Summary
Carpenter Technology Corp. (CRS) reported its third-quarter fiscal year 2010 results, showing a net income of $2.1 million, or $0.05 per diluted share, a significant decrease from $13.1 million, or $0.30 per diluted share, in the prior year's comparable quarter. This decline was primarily driven by lower gross profit due to a weaker product mix and increased net pension expense. Net sales saw a modest increase of 2% to $336.9 million, largely due to higher volumes in certain markets like consumer and automotive, despite a decrease in sales excluding surcharges. The company experienced a notable drop in performance for the nine months ended March 31, 2010, with a net loss of $3.8 million compared to a net income of $68.7 million in the prior year. This was attributed to a substantial 25% decrease in net sales, impacted by reduced demand across key end-use markets such as aerospace and energy. The company also recorded a one-time non-cash charge of $5.9 million related to healthcare reform legislation, which negatively affected deferred tax assets. Financially, Carpenter Technology maintained a strong liquidity position, with approximately $370 million in cash and cash equivalents and marketable securities, and an available borrowing capacity of $196 million under its credit facilities, suggesting sufficient resources to fund operations and obligations. However, the significant year-over-year decline in profitability and sales, particularly in the nine-month period, warrants investor attention, while the company emphasizes its efforts to strengthen its operational and strategic position.
Financial Highlights
27 data points| Revenue | $336.90M |
| Cost of Revenue | $290.60M |
| Gross Profit | $46.30M |
| SG&A Expenses | $33.50M |
| Operating Income | $12.80M |
| Interest Expense | $4.50M |
| Net Income | $28.60M |
| EPS (Basic) | $0.05 |
| EPS (Diluted) | $0.05 |
| Shares Outstanding (Basic) | 44.00M |
| Shares Outstanding (Diluted) | 44.40M |
Key Highlights
- 1Net income for the three months ended March 31, 2010, was $2.1 million ($0.05/share), down from $13.1 million ($0.30/share) in the prior year quarter.
- 2For the nine months ended March 31, 2010, the company reported a net loss of $3.8 million ($(0.09)/share), a significant decline from a net income of $68.7 million ($1.56/share) in the prior year period.
- 3Net sales for the three months increased by 2% to $336.9 million, while for the nine months, they decreased by 25% to $834.4 million.
- 4Gross profit margin declined to 13.7% (18.0% excluding surcharges) for the quarter, compared to 14.9% (18.4% excluding surcharges) in the prior year.
- 5The company recorded a $5.9 million non-cash charge related to healthcare reform legislation impacting deferred tax assets for anticipated retiree healthcare liabilities.
- 6Liquidity remains strong with $370 million in cash and marketable securities and $196 million available under credit facilities.
- 7Significant increases in net pension expense are noted, impacting both cost of sales and SG&A expenses, and are expected to remain elevated in fiscal year 2010.