Carpenter Technology Corporation · NYSE:CRS
Carpenter Technology — Q3 FY2019 Earnings Presentation
18 slides from Carpenter Technology's earnings presentation, Apr 26, 2019
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: 3rd Quarter Fiscal Year 2019 – Tony Thene, President and CEO
Tony Thene President and Chief Executive Officer 3rd Quarter Fiscal Year 2019
Slide 3: Safety is Our Highest Value
Safety is Our Highest Value 3.9 3.5 3.9 3.7 3.3 2.1 2.2 2.0 1.2 1.4 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 YTD Total Case Incident Rate (TCIR)
Slide 4: 3rd Quarter Summary
3rd Quarter Summary Expanded Customer Relationships, Stronger Mix and Enhanced Manufacturing Operations Driving Improved Performance; Continuing to Strengthen Foundation for Long-Term Sustainable Value Creation Continued strong execution and operating performance; reported EPS of $1.05 – includes $0
Slide 5: Q3 FY19 End-Use Market Highlights
Q3 FY19 End-Use Market Highlights Aerospace and Defense $273.8 54% +5% +17% Year-over-year (YoY) and sequential performance driven by broad solutions portfolio with solid demand across all major sub-markets Fastener sub-market volumes improved YoY and sequentially with demand signals that remain mix
Slide 6: 3rd Quarter Financial Overview and Business Update
Tim Lain Vice President and Chief Financial Officer 3rd Quarter Financial Overview and Business Update
Slide 7: Income Statement Summary
Strong year-over-year and sequential operating income growth Income Statement Summary *Detailed schedule included in Non-GAAP Schedules in Appendix $ Millions, except pounds and per-share amounts Q3-18 Q2-19 Q3-19 Sequential Change Pounds ('000) 68,898 63,918 67,918 4,000 Net Sales 572.2 556.5 609.9
Slide 8: Free Cash Flow Summary
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 Inventory build to support growing backlog 19 267
Slide 9: SAO Segment Summary
Q3 Operating Results SAO Segment Summary Q3 Business Results Q4-19 Outlook Year-over-year results driven by strategic shift to more complex materials with a favorable mix Excluding insurance recovery benefit of $4.7 million in Q2-19, sequential improvement in operating income of $9.3 million driven
Slide 10: PEP Segment Summary
PEP Segment Summary Q3 Operating Results Q3 Business Results Q4-19 Outlook Operating income includes insurance recovery benefit of $11.4 million Strengthening demand for titanium products in both Aerospace and Medical end-use markets Adoption rates for new tools used in oil & gas sub-market below ex
Slide 11: Closing Comments
Tony Thene President and Chief Executive Officer 3rd Quarter Fiscal Year 2019 Closing Comments
Slide 12: Investing in Future Growth
Investing in Future Growth Additive Manufacturing Soft Magnetics Expanding leadership position in key strategic growth platforms Feedstock production and metallurgical expertise enhanced with addition of part design and production LPW acquisition further strengthened team and integrates full life-cy
Slide 13: Closing Comments
Closing Comments Flexibly Supporting Short-Term Industry Needs Driving Strong Performance; Partnering with Solution-Oriented Customers for Longer-Term Sustainable Value Creation Strong commercial execution delivering market share gains, stronger customer relationships and growing backlogs Diverse Ae
Slide 14: Appendix of Non-GAAP Schedules
Appendix of Non-GAAP Schedules
Slide 15: Non-GAAP Schedules (Unaudited)
Non-GAAP Schedules (Unaudited) Management believes that earnings per share adjusted to exclude the impact of special items is helpful in analyzing the operating performance of the Company, as these items are not indicative of ongoing operating performance. Management uses its results excluding these
Slide 16: Operating Margin Excluding Surcharge Revenue and Special Items
Non-GAAP Schedules (Unaudited) Operating Margin Excluding Surcharge Revenue and Special Items $ Millions Q3-18 Q2-19 Q3-19 Net sales 572.2 556.5 609.9 Less: surcharge revenue 99.7 107.1 106.9 Consolidated Net Sales Excluding Surcharge 472.5 449.4 503.0 Operating Income 45.7 55.4 73.2 Special Items:
Slide 17: Non-GAAP Schedules (Unaudited)
Non-GAAP Schedules (Unaudited) Proceeds from disposals of property, plant and equipment and assets held for sale
Slide 18: Non-GAAP Schedules: Free Cash Flow
Non-GAAP Schedules (Unaudited) Free Cash Flow '$ Millions Q3-18 2-19 3-19 _ YTD FY18 YTD FY19 ‘Net cash provided from operating activities 73.4 37.8 10.0 90.7 87.2 Purchases of property, plant, equipment and software (25.2)) (40.1) (49.0))—(80.9)| (130.7) Proceeds from disposals of property, plant a
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