Carpenter Technology Corporation · NYSE:CRS
Carpenter Technology — Q2 FY2021 Earnings Presentation
20 slides from Carpenter Technology's earnings presentation, Jan 29, 2021
Slide 1: 2nd Quarter Fiscal Year 2021 Earnings Call
Exhibit 99.1 J A N U A R Y 2 8 , 2 0 2 1 CARPENTER TECHNOLOGY CORPORATION nd 2 Quarter Fiscal Year 2021 Earnings CallExhibit 99.1 J A N U A R Y 2 8 , 2 0 2 1 CARPENTER TECHNOLOGY CORPORATION nd 2 Quarter Fiscal Year 2021 Earnings Call
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: 2nd Quarter Fiscal Year 2021 – Tony Thene, CEO
2ND QUARTER FISCAL YEAR 2021 Tony Thene | President and Chief Executive Officer 32ND QUARTER FISCAL YEAR 2021 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 3.9 3.7 3.5 3.3 3 2.5 2.2 2.1 2.0 2 1.5 1.3 1.2 1.1 1 0.5 0.5 0 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 YTD © 2021 CRS Holdings Inc. All rights reserved. 4Safety is Our Highest Value Total Case Incident Rate (TCIR) 4 3.9 3.7 3.5
Slide 5: 2nd Quarter Summary
2nd Quarter Summary • Results impacted by ongoing targeted inventory reduction as well as COVID-19 related volume headwinds Continuing to Navigate Near- • Generated $84 million in cash provided from operating activities; $51 Term Market Disruption While million of free cash flow generation Driving I
Slide 6: 2nd Quarter End-Use Market Highlights
2nd Quarter End-Use Market Highlights Sales ex-surcharge down 36% year-over-year; down 3% sequentially Q2-21 NET SALES MARKET EX. SURCHARGE % VS. Q2-20 VS. Q1-21 COMMENTS ($M)* • Forecasted needs and timing vary widely by program and customer • Sentiment becoming more optimistic, though near-term sh
Slide 7: Positioned to emerge even stronger as markets recover
Positioned to emerge even stronger as markets recover Capitalizing on markets that are recovering faster • Best in class semiconductor portfolio supporting 5G, Cloud and IoT infrastructure buildout • Globally qualified Transportation business enabling rapid light and heavy-duty vehicle recovery Aero
Slide 8: Financial Overview and Business Update – Tim Lain, CFO
2ND QUARTER FISCAL YEAR 2021 FINANCIAL OVERVIEW AND BUSINESS UPDATE Tim Lain | Senior Vice President and Chief Financial Officer 82ND QUARTER FISCAL YEAR 2021 FINANCIAL OVERVIEW AND BUSINESS UPDATE Tim Lain | Senior Vice President and Chief Financial Officer 8
Slide 9: Income Statement Summary
Income Statement Summary Near-term market headwinds drove similar sequential volume combined with ongoing targeted inventory reduction to bolster liquidity SEQUENTIAL YEAR-OVER- $ in Millions, except pounds and per-share amounts Q2-20 Q1-21 Q2-21 CHANGE YEAR CHANGE Pounds ('000) 59,298 44,348 39,620
Slide 10: SAO Segment Summary
SAO Segment Summary Q2 OPERATING RESULTS Q2-20 Q1-21 Q2-21 vs Q2-20 vs Q1-21 Pounds ('000) 56,564 43,368 38,602 (17,962) (4,766) Net Sales ($M) 483.0 300.7 300.4 (182.6) (0.3) Sales ex. Surcharge ($M) 382.5 254.8 251.6 (130.9) (3.2) Operating Income (Loss) ($M) 76.3 (18.6) (11.6) (87.9) 7.0 % of Net
Slide 11: PEP Segment Summary
PEP Segment Summary Q2 OPERATING RESULTS Q2-20 Q1-21 Q2-21 vs Q2-20 vs Q1-21 Pounds* ('000) 3,424 1,466 1,534 (1,890) 68 Net Sales ($M) 106.0 61.8 54.8 (51.2) (7.0) Sales ex. Surcharge ($M) 104.1 61.2 54.1 (50.0) (7.1) Operating Income (Loss) ($M) 0.4 (3.6) (7.2) (7.6) (3.6) % of Net Sales 0.4% -5.8
Slide 12: Free Cash Flow Summary
Free Cash Flow Summary Continued focus on targeted inventory reduction to reflect near-term market disruption and further enhance total liquidity $ MILLIONS YTD FY20 Q1-21 Q2-21 YTD FY21 Net Income (Loss) + Non-Cash Items 164 4 ( 3) 1 Inventory (108) 85 71 156 Working Capital / Other (29) 2 18 20 To
Slide 13: Closing Comments – Tony Thene, CEO
2ND QUARTER FISCAL YEAR 2021 CLOSING COMMENTS Tony Thene | President and Chief Executive Officer 132ND QUARTER FISCAL YEAR 2021 CLOSING COMMENTS Tony Thene | President and Chief Executive Officer 13
Slide 14: Electrification - enhancing strong position to support growing megatrends
Electrification - enhancing strong position to support growing megatrends Soft magnetics alloy State of the art hot Capabilities needed to enable Stack building and electrification growth processing strip mill performance + + = • Processing knowhow refined • Leading combination of • Expert processin
Slide 15: Solid foundation for long-term growth
Solid foundation for long-term growth • Leveraged safety culture to continuously operate manufacturing facilities during pandemic while ensuring the safety of our employees • Executed targeted portfolio restructurings and cost reduction initiatives expected Near-Term Focus Centered on to generate si
Slide 16: Appendix of Non-GAAP Schedules
APPENDIX OF NON-GAAP SCHEDULES 16APPENDIX OF NON-GAAP SCHEDULES 16
Slide 17: Non-GAAP Schedules: Adjusted diluted earnings (loss) per share
Non-GAAP Schedules (Unaudited) Adjusted diluted earnings (loss) per share $ MILLIONS, EXCEPT PER-SHARE AMOUNTS Q2-20 Q1-21 Q2-21 Diluted Earnings (Loss) per Share $0.79 ($0.98) ($1.76) Net Income (Loss) 38.8 (47.1) (84.9) Special Items, net of tax: - 6.2 - Loss on debt extinguishment, net 1.8 7.6 -
Slide 18: Non-GAAP Schedules: Adjusted operating margin
Non-GAAP Schedules (Unaudited) Adjusted operating margin, excluding surcharge revenue and special items $ MILLIONS Q2-20 Q1-21 Q2-21 Net Sales 573.0 353.3 348.8 Less: Surcharge Revenue 101.8 46.1 49.4 Net Sales Excluding Surcharge Revenue 471.2 307.2 299.4 Operating Income (Loss) 55.0 ( 48.8) (89.0)
Slide 19: Non-GAAP Schedules: Free cash flow
Non-GAAP Schedules (Unaudited) Free cash flow $ MILLIONS YTD FY20 Q1-21 Q2-21 YTD FY21 Net cash provided from operating activities 22.6 88.0 83.6 171.6 Purchases of property, plant, equipment and software (94.3) ( 33.3) ( 26.6) (59.9) Proceeds from disposals of property and equipment and assets held
Slide 20: 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
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