01—Abstract
Summary
Summary of the 10-K filed August 22, 2012. Cited figures are marked; the original filing is the authoritative source.
Carpenter Technology Corporation (CRS) reported a significant increase in net sales and net income for the fiscal year ended June 30, 2012, compared to the prior year.
This growth was largely driven by the acquisition of Latrobe Specialty Metals in February 2012, which expanded the company's manufacturing capacity and product portfolio, particularly in high-demand aerospace and defense, and energy sectors. Excluding surcharge revenues, net sales increased by 27%, reflecting higher volumes and strategic pricing and mix management initiatives. The company is making substantial investments in future growth, notably a new $500 milliona manufacturing facility in Alabama, expected to be operational by April 2014.
This investment, alongside the Latrobe acquisition, signals a strategic focus on premium products and increased capacity to meet growing customer demand. Despite these investments and some acquisition-related costs, the company demonstrated improved operating income and a stronger financial position, while also continuing its long history of paying quarterly dividends.
02—Key points
Key Highlights
- Net sales increased by 21% to $2,028.7 million in fiscal year 2012, with a 27% increase when excluding surcharge revenues, driven by higher volumes and strategic initiatives.
- The company completed the acquisition of Latrobe Specialty Metals, Inc. (Latrobe) in February 2012, significantly expanding its manufacturing capacity and product offerings.
- Construction began on a new $500 million state-of-the-art manufacturing facility in Alabama, expected to be operational by April 2014, to support premium product growth.
- Net income attributable to Carpenter increased to $121.2 million in fiscal year 2012, a substantial improvement from $71.0 million in fiscal year 2011.
- Diluted earnings per share rose to $2.53 in fiscal year 2012, up from $1.59 in fiscal year 2011.
- Operating income increased to $210.1 million in fiscal year 2012, more than double the $96.4 million reported in fiscal year 2011.
- The company maintained its commitment to shareholders by paying a quarterly cash dividend of $0.18 per common share.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Carpenter Technology Corp kept $0.06.
- Revenue$2.03B100.0%
- Cost of revenue−$1.64B80.7%
- Gross profit$391.0M19.3%
- Operating costs−$180.9M8.9%
- Operating income$210.1M10.4%
- Interest, other & tax−$88.9M4.4%
- Net income$121.2M6.0%
Where FY2012 revenue went
$2.03B- Cost of revenue: $1.64B, 81% of revenue
- Net income: $121.2M, 6.0% of revenue
- R&D: $20.5M, 1.0% of revenue
- SG&A: $169.2M, 8.3% of revenue
- Interest, other & tax: $88.9M, 4.4% of revenue
Kept 6.0% as net incomeNet income $121.2M · 6.0%R&D $20.5M · 1.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed August 22, 2012Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $2.03B$1.68B | +21.1% |
| Cost of Revenue | $1.64B$1.43B | +14.8% |
| Gross Profit | $391.00M$249.00M | +57.0% |
| R&D Expenses | $20.50M$18.90M | +8.5% |
| SG&A Expenses | $169.20M$149.50M | +13.2% |
| Operating Income | $210.10M$96.40M | +117.9% |
| Interest Expense | $23.80M$17.10M | +39.2% |
| Net Income | $121.20M$71.00M | +70.7% |
| EPS (Basic) | $2.55$1.59 | +60.4% |
| EPS (Diluted) | $2.53$1.59 | +59.1% |
| Shares Outstanding (Basic) | 47.10M44.10M | +6.8% |
| Shares Outstanding (Diluted) | 47.50M44.70M | +6.3% |
05—Questions
Frequently Asked Questions
What were the main drivers of Carpenter Technology's financial performance in fiscal year 2012?
The primary drivers were a significant increase in net sales, particularly in the aerospace, defense, and energy markets, and improved operating income. The acquisition of Latrobe Specialty Metals was a key factor in expanding capacity and market reach, complementing strong organic growth fueled by pricing and product mix management.
What is the significance of the new manufacturing facility in Alabama?
The new facility represents a major strategic investment of $500 million to enhance production capacity for premium products. Expected to be operational by April 2014, it is designed to meet strong customer demand, particularly from the aerospace, defense, and energy industries, and is intended to drive long-term growth and competitiveness.
How did the Latrobe acquisition impact the company's financial results?
The Latrobe acquisition, completed in February 2012, significantly boosted net sales and operating income. It contributed to increased production capacity and a more favorable product mix. While there were acquisition-related costs and inventory fair value adjustments, the deal was accretive to earnings, excluding these one-time impacts, and is expected to deliver substantial strategic value and synergies.
What is the company's outlook regarding its pension obligations?
Carpenter Technology has substantial pension and postretirement benefit obligations. In fiscal year 2012, the company contributed $30 million to its U.S. pension plans and anticipated contributing another $82 million in fiscal year 2013. Management is actively managing these obligations and exploring options to address funding impacts, acknowledging the significant cash contributions expected over the next five years.
06—Continue