31.07.2008 12:00:00
|
Carpenter Technology Reports Fiscal Fourth Quarter and Full Year Results
Carpenter Technology Corporation (NYSE:CRS) today reported net income
from continuing operations of $46.9 million or $1.01 per diluted share
for the fiscal fourth quarter ended June 30, 2008, which includes a
special increase in reserves for litigation matters of $0.08 per diluted
share. This compares with net income from continuing operations a year
earlier of $58.9 million or $1.12 per diluted share.
Financial highlights for the fourth quarter and full fiscal year include:
(millions, except EPS & pounds shipped)
4Q 2008
4Q 2007
FY 2008
FY 2007
Net Sales
$556.3
$533.2
$1,953.5
$1,839.0
Net Sales excluding surcharge (a)
$391.3
$349.5
$1,369.0
$1,316.7
Income from continuing operations
$46.9
$58.9
$209.9
$215.2
Net income
$53.4
$61.3
$287.1
$227.2
Diluted EPS from continuing operations
$1.01
$1.12
$4.31
$4.09
Diluted EPS
$1.15
$1.17
$5.89
$4.32
Free cash flow excluding sale and acquisition of businesses (a)
$61.7
$101.1
$111.8
$202.3
Pounds sold (000)
65,028
56,382
223,460
229,072
(a) non-GAAP financial measure that is explained in the attached
tables
"We finished the year with good growth
momentum due to strong demand in the global energy and aerospace
markets, and improving demand in our industrial and consumer businesses.
Our international sales also continued to grow at a double-digit rate
year on year, and now account for 34% of total annual sales,”
said Anne Stevens, chairman, president and chief executive officer. "We
were pleased to achieve record full year EPS results for the fourth
consecutive year. We continue to drive operational excellence
initiatives to improve our results, and expect to complete the expansion
of our premium melt facilities by the turn of the calendar year, which
will provide needed additional capacity.” Fourth Quarter Results
Net sales from continuing operations for the fourth quarter were $556.3
million, or 4 percent higher than a year ago. Excluding surcharge
revenue, net sales from continuing operations were $391.3 million, 12
percent higher than last year.
Pounds sold in the fourth quarter were 15 percent above the quarter a
year ago. Volumes shipped by our Premium Alloys Operations segment
increased 30 percent, due to continued strong demand from energy and
aerospace. Pounds sold by our Advanced Metals Operations segment
increased 10 percent reflecting improvement in the industrial and
consumer markets.
Although volumes grew, gross profit in the fourth quarter declined to
$117.3 million, from $120.8 million a year earlier. The results reflect
LIFO accounting effects related to changes in inventory levels and year
to-year raw material costs, other impacts from the year-to-year
difference in raw material costs, significant equipment upgrade
activity, and general inflationary pressures.
Gross margin was 21.1 percent in the fourth quarter, compared to 22.7
percent in the 2007 fourth quarter. Adjusted for the dilutive impact of
the surcharge revenue, the year-to-year difference in the lag effect in
our surcharge mechanism, and the LIFO inventory effects, fourth quarter
gross margin on a comparable basis would have been an estimated 30.0
percent compared with an estimated 32.5 percent in the 2007 fourth
quarter.
Operating income for the fourth quarter was $72.7 million, down 17
percent compared with $87.4 million in the fourth quarter of 2007. The
decline in operating income reflected lower gross profit, and an $11.2
million increase in SG&A expenses, primarily from the special litigation
reserve, investments associated with driving our strategic initiatives,
and other year-end items.
Adjusted for the lag effect, surcharge revenue, other inventory effects
and the special litigation reserve, fourth quarter operating margin
would have been an estimated 18.6 percent versus an estimated 22.9
percent in the same quarter a year earlier.
Other income in the fourth quarter was $1.9 million, compared with other
income of $6.6 million in the 2007 fourth quarter. The decrease of $4.7
million or $0.07 per share primarily reflected lower interest income
from invested cash.
The income tax provision for fourth quarter continuing operations
totaled $23.2 million or 33.1 percent of pre-tax income, compared with
an income tax provision of $29.5 million or 33.4 percent in last year’s
fourth quarter.
Income from continuing operations was $46.9 million or $1.01 per diluted
share, which includes a special reserve for litigation matters of $0.08
per share. This compared with 2007 fourth quarter income from continuing
operations of $58.9 million or $1.12 per diluted share.
Aerospace market sales were $208.3 million, an increase of 10 percent
compared with a year earlier. Excluding surcharge revenue, aerospace
sales grew 12 percent over the fourth quarter of 2007. Aerospace results
picked up in the second half of the fiscal year, consistent with the
strong aircraft build schedule. There was relatively little change in
demand seen from announced delays in the deliveries of the 787 and A380
airliners or the reductions in the U.S. domestic fleet.
Energy market sales increased to $76.2 million, 18 percent growth
compared with the fourth quarter 2007. Excluding surcharge revenue,
energy market sales increased 29 percent. Power generation sales showed
significant gains due to strong demand for our materials for industrial
gas turbines going to Europe, the Middle East and Asia Pacific. Oil and
gas exploration remains strong as the number of directional drilling
rigs increases around the world.
Industrial market sales were $121.6 million, up 4 percent from the
fourth quarter a year earlier. Excluding surcharge, industrial sales
rose 17 percent. Sales improved for weld wire and stainless grades
supporting U.S. infrastructure projects, while there were offsets from
lower demand in the semiconductor and valves and fittings segments.
Medical market sales were $39.4 million, an increase of 11 percent
compared with the 2007 fourth quarter. Excluding surcharge revenue,
medical sales grew 10 percent. The medical supply chain appears to have
worked through its adjustment period from the last several quarters and
is returning to more normal purchasing patterns.
Consumer market sales were $51.9 million, an 11 percent decrease
compared with a year earlier. Excluding surcharge revenue, sales
improved 6 percent. The results reflect good growth in electronics and
sports, partially offset by weakness in the housing and construction
markets.
Automotive market sales were $58.9 million, a decline of 14 percent from
the same period a year ago. Excluding surcharge revenue, sales were down
6 percent. Our business continues to be impacted by the current weakness
in the domestic auto market.
Sales outside the United States were $177.7 million for the fourth
quarter, a 13 percent increase from the same quarter a year earlier.
Sales improved in all major markets.
Fiscal Year 2008 Results
Net sales from continuing operations for the year were $1.953 billion,
or 6 percent higher than a year ago. Excluding surcharge revenue, sales
from continuing operations were $1.369 billion, 4 percent higher than a
year ago.
Pounds shipped in FY2008 were 2 percent lower than last year. Pounds
shipped by our Premium Alloys Operations segment increased 21 percent
year on year, while our Advanced Metals Operations segment declined 7
percent.
Gross profit in FY2008 was $457.2 million, compared with $427.5 million
a year earlier.
Operating income for FY 2008 was $309.1 million, up 2 percent compared
with $304.4 million in 2007. Operating margin excluding surcharge was
22.6 percent in FY2008, compared to 23.1 percent in 2007.
Other income in FY 2008 was $24.2 million, compared with other income of
$30.3 million in 2007.
The income tax provision for FY2008 continuing operations totaled $102.9
million or 32.9 percent of pre-tax income, compared with an income tax
provision of $96.8 million or 31.0 percent last year.
For the year, income from continuing operations was $209.9 million or
$4.31 per diluted share, compared with 2007 income from continuing
operations of $215.2 million or $4.09 per diluted share.
Market data for fiscal 2008 is shown below.
Market
FY2008 Revenues
(in millions)
% change from FY2007
% change from FY2007
w/o surcharges
Aerospace
$753.3
9
%
2
%
Energy
$241.2
41
%
52
%
Medical
$133.6
7
%
Flat
Industrial
$419.5
(1
%)
(3
%)
Automotive
$221.0
(6
%)
(6
%)
Consumer
$184.9
(7
%)
(3
%)
International
$655.5
22
%
n/a
Other Financial Items
Free cash flow for the fourth quarter excluding the acquisition and
divestitures was $61.7 million, and $111.8 million for the year. Full
year capital expenditures totaled $118.9 million, primarily reflecting
Carpenter's ongoing expansion of its premium melt capacity. Total FY2007
capital expenditures were $47.1 million.
FY 2009 Outlook "In the 2009 fiscal year, we expect
continuing strong growth driven largely by the favorable industry
dynamics in our key aerospace and energy markets,”
said Stevens. "Our first half will be subject
to capacity constraints on our premium melt products that should be
relieved when the new melting facility and other equipment upgrades come
on line around the beginning of the 2009 calendar year. We are well
situated to respond to the challenges that the current economic
conditions are presenting, and anticipate greater demand for our high
performance materials as we pursue aggressive goals for new product
development. We will also continue our focused efforts on operational
excellence that are transforming a 120-year old business.
"We expect another year of record earnings and
strong free cash flow,” continued Stevens, "although
several factors will lead our second half comparisons to be stronger
than the first half. Of note, we have had significant planned outages
including an upgrade to our major rolling mill and an extended
maintenance outage on our cleaning facilities that will carry into the
first quarter.” Pension Effects
During FY2008, the Company had net pension income associated with its
pension and other post retirement benefit plans of $0.5 million. Based
on the value of the plans’ assets and
projected costs of the plans as of June 30, 2008, the Company will
experience a non-cash net pension expense during fiscal 2009 of $20.1
million, which equates to a year-to-year difference in reported earnings
of roughly $0.28 per share. The plans are well funded as of June 30,
2008, and the Company has had no required cash contributions to the
plans since 1986.
Discontinued Operations
On June 30, 2008, Carpenter completed the sale of its metal shapes
business, Rathbone Precision Metal, to Calvi Holdings, S.r.l., for $17.5
million in cash. Carpenter recorded a pre-tax gain in the quarter of
$8.1 million, or $0.09 per share on an after-tax basis.
Results for the metal shapes business were reported as discontinued
operations for the fourth quarter. Income from discontinued operations
of $6.5 million compares with income of $2.4 million for the fourth
quarter 2007. Details for the quarter and year, which includes the sale
of our ceramics businesses in March, 2008, are as follows:
(millions)
Q4-2008
Q4-2007
FY2008
FY2007
Income from discontinued operations
$0.4
$4.7
$13.2
$19.0
Gain on sale, net of expenses
$8.1
--
$109.6
--
Income tax expense
($2.0
)
($2.3
)
($45.6
)
($7.0
)
Income from discontinued operations
$6.5
$2.4
$77.2
$12.0
Share Repurchase Program
Carpenter repurchased 3.1 million shares of its common stock during the
fourth quarter for a total of $174 million, or an average price of
$56.43 per share, under the $250 million share repurchase plan that was
authorized by the Board of Directors on December 21, 2007. As of June
30, 2008, aggregate repurchases under this program and the previously
completed $250 million share repurchase program totaled 7.6 million
shares with an aggregate cost of $454 million, or an average price of
$59.69/share. As of June 30, 2008, there were 45,295,770 shares of
common stock outstanding.
Sales Excluding Surcharge
This press release includes discussions of net sales as adjusted to
exclude the impact of raw material surcharges, which represents a
financial measure that has not been determined in accordance with U.S.
generally accepted accounting principles ("GAAP"). The Company provides
this additional financial measure because management believes removing
the impact of raw material surcharges from net sales provides a more
consistent basis for comparing results of operations from period to
period.
Conference Call
Carpenter will host a conference call and webcast today, July 31st, at
10:00 a.m., ET, to discuss financial results and operations for the
fiscal fourth quarter and full year. Please call 610-208-2800 for
details of the conference call. Access to the call will also be made
available at Carpenter's web site (www.cartech.com)
and through CCBN (www.ccbn.com). A
replay of the call will be made available at www.cartech.com
or at www.ccbn.com.
About Carpenter Technology
Carpenter produces and distributes specialty alloys, including stainless
steels, titanium alloys, and superalloys, and various engineered
products. Information about Carpenter can be found on the Internet at www.cartech.com.
Except for historical information, all other information in this news
release consists of 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, 2007, its subsequent
Forms 10-Q 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, industrial,
automotive, consumer, medical, and energy, or other influences on
Carpenter's business such as new competitors, the consolidation of
customers, and suppliers or the transfer of manufacturing capacity from
the United States to foreign countries; 2) the ability of Carpenter to
achieve cost savings, productivity improvements or process changes; 3)
the ability to recoup increases in the cost of energy and raw materials
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; and 11) the ability of Carpenter to implement and manage
material capital expansion projects in a timely and efficient manner.
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.
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
Three Months Ended
Year Ended
June 30
June 30
2008
2007
2008
2007
NET SALES
$556.3
$533.2
$1,953.5
$1,839.0
Cost of sales
439.0
412.4
1,496.3
1,411.5
Gross profit
117.3
120.8
457.2
427.5
Selling, general and administrative expenses
44.6
33.4
148.1
123.1
Operating income
72.7
87.4
309.1
304.4
Interest expense
4.5
5.6
20.5
22.7
Other income, net
(1.9
)
(6.6
)
(24.2
)
(30.3
)
Income before income taxes
70.1
88.4
312.8
312.0
Income taxes
23.2
29.5
102.9
96.8
INCOME FROM CONTINUING OPERATIONS
46.9
58.9
209.9
215.2
INCOME FROM DISCONTINUED OPERATIONS
6.5
2.4
77.2
12.0
NET INCOME
$53.4
$61.3
$287.1
$227.2
EARNINGS PER COMMON SHARE - BASIC:
Income from continuing operations
$1.02
$1.12
$4.33
$4.16
Income from discontinued operations
$0.14
$0.05
$1.59
$0.24
NET INCOME PER SHARE - BASIC
$1.16
$1.17
$5.92
$4.40
EARNINGS PER COMMON SHARE - DILUTED:
Income from continuing operations
$1.01
$1.12
$4.31
$4.09
Income from discontinued operations
$0.14
$0.05
$1.58
$0.23
NET INCOME PER SHARE - DILUTED
$1.15
$1.17
$5.89
$4.32
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic
46.1
52.3
48.5
51.5
Diluted
46.4
52.5
48.7
52.5
Cash dividends per common share
$0.18
$0.15
$0.63
$0.4875
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
Year Ended
June 30
2008
2007
OPERATING ACTIVITIES:
Net income
$287.1
$227.2
Adjustments to reconcile net income to net cash provided from
operations:
Depreciation
46.8
47.1
Amortization
2.4
1.6
Deferred income taxes
2.1
5.7
Net pension (income) expense
(0.1
)
4.9
Net (gain) loss on asset disposals
(0.9
)
1.3
Gain on sale of businesses
(109.6
)
--
Changes in working capital and other:
Receivables
6.3
(63.9
)
Inventories
17.4
(8.1
)
Other current assets
(8.3
)
(4.5
)
Accounts payable
(56.1
)
77.8
Accrued current liabilities
19.8
(14.6
)
Other, net
11.6
0.6
Net cash provided from operating activities
218.5
275.1
INVESTING ACTIVITIES:
Purchases of plant, equipment and software
(118.9
)
(47.1
)
Proceeds from disposals of plant and equipment
1.5
--
Acquisition of business
(6.6
)
--
Net proceeds from sale of businesses
149.5
--
Purchases of marketable securities
(366.2
)
(680.3
)
Sales of marketable securities
722.2
449.4
Net cash provided from (used for) investing activities
381.5
(278.0
)
FINANCING ACTIVITIES:
Payments on long-term debt
(33.2
)
(0.2
)
Payments to acquire treasury stock
(425.2
)
(28.9
)
Dividends paid
(30.6
)
(25.7
)
Tax benefits on share-based compensation
1.0
7.7
Proceeds from common stock options exercised
0.7
4.2
Net cash used for financing activities
(487.3
)
(42.9
)
Effect of exchange rate changes on cash and cash equivalents
(10.2
)
(6.2
)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
102.5
(52.0
)
Cash and cash equivalents at beginning of period
300.8
352.8
Cash and cash equivalents at end of period
$403.3
$300.8
CONSOLIDATED BALANCE SHEET
(in millions)
June 30
June 30
2008
2007
ASSETS
Current assets:
Cash and cash equivalents
$403.3
$300.8
Marketable securities
5.3
372.7
Accounts receivable, net
285.1
303.2
Inventories
209.0
235.0
Deferred income taxes
16.4
13.3
Other current assets
44.2
30.7
Total current assets
963.3
1,255.7
Property, plant and equipment, net
583.8
537.4
Prepaid pension cost
51.5
132.4
Goodwill
35.2
46.4
Other intangibles
19.8
19.2
Other assets
55.2
34.6
Total assets
$1,708.8
$2,025.7
LIABILITIES
Current liabilities:
Accounts payable
$158.4
$215.9
Accrued liabilities
135.6
117.1
Current portion of long-term debt
23.0
33.2
Total current liabilities
317.0
366.2
Long-term debt, net of current portion
276.7
299.5
Accrued postretirement benefits
90.9
90.9
Deferred income taxes
98.4
143.5
Other liabilities
77.2
57.9
Total liabilities
860.2
958.0
STOCKHOLDERS' EQUITY
Common stock
273.0
272.8
Capital in excess of par value - common stock
197.5
191.6
Reinvested earnings
1,006.0
751.3
Common stock in treasury, at cost
(484.0
)
(65.7
)
Accumulated other comprehensive loss
(143.9
)
(82.3
)
Total stockholders' equity
848.6
1,067.7
Total liabilities and stockholders' equity
$1,708.8
$2,025.7
SEGMENT FINANCIAL DATA
(in millions)
Three Months Ended
Year Ended
June 30
June 30
2008
2007
2008
2007
Net sales:
Advanced Metals Operations
$393.1
$385.0
$1,390.7
$1,365.2
Premium Alloys Operations
167.0
148.8
575.7
475.7
Intersegment
(3.8
)
(0.6
)
(12.9
)
(1.9
)
Consolidated net sales
$556.3
$533.2
$1,953.5
$1,839.0
Operating income:
Advanced Metals Operations
$50.4
$55.3
$188.7
$202.9
Premium Alloys Operations
34.3
36.6
144.7
120.1
Corporate costs
(17.2
)
(7.9
)
(46.3
)
(33.2
)
Pension earnings, interest & deferrals
4.9
3.6
21.7
14.5
Intersegment
0.3
(0.2
)
0.3
0.1
Consolidated operating income
$72.7
$87.4
$309.1
$304.4
Beginning with the first quarter of fiscal 2008, Carpenter realigned
its reportable business segments to focus more effectively on our
customers, end-use markets, and operational excellence goals. As a
result, we now have two reportable business segments: Advanced
Metals Operations and Premium Alloys Operations.
The Advanced Metals Operations (AMO) segment includes the
manufacturing and distribution of high temperature and high strength
metal alloys, stainless steels and titanium in the form of small
bars and rods, wire, narrow strip and powder. AMO sales are spread
across many of our end-use markets including aerospace, industrial,
consumer, automotive, and medical.
The Premium Alloys Operations (PAO) segment includes the
manufacturing and distribution of high temperature and high strength
metal alloys and stainless steels in the form of ingots, billets,
large bars and hollows and primarily services the aerospace and
energy markets.
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, which 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, is included
under the heading "Pension earnings, interest & deferrals."
SELECTED FINANCIAL MEASURES
(in millions)
Three Months Ended
Year Ended
June 30
June 30
FREE CASH FLOW
2008
2007
2008
2007
Net cash provided from operations
$75.0
$128.4
$218.5
$275.1
Purchases of plant, equipment and software
(46.2
)
(19.3
)
(118.9
)
(47.1
)
Acquisition of business
--
--
(6.6
)
--
Proceeds from disposals of plant and
equipment
0.1
(0.2
)
1.5
--
Net proceeds from sale of businesses
6.5
--
149.5
--
Dividends paid
(8.5
)
(7.8
)
(30.6
)
(25.7
)
Free cash flow
$26.9
$101.1
$213.4
$202.3
Three Months Ended
Year Ended
June 30
June 30
FREE CASH FLOW EXCLUDING IMPACTS OF SALE AND ACQUISITION OF
BUSINESSES
2008
2007
2008
2007
Net cash provided from operations
$75.0
$128.4
$218.5
$275.1
Increased payment of income tax liability associated with gain on
sale of business
41.3
--
41.3
--
Purchases of plant, equipment and software
(46.2
)
(19.3
)
(118.9
)
(47.1
)
Proceeds from disposals of plant and
equipment
0.1
(0.2
)
1.5
--
Dividends paid
(8.5
)
(7.8
)
(30.6
)
(25.7
)
Free cash flow
$61.7
$101.1
$111.8
$202.3
Free cash flow is a measure of cash generated which management
evaluates for alternative uses.
SUPPLEMENTAL SCHEDULES
(in millions)
Three Months Ended
Year Ended
June 30
June 30
NET SALES BY MAJOR PRODUCT LINE
2008
2007
2008
2007
Product Line Excluding Surcharge:
Stainless steel
$133.9
$124.7
$459.7
$476.7
Special alloys
182.1
158.8
647.1
573.5
Titanium products
51.3
45.9
180.6
188.2
Tool and other steel
18.4
14.4
61.4
54.9
Other materials
5.6
5.7
20.2
23.4
Consolidated net sales excluding surcharge
$391.3
$349.5
$1,369.0
$1,316.7
Surcharge revenue
165.0
183.7
584.5
522.3
Consolidated net sales
$556.3
$533.2
$1,953.5
$1,839.0
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Ausblick: Carpenter Technology präsentiert Bilanzzahlen zum jüngsten Jahresviertel (finanzen.net) | |
11.07.24 |
Erste Schätzungen: Carpenter Technology verkündet Quartalsergebnis zum jüngsten Jahresviertel (finanzen.net) |
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Aktien in diesem Artikel
Carpenter Technology Corp. | 171,00 | 0,59% |
Indizes in diesem Artikel
S&P 600 SmallCap | 935,46 | -0,94% |