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Carpenter Technology Provides Update on Expected Second Quarter Results; Expresses Confidence in Underlying Demand Strength for

  Carpenter Technology Provides Update on Expected Second Quarter Results;
  Expresses Confidence in Underlying Demand Strength for Premium and
  Ultra-Premium Products

Business Wire

WYOMISSING, Pa. -- January 15, 2013

Carpenter Technology Corporation (NYSE:CRS) today reported that it expects net
sales, excluding surcharge, of $431 million for its second fiscal quarter
ended December 31, 2012. This compares to $441 million reported in the first
fiscal quarter of 2013, and is 30 percent higher than the second quarter of
fiscal year 2012. Carpenter continued to see strong demand for its Premium and
Ultra-Premium products sold into the Aerospace and Energy markets, but saw
weaker demand in lower value product lines, which were impacted by current
economic uncertainty.

Carpenter now expects second quarter earnings per diluted share to be
approximately $0.61 to $0.62, which is about 20 percent higher than the prior
fiscal second quarter, but below the $0.74 per diluted share reported in the
first quarter of fiscal year 2013. The earnings increase versus Q2 2012 was
driven primarily by the acquisition of Latrobe, which is delivering higher
than expected synergies, and improved overall pricing/mix actions. The
sequential reduction in earnings versus Q1 2013 is due to weaker Performance
Engineered Products (PEP) segment performance, softer demand for lower value
mill products, and the impact of production balancing within Specialty Alloys
Operations (SAO).

“We continue to see strong end-market demand for our Premium and Ultra-Premium
products where we remain capacity constrained, and are delivering above target
near-term Latrobe synergies,” said William A. Wulfsohn, President and Chief
Executive Officer. “We also see uncertainty in demand for lower value mill
products and are performing below plan in the PEP business segment. Therefore,
we currently expect full year operating income improvement of 20 to 30 percent
versus our last fiscal year. We are confident in the strategic actions we are
taking, and remain on track to deliver our mid-decade earnings target.”

The fiscal year 2013 earnings target excludes the anticipated financial impact
from selling the Latrobe distribution business, and one-time costs associated
with the inventory reduction initiative and footprint optimization actions
that will be outlined in further detail during the upcoming investor call.

As previously announced, Carpenter will report its second quarter results on
Thursday, January 31, 2013 and host a conference call and webcast at 10:00
a.m., Eastern Time on that day to discuss more fully the results of
operations, refine its full fiscal year targets and further review management
actions to drive its longer term strategy.

About Carpenter Technology

Carpenter produces and distributes premium alloys, including special alloys,
titanium alloys and powder metals, as well as stainless steels, and alloy and
tool steels. Information about Carpenter can be found on the Internet at
http://www.cartech.com.

Forward-Looking Statements

This press release 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, expected, anticipated or implied. 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 for the year ended June 30, 2012, the 10Q for the quarter ending
September 30, 2012 and the exhibits attached to those filing. They include but
are not limited to: (1) expectations with respect to the synergies, costs and
other anticipated financial impacts of the Latrobe acquisition transaction
could differ from actual synergies realized, costs incurred and financial
impacts experienced as a result of the transaction; (2) 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’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;(3) the
ability of Carpenter to achieve cost savings, productivity improvements or
process changes; (4) the ability to recoup increases in the cost of energy,
raw materials, freight or other factors; (5) domestic and foreign excess
manufacturing capacity for certain metals; (6) fluctuations in currency
exchange rates; (7) the degree of success of government trade actions; (8) the
valuation of the assets and liabilities in Carpenter’s pension trusts and the
accounting for pension plans; (9) possible labor disputes or work stoppages;
(10) the potential that our customers may substitute alternate materials or
adopt different manufacturing practices that replace or limit the suitability
of our products; (11) the ability to successfully acquire and integrate
acquisitions, including the Latrobe acquisition; (12) the availability of
credit facilities to Carpenter, its customers or other members of the supply
chain; (13) the ability to obtain energy or raw materials, especially from
suppliers located in countries that may be subject to unstable political or
economic conditions; (14) Carpenter’s manufacturing processes are dependent
upon highly specialized equipment located primarily in facilities in Reading
and Latrobe, Pennsylvania for which there may be limited alternatives if there
are significant equipment failures or catastrophic event; and (15) Carpenter’s
future success depends on the continued service and availability of key
personnel, including members of our executive management team, management,
metallurgists and other skilled personnel and the loss of these key personnel
could affect our ability to perform until suitable replacements are found. Any
of these factors could have an adverse and/or fluctuating effect on
Carpenter’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, and Section 21E of the
Securities Exchange Act of 1934, as amended. Carpenter undertakes no
obligation to update or revise any forward-looking statements.

Contact:

Carpenter Technology Corporation
Media Inquiries:
William J. Rudolph, Jr., 610-208-3892
wrudolph@cartech.com
or
Investor Inquiries:
Michael A. Hajost, 610-208-3476
mhajost@cartech.com
 
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