01—Abstract
Summary
Summary of the 10-K filed August 15, 2022. Cited figures are marked; the original filing is the authoritative source.
Carpenter Technology Corporation's fiscal year 2022 filing indicates a challenging but ultimately stabilizing year, marked by significant sales growth driven by demand across key end-use markets.
Despite an operating loss, the company saw an improvement in net loss compared to the prior year. The backlog of orders more than doubled, signaling strong future demand, particularly in the aerospace, defense, and medical sectors. Key to the company's performance were efforts to navigate operational challenges, including an equipment outage and supply chain disruptions.
The company highlighted progress in its strategic focus areas such as additive manufacturing and electrification. With a solid liquidity position, Carpenter Technology is positioning itself for continued growth, leveraging its core business and emerging technologies.
02—Key points
Key Highlights
- Significant sales growth of 24% year-over-year, reaching $1.836 billion, driven by strong demand across all end-use markets.
- A substantial increase in the company's sales backlog, more than doubling to $1.539 billion, indicating strong future demand.
- Aerospace and Defense remains the largest end-use market, with sales up 11% to $790.2 million, alongside significant growth in Medical (48%) and Industrial/Consumer (43%).
- The company reported a net loss of $49.1 million ($1.01 per diluted share) for fiscal year 2022, an improvement from the $229.6 million net loss ($4.76 per diluted share) in fiscal year 2021.
- Operating loss improved to $24.9 million from $248.6 million in the prior fiscal year, reflecting operational improvements and cost management.
- Total liquidity remained strong at $448.3 million as of June 30, 2022, comprising cash and cash equivalents and available borrowing capacity.
- The company continues to invest in research and development, with expenditures of $20.4 million in fiscal year 2022, focusing on innovation in specialty materials and additive manufacturing.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2022, Carpenter Technology Corp lost $0.03.
- Revenue$1.84B100.0%
- Cost of revenue−$1.69B91.8%
- Gross profit$149.8M8.2%
- Operating costs−$174.7M9.5%
- Operating income−$24.9M1.4%
- Interest, other & tax−$24.2M1.3%
- Net income−$49.1M2.7%
04—Financials
Financial Highlights
Figures from 10-KFY2022filed August 15, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $1.84B$1.48B | +24.4% |
| Gross Profit | $149.80M$1.00M | +14880.0% |
| R&D Expenses | $20.40M$19.70M | +3.6% |
| SG&A Expenses | $174.70M$180.20M | −3.1% |
| Operating Income | -$24.90M-$248.60M | +90.0% |
| Interest Expense | $44.90M$32.70M | +37.3% |
| Net Income | -$49.10M-$229.60M | +78.6% |
| EPS (Basic) | $-1.01$-4.76 | +78.8% |
| EPS (Diluted) | $-1.01$-4.76 | +78.8% |
| Shares Outstanding (Basic) | 48.50M48.30M | +0.4% |
| Shares Outstanding (Diluted) | 48.50M48.30M | +0.4% |
05—Questions
Frequently Asked Questions
What were the main drivers of Carpenter Technology's sales performance in fiscal year 2022?
Sales in fiscal year 2022 grew by 24% to $1.836 billion. This growth was primarily driven by increased demand across all key end-use markets, including Aerospace and Defense, Medical, Transportation, Energy, and Industrial and Consumer sectors. The company also benefited from higher shipment volumes and increased pricing.
How did Carpenter Technology's profitability improve in fiscal year 2022?
While the company still reported a net loss of $49.1 million, this was a significant improvement from a net loss of $229.6 million in fiscal year 2021. The operating loss also narrowed considerably, from $248.6 million in FY2021 to $24.9 million in FY2022. This improvement was attributed to higher sales volumes, better product mix, increased pricing, and the impact of cost-saving actions, partially offset by operational challenges and inflationary pressures.
What is the outlook for Carpenter Technology based on its backlog and market demand?
The company's sales backlog more than doubled year-over-year to $1.539 billion as of June 30, 2022, indicating strong customer demand. The company expects continued growth across its end-use markets, particularly in Aerospace, Defense, and Medical applications, as customers ramp up production. This positive outlook is supported by investments in emerging areas like electrification and additive manufacturing.
What are the key risks or challenges facing Carpenter Technology as highlighted in the filing?
Carpenter Technology faces several risks, including the cyclical nature of its end-use markets (aerospace, defense, energy), volatility in raw material prices, intense competition, reliance on key suppliers, and potential disruptions from environmental regulations, labor issues, and global economic or political events. The company also notes the ongoing impacts of supply chain challenges and inflationary pressures on operating costs.
06—Continue