Carpenter Technology Reports Fourth Quarter and Fiscal Year 2022 Results
Carpenter Technology Corporation (NYSE: CRS) reported Q4 fiscal 2022 results, achieving net income of $2.6 million or $0.05 per diluted share, reversing from a loss of $57.1 million in the previous year. Adjusted earnings per share stood at $0.00, compared to a loss of $0.28.
Significantly, backlog surged 29% sequentially and 191% year-over-year, with net sales reaching $563.8 million, a 34% increase from last year. The company generated $106.9 million in operating cash flow and $64.6 million in free cash flow, marking a positive outlook for fiscal 2023 amid strong demand in Aerospace and Medical sectors.
- Net sales increased by 34% to $563.8 million in Q4 FY2022.
- Net income of $2.6 million marks a significant recovery from a loss of $57.1 million in the previous year.
- Backlog grew by 29% sequentially and 191% year-over-year.
- Generated $106.9 million in cash from operating activities and $64.6 million in free cash flow.
- Increased operating income of $24.6 million compared to a loss of $70.7 million in the same quarter last year.
- Adjusted earnings per share at $0.00 indicates ongoing challenges despite overall positive results.
- Higher interest costs partially offset gains in operating income.
Reported earnings per share of
Backlog up
Generated
PHILADELPHIA, July 28, 2022 (GLOBE NEWSWIRE) -- Carpenter Technology Corporation (NYSE: CRS) (the “Company”) today announced financial results for the fiscal fourth quarter and year ended June 30, 2022. For the quarter, the Company reported net income of
“Our fourth quarter results marked a successful end to the year and place us on strong ground to deliver accelerated growth in fiscal year 2023,” said Tony Thene, Carpenter Technology’s President and CEO. “The quarter saw us return to a positive EPS as both the Specialty Alloy Operations (“SAO”) and Performance Engineered Products (“PEP”) segments outperformed our expectations. We also continued to expand our backlog across our end-use markets and secured another price increase on our transactional business as overall demand conditions across our end-use markets remain strong.”
“In the fourth quarter, our backlog grew by 29 percent on a sequential basis and 191 percent year-over-year. We also generated positive free cash flow of
“Fiscal year 2022 proved to be a challenging but successful year. We navigated through an unforeseen outage of our Reading Press, continued COVID-19 isolations, a difficult hiring environment, and other supply chain challenges. But in addressing each of them, I believe we are emerging from it stronger and well-positioned for growth.”
“Looking ahead, we expect to see continued growth across our end-use markets, especially in Aerospace, Defense and Medical applications, where customers are still ramping to pre-pandemic levels. To capitalize on the demand in our core business, we are focused on achieving additional productivity and capacity gains through the Carpenter Operating Model. Further, our strong position in our core business is supported by our capabilities in key emerging areas including electrification and additive manufacturing that further support our long-term growth profile. We believe the continued execution of our strategy will drive sustainable long-term value creation for our customers and shareholders.”
Financial Highlights
| Q4 | Q4 | YTD | YTD | ||||||||||||
| ($ in millions except per share amounts) | FY2022 | FY2021 | FY2022 | FY2021 | |||||||||||
| Net sales | $ | 563.8 | $ | 421.6 | $ | 1,836.3 | $ | 1,475.6 | |||||||
| Net sales excluding surcharge (a) | $ | 403.2 | $ | 348.1 | $ | 1,400.0 | $ | 1,252.8 | |||||||
| Operating income (loss) | $ | 24.6 | $ | (70.7 | ) | $ | (24.9 | ) | $ | (248.6 | ) | ||||
| Adjusted operating income (loss) excluding special items (a) | $ | 14.9 | $ | (12.5 | ) | $ | (34.0 | ) | $ | (105.5 | ) | ||||
| Net income (loss) | $ | 2.6 | $ | (57.1 | ) | $ | (49.1 | ) | $ | (229.6 | ) | ||||
| Earnings (loss) per share | $ | 0.05 | $ | (1.18 | ) | $ | (1.01 | ) | $ | (4.76 | ) | ||||
| Adjusted earnings (loss) per share (a) | $ | 0.00 | $ | (0.28 | ) | $ | (1.06 | ) | $ | (2.01 | ) | ||||
| Net cash provided from operating activities | $ | 106.9 | $ | 74.5 | $ | 6.0 | $ | 250.0 | |||||||
| Free cash flow (a) | $ | 64.6 | $ | 42.6 | $ | (122.3 | ) | $ | 132.0 | ||||||
| (a) non-GAAP financial measures explained in the attached tables | |||||||||||||||
Net sales for the fourth quarter of fiscal year 2022 were
Operating income for the fourth quarter of fiscal year 2022 was
Earnings per share for the fourth quarter of fiscal year 2022 was
The special items in the current quarter include
Cash provided from operating activities in the fourth quarter of fiscal year 2022 was
Total liquidity, including cash and available revolver balance, was
Conference Call and Webcast Presentation
Carpenter Technology will host a conference call and webcast presentation today, July 28th at 10:00 a.m. ET, to discuss the financial results of operations for the fourth quarter and full fiscal year 2022. Please dial +1 412-317-9259 for access to the live conference call. Access to the live webcast will be available at Carpenter Technology’s website (http://www.carpentertechnology.com), and a replay will be made available at http://www.carpentertechnology.com. Presentation materials used during this conference call will be available for viewing and download at http://www.carpentertechnology.com.
Non-GAAP Financial Measures
This press release includes discussions of financial measures that have not been determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP). A reconciliation of the non-GAAP financial measures to their most directly comparable financial measures prepared in accordance with GAAP, accompanied by reasons why the Company believes the non-GAAP measures are important, are included in the attached schedules.
About Carpenter Technology
Carpenter Technology Corporation is a recognized 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 markets. Founded in 1889, Carpenter Technology has evolved to become a pioneer in premium specialty alloys, including titanium, nickel, and cobalt, as well as alloys specifically engineered for additive manufacturing (AM) processes and soft magnetics applications. Carpenter Technology has expanded its AM capabilities to provide a complete “end-to-end” solution to accelerate materials innovation and streamline parts production. More information about Carpenter Technology can be found at www.carpentertechnology.com.
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 projected, anticipated or implied. The most significant of these uncertainties are described in Carpenter Technology’s filings with the Securities and Exchange Commission, including its report on Form 10-K for the year ended June 30, 2021, Form 10-Q for the quarters ended September 30, 2021, December 31, 2021 and March 31, 2022 and the exhibits attached to those filings. They include but are not limited to:(1) the cyclical nature of the specialty materials business and certain end-use markets, including aerospace, defense, medical, transportation, energy, industrial and consumer, or other influences on Carpenter Technology's business such as new competitors, the consolidation of competitors, customers, and suppliers or the transfer of manufacturing capacity from the United States to foreign countries; (2) the ability of Carpenter Technology to achieve cash generation, growth, earnings, profitability, operating income, cost savings and reductions, qualifications, productivity improvements or process changes; (3) the ability to recoup increases in the cost of energy, raw materials, freight or other factors; (4) domestic and foreign excess manufacturing capacity for certain metals; (5) fluctuations in currency exchange rates; (6) the effect of government trade actions; (7) the valuation of the assets and liabilities in Carpenter Technology's pension trusts and the accounting for pension plans; (8) possible labor disputes or work stoppages; (9) the potential that our customers may substitute alternate materials or adopt different manufacturing practices that replace or limit the suitability of our products; (10) the ability to successfully acquire and integrate acquisitions; (11) the availability of credit facilities to Carpenter Technology, its customers or other members of the supply chain; (12) the ability to obtain energy or raw materials, especially from suppliers located in countries that may be subject to unstable political or economic conditions; (13) Carpenter Technology's manufacturing processes are dependent upon highly specialized equipment located primarily in facilities in Reading and Latrobe, Pennsylvania and Athens, Alabama for which there may be limited alternatives if there are significant equipment failures or a catastrophic event; (14) the ability to hire and retain key personnel, including members of the executive management team, management, metallurgists and other skilled personnel; (15) fluctuations in oil and gas prices and production; (16) uncertainty regarding the return to service of the Boeing 737 MAX aircraft and the related supply chain disruption; (17) potential impacts of the COVID-19 pandemic on our operations, financial results and financial position; (18) our efforts and efforts by governmental authorities to mitigate the COVID-19 pandemic, such as travel bans, shelter in place orders and business closures, and the related impact on resource allocations and manufacturing and supply chains; (19) our ability to execute our business continuity, operational, budget and fiscal plans in light of the COVID-19 pandemic; and (20) our ability to successfully carry out restructuring and business exit activities on the expected terms and timelines. Any of these factors could have an adverse and/or fluctuating effect on Carpenter Technology's results of operations. The forward-looking statements in this document are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. Carpenter Technology undertakes no obligation to update or revise any forward-looking statements.
PRELIMINARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(Unaudited)
| Three Months Ended | Year Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net sales | $ | 563.8 | $ | 421.6 | $ | 1,836.3 | $ | 1,475.6 | ||||||||
| Cost of sales | 491.8 | 441.3 | 1,686.5 | 1,470.4 | ||||||||||||
| Cost of sales - inventory write-downs from restructuring | — | 1.6 | — | 4.2 | ||||||||||||
| Gross profit (loss) | 72.0 | (21.3 | ) | 149.8 | 1.0 | |||||||||||
| Selling, general and administrative expenses | 47.4 | 47.9 | 174.7 | 180.2 | ||||||||||||
| Restructuring and asset impairment charges | — | 1.5 | — | 16.6 | ||||||||||||
| Goodwill impairment | — | — | — | 52.8 | ||||||||||||
| Operating income (loss) | 24.6 | (70.7 | ) | (24.9 | ) | (248.6 | ) | |||||||||
| Interest expense, net | 13.4 | 9.2 | 44.9 | 32.7 | ||||||||||||
| Debt extinguishment losses, net | 6.0 | — | 6.0 | 8.2 | ||||||||||||
| Other (income) expense, net | (0.2 | ) | (0.9 | ) | (12.7 | ) | 8.4 | |||||||||
| Income (loss) before income taxes | 5.4 | (79.0 | ) | (63.1 | ) | (297.9 | ) | |||||||||
| Income tax expense (benefit) | 2.8 | (21.9 | ) | (14.0 | ) | (68.3 | ) | |||||||||
| Net income (loss) | $ | 2.6 | $ | (57.1 | ) | $ | (49.1 | ) | $ | (229.6 | ) | |||||
| EARNINGS (LOSS) PER COMMON SHARE: | ||||||||||||||||
| Basic | $ | 0.05 | $ | (1.18 | ) | $ | (1.01 | ) | $ | (4.76 | ) | |||||
| Diluted | $ | 0.05 | $ | (1.18 | ) | $ | (1.01 | ) | $ | (4.76 | ) | |||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||||
| Basic | 48.6 | 48.4 | 48.5 | 48.3 | ||||||||||||
| Diluted | 48.7 | 48.4 | 48.5 | 48.3 | ||||||||||||
| Cash dividends per common share | $ | 0.20 | $ | 0.20 | $ | 0.80 | $ | 0.80 | ||||||||
PRELIMINARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
| Year Ended | ||||||||
| June 30, | ||||||||
| 2022 | 2021 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (49.1 | ) | $ | (229.6 | ) | ||
| Adjustments to reconcile net loss to net cash provided from operating activities: | ||||||||
| Depreciation and amortization | 131.4 | 123.6 | ||||||
| Goodwill impairment charge | — | 52.8 | ||||||
| LIFO decrement | — | 52.2 | ||||||
| Non-cash inventory write-downs from restructuring | — | 4.2 | ||||||
| Acquisition-related contingent liability release | (4.7 | ) | — | |||||
| Non-cash restructuring and asset impairment charges | — | 16.2 | ||||||
| Debt extinguishment losses, net | 6.0 | 8.2 | ||||||
| Deferred income taxes | (3.1 | ) | (33.6 | ) | ||||
| Net pension (income) expense | (7.3 | ) | 24.6 | |||||
| Share-based compensation expense | 10.8 | 10.4 | ||||||
| Net loss on disposal of property, plant, and equipment and assets held for sale | 2.0 | 0.3 | ||||||
| Changes in working capital and other: | ||||||||
| Accounts receivable | (79.0 | ) | (14.9 | ) | ||||
| Inventories | (71.9 | ) | 238.5 | |||||
| Other current assets | 8.3 | (33.9 | ) | |||||
| Accounts payable | 95.7 | 22.4 | ||||||
| Accrued liabilities | (24.5 | ) | 33.8 | |||||
| Pension plan contributions | (0.7 | ) | (19.9 | ) | ||||
| Other postretirement plan contributions | (1.7 | ) | (2.7 | ) | ||||
| Other, net | (6.2 | ) | (2.6 | ) | ||||
| Net cash provided from operating activities | 6.0 | 250.0 | ||||||
| INVESTING ACTIVITIES | ||||||||
| Purchases of property, plant, equipment and software | (91.3 | ) | (100.5 | ) | ||||
| Proceeds from disposals of property, plant and equipment and assets held for sale | 2.2 | 1.6 | ||||||
| Proceeds from divestiture of business | — | 20.0 | ||||||
| Net cash used for investing activities | (89.1 | ) | (78.9 | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| Net change in short-term credit agreement borrowings | — | (170.0 | ) | |||||
| Proceeds from issuance of long-term debt, net of offering costs | 296.6 | 395.5 | ||||||
| Payments on long-term debt | (300.0 | ) | (250.0 | ) | ||||
| Payments for debt extinguishment costs, net | (6.0 | ) | (8.2 | ) | ||||
| Payments for debt issue costs | (0.8 | ) | (2.5 | ) | ||||
| Dividends paid | (39.2 | ) | (39.1 | ) | ||||
| Proceeds from stock options exercised | — | 0.5 | ||||||
| Withholding tax payments on share-based compensation awards | (3.4 | ) | (2.3 | ) | ||||
| Net cash used for financing activities | (52.8 | ) | (76.1 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 2.7 | (0.7 | ) | |||||
| (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (133.2 | ) | 94.3 | |||||
| Cash and cash equivalents at beginning of year | 287.4 | 193.1 | ||||||
| Cash and cash equivalents at end of year | $ | 154.2 | $ | 287.4 | ||||
PRELIMINARY
CONSOLIDATED BALANCE SHEETS
(in millions)
(Unaudited)
| June 30, | ||||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 154.2 | $ | 287.4 | ||||
| Accounts receivable, net | 382.3 | 308.7 | ||||||
| Inventories | 496.1 | 425.7 | ||||||
| Other current assets | 86.8 | 95.6 | ||||||
| Total current assets | 1,119.4 | 1,117.4 | ||||||
| Property, plant and equipment, net | 1,420.8 | 1,457.5 | ||||||
| Goodwill | 241.4 | 241.4 | ||||||
| Other intangibles, net | 35.2 | 43.1 | ||||||
| Deferred income taxes | 5.7 | 5.3 | ||||||
| Other assets | 109.8 | 106.5 | ||||||
| Total assets | $ | 2,932.3 | $ | 2,971.2 | ||||
| LIABILITIES | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 242.1 | $ | 142.4 | ||||
| Accrued liabilities | 133.5 | 163.9 | ||||||
| Total current liabilities | 375.6 | 306.3 | ||||||
| Long-term debt | 691.8 | 694.5 | ||||||
| Accrued pension liabilities | 196.6 | 222.6 | ||||||
| Accrued postretirement benefits | 77.4 | 98.6 | ||||||
| Deferred income taxes | 162.4 | 156.9 | ||||||
| Other liabilities | 98.0 | 100.0 | ||||||
| Total liabilities | 1,601.8 | 1,578.9 | ||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common stock | 280.1 | 280.1 | ||||||
| Capital in excess of par value | 320.3 | 322.6 | ||||||
| Reinvested earnings | 1,211.0 | 1,299.3 | ||||||
| Common stock in treasury | (307.4 | ) | (317.4 | ) | ||||
| Accumulated other comprehensive loss | (173.5 | ) | (192.3 | ) | ||||
| Total stockholders' equity | 1,330.5 | 1,392.3 | ||||||
| Total liabilities and stockholders' equity | $ | 2,932.3 | $ | 2,971.2 | ||||
PRELIMINARY
SEGMENT FINANCIAL DATA
(in millions, except pounds sold)
(Unaudited)
| Three Months Ended | Year Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Pounds sold (000): | |||||||||||||||
| Specialty Alloys Operations | 51,626 | 47,712 | 187,754 | 166,942 | |||||||||||
| Performance Engineered Products | 2,808 | 2,912 | 10,662 | 7,936 | |||||||||||
| Intersegment | (2,674 | ) | (2,656 | ) | (10,304 | ) | (5,172 | ) | |||||||
| Consolidated pounds sold | 51,760 | 47,968 | 188,112 | 169,706 | |||||||||||
| Net sales: | |||||||||||||||
| Specialty Alloys Operations | |||||||||||||||
| Net sales excluding surcharge | $ | 327.2 | $ | 289.9 | $ | 1,137.1 | $ | 1,042.8 | |||||||
| Surcharge | 157.7 | 71.6 | 428.5 | 219.4 | |||||||||||
| Specialty Alloys Operations net sales | 484.9 | 361.5 | 1,565.6 | 1,262.2 | |||||||||||
| Performance Engineered Products | |||||||||||||||
| Net sales excluding surcharge | 92.9 | 75.6 | 336.7 | 255.9 | |||||||||||
| Surcharge | 2.9 | 1.9 | 7.8 | 3.9 | |||||||||||
| Performance Engineered Products net sales | 95.8 | 77.5 | 344.5 | 259.8 | |||||||||||
| Intersegment | |||||||||||||||
| Net sales excluding surcharge | (16.9 | ) | (17.4 | ) | (73.8 | ) | (45.9 | ) | |||||||
| Surcharge | — | — | — | (0.5 | ) | ||||||||||
| Intersegment net sales | (16.9 | ) | (17.4 | ) | (73.8 | ) | (46.4 | ) | |||||||
| Consolidated net sales | $ | 563.8 | $ | 421.6 | $ | 1,836.3 | $ | 1,475.6 | |||||||
| Operating income (loss): | |||||||||||||||
| Specialty Alloys Operations | $ | 30.0 | $ | (47.3 | ) | $ | 9.6 | $ | (87.4 | ) | |||||
| Performance Engineered Products | 10.3 | (2.3 | ) | 18.1 | (16.5 | ) | |||||||||
| Corporate (including restructuring and asset impairment charges) | (15.5 | ) | (20.8 | ) | (52.8 | ) | (144.3 | ) | |||||||
| Intersegment | (0.2 | ) | (0.3 | ) | 0.2 | (0.4 | ) | ||||||||
| Consolidated operating income (loss) | $ | 24.6 | $ | (70.7 | ) | $ | (24.9 | ) | $ | (248.6 | ) | ||||
The Company has two reportable segments, Specialty Alloys Operations (“SAO”) and Performance Engineered Products (“PEP”).
The SAO segment is comprised of Carpenter's major premium alloy and stainless steel manufacturing operations. This includes operations performed at mills primarily in Reading and Latrobe, Pennsylvania and surrounding areas as well as South Carolina and Alabama.
The PEP segment is comprised of the Company’s differentiated operations. This segment includes the Dynamet titanium business, the Carpenter Additive business and the Latrobe and Mexico distribution businesses. Effective July 1, 2020, the Company's Carpenter Powder Products business was merged into the Carpenter Additive business. The Amega West business was also part of the PEP segment however the business was divested during the quarter ended September 30, 2020. The businesses in the PEP segment are managed with an entrepreneurial structure to promote flexibility and agility to quickly respond to market dynamics. It is our belief this model will ultimately drive overall revenue and profit growth. The pounds sold data above for the PEP segment includes only the Dynamet and Additive businesses.
Corporate costs are comprised of executive and director compensation, and other corporate facilities and administrative expenses not allocated to the segments. Also included are items that management considers not representative of ongoing operations and other specifically-identified income or expense items.
The service cost component of net pension expense, which represents the estimated cost of future pension liabilities earned associated with active employees, is included in the operating results of the business segments. The residual net pension expense is comprised of the expected return on plan assets, interest costs on the projected benefit obligations of the plans, and amortization of actuarial gains and losses and prior service costs and is included in other (income) expense, net.
PRELIMINARY
NON-GAAP FINANCIAL MEASURES
(in millions, except per share data)
(Unaudited)
| ADJUSTED OPERATING MARGIN EXCLUDING | ||||||||||||||||
| SURCHARGE REVENUE AND SPECIAL ITEMS | Three Months Ended | Year Ended | ||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net sales | $ | 563.8 | $ | 421.6 | $ | 1,836.3 | $ | 1,475.6 | ||||||||
| Less: surcharge revenue | 160.6 | 73.5 | 436.3 | 222.8 | ||||||||||||
| Net sales excluding surcharge revenue | $ | 403.2 | $ | 348.1 | $ | 1,400.0 | $ | 1,252.8 | ||||||||
| Operating income (loss) | $ | 24.6 | $ | (70.7 | ) | $ | (24.9 | ) | $ | (248.6 | ) | |||||
| Special items: | ||||||||||||||||
| LIFO decrement | — | 52.2 | — | 52.2 | ||||||||||||
| COVID-19 costs | 0.6 | 2.9 | 5.9 | 17.3 | ||||||||||||
| COVID-19 employee retention credits | (12.7 | ) | — | (12.7 | ) | — | ||||||||||
| Inventory write-downs from restructuring | — | 1.6 | — | 4.2 | ||||||||||||
| Acquisition-related contingent liability release | — | — | (4.7 | ) | — | |||||||||||
| Environmental site charge | 2.4 | — | 2.4 | — | ||||||||||||
| Restructuring and asset impairment charges | — | 1.5 | — | 16.6 | ||||||||||||
| Goodwill impairment | — | — | — | 52.8 | ||||||||||||
| Operating income (loss) excluding special items | $ | 14.9 | $ | (12.5 | ) | $ | (34.0 | ) | $ | (105.5 | ) | |||||
| Operating margin | 4.4 | % | (16.8) % | (1.4) % | (16.8) % | |||||||||||
| Adjusted operating margin excluding surcharge revenue and special items | 3.7 | % | (3.6) % | (2.4) % | (8.4) % | |||||||||||
Management believes that removing the impact of raw material surcharge from operating margin provides a more consistent basis for comparing results of operations from period to period, thereby permitting management to evaluate performance and investors to make decisions based on the ongoing operations of the Company. In addition, management believes that excluding the impact of special items from operating margin 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 amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company’s board of directors and others.
| ADJUSTED EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS | Income Before Income Taxes | Income Tax Expense | Net Income | Earnings Per Diluted Share* | ||||||||||||
| Three months ended June 30, 2022, as reported | $ | 5.4 | $ | (2.8 | ) | $ | 2.6 | $ | 0.05 | |||||||
| Special items: | ||||||||||||||||
| COVID-19 costs | 0.6 | — | 0.6 | 0.01 | ||||||||||||
| COVID-19 employee retention credits | (12.7 | ) | 2.8 | (9.9 | ) | (0.20 | ) | |||||||||
| Debt extinguishment losses, net | 6.0 | (1.3 | ) | 4.7 | 0.10 | |||||||||||
| Environmental site charge | 2.4 | (0.5 | ) | 1.9 | 0.04 | |||||||||||
| Total impact of special items | (3.7 | ) | 1.0 | (2.7 | ) | (0.05 | ) | |||||||||
| Three months ended June 30, 2022, as adjusted | $ | 1.7 | $ | (1.8 | ) | $ | (0.1 | ) | $ | — | ||||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 48.7 million for the three months ended June 30, 2022. | ||||||||||||||||
| ADJUSTED LOSS PER SHARE EXCLUDING SPECIAL ITEMS | Loss Before Income Taxes | Income Tax Benefit | Net Loss | Loss Per Diluted Share* | ||||||||||||
| Three months ended June 30, 2021, as reported | $ | (79.0 | ) | $ | 21.9 | $ | (57.1 | ) | $ | (1.18 | ) | |||||
| Special items: | ||||||||||||||||
| LIFO decrement | 52.2 | (14.9 | ) | 37.3 | 0.77 | |||||||||||
| COVID-19 costs | 2.9 | (0.8 | ) | 2.1 | 0.04 | |||||||||||
| Inventory write-downs from restructuring | 1.6 | (0.4 | ) | 1.2 | 0.03 | |||||||||||
| Restructuring and asset impairment charges | 1.5 | (0.4 | ) | 1.1 | 0.02 | |||||||||||
| Pension settlement charges | 2.5 | (0.6 | ) | 1.9 | 0.04 | |||||||||||
| Total impact of special items | 60.7 | (17.1 | ) | 43.6 | 0.90 | |||||||||||
| Three months ended June 30, 2021, as adjusted | $ | (18.3 | ) | $ | 4.8 | $ | (13.5 | ) | $ | (0.28 | ) | |||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 48.4 million for the three months ended June 30, 2021. | ||||||||||||||||
| ADJUSTED LOSS PER SHARE EXCLUDING SPECIAL ITEMS | Loss Before Income Taxes | Income Tax Benefit | Net Loss | Loss Per Diluted Share* | ||||||||||||
| Year ended June 30, 2022, as reported | $ | (63.1 | ) | $ | 14.0 | $ | (49.1 | ) | $ | (1.01 | ) | |||||
| Special items: | ||||||||||||||||
| COVID-19 costs | 5.9 | (1.3 | ) | 4.6 | 0.08 | |||||||||||
| COVID-19 employee retention credits | (12.7 | ) | 2.8 | (9.9 | ) | (0.20 | ) | |||||||||
| Acquisition-related contingent liability release | (4.7 | ) | 1.1 | (3.6 | ) | (0.07 | ) | |||||||||
| Environmental site charge | 2.4 | (0.5 | ) | 1.9 | 0.04 | |||||||||||
| Debt extinguishment losses, net | 6.0 | (1.3 | ) | 4.7 | 0.10 | |||||||||||
| Total impact of special items | (3.1 | ) | 0.8 | (2.3 | ) | (0.05 | ) | |||||||||
| Year ended June 30, 2022, as adjusted | $ | (66.2 | ) | $ | 14.8 | $ | (51.4 | ) | $ | (1.06 | ) | |||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 48.5 million for the year ended June 30, 2022. | ||||||||||||||||
| ADJUSTED LOSS PER SHARE EXCLUDING SPECIAL ITEMS | Loss Before Income Taxes | Income Tax Benefit | Net Loss | Loss Per Diluted Share* | ||||||||||||
| Year ended June 30, 2021, as reported | $ | (297.9 | ) | $ | 68.3 | $ | (229.6 | ) | $ | (4.76 | ) | |||||
| Special Items: | ||||||||||||||||
| LIFO decrement | 52.2 | (14.9 | ) | 37.3 | 0.77 | |||||||||||
| COVID-19 costs | 17.3 | (5.0 | ) | 12.3 | 0.25 | |||||||||||
| Inventory write-downs from restructuring | 4.2 | (1.0 | ) | 3.2 | 0.07 | |||||||||||
| Restructuring and asset impairment charges | 16.6 | (4.0 | ) | 12.6 | 0.26 | |||||||||||
| Goodwill impairment | 52.8 | (0.1 | ) | 52.7 | 1.09 | |||||||||||
| Debt extinguishment losses, net | 8.2 | (2.0 | ) | 6.2 | 0.13 | |||||||||||
| Pension settlement charges | 11.4 | (2.8 | ) | 8.6 | 0.18 | |||||||||||
| Total impact of special items | 162.7 | (29.8 | ) | 132.9 | 2.75 | |||||||||||
| Year ended June 30, 2021, as adjusted | $ | (135.2 | ) | $ | 38.5 | $ | (96.7 | ) | $ | (2.01 | ) | |||||
| * Impact per diluted share calculated using weighted average common shares outstanding of 48.3 million for the year ended June 30, 2021. | ||||||||||||||||
Management believes that (loss) 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 amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company's board of directors and others.
| Three Months Ended | Year Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| FREE CASH FLOW | 2022 | 2021 | 2022 | 2021 | ||||||||||||
| Net cash provided from operating activities | $ | 106.9 | $ | 74.5 | $ | 6.0 | $ | 250.0 | ||||||||
| Purchases of property, plant, equipment and software | (32.8 | ) | (22.1 | ) | (91.3 | ) | (100.5 | ) | ||||||||
| Proceeds from disposals of property, plant and equipment and assets held for sale | 0.3 | — | 2.2 | 1.6 | ||||||||||||
| Proceeds from divestiture of business | — | — | — | 20.0 | ||||||||||||
| Dividends paid | (9.8 | ) | (9.8 | ) | (39.2 | ) | (39.1 | ) | ||||||||
| Free cash flow | $ | 64.6 | $ | 42.6 | $ | (122.3 | ) | $ | 132.0 | |||||||
Management believes that the free cash flow measure provides useful information to investors regarding the Company's financial condition because it is a measure of cash generated which management evaluates for alternative uses.
PRELIMINARY
SUPPLEMENTAL SCHEDULES
(in millions)
(Unaudited)
| Three Months Ended | Year Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| NET SALES BY END-USE MARKET | 2022 | 2021 | 2022 | 2021 | |||||||||||
| End-Use Market Excluding Surcharge Revenue: | |||||||||||||||
| Aerospace and Defense | $ | 178.5 | $ | 165.5 | $ | 599.6 | $ | 598.8 | |||||||
| Medical | 53.7 | 38.1 | 177.2 | 128.2 | |||||||||||
| Transportation | 32.9 | 36.5 | 125.2 | 115.9 | |||||||||||
| Energy | 21.0 | 13.4 | 76.3 | 70.5 | |||||||||||
| Industrial and Consumer | 82.4 | 67.8 | 297.2 | 243.1 | |||||||||||
| Distribution | 34.7 | 26.8 | 124.5 | 96.3 | |||||||||||
| Total net sales excluding surcharge revenue | 403.2 | 348.1 | 1,400.0 | 1,252.8 | |||||||||||
| Surcharge revenue | 160.6 | 73.5 | 436.3 | 222.8 | |||||||||||
| Total net sales | $ | 563.8 | $ | 421.6 | $ | 1,836.3 | $ | 1,475.6 | |||||||
| Media Inquiries: Heather Beardsley +1 610-208-2278 hbeardsley@cartech.com | Investor Inquiries: The Plunkett Group Brad Edwards +1 914-582-4187 brad@theplunkettgroup.com |
FAQ
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