Summary
Carpenter Technology Corporation (CRS) reported its first fiscal quarter results ending September 30, 2021, showing a net loss of $14.8 million, an improvement from a net loss of $47.1 million in the prior year's comparable quarter. This narrowing of losses was driven by a 10% increase in net sales, reaching $387.6 million, primarily due to recovering demand in key markets like Medical, Transportation, and Industrial/Consumer, coupled with effective cost management and the completion of certain restructuring actions. Despite the sales growth, the company continues to face challenges, including ongoing supply chain disruptions and labor market tightness, which led to a temporary build-up in inventory and a negative $47.0 million in cash flow from operations. However, the company maintained a strong liquidity position with $507.8 million in total liquidity as of quarter-end, comprising cash and cash equivalents and available credit facilities. Management expressed confidence in a broad-based recovery, particularly in the aerospace sector, and its strategic positioning for future growth in its core business as well as in emerging areas like additive manufacturing.
Financial Highlights
49 data points| Revenue | $387.60M |
| Gross Profit | $25.20M |
| SG&A Expenses | $44.30M |
| Operating Income | -$19.10M |
| Interest Expense | $10.20M |
| Net Income | -$14.80M |
| EPS (Basic) | $-0.31 |
| EPS (Diluted) | $-0.31 |
| Shares Outstanding (Basic) | 48.50M |
| Shares Outstanding (Diluted) | 48.50M |
Key Highlights
- 1Net sales increased by 10% year-over-year to $387.6 million, indicating a recovery in demand across several key end-use markets.
- 2Net loss narrowed significantly to $14.8 million from $47.1 million in the prior year's comparable quarter.
- 3Gross profit improved to $25.2 million (6.5% of net sales) from $3.5 million (1.0% of net sales) in the prior year, with adjusted gross margin excluding surcharges also showing improvement.
- 4Operating loss improved to $19.1 million from $48.8 million in the prior year, with adjusted operating margin excluding surcharges and special items showing a positive trend.
- 5The company experienced a significant inventory build-up ($66.5 million increase), negatively impacting operating cash flow, attributed to supply chain and operational delays.
- 6Total liquidity remained strong at $507.8 million, comprising $213.2 million in cash and cash equivalents and $294.6 million in available credit facilities.
- 7Capital expenditures decreased to $14.4 million from $33.3 million year-over-year, with full-year fiscal 2022 capital expenditure expectations around $125 million.