Precision Castparts Corp. Reports Fourth Quarter Fiscal 2013 Earnings

Precision Castparts Corp. Reports Fourth Quarter Fiscal 2013 Earnings

                    Fourth Quarter Fiscal 2013 Highlights

  *Record sales of $2.44 billion and EPS of $2.82 from continuing operations
  *Consolidated segment operating margin of 25.7%
  *Rapid Timet integration and achievement of synergies
  *Cash generation of $437 million, excluding cash paid for acquisitions,
    stock repurchases, and debt repayments

PORTLAND, Ore., May 9, 2013 (GLOBE NEWSWIRE) -- Precision Castparts Corp.
(NYSE:PCP) continued to effectively leverage sales in its major markets in the
fourth quarter of 2013, driven by year-over-year growth in commercial OEM
aerospace demand, steady improvement in industrial gas turbine (IGT) spares,
and accelerating oil and gas downhole casing production, along with a full
quarter of strong Timet performance.

Fourth Quarter Fiscal 2013 Financial Highlights

Sales totaled $2.44 billion in the fourth quarter of fiscal 2013, growing 25
percent over sales of $1.95 billion in the same period last year. Consolidated
segment operating income improved by approximately 26 percent year over year,
rising to $627.3 million, or 25.7 percent of sales in the quarter, versus
consolidated segment operating income of $497.5 million, or 25.6 percent of
sales a year ago. Net income from continuing operations (attributable to PCC)
in the fourth quarter was $415.1 million, an increase of 23 percent over net
income of $338.2 million in the fourth quarter of fiscal 2012. In the quarter,
the Company delivered earnings per share (EPS) from continuing operations
(attributable to PCC) of $2.82 (diluted, based on 147.1 million shares
outstanding), compared to $2.31 (diluted, based on 146.2 million shares
outstanding) last year.

Including discontinued operations, PCC's net income (attributable to PCC) for
the fourth quarter of fiscal 2013 totaled $414.2 million, or $2.82 per share

Business Highlights

Investment Cast Products:

Investment Cast Products grew year-over-year sales by approximately 5 percent
in the fourth quarter of fiscal 2013, increasing to $635.7 million from $602.7
million a year ago. Fourth quarter operating income of $214.3 million, or 33.7
percent of sales, increased by approximately 9 percent over last year's $196.4
million, or 32.6 percent of sales. Contractual material pass-through pricing
for Investment Cast Products was relatively flat year over year. The segment's
aerospace sales improved approximately 5 percent over the same period last
year. OEM shipments remain aligned with current production rates, with further
growth opportunities from future build rate increases and accelerated
shipments of development parts for narrow-body re-engining programs beginning
in the second half of fiscal 2014. In addition, strong demand for industrial
gas turbine (IGT) spares drove a year-over-year increase in power sales of
approximately 8 percent. The segment delivered solid operating performance
and generated strong incremental margins, continuing to capture opportunities
for cost reduction and improved productivity across its manufacturing

Forged Products:

Sales for Forged Products in the fourth quarter increased by 31 percent to
$1,118.1 million, compared to sales of $855.1 million in the same period last
year, and operating income improved to $252.8 million, or 22.6 percent of
sales in the fourth quarter, compared to operating income of $192.7 million,
or 22.5 percent of sales, last year.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 $17 million lower than a year
ago.The inclusion of a full quarter of Timet was the largest driver of the
sales growth in the fourth quarter.In addition, throughput improved on the
29,000-ton press, which helped boost aerospace sales at the Houston plant by
more than 25 percent sequentially. Downhole casing for the oil and gas market
also continued to show a robust shipping profile for the second quarter in
row.In terms of segment performance, Timet made a substantial contribution
during its first full quarter; the integration is making rapid progress, with
significant top- and bottom-line improvements identified for continued,
long-term growth.In addition, segment operating results benefitted from
continued strong leverage on base production, the restoration of the
29,000-ton press to more normal efficiency levels, and the production of
downhole casing moving steadily down the learning curve.

Airframe Products:

Airframe Products' fourth quarter sales grew by 40 percent to $685.1 million,
compared to sales of $487.9 million in the same period last year, and the
segment's operating income increased by 42 percent in the fourth quarter to
$198.0 million, or 28.9 percent of sales, versus $139.5 million, or 28.6
percent of sales last year.In addition to the impact from acquisitions,
Airframe Products' commercial aerospace sales showed organic growth of more
than 10 percent over last year, reflecting solid market share positions and
core fasteners further narrowing the gap with current 787 production
rates.The segment demonstrated strong operating leverage, extracting solid
drop-through from its base businesses and overcoming significant dilution from
six lower-margin acquisitions.This strength is expected to continue as
aerospace demand increases, and the recent Airframe Products acquisitions
further accelerate and drive even greater improvements throughout their

"In our fourth quarter, we started to realize the solid benefits of a
long-term plan for continued profitable growth," said Mark Donegan, chairman
and chief executive officer of Precision Castparts."We have focused on and
have been diligent in acquiring the right assets over the last few years, and
now those acquisitions have started to deliver on the value we
anticipated.Our fourth quarter performance is only an initial data point on a
long continuum for improved sales and earnings performance in the future.

"Timet is certainly a significant catalyst in achieving our long-term
objectives.We are integrating Timet's businesses at a rapid pace, and we see
multiple opportunities for growth and improvement well out into the
future.It's a strong first step, but we are really just beginning to scratch
the surface of this value-creating opportunity.

"The fourth quarter also showed how well positioned our base businesses are
for further upside," said Donegan."Commercial OEM build rates are solid, with
additional acceleration as the 787 program moves from five aircraft per month
to 10 by the end of the calendar year, and the 737 rate steps up again in
early 2014.We have secured strong positions on the development engines for
the new narrow-body platforms and will begin increasing shipments of that
hardware starting in the second half of this fiscal year.Our power businesses
are improving on several fronts.IGT spares sales have been strong and
continue to present upside opportunity, and we are also participating in
several upgrade programs, which will drive growth even in a flat OEM
market.In addition, shipments of our oil & gas downhole casing continue, with
several large contracts currently in the negotiation phase, and the
international markets for our interconnect seamless pipe are slowly

"An unyielding focus on improving performance in all our manufacturing
operations will always be what drives this business forward," said
Donegan."Over the past year, we completed 12 acquisitions, the vast majority
with margins lower than the Company average, and our overall operating
performance increased.Investment Cast Products continues to deliver strong
incremental drop-through, and each improvement in operating margins
establishes a new data point to beat.The Forged Products segment is
benefitting from the fast-paced Timet integration, higher volumes moving
across the 29K-ton press, and margin opportunities as future downhole casing
production ramps.And, in Airframe Products, double-digit increases in core
fastener volumes and aggressive cost management are generating solid
incremental margins, and the integration of the new aerostructure acquisitions
continues to accelerate.We continue to expect a steady and sustained
improvement across our operations for the foreseeable future.The long-term
prospects for Precision Castparts are truly exciting."

At the end of the quarter, cash was $280 million, and debt was $3,807 million.

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 to888-490-2763, Access Code: 5268536.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 5268536.

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.

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
Globe Newswire'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    Twelve Months Ended
                                  March 31,  April 1,   March 31,  April 1,
                                   2013       2012       2013       2012
Net sales                          $2,438.9 $1,945.7 $8,377.8 $7,201.9
Costs and expenses:                                              
Cost of goods sold                 1,652.1   1,329.3   5,680.3   4,939.6
Selling and administrative         159.5     118.9     536.2     446.4
Interest expense                   19.9      2.8       38.1      12.8
Interest income                    (1.5)     (2.3)     (6.3)     (7.6)
Total costs and expenses           1,830.0   1,448.7   6,248.3   5,391.2
Income before income tax expense
and equity in earnings of          608.9     497.0     2,129.5   1,810.7
unconsolidated affiliates
Income tax expense                 (191.9)   (161.5)   (695.6)   (594.0)
Equity in earnings of              (0.7)     3.2       0.6       14.6
unconsolidated affiliates
Net income from continuing         416.3     338.7     1,434.5   1,231.3
Net loss from discontinued         (0.9)     (2.1)     (5.4)     (5.5)
Net income                         415.4     336.6     1,429.1   1,225.8
Net income attributable to         (1.2)     (0.5)     (2.5)     (1.7)
noncontrolling interests
Net income attributable to         $414.2   $336.1   $1,426.6 $1,224.1
Precision Castparts Corp. ("PCC")
Net income per common share
attributable to PCC shareholders –                               
Net income per share from          $2.84    $2.33    $9.83    $8.52
continuing operations
Net loss per share from            (0.01)    (0.01)    (0.04)    (0.04)
discontinued operations
Net income per share               $2.83    $2.32    $9.79    $8.48
Net income per common share
attributable to PCC shareholders –                               
Net income per share from          $2.82    $2.31    $9.76    $8.45
continuing operations
Net loss per share from            —         (0.01)    (0.04)    (0.04)
discontinued operations
Net income per share               $2.82    $2.30    $9.72    $8.41
Weighted average common shares                                   
Basic                              146.3     145.1     145.7     144.4
Diluted                            147.1     146.2     146.7     145.6
                                  Three Months Ended    Twelve Months Ended
                                  March 31,  April 1,   March 31,  April 1,
                                   2013       2012       2013       2012
Sales by Segment                                                 
Investment Cast Products           $635.7   $602.7   $2,480.4 $2,326.9
Forged Products                    1,118.1   855.1     3,566.0   3,176.8
Airframe Products                  685.1     487.9     2,331.4   1,698.2
Total                              $2,438.9 $1,945.7 $8,377.8 $7,201.9
Segment Operating Income (Loss)^2                                
Investment Cast Products           $214.3   $196.4   $838.4   $766.4
Forged Products                    252.8     192.7     777.0     684.9
Airframe Products                  198.0     139.5     690.8     488.1
Corporate expense                  (37.8)    (31.1)    (144.9)   (123.5)
Consolidated segment operating     627.3     497.5     2,161.3   1,815.9
Interest expense                   19.9      2.8       38.1      12.8
Interest income                    (1.5)     (2.3)     (6.3)     (7.6)
Income before income tax expense
and equity in earnings of          $608.9   $497.0   $2,129.5 $1,810.7
unconsolidated affiliates
^1Reported results for the three and twelve months ended April 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)

                                                    March 31,  April 1,
                                                     2013       2012
Cash and Debt Balances                                         
Cash                                                 $280.2   $698.7
Total Debt                                           $3,807.2 $208.2
Total Equity                                         $9,804.4 $8,364.8
Total Debt, as % of Total Capitalization             28.0 %     2.4 %
Working Capital Items^1                                        
Receivables, Net                                     $1,509.3 $1,186.4
Inventories                                          2,981.8   1,815.3
Accounts Payable                                     941.0     713.7
Total                                                $3,550.1 $2,288.0
                                                    Three Months Ended
                                                    March 31,  April 1,
                                                     2013       2012
Selected Cash Flow Items^1                                     
Depreciation and Amortization                        $68.8    $43.6
Capital Expenditures                                 $118.1   $88.5
Acquisitions of Businesses, Net of Cash Acquired     $527.5   $15.2
^1 Reported results exclude discontinued operations.           

CONTACT: Jay Khetani, Vice President of Investor Relations
         (503) 946-4700

company logo
Press spacebar to pause and continue. Press esc to stop.