Carpenter Technology Reports Record Fourth Quarter and Fiscal Year 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 ) --Record quarterly net income of $68 million - up 42% from last year --Record quarterly sales of $451 million - up 24% from last year --Aerospace market quarterly sales increased 71% to a record high --Free cash flow exceeded $200 million for fiscal 2006 Carpenter Technology Corporation (NYSE:CRS) today reported record fourth quarter sales and net income. Results were led by significantly higher sales to the aerospace market, a richer product mix, and by the company's continued focus on cost through lean and variation reduction. 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 quarter ended June June: see month. 30, 2006 were $450.5 million, compared with $362.4 million for the same quarter a year ago. Net income in the fourth quarter was $68.0 million, or $2.58 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 $47.8 million, or $1.86 per diluted share, a year ago. The recent fourth quarter included a benefit of $0.19 per diluted share as a result of favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. tax adjustments. Earnings per share in the fourth quarter a year ago included a benefit of $0.23 per diluted share from favorable tax adjustments and a gain of $0.21 per diluted share from the sale of a subsidiary. Excluding the tax adjustments and the gain on the sale of a subsidiary, fourth quarter 2006 earnings per share increased by $0.97 or 68 percent from the fourth quarter a year ago. Free cash flow in the fourth quarter was $106.9 million, compared with $45.1 million in the quarter a year ago. Fiscal 2006 Results Net sales for fiscal 2006 were $1.57 billion, compared with $1.31 billion, for the previous fiscal year. Net income for fiscal 2006 was $211.8 million, or $8.08 per diluted share, compared with net income of $135.5 million, or $5.37 per diluted share, for the previous fiscal year. Net income for fiscal 2006 included $0.19 per diluted share from favorable tax adjustments. Fiscal 2005 net income included a benefit of $0.44 per diluted share from favorable tax adjustments and a gain of $0.21 per diluted share from the sale of a subsidiary. Free cash flow for fiscal 2006 was $202.8 million, compared to free cash flow of $133.8 million a year ago. Fourth Quarter - Operating Summary "Our continued focus on operational excellence through lean and variation reduction and on producing high value, high performance materials helped us to achieve a record fourth quarter and another record fiscal year," 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. "These efforts, combined with favorable market conditions, allowed us to surpass last year's fourth quarter earnings by more than 40 percent. "Sales to the aerospace market were particularly strong, increasing more than 70 percent from the quarter a year ago. Results also benefited from increased sales of higher value materials to the medical and automotive markets. "These results demonstrate that our business operating model Operating Model is a term that is used in many contexts. In essence an operating model describes how an organization operates across both business and technology domains. The Operating Model describes what is important for the organization. has proven effective in enabling us to generate returns well above our cost of capital. We will continue to improve upon our operating model with the goal of building shareholder value through all phases of a business cycle." For the fourth quarter, Carpenter's sales increased 24 percent compared to a year ago. Sales benefited from robust conditions in the aerospace market, increased sales of higher value materials, and higher base selling prices. Adjusted for surcharges, sales increased 23 percent from the fourth quarter a year ago. Aerospace market sales increased 71 percent from the fourth quarter a year ago to $193 million. The increase reflected strong demand for 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. used in the manufacture of aircraft engines and titanium titanium (tītā`nēəm, tĭ–) [from Titan], metallic chemical element; symbol Ti; at. no. 22; at. wt. 47.88; m.p. 1,675°C;; b.p. 3,260°C;; sp. gr. 4.54 at 20°C;; valence +2, +3, or +4. used in structural components. This marked the second consecutive quarter in which aerospace sales accounted for more than 40 percent of total Carpenter sales. Medical market sales increased 29 percent to $37 million primarily as a result of a richer product mix and increased selling prices. Sales to the automotive and truck markets increased 5 percent to $56 million. Sales benefited from increased demand for corrosion resistant materials used in engine components such as fuel injectors a device for actively injecting fuel into an internal-combustion engines by directly forcing the liquid fuel into the combustion chamber at an appropriate point in the piston cycle; - an alternative to a Sales to the power generation market increased 5 percent to $14 million. Adjusted for sales of a divested business, sales to this market increased 29 percent in the fourth quarter compared to the same quarter a year ago. Sales to the consumer market of $56 million were essentially flat compared to a year ago. An increase in sales of materials used in durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. was offset primarily by reduced sales to the sporting goods Noun 1. sporting goods - sports equipment sold as a commodity commodity, trade good, good - articles of commerce sports equipment - equipment needed to participate in a particular sport market. Industrial market sales decreased 4 percent to $94 million. Higher sales to the oil and gas market were offset by reduced sales of marginally mar·gin·al adj. 1. Of, relating to, located at, or constituting a margin, a border, or an edge: the marginal strip of beach; a marginal issue that had no bearing on the election results. 2. profitable products. 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 to $147 million or 38 percent from a year ago, and represented 33 percent of fourth quarter sales. International sales reflected strong demand for higher value materials, particularly in the aerospace and medical markets. Carpenter's fourth quarter gross profit increased 36 percent to $126.6 million, or 28.1 percent of sales, from $92.9 million, or 25.6 percent of sales, in the same quarter a year ago. The 250 basis point improvement in the gross margin reflected pricing actions, a richer product mix primarily as a result of solid demand for higher value materials from the aerospace, medical, and automotive markets, and reduced sales of marginally profitable products. Margins also benefited from ongoing cost reductions generated by lean and variation reduction initiatives. Carpenter's fourth quarter operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 36 percent to $90.9 million, or 20.2 percent of sales, from $66.9 million, or 18.5 percent of sales, a year ago. The increase resulted from improved gross margins and diligent dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d management of selling and administrative expenses. Outlook "We believe that market conditions will remain favorable in fiscal 2007, particularly for our specialty alloys, titanium, 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). materials sold into the aerospace market. We expect that sales to the aerospace market will be higher in fiscal 2007 despite the delay in the first commercial delivery of the Airbus A380 and some inventory rebalancing Rebalancing The process of realigning the weightings of one's portfolio of assets. Notes: For example, if your portfolio's proportion of stock has grown too large for your intended assets weightings and risk tolerance, you might rebalance by selling some stock and putting within certain segments of the aerospace supply chain. "Several other markets including medical and industrial are expected to be strong as well," Torcolini said. "Although we are pleased with our performance during the past fiscal year, we continue to improve the fundamentals of our business through a relentless focus on cost and on reducing complexity throughout our business." Based on current market conditions, Carpenter expects that fiscal 2007 will be another record year for both sales and net income, and anticipates that free cash flow will be in excess of $200 million. Segment Results - Fourth Quarter Specialty Metals Net sales for the quarter ended June 30, 2006 for the Specialty Metals segment, which includes 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 $424.6 million, compared to $329.7 million in the same quarter a year ago. SAO sales increased 28 percent from the same quarter a year ago as a result of higher base prices, a better product mix, and a 6 percent increase in shipments. Higher shipments to the aerospace, automotive, and power generation markets were primarily offset by lower shipments to the consumer, medical, and industrial markets. Dynamet's sales increased 49 percent in the fourth quarter versus the same quarter a year ago. Robust demand from the aerospace market for materials used in structural fasteners fasteners In construction, connectors between structural members. Bolted connections are used when it is necessary to fasten two elements tightly together, especially to resist shear and bending, as in column and beam connections. , increased sales to the medical market, and higher base selling prices were principally responsible for the sales growth. The sales increase also reflected the impact of significantly higher titanium costs. CPP's sales were essentially flat with a year ago. Increased sales to the aerospace and medical markets were offset by the intentional in·ten·tion·al adj. 1. Done deliberately; intended: an intentional slight. See Synonyms at voluntary. 2. Having to do with intention. reduction in the sale of marginally profitable tool steel products. Operating income for the Specialty Metals segment was $94.4 million in the recent fourth quarter, compared to $58.4 million in the same quarter a year ago. The increase in operating income reflected increased sales of higher value materials, higher base prices, and a continued focus on operational improvements. Engineered Products Segment Net sales for this segment, which includes sales of ceramic components and 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 were $26.3 million, compared to $33.4 million a year ago. Last year's fourth quarter included $6.1 million in sales from a business that was divested at the end of fiscal 2005. Lower demand for ceramic components also contributed to the reduction in sales. In the fourth quarter, operating income for the Engineered Products segment was $3.4 million compared to $5.8 million in the same quarter a year ago. The decrease is attributed to reduced sales, lower operating income in the ceramics ceramics (sərăm`ĭks), materials made of nonmetallic minerals that have been permanently hardened by firing at a high temperature, or objects made of such materials. businesses, and the absence of operating income from the divested business. Segment Results - Fiscal Year Specialty Metals Fiscal 2006 net sales for the Specialty Metals segment were $1.47 billion, compared to $1.19 billion for the previous fiscal year. SAO sales increased 21 percent from the previous fiscal year due to solid demand from the aerospace market, the sale of higher value materials to the medical and automotive markets, and pricing actions. SAO shipments decreased 7 percent from a year ago primarily due to the intentional reduction in the sale of marginally profitable products. Dynamet's sales increased 57 percent in fiscal 2006 compared to a year ago. Robust demand from the aerospace market, continued growth in the domestic and international medical markets, and higher base selling prices were principally responsible for sales growth. CPP's sales were 10 percent higher than a year ago due to higher selling prices, stronger demand from the industrial market, and a better product mix. Operating income for the Specialty Metals segment was $311.8 million for fiscal 2006, as compared to $183.9 million for the previous fiscal year. The increase in operating income reflected increased sales of higher value materials, base pricing actions, and continued operational improvements. Engineered Products Segment Net sales for the Engineered Products segment for fiscal 2006 were $102.9 million, as compared to $129.1 million for the previous fiscal year. Sales in the previous fiscal year included $29.2 million from the business that was subsequently divested. This group of companies experienced increased sales to the automotive and aerospace markets, and higher base selling prices, which was partially offset by lower sales to the consumer and industrial markets. Operating income for the Engineered Products segment was $17.1 million compared to $22.2 million in the previous fiscal year. The decrease is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to lower operating income in the ceramics businesses and the absence of operating income from the divested business. Other Items In the fourth quarter of fiscal 2006, selling and administrative expenses were $35.7 million, or 7.9 percent of sales, compared to $34.7 million, or 9.6 percent of sales, in the same quarter a year ago. For fiscal 2006, selling and administrative expenses were $125.4 million, or 8.0 percent of sales, compared to $120.6 million, or 9.2 percent of sales, for the previous fiscal year. Interest expense for the quarter of $5.5 million compared to $5.4 million in the fourth quarter a year ago. For fiscal 2006, interest expense was $23.3 million compared to $23.0 million a year ago. Other income in the quarter was $6.0 million compared to $1.1 million in last year's fourth quarter. The change in other income is primarily due to increased interest income from higher balances of invested cash and foreign exchange gains. For fiscal 2006, other income rose to $21.7 million from $8.8 million for the previous fiscal year. The change in other income is due primarily to increases in interest income from higher balances of invested cash and foreign exchange gains. Carpenter's income tax provision in the recent fourth quarter was $23.4 million, or 25.6 percent of pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income, versus $14.8 million, or 23.6 percent, in the same quarter a year ago. In the recent fourth quarter, the company's income tax provision was favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by $5.0 million primarily due to a reduction in valuation allowances related to state tax operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. carryforwards Carryforwards Tax losses allowed to be applied to offset future income in some specified number of future years. and additional U.S. export incentives. In the fourth quarter a year ago, the company's income tax provision was favorably impacted by $5.8 million as a result of a reduction in valuation allowances related to state tax operating loss carryforwards and a benefit due to an adjustment of the state deferred tax rate. For fiscal 2006, Carpenter's income tax provision was $97.3 million, or 31.5 percent of pre-tax income, versus $54.5 million, or 28.7 percent in the previous fiscal year. In addition to the favorable impacts in the fourth quarter a year ago, the company's 2005 income tax provision benefited primarily from a $4.5 million favorable tax settlement. 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 in the recent fourth quarter was $106.9 million, compared with free cash flow of $45.1 million in the fourth quarter a year ago. For fiscal 2006, free cash flow was $202.8 million, compared to $133.8 million in the previous fiscal year. Conference Call Carpenter will host a conference call and webcast today, July July: see month. 26, at 10:00 AM, Eastern Time, to discuss the results of operations for the fourth quarter of fiscal 2006. 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). A replay of the call will be made available at www.cartech.com or at 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. 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 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. 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, 2005, its subsequent Form 10-Q Form 10-Q See 10-Q. and the exhibits attached to those filings. 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, industrial, automotive, consumer, medical, and energy including power generation, or other influences on Carpenter's business such as 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. , 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 recoup To sell an asset at a price sufficient to recover the original outlay or to offset a previous loss. 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; and 9) 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 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. , 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 STATEMENT OF INCOME
(in millions, except per share data)
Three Months Ended Year Ended
June 30 June 30
--------------------- ---------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
NET SALES $450.5 $362.4 $1,568.2 $1,314.2
Cost of sales 323.9 269.5 1,132.1 998.1
---------- ---------- ---------- ----------
Gross profit 126.6 92.9 436.1 316.1
Selling and administrative
expenses 35.7 34.7 125.4 120.6
Gain on sale of business - (8.7) - (8.7)
---------- ---------- ---------- ----------
Operating income 90.9 66.9 310.7 204.2
Interest expense 5.5 5.4 23.3 23.0
Other income, net (6.0) (1.1) (21.7) (8.8)
---------- ---------- ---------- ----------
Income before income taxes 91.4 62.6 309.1 190.0
Income taxes 23.4 14.8 97.3 54.5
---------- ---------- ---------- ----------
NET INCOME $68.0 $47.8 $211.8 $135.5
========== ========== ========== ==========
EARNINGS PER COMMON SHARE:
Basic $2.66 $1.92 $8.33 $5.54
========== ========== ========== ==========
Diluted $2.58 $1.86 $8.08 $5.37
========== ========== ========== ==========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 25.4 24.7 25.2 24.2
========== ========== ========== ==========
Diluted 26.2 25.6 26.1 25.1
========== ========== ========== ==========
Cash dividends per common
share $0.15 $0.125 $0.60 $0.4075
========== ========== ========== ==========
PRELIMINARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
Year Ended
June 30
---------------------
2006 2005
---------- ----------
OPERATIONS:
Net income $211.8 $135.5
Adjustments to reconcile net income to
net cash provided from operations:
Depreciation and amortization 47.6 50.2
Deferred income taxes (11.0) 7.7
Net pension expense 10.8 2.4
Net loss on asset disposals 1.0 1.2
Gain on sale of business - (8.7)
Changes in working capital and other:
Receivables (39.5) (31.8)
Inventories 3.6 (49.8)
Other current assets 7.2 (9.2)
Accounts payable 4.0 26.2
Accrued current liabilities 16.6 46.1
Contribution to VEBA - (25.0)
Other, net (14.5) (2.3)
---------- ----------
Net cash provided from operations 237.6 142.5
---------- ----------
INVESTING ACTIVITIES:
Purchases of plant, equipment and software (19.3) (13.8)
Proceeds from disposals of plant and equipment 1.0 1.1
Proceeds from the sale of business - 15.4
Purchases of marketable securities (450.4) (172.4)
Sales of marketable securities 476.0 94.6
---------- ----------
Net cash provided from (used for) investing
activities 7.3 (75.1)
---------- ----------
FINANCING ACTIVITIES:
Net change in short-term debt - (2.3)
Payments on long-term debt (0.2) (20.2)
Dividends paid (16.5) (11.4)
Tax benefits on share-based compensation 8.0 -
Proceeds from issuance of common stock 15.0 54.2
---------- ----------
Net cash provided from financing activities 6.3 20.3
---------- ----------
Effect of exchange rate changes on cash and cash
equivalents (1.6) (0.5)
---------- ----------
INCREASE IN CASH AND CASH EQUIVALENTS 249.6 87.2
Cash and cash equivalents at beginning of period 163.8 76.6
---------- ----------
Cash and cash equivalents at end of period $413.4 $163.8
========== ==========
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
2006 2005
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $413.4 $163.8
Marketable securities 81.2 106.6
Accounts receivable, net 234.7 193.4
Inventories 224.3 228.6
Deferred income taxes 11.4 7.4
Other current assets 32.0 31.8
---------- ----------
Total current assets 997.0 731.6
Property, plant and equipment, net 541.1 569.2
Prepaid pension cost 247.1 250.8
Goodwill 46.4 46.4
Trademarks and trade names, net 20.1 21.1
Other assets 33.9 34.3
---------- ----------
Total assets $1,885.6 $1,653.4
========== ==========
LIABILITIES
Current liabilities:
Accounts payable $137.4 $133.4
Accrued liabilities 133.8 115.5
Current portion of long-term debt 0.2 0.2
---------- ----------
Total current liabilities 271.4 249.1
Long-term debt, net of current portion 333.1 333.7
Accrued postretirement benefits 102.2 108.5
Deferred income taxes 186.7 192.5
Other liabilities 45.9 45.4
---------- ----------
Total liabilities 939.3 929.2
---------- ----------
STOCKHOLDERS' EQUITY
Convertible preferred stock 18.0 19.7
Common stock 132.5 129.7
Capital in excess of par value - common stock 294.2 278.1
Reinvested earnings 549.8 354.5
Common stock in treasury, at cost (37.3) (35.8)
Deferred compensation (1.5) (9.2)
Accumulated other comprehensive loss (9.4) (12.8)
---------- ----------
Total stockholders' equity 946.3 724.2
---------- ----------
Total liabilities and stockholders' equity $1,885.6 $1,653.4
========== ==========
PRELIMINARY
SEGMENT FINANCIAL DATA
(in millions)
Three Months Ended Year Ended
June 30 June 30
-------------------------------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Net sales:
Specialty Metals $424.6 $329.7 $1,467.1 $1,188.3
Engineered Products 26.3 33.4 102.9 129.1
Intersegment (0.4) (0.7) (1.8) (3.2)
---------- ---------- ---------- ----------
Consolidated net sales $450.5 $362.4 $1,568.2 $1,314.2
========== ========== ========== ==========
Operating income:
Specialty Metals $94.4 $58.4 $311.8 $183.9
Engineered Products 3.4 5.8 17.1 22.2
Gain on sale of business - 8.7 - 8.7
Corporate costs (9.6) (9.9) (28.2) (25.2)
Pension earnings,
interest & deferrals 2.6 3.7 10.4 14.7
Intersegment 0.1 0.2 (0.4) (0.1)
---------- ---------- ---------- ----------
Consolidated operating
income $90.9 $66.9 $310.7 $204.2
========== ========== ========== ==========
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.
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."
PRELIMINARY
SELECTED FINANCIAL MEASURES
(in millions, except per share data)
Three Months Ended Year Ended
June 30 June 30
--------------------- ---------------------
FREE CASH FLOW 2006 2005 2006 2005
---------- ---------- ---------- ----------
Net cash provided from
operations $115.9 $37.7 $237.6 $142.5
Purchases of plant,
equipment and software (5.6) (5.0) (19.3) (13.8)
Proceeds from disposals of
plant and equipment 0.7 0.5 1.0 1.1
Proceeds from the sale of
business - 15.4 - 15.4
Dividends paid (4.1) (3.5) (16.5) (11.4)
---------- ---------- ---------- ----------
Free cash flow $106.9 $45.1 $202.8 $133.8
========== ========== ========== ==========
Free cash flow is a measure of cash generated which management
evaluates for alternative uses.
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