Summary
Carpenter Technology Corporation (CRS) reported a net loss of $6.2 million, or $0.13 per diluted share, for the first quarter of fiscal year 2017, a significant decline from a net income of $8.9 million, or $0.18 per diluted share, in the same period last year. This downturn was primarily driven by a 15% decrease in net sales to $389.0 million, attributed to weaker demand across key end-use markets including Aerospace & Defense, Energy, and Transportation, as well as unfavorable product mix. Despite lower sales volumes, the company highlighted cost savings initiatives and a strategic pension plan freeze expected to yield significant annual savings. However, the company's operating performance was impacted by challenges in specific Aerospace sub-markets and continued weakness in the Energy sector. Looking ahead, Carpenter Technology plans to actively manage its business amidst industry uncertainty by continuing to implement its operating model and seeking to expand its presence in key markets.
Financial Highlights
51 data points| Revenue | $389.00M |
| Cost of Revenue | $343.00M |
| Gross Profit | $46.00M |
| SG&A Expenses | $44.60M |
| Operating Income | $1.40M |
| Interest Expense | $7.30M |
| Net Income | -$6.20M |
| EPS (Basic) | $-0.13 |
| EPS (Diluted) | $-0.13 |
| Shares Outstanding (Basic) | 47.10M |
| Shares Outstanding (Diluted) | 47.30M |
Key Highlights
- 1Reported a net loss of $6.2 million in Q1 FY2017, compared to a net income of $8.9 million in Q1 FY2016.
- 2Net sales decreased by 15% to $389.0 million, driven by lower volumes and a less favorable product mix, particularly in Aerospace, Energy, and Transportation markets.
- 3Gross profit declined by 33% to $46.0 million, with gross margin decreasing to 11.8% from 15.1% year-over-year.
- 4Operating income significantly decreased to $1.4 million from $24.8 million in the prior year period.
- 5The company announced a freeze on its largest qualified defined benefit pension plan, effective December 31, 2016, anticipating approximately $50 million in annual run-rate net cost savings.
- 6Cash flow from operations significantly decreased to $3.9 million from $41.5 million in the prior year quarter, resulting in negative free cash flow of ($31.2) million.
- 7Carpenter Technology maintained compliance with its debt covenants, with an interest coverage ratio of 9.2:1.00 and a debt to capital ratio of 35.2%.