Carpenter Technology Reports Fourth Quarter and Year-End Results.WYOMISSING, Pa. -- Carpenter Technology Corporation Carpenter Technology Corporation (NYSE:CRS) is a leading manufacturer and distributor of specialty alloys, including stainless steel and titanium, and various engineered products made from metallic and ceramic materials. (NYSE NYSE See: New York Stock Exchange :CRS CRS Course CRS Certified Residential Specialist (real estate certification) CRS Central Reservation System CRS Can't Remember Stuff (polite form) CRS Cost Reduction Strategy CRS Consumer Relations Specialist ) today reported fourth quarter results, which reflected strong broad based demand, continued improvement in its operating performance and a significant increase in net income versus a year ago. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the fourth fiscal quarter ended June June: see month. 30, 2004 were $296.8 million, compared with $212.4 million for the same period a year ago. Net income in the fourth quarter was $17.7 million or $.73 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to net income of $5.5 million or $.23 per diluted share a year ago. Net income in the fourth quarter included non-cash pension and retiree medical expenses of $3.6 million or $.09 per diluted share. In the fourth quarter a year ago, Carpenter had non-cash net pension income of $0.8 million or $.02 per diluted share. Also in the fourth quarter a year ago, Carpenter incurred a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta special charge of $3.6 million or $.09 per diluted share related primarily to the early repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan of debt. Free cash flow, defined as net cash provided before financing activities but after dividends and excluding the effects of marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has , was $9.4 million in the fourth quarter. This amount was after the company's decision to make a $25 million contribution to a VEBA VEBA Voluntary Employees' Beneficiary Association trust that funds post-retirement medical expenses. Free cash flow in last year's fourth quarter was $31.7 million. At the end of the fourth quarter, total debt net of cash was $249.7 million. Carpenter's net debt amount was $16.0 million lower than at the end of the previous quarter and $106.6 million lower than a year ago. Fiscal Year Results Net sales for fiscal 2004 were $1.0 billion, compared with $871.1 million in the previous fiscal year. Net income for fiscal 2004 was $36.0 million or $1.49 per diluted share, compared to a net loss of $10.9 million or $.56 per diluted share a year ago. Net income for fiscal 2004 included non-cash pension and retiree medical expenses of $16.1 million or $.42 per diluted share and a pre-tax special charge of $2.3 million or $.06 per diluted share associated with the early repayment of debt. The net loss a year ago included non-cash pension income of $3.4 million or $.09 per diluted share as well as pre-tax special charges of $30.6 million or $.82 per diluted share related primarily to the company's cost reduction efforts and the early redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of debt. For fiscal 2004, the company generated $88.4 million of free cash flow after the $25 million contribution to the VEBA trust versus $80.2 million of free cash flow in the previous fiscal year. Fourth Quarter - Operating Summary "Our continued focus on lean and variation reduction combined with strong demand across all major markets allowed us to achieve the highest level of quarterly earnings in four years," said Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. J. Torcolini, chairman, president and chief executive officer. "While we are encouraged by our performance in fiscal 2004, there remains significantly more opportunity to improve profitability. We will continue to focus on operational excellence and to direct our efforts toward leveraging our higher value products." Carpenter sales increased 40 percent in the fourth quarter from a year ago, reflecting strong demand, selective market share gains, increased base selling prices and surcharges that were implemented to help recover escalating raw material and energy costs. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. one-third of the sales increase was derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from surcharges. All major end-use markets experienced year-over-year sales increases during the fourth quarter. Industrial markets sales increased 53 percent; aerospace and power generation market sales, a combined 39 percent; consumer market sales, 20 percent; automotive market sales, 47 percent; and medical market sales, 29 percent. Geographically ge·o·graph·ic also ge·o·graph·i·cal adj. 1. Of or relating to geography. 2. Concerning the topography of a specific region. ge , sales outside the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. increased 51 percent from a year ago and represented 27 percent of fourth quarter sales. Sales outside the United States benefited from the effects of a weaker U.S. dollar, market share gains and stronger demand from most end-use markets. Carpenter's gross profit in the fourth quarter increased to $62.3 million or 21.0 percent of sales from $48.3 million or 22.7 percent of sales a year ago. During the recent fourth quarter, Carpenter's Specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Alloys This is a list of alloys for which an article exists in Wikipedia (or is proposed but not yet written). They are grouped by base metal, in order of increasing atomic number. Within these headings they are in no particular order. Operations initiated a process change for the disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of aged inventory as part of its complexity reduction initiative. As a result of the more comprehensive practice for recognizing aged inventory, the gross profit was reduced by $2.4 million or 0.8 percent of sales. The gross profit in the recent fourth quarter also included non-cash pension and retiree medical expenses of $2.5 million or 0.8 percent of sales. In addition, the gross profit as a percentage of sales was negatively impacted from the dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. caused by the direct pass through of increased raw material prices. The combined effect of these three items reduced gross profit as a percentage of sales by approximately 370 basis points. In the fourth quarter a year ago, the gross profit reflected non-cash pension income of $1.0 million or 0.5 percent of sales. Strong sales growth, increased productivity and cost reduction attributed to Carpenter's continued focus on lean and variation reduction were the primary contributors to the gross profit improvement. Carpenter's fourth quarter income before other income and expense (net sales less cost of sales and selling and administrative expenses) increased to $31.2 million or 10.5 percent of sales from $19.8 million or 9.3 percent of sales a year ago. Excluding the effects of the non-cash pension and retiree medical expenses, income before other income and expense increased to $34.8 million or 11.7 percent of sales from $19.0 million or 8.9 percent of sales a year ago. Outlook "We expect to build on the momentum generated in fiscal 2004 by intensifying in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: our efforts in lean and variation reduction," Torcolini said. "We also expect additional benefits from our strategy to price products and services for the value delivered to our customers and from our initiative to reduce complexity by eliminating less profitable products. We anticipate that our fiscal 2005 operating performance will also benefit from strong demand across our major end-use markets, including aerospace." Accordingly, Carpenter expects that its operating performance will continue to show year-over-year quarterly improvements throughout the current fiscal year ending June 30, 2005. Additionally, the company anticipates continued strong free cash flow for fiscal 2005. The company estimates that free cash flow will be in excess of $60 million, which is after capital expenditures of approximately $20 - $25 million. Segment Results - Fourth Quarter Specialty Metals Net sales for the quarter ended June 30, 2004 for the Specialty Metals segment, which includes the Specialty Alloys Operations (SAO Sa´o n. 1. (Zool.) Any marine annelid of the genus Hyalinæcia, especially H. tubicola of Europe, which inhabits a transparent movable tube resembling a quill in color and texture. ), Dynamet, and Carpenter Powder powder, any mass of fine particles or dust prepared by various mechanical means, e.g., grinding of solid substances, or by chemical means, e.g., precipitation from solutions. In a special sense, the word is applied to powdered propellant explosives, e.g. Products (CPP cpp - C preprocessor. ) business units, were $268.3 million as compared to $191.0 million in the same quarter a year ago. SAO sales increased 44 percent from the same quarter a year ago due to strong demand across all markets, selective market share gains and pricing actions, including the pass through of escalating raw material and energy costs. In addition, SAO volume increased 22 percent. Dynamet's sales increased 7 percent in the fourth quarter versus a year ago, largely related to stronger demand and share gains in the medical market. CPP's sales were 33 percent higher than a year ago due to increased demand from the industrial market and pricing actions. Income for the Specialty Metals segment was $36.4 million, compared to $23.0 million a year ago. The increase in income reflected the effects of higher sales, a better product mix and realized operating efficiencies, including better yields and improved productivity. Engineered Products Segment Net sales for this segment, which includes sales of fabricated fab·ri·cate tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates 1. To make; create. 2. To construct by combining or assembling diverse, typically standardized parts: metal and ceramic This article is about ceramic materials. For the fine art, see Ceramic art. The word ceramic is derived from the Greek word κεραμικός (keramikos). components, were $29.0 million, compared to $22.1 million a year ago. Sales in this segment benefited from increased sales to the nuclear power, automotive and industrial markets. Income for the Engineered Products segment increased to $4.0 million in the fourth quarter from $1.5 million a year ago. The sales increase combined with improved operating efficiencies from lean and variation reduction initiatives were the primary contributors to the improvement in income. Segment Results - Fiscal Year Specialty Metals Fiscal 2004 net sales for the Specialty Metals segment were $909.1 million, compared to $760.2 million for the previous fiscal year. SAO sales increased 21 percent from a year ago, due to stronger demand, selective market share gains and pricing actions. Throughout most of fiscal 2004, SAO focused on operational excellence through complexity reduction and on eliminating the sale of less profitable products. As a result, SAO had a 3 percent increase in volume from a year ago. In fiscal 2004, Dynamet's sales increased 14 percent from a year ago. The increase was due primarily to higher volumes sold to the medical market and pricing actions. CPP's sales were 15 percent higher than a year ago due to increased demand from the industrial market and pricing actions. Fiscal 2004 income for the Specialty Metals segment was $86.8 million compared to $38.8 million a year ago. Increased sales combined with lower costs through realized operating efficiencies, including better yields and improved productivity, were the primary contributors to the improvement in income. Engineered Products Segment Net sales for this segment in fiscal 2004 were $110.0 million, compared to $113.3 million for the same period a year ago. The previous fiscal year included $12.9 million from businesses that were subsequently divested. This group of companies benefited from stronger demand from the automotive, medical, aerospace and power generation markets. Income for the Engineered Products segment for fiscal 2004 was $15.2 million versus $10.9 million a year ago. The increase in income was primarily associated with cost savings from lean and variation reduction initiatives. Net Pension Expense / Income In the fourth quarter of fiscal 2004, Carpenter had non-cash pension and retiree medical expenses of $3.6 million or $.09 per diluted share. This compares to non-cash net pension income of $0.8 million or $.02 per diluted share for the same quarter a year ago. For fiscal 2004, the company's non-cash pension and retiree medical expenses were $16.1 million or $.42 per diluted share. For the same period a year ago, Carpenter had non-cash net pension income of $3.4 million or $.09 per diluted share. The net pension amount is actuarially determined as of each June 30 and typically held constant throughout the fiscal year. Certain events such as legislative actions may result in changes to the pension amounts during the fiscal year. On December December: see month. 8, 2003, the Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. Prescription Drug prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, , Improvement and Modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, Act of 2003 (the Act) was signed into legislation. This Act introduces a prescription drug benefit under Medicare Part D, as well as a federal subsidy subsidy, financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. to sponsors of retiree health care benefit plans, like Carpenter, that provide benefits that are equal to or better than those under Medicare Part D. In May 2004 the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). issued a staff position on accounting for the effects of the new Act. Accordingly, Carpenter reduced its non-cash pension and retiree medical expenses in the fourth quarter by $0.8 million or $.03 per diluted share. In addition to the fourth quarter adjustment, the company also recognized a retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a reduction to its third quarter non-cash pension and retiree medical expenses in the amount of $0.8 million or $.03 per diluted share as a result of the new Act, which is reflected in fiscal 2004 net income. In fiscal 2005, Carpenter expects that it will have pension income related to its defined benefit pension plans of approximately $2.4 million. This amount will be more than offset by post-retirement medical expenses, net of the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. effects of Medicare Part D, of $4.8 million. As a result, Carpenter will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. a $2.4 million net pension expense or $.01 per diluted share in fiscal 2005. The reduction in expense from fiscal 2004 reflects several factors including higher returns on assets in the company's largest pension plan, an increase in the discount rate to 6.25% from 6.0% as a result of a higher interest rate environment and the full year favorable effects of Medicare Part D. The company's defined benefit pension plan remains well funded and, as in prior years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time company is not required to make a cash contribution to the plan. Special Charges In fiscal 2004, Carpenter incurred a special charge of $2.3 million or $.06 per diluted share. The charge was incurred as a result of a $20 million open market purchase of medium-term notes Medium-term note (MTN) A corporate debt instrument that is continuously offered to investors over a period of time by an agent of the issuer. Investors can select from maturity bands of: 9 months to 1 year, more than 1 year to 18 months, more than 18 months to 2 years, etc. previously issued by the company and the unwinding of interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. associated with the partial repayment of foreign currency loans. In the last fiscal year, Carpenter incurred pre-tax special charges of $30.6 million or $.82 per diluted share. The charges were primarily related to the company's cost reduction initiatives and the early repayment of debt. Other Items In the fourth quarter of fiscal 2004, selling and administrative expenses of $31.1 million were 10.5 percent of sales versus $28.5 million or 13.4 percent of sales in the same quarter a year ago. Selling and administrative expenses included non-cash pension and retiree medical expenses of $1.1 million in the current fourth quarter versus $0.3 million in the quarter a year ago. The increase in selling and administrative expenses reflected higher employee variable compensation costs and the increased non-cash pension and retiree medical expenses from a year ago, partially offset by lower depreciation and reduced professional fees. For fiscal 2004, selling and administrative expenses of $118.7 million were 11.7 percent of sales compared to $118.8 million or 13.6 percent of sales in the previous fiscal year. Non-cash pension and retiree medical expenses included in fiscal 2004 selling and administrative expenses were $4.8 million versus $1.0 million a year ago. Interest expense for the quarter was $5.6 million as compared to $7.5 million in the quarter a year ago, due to reduced debt levels and lower interest rates. For fiscal 2004, interest expense was $23.7 million or $7.3 million lower than the previous fiscal year. Other income for the fourth quarter was $0.7 million, compared to an expense of $0.6 million a year ago. For fiscal 2004, other income was $8.9 million versus $3.8 million for the previous fiscal year. The increase in other income primarily reflected an increase in the receipt of funds under the "Continued Dumping dumping, selling goods at less than the normal price, usually as exports in international trade. It may be done by a producer, a group of producers, or a nation. and Subsidy Offset Act of 2000," reduced losses on the sale of certain assets and the favorable settlement of a litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. matter. Cash Flow and Liquidity Carpenter has maintained the ability to provide cash to meet its needs through cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , management of working capital and the flexibility to use outside sources of financing to supplement internally generated funds. Free cash flow for the fourth quarter was $9.4 million, compared to $31.7 million a year ago. Free cash flow in the recent fourth quarter was after a $25 million voluntary contribution to a VEBA trust that funds post-retirement medical benefits. For fiscal 2004, free cash flow was $88.4 million after the $25 million VEBA contribution compared to $80.2 million for the previous fiscal year. Carpenter believes that its current financial resources, both from internal and external sources, will be more than adequate to meet its foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. needs. At the end of the fourth quarter, Carpenter had approximately $180 million available under its credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities . Conference Call Carpenter will host a conference call and webcast on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , July July: see month. 23, at 10 a.m., Eastern Time, to discuss the results of operations for the fourth quarter. 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 CCBN Central Coast Bancorp CCBN Charles County Business Network (www.ccbn.com). Carpenter produces and distributes specialty alloys, including stainless steels stainless steel: see steel. stainless steel Any of a family of alloy steels usually containing 10–30% chromium. The presence of chromium, together with low carbon content, gives remarkable resistance to corrosion and heat. , titanium alloys Titanium alloys are metallic materials which contain a mixture of titanium and other chemical elements. Such alloys have very high tensile strength and toughness (even at extreme temperatures), light weight, extraordinary corrosion resistance, and ability to withstand extreme and superalloys, and various engineered products. Information about Carpenter can be found on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.cartech.com, with selected products sold online at www.carpenterdirect.com. Except for historical information, all other information in this news release consists of forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. . 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended June 30, 2003, its Form 10-Q Form 10-Q See 10-Q. for the third quarter and its most recent registration statement on Form S-4, filed on September September: see month. 16, 2003, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. on October October: see month. 3, 2003. They include but are not limited to: 1) the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the specialty materials business and certain end-use markets, including aerospace, power generation, automotive, industrial and consumer, all of which are subject to changes in general economic and financial market conditions; 2) the ability of Carpenter to ensure adequate supplies of raw materials and to recoup recoup To sell an asset at a price sufficient to recover the original outlay or to offset a previous loss. increased costs of electricity, natural gas, and raw materials, such as nickel nickel, metallic chemical element; symbol Ni; at. no. 28; at. wt. 58.69; m.p. about 1,453°C;; b.p. about 2,732°C;; sp. gr. 8.902 at 25°C;; valence 0, +1, +2, +3, or +4. , through increased prices and surcharges; 3) domestic and foreign excess manufacturing capacity for certain metals that Carpenter produces; 4) fluctuations in currency exchange rates, resulting in increased competition and downward pricing pressure on certain Carpenter products; 5) the degree of success of government trade actions; 6) fluctuations in capital markets that could impact the valuation of the assets and liabilities in Carpenter's pension trusts and the accounting for pension plans; 7) the potential cost advantages that new competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. or competitors who have reorganized re·or·gan·ize v. re·or·gan·ized, re·or·gan·iz·ing, re·or·gan·iz·es v.tr. To organize again or anew. v.intr. To undergo or effect changes in organization. through bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most may have; 8) the transfer of manufacturing capacity from the United States to foreign countries; 9) the consolidation of customers and suppliers; and 10) the potential that our customers may substitute alternate alternate /al·ter·nate/ (awl´ter-nit) 1. following in turns. 2. pertaining to every other one in a series. 3. occurring in place of another; acting as a substitute. materials or adopt different manufacturing practices that replace or limit the suitability of our products. Any of these factors could have an adverse and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. effect on Carpenter's results of operations. The forward-looking statements in this document are intended to be subject to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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
------------------ ------------------
2004 2003 2004 2003
--------- -------- --------- --------
NET SALES $296.8 $212.4 $1,016.7 $871.1
Cost of sales 234.5 164.1 831.2 717.4
--------- -------- --------- --------
Gross profit 62.3 48.3 185.5 153.7
Selling and administrative
expenses 31.1 28.5 118.7 118.8
Special charge -- 3.6 2.3 30.6
Interest expense 5.6 7.5 23.7 31.0
Other (income) expense, net (0.7) 0.6 (8.9) (3.8)
--------- -------- --------- --------
Income (loss) before income taxes 26.3 8.1 49.7 (22.9)
Income tax expense (benefit) 8.6 2.6 13.7 (12.0)
--------- -------- --------- --------
NET INCOME (LOSS) $17.7 $5.5 $36.0 ($10.9)
========= ======== ========= ========
EARNINGS (LOSS) PER COMMON SHARE:
Basic $0.75 $0.23 $1.51 ($0.56)
========= ======== ========= ========
Diluted $0.73 $0.23 $1.49 ($0.56)
========= ======== ========= ========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic 22.8 22.4 22.5 22.3
========= ======== ========= ========
Diluted 23.7 23.1 23.4 22.3
========= ======== ========= ========
Cash dividends per common share $0.0825 $0.0825 $0.3300 $0.5775
========= ======== ========= ========
Certain reclassifications of prior year's amounts have been made to
conform with current year's presentation.
PRELIMINARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(in Millions)
Year Ended
June 30
--------------
2004 2003
------ -------
OPERATIONS:
Net income (loss) $36.0 ($10.9)
Adjustments to reconcile net income (loss) to
net cash provided from operations:
Depreciation 49.2 53.3
Amortization 7.9 10.7
Deferred income taxes 6.5 (14.7)
Net pension expense (income) 16.1 (3.4)
Net loss on asset disposals 0.1 0.2
Special charge -- 24.6
Changes in working capital and other:
Receivables (40.5) 18.7
Net change in accounts receivable purchase
facility (10.0) --
Inventories (4.3) 8.2
Other current assets (0.1) 9.8
Accounts payable 44.5 (11.7)
Accrued current liabilities 28.2 (2.2)
Income tax refund 0.6 18.3
Contribution to VEBA (25.0) --
Other, net (15.1) (8.7)
------ -------
Net cash provided from operations 94.1 92.2
------ -------
INVESTING ACTIVITIES:
Purchases of plant, equipment and software (8.0) (8.5)
Proceeds from sale of business -- 8.5
Proceeds from disposals of plant and equipment 1.6 2.5
Purchases of marketable securities (70.0) --
Sales of marketable securities 41.2 --
------ -------
Net cash (used for) provided from investing activities (35.2) 2.5
------ -------
FINANCING ACTIVITIES:
Net change in short-term debt (15.7) (1.7)
Proceeds from issuance of long-term debt -- 98.0
Payments on long-term debt (20.2) (145.8)
Checks not cleared (3.7) 3.7
Dividends paid (9.3) (14.5)
Proceeds from issuance of common stock 12.8 --
------ -------
Net cash used for financing activities (36.1) (60.3)
------ -------
Effect of exchange rate changes on cash and cash
equivalents 0.3 0.4
------ -------
INCREASE IN CASH AND CASH EQUIVALENTS 23.1 34.8
Cash and cash equivalents at beginning of period 53.5 18.7
------ -------
Cash and cash equivalents at end of period $76.6 $53.5
====== =======
Certain reclassifications of prior year's amounts have been made to
conform with current year's presentation.
PRELIMINARY
CONSOLIDATED BALANCE SHEET
(in Millions)
June 30 June 30
2004 2003
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $76.6 $53.5
Marketable securities 28.8 --
Accounts receivable, net 165.2 113.8
Inventories 185.0 180.9
Other current assets 36.2 21.1
--------- ---------
Total current assets 491.8 369.3
Property, plant and equipment, net 608.7 651.7
Prepaid pension cost 247.0 253.7
Goodwill 46.4 46.4
Trademarks and trade names, net 24.3 25.4
Other assets 38.0 53.4
--------- ---------
Total assets $1,456.2 $1,399.9
========= =========
LIABILITIES
Current liabilities:
Short-term debt $2.2 $17.1
Accounts payable 109.0 68.2
Accrued compensation 26.1 13.5
Accrued income taxes 10.3 6.1
Accrued liabilities 51.4 40.6
Deferred income taxes 10.9 4.3
Current portion of long-term debt 20.2 0.1
--------- ---------
Total current liabilities 230.1 149.9
Long-term debt, net of current portion 332.7 378.9
Accrued postretirement benefits 143.5 182.4
Deferred income taxes 175.6 166.7
Other liabilities 36.3 47.4
--------- ---------
Total liabilities 918.2 925.3
--------- ---------
STOCKHOLDERS' EQUITY
Convertible preferred stock 20.8 10.2
Common stock 120.7 117.3
Capital in excess of par value - common stock 215.1 199.8
Reinvested earnings 230.4 203.7
Common stock in treasury, at cost (38.0) (38.3)
Deferred compensation (9.5) (3.8)
Accumulated other comprehensive income (loss) (1.5) (14.3)
--------- ---------
Total stockholders' equity 538.0 474.6
--------- ---------
Total liabilities and stockholders' equity $1,456.2 $1,399.9
========= =========
Certain reclassifications of prior year's amounts have been made to
conform with current year's presentation.
PRELIMINARY
SEGMENT FINANCIAL DATA
(in Millions)
Three Months Ended Year Ended
June 30 June 30
------------------ ------------------
2004 2003 2004 2003
---------- ------- --------- --------
Net sales:
Specialty Metals $268.3 $191.0 $909.1 $760.2
Engineered Products 29.0 22.1 110.0 113.3
Intersegment (0.5) (0.7) (2.4) (2.4)
---------- ------- --------- --------
Consolidated net sales $296.8 $212.4 $1,016.7 $871.1
========== ======= ========= ========
Operating results:
Specialty Metals $36.4 $23.0 $86.8 $38.8
Engineered Products 4.0 1.5 15.2 10.9
Net pension (expense) income (3.6) 0.8 (16.1) 3.4
Corporate costs (5.6) (5.5) (19.1) (18.2)
Special charge -- (3.6) (2.3) (30.6)
Interest expense (5.6) (7.5) (23.7) (31.0)
Other income (expense), net 0.7 (0.6) 8.9 3.8
---------- ------- --------- --------
Consolidated income (loss)
before income taxes $26.3 $8.1 $49.7 ($22.9)
========== ======= ========= ========
Carpenter is organized in the following business units: Specialty
Alloys Operations, Dynamet, Carpenter Powder Products and Engineered
Products. For segment reporting, the Specialty Alloys Operations,
Dynamet and Carpenter Powder Products operating segments have been
aggregated into one reportable segment, Specialty Metals, because of
the similarities in products, processes, customers, distribution
methods and economic characteristics.
Certain reclassifications of prior year's amounts have been made to
conform with current year's presentation.
PRELIMINARY
SELECTED FINANCIAL MEASURES
(in Millions)
Three Months Ended Year Ended
June 30 June 30
------------------- ------------------
FREE CASH FLOW 2004 2003 2004 2003
--------- --------- --------- --------
Net cash provided from
operations $4.4 $35.5 $94.1 $92.2
Net change in accounts
receivable purchase facility 10.0 -- 10.0 --
Purchases of plant, equipment
and software (2.8) (1.7) (8.0) (8.5)
Proceeds from sale of business -- -- -- 8.5
Proceeds from disposals of plant
and equipment 0.2 0.2 1.6 2.5
Dividends paid (2.4) (2.3) (9.3) (14.5)
--------- --------- --------- --------
Free cash flow $9.4 $31.7 $88.4 $80.2
========= ========= ========= ========
Free cash flow is a measure of cash generated which management
evaluates for alternative uses and has chosen to apply to debt
repayment.
June 30 March 31 June 30
NET DEBT 2004 2004 2003
--------- --------- ---------
Accounts receivable purchase
facility $--- $10.0 $10.0
Short-term debt 2.2 2.6 17.1
Current portion of long-term
debt 20.2 0.1 0.1
Long-term debt, net of current
portion 332.7 357.5 378.9
--------- --------- ---------
Total Debt 355.1 370.2 406.1
Cash (76.6) (85.3) (53.5)
Checks not cleared -- -- 3.7
Marketable securities (28.8) (19.2) --
--------- --------- ---------
Net Debt $249.7 $265.7 $356.3
========= ========= =========
Accumulated cash and marketable securities are expected to be used for
debt repayment until a targeted debt to capital ratio is achieved.
Three Months Ended Year Ended
June 30 June 30
------------------- ------------------
NET SALES ADJUSTED FOR
DIVESTED COMPANIES 2004 2003 2004 2003
--------- --------- --------- --------
Net sales $296.8 $212.4 $1,016.7 $871.1
Divested companies -- -- -- (12.9)
--------- --------- --------- --------
Net sales adjusted for divested
companies $296.8 $212.4 $1,016.7 $858.2
========= ========= ========= ========
PRELIMINARY
SELECTED FINANCIAL MEASURES
(in Millions, Except per Share Data)
Three Months Ended Year Ended
June 30 June 30
------------------- ------------------
NET PENSION EXPENSE (INCOME) 2004 2003 2004 2003
--------- --------- --------- --------
Pension plan expense (income) $2.2 ($4.1) $8.8 ($16.4)
Other postretirement benefit
expense 1.4 3.3 7.3 13.0
--------- --------- --------- --------
3.6 (0.8) 16.1 (3.4)
Income tax (benefit) expense (1.5) 0.3 (6.3) 1.4
--------- --------- --------- --------
Net pension expense (income) $2.1 ($0.5) $9.8 ($2.0)
========= ========= ========= ========
Pension expense (income) per
share $0.09 ($0.02) $0.42 ($0.09)
========= ========= ========= ========
Weighted average diluted common
shares 23.7 23.1 23.4 22.3
========= ========= ========= ========
Three Months Ended Year Ended
June 30 June 30
------------------- ------------------
SPECIAL CHARGE 2004 2003 2004 2003
--------- --------- --------- --------
Premium on early retirement of
debt -- $4.5 $2.3 $4.5
Reductions in workforce -- -- -- 17.4
Pension plan curtailment loss -- -- -- 6.7
Writedown of certain assets -- (0.9) -- 2.0
--------- --------- --------- --------
Special charge -- 3.6 2.3 30.6
Income tax benefit -- (1.4) (0.8) (12.2)
--------- --------- --------- --------
Special charge, net of income
taxes -- $2.2 $1.5 $18.4
========= ========= ========= ========
Special charge per share -- $0.09 $0.06 $0.82
========= ========= ========= ========
Weighted average diluted common
shares 23.7 23.1 23.4 22.3
========= ========= ========= ========
Three Months Ended Year Ended
June 30 June 30
------------------- ------------------
INCOME BEFORE OTHER INCOME 2004 2003 2004 2003
--------- --------- --------- --------
AND EXPENSE
Net sales $296.8 $212.4 $1,016.7 $871.1
Cost of sales (234.5) (164.1) (831.2) (717.4)
Selling and administrative
expenses (31.1) (28.5) (118.7) (118.8)
--------- --------- --------- --------
Income before other income and
expense $31.2 $19.8 $66.8 $34.9
========= ========= ========= ========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion