Carpenter(CRS) - 2026 Q1 - Quarterly Results

Financial Performance - Carpenter Technology reported record quarterly operating income of $153.3 million, a 31% increase year-over-year[2] - Earnings per diluted share for the quarter were $2.43, compared to $1.67 in the same quarter last year[9] - Net income for the three months ended September 30, 2025, was $122.5 million, up from $84.8 million in the same period of 2024, representing a 44.4% increase[21] - Operating income for the consolidated entity rose to $153.3 million, compared to $113.6 million in the previous year, marking a 35% increase[25] - Adjusted earnings for the three months ended September 30, 2024, were reported at $104.7 million, with an adjusted earnings per diluted share of $1.73[34] - The company reported a net income of $84.8 million for the quarter, adjusted for special items[34] Sales and Revenue - Consolidated net sales for the same period were $733.7 million, compared to $717.6 million in 2024, reflecting a 2.8% growth[25] - Specialty Alloys Operations net sales were $659.6 million, an increase from $645.1 million in the prior year, while Performance Engineered Products net sales decreased to $93.6 million from $100.8 million[25] - The aerospace and defense sector saw net sales of $388.3 million, up from $349.9 million, while the medical sector decreased to $61.6 million from $73.4 million[38] - Surcharge revenue for the three months ended September 30, 2024, was $130.6 million, down from $140.2 million in the previous year[38] Operational Highlights - The Specialty Alloys Operations segment achieved operating income of $170.7 million, up 27% year-over-year, with an adjusted operating margin of 32.0%, up from 26.3%[2] - Bookings for the Aerospace and Defense end-use market increased by 23% sequentially, reflecting strong demand[4] - Adjusted operating margin excluding surcharge revenue improved to 25.4% from 20.3% year-over-year[31] Cash Flow and Liquidity - Projected adjusted free cash flow for FY2026 is between $240 million and $280 million, net of $175 million to $185 million in capital expenditures related to brownfield expansion[5] - The company generated $39.2 million in net cash operating activities, with adjusted free cash flow reflecting a significant investment in capital equipment and acquisitions[36] - The adjusted free cash flow for the period was $13.3 million, reflecting a strategic focus on cash generation[36] - Total liquidity at the end of Q1 FY2026 was $556.9 million, consisting of $208 million in cash and $348.9 million in available borrowings[12] Capital Expenditures and Investments - Capital expenditures for Q1 FY2026 were $42.6 million, up from $26.9 million in the same quarter last year, primarily due to brownfield expansion[10] - The company plans to utilize excess cash for investments, acquisitions, and a share repurchase program of up to $400 million[36] Shareholder Returns - The company executed $49.1 million in share repurchases during the quarter, with $249 million remaining under the authorized repurchase program[11] - The company paid dividends of $10.1 million and repurchased treasury stock worth $49.1 million during the quarter[21] Balance Sheet - Cash and cash equivalents at the end of the period were $208.0 million, down from $315.5 million at the beginning of the year[23] - Total assets decreased to $3,402.2 million from $3,486.8 million in the previous quarter[23] - Total liabilities reduced to $1,491.0 million from $1,599.8 million, indicating a decrease in financial obligations[23]