Carpenter(US:CRS)2024-10-24 20:02Financial Performance - Net sales for the three months ended September 30, 2024, increased to $717.6 million, up 10.1% from $651.9 million in the same period of 2023[8] - Gross profit rose to $176.3 million, representing a 42.0% increase compared to $124.1 million in the prior year[8] - Operating income for the quarter was $113.6 million, a significant increase of 64.4% from $69.0 million in the same quarter of 2023[8] - Net income reached $84.8 million, up 93.1% from $43.9 million in the same period last year[8] - Basic earnings per share increased to $1.69, compared to $0.89 in the prior year, reflecting an increase of 90.0%[8] - Adjusted operating income for the quarter was $117.2 million, marking the most profitable first quarter in the company's history, with an operating income increase of $44.6 million year-over-year[102] - Net income for the quarter was $84.8 million, or $1.67 per diluted share, compared to $43.9 million, or $0.88 per diluted share, in the prior year[105] Cash Flow and Liquidity - Cash and cash equivalents at the end of the period were $150.2 million, a decrease from $199.1 million at the beginning of the year[12] - The company reported net cash provided from operating activities of $40.2 million, compared to $7.4 million in the same quarter of 2023[12] - Total liquidity as of September 30, 2024, was $499.1 million, consisting of $150.2 million in cash and cash equivalents and $348.9 million in available borrowing capacity[148] - Cash generated from operating activities was $40.2 million for the three months ended September 30, 2024, compared to $7.4 million in the same period of 2023[142] - Adjusted free cash flow was positive $13.3 million for the three months ended September 30, 2024, compared to negative $14.6 million in the same period of 2023[142] Segment Performance - Revenue from the Aerospace and Defense segment for the three months ended September 30, 2024, was $437.4 million, compared to $352.5 million in the same period of 2023, reflecting a growth of approximately 24.1%[30] - The Company operates in two business segments: Specialty Alloys Operations (SAO) and Performance Engineered Products (PEP), with SAO generating $645.1 million in revenue for the three months ended September 30, 2024[30] - Specialty Alloys Operations (SAO) segment net sales increased 13% to $645.1 million for the three months ended September 30, 2024, compared to $570.1 million in the same period of 2023[138] - Performance Engineered Products (PEP) segment net sales decreased 1% to $100.8 million for the three months ended September 30, 2024, compared to $101.8 million in the same period of 2023[140] Expenses and Charges - The company incurred restructuring and asset impairment charges of $3.6 million during the quarter[8] - The Company recorded $2.5 million in noncash pre-tax inventory impairment charges during the three months ended September 30, 2024[18] - Selling, general and administrative expenses were $59.1 million, or 8.2% of net sales, compared to $55.1 million, or 8.5% of net sales in the prior year[120] - The total cash payments related to restructuring charges were $0.3 million during the quarter[19] Equity and Shareholder Returns - Total equity increased to $1,660.3 million as of September 30, 2024, up from $1,429.3 million a year earlier, reflecting a growth of 16.1%[14][15] - Carpenter Technology Corporation paid dividends of $10.1 million during the quarter, reflecting a slight increase from $9.9 million in the same period last year[12] - The company authorized a share repurchase program of up to $400.0 million, with $367.9 million remaining available for future purchases as of September 30, 2024[50] - During the three months ended September 30, 2024, the Company repurchased 230,000 shares for an aggregate of $32.1 million[50] Assets and Liabilities - Total assets as of September 30, 2024, were $3,255.0 million, a slight decrease from $3,291.7 million as of June 30, 2024[80] - Total debt as of September 30, 2024, was $694.5 million, a slight increase from $694.2 million as of June 30, 2024[44] - Total accrued liabilities decreased to $132.9 million as of September 30, 2024, down from $202.4 million as of June 30, 2024, a reduction of 34.3%[36] Market and Operational Insights - The geographic breakdown of total net sales shows the United States contributing $421.1 million, Europe $140.3 million, and Asia Pacific $94.4 million for the three months ended September 30, 2024[32] - Sales outside the United States increased 15% to $296.5 million, representing 41% of total net sales for the quarter[108] - The Aerospace and Defense end-use market saw a 24% increase in sales to $437.4 million, with a 34% increase in sales excluding surcharge revenue[112] - Medical end-use market sales increased by 9% to $86.9 million for the three months ended September 30, 2024, with a 10% increase excluding surcharge revenue despite a 16% decrease in shipment volume[113] - Sales to the Energy end-use market rose 17% to $52.5 million, with a 35% increase in sales excluding surcharge revenue driven by a 29% increase in shipment volume[114] - Transportation end-use market sales decreased by 33% to $28.3 million, with a 28% decrease in sales excluding surcharge revenue due to declining build rates[114] - Industrial and Consumer end-use market sales fell 13% to $91.2 million, with a 9% decrease in sales excluding surcharge revenue on a 28% lower shipment volume[115] Compliance and Risk Management - The Company has adopted the five-step model for revenue recognition in accordance with Topic 606, ensuring compliance with U.S. GAAP[23] - The effective tax rate is subject to volatility due to various factors, including changes in tax laws and the finalization of tax audits[70] - The company is exposed to various risks including fluctuations in raw material prices, energy costs, and foreign currency exchange rates, which could impact financial performance[173] - The company continuously monitors for events that could negatively impact key assumptions in determining the fair value of reporting units[171] Future Outlook - The company is actively exploring strategic acquisitions and joint collaborations to broaden its market offerings[89] - The Company expects to make $17.0 million of required cash pension contributions during the remainder of fiscal year 2025[38] - Capital expenditures for the three months ended September 30, 2024, totaled $26.9 million, compared to $0 million in the same period of 2023[79] - The total net pension expense for fiscal year 2025 is expected to be $24.8 million, a decrease from $76.0 million in fiscal year 2024[96]