17 Q2-18 Net cash provided from operating activities Purchases of property, equipment and software |Acquisition of businesses Proceeds from disposals of property and equipment and assets held for sale Proceeds from note receivable from sale of equit
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