Carpenter Technology Reports Third Quarter Results.Business Editors WYOMISSING, Pa.--(BUSINESS WIRE)--April 19, 2000 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 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 third fiscal quarter (ended March 31, 2000) of $298.1 million compared with $271.8 million for last year's third quarter, an increase of 10 percent. Net income was $11.9 million as compared with $9.6 million, before a special charge, for the year-ago quarter. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter increased 27 percent to $.52 per share from last year's $.41 per share, before a special charge. Last year's special charge of $14.2 million before taxes ($.37 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) resulted from work force reductions. 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. W. Cardy, chairman and chief executive officer, said, "As we reported in March, Carpenter's results for the quarter ended March 31, 2000, were adversely impacted by rapidly increasing 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. costs. However, demand and production volumes have increased, and we have recently increased selling prices and improved our product mix. Also, we continue our cost reduction initiatives." The overall 10 percent sales increase from the same quarterly period a year ago was primarily a result of a 13 percent increase in the sales of 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 ("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. ") and a 14 percent increase in sales of the Engineered Products Group ("EPG (Electronic Program Guide) An online listing of TV or other programs. Periodically, EPGs are downloaded into set-top boxes so that viewers can preview offerings by time or category and set reminders. "). The increases were somewhat offset by a 16 percent decrease in sales at Dynamet Incorporated. Overall, Carpenter's quarterly gross margin increased to 25.2 percent of sales compared with 23.5 percent last year. This increase resulted from higher unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. and production levels in SAO and manufacturing cost reductions. Higher costs for nickel offset much of these favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. effects because Carpenter's raw material surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. recovers nickel cost increases approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 60 days after they are incurred. Raw material is accounted for under the last-in, first-out last-in, first-out n. A method of inventory accounting in which the most recently acquired items are assumed to have been the first sold. In a period of rising prices, this method yields a lower ending inventory, a higher cost of goods sold, a lower (LIFO (Last In-First Out) A queueing method in which the next item to be retrieved is the item most recently placed in the queue. Contrast with FIFO. LIFO - stack ) method of accounting, resulting in current cost being charged to the income statement. Carpenter's selling and administrative expenses increased by $9.4 million for the quarter ended March 31, 2000, compared with the same quarter a year ago. The increase primarily resulted from increased freight expenses In accounting, the concept of a freight expense account can be generalized as a payment for sending out a product to a customer. It falls under the umbrella category of Expenses and is treated like other expense accounts in relation to the accounting equation. , start-up Start-up The earliest stage of a new business venture. costs related to the consolidation of our distribution system, and development costs for Carpenter's e-business (Electronic-BUSINESS) Doing business online. The term is often used synonymously with e-commerce, but e-business is more of an umbrella term for having a presence on the Web. initiatives. Other income/expense, compared with the same quarter a year ago, was more favorable by $5.5 million. Other income for the quarter ended March 31, 2000, of $2.2 million was primarily gains recognized on the sale of three warehouses. Last year's third quarter other expense included foreign exchange losses and write-downs of assets held for sale. For the quarter, income taxes were 37.5 percent of income before taxes. For the same quarter last year, an income tax benefit of $2.2 million was recognized as a result of tax issues that were satisfactorily resolved. Quarterly earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Nine Months Financial Performance For the first nine months of the current fiscal year, net income was $34.8 million compared with $34.1 million, before the special charge, last year. Diluted earnings per share were $1.51 compared with $1.45, before the special charge, for the same period a year ago. Sales for the nine months were $787.5 million compared with $770.8 million reported last year. The growth in sales revenue and earnings for the nine months was constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by reduced selling prices and higher raw material costs. Future Outlook For the quarter and year ending June June: see month. 30, 2000, diluted earnings per share are expected to be in line with current analysts' consensus estimates of approximately $.70 and $2.20, respectively. During the quarter ending March 31, 2000, Carpenter substantially completed two large capital projects - a new 4,500-ton press 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, of its strip product processing facility. As cash requirements for capital expenditures decrease with the completion of these projects, cash flow before financing activities is expected to improve. Cash flows are expected to be significantly better in fiscal year 2001. Carpenter has scheduled a conference call for Wednesday Wednesday: see week. , April 19, at 2:00 p.m., Eastern Time, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc its results of operations for the third quarter and current business conditions. Please call 610/208-2165 for the conference call phone number and password A secret word or code used to serve as a security measure against unauthorized access to data. It is normally managed by the operating system or DBMS. However, the computer can only verify the legitimacy of the password, not the legitimacy of the user. See NCSC. . A replay of the conference call will also be available by calling 1-800-756-8787. The passcode for the replay is "0331." The replay will be available until Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , April 28. The live conference call and the replay will also be available over 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.vcall.com, www.streetfusion.com and www.streetevents.com. Carpenter produces and distributes 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 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. , other specialty alloys and various engineered products. Information about Carpenter can be found on the Internet at www.cartech.com, www.dynamet.com and www.carpenterepg.com. Some of the statements in this news release are 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. . These statements are based on current expectations that involve a number of risks and uncertainties, which are specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. in Carpenter's filings with the Securities and Exchange Commission, including the December December: see month. 31, 1999, Form 10-Q Form 10-Q See 10-Q. . Actual results could differ materially from those indicated in the forward-looking statements.
CONSOLIDATED STATEMENT OF INCOME
(in Millions, Except per Share Data)
Three Months Ended Nine Months Ended
March 31 March 31
-------- --------
2000 1999 2000 1999
---- ---- ---- ----
NET SALES $298.1 $271.8 $787.5 $770.8
----- ----- ----- -----
COSTS AND EXPENSES:
Cost of sales 223.1 207.9 587.5 574.6
Selling and administrative
expenses 49.4 40.0 131.4 121.1
Interest expense 8.7 7.9 23.7 21.6
Special charge -- 14.2 -- 14.2
Other (income) expense, net (2.2) 3.3 (7.9) 1.0
----- ----- ----- -----
279.0 273.3 734.7 732.5
----- ----- ----- -----
INCOME (LOSS) BEFORE INCOME
TAXES 19.1 (1.5) 52.8 38.3
Income tax expense (benefit) 7.2 (2.7) 18.0 12.7
----- ----- ----- -----
NET INCOME $ 11.9 $ 1.2 $ 34.8 $ 25.6
===== ===== ===== =====
EARNINGS PER COMMON SHARE:
Basic $ .53 $ .04 $ 1.54 $ 1.10
===== ===== ===== =====
Diluted $ .52 $ .04 $ 1.51 $ 1.08
===== ===== ===== =====
Diluted, without special
charge $ .52 $ .41 $ 1.51 $ 1.45
===== ===== ===== =====
Weighted average common
shares outstanding (diluted) 22.8 22.8 22.8 23.1
===== ===== ===== =====
Cash dividends per common
share $ .33 $ .33 $ .99 $ .99
===== ===== ===== =====
CONSOLIDATED STATEMENT OF CASH FLOWS
(in Millions)
Nine Months Ended
March 31
--------
2000 1999
---- ----
OPERATIONS
Net income $ 34.8 $ 25.6
Adjustments to reconcile net income
to net cash provided from operations:
Depreciation 38.5 39.6
Amortization of intangible assets 11.2 10.0
Deferred income taxes 11.8 (16.9)
Prepaid pension costs (34.3) (18.7)
Loss (gain) on asset disposals (2.1) 2.1
Special charge -- 14.2
Changes in working capital and other,
net of acquisitions:
Receivables (28.1) 18.5
Inventories (23.4) 7.0
Accounts payable 35.9 (18.7)
Accrued current liabilities (4.7) (12.4)
Other, net (5.2) (4.2)
----- -----
Net cash provided from operations 34.4 46.1
----- -----
INVESTING ACTIVITIES
Purchases of plant and equipment (73.4) (118.9)
Proceeds from disposals of plant
and equipment 7.8 .2
Acquisitions of businesses, net
of cash received (6.7) (23.1)
Proceeds from net assets held for sale -- 97.0
----- -----
Net cash used for investing activities (72.3) (44.8)
----- -----
FINANCING ACTIVITIES
Net change in short-term debt 71.0 47.1
Proceeds from issuance of long-term debt 7.6 --
Payments on long-term debt (15.4) (36.2)
Dividends paid (22.7) (23.1)
Payments to acquire treasury stock -- (34.9)
Proceeds from issuance of common stock .3 1.3
----- -----
Net cash provided from (used for) financing
activities 40.8 (45.8)
----- -----
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 2.9 (44.5)
Cash and cash equivalents at beginning
of period 5.5 52.4
----- -----
Cash and cash equivalents at end of period $ 8.4 $ 7.9
===== =====
CONSOLIDATED BALANCE SHEET
(in Millions)
March 31 June 30
2000 1999
---- ----
ASSETS
Current assets:
Cash and cash equivalents $ 8.4 $ 5.5
Accounts receivable, net 180.6 150.6
Inventories 277.0 250.3
Other current assets 20.3 16.3
------ ------
Total current assets 486.3 422.7
Property, plant and equipment, net 783.4 750.4
Prepaid pension cost 174.8 140.5
Goodwill, net 173.7 179.2
Other assets 115.8 115.0
----- -----
Total assets $1,734.0 $1,607.8
======== ========
LIABILITIES
Current liabilities:
Short-term debt $ 212.4 $ 140.0
Accounts payable 97.4 59.6
Accrued liabilities 75.5 78.2
Deferred income taxes -- 1.3
Current portion of long-term debt 10.8 15.4
----- -----
Total current liabilities 396.1 294.5
Long-term debt, net of current portion 352.0 355.0
Accrued postretirement benefits 143.8 138.9
Deferred income taxes 160.5 149.8
Other liabilities 35.3 37.1
SHAREHOLDERS' EQUITY
Preferred stock 26.3 26.8
Common stock 115.3 115.3
Capital in excess of par value 192.2 191.9
Reinvested earnings 377.6 365.5
Common stock in treasury, at cost (38.4) (38.4)
Deferred compensation (14.5) (16.4)
Foreign currency translation adjustments (12.2) (12.2)
----- -----
Total shareholders' equity 646.3 632.5
----- -----
Total liabilities and shareholders' equity $1,734.0 $1,607.8
======== ========
SEGMENT FINANCIAL DATA
(in Millions)
Three Months Ended Nine Months Ended
March 31 March 31
-------- --------
2000 1999 2000 1999
---- ---- ---- ----
Net sales:
Specialty Metals $266.9 $244.0 $697.1 $688.6
Engineered Products 32.1 28.3 92.6 83.8
Intersegment (.9) (.5) (2.2) (1.6)
------ ------ ------ ------
Consolidated net sales $298.1 $271.8 $787.5 $770.8
====== ====== ====== ======
Income before income taxes:
Specialty Metals $ 23.1 $ 17.1 $ 55.9 $ 63.5
Engineered Products 1.4 1.0 3.8 1.2
Pension Credit 11.5 9.3 34.3 27.1
Corporate Costs (8.7) (7.4) (19.4) (19.6)
Special charge -- (14.2) -- (14.2)
------ ------ ------ ------
Consolidated EBIT 27.3 5.8 74.6 58.0
Interest expense (8.7) (7.9) (23.7) (21.6)
Interest income 0.5 0.6 1.9 1.9
------ ------ ------ ------
Consolidated income
before income taxes $ 19.1 $ (1.5) $ 52.8 $ 38.3
====== ====== ====== ======
Carpenter is organized on a product basis and managed in three
segments: Specialty Alloys Operations (SAO), Titanium Alloys (Dynamet)
and Engineered Products (EPG). For segment reporting purposes, the
Specialty Alloys and Titanium Alloys segments are aggregated into one
reportable segment called Specialty Metals because of the similarities
in products, processes, customers and distribution methods.
SUPPLEMENTAL INFORMATION
(Dollars in Millions, Except per Share Data)
Nine Months Year
Ended Ended
March 31 June 30
2000 1999
---- ----
Financial information:
Cash flow from operations $ 34.4 $ 87.4
Working capital $ 90.2 $128.2
Total debt $575.2 $510.4
EBITDA(2) $126.2 $165.0
Financial ratios:
Cash flow from operations per
diluted share $ 1.51 $ 3.78
Shareholders' equity per basic
share $29.48 $28.82
Return on sales(1) 4.4% 4.4%
EBITDA(2) percent of sales 16.0% 15.9%
Return on average capital
employed(1)(3)(4) 5.1% 4.9%
Return on average equity(1)(4) 7.3% 7.1%
Debt to capital employed(3) 41.6% 39.4%
Inventory turns (before LIFO)(4) 2.1x 1.9x
Common dividends as a percent of
net income(1) 62.3% 67.7%
Common dividends as a percent of
cash flow from operations 63.0% 33.4%
Number of employees 5,889 5,750
(1) Full-year 1999 numbers are before a third quarter special
charge of $14.2 million ($8.5 million after tax, or $.37 per
diluted share) related to work force reductions.
(2) Earnings before interest, taxes, depreciation and
amortization.
(3) Capital employed is defined as deferred taxes, total debt and
shareholders' equity.
(4) Twelve-month moving average.
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