Precision Castparts Corp. Reports Third Quarter Fiscal 2013 Earnings

Precision Castparts Corp. Reports Third Quarter Fiscal 2013 Earnings

                     Third Quarter Fiscal 2013 Highlights

  *Closed five acquisitions, including Timet and Synchronous
  *EPS from continuing operations of $2.32 (diluted), including $0.08 of
    acquisition-related expenses
  *Consolidated segment operating income margin of 25.5%

PORTLAND, Ore., Jan. 24, 2013 (GLOBE NEWSWIRE) -- Precision Castparts Corp.
(NYSE:PCP) delivered solid top- and bottom-line performance in the third
quarter of fiscal 2013, driven by strong Airframe Products commercial
aerospace sales, steady Forged Products recovery from its press outages,
continued growth in industrial gas turbine (IGT) sales, accelerating shipments
of downhole casing for the oil & gas market, and further upside from recently
closed acquisitions.

Third Quarter Fiscal 2013 Financial Highlights

Sales totaled $2.0 billion in the third quarter of fiscal 2013, growing 13
percent over sales of $1.8 billion in the same period last year.Consolidated
segment operating income improved by 13 percent year over year, rising to
$520.6 million, or 25.5 percent of sales, in the quarter (including the
incorporation of several lower-margin businesses), versus consolidated segment
operating income of $460.1 million, or 25.5 percent of sales, a year ago. The
Titanium Metals Corporation (Timet) acquisition, as well as other acquisition
activity during the quarter, resulted in approximately $18 million, or $(0.08)
per share (diluted), of higher corporate and financing expense in the third
quarter.The corporate charges reduced net operating income by 0.4 percentage
points.Net income from continuing operations (attributable to PCC) in the
third quarter was $339.9 million, an increase of 10 percent over net income of
$309.7 million in the third quarter of fiscal 2012. In the quarter, the
Company delivered earnings per share (EPS) from continuing operations
(attributable to PCC) of $2.32 (diluted, based on 146.8 million shares
outstanding), compared to $2.13 (diluted, based on 145.6 million shares
outstanding) last year.

Third quarter fiscal 2013 results include the addition of a full quarter of
RathGibson, Centra Industries, Klune, Progressive (Heroux-Devtek assets),
Aerocraft Heat Treating, and Dickson Testing, as well as partial results from
Texas Honing and Synchronous.Timet had an immaterial impact on the quarter's
results.In addition, on a sequential basis, all three operating segments
averaged three fewer manufacturing days due to holidays during the third

Including discontinued operations, Precision Castparts' net income
(attributable to PCC) for the third quarter of fiscal 2013 totaled $338.0
million, or $2.30 per share (diluted).

Business Highlights

Investment Cast Products: Investment Cast Products grew year-over-year sales
by 5 percent in the third quarter of fiscal 2013, increasing to $612.6 million
from $582.1 million a year ago.The segment's aerospace OEM business continues
to be aligned with current commercial aircraft production rates; future ramps
in aircraft build schedules will serve as the catalyst for increased aerospace
growth approximately six months in advance of these step-ups.On the power
side, IGT sales grew more than 20 percent over the same quarter last year,
driven by strong spares sales and solid OEM activity.The segment continued to
deliver strong performance across its production facilities, delivering
incremental margins in excess of 50 percent.Third quarter operating income of
$209.2 million, or 34.1 percent of sales, marked an 8 percent improvement over
operating income of $193.0 million, or 33.2 percent of sales, last
year.Contractual material pass-through pricing for Investment Cast Products
was relatively flat year over year.

Forged Products: Total sales for Forged Products in the third quarter
increased by 9 percent, climbing to $833.2 million, versus sales of $768.0
million in the same period last year.This segment is driven by the same basic
commercial aerospace dynamics as Investment Cast Products.The 29,000-ton
forging press in Houston has returned to operation but, as anticipated,
continues to produce sub-optimal runs to meet specific customer requirements,
resulting in further inefficiencies from increased press set-ups, the use of
outside services, and rerouting parts.The business still faces delinquencies
on high pressure turbine discs of more than $30 million, which should be
purged out of the system over the next two quarters.In the oil and gas
market, Forged Products increased sales by more than 30 percent.The segment
has established a solid production and shipping process for downhole casing,
with deliveries steadily improving throughout the quarter and into fiscal
2014.The segment reported operating income of $173.8 million, or 20.9 percent
of sales, in the third quarter, compared to operating income of $172.1
million, or 22.4 percent of sales, last year, due primarily to inefficiencies
associated with meeting short-cycle customer demand on the 29,000-ton forging
press and increased volume of downhole casing, which currently carries lower
margins due to embedded learning curve costs.Contractual material
pass-through pricing was relatively flat year over year, and selling prices of
metal at the segment's three primary mills were approximately $11 million
lower than a year ago.

Airframe Products: Airframe Products' third quarter sales showed a
year-over-year improvement of 32 percent, accelerating to $597.4 million,
compared to sales of $452.3 million in last fiscal year's third quarter. The
segment delivered strong organic growth in commercial aerospace with a 13
percent increase over last year, reflecting Airframe Products' solid position
on all major large commercial aircraft platforms.The segment's core fastener
production rates continue to ramp steadily, with effective leverage of these
higher volumes, and the aerostructures businesses are showing solid gains in
both sales and operating income.By driving productivity and machine
utilization improvements, the base aerostructures operations are opening up
significant untapped capacity, and the recent acquisitions are providing
Airframe Products with new capabilities and capacity, all of which will
benefit both the customers and the segment as higher volumes flow over these
fixed assets.The segment's operating income increased by 43 percent in the
third quarter to $180.1 million, or 30.1 percent of sales, versus $125.7
million, or 27.8 percent of sales last year, including the impact from the
results of lower-margin acquisitions.

"Each of the segments had its own unique operational profile during the third
quarter," said Mark Donegan, chairman and chief executive officer of Precision
Castparts Corp."Investment Cast Products, which is solidly positioned on all
major commercial aircraft programs, is producing at the currently published
production rates and continues to leverage this throughput very
effectively.Future rate increases will drive this segment's growth, along
with any acceleration in the commercial aftermarket and the IGT
market.Airframe Products showed solid year-over-year aerospace growth, with
strong leverage as critical aerospace fastener volumes continued to accelerate
after an extended period of destocking.We are continuing to open up latent
capacity in our base aerostructures businesses through improved productivity
and machine utilization.In addition, our recent acquisitions bring us not
only new capabilities but also production assets from which we will use the
same operating models to extract even more capacity, enabling us to deliver
greater value to customers and shareholders as volumes increase.Finally,
Forged Products fought a tough uphill battle in the quarter to recover from
the outage of one of its primary fixed assets during the first and second
quarter.To support sub-optimal production runs, the Houston aerospace
operations faced continued inefficiencies throughout the quarter and must
still work through significant delinquencies before production moves at a more
normalized rate.However, in the process, we lost no orders, and we are
committed to keeping up with our customers' expectations.We are also now
producing the large downhole casing orders in meaningful quantities, with
these early shipments bearing the burden of initial development costs.These
production rates will continue to accelerate into fiscal 2014, and
interconnect pipe sales are beginning to improve as well.

"In addition to all the upside potential in our current operations, the
acquisition of Timet will be a significant needle mover, a true accelerator
for Precision Castparts on many different fronts," Donegan said."We
successfully faced the challenge of getting approval from three independent
regulatory agencies and closed the transaction only six weeks after the
announcement of the acquisition.Now we are moving out on all fronts to
extract value from Timet's worldwide operations.To begin with, we have
multiple opportunities to improve existing Timet manufacturing operations,
applying our manufacturing disciplines, driving out costs, and positioning
those operations for improved sales.On top of that, the synergies of our two
companies are remarkable: better vertical integration, increased revert
availability and utilization, higher volumes across our forging assets, and
additional market penetration, among others.At this point, we believe
synergies of $80-100 million are well within reach over the first 24 to 36
months.The integration has already begun in full force, and the plans for
future value creation are actively being rolled out throughout all of our
manufacturing operations."

At the end of the third quarter, cash was $483.3 million, with debt at $3.8

Precision Castparts is hosting a conference call to discuss the above
financial results today at 7:00 a.m. Pacific Time.

NOTE: The presentation charts are immediately available on the Company's web

Individuals interested in monitoring the webcast should paste the following
address into their browser for access to the live conference link:

This link will provide both audio and video through the Internet
connection.You may use the following link to check your computer system's
compatibility any time prior to the call:

For Webcast assistance, please dial (888) 569-3848 or (719) 785-6626.

Those interested in asking questions following the earnings presentation must
dial in for audio access to(877) 857-6163, Access Code: 4248390.Dial *0 for
technical assistance with dial-in access.In order to assure the conference
begins in a timely manner, please dial in 10 to 15 minutes prior to the
scheduled start time.

You may also gain access to the webcast through Precision Castparts Corp.'s
corporate website:

Following the conference call, you may replay the conference by calling (888)
203-1112 or (719) 457-0820; the replay pass code is 4248390.

Precision Castparts Corp. is a worldwide, diversified manufacturer of complex
metal components and products.It serves the aerospace, power, and general
industrial markets.PCC is the market leader in manufacturing large, complex
structural investment castings, airfoil castings, forged components and highly
engineered, critical fasteners for aerospace applications. The Company is
also the leading producer of airfoil castings for the industrial gas turbine
market. In addition, PCC manufactures extruded seamless pipe, fittings,
forgings, and clad products for power generation and oil & gas applications;
commercial and military airframe aerostructures; and metal alloys and other
materials to the casting, forging, and other industries.

The Precision Castparts Corp. logo is available at

Information included within this press release describing the projected growth
and future results and events constitutes forward-looking statements, within
the meaning of the Private Securities Litigation Reform Act of 1995. Actual
results in future periods may differ materially from the forward-looking
statements because of a number of risks and uncertainties, including but not
limited to fluctuations in the aerospace, power generation, and general
industrial cycles; the relative success of our entry into new markets;
competitive pricing; the financial viability of our significant customers; the
concentration of a substantial portion of our business with a relatively small
number of key customers; the impact on the Company of customer or supplier
labor disputes; demand, timing and market acceptance of new commercial and
military programs, including the Boeing 787; the availability and cost of
energy, raw materials, supplies, and insurance; the cost of pension and
postretirement medical benefits; equipment failures; product liability claims;
relations with our employees; our ability to manage our operating costs and to
integrate acquired businesses in an effective manner, including the ability to
realize expected synergies; misappropriation of our intellectual property
rights; governmental regulations and environmental matters; risks associated
with international operations and world economies; the relative stability of
certain foreign currencies; the impact of adverse weather conditions or
natural disasters; the availability and cost of financing; and implementation
of new technologies and process improvements. Any forward-looking statements
should be considered in light of these factors. We undertake no obligation to
update any forward-looking information to reflect anticipated or unanticipated
events or circumstances after the date of this document.

Precision Castparts Corp.'s press releases are available on the Internet at
GlobeNewswire's website – or PCC's home page at you wish to be removed from this list, please reply

(Unaudited; in millions, except per share data)
                              Three Months Ended      Nine Months Ended
                              December 30, January 1, December 30, January 1,
                               2012         2012       2012         2012
Net sales                      $2,043.2   $1,802.4 $5,939.7   $5,256.2
Costs and expenses:                                              
Cost of goods sold             1,387.0     1,231.0   4,028.8     3,610.3
Selling and administrative     135.6       111.3     376.8       327.5
Interest expense               11.9        3.9       18.2        10.0
Interest income                (1.6)       (1.6)     (4.8)       (5.3)
Total costs and expenses       1,532.9     1,344.6   4,419.0     3,942.5
Income before income tax
expense and equity in earnings 510.3       457.8     1,520.7     1,313.7
of unconsolidated affiliates
Income tax expense             (168.1)     (151.8)   (503.8)     (432.5)
Equity in earnings of          (1.8)       4.1       1.3         11.4
unconsolidated affiliates
Net income from continuing     340.4       310.1     1,018.2     892.6
Net loss from discontinued     (1.9)       (2.4)     (4.5)       (3.4)
Net income                     338.5       307.7     1,013.7     889.2
Net income attributable to     (0.5)       (0.4)     (1.3)       (1.2)
noncontrolling interests
Net income attributable to
Precision Castparts Corp.      $338.0     $307.3   $1,012.4   $888.0
Net income per common share
attributable to PCC                                              
shareholders – basic:
Net income per share from      $2.33      $2.14    $6.99      $6.19
continuing operations
Net loss per share from        (0.01)      (0.01)    (0.03)      (0.03)
discontinued operations
Net income per share           $2.32      $2.13    $6.96      $6.16
Net income per common share
attributable to PCC                                              
shareholders – diluted:
Net income per share from      $2.32      $2.13    $6.94      $6.13
continuing operations
Net loss per share from        (0.02)      (0.02)    (0.03)      (0.02)
discontinued operations
Net income per share           $2.30      $2.11    $6.91      $6.11
Weighted average common shares                                   
Basic                          145.8       144.4     145.5       144.1
Diluted                        146.8       145.6     146.5       145.4
                              Three Months Ended      Nine Months Ended
                              December 30, January 1, December 30, January 1,
                               2012         2012       2012         2012
Sales by Segment                                                 
Investment Cast Products       $612.6     $582.1   $1,844.7   $1,724.2
Forged Products                833.2       768.0     2,447.9     2,321.7
Airframe Products              597.4       452.3     1,647.1     1,210.3
Total                          $2,043.2   $1,802.4 $5,939.7   $5,256.2
Segment Operating Income                                         
Investment Cast Products       $209.2     $193.0   $624.1     $570.0
Forged Products                173.8       172.1     524.2       492.2
Airframe Products              180.1       125.7     492.9       348.6
Corporate expense              (42.5)      (30.7)    (107.1)     (92.4)
Consolidated segment operating 520.6       460.1     1,534.1     1,318.4
Interest expense               11.9        3.9       18.2        10.0
Interest income                (1.6)       (1.6)     (4.8)       (5.3)
Income before income tax
expense and equity in earnings $510.3     $457.8   $1,520.7   $1,313.7
of unconsolidated affiliates
^1Reported results for the three and nine months ended January 1, 2012 have
been restated for discontinued operations.
^2Operating income represents earnings before interest, income tax expense,
and equity in earnings of unconsolidated affiliates.

(Unaudited; in millions)
                                                December 30, April 1,
                                                 2012         2012
Cash and Debt Balances                                       
Cash                                             $483.3     $698.7
Total Debt                                       $3,825.7   $208.2
Total Equity                                     $9,890.5   $8,364.8
Total Debt, as % of Total Capitalization         27.9 %       2.4 %
Working Capital Items^1                                      
Receivables, Net                                 $1,408.7   $1,186.4
Inventories                                      3,049.8     1,815.3
Accounts Payable                                 802.4       713.7
Total                                            $3,656.1   $2,288.0
                                                Three Months Ended
                                                December 30, January 1,
                                                 2012         2012
Selected Cash Flow Items^1                                   
Depreciation and Amortization                    $52.6      $43.0
Capital Expenditures                             $78.3      $37.2
Acquisitions of Businesses, Net of Cash Acquired $3,107.5   $140.4
^1 Reported results exclude discontinued operations.

CONTACT: Dwight Weber, Director of Communications (503) 946-4855

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