Carpenter Technology Corporation · NYSE:CRS
Carpenter Technology — Q4 FY2016 Earnings Presentation
22 slides from Carpenter Technology's earnings presentation, Jul 29, 2016
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 2016 Summary
4th Quarter and Fiscal Year 2016 Summary Tony Thene President and Chief Executive Officer
Slide 3: Safety is our First Priority
Safety is our First Priority 1Q-16 TCIR = 2.3 2Q-16 TCIR = 1.9 3Q-16 TCIR = 2.2 4Q-16 TCIR = 2.2 4.8 3.9 3.5 3.9 3.7 3.3 2.1 2.2 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Total Case Incident Rate (TCIR)
Slide 4: Fiscal Year 2016 Summary
Fiscal Year 2016 Summary Solid Progress in Setting Stage for Growth and Enhanced Profits Through Initiation of Carpenter Operating Model and Realignment of Commercial Organization Strengthened the Carpenter team and actively managed the business during challenging market environment Execution of Car
Slide 5: Fiscal Year 2016 Adjusted Operating Income Bridge
Fiscal Year 2016 Adjusted Operating Income Bridge Operating Income excluding Pension EID, Restructuring Charges and Special Items* Cost reduction efforts largely offset impact of volume decline * Detailed schedule included in Non-GAAP Schedules in Appendix Operating Income: $51.6 Operating Income: $
Slide 6: 4th Quarter Summary
4th Quarter Summary Solid Free Cash Flow Reflects Strong Execution, Benefits of Diverse Customer Base and Focus on Operating Efficiency Strong operating and commercial performance; adjusted EPS of $0.35 ($0.32 as reported) Performance driven by slightly higher sequential volumes and continued cost i
Slide 7: 4th Quarter End-Use Market Highlights
4th Quarter End-Use Market Highlights Aerospace and Defense 219.3 54% -2% +5% Engines up sequentially and year-over-year (YOY) from increased activity across new platforms Fasteners down slightly sequentially and down YOY reflecting continued supply chain inventory adjustments Defense down YOY, but
Slide 8: 4th Quarter Financial Overview & Business Update
4th Quarter Financial Overview & Business Update Damon Audia Senior Vice President and Chief Financial Officer
Slide 9: Income Statement Summary
Income Statement Summary End-use market diversification and operating model execution delivered strong Q4 results *Detailed schedule included in Non-GAAP Schedules in Appendix $ Millions, except pounds and per-share amounts Q4-15 Q3-16 Q4-16 Sequential Change Pounds ('000) 68,972 61,338 65,870 4,532
Slide 10: Cash Flow Summary
Cash Flow Summary The clerical accuracy of certain amounts may be impacted due to rounding. Nearly doubled Free Cash Flow *Detailed schedule included in Non-GAAP Schedules in Appendix 70 493
Slide 11: SAO Segment Summary
SAO Segment Summary Q4 Operating Results Q4 Business Results Q1 Outlook Year-over-year (YOY) volume decline driven by continued weakness in oil & gas Increased operating margins YOY driven by 10% improvement in variable manufacturing cost resulting from execution of Carpenter Operating Model Higher
Slide 12: PEP Segment Summary
PEP Segment Summary Q4 Operating Results * Pounds related to manufactured tons for Dynamet and Carpenter Powder Products only Q4 Business Results Q1 Outlook Sales and operating income down year-over-year (YOY) primarily influenced by: Weak oil & gas demand due to reduced drilling activity Lower dema
Slide 13: Selected Fiscal Year 2017 Guidance
Selected Fiscal Year 2017 Guidance $ Millions FY16 FY17 Depreciation and Amortization 119 ~120 #VALUE! Interest Expense, net 28 ~32 #VALUE! Net Pension Expense 54 69 15 Required Cash Pension Contributions - 1 Effective Tax Rate 47% 28%- 30% #VALUE! Capital Expenditures 95 ~120
Slide 14: 4th Quarter and Fiscal 2016 Closing Comments
4th Quarter and Fiscal 2016 Closing Comments Tony Thene President and Chief Executive Officer
Slide 15: Athens Facility Powder Products
Athens Facility Powder Products Achievements to Date Facility is fully operational 99% of customer site non-VAP certifications complete 83% of Oil & Gas qualifications achieved Continue to expand range of products approved for manufacturing Two VAP qualifications completed for nickel superalloy used
Slide 16: Closing Comments
Closing Comments Well Positioned as Preferred Solutions Provider for High-end Premium Alloy Markets; Poised for Revenue and Margin Growth as Markets Recover Continued focus on actively managing our business and optimizing our long-term cost structure Delivering strong results and cash flow despite v
Slide 17: Appendix of Non-GAAP Schedules
Appendix of Non-GAAP Schedules
Slide 18: Non-GAAP Schedules (Unaudited)
Non-GAAP Schedules (Unaudited) $ Millions except per share amounts Q4-15 Q3-16 Q4-16 FY15 FY16 Net Income (Loss) 22.5 (23.9) 14.9 58.7 11.3 Diluted Earnings (Loss) Per Share 0.44 (0.51) 0.32 1.11 0.23 Excess Inventory Write-down - 14.7 - - 14.7 Restructuring and Asset Impairment Charges 2.4 12.0 - 1
Slide 19: Operating Income and Margin Excluding Surcharge Revenue, Pension EID, Special Items
Non-GAAP Schedules (Unaudited) Operating Income And Margin Excluding Surcharge Revenue, Pension Earnings, Interest and Deferrals "Pension EID", and Special Items Q4-15 Q3-16 Q4-16 FY15 FY16 Net sales 558.0 456.3 457.7 2,226.7 1,813.4 Less: surcharge revenue 95.0 53.9 52.0 414.9 240.8 Net Sales Exclu
Slide 20: Non-GAAP Schedules: Free Cash Flow
Non-GAAP Schedules (Unaudited) Free Cash Flow $ Millions Q4-15 Q4-16 FY15 FY16 Net cash provided from operating activities 134.1 119.7 282.6 256.9 Purchases of property, equipment and software (18.3) (29.1) (170.5) (95.2) Proceeds from disposals of property and equipment and assets held for sale - 1
Slide 21: Supplemental Schedule: Net Sales By End-Use Market
Supplemental Schedule (Unaudited) Net Sales By End-Use Market $ Millions Q4-15 Q3-16 Q4-16 FY15 FY16 Aerospace and Defense 224.9 208.4 219.3 823.5 823.1 Energy 48.7 33.3 23.5 245.0 115.3 Transportation 33.5 34.7 33.2 130.9 136.8 Medical 33.9 30.2 30.1 118.5 114.5 Industrial and Consumer 88.4 65.0 70
Slide 22: Net Sales By End-Use Market
Net Sales By End-Use Market i$ Millions a4 FY1 FY16 Aerospace and Defense 224.9 208.4 219.3 823.5 823.1 Energy 48.7 33.3 235 | 2450) 1153 Transportation 33.5 34.7 33.2 130.9 136.8 Medical 33.9 30.2 30.1 118.5 14.5 Industrial and Consumer 88.4 65.0 70.6 358.3 265.2 Distribution 33.6 30.8 29.0 135.6 1
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