UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

Form 8-K

 


 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 


 

Date of Report: April 25, 2019

 


 

CARPENTER TECHNOLOGY CORPORATION

(Exact name of registrant as specified in its charter)

 


 

Delaware

 

1-5828

 

23-0458500

(State of or other jurisdiction of
incorporation)

 

(Commission File Number)

 

(IRS Employer I.D. No.)

 

 

 

 

 

1735 Market Street
Philadelphia, Pennsylvania

 

 

 

19103

(Address of principal executive
offices)

 

 

 

(Zip Code)

 

(610) 208-2000

Registrant’s telephone number, including area code

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o                                    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o                                    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o                                    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                                    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b.2 of this chapter).

 

Emerging growth company   o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o

 

 

 


 

Item 2.02 - Results of Operations and Financial Condition.

 

On April 25, 2019, Carpenter Technology Corporation issued a press release announcing fiscal 2019 third quarter results for the period ended March 31, 2019.  A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and shall not be deemed to be “filed” for any purpose.

 

Item 9.01 - Financial Statements and Exhibits

 

(d)         Exhibits

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release regarding earnings, dated April 25, 2019

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

CARPENTER TECHNOLOGY CORPORATION

 

 

 

 

 

 

 

 

By

/s/

Timothy Lain

 

 

 

Timothy Lain

 

 

 

Vice President and Chief Financial Officer

 

 

 

 

Date: April 26, 2019

 

 

 

 

2


Exhibit 99.1

 

 

Media Inquiries:

Investor Inquiries:

William J. Rudolph, Jr.

Brad Edwards

+1 610-208-3892

The Plunkett Group

wrudolph@cartech.com

+1 212-739-6740

 

brad@theplunkettgroup.com

 

CARPENTER TECHNOLOGY REPORTS THIRD QUARTER

FISCAL YEAR 2019 RESULTS

 

Reported earnings per share of $1.05

 

Net Sales of $610 million; sequential and year-over-year revenue growth across key end-use markets

 

Backlog up 9% sequentially and 44% year-over-year

 

Athens facility received four additional qualifications

 

PHILADELPHIA — April 25, 2019 — Carpenter Technology Corporation (NYSE: CRS) (the “Company”) today announced financial results for the fiscal third quarter ended March 31, 2019. For the quarter, the Company reported net income of $51.1 million, or $1.05 earnings per diluted share. The reported results included an $11.4 million, or $0.18 per share, benefit from an insurance recovery.

 

“Our third quarter results reflect the continued momentum we are driving across our core business as we delivered our ninth consecutive quarter of year-over-year earnings growth,” said Tony Thene, Carpenter Technology’s President and CEO.  “Our strong operational performance and healthy demand across our key end-use markets drove sequential volume growth and richer product mix.  Demand signals remain strong as backlog levels continue to increase, marking the eleventh consecutive quarter of growth.  We also continue to progress with obtaining the necessary qualifications for our Athens facility and received four additional qualifications in the current quarter.”

 

“From a commercial perspective, we generated sequential sales growth across four of our five end-use markets during the third quarter, which demonstrates our ability to capitalize on emerging demand and gain market

 


 

share. In addition, backlog increased 9% sequentially and 44% compared to last year. This includes Aerospace and Defense where backlog increased across all of our major sub-markets. Customer engagement levels related to Athens qualifications remain high and we are working diligently with our partners to secure additional approvals and provide critical incremental capacity for the industry. Other key commercial highlights in the quarter include the Medical market where we delivered robust sequential and year-over-year growth due to our high-value offerings and expanded direct customer relationships.”

 

“As we continue to drive our core business forward, we remain committed to maintaining a balance between executing in the short-term and investing for the long-term. Looking to the longer term, we continue to take innovative action in significant growth areas like soft magnetics and additive manufacturing to accelerate profitable revenue growth to deliver increasing value to shareholders in the years ahead.”

 

Financial Highlights

 

 

 

Q3

 

Q3

 

Q2

 

($ in millions)

 

FY2019

 

FY2018

 

FY2019

 

Net Sales

 

$

609.9

 

$

572.2

 

$

556.5

 

Net Sales Excluding Surcharge (a)

 

$

503.0

 

$

472.5

 

$

449.4

 

Operating Income

 

$

73.2

 

$

45.7

 

$

55.4

 

Operating Income Excluding Special Items (a)

 

$

73.2

 

$

45.7

 

$

56.6

 

Net Income

 

$

51.1

 

$

30.2

 

$

35.5

 

Cash Provided from Operating Activities

 

$

10.0

 

$

73.4

 

$

37.8

 

Free Cash Flow (a)

 

$

(37.0

)

$

34.5

 

$

(90.9

)

 


(a)         Non-GAAP financial measures explained in the attached tables

 

Net sales for the third quarter of fiscal year 2019 were $609.9 million compared with $572.2 million in the third quarter of fiscal year 2018, an increase of $37.7 million (6.6 percent), on 1.4 percent lower volume. Net sales excluding surcharge were $503.0 million, an increase of $30.5 million (6.5 percent) from the same period a year ago.

 

Operating income was $73.2 million compared to $45.7 million in the prior year period. These results primarily reflect strong commercial execution and improved end-use market conditions compared to the prior year

 


 

period. The current quarter’s results include an $11.4 million, or $0.18 per share, benefit related to an insurance recovery.

 

Cash provided from operating activities in the third quarter of fiscal year 2019 was $10.0 million, compared to $73.4 million in the same quarter last year. The decrease in operating cash flow primarily reflects increased inventory partially offset by higher earnings in the current year quarter. Free cash flow in the third quarter of fiscal year 2019 was negative $37.0 million, compared to positive $34.5 million in the same quarter last year. The decrease in free cash flow was primarily due to lower cash from operating activities as well as increased capital expenditures in the current year quarter. Capital expenditures were $49.0 million in the third quarter of fiscal year 2019 compared to $25.2 million in the same quarter last year due to ongoing investment in target growth areas including additive manufacturing and soft magnetics.

 

Total liquidity, including cash and available revolver balance, was $285.9 million at the end of the third quarter of fiscal year 2019. This consisted of $18.9 million of cash and $267.0 million of available borrowings under the Company’s credit facility.

 

Conference Call and Webcast Presentation

 

Carpenter Technology will host a conference call and webcast presentation today, April 25th at 10:00 a.m. ET, to discuss the financial results of operations for the third quarter of fiscal year 2019. Please dial +1 412-317-9259 for access to the live conference call. Access to the live webcast will be available at Carpenter Technology’s website (http://www.cartech.com), and a replay will soon be made available at http://www.cartech.com. Presentation materials used during this conference call will be available for viewing and download at http://www.cartech.com.

 

Non-GAAP Financial Measures

 

This press release includes discussions of financial measures that have not been determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP). A reconciliation of the non-GAAP financial measures

 


 

to their most directly comparable financial measures prepared in accordance with GAAP, accompanied by reasons why the Company believes the non-GAAP measures are important, are included in the attached schedules.

 

About Carpenter Technology

 

Carpenter Technology Corporation is a recognized leader in high-performance specialty alloy-based materials and process solutions for critical applications in the aerospace, defense, transportation, energy, industrial, medical, and consumer electronics markets. Founded in 1889, Carpenter Technology has evolved to become a pioneer in premium specialty alloys, including titanium, nickel, and cobalt, as well as alloys specifically engineered for additive manufacturing (AM) processes and soft magnetics applications. Carpenter Technology has expanded its AM capabilities to provide a complete “end-to-end” solution to accelerate materials innovation and streamline parts production. More information about Carpenter Technology can be found at www.cartech.com.

 

Forward-Looking Statements

 

This presentation contains forward-looking statements 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. The most significant of these uncertainties are described in Carpenter Technology’s filings with the Securities and Exchange Commission, including its report on Form 10-K for the year ended June 30, 2018, Form 10-Q for the quarters ended September 30, 2018 and December 31, 2018, and the exhibits attached to those filings. They include but are not limited to: (1) the cyclical nature of the specialty materials business and certain end-use markets, including aerospace, defense, industrial, transportation, consumer, medical, and energy, or other influences on Carpenter Technology’s business such as new competitors, the consolidation of competitors, customers, and suppliers or the transfer of manufacturing capacity from the United States to foreign countries; (2) the ability of Carpenter Technology to achieve cash generation, growth, earnings, profitability, operating income, cost savings and reductions, qualifications, productivity improvements or process changes; (3) the ability to recoup increases in the cost of energy, raw materials, freight or other factors; (4) domestic and foreign excess manufacturing capacity for certain metals; (5) fluctuations in currency exchange rates; (6) the effect of government trade actions; (7) the valuation of the assets and liabilities in Carpenter Technology’s pension trusts and the accounting for pension plans; (8) possible labor disputes or work stoppages; (9) the potential that our customers may substitute alternate materials or adopt different manufacturing practices that replace or limit the suitability of our products; (10) the ability to successfully acquire and integrate acquisitions, including LPW Technology Ltd.; (11) the availability of credit facilities to Carpenter Technology, its customers or other members of the supply chain; (12) the ability to obtain energy or raw materials, especially from suppliers located in countries that may be subject to unstable political or economic conditions; (13) Carpenter Technology’s manufacturing processes are dependent upon highly specialized equipment located primarily in facilities in Reading and Latrobe, Pennsylvania and Athens, Alabama for which there may be limited alternatives if there are significant equipment failures or a catastrophic event; (14) the ability to hire and retain key personnel, including members of the executive management team, management, metallurgists and other skilled personnel; and (15) fluctuations in oil

 


 

and gas prices and production. Any of these factors could have an adverse and/or fluctuating effect on Carpenter Technology’s results of operations. The forward-looking statements in this document are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Carpenter Technology undertakes no obligation to update or revise any forward-looking statements.

 


 

PRELIMINARY

CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

NET SALES

 

$

609.9

 

$

572.2

 

$

1,738.8

 

$

1,539.7

 

Cost of sales

 

486.7

 

476.2

 

1,416.9

 

1,272.3

 

Gross profit

 

123.2

 

96.0

 

321.9

 

267.4

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

50.0

 

50.3

 

148.3

 

138.1

 

Operating income

 

73.2

 

45.7

 

173.6

 

129.3

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(7.1

)

(7.5

)

(20.3

)

(22.0

)

Other income (expense), net

 

1.9

 

(0.5

)

0.1

 

(0.7

)

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

68.0

 

37.7

 

153.4

 

106.6

 

Income tax expense (benefit)

 

16.9

 

7.5

 

35.3

 

(39.1

)

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

51.1

 

$

30.2

 

$

118.1

 

$

145.7

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

Basic

 

$

1.06

 

$

0.63

 

$

2.45

 

$

3.06

 

Diluted

 

$

1.05

 

$

0.63

 

$

2.43

 

$

3.04

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

 

 

 

 

 

 

 

 

 

Basic

 

47.7

 

47.2

 

47.7

 

47.2

 

Diluted

 

48.1

 

47.7

 

48.1

 

47.5

 

 

 

 

 

 

 

 

 

 

 

Cash dividends per common share

 

$

0.20

 

$

0.18

 

$

0.60

 

$

0.54

 

 


 

PRELIMINARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(Unaudited)

 

 

 

Nine Months Ended

 

 

 

March 31,

 

 

 

2019

 

2018

 

OPERATING ACTIVITIES:

 

 

 

 

 

Net income

 

$

118.1

 

$

145.7

 

Adjustments to reconcile net income to net cash provided from operating activities:

 

 

 

 

 

Depreciation and amortization

 

90.9

 

87.2

 

Deferred income taxes

 

7.0

 

(68.9

)

Net pension expense

 

8.7

 

10.6

 

Share-based compensation expense

 

12.7

 

12.8

 

Net loss on disposals of property and equipment and assets held for sale

 

0.7

 

2.0

 

Gain on insurance recovery

 

(11.4

)

 

Changes in working capital and other:

 

 

 

 

 

Accounts receivable

 

(12.1

)

(54.4

)

Inventories

 

(168.3

)

(41.1

)

Other current assets

 

7.6

 

(15.6

)

Accounts payable

 

36.6

 

16.9

 

Accrued liabilities

 

(25.2

)

5.5

 

Pension plan contributions

 

(4.3

)

(5.7

)

Other postretirement plan contributions

 

(2.5

)

(2.5

)

Other, net

 

(1.3

)

(1.8

)

Net cash provided from operating activities

 

57.2

 

90.7

 

INVESTING ACTIVITIES:

 

 

 

 

 

Purchases of property, plant, equipment and software

 

(130.7

)

(80.9

)

Proceeds from disposals of property, plant and equipment and assets held for sale

 

0.3

 

2.0

 

Acquisition of businesses, net of cash acquired

 

(79.0

)

(13.3

)

Proceeds from sales of marketable securities

 

2.9

 

 

Proceeds from note receivable from the sale of equity method investment

 

 

6.3

 

Proceeds from insurance recovery

 

11.4

 

 

Net cash used for investing activities

 

(195.1

)

(85.9

)

FINANCING ACTIVITIES:

 

 

 

 

 

Net change in short-term credit agreement borrowings

 

127.0

 

 

Dividends paid

 

(28.9

)

(25.8

)

Proceeds from stock options exercised

 

3.7

 

4.5

 

Withholding tax payments on share-based compensation awards

 

(4.4

)

(0.9

)

Net cash provided from (used for) financing activities

 

97.4

 

(22.2

)

Effect of exchange rate changes on cash and cash equivalents

 

3.2

 

(2.1

)

DECREASE IN CASH AND CASH EQUIVALENTS

 

(37.3

)

(19.5

)

Cash and cash equivalents at beginning of period

 

56.2

 

66.3

 

Cash and cash equivalents at end of period

 

$

18.9

 

$

46.8

 

 


 

PRELIMINARY

CONSOLIDATED BALANCE SHEETS

(in millions)

(Unaudited)

 

 

 

March 31,

 

June 30,

 

 

 

2019

 

2018

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

18.9

 

$

56.2

 

Accounts receivable, net

 

390.1

 

378.5

 

Inventories

 

861.0

 

689.2

 

Other current assets

 

39.2

 

54.9

 

Total current assets

 

1,309.2

 

1,178.8

 

Property, plant and equipment, net

 

1,350.8

 

1,313.4

 

Goodwill

 

327.9

 

268.7

 

Other intangibles, net

 

69.4

 

63.3

 

Deferred income taxes

 

4.6

 

4.3

 

Other assets

 

178.3

 

178.5

 

Total assets

 

$

3,240.2

 

$

3,007.0

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Short-term credit agreement borrowings

 

$

127.0

 

$

 

Accounts payable

 

252.0

 

214.7

 

Accrued liabilities

 

138.4

 

148.6

 

Total current liabilities

 

517.4

 

363.3

 

Long-term debt

 

549.0

 

545.7

 

Accrued pension liabilities

 

280.1

 

288.8

 

Accrued postretirement benefits

 

109.7

 

108.2

 

Deferred income taxes

 

159.8

 

161.6

 

Other liabilities

 

66.6

 

53.5

 

Total liabilities

 

1,682.6

 

1,521.1

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

Common stock

 

279.0

 

278.6

 

Capital in excess of par value

 

319.6

 

310.0

 

Reinvested earnings

 

1,566.1

 

1,475.9

 

Common stock in treasury, at cost

 

(335.6

)

(338.8

)

Accumulated other comprehensive loss

 

(271.5

)

(239.8

)

Total stockholders’ equity

 

1,557.6

 

1,485.9

 

Total liabilities and stockholders’ equity

 

$

3,240.2

 

$

3,007.0

 

 


 

PRELIMINARY

SEGMENT FINANCIAL DATA

(in millions, except pounds sold)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

March 31,

 

March 31,

 

 

 

2019

 

2018

 

2019

 

2018

 

Pounds sold (000):

 

 

 

 

 

 

 

 

 

Specialty Alloys Operations

 

65,296

 

66,866

 

189,678

 

188,136

 

Performance Engineered Products

 

3,540

 

2,946

 

9,572

 

9,754

 

Intersegment

 

(918

)

(914

)

(1,798

)

(5,382

)

Consolidated pounds sold

 

67,918

 

68,898

 

197,452

 

192,508

 

 

 

 

 

 

 

 

 

 

 

Net sales:

 

 

 

 

 

 

 

 

 

Specialty Alloys Operations

 

 

 

 

 

 

 

 

 

Net sales excluding surcharge

 

$

393.3

 

$

381.3

 

$

1,111.0

 

$

1,038.7

 

Surcharge

 

105.0

 

101.1

 

324.4

 

246.9

 

Specialty Alloys Operations net sales

 

498.3

 

482.4

 

1,435.4

 

1,285.6

 

 

 

 

 

 

 

 

 

 

 

Performance Engineered Products

 

 

 

 

 

 

 

 

 

Net sales excluding surcharge

 

125.9

 

107.5

 

343.3

 

312.6

 

Surcharge

 

2.8

 

0.4

 

10.1

 

0.8

 

Performance Engineered Products net sales

 

128.7

 

107.9

 

353.4

 

313.4

 

 

 

 

 

 

 

 

 

 

 

Intersegment

 

 

 

 

 

 

 

 

 

Net sales excluding surcharge

 

(16.2

)

(16.3

)

(45.5

)

(53.5

)

Surcharge

 

(0.9

)

(1.8

)

(4.5

)

(5.8

)

Intersegment net sales

 

(17.1

)

(18.1

)

(50.0

)

(59.3

)

 

 

 

 

 

 

 

 

 

 

Consolidated net sales

 

$

609.9

 

$

572.2

 

$

1,738.8

 

$

1,539.7

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

Specialty Alloys Operations

 

$

73.6

 

$

58.0

 

$

195.3

 

$

158.3

 

Performance Engineered Products

 

16.6

 

5.4

 

28.3

 

18.1

 

Corporate costs

 

(17.3

)

(18.0

)

(51.5

)

(44.9

)

Intersegment

 

0.3

 

0.3

 

1.5

 

(2.2

)

Consolidated operating income

 

$

73.2

 

$

45.7

 

$

173.6

 

$

129.3

 

 

The Company has two reportable segments, Specialty Alloys Operations (“SAO”) and Performance Engineered Products (“PEP”).

 

The SAO segment is comprised of Carpenter’s major premium alloy and stainless steel manufacturing operations.  This includes operations performed at mills primarily in Reading and Latrobe, Pennsylvania and surrounding areas as well as South Carolina and Alabama.

 


 

The PEP segment is comprised of the Company’s differentiated operations. This segment includes the Dynamet titanium business, the Carpenter Powder Products (CPP) business, the Amega West business, the CalRAM business, the LPW Technology Ltd. (LPW) business and the Latrobe and Mexico distribution businesses. The businesses in the PEP segment are managed with an entrepreneurial structure to promote flexibility and agility to quickly respond to market dynamics.  It is our belief this model will ultimately drive overall revenue and profit growth.  The pounds sold data above for the PEP segment includes only the Dynamet, CPP and LPW businesses.

 

Corporate costs are comprised of executive and director compensation, and other corporate facilities and administrative expenses not allocated to the segments. Also included are items that management considers not representative of ongoing operations and other specifically-identified income or expense items.

 

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 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 and is included in other income (expense), net.

 


 

PRELIMINARY

NON-GAAP FINANCIAL MEASURES

(in millions, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

March 31,

 

March 31,

 

OPERATING MARGIN EXCLUDING SURCHARGE AND
SPECIAL ITEMS

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

609.9

 

$

572.2

 

$

1,738.8

 

$

1,539.7

 

Less: surcharge

 

106.9

 

99.7

 

330.0

 

241.9

 

Net sales excluding surcharge

 

$

503.0

 

$

472.5

 

$

1,408.8

 

$

1,297.8

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

$

73.2

 

$

45.7

 

$

173.6

 

$

129.3

 

Special items:

 

 

 

 

 

 

 

 

 

Acquisition-related costs

 

 

 

1.2

 

 

Operating income excluding special items

 

$

73.2

 

$

45.7

 

$

174.8

 

$

129.3

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

12.0

%

8.0

%

10.0

%

8.4

%

 

 

 

 

 

 

 

 

 

 

Operating margin excluding surcharge and special items

 

14.6

%

9.7

%

12.4

%

10.0

%

 

Management believes that removing the impact of raw material surcharge from operating margin provides a more consistent basis for comparing results of operations from period to period, thereby permitting management to evaluate performance and investors to make decisions based on the ongoing operations of the Company.  In addition, management also believes that excluding the impact of the special items is helpful in analyzing the operating performance of the Company, as these items are not indicative of ongoing operating performance.  Management uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company’s board of directors and others.

 

ADJUSTED EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS

 

Income
Before
Income
Taxes

 

Income Tax
Expense

 

Net Income

 

Earnings Per
Diluted
Share

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2019, as reported

 

$

68.0

 

$

(16.9

)

$

51.1

 

$

1.05

 

Special items:

 

 

 

 

 

 

 

 

 

None reported

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months March 31, 2019, as adjusted

 

$

68.0

 

$

(16.9

)

$

51.1

 

$

1.05

 

 


 

ADJUSTED EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS

 

Income
Before
Income
Taxes

 

Income Tax
Expense

 

Net Income

 

Earnings Per
Diluted
Share*

 

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2018, as reported

 

$

37.7

 

$

(7.5

)

$

30.2

 

$

0.63

 

Special items:

 

 

 

 

 

 

 

 

 

Impact of US tax reform and other legislative changes

 

 

(1.6

)

(1.6

)

(0.03

)

 

 

 

 

 

 

 

 

 

 

Three months ended March 31, 2018, as adjusted

 

$

37.7

 

$

(9.1

)

$

28.6

 

$

0.60

 

 


* Impact per diluted share calculated using weighted average common shares outstanding of 47.7 million for the three months ended March 31, 2018.

 

ADJUSTED EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS

 

Income
Before
Income
Taxes

 

Income Tax
Expense

 

Net Income

 

Earnings Per
Diluted
Share*

 

Nine months ended March 31, 2019, as reported

 

$

153.4

 

$

(35.3

)

$

118.1

 

$

2.43

 

Special items:

 

 

 

 

 

 

 

 

 

Acquisition-related costs

 

1.2

 

 

1.2

 

0.03

 

 

 

 

 

 

 

 

 

 

 

Nine months ended March 31, 2019, as adjusted

 

$

154.6

 

$

(35.3

)

$

119.3

 

$

2.46

 

 


* Impact per diluted share calculated using weighted average common shares outstanding of 48.1 million for the nine months ended March 31, 2019.

 

ADJUSTED EARNINGS PER SHARE
EXCLUDING SPECIAL ITEMS

 

Income
Before
Income
Taxes

 

Income Tax
Benefit
(Expense)

 

Net Income

 

Earnings Per
Diluted
Share*

 

Nine months ended March 31, 2018, as reported

 

$

106.6

 

$

39.1

 

$

145.7

 

$

3.04

 

Special items:

 

 

 

 

 

 

 

 

 

Impact of US tax reform and other legislative changes

 

 

(67.6

)

(67.6

)

(1.41

)

 

 

 

 

 

 

 

 

 

 

Nine months ended March 31, 2018, as adjusted

 

$

106.6

 

$

(28.5

)

$

78.1

 

$

1.63

 

 


* Impact per diluted share calculated using weighted average common shares outstanding of 47.5 million for the nine months ended March 31, 2018.

 

Management believes that earnings per share adjusted to exclude the impact of the special items is helpful in analyzing the operating performance of the Company, as these items are not indicative of ongoing operating

 


 

performance. Management uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company’s board of directors and others.

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

March 31,

 

March 31,

 

FREE CASH FLOW

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

Net cash provided from operating activities

 

$

10.0

 

$

73.4

 

$

57.2

 

$

90.7

 

Purchases of property, plant, equipment and software

 

(49.0

)

(25.2

)

(130.7

)

(80.9

)

Proceeds from disposals of property, plant and equipment and assets held for sale

 

0.2

 

1.9

 

0.3

 

2.0

 

Acquisition of businesses, net of cash acquired

 

 

(13.3

)

(79.0

)

(13.3

)

Proceeds from note receivable from the sale of equity method investment

 

 

6.3

 

 

6.3

 

Proceeds from insurance recovery

 

11.4

 

 

11.4

 

 

Dividends paid

 

(9.6

)

(8.6

)

(28.9

)

(25.8

)

 

 

 

 

 

 

 

 

 

 

Free cash flow

 

$

(37.0

)

$

34.5

 

$

(169.7

)

$

(21.0

)

 

Management believes that the free cash flow measure provides useful information to investors regarding our financial condition because it is a measure of cash generated which management evaluates for alternative uses.

 


 

PRELIMINARY

SUPPLEMENTAL SCHEDULE

(in millions)

(Unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

March 31,

 

March 31,

 

NET SALES BY END-USE MARKET

 

2019

 

2018

 

2019

 

2018

 

End-Use Market Excluding Surcharge:

 

 

 

 

 

 

 

 

 

Aerospace and Defense

 

$

273.8

 

$

260.5

 

$

747.6

 

$

696.5

 

Medical

 

47.1

 

37.6

 

125.0

 

108.2

 

Energy

 

40.8

 

33.3

 

114.7

 

91.0

 

Transportation

 

33.5

 

33.9

 

94.3

 

94.2

 

Industrial and Consumer

 

71.9

 

72.2

 

224.0

 

214.0

 

Distribution

 

35.9

 

35.0

 

103.2

 

93.9

 

 

 

 

 

 

 

 

 

 

 

Total net sales excluding surcharge

 

503.0

 

472.5

 

1,408.8

 

1,297.8

 

 

 

 

 

 

 

 

 

 

 

Surcharge

 

106.9

 

99.7

 

330.0

 

241.9

 

 

 

 

 

 

 

 

 

 

 

Total net sales

 

$

609.9

 

$

572.2

 

$

1,738.8

 

$

1,539.7