Carpenter Technology Corporation · NYSE:CRS

Carpenter Technology — Q4 FY2013 Earnings Presentation

25 slides from Carpenter Technology's earnings presentation, Aug 2, 2013

  1. Slide 1: 4th Quarter and Fiscal Year 2013 Earnings Call

    Carpenter Technology Corporation ENGINEERED MATERIALS FOR A CHANGING WORLD Unless otherwise noted, the logo and registered trademarks are property of CRS Holdings , Inc . a subsidiary of Carpenter Technology Corporation. © 2013 CRS Holdings, Inc. All rights reserved 4th Quarter and Fiscal Year 2013

  2. Slide 2: Cautionary Statement

    © 2013 CRS Holdings, Inc. All rights reserved Cautionary Statement 2 Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act. These statements, which represent

  3. Slide 3: 4th Quarter & Fiscal Year Summary

    © 2013 CRS Holdings, Inc. All rights reserved 4th Quarter & Fiscal Year Summary Bill Wulfsohn President and CEO 3

  4. Slide 4: 4th Quarter and FY13 Summary

    © 2013 CRS Holdings, Inc. All rights reserved • Focused strategy with disciplined execution in challenging environment . Operating margins neared 15% for quarter and year . Increased margin per pound at SAO for year • Growth investments made in PEP businesses . Increased titanium wire capacity . Exp

  5. Slide 5: 4th Quarter and FY13 Summary

    © 2013 CRS Holdings, Inc. All rights reserved • Strong financial performance in challenging environment . EPS up 12% on an adjusted basis versus Q3 . Record full year adjusted EBITDA of $406 million up 21% versus year ago . Latrobe contributed $87 million . Legacy CRS up 1% including Athens related

  6. Slide 6: Financial Update

    © 2013 CRS Holdings, Inc. All rights reserved Financial Update Tony Thene Senior Vice President and Chief Financial Officer 6

  7. Slide 7: 4th Quarter FY13 Financial Overview

    © 2013 CRS Holdings, Inc. All rights reserved • Q4 Net income of $40.9 million or $0.77 per share • Sales, excluding surcharge, of $496.6 million – Aerospace and energy comprised 62% of sales • Operating margins (ex pension EID) improved sequentially by 190 basis points due to increased volumes and

  8. Slide 8: Income Statement Summary

    © 2013 CRS Holdings, Inc. All rights reserved Income Statement Summary Achieved solid gross and operating margin expansion 8 * Detailed s chedule included in Non-GAAP Schedules in Appendi x $ Millions, except per-share amounts Q4-12 Q3-13 Q4-13 Sequential Change Net Sales 643.7 581.4 611.8 30.4 Sale

  9. Slide 9: Restructuring and Other Special Items

    © 2013 CRS Holdings, Inc. All rights reserved Restructuring and Other Special Items 9 $ Millions, except per-share amounts Q4-13 Income Statement Classification Net Income 40.9 Diluted Earnings Per Share $0.77 • Restructuring-related 0.04 CGS / SG&A Expense • Income tax impact of the change in assum

  10. Slide 10: Free Cash Flow Summary

    © 2013 CRS Holdings, Inc. All rights reserved $ Millions Q1 Q2 Q3 Q4 FY13 Net Income + Non-cash Items 82 76 115 58 331 Inventory (79) (10) 47 27 (15) Working capital / other 7 (17) (47) 101 44 Total Net Working Capital / Other (72) (27) 0 128 29 Pension Plan Contributions - Required (48) (10) (10) (

  11. Slide 11: Business Update

    © 2013 CRS Holdings, Inc. All rights reserved Business Update Bill Wulfsohn President and CEO 11

  12. Slide 12: End-Market Sales and Demand Outlook

    © 2013 CRS Holdings, Inc. All rights reserved Aerospace & Defense 227.9 49% 4% 6% • Commercial aerospace build rates remain s trong; outlook positive • Shorter lead times allowing dis tributors to delay purchases and benefi t from falling Ni prices • Demand growth for proprietary materials for struc

  13. Slide 13: Business Update

    © 2013 CRS Holdings, Inc. All rights reserved Business Update Andy Ziolkowski S.V.P. – Commercial, Specialty Alloys Operations 13

  14. Slide 14: Latrobe Segment Summary

    © 2013 CRS Holdings, Inc. All rights reserved Q4 Operating Results Q4 Business Highlights Q1-14 Outlook • Manufacturing gross margin expansion from operational execution . Better melt yields . Improved scrap management . Enhanced focus on manufacturing costs and OH • Better mix management within man

  15. Slide 15: SAO Segment Summary

    © 2013 CRS Holdings, Inc. All rights reserved Aerospace demand remains solid, while other economically-sensitive markets remained challenged Q4 Operating Results Q4 Business Highlights Q1-14 Outlook • Solid operational execution . Sequential margin expansion . Continued focus on reducing costs per t

  16. Slide 16: Business Update

    © 2013 CRS Holdings, Inc. All rights reserved Business Update Bill Wulfsohn President and CEO 16

  17. Slide 17: PEP Segment Summary

    © 2013 CRS Holdings, Inc. All rights reserved Q4 Operating Results Q4 Business Highlights Q1-14 Outlook • Sales up 7% sequentially but down 11% y-o-y - Strong demand for ti aero fastener material - Tool steel and distribution remained soft • Margins negatively impact by - Facility start-up costs and

  18. Slide 18: Growth Enablers Driving Innovation & Responding to Increased Customer Demand

    © 2013 CRS Holdings, Inc. All rights reserved Growth Enablers 18 Driving Innovation & Responding to Increased Customer Demand Athens Facility Forge Finishing Capacity • On time and under budget • Data Center and Met/Chem Laboratory both on-line for start of qualifications • Radial press foundation c

  19. Slide 19: Q4 and FY13 Highlights, Q1 and FY14 Outlook

    © 2013 CRS Holdings, Inc. All rights reserved Q4 and FY13 Highlights Q1 and FY14 Outlook • Solid execution in a challenging environment . Sales, ex. surcharge, up 5% from Q3 . Operating income, ex. pension EID, up 20% from Q3 • Focused strategy resulted in increased sales to the Aerospace and Energy

  20. Slide 20: Appendix of Non-GAAP Schedules

    © 2013 CRS Holdings, Inc. All rights reserved Appendix of Non-GAAP Schedules 20

  21. Slide 21: Operating Margin Excluding Surcharge and Pension EID and Special Items

    © 2013 CRS Holdings, Inc. All rights reserved 21 Preliminary Non-GAAP Unaudited Schedules (in millions) OPERATING MARGIN EXCLUDING SURCHARGE AND Three Months Ended Year Ended PENSION EARNINGS, INTEREST AND DEFERRALS June 30, March 31, June 30, AND SPECIAL ITEMS 2013 2012 2013 2013 2012 Net sales $ 6

  22. Slide 22: Impact of Special Items

    © 2013 CRS Holdings, Inc. All rights reserved 22 Preliminary Non-GAAP Unaudited Schedules (in millions, except per share data) Three Months Ended June 30, March 31, IMPACT OF SPECIAL ITEMS 2013 2012 2013 Restructuring related costs $ 3.3 $ - $ - Inventory fair value cost adjustment - 8.7 - Inventory

  23. Slide 23: Adjusted EBITDA

    © 2013 CRS Holdings, Inc. All rights reserved 23 Preliminary Non-GAAP Unaudited Schedules (in millions) Three Months Ended Year Ended June 30, June 30, ADJUSTED EARNINGS BEFORE INTEREST, TAXES, 2013 2012 2013 2012 DEPRECIATION AND AMORTIZATION (EBITDA) Net income $ 40.9 $ 41.0 $ 146.5 $ 121.6 Intere

  24. Slide 24: Free Cash Flow

    © 2013 CRS Holdings, Inc. All rights reserved 24 Preliminary Non-GAAP Unaudited Schedules Three Months Ended Year Ended (in millions) June 30, June 30, FREE CASH FLOW 2013 2012 2013 2012 Net cash provided from operating activities $ 183.5 $ 112.4 $ 215.2 $ 160.3 Purchases of property, equipment and

  25. Slide 25: Net Pension Expense per Diluted Share

    © 2013 CRS Holdings, Inc. All rights reserved 25 Preliminary Non-GAAP Unaudited Schedules Three Months Ended Year Ended June 30, June 30, NET PENSION EXPENSE PER DILUTED SHARE 2013 2012 2013 2012 Pension plans expense 14.8 $ 10.1 $ 59.5 $ 38.5 $ Other postretirement benefits expense 2.3 1.7 9.3 3.6

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