PHILADELPHIA, April 27, 2023 (GLOBE NEWSWIRE) — Carpenter Technology Corporation (NYSE: CRS) today announced financial results for the fiscal third quarter ended March 31, 2023. For the quarter, the Company reported net income of $18.6 million, or $0.38 earnings per diluted share.
“By outperforming expectations for the third quarter of fiscal year 2023, we remain on the path to returning to pre-pandemic levels of profitability in the fourth quarter of fiscal year 2023,” said Tony R. Thene, President and CEO of Carpenter Technology. “Our third quarter performance was driven by increased productivity across our manufacturing facilities and ongoing strong demand in each of our end-use markets.”
“The Specialty Alloys Operations (“SAO”) segment demonstrated continued improvement with operating income of $49.0 million for the third quarter of fiscal year 2023. The results for SAO were driven by increased productivity at our facilities as we continued to safely onboard new employees and accelerate training. The Performance Engineered Products (“PEP”) segment had a strong quarter with operating income of $10.2 million, led by our Dynamet Titanium and Additive businesses.”
“Looking ahead, we are well positioned to achieve our goal of delivering operating income of $54-60 million in the fourth quarter of fiscal year 2023. To achieve this goal, we are continuing to focus on increasing productivity across our manufacturing facilities to meet the strong demand across each of our end-use markets. With higher volumes, improved product mix and increased prices, we expect to realize accelerating sales momentum and improved margins.”
Financial Highlights
| Q3 | Q3 | Q2 | |||||||||||
| ($ in millions except per share amounts) | FY2023 | FY2022 | FY2023 | ||||||||||
| Net sales | $ | 690.1 | $ | 489.0 | $ | 579.1 | |||||||
| Net sales excluding surcharge (a) | $ | 491.5 | $ | 369.0 | $ | 420.8 | |||||||
| Operating income | $ | 39.3 | $ | 1.1 | $ | 22.6 | |||||||
| Adjusted operating income (loss) excluding special items (a) | $ | 39.3 | $ | (1.6 | ) | $ | 22.6 | ||||||
| Net income (loss) | $ | 18.6 | $ | (7.5 | ) | $ | 6.2 | ||||||
| Earnings (loss) per share | $ | 0.38 | $ | (0.16 | ) | $ | 0.13 | ||||||
| Adjusted earnings (loss) per share (a) | $ | 0.38 | $ | (0.20 | ) | $ | 0.13 | ||||||
| Net cash provided from (used for) operating activities | $ | 4.3 | $ | 35.3 | $ | (86.4 | ) | ||||||
| Adjusted free cash flow (a) | $ | (26.0 | ) | $ | 0.4 | $ | (113.7 | ) | |||||
| (a) Non-GAAP financial measures explained in the tables below | |||||||||||||
Net sales for the third quarter of fiscal year 2023 were $690.1 million, compared with $489.0 million in the third quarter of fiscal year 2022, an increase of $201.1 million (or 41 percent), on a 15 percent increase in shipment volume. Net sales excluding surcharge were $491.5 million, an increase of $122.5 million (or 33 percent) from the same period a year ago.
Operating income was $39.3 million in the current quarter compared to operating income of $1.1 million in the prior year period. Earnings per share in the third quarter of fiscal year 2023 was $0.38 compared to loss of $0.16 per share in the prior year quarter. Excluding special items, adjusted loss per share in the third quarter of fiscal year 2022 was $0.20. The improvement in operating income and earnings per share is primarily the result of increased shipments as activity levels continued to increase to meet improving market conditions in key end-use markets compared to the prior year period.
Cash provided from operating activities in the third quarter of fiscal year 2023 was $4.3 million compared to cash provided from operating activities of $35.3 million in the same quarter last year. Adjusted free cash flow in the third quarter of fiscal year 2023 was negative $26.0 million, compared to positive $0.4 million in the same quarter last year. The operating cash flow and adjusted free cash flow in the third quarter of fiscal year 2023 compared to the prior year period reflect improved earnings offset by higher cash used for working capital needs to meet growing demand. Capital expenditures in the third quarter of fiscal year 2023 were $20.5 million, compared to $25.1 million in the same quarter last fiscal year.
Total liquidity, including cash and available revolver balance, was $211.9 million at the end of the third quarter of fiscal year 2023. This consisted of $22.3 million of cash and $189.6 million of available borrowing under the Company’s credit facility.
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.
