Carpenter Technology Corporation · NYSE:CRS
Carpenter Technology — Q4 FY2017 Earnings Presentation
20 slides from Carpenter Technology's earnings presentation, Jul 28, 2017
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: 4th Quarter and Fiscal Year 2017 Summary
4th Quarter and Fiscal Year 2017 Summary Tony Thene President and Chief Executive Officer
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 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Total Case Incident Rate (TCIR)
Slide 4: Fiscal Year 2017 Summary
Fiscal Year 2017 Summary Positioned for Sustainable Growth Through Solutions Focus, Implementation of Carpenter Operating Model and Expansion of Capabilities in Core Growth Areas Achieved solid progress in ongoing transition to become a complete solutions provider Realigned Commercial team deepened
Slide 5: 4th Quarter Summary
4th Quarter Summary Performance Driven by Product and Market Diversity, Higher Mix, Realigned Commercial Team and Carpenter Operating Model Strong execution of strategy and corresponding operating results; reported EPS of $0.54, adjusted EPS of $0.58 Continued solid growth in Aerospace and Defense e
Slide 6: End-Use Market Results: Aerospace and Defense, Energy, Transportation
Aerospace and Defense 230.7 53% +5% +8% Continued solid engine demand across multiple platforms Sequential improvement in fasteners, although still trailing prior year Structural/distribution overall down year-over-year (YoY) and sequentially due to timing of program-related sales Defense up YoY and
Slide 7: 4th Quarter Financial Overview & Business Update
4th Quarter Financial Overview & Business Update Damon Audia Senior Vice President and Chief Financial Officer
Slide 8: Income Statement Summary
9 © 2017 CRS Holdings, Inc. All rights reserved $ Millions, except pounds and per-share amounts Q4-16 Q3-17 Q4-17 Sequential Change Pounds ('000) 65,870 63,270 65,610 2,340 Net Sales 457.7 473.6 507.7 34.1 Sales ex. Surcharge * 405.7 412.9 438.9 26.0 Gross Profit 73.5 83.1 92.7 9.6 Selling, General
Slide 9: Cash Flow Summary
10 © 2017 CRS Holdings, Inc. All rights reserved $ Millions FY16 Q1-17 Q2-17 Q3-17 Q4-17 FY17 Net Income + Non-cash Items 247 80 56 64 74 274 Inventory 2 (33) (41) (15) 14 (75) Working Capital / Other 8 (43) 56 12 6 30 Total Net Working Capital / Other 10 (76) 15 (3) 20 (45) Pension Plan Contributio
Slide 10: SAO Segment Summary
SAO Segment Summary Q4 Business Results Q1-18 Outlook Strong sequential sales growth across all end-use markets except Energy (power generation decline) Favorable mix on year-over-year basis Highest quarterly operating margin percentage since Q4-14 Carpenter Operating Model delivered continued varia
Slide 11: PEP Segment Summary
PEP Segment Summary Q4 Business Results Q1-18 Outlook Third consecutive profitable quarter Operating income increase on both YoY and sequential basis primarily influenced by increased rental activity within oil & gas business Continued strong demand for titanium-related products Relatively consisten
Slide 12: Selected Fiscal Year 2018 Guidance
Selected Fiscal Year 2018 Guidance *Excludes incremental defined contribution costs of ~$5 million in 2nd half FY17 and ~$9 million in FY18. $ Millions FY17 FY18 Depreciation and Amortization 118 ~118 Interest Expense 31 ~32 Net Pension Expense* 48 14 Pension Contributions 100 7 Effective Tax Rate 3
Slide 13: 4th Quarter and Fiscal Year 2017 Closing Comments
4th Quarter and Fiscal Year 2017 Closing Comments Tony Thene President and Chief Executive Officer
Slide 14: Reflections on Paris Air Show
Reflections on Paris Air Show Customers’ feedback and activity demonstrates our solutions-focused approach is resonating Signed new customer agreements as well as expanded product relationships with existing customers Activity spanned sub-markets, solution types and geographies, highlighting our div
Slide 15: Closing Comments
Closing Comments Strong Finish to the Year, Commercial and Manufacturing Strategies Delivering Results, Focused on Strengthening Long-Term Growth Profile Improved market conditions, stronger mix and solid execution drove strong Q4 performance Remain well positioned across attractive end-use markets
Slide 16: Appendix of Non-GAAP Schedules
Appendix of Non-GAAP Schedules
Slide 17: Non-GAAP Schedules (Unaudited)
Non-GAAP Schedules (Unaudited) 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 costs are not indicative of ongoing operating performance. Management uses its results excluding these
Slide 18: Non-GAAP Schedules: Operating Margin Excluding Surcharge, Pension EID and Special Items
Non-GAAP Schedules (Unaudited) Operating Margin Excluding Surcharge Revenue, Pension Earnings, Interest and Deferrals (“Pension EID”) and Special Items Management believes that removing the impacts of raw material surcharge from operating margin provides a more consistent basis for comparing results
Slide 19: Non-GAAP Schedules: Free Cash Flow
Non-GAAP Schedules (Unaudited) 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. Free Cash Flow Q4-16 Q4-17 YTD FY16 YTD FY17 Net ca
Slide 20: Non-GAAP Schedules: Free Cash Flow
P Schedules (Unaudited) Free Cash Flow $ Millions Q4-16 Q4-17__ YTD FY16 YTD FY17 Net cash provided from operating activities 119.7 93.8 256.9 129.3 Purchases of property, equipment and software (29.1) (35.4) (95.2)| (98.5)| Proceeds from divestiture of business - 12.0 = 12.0 Proceeds from disposals
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