Carpenter Technology Corporation · NYSE:CRS
Carpenter Technology — Q4 FY2018 Earnings Presentation
19 slides from Carpenter Technology's earnings presentation, Aug 3, 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: 4th Quarter and Fiscal Year 2018 Summary
4th Quarter and Fiscal Year 2018 Summary Tony Thene President and Chief Executive Officer
Slide 3: Safety is Our Highest Value
Safety is Our Highest Value 3.7 3.3 © 2018 CRS Holdings, Inc. All rights reserved 4 Total Case Incident Rate (TCIR) 4.8 3.9 3.9 3.5 2.12.22.0 1.1 FY09FY10FY11FY12FY13FY14FY15FY16FY17FY18
Slide 4: Fiscal Year 2018 Summary
Fiscal Year 2018 Summary to meet growing customer demand through acquisition of CalRAM, exclusive license for meltless titanium capital expenditures for soft magnetics portfolio © 2018 CRS Holdings, Inc. All rights reserved 5 Execution of strategy, increased customer focused solutions and strong mar
Slide 5: 4th Quarter Summary
4th Quarter Summary market diversity and robust engine platform ramp; 8th consecutive quarter horizontal rig count Operations (SAO) since Q4-13 © 2018 CRS Holdings, Inc. All rights reserved 6 Reported EPS of $0.88, adjusted EPS of $0.87 – strongest quarterly operating income performance since Q4-14
Slide 6: Q4-18 End-Use Market Highlights
Q4-18 End-Use Market Highlights Q4-18 Net Sales ex. Surcharge ($M)* vs. Q4-17 vs. Q3-18 Comments 53% 8% 7% 8% share gains and demand for select applications (e.g., pumps & valves) 17% *Excludes sales through Carpenter’s Distribution businesses © 2018 CRS Holdings, Inc. All rights reserved 7 Sales ex
Slide 7: 4th Quarter Financial Overview and Business Update
4th Quarter Financial Overview and Business Update Damon Audia Senior Vice President and Chief Financial Officer
Slide 8: Free Cash Flow Summary
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 © 2018 CRS Holdings, Inc. All rights reserved 10 Strong free cash flow generation while investing for growth Cash Available Borrowing Under C
Slide 9: SAO Segment Summary
SAO Segment Summary © 2018 CRS Holdings, Inc. All rights reserved 11 Q1-19 Outlook Macro-demand signals across end-use markets strong Traditional preventative maintenance limiting production days Operating income down ~15-20% sequentially, but up ~20-25% versus Q1-18 Expected to be best first quarte
Slide 10: PEP Segment Summary
PEP Segment Summary * Pounds related to manufactured pounds for Dynamet and Carpenter Powder Products only © 2018 CRS Holdings, Inc. All rights reserved 12 Q1-19 Outlook Further strong demand for titanium products Continued favorable market conditions for the oil & gas sub-market Ongoing operational
Slide 11: Selected Fiscal Year 2019 Guidance
Selected Fiscal Year 2019 Guidance © 2018 CRS Holdings, Inc. All rights reserved 13 $ Millions FY18 FY19 Estimated Depreciation and Amortization Capital Expenditures Pension Contributions Pension Expense Interest Expense Effective Tax Rate 117 135 7 14 28 (18)% ~120 ~190 6 11 ~28 24% - 26%
Slide 12: 4th Quarter and Fiscal Year 2018 Closing Comments
4th Quarter and Fiscal Year 2018 Closing Comments Tony Thene President and Chief Executive Officer
Slide 13: Additive Manufacturing (AM) Evolution
Additive Manufacturing (AM) Evolution feedstock supplier (powder, focused strategy and © 2018 CRS Holdings, Inc. All rights reserved 15 FY 2017 Metallurgical expertise and wire) Puris acquisition and development of Puris 5+ titanium powder Established AM solutions strategic partnership FY 2019 & Bey
Slide 14: Closing Comments
Closing Comments Generated consistent backlog growth, deepened our customer new engine platforms delivering significant growth incremental capacity gains Investment in Emerging Technology Center builds upon commitment to in strategic growth areas while maintaining direct returns to shareholders © 20
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 Revenue and Pension EID
Non-GAAP Schedules (Unaudited) Operating Margin Excluding Surcharge Revenue and 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 resu
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. © 2018 CRS Holdings, Inc. All rights
Slide 19: Non-GAAP Schedules - Free Cash Flow
EE Non-GAAP Schedules (Unaudited) Free Cash Flow YTD FY17 YTD FY18 '$ Millions Net cash provided from operating a 1303] 209.2 Purchases of property, equipment and software 98.5)| (135.0) Proceeds from divestiture of business 12.0 - Proceeds from disposals of property and equipment and assets held fo
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