Carpenter Technology Corporation · NYSE:CRS
Carpenter Technology — Q1 FY2020 Earnings Presentation
18 slides from Carpenter Technology's earnings presentation, Oct 28, 2019
Slide 1: Cautionary Statement: Forward-Looking Statements
2 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 pr
Slide 2: 1st Quarter Fiscal Year 2020
1st Quarter Fiscal Year 2020 Tony Thene President and Chief Executive Officer 3
Slide 3: Safety is Our Highest Value
4 Safety is Our Highest Value FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Total Case Incident Rate (TCIR) Q1-20 3.5 3.9 3.7 3.3 2.1 2.2 2.0 1.2 1.3 1.4
Slide 4: 1st Quarter Summary
Strong Commercial Execution and Ongoing Manufacturing Focus on Capacity and Productivity Driving Results; Long-Term Sustainable Growth Profile Supported by Investments in Targeted Growth Areas 5 1st Quarter Summary EPS of $0.85 – 11th consecutive quarter of year-over-year earnings growth Solid opera
Slide 5: End-Use Market Sales and Demand
Aerospace and Defense $286.1 59% +19% -6% Generally robust demand environment, with record Q1 shipments Short-term shifts in some areas related to 737 MAX with no material near-term impact and strong mid and long-term demand signals from customers Marked uptick in fastener demand, though forward vis
Slide 6: 1st Quarter Financial Overview and Business Update
1st Quarter Financial Overview and Business Update Tim Lain Vice President and Chief Financial Officer 7
Slide 7: Income Statement Summary
8 Strongest Q1 operating income performance since fiscal year 2014 Income Statement Summary * Detailed schedule included in Non-GAAP Schedules in Appendix $ Millions, except pounds and per-share amounts Q1-19 Q4-19 Q1-20 Year Over Year Change Sequential Change Pounds ('000) 65,616 70,084 62,298 (3,3
Slide 8: Free Cash Flow Summary
9 Strong earnings funding seasonal inventory growth and investments in key strategic projects 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 $ Millions Q1-19 Q4-19 Q1-20 Net Income + Non-c
Slide 9: SAO Segment Summary
10 SAO Segment Summary Q1 Operating Results Q1 Business Results Q2-20 Outlook Record Q1 operating income performance Year-over-year results driven by continued focus on richer product mix Carpenter Operating Model focused on capturing capacity and productivity gains Continued positive demand signals
Slide 10: PEP Segment Summary
11 PEP Segment Summary Q1 Operating Results Q1 Business Results Q2-20 Outlook Demand for titanium applications in the Aerospace and Medical end-use markets remains strong Results include operating losses related to strategic investments in additive manufacturing Oil & gas business impacted by decrea
Slide 11: Closing Comments
1st Quarter Fiscal Year 2020 Closing Comments Tony Thene President and Chief Executive Officer 12
Slide 12: Building on Leadership Position in Additive Manufacturing
Recent investments in AM capabilities support momentum for future growth Building on Leadership Position in Additive Manufacturing (AM) 13 Strengthened existing powder capabilities and metallurgical expertise Feedstock production and metallurgical expertise Process parameter development, characteriz
Slide 13: Soft Magnetics Solutions for Growing Electrification Trend
Well positioned to capture growth through advanced portfolio and capabilities Soft Magnetics Solutions for Growing Electrification Trend 14 Electrification trend accelerating across multiple industries Applications requiring high performance materials Soft Magnetics portfolio enables advanced soluti
Slide 14: Closing Comments
Irreplaceable Supply Chain Partner across Multiple Attractive End-Use Markets; Expanding Solutions Portfolio Through Investments in Additive Manufacturing and Soft Magnetics 15 Closing Comments Strongest first quarter operating and financial performance since fiscal year 2014 Continuing to benefit f
Slide 15: Appendix of Non-GAAP Schedules
Appendix of Non-GAAP Schedules 16
Slide 16: Non-GAAP Schedules: Adjusted Operating Margin Excluding Surcharge Revenue
17 Non-GAAP Schedules (Unaudited) Adjusted Operating Margin Excluding Surcharge Revenue $ Millions Q1-19 Q4-19 Q1-20 Net sales 572.4 641.4 585.4 Less: surcharge revenue 116.1 108.1 98.8 Consolidated Net Sales Excluding Surcharge Revenue 456.3 533.3 486.6 Operating Income 45.0 67.9 59.8 Operating Mar
Slide 17: Non-GAAP Schedules: Free Cash Flow
18 Non-GAAP Schedules (Unaudited) Free Cash Flow Q1-19 Q4-19 Q1-20 Net cash provided from operating activities 9.4 175.1 0.7 Purchases of property, plant, equipment and software (41.6) (49.7) (47.5) 0.1 0.1 0.1 Dividends paid (9.6) (9.7) (9.7) Free Cash Flow (41.7) 115.8 (56.4) $ Millions Management
Slide 18: Non-GAAP Schedules: Free Cash Flow
Non-GAAP Schedules (Unaudited) Free Cash Flow Q4-19 Q1-20 $ Millions Net cash provided from operating activities 94] 175.1 07 Purchases of property, plant, equipment and software (41.6)} (49.7) (47.5) Proceeds from disposals of property, plant and equipment and assets held for sale 0.1 0.1 0.1 Divid
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