Slide 1: 2nd Quarter Fiscal 2015 Earnings Call
2nd Quarter Fiscal 2015 Earnings Call January 28, 2015 Carpenter Technology Corporation Unless otherwise noted, the logo and registered trademarks are property of CRS Holdings, Inc. a subsidiary of Carpenter Technology Corporation.
Slide 2: Cautionary Statement
Cautionary Statement 2 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 3: 2nd Quarter Fiscal Year 2015 Summary
Gregory Pratt Chairman, President and Chief Executive Officer 2nd Quarter Fiscal Year 2015 Summary
Slide 4: Safety is our First Priority
Safety is our First Priority 4
Slide 5: 2nd Quarter Summary and Opening Comments
2nd Quarter Summary and Opening Comments 5
Slide 6: Sales by End-Use Market
6 Aerospace & Defense 189.2 42% +6% +5% Sales for aerospace engine materials up 5% and sales for fastener materials (titanium and nickel) up 20% year-over-year (YOY) Demand returning with stronger mix for aerospace distribution products Defense related activity improving; remains below prior year le
Slide 7: Financial Overview
Tony Thene Senior Vice President and Chief Financial Officer 2nd Quarter Fiscal Year 2015 Financial Overview
Slide 8: Income Statement Summary
Income Statement Summary 8 Q2 Adjusted EPS of $0.48 per share excluding a discrete tax item *Detailed schedule included in Non-GAAP Schedules in Appendix $ Millions, except per-share amounts Q2-14 Q1-15 Q2-15 Sequential Change Pounds ('000) 67,378 71,746 67,712 (4,034) Net Sales 503.5 549.8 548.4 (1
Slide 9: Special Item
Special Item 9 Q2 Net Income negatively impacted by $1.6 million ($0.03 EPS) for the discrete tax item $ Millions, except per-share amounts Net Income Diluted Earnings per Share Income Statement Classification Q2-15 As Reported 24.1 $0.45 Special Item Income tax impact of the Tax Increase Prevention
Slide 10: Free Cash Flow Summary
Free Cash Flow Summary 10 The clerical accuracy of certain amounts may be impacted due to rounding. $484 million of total liquidity including $29 million of cash at end of Q2 $ Millions Q1 Q2 FY14 YTD Q1 Q2 FY15 YTD YTD vs LY Net Income 35 30 64 14 24 38 (26) Non-cash Items 44 42 86 47 109 155 69 In
Slide 11: SAO Business Update
Andy Ziolkowski Senior Vice President Commercial, Specialty Alloys Operations SAO Business Update
Slide 12: SAO Segment Summary
SAO Segment Summary 12 Q2 Operating Results Q2 Business Results Q3 Outlook Sales up YOY in all end markets Sales mix stronger YOY and sequentially Lower YOY operating margins caused by: Higher system operating costs due to early stage integration of the mill operating system The planned and previous
Slide 13: PEP Business Update
Gary Heasley Senior Vice President Performance Engineered Products PEP Business Update
Slide 14: PEP Segment Summary
PEP Segment Summary 14 Q2 Operating Results Q2 Business Results Q3 Outlook Sales up 18% YOY primarily driven by: Rentals and sales of down-hole drilling tools Shipments of powder products Shipments of titanium bar and wire products on strong aerospace demand and increased capacity Operating income u
Slide 15: Growth Enablers and Forward Outlook
Gregory Pratt Chairman, President and Chief Executive Officer Growth Enablers and Forward Outlook
Slide 16: Athens Qualification Process On-Track
Athens Qualification Process On-Track 16 Current Commercially operational and providing some capacity relief at Reading and Latrobe Supporting some aerospace applications that require base industry specifications Producing stainless directional drilling products for oil and gas exploration and corro
Slide 17: Outlook and Closing Comments
Outlook and Closing Comments 17
Slide 18: Appendix of Non-GAAP Schedules
Appendix of Non-GAAP Schedules
Slide 19: Operating Margin Excluding Surcharge and Pension EID
Preliminary Non-GAAP Unaudited Schedules 19 Operating Margin Excluding Surcharge and Pension Earnings, Interest and Deferrals (Pension EID) Q2-14 Q1-15 Q2-15 Q2-14 YTD Q2-15 YTD Net sales 503.5 549.8 548.4 1,002.1 1,098.2 Less: surcharge revenue 88.9 109.7 102.7 175.4 212.4 Consolidated Net Sales Ex
Slide 20: Free Cash Flow Non-GAAP Schedule
Preliminary Non-GAAP Unaudited Schedules 20 Free Cash Flow Q2-14 Q2-15 Q2-14 YTD Q2-15 YTD Net cash provided from operating activities 23.6 12.5 63.1 27.5 Purchases of property, equipment and software (114.2) (68.4) (204.5) (127.4) Proceeds from disposals of property and equipment 0.3 - 0.3 0.1 Divi