01—Abstract
Summary
Summary of the 10-K filed August 13, 2024. Cited figures are marked; the original filing is the authoritative source.
Carpenter Technology Corporation (CRS) reported its fiscal year 2024 results, showcasing a significant turnaround and record profitability.
The company achieved its highest-ever adjusted operating income, reaching $354.1 milliona, a substantial increase from the previous year, driven by improved productivity, optimized product mix, and effective pricing strategies. The Specialty Alloys Operations (SAO) segment was a key contributor, with strong performance in the aerospace, defense, and medical markets. Looking ahead, Carpenter Technology is accelerating its previously stated goals, now targeting $460 million to $500 million in operating income for fiscal year 2025.
The company also generated positive adjusted free cash flow of $179.0 millionb for fiscal year 2024, a notable improvement from the prior year. Management is focused on a balanced capital allocation strategy, including reinvestment in the business, growth initiatives, and returning capital to shareholders through a recently approved $400 million share repurchase program.
The company's stock performance has been strong, significantly outperforming its peer group and the S&P MidCap 400 over the last five years. The robust financial results and optimistic outlook suggest continued positive momentum for Carpenter Technology.
02—Key points
Key Highlights
- Achieved record adjusted operating income of $354.1 million in fiscal year 2024, up from $133.1 million in fiscal year 2023.
- Sales increased by 8% to $2,759.7 million in fiscal year 2024, with a significant 17% increase excluding surcharge revenue.
- Aerospace and Defense remains the largest end-use market, accounting for 56% of net sales, with a 19% year-over-year increase.
- Generated positive adjusted free cash flow of $179.0 million in fiscal year 2024, a substantial improvement from negative $67.6 million in fiscal year 2023.
- Accelerated fiscal year 2025 operating income target to $460 million - $500 million, up from previous guidance.
- Announced a $400 million share repurchase program, signaling a commitment to returning capital to shareholders.
- Stockholder return significantly outperformed market indices over the past five years, with a 255.1% total return compared to 150.6% for the S&P MidCap 400 and 155.1% for the Russell Materials & Processing Growth Index.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Carpenter Technology Corp kept $0.07.
- Revenue$2.76B100.0%
- Cost of revenue−$2.18B78.8%
- Gross profit$584.3M21.2%
- Operating costs−$261.2M9.5%
- Operating income$323.1M11.7%
- Interest, other & tax−$136.6M4.9%
- Net income$186.5M6.8%
Where FY2024 revenue went
$2.76B- Cost of revenue: $2.18B, 79% of revenue
- Net income: $186.5M, 6.8% of revenue
- R&D: $25.6M, 0.9% of revenue
- SG&A: $230.2M, 8.3% of revenue
- Interest, other & tax: $136.6M, 4.9% of revenue
Kept 6.8% as net incomeNet income $186.5M · 6.8%R&D $25.6M · 0.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed August 13, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $2.76B$2.55B | +8.2% |
| Gross Profit | $584.30M$337.30M | +73.2% |
| R&D Expenses | $25.60M$24.40M | +4.9% |
| SG&A Expenses | $230.20M$204.20M | +12.7% |
| Operating Income | $323.10M$133.10M | +142.7% |
| Net Income | $186.50M$56.40M | +230.7% |
| EPS (Basic) | $3.75$1.15 | +226.1% |
| EPS (Diluted) | $3.70$1.14 | +224.6% |
| Shares Outstanding (Basic) | 49.70M48.80M | +1.8% |
| Shares Outstanding (Diluted) | 50.30M49.20M | +2.2% |
05—Questions
Frequently Asked Questions
What were the key drivers of Carpenter Technology's strong financial performance in fiscal year 2024?
Carpenter Technology's record financial performance in fiscal year 2024 was driven by several factors, including improved productivity across its operations, optimization of its product mix to favor higher-margin products, and effective pricing strategies. Increased demand in key end-use markets, particularly Aerospace and Defense, Medical, and Energy, also contributed significantly to the revenue growth.
What is the company's outlook for fiscal year 2025?
Carpenter Technology has accelerated its financial targets, now expecting operating income for fiscal year 2025 to be in the range of $460 million to $500 million. The company also anticipates generating between $250 million and $300 million in adjusted free cash flow in fiscal year 2025.
How is Carpenter Technology allocating capital?
The company is employing a balanced approach to capital allocation. This includes reinvesting in its asset base to support operational targets, investing in incremental growth initiatives, and returning cash to shareholders. A significant aspect of this is the recently approved $400 million share repurchase program, primarily intended to offset dilution.
What are the main risks facing Carpenter Technology?
Key risks include the cyclical nature of its end-use markets (aerospace, defense, energy), volatility in raw material prices, potential supply chain disruptions, international economic and political instability, and the complex nature of its manufacturing processes. The company also faces risks related to environmental regulations and potential litigation.
06—Continue