PHILADELPHIA, Jan. 28, 2021 (GLOBE NEWSWIRE) -- Carpenter Technology Corporation (NYSE: CRS)) today announced financial results for the fiscal second quarter ended December 31, 2020. For the quarter, the Company reported a net loss of $84.9 million, or $1.76 loss per diluted share. Excluding special items, adjusted loss per diluted share was $0.61 for the quarter.
“Our second quarter results reflect our continued emphasis on driving cash flow generation as we ended the second quarter with $665 million in total liquidity including $271 million in cash,” said Tony R. Thene, President and CEO of Carpenter Technology. “Over the last nine months, we have generated $214 million in free cash flow. We also moved quickly to implement targeted cost reduction initiatives and portfolio realignments that are delivering significant costs savings. We believe the combination of these strategic actions gives us increased flexibility and places us on solid ground to capitalize on demand patterns as market conditions normalize.”
“During the pandemic, we continued to strengthen our customer relationships. To that end, in the Aerospace and Defense end-use market, we have recently secured multiple, beneficial long-term contracts with key customers which further demonstrates the future outlook is strong. We are also well positioned to benefit from a recovery in the Medical end-use market as the supply chain gains confidence to meet pent up demand for elective procedures. Overall, we believe end-use market conditions will gradually improve during the second half of fiscal year 2021 and are working hard to capitalize on the recovery.”
“Our core business is built upon over 130 years of advanced material development, production and expertise. We remain a critical supply chain partner today and have made strategic investments to build upon that position in the years to come. The addition of our hot strip mill will significantly strengthen our soft magnetic capabilities at a time when electrification is helping to shape the long-term profile of many of our end-use markets. We also have built an additive manufacturing platform focused on powder lifecycle management. These investments are a strategic extension of our core business and consistent with our mandate to deliver increasing value to our customers and our stakeholders.”
Net sales for the second quarter of fiscal year 2021 were $348.8 million compared with $573.0 million in the second quarter of fiscal year 2020, a decrease of $224.2 million (negative 39 percent), on 33 percent lower volume. Net sales excluding surcharge were $299.4 million, a decrease of $171.8 million (negative 36 percent) from the same period a year ago.
Operating loss was $89.0 million compared to operating income of $55.0 million in the prior year period. Adjusted operating loss excluding special items was $32.3 million in the recent second quarter. Special items excluded from adjusted operating loss in the current quarter include a goodwill impairment charge of $52.8 million associated with the Company’s Additive reporting unit that is included in the Performance Engineered Products segment and $3.9 million of costs associated with COVID-19. These COVID-19 costs principally consist of direct incremental operating costs including outside services to execute enhanced cleaning protocols, additional personal protective equipment, isolation pay for production employees potentially exposed to COVID-19 and various operating supplies necessary to maintain the operations while keeping employees safe against possible exposure in the Company’s facilities.
Cash provided from operating activities in the second quarter of fiscal year 2021 was $83.6 million, compared to $21.8 million in the same quarter last year. Free cash flow in the second quarter of fiscal year 2021 was positive $51.0 million, compared to negative $34.5 million in the same quarter last year. The increases in operating cash flow and free cash flow primarily reflect the impact of inventory reduction in the current quarter partially offset by lower earnings relative to the same quarter a year ago. In addition, capital expenditures were $26.6 million in the second quarter of fiscal year 2021 compared to $46.7 million in the same quarter last year.
Total liquidity, including cash and available credit facility borrowings, was $665.4 million at the end of the second quarter of fiscal year 2021. This consisted of $271.4 million of cash and $394.0 million of available borrowings under the Company’s credit facility.
About Carpenter Technology
Carpenter Technology Corporation is a recognized leader in high-performance specialty alloy-based materials and process solutions for critical applications in the aerospace, defense, medical, transportation, energy, industrial and consumer electronics markets. Founded in 1889, Carpenter Technology has evolved to become a pioneer in premium specialty alloys, including titanium, nickel, and cobalt, as well as alloys specifically engineered for additive manufacturing (AM) processes and soft magnetics applications. Carpenter Technology has expanded its AM capabilities to provide a complete “end-to-end” solution to accelerate materials innovation and streamline parts production. More information about Carpenter Technology can be found at www.carpentertechnology.com.
