Slide 1: Carpenter Technology Corporation 4th Quarter Fiscal Year 2023 Earnings Call
July 27, 2023 CARPENTER TECHNOLOGY CORPORATION th 4 Quarter Fiscal Year 2023 Earnings Call 1
Slide 2: Cautionary Statement
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 3: 4th Quarter Fiscal Year 2023
th 4 QUARTER FISCAL YEAR 2023 Tony Thene | President and Chief Executive Officer 3
Slide 4: Safety is Our Highest Value
Safety is Our Highest Value Total Case Incident Rate (TCIR) 4 3.7 3.5 3.3 3 2.5 2.2 2.1 2.0 2 1.5 1.7 1.3 1.2 1.1 1.0 1 0.6 0.5 0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 © 2023 CRS Holdings, LLC. All rights reserved. 4
Slide 5: Exceeded Target to Return to Pre-Pandemic Operating Income Run Rate
Fourth Quarter Summary • Achieved operating income of $62.9 million, surpassing target to return to pre-pandemic operating income run rate in fourth quarter of fiscal year 2023 • SAO segment significantly exceeded expectations with operating income of $80 million and adjusted operating margin reachi
Slide 6: Fourth Quarter End-Use Market Highlights
Fourth Quarter End-Use Market Highlights Q4-23 NET SALES MARKET EX. SURCHARGE % VS. Q4-22 VS. Q3-23 COMMENTS ($M)* • Global travel surging and now nearly at pre-COVID levels, with ongoing demand increases • More material wanted sooner by all supply chains $294.2 53% • Customers prioritizing security
Slide 7: Financial Overview and Business Update
th 4 QUARTER FISCAL YEAR 2023 FINANCIAL OVERVIEW AND BUSINESS UPDATE Tim Lain | Senior Vice President and Chief Financial Officer 7
Slide 8: Income Statement Summary
Income Statement Summary YEAR-OVER- SEQUENTIAL $ millions, except pounds and per-share amounts Q4-23 Q4-22 Q3-23 YEAR CHANGE CHANGE Pounds (‘000) 61,428 51,760 57,302 9,668 4,126 Net Sales 758.1 563.8 690.1 194.3 68.0 Net Sales ex. Surcharge Revenue* 560.0 403.2 491.5 156.8 68.5 Gross Profit 119.0 7
Slide 9: SAO Segment Summary
SAO Segment Summary YEAR-OVER- SEQUENTIAL $ millions Q4-23 Q4-22 Q3-23 YEAR CHANGE CHANGE Pounds ('000) 61,528 51,626 56,516 9,902 5,012 Net Sales 667.0 484.9 603.4 182.1 63.6 Net Sales ex. Surcharge Revenue * 477.2 327.2 411.5 150.0 65.7 Operating Income 80.0 30.0 49.0 50.0 31.0 Adjusted Operating
Slide 10: PEP Segment Summary
PEP Segment Summary YEAR-OVER- SEQUENTIAL $ millions Q4-23 Q4-22 Q3-23 YEAR CHANGE CHANGE Pounds ('000)* 3,328 2,808 3,232 520 96 Net Sales 118.7 95.8 115.1 22.9 3.6 Net Sales ex. Surcharge Revenue ** 107.6 92.9 103.8 14.7 3.8 Operating Income 5.9 10.3 10.2 -4.4 -4.3 Adjusted Operating Income ** 5.9
Slide 11: Adjusted Free Cash Flow Summary
Adjusted Free Cash Flow Summary $ millions Q4-23 Q3-23 Q2-23 Q1-23 FY23 FY22 Net Income + Non-Cash Items 84 61 49 32 226 86 Inventory 73 13 (106) (121) (140) (72) Working Capital / Other 18 (69) (29) 11 (71) (8) Total Net Working Capital / Other 91 (56) (135) (110) (211) (80) Net Cash Provided from
Slide 12: Selected Fiscal Year 2024 Guidance
Selected Fiscal Year 2024 Guidance FY24 $ in millions FY23 ESTIMATE Depreciation and Amortization $131 $131 Capital Expenditures $82 $125-130 Pension Contributions $- $11 Net Pension Expense $20 $24 Interest Expense $54 $52-54 Effective Tax Rate 22% 22-24% © 2023 CRS Holdings, LLC. All rights reserv
Slide 13: Closing Comments
th 4 QUARTER FISCAL YEAR 2023 CLOSING COMMENTS Tony Thene | President and Chief Executive Officer 13
Slide 14: Fourth Quarter Recap: Exceeded Expectations with Momentum to Drive Growth in FY24
Fourth Quarter Recap • Exceeded target to return to fiscal year 2019 operating income run-rate by the end of fiscal year 2023 • Achieved adjusted operating income of $62.9 million, a significant improvement from $39.3 million in the previous quarter and $14.9 million in the fourth quarter of fiscal
Slide 15: Compelling Near-Term and Long-Term Financial Outlook
Compelling Near-Term and Long-Term Financial Outlook Projecting Q1 FY24 operating income performance above On path to achieve goal of doubling FY19 operating income by historical trend FY27 - Projecting FY24 to be meaningful step forward Operating Income ($M) Operating Income ($M) 2x 460-500 63 61-6
Slide 16: Appendix of Non-GAAP Schedules
APPENDIX OF NON-GAAP SCHEDULES 16
Slide 17: Non-GAAP Schedules
Non-GAAP Schedules Adjusted diluted earnings (loss) per share $ millions, except per-share amounts Q4-23 Q4-22 Q3-23 FY23 FY22 Diluted Earnings (Loss) per Share $0.78 $0.05 $0.38 $1.14 ($1.01) Net Income (Loss) 38.4 2.6 18.6 56.4 (49.1) Special Items, net of tax: COVID-19 Costs — 0.6 — — 4.6 COVID-1
Slide 18: Non-GAAP Schedules
Non-GAAP Schedules Adjusted operating margin, excluding surcharge revenue and special items $ millions Q4-23 Q4-22 Q3-23 FY23 FY22 Net Sales 758.1 563.8 690.1 2,550.3 1,836.3 Less: Surcharge Revenue 198.1 160.6 198.6 702.3 436.3 Net Sales Excluding Surcharge Revenue 560.0 403.2 491.5 1,848.0 1,400.0
Slide 19: Non-GAAP Schedules
Non-GAAP Schedules Adjusted segment operating margin, excluding surcharge revenue and special items SAO SAO SAO PEP PEP PEP $ millions Q4-23 Q4-22 Q3-23 Q4-23 Q4-22 Q3-23 Net Sales 667.0 484.9 603.4 118.7 95.8 115.1 Less: Surcharge Revenue 189.8 157.7 191.9 11.1 2.9 11.3 Net Sales Excluding Surcharg
Slide 20: Non-GAAP Schedules
Non-GAAP Schedules Adjusted Free Cash Flow $ millions Q4-23 Q3-23 Q2-23 Q1-23 FY23 FY22 Net Cash Provided from (Used for) Operating 174.9 4.3 (86.4) (78.0) 14.7 6.0 Activities Purchases of Property, Plant, Equipment and (30.8) (20.5) (17.5) (13.5) (82.3) (91.3) Software Proceeds from Disposals of Pr
Slide 21: Your trusted partner in innovation
Your trusted partner in innovation. Carpenter Technology Corporation (NYSE: CRS) is a global leader in high-performance specialty alloy-based materials and process solutions for critical applications in the aerospace, defense, medical, transportation, energy, industrial and consumer electronics mark