Slide 1: Carpenter Technology Corporation 3rd Quarter Fiscal Year 2023 Earnings Call
April 27, 2023 CARPENTER TECHNOLOGY CORPORATION rd 3 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: 3rd Quarter Fiscal Year 2023
rd 3 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 1.4 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 YTD © 2023 CRS Holdings, LLC. All rights reserved. 4
Slide 5: Third Quarter Summary
Third Quarter Summary • Demand conditions across end-use markets remain strong; backlog up 10% sequentially and 70% year-over-year • Realizing share and price gains through contract negotiations and price increases on transactional business Outperformed Expectations • Continue to improve productivit
Slide 6: Third Quarter End-Use Market Highlights
Third Quarter End-Use Market Highlights Q3-23 NET SALES MARKET EX. SURCHARGE % VS. Q3-22 VS. Q2-23 COMMENTS ($M)* • Ongoing improvements to global travel demand and industry need for new planes • Supply chains struggling to keep up with demand, with more material wanted sooner $241.5 49% • Growing b
Slide 7: Financial Overview and Business Update
rd 3 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 Q3-23 Q3-22 Q2-23 YEAR CHANGE CHANGE Pounds (‘000) 57,302 49,740 50,500 7,562 6,802 Net Sales 690.1 489.0 579.1 201.1 111.0 Net Sales ex. Surcharge Revenue* 491.5 369.0 420.8 122.5 70.7 Gross Profit 93.5 3
Slide 9: SAO Segment Summary
SAO Segment Summary YEAR-OVER- SEQUENTIAL $ millions Q3-23 Q3-22 Q2-23 YEAR CHANGE CHANGE Pounds ('000) 56,516 49,872 49,442 6,644 7,074 Net Sales 603.4 418.0 495.8 185.4 107.6 Net Sales ex. Surcharge Revenue * 411.5 300.0 346.2 111.5 65.3 Operating Income 49.0 5.8 30.3 43.2 18.7 Adjusted Operating
Slide 10: PEP Segment Summary
PEP Segment Summary YEAR-OVER- SEQUENTIAL $ millions Q3-23 Q3-22 Q2-23 YEAR CHANGE CHANGE Pounds ('000) * 3,232 2,706 2,978 526 254 Net Sales 115.1 88.4 106.7 26.7 8.4 Net Sales ex. Surcharge Revenue ** 103.8 86.4 98.0 17.4 5.8 Operating Income 10.2 4.2 9.3 6.0 0.9 Adjusted Operating Income ** 10.2
Slide 11: Adjusted Free Cash Flow Summary
Adjusted Free Cash Flow Summary $ millions Q1-23 Q2-23 Q3-23 9 MOS FY23 9 MOS FY22 Net Income + Non-Cash Items 32 49 61 142 27 Inventory (121) (106) 13 (214) (101) Working Capital / Other 11 (29) (69) (88) (27) Total Net Working Capital / Other (110) (135) (56) (302) (128) Net Cash (Used for) Provid
Slide 12: Closing Comments
rd 3 QUARTER FISCAL YEAR 2023 CLOSING COMMENTS Tony Thene | President and Chief Executive Officer 12
Slide 13: Third Quarter Recap
Third Quarter Recap • Increasing demand across end-use markets • Accelerating productivity across manufacturing facilities to capture demand • Expanding margins through higher volumes, improved product mix and Well-Positioned to increased prices Achieve FY19 Operating • Offsetting inflationary press
Slide 14: On-Track to Return to FY19 Operating Income Run-Rate and to Grow Beyond
On-Track to Return to FY19 Operating Income Run-Rate and to Grow Beyond Strong demand outlook across end-use markets supports long- Focused on ramping operations to capture demand and realize term growth FY23 outlook MARKET OUTLOOK Operating Income ($M) Will exceed pre-COVID-19 levels, with growing
Slide 15: Appendix of Non-GAAP Schedules
APPENDIX OF NON-GAAP SCHEDULES 15
Slide 16: Non-GAAP Schedules: Adjusted Diluted EPS
Non-GAAP Schedules Adjusted diluted earnings (loss) per share $ millions, except per-share amounts Q3-23 Q3-22 Q2-23 Diluted Earnings (Loss) per Share $0.38 ($0.16) $0.13 Net Income (Loss) 18.6 (7.5) 6.2 Special Items, net of tax: COVID-19 Costs — 1.6 — Acquisition-related Contingent Liability Relea
Slide 17: Non-GAAP Schedules: Adjusted Operating Margin
Non-GAAP Schedules Adjusted operating margin, excluding surcharge revenue and special items $ millions Q3-23 Q2-22 Q2-23 Net Sales 690.1 489.0 579.1 Less: Surcharge Revenue 198.6 120.0 158.3 Net Sales Excluding Surcharge Revenue 491.5 369.0 420.8 Operating Income 39.3 1.1 22.6 Special Items: COVID-1
Slide 18: Non-GAAP Schedules: Adjusted Segment Operating Margin
Non-GAAP Schedules Adjusted segment operating margin, excluding surcharge revenue and special item SAO SAO SAO PEP PEP PEP $ millions Q3-23 Q3-22 Q2-23 Q3-23 Q3-22 Q2-23 Net Sales 603.4 418.0 495.8 115.1 88.4 106.7 Less: Surcharge Revenue 191.9 118.0 149.6 11.3 2.0 8.7 Net Sales Excluding Surcharge
Slide 19: Non-GAAP Schedules: Adjusted Free Cash Flow
Non-GAAP Schedules Adjusted Free Cash Flow $ millions Q1-23 Q2-23 Q3-23 9 MOS FY23 9 MOS FY22 Net Cash (Used for) Provided from Operating Activities (78.0) (86.4) 4.3 (160.2) (101.0) Purchases of Property, Plant, Equipment and Software (13.5) (17.5) (20.5) (51.5) (58.5) Proceeds from Disposals of Pr
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