Reported earnings per share $0.23; Adjusted for
special items $0.24 per share
Carpenter Technology Corporation (NYSE:CRS) today announced
financial results for the quarter ended December 31, 2015.
“Our fiscal 2016 second quarter results reflect our efforts to
effectively manage our business despite challenges in some of our
key end-use markets,” said Tony Thene, Carpenter’s President and
Chief Executive Officer. “Our ongoing focus on driving
operational efficiencies and cost management, combined with our
stronger product mix, supported operating margin stability even
with a decline in volume primarily in our Energy and Industrial and
Consumer end-use markets. This approach also enabled us to
generate consistent profitability over the last couple of quarters.
Further, we continue to benefit from our market and product
diversity, as our performance in our Aerospace and Defense,
Transportation and Medical end-use markets helped offset our oil
and gas exposure. We remain focused on strengthening our strategic
position as a preferred solutions provider in the high-end premium
alloy markets, while laying the groundwork to support margin growth
when volumes begin to recover.”
Mr. Thene added, “Looking ahead, we remain focused on actively
managing our business to maximize our results. Given the further
worsening of the Energy and Industrial and Consumer end-use
markets, we currently expect volumes in the second half of fiscal
year 2016 to be up modestly compared to the first half of fiscal
year 2016. We also continue to evaluate avenues to drive
further operational improvements, while seeking additional volume
opportunities and optimizing our product mix. We remain
committed to improving our working capital efficiency and
maintaining capital spending discipline. We believe these steps,
combined with ongoing investment in new technologies, will position
us for growth over the longer-term.”
Financial Highlights
($ in millions) |
Q2 |
|
Q2 |
|
Q1 |
|
FY2016 |
|
FY2015 |
|
FY2016 |
Net Sales |
$ |
443.8 |
|
|
$ |
548.4 |
|
|
$ |
455.6 |
|
Net Sales Excluding
Surcharge (a) |
$ |
379.4 |
|
|
$ |
445.7 |
|
|
$ |
385.1 |
|
Operating Income |
$ |
21.8 |
|
|
$ |
45.0 |
|
|
$ |
24.8 |
|
Net Income |
$ |
11.5 |
|
|
$ |
24.1 |
|
|
$ |
8.9 |
|
Free Cash Flow (a) |
$ |
1.8 |
|
|
$ |
(65.5 |
) |
|
$ |
6.6 |
|
|
|
|
|
|
|
(a)
non-GAAP financial measure explained in the attached tables |
|
Net sales for the second quarter of fiscal year 2016 were $443.8
million. Net sales excluding surcharge were $379.4 million, a
decrease of $66.3 million (or 15 percent) from the same quarter
last year, on 16 percent lower volume.
Operating income was $21.8 million, a decrease of $23.2 million
from the second quarter of the prior year. Operating
income—excluding pension earnings, interest and deferrals (EID) and
special items—was $29.2 million, a decrease of $18.2 million (or 38
percent) from the second quarter of the prior year. These results
primarily reflect lower volume, partially offset by an improved
product mix and lower operating costs compared to the same period
one year ago.
Carpenter reported net income of $11.5 million or $0.23 per
diluted share. Excluding special items, earnings per diluted share
would have been $0.24 in the current quarter. This compares to a
reported net income of $24.1 million or $0.45 per diluted share in
the same quarter last year. Excluding a special item,
earnings per diluted share would have been $0.48 in the prior year
quarter.
The second quarter of fiscal year 2016 results include special
items of $0.01 per diluted share consisting of consulting fees and
a tax discrete item as a result of a tax law change. The
second quarter of fiscal year 2015 results includes a special item
of $0.03 per diluted share consisting of a tax discrete item as a
result of a tax law change.
Cash provided from operating activities was $30.1 million in the
second quarter of fiscal year 2016. This compares to cash provided
from operating activities of $12.5 million in the prior year’s
second quarter.
Free cash flow in the second quarter of fiscal year 2016 was
positive $1.8 million, compared to negative $65.5 million in the
same quarter last year. Capital expenditures in the second quarter
of fiscal year 2016 were $19.6 million, compared to $68.4 million
in the prior year’s second quarter.
For the full year, Carpenter expects inventory to decline in the
second half of the fiscal year and finish largely in-line with
year-end fiscal 2015 levels. Capital expenditures are expected to
be approximately $100 million for year fiscal 2016.
Total liquidity, including cash and available revolver balance,
was $474 million at the end of the second quarter. This consisted
of $21 million of cash and $453 million of available borrowing
under the Company’s credit facility.
Conference Call and Webcast Presentation
Carpenter will host a conference call and webcast presentation
today, February 4th at 10:00 a.m. ET, to discuss the financial
results and operations for the fiscal second quarter. Please call
(610) 208-2222 for details. Access to the live webcast will be
available at Carpenter’s website (http://www.cartech.com), and a
replay will soon be made available at http://www.cartech.com.
Presentation materials used during this conference call will be
available for viewing and download at http://www.cartech.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 produces and distributes premium alloys, including
specialty alloys, titanium alloys and powder metals, as well as
stainless steels, alloy steels and tool steels. Information about
Carpenter can be found at http://www.cartech.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’s filings with the Securities and
Exchange Commission, including its annual report on Form 10-K for
the year ended June 30, 2015, Form 10-Q for the quarter ended
September 30, 2015 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, industrial, transportation, consumer, medical
and energy, or other influences on Carpenter’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 to
achieve cash generation, growth, earnings, profitability, cost
savings and reductions, 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 degree of success of government
trade actions; (7) the valuation of the assets and liabilities in
Carpenter’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, 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’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) the success
of restructuring actions; and (17) share repurchases are at
Carpenter’s discretion and could be affected by changes in
Carpenter’s share price, operating results, capital spending, cash
flows, inventory, acquisitions, investments, tax laws and general
market conditions. Any of these factors could have an adverse
and/or fluctuating effect on Carpenter’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, and Section 21E of the
Securities Exchange Act of 1934, as amended. Carpenter undertakes
no obligation to update or revise any forward-looking
statements.
PRELIMINARY |
CONSOLIDATED
STATEMENTS OF INCOME |
(in millions, except per
share data) |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
December 31, |
|
December 31, |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
NET SALES |
|
$ |
443.8 |
|
|
$ |
548.4 |
|
|
$ |
899.4 |
|
|
$ |
1,098.2 |
|
Cost of sales |
|
377.5 |
|
|
463.4 |
|
|
764.5 |
|
|
944.1 |
|
Gross profit |
|
66.3 |
|
|
85.0 |
|
|
134.9 |
|
|
154.1 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
44.5 |
|
|
40.0 |
|
|
87.8 |
|
|
86.9 |
|
Restructuring
charges |
|
— |
|
|
— |
|
|
0.4 |
|
|
— |
|
Operating income |
|
21.8 |
|
|
45.0 |
|
|
46.7 |
|
|
67.2 |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(7.0 |
) |
|
(6.8 |
) |
|
(13.6 |
) |
|
(13.8 |
) |
Other income (expense),
net |
|
0.3 |
|
|
— |
|
|
(1.9 |
) |
|
4.8 |
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
15.1 |
|
|
38.2 |
|
|
31.2 |
|
|
58.2 |
|
Income tax expense |
|
3.6 |
|
|
14.1 |
|
|
10.8 |
|
|
20.6 |
|
|
|
|
|
|
|
|
|
|
NET INCOME |
|
$ |
11.5 |
|
|
$ |
24.1 |
|
|
$ |
20.4 |
|
|
$ |
37.6 |
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.23 |
|
|
$ |
0.45 |
|
|
$ |
0.41 |
|
|
$ |
0.70 |
|
Diluted |
|
$ |
0.23 |
|
|
$ |
0.45 |
|
|
$ |
0.41 |
|
|
$ |
0.70 |
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING: |
|
|
|
|
|
|
|
|
Basic |
|
48.8 |
|
|
53.4 |
|
|
49.3 |
|
|
53.5 |
|
Diluted |
|
48.9 |
|
|
53.6 |
|
|
49.4 |
|
|
53.7 |
|
|
|
|
|
|
|
|
|
|
Cash dividends per
common share |
|
$ |
0.18 |
|
|
$ |
0.18 |
|
|
$ |
0.36 |
|
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRELIMINARY |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(in millions) |
(Unaudited) |
|
|
|
|
|
Six Months Ended |
|
|
December 31, |
|
|
2015 |
|
2014 |
OPERATING
ACTIVITIES: |
|
|
|
|
Net income |
|
$ |
20.4 |
|
|
$ |
37.6 |
|
Adjustments to reconcile net income
to net cash provided from operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
60.3 |
|
|
60.6 |
|
Deferred income taxes |
|
2.5 |
|
|
69.5 |
|
Net pension expense |
|
26.9 |
|
|
23.0 |
|
Stock-based compensation
expense |
|
4.9 |
|
|
2.2 |
|
Net loss on disposals of property
and equipment |
|
0.1 |
|
|
0.4 |
|
Changes in working capital and
other: |
|
|
|
|
Accounts receivable |
|
33.4 |
|
|
22.7 |
|
Inventories |
|
(34.8 |
) |
|
(62.2 |
) |
Other current assets |
|
(8.2 |
) |
|
(61.4 |
) |
Accounts payable |
|
(17.6 |
) |
|
(28.0 |
) |
Accrued liabilities |
|
(11.3 |
) |
|
(25.0 |
) |
Pension plan contributions |
|
— |
|
|
(3.9 |
) |
Other postretirement plan
contributions |
|
(6.1 |
) |
|
(6.7 |
) |
Other, net |
|
1.1 |
|
|
(1.3 |
) |
Net cash provided from operating
activities |
|
71.6 |
|
|
27.5 |
|
|
|
|
|
|
INVESTING
ACTIVITIES: |
|
|
|
|
Purchases of property, equipment
and software |
|
(49.5 |
) |
|
(127.4 |
) |
Proceeds from disposals of property
and equipment |
|
0.3 |
|
|
0.1 |
|
Other |
|
4.0 |
|
|
— |
|
Net cash used for investing
activities |
|
(45.2 |
) |
|
(127.3 |
) |
|
|
|
|
|
FINANCING
ACTIVITIES: |
|
|
|
|
Net change in short-term debt |
|
39.5 |
|
|
37.0 |
|
Dividends paid |
|
(17.9 |
) |
|
(19.3 |
) |
Purchases of treasury stock |
|
(96.3 |
) |
|
(10.0 |
) |
Payments on seller financed debt
related to purchase of software |
|
(2.5 |
) |
|
— |
|
Tax benefits on share-based
compensation |
|
— |
|
|
0.6 |
|
Proceeds from stock options
exercised |
|
0.2 |
|
|
0.7 |
|
Net cash (used for) provided from
financing activities |
|
(77.0 |
) |
|
9.0 |
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
1.7 |
|
|
(0.4 |
) |
|
|
|
|
|
DECREASE IN CASH AND
CASH EQUIVALENTS |
|
(48.9 |
) |
|
(91.2 |
) |
Cash and cash
equivalents at beginning of period |
|
70.0 |
|
|
120.0 |
|
|
|
|
|
|
Cash and cash
equivalents at end of period |
|
$ |
21.1 |
|
|
$ |
28.8 |
|
PRELIMINARY |
CONSOLIDATED
BALANCE SHEETS |
(in millions) |
(Unaudited) |
|
|
|
|
|
|
|
December 31, |
|
June 30, |
|
|
2015 |
|
2015 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
21.1 |
|
|
$ |
70.0 |
|
Accounts receivable, net |
|
268.4 |
|
|
304.1 |
|
Inventories |
|
687.7 |
|
|
655.8 |
|
Deferred income taxes |
|
11.4 |
|
|
3.3 |
|
Other current assets |
|
47.6 |
|
|
37.2 |
|
Total current assets |
|
1,036.2 |
|
|
1,070.4 |
|
|
|
|
|
|
Property, plant and
equipment, net |
|
1,366.9 |
|
|
1,397.0 |
|
Goodwill |
|
257.2 |
|
|
257.4 |
|
Other intangibles,
net |
|
67.6 |
|
|
71.6 |
|
Other assets |
|
112.7 |
|
|
109.5 |
|
Total assets |
|
$ |
2,840.6 |
|
|
$ |
2,905.9 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Current
liabilities: |
|
|
|
|
Short-term debt |
|
$ |
39.5 |
|
|
$ |
— |
|
Accounts payable |
|
140.2 |
|
|
169.5 |
|
Accrued liabilities |
|
155.6 |
|
|
152.6 |
|
Total current liabilities |
|
335.3 |
|
|
322.1 |
|
|
|
|
|
|
Long-term debt |
|
608.4 |
|
|
607.1 |
|
Accrued pension
liabilities |
|
343.6 |
|
|
334.1 |
|
Accrued postretirement
benefits |
|
108.5 |
|
|
111.2 |
|
Deferred income
taxes |
|
154.7 |
|
|
146.5 |
|
Other liabilities |
|
62.1 |
|
|
59.0 |
|
Total liabilities |
|
1,612.6 |
|
|
1,580.0 |
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
|
Common stock |
|
276.2 |
|
|
276.2 |
|
Capital in excess of
par value |
|
271.4 |
|
|
266.6 |
|
Reinvested
earnings |
|
1,334.9 |
|
|
1,332.4 |
|
Common stock in
treasury, at cost |
|
(316.9 |
) |
|
(221.1 |
) |
Accumulated other
comprehensive loss |
|
(337.6 |
) |
|
(328.2 |
) |
Total stockholders' equity |
|
1,228.0 |
|
|
1,325.9 |
|
Total liabilities and stockholders'
equity |
|
$ |
2,840.6 |
|
|
$ |
2,905.9 |
|
|
|
|
|
|
|
|
|
|
PRELIMINARY |
SEGMENT
FINANCIAL DATA |
(in millions, except
pounds sold) |
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
December 31, |
|
December 31, |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
Pounds sold (000): |
|
|
|
|
|
|
|
Specialty Alloys Operations |
54,794 |
|
|
65,600 |
|
|
111,606 |
|
|
135,718 |
|
Performance Engineered
Products |
2,800 |
|
|
4,224 |
|
|
5,756 |
|
|
7,258 |
|
Intersegment |
(666 |
) |
|
(2,112 |
) |
|
(2,010 |
) |
|
(3,518 |
) |
Consolidated pounds sold |
56,928 |
|
|
67,712 |
|
|
115,352 |
|
|
139,458 |
|
|
|
|
|
|
|
|
|
Net sales: |
|
|
|
|
|
|
|
Specialty Alloys Operations |
|
|
|
|
|
|
|
Net sales excluding surcharge |
$ |
299.2 |
|
|
$ |
332.4 |
|
|
$ |
600.8 |
|
|
$ |
656.4 |
|
Surcharge |
64.4 |
|
|
105.9 |
|
|
135.4 |
|
|
217.8 |
|
Specialty Alloys Operations net
sales |
363.6 |
|
|
438.3 |
|
|
736.2 |
|
|
874.2 |
|
|
|
|
|
|
|
|
|
Performance Engineered
Products |
|
|
|
|
|
|
|
Net sales excluding surcharge |
85.2 |
|
|
133.4 |
|
|
176.6 |
|
|
263.0 |
|
Surcharge |
0.2 |
|
|
0.3 |
|
|
0.4 |
|
|
0.7 |
|
Performance Engineered Products net
sales |
85.4 |
|
|
133.7 |
|
|
177.0 |
|
|
263.7 |
|
|
|
|
|
|
|
|
|
Intersegment |
|
|
|
|
|
|
|
Net sales excluding surcharge |
(5.0 |
) |
|
(20.1 |
) |
|
(12.8 |
) |
|
(33.6 |
) |
Surcharge |
(0.2 |
) |
|
(3.5 |
) |
|
(1.0 |
) |
|
(6.1 |
) |
Intersegment net sales |
(5.2 |
) |
|
(23.6 |
) |
|
(13.8 |
) |
|
(39.7 |
) |
|
|
|
|
|
|
|
|
Consolidated net sales |
$ |
443.8 |
|
|
$ |
548.4 |
|
|
$ |
899.4 |
|
|
$ |
1,098.2 |
|
|
|
|
|
|
|
|
|
Operating income: |
|
|
|
|
|
|
|
Specialty Alloys Operations |
$ |
41.5 |
|
|
$ |
43.4 |
|
|
$ |
82.7 |
|
|
$ |
68.0 |
|
Performance Engineered
Products |
(2.9 |
) |
|
12.6 |
|
|
(3.3 |
) |
|
22.2 |
|
Corporate costs (including
restructuring charges) |
(12.7 |
) |
|
(7.0 |
) |
|
(24.8 |
) |
|
(17.3 |
) |
Pension earnings, interest and
deferrals |
(4.8 |
) |
|
(2.4 |
) |
|
(9.6 |
) |
|
(4.7 |
) |
Intersegment |
0.7 |
|
|
(1.6 |
) |
|
1.7 |
|
|
(1.0 |
) |
Consolidated operating income |
$ |
21.8 |
|
|
$ |
45.0 |
|
|
$ |
46.7 |
|
|
$ |
67.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 and
surrounding areas in Pennsylvania, South Carolina and Alabama.
The PEP segment is comprised of the Company’s differentiated
operations. This segment includes the Dynamet titanium business,
the Carpenter Powder Products (CPP) business, the Amega West
business, the Specialty Steel Supply business, and the Latrobe and
Mexico distribution businesses. 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 CPP
businesses.
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, or pension earnings, interest and deferrals (pension EID),
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 under the heading "Pension earnings, interest and
deferrals".
PRELIMINARY |
NON-GAAP
FINANCIAL MEASURES |
(in millions, except per
share data) |
(Unaudited) |
|
|
|
|
|
OPERATING MARGIN
EXCLUDING SURCHARGE, |
|
Three Months Ended |
|
Six Months Ended |
PENSION EARNINGS,
INTEREST AND DEFERRALS, |
|
December 31, |
|
December 31, |
RESTRUCTURING CHARGES
AND SPECIAL ITEMS |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
443.8 |
|
|
$ |
548.4 |
|
|
$ |
899.4 |
|
|
$ |
1,098.2 |
|
Less: surcharge
revenue |
|
64.4 |
|
|
102.7 |
|
|
134.8 |
|
|
212.4 |
|
Consolidated net sales
excluding surcharge |
|
$ |
379.4 |
|
|
$ |
445.7 |
|
|
$ |
764.6 |
|
|
$ |
885.8 |
|
|
|
|
|
|
|
|
|
|
Operating income |
|
21.8 |
|
|
45.0 |
|
|
46.7 |
|
|
67.2 |
|
Pension earnings,
interest and deferrals |
|
4.8 |
|
|
2.4 |
|
|
9.6 |
|
|
4.7 |
|
Operating income
excluding pension earnings, interest and deferrals |
|
26.6 |
|
|
47.4 |
|
|
56.3 |
|
|
71.9 |
|
|
|
|
|
|
|
|
|
|
Restructuring charges
and special items: |
|
|
|
|
|
|
|
|
Restructuring charges |
|
— |
|
|
— |
|
|
0.4 |
|
|
— |
|
Consulting costs |
|
2.6 |
|
|
— |
|
|
5.1 |
|
|
— |
|
Operating income
excluding pension earnings, interest and deferrals, restructuring
charges and special items |
|
$ |
29.2 |
|
|
$ |
47.4 |
|
|
$ |
61.8 |
|
|
$ |
71.9 |
|
|
|
|
|
|
|
|
|
|
Operating margin |
|
4.9 |
% |
|
8.2 |
% |
|
5.2 |
% |
|
6.1 |
% |
|
|
|
|
|
|
|
|
|
Operating margin
excluding surcharge, pension earnings, interest and deferrals,
restructuring charges and special items |
|
7.7 |
% |
|
10.6 |
% |
|
8.1 |
% |
|
8.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Management believes that removing the impacts of raw material
surcharge from operating margin provides a more consistent basis
for comparing results of operations from period to period. In
addition, management believes that excluding the impact of pension
earnings, interest and deferrals, which may be volatile due to
changes in the financial markets, is helpful in analyzing the true
operating performance of the Company.
Management believes that removing the impact of restructuring
charges and special items is helpful in analyzing the operating
performance of the Company, as these costs are not indicative of
ongoing operating performance.
ADJUSTED
EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS |
|
IncomeBeforeIncomeTaxes |
|
IncomeTaxExpense |
|
NetIncome |
|
EarningsPerDilutedShare** |
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2015, as reported |
|
$ |
15.1 |
|
|
$ |
(3.6 |
) |
|
$ |
11.5 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
Consulting costs |
|
2.6 |
|
|
(0.9 |
) |
|
1.7 |
|
|
0.03 |
|
Impact of tax law
change |
|
— |
|
|
(0.8 |
) |
|
(0.8 |
) |
|
(0.02 |
) |
Total impact of special
items |
|
2.6 |
|
|
(1.7 |
) |
|
0.9 |
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2015, as adjusted |
|
$ |
17.7 |
|
|
$ |
(5.3 |
) |
|
$ |
12.4 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
** Impact
per diluted share calculated using weighted average common shares
outstanding of 48.9 million for the three months ended December 31,
2015. |
ADJUSTED
EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS |
|
IncomeBeforeIncomeTaxes |
|
IncomeTaxExpense |
|
NetIncome |
|
EarningsPerDilutedShare** |
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2014, as reported |
|
$ |
38.2 |
|
|
$ |
(14.1 |
) |
|
$ |
24.1 |
|
|
$ |
0.45 |
|
|
|
|
|
|
|
|
|
|
Impact of tax law
change |
|
— |
|
|
1.6 |
|
|
1.6 |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31, 2014, as adjusted |
|
$ |
38.2 |
|
|
$ |
(12.5 |
) |
|
$ |
25.7 |
|
|
$ |
0.48 |
|
|
|
|
|
|
|
|
|
|
** Impact
per diluted share calculated using weighted average common shares
outstanding of 53.6 million for the three months ended December 31,
2014. |
ADJUSTED EARNINGS PER
SHARE EXCLUDING RESTRUCTURING CHARGES AND SPECIAL ITEMS |
|
IncomeBeforeIncomeTaxes |
|
IncomeTaxExpense |
|
NetIncome |
|
EarningsPerDilutedShare** |
|
|
|
|
|
|
|
|
|
Six months ended
December 31, 2015, as reported |
|
$ |
31.2 |
|
|
$ |
(10.8 |
) |
|
$ |
20.4 |
|
|
$ |
0.41 |
|
|
|
|
|
|
|
|
|
|
Restructuring
charges |
|
0.4 |
|
|
(0.1 |
) |
|
0.3 |
|
|
0.01 |
|
Consulting costs |
|
5.1 |
|
|
(1.8 |
) |
|
3.3 |
|
|
0.07 |
|
Income tax item* |
|
— |
|
|
2.0 |
|
|
2.0 |
|
|
0.04 |
|
Impact of tax law
change |
|
— |
|
|
(0.8 |
) |
|
(0.8 |
) |
|
(0.02 |
) |
Total impact of
restructuring charges and special items |
|
5.5 |
|
|
(0.7 |
) |
|
4.8 |
|
|
0.10 |
|
|
|
|
|
|
|
|
|
|
Six months ended
December 31, 2015, as adjusted |
|
$ |
36.7 |
|
|
$ |
(11.5 |
) |
|
$ |
25.2 |
|
|
$ |
0.51 |
|
|
|
|
|
|
|
|
|
|
* Discrete
income tax charge recorded during the six months ended December 31,
2015 as a result of the decision to sell equity method investment
in India. |
** Impact
per diluted share calculated using weighted average common shares
outstanding of 49.4 million for the six months ended December 31,
2015. |
ADJUSTED EARNINGS PER
SHARE EXCLUDING SPECIAL ITEMS |
|
IncomeBeforeIncomeTaxes |
|
IncomeTaxExpense |
|
NetIncome |
|
EarningsPerDilutedShare** |
|
|
|
|
|
|
|
|
|
Six months ended
December 31, 2014, as reported |
|
$ |
58.2 |
|
|
$ |
(20.6 |
) |
|
$ |
37.6 |
|
|
$ |
0.70 |
|
|
|
|
|
|
|
|
|
|
Impact of tax law
change |
|
— |
|
|
1.6 |
|
|
1.6 |
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
Six months ended
December 31, 2014, as adjusted |
|
$ |
58.2 |
|
|
$ |
(19.0 |
) |
|
$ |
39.2 |
|
|
$ |
0.73 |
|
|
|
|
|
|
|
|
|
|
** Impact
per diluted share calculated using weighted average common shares
outstanding of 53.7 million for the six months ended December 31,
2014. |
Management believes that earnings per share adjusted to exclude
the impact of restructuring charges and special items is helpful in
analyzing the operating performance of the Company, as these costs
are not indicative of ongoing operating performance.
|
|
Three Months Ended |
|
Six Months Ended |
|
|
December 31, |
|
December 31, |
FREE CASH FLOW |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
|
|
|
|
|
|
|
|
|
Net cash provided from
operating activities |
|
$ |
30.1 |
|
|
$ |
12.5 |
|
|
$ |
71.6 |
|
|
$ |
27.5 |
|
Purchases of property,
equipment and software |
|
(19.6 |
) |
|
(68.4 |
) |
|
(49.5 |
) |
|
(127.4 |
) |
Proceeds from disposals
of property and equipment |
|
0.2 |
|
|
— |
|
|
0.3 |
|
|
0.1 |
|
Other |
|
— |
|
|
— |
|
|
4.0 |
|
|
— |
|
Dividends paid |
|
(8.9 |
) |
|
(9.6 |
) |
|
(17.9 |
) |
|
(19.3 |
) |
|
|
|
|
|
|
|
|
|
Free cash flow |
|
$ |
1.8 |
|
|
$ |
(65.5 |
) |
|
$ |
8.5 |
|
|
$ |
(119.1 |
) |
Management believes that the free cash flow measure provides
useful information to investors regarding our 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 |
|
Six Months Ended |
|
|
December 31, |
|
December 31, |
NET SALES BY END-USE
MARKET |
|
2015 |
|
2014 |
|
2015 |
|
2014 |
End-Use Market
Excluding Surcharge: |
|
|
|
|
|
|
|
|
Aerospace and Defense |
|
$ |
195.6 |
|
|
$ |
189.2 |
|
|
$ |
382.4 |
|
|
$ |
369.9 |
|
Energy |
|
23.9 |
|
|
70.3 |
|
|
56.0 |
|
|
138.1 |
|
Transportation |
|
34.8 |
|
|
31.3 |
|
|
71.5 |
|
|
62.0 |
|
Medical |
|
25.8 |
|
|
25.7 |
|
|
50.8 |
|
|
52.4 |
|
Industrial and Consumer |
|
71.1 |
|
|
96.5 |
|
|
145.9 |
|
|
195.1 |
|
Distribution |
|
28.2 |
|
|
32.7 |
|
|
58.0 |
|
|
68.3 |
|
|
|
|
|
|
|
|
|
|
Consolidated net sales
excluding surcharge |
|
379.4 |
|
|
445.7 |
|
|
764.6 |
|
|
885.8 |
|
|
|
|
|
|
|
|
|
|
Surcharge revenue |
|
64.4 |
|
|
102.7 |
|
|
134.8 |
|
|
212.4 |
|
|
|
|
|
|
|
|
|
|
Consolidated net
sales |
|
$ |
443.8 |
|
|
$ |
548.4 |
|
|
$ |
899.4 |
|
|
$ |
1,098.2 |
|
Media Inquiries:
William J. Rudolph, Jr.
+1 610-208-3892
wrudolph@cartech.com
Investor Inquiries:
Brainerd Communicators
Brad Edwards
+1 212-986-6667
edwards@braincomm.com
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