Cover Page
Cover Page - shares | 3 Months Ended | |
Sep. 30, 2022 | Oct. 24, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-5828 | |
Entity Registrant Name | CARPENTER TECHNOLOGY CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 23-0458500 | |
Entity Address, Address Line One | 1735 Market Street | |
Entity Address, Address Line Two | 15th Floor | |
Entity Address, City or Town | Philadelphia, | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19103 | |
City Area Code | 610 | |
Local Phone Number | 208-2000 | |
Title of 12(b) Security | Common Stock, $5 Par Value | |
Trading Symbol | CRS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 48,444,926 | |
Entity Central Index Key | 0000017843 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 52.6 | $ 154.2 |
Accounts receivable, net | 390.2 | 382.3 |
Inventories | 616.1 | 496.1 |
Other current assets | 92.6 | 86.8 |
Total current assets | 1,151.5 | 1,119.4 |
Property, plant and equipment, net | 1,402 | 1,420.8 |
Goodwill | 241.4 | 241.4 |
Other intangibles, net | 32.8 | 35.2 |
Deferred income taxes | 5.1 | 5.7 |
Other assets | 107.1 | 109.8 |
Total assets | 2,939.9 | 2,932.3 |
Current liabilities: | ||
Accounts payable | 288 | 242.1 |
Accrued liabilities | 122.9 | 133.5 |
Total current liabilities | 410.9 | 375.6 |
Long-term debt | 692.1 | 691.8 |
Accrued pension liabilities | 198 | 196.6 |
Accrued postretirement benefits | 78.3 | 77.4 |
Deferred income taxes | 158.3 | 162.4 |
Other liabilities | 95.5 | 98 |
Total liabilities | 1,633.1 | 1,601.8 |
Contingencies and commitments (see Note 9) | ||
STOCKHOLDERS' EQUITY | ||
Common stock — authorized 100,000,000 shares; issued 56,025,510 shares at September 30, 2022 and 56,025,510 shares at June 30, 2022; outstanding 48,444,925 shares at September 30, 2022 and 48,286,439 shares at June 30, 2022 | 280.1 | 280.1 |
Capital in excess of par value | 314.3 | 320.3 |
Reinvested earnings | 1,194.3 | 1,211 |
Common stock in treasury (7,580,585 shares and 7,739,071 shares at September 30, 2022 and June 30, 2022, respectively), at cost | (300.8) | (307.4) |
Accumulated other comprehensive loss | (181.1) | (173.5) |
Total stockholders' equity | 1,306.8 | 1,330.5 |
Total liabilities and stockholders' equity | $ 2,939.9 | $ 2,932.3 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Sep. 30, 2022 | Jun. 30, 2022 |
STOCKHOLDERS' EQUITY | ||
Common stock authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock issued (in shares) | 56,025,510 | 56,025,510 |
Common stock outstanding (in shares) | 48,444,925 | 48,286,439 |
Common stock in treasury (in shares) | 7,580,585 | 7,739,071 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 522.9 | $ 387.6 |
Cost of sales | 468.1 | 362.4 |
Gross profit | 54.8 | 25.2 |
Selling, general and administrative expenses | 46.5 | 44.3 |
Operating income (loss) | 8.3 | (19.1) |
Interest expense, net | 12.6 | 10.2 |
Other expense (income), net | 3.5 | (4.1) |
Loss before income taxes | (7.8) | (25.2) |
Income tax benefit | (0.9) | (10.4) |
Net loss | $ (6.9) | $ (14.8) |
LOSS PER COMMON SHARE: | ||
Basic (in dollars per share) | $ (0.14) | $ (0.31) |
Diluted (in dollars per share) | $ (0.14) | $ (0.31) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||
Basic (in shares) | 48.7 | 48.5 |
Diluted (in shares) | 48.7 | 48.5 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (6.9) | $ (14.8) |
Other comprehensive income (loss), net of tax | ||
Pension and postretirement benefits, net of tax of $(0.5) and $(0.4), respectively | 1 | 1.1 |
Net (loss) gain on derivative instruments, net of tax of $1.6 and $(0.4), respectively | (5.3) | 1.1 |
Foreign currency translation | (3.3) | (2.1) |
Other comprehensive (loss) income, net of tax | (7.6) | 0.1 |
Comprehensive loss, net of tax | $ (14.5) | $ (14.7) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Pension and post-retirement benefits, tax expense | $ (0.5) | $ (0.4) |
Net gain on derivative instruments, tax benefit (expense) | $ 1.6 | $ (0.4) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
OPERATING ACTIVITIES | ||
Net loss | $ (6.9) | $ (14.8) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation and amortization | 32.3 | 32.5 |
Deferred income taxes | (2.2) | (8) |
Net pension expense (income) | 5 | (1.8) |
Share-based compensation expense | 3.6 | 2.8 |
Net loss on disposals of property, plant and equipment | 0.3 | 0 |
Changes in working capital and other: | ||
Accounts receivable | (12.1) | (3.8) |
Inventories | (121.2) | (66.5) |
Other current assets | (11.5) | (13.2) |
Accounts payable | 46.7 | 69.3 |
Accrued liabilities | (11.9) | (41.7) |
Pension plan contributions | 0 | (0.2) |
Other postretirement plan contributions | (0.3) | (0.7) |
Other, net | 0.2 | (0.9) |
Net cash used for operating activities | (78) | (47) |
INVESTING ACTIVITIES | ||
Purchases of property, plant, equipment and software | (13.5) | (14.4) |
Net cash used for investing activities | (13.5) | (14.4) |
FINANCING ACTIVITIES | ||
Dividends paid | (9.8) | (9.8) |
Withholding tax payments on share-based compensation awards | (3.2) | (3) |
Net cash used for financing activities | (13) | (12.8) |
Effect of exchange rate changes on cash and cash equivalents | 2.9 | 0 |
DECREASE IN CASH AND CASH EQUIVALENTS | (101.6) | (74.2) |
Cash and cash equivalents at beginning of year | 154.2 | 287.4 |
Cash and cash equivalents at end of period | 52.6 | 213.2 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Non-cash investing activities: Purchase of property, plant, equipment and software | $ 7.3 | $ 7.6 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Millions | Total | Common Stock, Par Value of $5 | Common Stock, Capital in Excess of Par Value | Reinvested Earnings | Common Stock in Treasury | Accumulated Other Comprehensive (Loss) Income |
Balances at the beginning of the period at Jun. 30, 2021 | $ 1,392.3 | $ 280.1 | $ 322.6 | $ 1,299.3 | $ (317.4) | $ (192.3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (14.8) | (14.8) | ||||
Pension and postretirement benefits, net of tax | 1.1 | 1.1 | ||||
Net gain (loss) on derivative instruments, net of tax | 1.1 | 1.1 | ||||
Foreign currency translation | (2.1) | (2.1) | ||||
Cash Dividends: | ||||||
Common stock | (9.8) | (9.8) | ||||
Share-based compensation plans | (0.2) | (6.3) | 6.1 | |||
Balances at the end of the period at Sep. 30, 2021 | 1,367.6 | 280.1 | 316.3 | 1,274.7 | (311.3) | (192.2) |
Balances at the beginning of the period at Jun. 30, 2022 | 1,330.5 | 280.1 | 320.3 | 1,211 | (307.4) | (173.5) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (6.9) | (6.9) | ||||
Pension and postretirement benefits, net of tax | 1 | 1 | ||||
Net gain (loss) on derivative instruments, net of tax | (5.3) | (5.3) | ||||
Foreign currency translation | (3.3) | (3.3) | ||||
Cash Dividends: | ||||||
Common stock | (9.8) | (9.8) | ||||
Share-based compensation plans | 0.6 | (6) | 6.6 | |||
Balances at the end of the period at Sep. 30, 2022 | $ 1,306.8 | $ 280.1 | $ 314.3 | $ 1,194.3 | $ (300.8) | $ (181.1) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 5 | $ 5 | $ 5 | $ 5 |
Cash dividends per common share (in dollars per share) | $ 0.20 | $ 0.20 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, considered necessary for a fair statement of the results are reflected in the interim periods presented. The June 30, 2022 consolidated balance sheet data was derived from audited financial statements, but does not include all of the disclosures required by accounting principles generally accepted in the United States of America. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in Carpenter Technology's Annual Report on Form 10-K for the fiscal year ended June 30, 2022 (the "2022 Form 10-K"). Operating results for the three months ended September 30, 2022 are not necessarily indicative of the operating results for any future period. As used throughout this report, unless the context requires otherwise, the terms "Carpenter", "Carpenter Technology", the "Company", "Registrant", "Issuer", "we" and "our" refer to Carpenter Technology Corporation. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Pronouncements |
Revenue
Revenue | 3 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company recognizes revenue in accordance with Topic 606, Revenue from Contracts. The Company applies the five-step model in the FASB's guidance, which requires the Company to: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation. The Company recognizes revenue when performance obligations under the terms of a customer purchase order or contract are satisfied. This occurs when control of the goods and services has transferred to the customer, which is generally determined when title, ownership, and risk of loss pass to the customer, all of which occurs upon shipment or delivery of the product. Consignment transactions are arrangements where the Company transfers product to a customer location but retains ownership and control of such product until it is used by the customer. Revenue for consignment arrangements is recognized upon usage by the customer. Service revenue is recognized as the services are performed. Each customer purchase order or contract for goods transferred has a single performance obligation for which revenue is recognized at a point in time. The standard terms and conditions of a customer purchase order include general rights of return and product warranty provisions related to nonconforming product. Depending on the circumstances, the product is either replaced or a quality adjustment is issued. Such warranties do not represent a separate performance obligation. Each customer purchase order or contract sets forth the transaction price for the products and services purchased under that arrangement. Some customer arrangements include variable consideration, such as volume rebates, which generally depend upon the Company's customers meeting specified performance criteria, such as a purchasing level over a period of time. The Company exercises judgment to estimate the most likely amount of variable consideration at each reporting date. Revenue is measured as the amount of consideration the Company expects to receive in exchange for its product. The standard payment terms are 30 days. The Company has elected to use the practical expedient that permits a Company to not adjust for the effects of a significant financing component if it expects that at the contract inception, the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Amounts billed to customers for shipping and handling activities to fulfill the Company's promise to transfer the goods are included in revenues and costs incurred by the Company for the delivery of goods are classified as cost of sales in the consolidated statements of operations. Shipping terms may vary for products shipped outside the United States depending on the mode of transportation, the country where the material is shipped and any agreements made with the customers. Contract liabilities are recognized when the Company has received consideration from a customer to transfer goods or services at a future point in time when the Company performs under the purchase order or contract. Contract liabilities were $15.4 million and $14.4 million at September 30, 2022 and June 30, 2022, respectively, and are included in accrued liabilities on the consolidated balance sheets. The Company has elected to use the practical expedient that permits the omission of disclosure for remaining performance obligations which are expected to be satisfied in one year or less. Disaggregation of Revenue The Company operates in two business segments, Specialty Alloys Operations ("SAO") and Performance Engineered Products ("PEP"). Revenue is disaggregated within these two business segments by diversified end-use markets and by geographical location. Comparative information of the Company's overall revenues by end-use markets and geography for the three months ended September 30, 2022 and 2021 were as follows: End-Use Market Data Three Months Ended ($ in millions) 2022 2021 Aerospace and Defense $ 261.6 $ 166.9 Medical 59.2 43.1 Transportation 36.9 41.6 Energy 27.9 22.2 Industrial and Consumer 105.0 86.6 Distribution 32.3 27.2 Consolidated net sales $ 522.9 $ 387.6 Geographic Data Three Months Ended ($ in millions) 2022 2021 United States $ 319.6 $ 246.9 Europe 90.8 48.5 Asia Pacific 58.1 61.5 Mexico 33.0 15.8 Canada 11.7 7.9 Other 9.7 7.0 Consolidated net sales $ 522.9 $ 387.6 |
Loss per Common Share
Loss per Common Share | 3 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Loss per Common Share | Loss per Common Share The Company calculates basic and diluted loss per share using the two class method. Under the two class method, losses are allocated to common stock and participating securities (non-vested restricted shares and units that receive non-forfeitable dividends) according to their participation rights in dividends and undistributed earnings. The losses available to each class of stock are divided by the weighted average number of outstanding shares for the period in each class. Diluted loss per share assumes the issuance of common stock for all potentially dilutive share equivalents outstanding. For the three months ended September 30, 2022 and 2021, respectively, the Company incurred a net loss and accordingly excluded all potentially dilutive securities from the determination of diluted loss per share as their impact was anti-dilutive. The calculations of basic and diluted loss per common share for the three months ended September 30, 2022 and 2021 were as follows: Three Months Ended (in millions, except per share data) 2022 2021 Net loss $ (6.9) $ (14.8) Dividends allocated under share-based compensation plans (0.1) — Loss available for common stockholders used in calculation of basic loss per common share $ (7.0) $ (14.8) Weighted average number of common shares outstanding, basic 48.7 48.5 Basic loss per common share $ (0.14) $ (0.31) Net loss $ (6.9) $ (14.8) Dividends allocated under share-based compensation plans (0.1) — Loss available for common stockholders used in calculation of diluted loss per common share $ (7.0) $ (14.8) Weighted average number of common shares outstanding, basic 48.7 48.5 Effect of shares issuable under share-based compensation plans — — Weighted average number of common shares outstanding, diluted 48.7 48.5 Diluted loss per common share $ (0.14) $ (0.31) The following awards issued under share-based compensation plans were excluded from the above calculations of diluted loss per share because their effects were anti-dilutive: Three Months Ended (in millions) 2022 2021 Stock options 1.9 1.9 |
Inventories
Inventories | 3 Months Ended |
Sep. 30, 2022 | |
Inventory, Net [Abstract] | |
Inventories | Inventories Inventories consisted of the following components as of September 30, 2022 and June 30, 2022: ($ in millions) September 30, June 30, Raw materials and supplies $ 155.2 $ 127.8 Work in process 336.2 261.2 Finished and purchased products 124.7 107.1 Total inventories $ 616.1 $ 496.1 Inventories are valued at the lower of cost or market. Cost for inventories is principally determined using the last-in, first-out ("LIFO") inventory costing method. The Company also uses the first-in, first-out ("FIFO") and average cost methods. As of September 30, 2022 and June 30, 2022, $133.1 million and $122.9 million of inventory, respectively, was accounted for using a method other than the LIFO inventory costing method. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Sep. 30, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following as of September 30, 2022 and June 30, 2022: ($ in millions) September 30, June 30, Accrued compensation and benefits $ 52.5 $ 53.2 Contract liabilities 15.4 14.4 Accrued postretirement benefits 14.1 14.1 Current portion of lease liabilities 9.5 9.9 Accrued taxes 7.3 6.3 Accrued interest expense 6.4 18.4 Accrued pension liabilities 3.4 3.4 Derivative financial instruments 1.9 0.3 Accrued income taxes 0.4 0.4 Other 12.0 13.1 Total accrued liabilities $ 122.9 $ 133.5 |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 3 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefits | Pension and Other Postretirement Benefits The components of the net periodic pension expense (income) related to the Company's pension and other postretirement benefits for the three months ended September 30, 2022 and 2021 were as follows: Three months ended September 30, Pension Plans Other Postretirement Plans ($ in millions) 2022 2021 2022 2021 Service cost $ 2.0 $ 2.1 $ 0.5 $ 0.6 Interest cost 11.5 9.1 2.4 1.8 Expected return on plan assets (11.2) (14.9) (1.7) (2.0) Amortization of net loss (gain) 2.4 2.1 (0.4) (0.2) Amortization of prior service cost (credits) 0.5 0.6 (1.0) (1.0) Net pension expense (income) $ 5.2 $ (1.0) $ (0.2) $ (0.8) During the three months ended September 30, 2022 and 2021, the Company made $0.0 million and $0.2 million, respectively, of contributions to its qualified defined benefit pension plans. The Company currently does not expect to contribute to the qualified defined benefit pension plans during the remainder of fiscal year 2023. |
Debt
Debt | 3 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt On March 16, 2022, the Company completed its offering and sale of $300.0 million in aggregate principal amount of 7.625% Senior Notes due 2030 (the "2030 Notes"). The 2030 Notes accrue interest at the rate of 7.625% per annum, with interest payable in cash semi-annually in arrears on March 15 and September 15, commencing September 15, 2022. The 2030 Notes will mature on March 15, 2030. The 2030 Notes are senior unsecured indebtedness of the Company, ranking equally in right of payment with all its existing and future senior unsecured indebtedness and senior to its future subordinated indebtedness. The Company used the net proceeds from the issuance of the 2030 Notes to repay, in April 2022, in full $300.0 million in principal of its 4.45% senior unsecured notes due March 2023, including any interest and premium due thereon. On March 26, 2021, the Company entered into a $300.0 million secured revolving credit facility (the "Credit Facility"). The Credit Facility amended and restated the Company's previous revolving credit facility, dated March 31, 2017, which had been set to expire in March 2022. The Credit Facility extends the maturity to March 31, 2024, subject to a springing maturity of November 30, 2022. If, by November 30, 2022, the Company's $300.0 million 4.45% Senior Notes due in March 2023 were not redeemed, repurchased or refinanced with indebtedness having a maturity date of October 1, 2024 or later, all indebtedness under the Credit Facility would have been due. The springing maturity clause has been satisfied with the issuance of the 2030 Notes and subsequent payment in full of the 4.45% Senior Notes, as discussed above. The Credit Facility contains a revolving credit commitment amount of $300.0 million, subject to the Company's right, from time to time, to request an increase of the commitment to $500.0 million in the aggregate; and provides for the issuance of letters of credit subject to a $40.0 million sub-limit. The Company has the right to terminate or reduce the commitments under the Credit Facility, and, subject to certain lender approvals, to join subsidiaries as subsidiary borrowers. On February 14, 2022, the Company entered into an amendment (the "Amendment") to its Credit Facility. The Amendment revised the interest coverage ratio covenant under the Credit Facility so the first test date was June 30, 2022, and required a minimum interest coverage ratio of 2.00 to 1.00 at June 30, 2022 (calculated for the two fiscal quarters then ended), 3.00 to 1.00 at September 30, 2022 (calculated for the three fiscal quarters then ended) and 3.50 to 1.00 at December 31, 2022 and thereafter (calculated for the four fiscal quarters then ended). The Amendment revised the restricted period under the Credit Facility, during which the Company was prohibited from incurring any secured debt other than purchase money financing for new equipment and was subject to additional restrictions on its ability to make dividends or distributions or to make certain investments. The restricted period expired on September 30, 2022. Interest on the borrowings under the Credit Facility accrues at variable rates, based upon a "Eurocurrency Rate" or a defined "Base Rate". Both are determined based upon the credit rating of the Company's senior unsecured long-term debt (the "Debt Rating"). The applicable margin to be added to Eurocurrency Rate ranges from 1.25% to 2.25% (2.00% as of September 30, 2022), and for Base Rate-determined loans, from 0.25% to 1.25% (1.00% as of September 30, 2022). The Company also pays a quarterly commitment fee ranging from 0.275% to 0.375% (0.35% as of September 30, 2022), determined based upon the Debt Rating, of the unused portion of the $300.0 million commitment under the Credit Facility. In addition, the Company must pay certain letter of credit fees, ranging from 1.25% to 2.25% (2.00% as of September 30, 2022), with respect to letters of credit issued under the Credit Facility. The Company has the right to voluntarily prepay and re-borrow loans and to terminate or reduce the commitments under the facility. As of September 30, 2022, the Company had $1.8 million of issued letters of credit under the Credit Facility and no short-term borrowings, with the balance of $298.2 million available to the Company. As of September 30, 2022, the borrowing rate for the Credit Facility was 5.12%. The Company is subject to certain financial and restrictive covenants under the Credit Facility, which, among other things, require the maintenance of a minimum interest coverage ratio. The interest coverage ratio is defined in the Credit Facility as, for any period, the ratio of consolidated earnings before interest, taxes, depreciation and amortization and non-cash net pension expense ("EBITDA") to consolidated interest expense for such period. The interest coverage covenant was waived until the quarter ended June 30, 2022 at which time it was required to be 2.00 to 1.00 and then 3.00 to 1.00 at September 30, 2022. The Credit Facility also requires the Company to maintain a debt to capital ratio of less than 55 percent. The debt to capital ratio is defined in the Credit Facility as the ratio of consolidated indebtedness, as defined therein, to consolidated capitalization, as defined therein. In addition, the Company is also subject to an asset coverage ratio minimum of 1.10 to 1.00. The asset coverage ratio is defined in the Credit Facility as eligible receivables and inventory, as defined therein, to outstanding loans and obligations, as defined therein. As of September 30, 2022, the Company was in compliance with all of the covenants of the Credit Facility. Long-term debt outstanding as of September 30, 2022 and June 30, 2022 consisted of the following: ($ in millions) September 30, June 30, Senior unsecured notes, 6.375% due July 2028 (face value of $400.0 million at September 30, 2022 and June 30, 2022) $ 396.0 $ 395.9 Senior unsecured notes, 7.625% due March 2030 (face value of $300.0 million at September 30, 2022 and June 30, 2022) 296.1 295.9 Total debt 692.1 691.8 Less: amounts due within one year — — Long-term debt, net of current portion $ 692.1 $ 691.8 For the three months ended September 30, 2022 and 2021, interest costs totaled $12.9 million and $10.3 million, respectively, of which $0.3 million and $0.1 million, respectively, were capitalized as part of the cost of property, plant, equipment and software. |
Contingencies and Commitments
Contingencies and Commitments | 3 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | Contingencies and Commitments Environmental The Company is subject to various federal, state, local and international environmental laws and regulations relating to pollution, protection of public health and the environment, natural resource damages and occupational safety and health. Although compliance with these laws and regulations may affect the costs of the Company's operations, compliance costs to date have not been material. The Company has environmental remediation liabilities at some of its owned operating facilities and has been designated as a potentially responsible party ("PRP") with respect to certain third party Superfund waste-disposal sites and other third party-owned sites. The Company accrues amounts for environmental remediation costs that represent management's best estimate of the probable and reasonably estimable future costs related to environmental remediation. During the three months ended September 30, 2022, the Company increased the liability for a company-owned former operating site by $0.1 million. The liabilities recorded for environmental remediation costs at Superfund sites, other third party-owned sites and Carpenter-owned current or former operating facilities remaining at September 30, 2022 and June 30, 2022 were $18.4 million and $18.3 million, respectively. Additionally, the Company has been notified that it may be a PRP with respect to other Superfund sites as to which no proceedings have been instituted against the Company. Neither the exact amount of remediation costs nor the final method of their allocation among all designated PRPs at these Superfund sites have been determined. Accordingly, at this time we cannot reasonably estimate expected costs for such matters. The liability for future environmental remediation costs that can be reasonably estimated is evaluated by management on a quarterly basis. The Company accrues amounts for environmental remediation costs that represent management's best estimate of the probable and reasonably estimable future costs related to environmental remediation. Estimates of the amount and timing of future costs of environmental remediation requirements are inherently imprecise because of the continuing evolution of environmental laws and regulatory requirements, the availability and application of technology, the identification of currently unknown remediation sites and the allocation of costs among the PRPs. Based upon information currently available, such future costs are not expected to have a material effect on the Company's financial position, results of operations or cash flows over the long-term. However, such costs could be material to the Company's financial position, results of operations or cash flows in a particular future quarter or year. Other The Company is defending various routine claims and legal actions that are incidental to its business and common to its operations, including those pertaining to product claims, commercial disputes, patent infringement, employment actions, employee benefits, compliance with domestic and foreign laws, personal injury claims and tax issues. Like many other manufacturing companies in recent years, the Company, from time to time, has been named as a defendant in lawsuits alleging personal injury as a result of exposure to chemicals and substances in the workplace such as asbestos. The Company provides for costs relating to these matters when a loss is probable and the amount of the loss is reasonably estimable. The effect of the outcome of these matters on the Company's future results of operations and liquidity cannot be predicted because any such effect depends on future results of operations and the amount and timing (both as to recording future charges to operations and cash expenditures) of the resolution of such matters. While it is not feasible to determine the outcome of these matters, management believes that the total liability from these matters will not have a material effect on the Company's financial position, results of operations or cash flows over the long-term. However, there can be no assurance that an increase in the scope of pending matters or that any future lawsuits, claims, proceedings or investigations will not be material to the Company's financial position, results of operations or cash flows in a particular future quarter or year. |
Leases
Leases | 3 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company records right-of-use ("ROU") assets and operating lease liabilities on the consolidated balance sheet for several types of operating leases, including land and buildings, equipment (e.g. trucks and forklifts), vehicles and computer equipment. On the lease commencement date, the Company measures and records a ROU asset and lease liability equal to the present value of the remaining lease payments, discounted using the rate implicit in the lease (or if that rate cannot be readily determined, the Company's incremental borrowing rate). Operating leases are included in other assets, accrued liabilities (current) and other liabilities (long-term) on the consolidated balance sheets. The Company elected the practical expedient to not separate lease components from non-lease components for all asset classes. The Company recognizes lease expense in the consolidated statements of operations on a straight-line basis over the lease term. The Company elected to not recognize ROU assets and lease liabilities for short-term leases with an initial term of 12 months or less for all asset classes. Leases with the option to extend their term or terminate early are reflected in the lease term when it is reasonably certain that the Company will exercise such options. Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments. The variable lease payments are not presented as part of the ROU asset or lease liability. Income from subleased properties is recognized and presented as a reduction of selling, general and administrative expenses in the Company's consolidated statements of operations. The following table sets forth the components of the Company's lease cost for the three months ended September 30, 2022 and September 30, 2021: Three Months Ended ($ in millions) 2022 2021 Operating lease cost $ 2.8 $ 2.5 Short-term lease cost 0.9 0.8 Variable lease cost — 0.2 Sublease income (0.2) (0.2) Total lease cost $ 3.5 $ 3.3 Operating cash flow payments from operating leases $ 3.1 $ 2.8 Non-cash ROU assets obtained in exchange for lease obligations $ 0.2 $ 0.2 The leases have remaining terms of one September 30, June 30, Weighted-average remaining lease term - operating leases 8.4 years 8.5 years Weighted-average discount rate - operating leases 3.7 % 3.7 % The following table sets forth the Company's ROU assets and lease liabilities at September 30, 2022 and June 30, 2022: ($ in millions) September 30, June 30, Operating lease assets: Other assets $ 40.2 $ 42.9 Operating lease liabilities: Accrued liabilities $ 9.5 $ 9.9 Other liabilities 40.2 42.7 Total operating lease liabilities $ 49.7 $ 52.6 Minimum lease payments for operating leases by fiscal year expiring subsequent to September 30, 2022 are as follows: ($ in millions) September 30, 2023 (remaining period of fiscal year) $ 8.6 2024 8.9 2025 6.3 2026 5.0 2027 4.9 Thereafter 24.9 Total future minimum lease payments 58.6 Less imputed interest (8.9) Total $ 49.7 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value hierarchy has three levels based on the inputs used to determine fair value. Level 1 refers to quoted prices in active markets for identical assets or liabilities. Level 2 refers to observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 refers to unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Currently, the Company does not use Level 1 and 3 inputs. The following tables present the Company's assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy: September 30, 2022 Fair Value ($ in millions) Level 2 Assets: Derivative financial instruments $ 12.0 Liabilities: Derivative financial instruments $ 2.0 June 30, 2022 Fair Value ($ in millions) Level 2 Assets: Derivative financial instruments $ 16.6 Liabilities: Derivative financial instruments $ 0.4 The Company's derivative financial instruments consist of commodity forward contracts and foreign currency forward contracts. These instruments are measured at fair value using the market method valuation technique. The inputs to this technique utilize information related to commodity prices and foreign exchange rates published by third party leading financial news and data providers. This is observable data; however, the valuation of these instruments is not based on actual transactions for the same instruments and, as such, they are classified as Level 2. The Company's use of derivatives and hedging policies are more fully discussed in Note 12 Derivatives and Hedging Activities. The Company has currently chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with accounting principles generally accepted in the United States of America. The carrying amounts of other financial instruments not listed in the table below approximate fair value due to the short-term nature of these items. The carrying amounts and estimated fair values of the Company's financial instruments not recorded at fair value in the financial statements were as follows: September 30, 2022 June 30, 2022 ($ in millions) Carrying Fair Carrying Fair Long-term debt $ 692.1 $ 660.0 $ 691.8 $ 641.5 Company-owned life insurance $ 21.9 $ 21.9 $ 22.9 $ 22.9 The fair values of long-term debt as of September 30, 2022 and June 30, 2022 were determined by using current interest rates for debt with terms and maturities similar to the Company's existing debt arrangements and accordingly would be classified as Level 2 inputs in the fair value hierarchy. The carrying amount of company-owned life insurance as of September 30, 2022 and June 30, 2022 reflects cash surrender values based upon the market values of underlying securities, using Level 2 inputs, net of any outstanding policy loans. The carrying value associated with the cash surrender value of these policies is recorded in other assets in the accompanying consolidated balance sheets. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 3 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities The Company from time to time uses commodity forwards, interest rate swaps, forward interest rate swaps and foreign currency forwards to manage risks generally associated with commodity price, interest rate and foreign currency rate fluctuations. The following explains the various types of derivatives and includes a summary of the impact the derivative instruments had on the Company's financial position, results of operations and cash flows. Cash Flow Hedging — Commodity forward contracts: The Company enters into commodity forward contracts to fix the price of a portion of anticipated future purchases of certain critical raw materials and energy to manage the risk of cash flow variability associated with volatile commodity prices. The commodity forward contracts have been designated as cash flow hedges. The qualifying hedge contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in accumulated other comprehensive (loss) income ("AOCI") and reclassified to cost of sales in the period during which the hedged transaction affects earnings or it becomes probable that the forecasted transaction will not occur. As of September 30, 2022, the Company had forward contracts to purchase 5.2 million pounds of certain raw materials with settlement dates through May 2025. Cash Flow Hedging — Forward interest rate swaps: Historically, the Company has entered into forward interest rate swap contracts to manage the risk of cash flow variability associated with fixed interest debt expected to be issued. The forward interest rate swaps were designated as cash flow hedges. The qualifying hedge contracts were marked-to-market at each reporting date and any unrealized gains or losses were included in AOCI and reclassified to interest expense in the period during which the hedged transaction affected earnings or it became probable that the forecasted transaction would not occur. Upon the issuance of the fixed rate debt, the forward interest rate swap contracts were terminated. The realized gains at the time the interest rate swap contracts were terminated were amortized over the term of the underlying debt. For the three months ended September 30, 2022 and 2021, net gains related to the previously terminated contracts of $0.0 million and $0.1 million, respectively, were recorded as a reduction to interest expense Cash Flow Hedging — Foreign currency forward contracts: From time-to-time, the Company uses foreign currency forward contracts to hedge a portion of anticipated future sales denominated in foreign currencies, principally the Euro in order to offset the effect of changes in exchange rates. The qualifying hedge contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in AOCI and reclassified to net sales in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur. The Company also uses foreign currency forward contracts to protect certain short-term positions denominated in foreign currencies against the effect of changes in exchange rates. These positions do not qualify for hedge accounting and accordingly are marked-to-market at each reporting date through charges to other expense (income), net. As of September 30, 2022 and June 30, 2022, the fair value of the outstanding foreign currency forwards not designated as hedging instruments and the charges to income for changes in fair value for these contracts were not material. The fair value and location of outstanding derivative contracts recorded in the accompanying consolidated balance sheets were as follows as of September 30, 2022 and June 30, 2022: September 30, 2022 Foreign Commodity Total ($ in millions) Asset Derivatives: Derivatives designated as hedging instruments: Other current assets $ 0.5 $ 5.4 $ 5.9 Other assets 5.0 1.1 6.1 Total asset derivatives $ 5.5 $ 6.5 $ 12.0 Liability Derivatives: Derivatives designated as hedging instruments: Accrued liabilities $ — $ 1.9 $ 1.9 Other liabilities — 0.1 0.1 Total liability derivatives $ — $ 2.0 $ 2.0 June 30, 2022 Foreign Commodity Total ($ in millions) Asset Derivatives: Derivatives designated as hedging instruments: Other current assets $ — $ 11.5 $ 11.5 Other assets 2.6 2.5 5.1 Total asset derivatives $ 2.6 $ 14.0 $ 16.6 Liability Derivatives: Derivatives designated as hedging instruments: Accrued liabilities $ 0.2 $ 0.1 $ 0.3 Other liabilities — 0.1 0.1 Total liability derivatives $ 0.2 $ 0.2 $ 0.4 Substantially all of the derivative contracts are subject to master netting arrangements, or similar agreements with each counterparty, which provide for the option to settle contracts on a net basis when they settle on the same day and in the same currency. In addition, these arrangements provide for a net settlement of all contracts with a given counterparty in the event that the arrangement is terminated due to the occurrence of default or a termination event. The Company presents the outstanding derivative contracts on a net basis by counterparty in the consolidated balance sheets. If the Company had chosen to present the derivative contracts on a gross basis, the total asset derivatives would have been $17.5 million and total liability derivatives would have been $7.5 million as of September 30, 2022. According to the provisions of the Company's derivative arrangements, in the event that the fair value of outstanding derivative positions with certain counterparties exceeds certain thresholds, the Company may be required to issue cash collateral to the counterparties. As of September 30, 2022 and June 30, 2022, the Company had no cash collateral held by counterparties. The Company is exposed to credit loss in the event of nonperformance by counterparties on its derivative instruments as well as credit or performance risk with respect to its customer commitments to perform. Although nonperformance is possible, the Company does not anticipate nonperformance by any of the parties. In addition, various master netting arrangements are in place with counterparties to facilitate settlements of gains and losses on these contracts. Cash Flow and Fair Value Hedges For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the derivative is reported as a component of AOCI and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings or it becomes probable the forecasted transactions will not occur. The following is a summary of the losses to cash flow hedges recognized during the three months ended September 30, 2022 and 2021: Amount of Loss Three Months Ended ($ in millions) 2022 2021 Derivatives in Cash Flow Hedging Relationship: Commodity contracts $ (0.2) $ (0.3) Total $ (0.2) $ (0.3) ($ in millions) Location of (Loss) Gain Amount of (Loss) Gain Reclassified from AOCI Three Months Ended 2022 2021 Derivatives in Cash Flow Hedging Relationship: Commodity contracts Cost of sales $ 6.7 $ (1.8) Forward interest rate swaps Interest expense, net — 0.1 Total $ 6.7 $ (1.7) The following is a summary of total amounts presented in the consolidated statements of operations in which the effects of cash flow and fair value hedges are recorded during the three months ended September 30, 2022 and 2021: Three Months Ended Three Months Ended ($ in millions) Cost of Sales Interest Expense, Net Cost of Sales Interest Expense, Net Total amounts presented in the consolidated statement of operations in which the effects of cash flow and fair value hedges are recorded $ 468.1 $ 12.6 $ 362.4 $ 10.2 Gain (Loss) on Derivatives in Cash Flow Hedging Relationship: Commodity contracts Amount of gain (loss) reclassified from AOCI to income $ 6.7 $ — $ (1.8) $ — Interest rate swap agreements Amount of gain reclassified from AOCI to income — — — 0.1 Total gain (loss) $ 6.7 $ — $ (1.8) $ 0.1 The Company estimates that $2.5 million of net derivative gains included in AOCI as of September 30, 2022 will be reclassified into income within the next 12 months. No significant cash flow hedges were discontinued during the three months ended September 30, 2022. |
Other Expense (Income), Net
Other Expense (Income), Net | 3 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other Expense (Income), Net | Other Expense (Income), Net Other expense (income), net consisted of the following: Three Months Ended ($ in millions) 2022 2021 Unrealized losses on company-owned life insurance contracts and investments held in rabbi trusts $ 1.0 $ 0.2 Foreign exchange loss 0.1 0.3 Interest income (0.1) — Pension earnings, interest and deferrals expense (income) 2.5 (4.5) Other — (0.1) Total other expense (income), net $ 3.5 $ (4.1) |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate used for interim periods is the estimated annual effective consolidated tax rate, based on the current estimate of full year results, except that taxes related to specific events, if any, are recorded in the interim period in which they occur. The annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pre-tax income, or loss, of the Company in each tax jurisdiction in which it operates, and the development of tax planning strategies during the year. In addition, the Company’s tax expense or benefit can be impacted by changes in tax rates or laws, the finalization of tax audits, and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions. During the three months ended September 30, 2022, deferred taxes were determined by the year-to-date tax benefit with current taxes accounting for the remaining tax benefit recorded in the period. Income tax benefit was $0.9 million, or 11.5 percent of pre-tax loss for the three months ended September 30, 2022, as compared with income tax benefit of $10.4 million, or 41.3 percent of pre-tax loss for the three months ended September 30, 2021. Income tax benefit for the three months ended September 30, 2022, includes the unfavorable impact of losses in certain jurisdictions for which no tax benefit can be recognized. Also included is a discrete tax charge of $0.6 million for the impact of a state tax legislative change and a discrete tax benefit of $0.3 million attributable to employee share-based compensation. Income tax benefit for the three months ended September 30, 2021 included the unfavorable impacts of losses in certain foreign jurisdictions for which no tax benefit can be recognized. The Inflation Reduction Act of 2022 (the "IRA") was enacted on August 16, 2022. The IRA includes climate and energy provisions, extends the Affordable Care Act subsidies, increases Internal Revenue Enforcement funding and allows Medicare to negotiate prescription drug prices. The IRA creates a 15 percent corporate alternative minimum tax on profits of corporations whose average annual adjusted financial statement income for any consecutive three-tax-year period preceding the tax year exceeds $1.0 billion and is effective for tax years beginning after December 31, 2022. The IRA also creates an excise tax of 1 percent on stock repurchases by publicly traded U.S. corporations, effective for repurchases after December 31, 2022. The provisions of the IRA are not expected to have a significant impact on our financial position, results of operations or cash flows. |
Business Segments
Business Segments | 3 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments The Company has two reportable segments, Specialty Alloys Operations ("SAO") and Performance Engineered Products ("PEP"). The SAO segment is comprised of the Company's major premium alloy and stainless steel manufacturing operations. This includes operations performed at mills primarily in Reading and Latrobe, Pennsylvania and surrounding areas as well as South Carolina and Alabama. The combined assets of the SAO operations are managed in an integrated manner to optimize efficiency and profitability across the total system. The PEP segment is comprised of the Company's differentiated operations. This segment includes the Dynamet titanium business, the Carpenter Additive business and the Latrobe and Mexico distribution businesses. The businesses in the PEP segment are managed with an entrepreneurial structure to promote flexibility and agility to quickly respond to market dynamics. The Company's executive management evaluates the performance of these operating segments based on sales, operating income and cash flow generation. Segment operating results exclude general corporate costs, which are comprised of executive and director compensation and other corporate facilities and administrative expenses not allocated to the segments. Also excluded are items that management considers not representative of ongoing operations, such as restructuring charges and other specifically-identified income or expense items. On a consolidated basis, no single customer accounted for 10 percent or more of net sales for the three months ended September 30, 2022 and September 30, 2021. On a consolidated basis, no single customer accounted for 10 percent or more of accounts receivable outstanding at September 30, 2022 and June 30, 2022. Three Months Ended ($ in millions) 2022 2021 Net Sales: Specialty Alloys Operations $ 447.3 $ 331.9 Performance Engineered Products 93.2 74.6 Intersegment (17.6) (18.9) Consolidated net sales $ 522.9 $ 387.6 Three Months Ended ($ in millions) 2022 2021 Operating Income (Loss): Specialty Alloys Operations $ 19.9 $ (5.9) Performance Engineered Products 6.3 0.6 Corporate costs (17.1) (14.2) Intersegment (0.8) 0.4 Consolidated operating income (loss) $ 8.3 $ (19.1) Three Months Ended ($ in millions) 2022 2021 Depreciation and Amortization: Specialty Alloys Operations $ 27.1 $ 27.2 Performance Engineered Products 3.8 3.9 Corporate 1.4 1.4 Consolidated depreciation and amortization $ 32.3 $ 32.5 Three Months Ended ($ in millions) 2022 2021 Capital Expenditures: Specialty Alloys Operations $ 11.4 $ 12.1 Performance Engineered Products 2.0 1.3 Corporate 0.1 1.0 Consolidated capital expenditures $ 13.5 $ 14.4 September 30, June 30, ($ in millions) Total Assets: Specialty Alloys Operations $ 2,339.3 $ 2,262.4 Performance Engineered Products 433.2 418.9 Corporate 163.9 248.9 Intersegment 3.5 2.1 Consolidated total assets $ 2,939.9 $ 2,932.3 |
Reclassifications from Accumula
Reclassifications from Accumulated Other Comprehensive Loss | 3 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Reclassifications from Accumulated Other Comprehensive Loss | Reclassifications from Accumulated Other Comprehensive Loss The changes in AOCI by component, net of tax, for the three months ended September 30, 2022 and 2021 were as follows: Three Months Ended September 30, 2022 Cash flow Pension and Foreign Total Balances at June 30, 2022 $ 5.5 $ (132.9) $ (46.1) $ (173.5) Other comprehensive loss before reclassifications (0.2) — (3.3) (3.5) Amounts reclassified from AOCI (b) (5.1) 1.0 — (4.1) Net other comprehensive (loss) income (5.3) 1.0 (3.3) (7.6) Balances at September 30, 2022 $ 0.2 $ (131.9) $ (49.4) $ (181.1) Three Months Ended September 30, 2021 Cash flow Pension and Foreign Total Balances at June 30, 2021 $ 6.9 $ (159.1) $ (40.1) $ (192.3) Other comprehensive loss before reclassifications (0.2) — (2.1) (2.3) Amounts reclassified from AOCI (b) 1.3 1.1 — 2.4 Net other comprehensive income (loss) 1.1 1.1 (2.1) 0.1 Balances at September 30, 2021 $ 8.0 $ (158.0) $ (42.2) $ (192.2) (a) All amounts are net of tax. Amounts in parentheses indicate debits. (b) See separate table below for further details. The following is a summary of amounts reclassified from AOCI for the three months ended September 30, 2022 and 2021: Details about AOCI Components Location of Amount Reclassified from AOCI ($ in millions) (a) 2022 2021 Cash flow hedging items: Commodity contracts Cost of sales $ 6.7 $ (1.8) Forward interest rate swaps Interest expense, net — 0.1 Total before tax 6.7 (1.7) Tax (expense) benefit (1.6) 0.4 Net of tax $ 5.1 $ (1.3) Details about AOCI Components Location of Amount Reclassified from AOCI ($ in millions) (a) 2022 2021 Amortization of pension and other postretirement benefit plan items: Net actuarial loss (b) $ (2.0) $ (1.9) Prior service benefit (b) 0.5 0.4 Total before tax (1.5) (1.5) Tax benefit 0.5 0.4 Net of tax $ (1.0) $ (1.1) (a) Amounts in parentheses indicate debits to income/loss. (b) These AOCI components are included in the computation of net periodic benefit cost (see Note 7. Pension and Other Postretirement Benefits for additional details). |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, considered necessary for a fair statement of the results are reflected in the interim periods presented. The June 30, 2022 consolidated balance sheet data was derived from audited financial statements, but does not include all of the disclosures required by accounting principles generally accepted in the United States of America. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in Carpenter Technology's Annual Report on Form 10-K for the fiscal year ended June 30, 2022 (the "2022 Form 10-K"). Operating results for the three months ended September 30, 2022 are not necessarily indicative of the operating results for any future period. |
Recently Issued Accounting Pronouncements Adopted in Current Period and Pending Adoption | Recently Issued Accounting Pronouncements At this time there are no issued pronouncements, adopted or pending adoption, in the current fiscal year that would materially impact the company. |
Revenue | The Company recognizes revenue in accordance with Topic 606, Revenue from Contracts. The Company applies the five-step model in the FASB's guidance, which requires the Company to: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation. The Company recognizes revenue when performance obligations under the terms of a customer purchase order or contract are satisfied. This occurs when control of the goods and services has transferred to the customer, which is generally determined when title, ownership, and risk of loss pass to the customer, all of which occurs upon shipment or delivery of the product. Consignment transactions are arrangements where the Company transfers product to a customer location but retains ownership and control of such product until it is used by the customer. Revenue for consignment arrangements is recognized upon usage by the customer. Service revenue is recognized as the services are performed. Each customer purchase order or contract for goods transferred has a single performance obligation for which revenue is recognized at a point in time. The standard terms and conditions of a customer purchase order include general rights of return and product warranty provisions related to nonconforming product. Depending on the circumstances, the product is either replaced or a quality adjustment is issued. Such warranties do not represent a separate performance obligation. Each customer purchase order or contract sets forth the transaction price for the products and services purchased under that arrangement. Some customer arrangements include variable consideration, such as volume rebates, which generally depend upon the Company's customers meeting specified performance criteria, such as a purchasing level over a period of time. The Company exercises judgment to estimate the most likely amount of variable consideration at each reporting date. Revenue is measured as the amount of consideration the Company expects to receive in exchange for its product. The standard payment terms are 30 days. The Company has elected to use the practical expedient that permits a Company to not adjust for the effects of a significant financing component if it expects that at the contract inception, the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Amounts billed to customers for shipping and handling activities to fulfill the Company's promise to transfer the goods are included in revenues and costs incurred by the Company for the delivery of goods are classified as cost of sales in the consolidated statements of operations. Shipping terms may vary for products shipped outside the United States depending on the mode of transportation, the country where the material is shipped and any agreements made with the customers. Contract liabilities are recognized when the Company has received consideration from a customer to transfer goods or services at a future point in time when the Company performs under the purchase order or contract. Contract liabilities were $15.4 million and $14.4 million at September 30, 2022 and June 30, 2022, respectively, and are included in accrued liabilities on the consolidated balance sheets. |
Loss per Common Share | The Company calculates basic and diluted loss per share using the two class method. Under the two class method, losses are allocated to common stock and participating securities (non-vested restricted shares and units that receive non-forfeitable dividends) according to their participation rights in dividends and undistributed earnings. The losses available to each class of stock are divided by the weighted average number of outstanding shares for the period in each class. Diluted loss per share assumes the issuance of common stock for all potentially dilutive share equivalents outstanding. For the three months ended September 30, 2022 and 2021, respectively, the Company incurred a net loss and accordingly excluded all potentially dilutive securities from the determination of diluted loss per share as their impact was anti-dilutive. |
Inventories | Inventories are valued at the lower of cost or market. Cost for inventories is principally determined using the last-in, first-out ("LIFO") inventory costing method. The Company also uses the first-in, first-out ("FIFO") and average cost methods. |
Regulatory Environmental Costs | The Company is subject to various federal, state, local and international environmental laws and regulations relating to pollution, protection of public health and the environment, natural resource damages and occupational safety and health. Although compliance with these laws and regulations may affect the costs of the Company's operations, compliance costs to date have not been material. The Company has environmental remediation liabilities at some of its owned operating facilities and has been designated as a potentially responsible party ("PRP") with respect to certain third party Superfund waste-disposal sites and other third party-owned sites. The Company accrues amounts for environmental remediation costs that represent management's best estimate of the probable and reasonably estimable future costs related to environmental remediation. |
Contingencies and Commitments | The Company is defending various routine claims and legal actions that are incidental to its business and common to its operations, including those pertaining to product claims, commercial disputes, patent infringement, employment actions, employee benefits, compliance with domestic and foreign laws, personal injury claims and tax issues. Like many other manufacturing companies in recent years, the Company, from time to time, has been named as a defendant in lawsuits alleging personal injury as a result of exposure to chemicals and substances in the workplace such as asbestos. The Company provides for costs relating to these matters when a loss is probable and the amount of the loss is reasonably estimable. The effect of the outcome of these matters on the Company's future results of operations and liquidity cannot be predicted because any such effect depends on future results of operations and the amount and timing (both as to recording future charges to operations and cash expenditures) of the resolution of such matters. While it is not feasible to determine the outcome of these matters, management believes that the total liability from these matters will not have a material effect on the Company's financial position, results of operations or cash flows over the long-term. However, there can be no assurance that an increase in the scope of pending matters or that any future lawsuits, claims, proceedings or investigations will not be material to the Company's financial position, results of operations or cash flows in a particular future quarter or year. |
Leases | The Company elected the practical expedient to not separate lease components from non-lease components for all asset classes. The Company recognizes lease expense in the consolidated statements of operations on a straight-line basis over the lease term. The Company elected to not recognize ROU assets and lease liabilities for short-term leases with an initial term of 12 months or less for all asset classes. Leases with the option to extend their term or terminate early are reflected in the lease term when it is reasonably certain that the Company will exercise such options. Some leasing arrangements require variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments. The variable lease payments are not presented as part of the ROU asset or lease liability. Income from subleased properties is recognized and presented as a reduction of selling, general and administrative expenses in the Company's consolidated statements of operations. |
Fair Value Measurements | The fair value hierarchy has three levels based on the inputs used to determine fair value. Level 1 refers to quoted prices in active markets for identical assets or liabilities. Level 2 refers to observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3 refers to unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Currently, the Company does not use Level 1 and 3 inputs. |
Fair Value of Financial Instruments | The Company's derivative financial instruments consist of commodity forward contracts and foreign currency forward contracts. These instruments are measured at fair value using the market method valuation technique. The inputs to this technique utilize information related to commodity prices and foreign exchange rates published by third party leading financial news and data providers. This is observable data; however, the valuation of these instruments is not based on actual transactions for the same instruments and, as such, they are classified as Level 2. The Company's use of derivatives and hedging policies are more fully discussed in Note 12 Derivatives and Hedging Activities. The Company has currently chosen not to elect the fair value option for any items that are not already required to be measured at fair value in accordance with accounting principles generally accepted in the United States of America. The fair values of long-term debt as of September 30, 2022 and June 30, 2022 were determined by using current interest rates for debt with terms and maturities similar to the Company's existing debt arrangements and accordingly would be classified as Level 2 inputs in the fair value hierarchy. The carrying amount of company-owned life insurance as of September 30, 2022 and June 30, 2022 reflects cash surrender values based upon the market values of underlying securities, using Level 2 inputs, net of any outstanding policy loans. The carrying value associated with the cash surrender value of these policies is recorded in other assets in the accompanying consolidated balance sheets. |
Cash Flow Hedging | Cash Flow Hedging — Commodity forward contracts: The Company enters into commodity forward contracts to fix the price of a portion of anticipated future purchases of certain critical raw materials and energy to manage the risk of cash flow variability associated with volatile commodity prices. The commodity forward contracts have been designated as cash flow hedges. The qualifying hedge contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in accumulated other comprehensive (loss) income ("AOCI") and reclassified to cost of sales in the period during which the hedged transaction affects earnings or it becomes probable that the forecasted transaction will not occur.Cash Flow Hedging — Forward interest rate swaps: Historically, the Company has entered into forward interest rate swap contracts to manage the risk of cash flow variability associated with fixed interest debt expected to be issued. The forward interest rate swaps were designated as cash flow hedges. The qualifying hedge contracts were marked-to-market at each reporting date and any unrealized gains or losses were included in AOCI and reclassified to interest expense in the period during which the hedged transaction affected earnings or it became probable that the forecasted transaction would not occur. Upon the issuance of the fixed rate debt, the forward interest rate swap contracts were terminated. The realized gains at the time the interest rate swap contracts were terminated were amortized over the term of the underlying debt. Cash Flow Hedging — Foreign currency forward contracts: From time-to-time, the Company uses foreign currency forward contracts to hedge a portion of anticipated future sales denominated in foreign currencies, principally the Euro in order to offset the effect of changes in exchange rates. The qualifying hedge contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in AOCI and reclassified to net sales in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur. The Company also uses foreign currency forward contracts to protect certain short-term positions denominated in foreign currencies against the effect of changes in exchange rates. These positions do not qualify for hedge accounting and accordingly are marked-to-market at each reporting date through charges to other expense (income), net. As of September 30, 2022 and June 30, 2022, the fair value of the outstanding foreign currency forwards not designated as hedging instruments and the charges to income for changes in fair value for these contracts were not material. |
Business Segments | The Company has two reportable segments, Specialty Alloys Operations ("SAO") and Performance Engineered Products ("PEP"). The SAO segment is comprised of the Company's major premium alloy and stainless steel manufacturing operations. This includes operations performed at mills primarily in Reading and Latrobe, Pennsylvania and surrounding areas as well as South Carolina and Alabama. The combined assets of the SAO operations are managed in an integrated manner to optimize efficiency and profitability across the total system. The PEP segment is comprised of the Company's differentiated operations. This segment includes the Dynamet titanium business, the Carpenter Additive business and the Latrobe and Mexico distribution businesses. The businesses in the PEP segment are managed with an entrepreneurial structure to promote flexibility and agility to quickly respond to market dynamics. The Company's executive management evaluates the performance of these operating segments based on sales, operating income and cash flow generation. Segment operating results exclude general corporate costs, which are comprised of executive and director compensation and other corporate facilities and administrative expenses not allocated to the segments. Also excluded are items that management considers not representative of ongoing operations, such as restructuring charges and other specifically-identified income or expense items. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of revenues by end-use markets and geography | Comparative information of the Company's overall revenues by end-use markets and geography for the three months ended September 30, 2022 and 2021 were as follows: End-Use Market Data Three Months Ended ($ in millions) 2022 2021 Aerospace and Defense $ 261.6 $ 166.9 Medical 59.2 43.1 Transportation 36.9 41.6 Energy 27.9 22.2 Industrial and Consumer 105.0 86.6 Distribution 32.3 27.2 Consolidated net sales $ 522.9 $ 387.6 Geographic Data Three Months Ended ($ in millions) 2022 2021 United States $ 319.6 $ 246.9 Europe 90.8 48.5 Asia Pacific 58.1 61.5 Mexico 33.0 15.8 Canada 11.7 7.9 Other 9.7 7.0 Consolidated net sales $ 522.9 $ 387.6 |
Loss per Common Share (Tables)
Loss per Common Share (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of calculations of basic and diluted loss per common share | The calculations of basic and diluted loss per common share for the three months ended September 30, 2022 and 2021 were as follows: Three Months Ended (in millions, except per share data) 2022 2021 Net loss $ (6.9) $ (14.8) Dividends allocated under share-based compensation plans (0.1) — Loss available for common stockholders used in calculation of basic loss per common share $ (7.0) $ (14.8) Weighted average number of common shares outstanding, basic 48.7 48.5 Basic loss per common share $ (0.14) $ (0.31) Net loss $ (6.9) $ (14.8) Dividends allocated under share-based compensation plans (0.1) — Loss available for common stockholders used in calculation of diluted loss per common share $ (7.0) $ (14.8) Weighted average number of common shares outstanding, basic 48.7 48.5 Effect of shares issuable under share-based compensation plans — — Weighted average number of common shares outstanding, diluted 48.7 48.5 Diluted loss per common share $ (0.14) $ (0.31) |
Schedule of awards issued under share-based compensation plans excluded from the calculations of diluted earnings per share | The following awards issued under share-based compensation plans were excluded from the above calculations of diluted loss per share because their effects were anti-dilutive: Three Months Ended (in millions) 2022 2021 Stock options 1.9 1.9 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Inventory, Net [Abstract] | |
Schedule of Inventories | Inventories consisted of the following components as of September 30, 2022 and June 30, 2022: ($ in millions) September 30, June 30, Raw materials and supplies $ 155.2 $ 127.8 Work in process 336.2 261.2 Finished and purchased products 124.7 107.1 Total inventories $ 616.1 $ 496.1 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following as of September 30, 2022 and June 30, 2022: ($ in millions) September 30, June 30, Accrued compensation and benefits $ 52.5 $ 53.2 Contract liabilities 15.4 14.4 Accrued postretirement benefits 14.1 14.1 Current portion of lease liabilities 9.5 9.9 Accrued taxes 7.3 6.3 Accrued interest expense 6.4 18.4 Accrued pension liabilities 3.4 3.4 Derivative financial instruments 1.9 0.3 Accrued income taxes 0.4 0.4 Other 12.0 13.1 Total accrued liabilities $ 122.9 $ 133.5 |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefits (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of components of the net periodic pension (income) expense | The components of the net periodic pension expense (income) related to the Company's pension and other postretirement benefits for the three months ended September 30, 2022 and 2021 were as follows: Three months ended September 30, Pension Plans Other Postretirement Plans ($ in millions) 2022 2021 2022 2021 Service cost $ 2.0 $ 2.1 $ 0.5 $ 0.6 Interest cost 11.5 9.1 2.4 1.8 Expected return on plan assets (11.2) (14.9) (1.7) (2.0) Amortization of net loss (gain) 2.4 2.1 (0.4) (0.2) Amortization of prior service cost (credits) 0.5 0.6 (1.0) (1.0) Net pension expense (income) $ 5.2 $ (1.0) $ (0.2) $ (0.8) |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt outstanding | Long-term debt outstanding as of September 30, 2022 and June 30, 2022 consisted of the following: ($ in millions) September 30, June 30, Senior unsecured notes, 6.375% due July 2028 (face value of $400.0 million at September 30, 2022 and June 30, 2022) $ 396.0 $ 395.9 Senior unsecured notes, 7.625% due March 2030 (face value of $300.0 million at September 30, 2022 and June 30, 2022) 296.1 295.9 Total debt 692.1 691.8 Less: amounts due within one year — — Long-term debt, net of current portion $ 692.1 $ 691.8 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Summary of lease cost | The following table sets forth the components of the Company's lease cost for the three months ended September 30, 2022 and September 30, 2021: Three Months Ended ($ in millions) 2022 2021 Operating lease cost $ 2.8 $ 2.5 Short-term lease cost 0.9 0.8 Variable lease cost — 0.2 Sublease income (0.2) (0.2) Total lease cost $ 3.5 $ 3.3 Operating cash flow payments from operating leases $ 3.1 $ 2.8 Non-cash ROU assets obtained in exchange for lease obligations $ 0.2 $ 0.2 September 30, June 30, Weighted-average remaining lease term - operating leases 8.4 years 8.5 years Weighted-average discount rate - operating leases 3.7 % 3.7 % |
Summary of right-of-use assets and lease liabilities | The following table sets forth the Company's ROU assets and lease liabilities at September 30, 2022 and June 30, 2022: ($ in millions) September 30, June 30, Operating lease assets: Other assets $ 40.2 $ 42.9 Operating lease liabilities: Accrued liabilities $ 9.5 $ 9.9 Other liabilities 40.2 42.7 Total operating lease liabilities $ 49.7 $ 52.6 |
Schedule of minimum lease payments for operating leases expiring | Minimum lease payments for operating leases by fiscal year expiring subsequent to September 30, 2022 are as follows: ($ in millions) September 30, 2023 (remaining period of fiscal year) $ 8.6 2024 8.9 2025 6.3 2026 5.0 2027 4.9 Thereafter 24.9 Total future minimum lease payments 58.6 Less imputed interest (8.9) Total $ 49.7 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets and liabilities measured on a recurring basis | The following tables present the Company's assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy: September 30, 2022 Fair Value ($ in millions) Level 2 Assets: Derivative financial instruments $ 12.0 Liabilities: Derivative financial instruments $ 2.0 June 30, 2022 Fair Value ($ in millions) Level 2 Assets: Derivative financial instruments $ 16.6 Liabilities: Derivative financial instruments $ 0.4 |
Schedule of carrying amounts and estimated fair values of financial instruments not recorded at fair value in the financial statements | The carrying amounts and estimated fair values of the Company's financial instruments not recorded at fair value in the financial statements were as follows: September 30, 2022 June 30, 2022 ($ in millions) Carrying Fair Carrying Fair Long-term debt $ 692.1 $ 660.0 $ 691.8 $ 641.5 Company-owned life insurance $ 21.9 $ 21.9 $ 22.9 $ 22.9 |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value and location of outstanding derivative contracts recorded in consolidated balance sheets | The fair value and location of outstanding derivative contracts recorded in the accompanying consolidated balance sheets were as follows as of September 30, 2022 and June 30, 2022: September 30, 2022 Foreign Commodity Total ($ in millions) Asset Derivatives: Derivatives designated as hedging instruments: Other current assets $ 0.5 $ 5.4 $ 5.9 Other assets 5.0 1.1 6.1 Total asset derivatives $ 5.5 $ 6.5 $ 12.0 Liability Derivatives: Derivatives designated as hedging instruments: Accrued liabilities $ — $ 1.9 $ 1.9 Other liabilities — 0.1 0.1 Total liability derivatives $ — $ 2.0 $ 2.0 June 30, 2022 Foreign Commodity Total ($ in millions) Asset Derivatives: Derivatives designated as hedging instruments: Other current assets $ — $ 11.5 $ 11.5 Other assets 2.6 2.5 5.1 Total asset derivatives $ 2.6 $ 14.0 $ 16.6 Liability Derivatives: Derivatives designated as hedging instruments: Accrued liabilities $ 0.2 $ 0.1 $ 0.3 Other liabilities — 0.1 0.1 Total liability derivatives $ 0.2 $ 0.2 $ 0.4 |
Summary of the gains (losses) related to cash flow hedges | The following is a summary of the losses to cash flow hedges recognized during the three months ended September 30, 2022 and 2021: Amount of Loss Three Months Ended ($ in millions) 2022 2021 Derivatives in Cash Flow Hedging Relationship: Commodity contracts $ (0.2) $ (0.3) Total $ (0.2) $ (0.3) ($ in millions) Location of (Loss) Gain Amount of (Loss) Gain Reclassified from AOCI Three Months Ended 2022 2021 Derivatives in Cash Flow Hedging Relationship: Commodity contracts Cost of sales $ 6.7 $ (1.8) Forward interest rate swaps Interest expense, net — 0.1 Total $ 6.7 $ (1.7) |
Summary of effect of derivative instruments on income | The following is a summary of total amounts presented in the consolidated statements of operations in which the effects of cash flow and fair value hedges are recorded during the three months ended September 30, 2022 and 2021: Three Months Ended Three Months Ended ($ in millions) Cost of Sales Interest Expense, Net Cost of Sales Interest Expense, Net Total amounts presented in the consolidated statement of operations in which the effects of cash flow and fair value hedges are recorded $ 468.1 $ 12.6 $ 362.4 $ 10.2 Gain (Loss) on Derivatives in Cash Flow Hedging Relationship: Commodity contracts Amount of gain (loss) reclassified from AOCI to income $ 6.7 $ — $ (1.8) $ — Interest rate swap agreements Amount of gain reclassified from AOCI to income — — — 0.1 Total gain (loss) $ 6.7 $ — $ (1.8) $ 0.1 |
Other Expense (Income), Net (Ta
Other Expense (Income), Net (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of other (income) expense, net | Other expense (income), net consisted of the following: Three Months Ended ($ in millions) 2022 2021 Unrealized losses on company-owned life insurance contracts and investments held in rabbi trusts $ 1.0 $ 0.2 Foreign exchange loss 0.1 0.3 Interest income (0.1) — Pension earnings, interest and deferrals expense (income) 2.5 (4.5) Other — (0.1) Total other expense (income), net $ 3.5 $ (4.1) |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of results of operation, depreciation and amortization, capital expenditures and total assets by reportable segments | Three Months Ended ($ in millions) 2022 2021 Net Sales: Specialty Alloys Operations $ 447.3 $ 331.9 Performance Engineered Products 93.2 74.6 Intersegment (17.6) (18.9) Consolidated net sales $ 522.9 $ 387.6 Three Months Ended ($ in millions) 2022 2021 Operating Income (Loss): Specialty Alloys Operations $ 19.9 $ (5.9) Performance Engineered Products 6.3 0.6 Corporate costs (17.1) (14.2) Intersegment (0.8) 0.4 Consolidated operating income (loss) $ 8.3 $ (19.1) Three Months Ended ($ in millions) 2022 2021 Depreciation and Amortization: Specialty Alloys Operations $ 27.1 $ 27.2 Performance Engineered Products 3.8 3.9 Corporate 1.4 1.4 Consolidated depreciation and amortization $ 32.3 $ 32.5 Three Months Ended ($ in millions) 2022 2021 Capital Expenditures: Specialty Alloys Operations $ 11.4 $ 12.1 Performance Engineered Products 2.0 1.3 Corporate 0.1 1.0 Consolidated capital expenditures $ 13.5 $ 14.4 September 30, June 30, ($ in millions) Total Assets: Specialty Alloys Operations $ 2,339.3 $ 2,262.4 Performance Engineered Products 433.2 418.9 Corporate 163.9 248.9 Intersegment 3.5 2.1 Consolidated total assets $ 2,939.9 $ 2,932.3 |
Reclassifications from Accumu_2
Reclassifications from Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of changes in AOCI by component, net of tax | The changes in AOCI by component, net of tax, for the three months ended September 30, 2022 and 2021 were as follows: Three Months Ended September 30, 2022 Cash flow Pension and Foreign Total Balances at June 30, 2022 $ 5.5 $ (132.9) $ (46.1) $ (173.5) Other comprehensive loss before reclassifications (0.2) — (3.3) (3.5) Amounts reclassified from AOCI (b) (5.1) 1.0 — (4.1) Net other comprehensive (loss) income (5.3) 1.0 (3.3) (7.6) Balances at September 30, 2022 $ 0.2 $ (131.9) $ (49.4) $ (181.1) Three Months Ended September 30, 2021 Cash flow Pension and Foreign Total Balances at June 30, 2021 $ 6.9 $ (159.1) $ (40.1) $ (192.3) Other comprehensive loss before reclassifications (0.2) — (2.1) (2.3) Amounts reclassified from AOCI (b) 1.3 1.1 — 2.4 Net other comprehensive income (loss) 1.1 1.1 (2.1) 0.1 Balances at September 30, 2021 $ 8.0 $ (158.0) $ (42.2) $ (192.2) (a) All amounts are net of tax. Amounts in parentheses indicate debits. |
Schedule of amounts reclassified from AOCI | The following is a summary of amounts reclassified from AOCI for the three months ended September 30, 2022 and 2021: Details about AOCI Components Location of Amount Reclassified from AOCI ($ in millions) (a) 2022 2021 Cash flow hedging items: Commodity contracts Cost of sales $ 6.7 $ (1.8) Forward interest rate swaps Interest expense, net — 0.1 Total before tax 6.7 (1.7) Tax (expense) benefit (1.6) 0.4 Net of tax $ 5.1 $ (1.3) Details about AOCI Components Location of Amount Reclassified from AOCI ($ in millions) (a) 2022 2021 Amortization of pension and other postretirement benefit plan items: Net actuarial loss (b) $ (2.0) $ (1.9) Prior service benefit (b) 0.5 0.4 Total before tax (1.5) (1.5) Tax benefit 0.5 0.4 Net of tax $ (1.0) $ (1.1) (a) Amounts in parentheses indicate debits to income/loss. (b) These AOCI components are included in the computation of net periodic benefit cost (see Note 7. Pension and Other Postretirement Benefits for additional details). |
Revenue - Narrative (Details)
Revenue - Narrative (Details) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 USD ($) segment | Jun. 30, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Payment terms | 30 days | |
Contract liabilities | $ | $ 15.4 | $ 14.4 |
Number of business segments | segment | 2 |
Revenue - Summary of revenues b
Revenue - Summary of revenues by end-use markets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | $ 522.9 | $ 387.6 |
Aerospace and Defense | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | 261.6 | 166.9 |
Medical | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | 59.2 | 43.1 |
Transportation | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | 36.9 | 41.6 |
Energy | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | 27.9 | 22.2 |
Industrial and Consumer | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | 105 | 86.6 |
Distribution | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | $ 32.3 | $ 27.2 |
Revenue - Summary of revenue by
Revenue - Summary of revenue by geography (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | $ 522.9 | $ 387.6 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | 319.6 | 246.9 |
Europe | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | 90.8 | 48.5 |
Asia Pacific | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | 58.1 | 61.5 |
Mexico | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | 33 | 15.8 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | 11.7 | 7.9 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Consolidated net sales | $ 9.7 | $ 7 |
Loss per Common Share - Schedul
Loss per Common Share - Schedule of calculations of basic and diluted earnings per common share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (6.9) | $ (14.8) |
Dividends allocated under share-based compensation plans | (0.1) | 0 |
Loss available for common stockholders used in calculation of basic loss per common share | $ (7) | $ (14.8) |
Weighted average number of common shares outstanding, basic (in shares) | 48.7 | 48.5 |
Basic loss per common share (in dollars per share) | $ (0.14) | $ (0.31) |
Dividends allocated under share-based compensation plans | $ (0.1) | $ 0 |
Loss available for common stockholders used in calculation of diluted loss per common share | $ (7) | $ (14.8) |
Effect of shares issuable under share-based compensation plans (in shares) | 0 | 0 |
Weighted average number of common shares outstanding, diluted (in shares) | 48.7 | 48.5 |
Diluted loss per common share (in dollars per share) | $ (0.14) | $ (0.31) |
Loss per Common Share - Sched_2
Loss per Common Share - Schedule of awards issued under share-based compensation plans excluded from the calculations of diluted earnings per share (Details) - shares shares in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Stock options | ||
Awards issued under share-based compensation plans that were excluded from calculations of diluted earnings per share because their effects were anti-dilutive | ||
Stock options (in shares) | 1.9 | 1.9 |
Inventories - Schedule of inven
Inventories - Schedule of inventories (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Inventory, Net [Abstract] | ||
Raw materials and supplies | $ 155.2 | $ 127.8 |
Work in process | 336.2 | 261.2 |
Finished and purchased products | 124.7 | 107.1 |
Total inventories | $ 616.1 | $ 496.1 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Inventory, Net [Abstract] | ||
Inventory accounted for using a method other than LIFO | $ 133.1 | $ 122.9 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Accrued Liabilities, Current [Abstract] | ||
Accrued compensation and benefits | $ 52.5 | $ 53.2 |
Contract liabilities | 15.4 | 14.4 |
Accrued postretirement benefits | 14.1 | 14.1 |
Current portion of lease liabilities | 9.5 | 9.9 |
Accrued taxes | 7.3 | 6.3 |
Accrued interest expense | 6.4 | 18.4 |
Accrued pension liabilities | 3.4 | 3.4 |
Derivative financial instruments | 1.9 | 0.3 |
Accrued income taxes | 0.4 | 0.4 |
Other | 12 | 13.1 |
Total accrued liabilities | $ 122.9 | $ 133.5 |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefits - Schedule of components of the net periodic pension (income) expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Pension Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 2 | $ 2.1 |
Interest cost | 11.5 | 9.1 |
Expected return on plan assets | (11.2) | (14.9) |
Amortization of net loss (gain) | 2.4 | 2.1 |
Amortization of prior service cost (credits) | 0.5 | 0.6 |
Net pension expense (income) | 5.2 | (1) |
Other Postretirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 0.5 | 0.6 |
Interest cost | 2.4 | 1.8 |
Expected return on plan assets | (1.7) | (2) |
Amortization of net loss (gain) | (0.4) | (0.2) |
Amortization of prior service cost (credits) | (1) | (1) |
Net pension expense (income) | $ (0.2) | $ (0.8) |
Pension and Other Postretirem_4
Pension and Other Postretirement Benefits - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Pension Plans | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Contributions | $ 0 | $ 0.2 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||||||
Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) Rate | Sep. 30, 2021 USD ($) | Dec. 31, 2022 | Jun. 30, 2022 USD ($) | Apr. 30, 2022 USD ($) | Mar. 16, 2022 USD ($) | Mar. 26, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||||||
Long-term debt | $ 692,100,000 | $ 692,100,000 | $ 692,100,000 | $ 691,800,000 | |||||
Letters of credit issued | 1,800,000 | $ 1,800,000 | 1,800,000 | ||||||
Interest costs | 12,900,000 | $ 10,300,000 | |||||||
Interest costs, capitalized | 300,000 | $ 100,000 | |||||||
Line of Credit | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Required debt to capital ratio (less than) | 0.55 | ||||||||
Revolving Credit Facility | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Current borrowing capacity | $ 300,000,000 | ||||||||
Debt instrument, covenant, credit commitment amount | 300,000,000 | ||||||||
Maximum borrowing capacity | 500,000,000 | ||||||||
Commitment fee rate | 0.35% | ||||||||
Short-term credit agreement borrowings | 0 | $ 0 | 0 | ||||||
Credit Agreement available for future borrowings | $ 298,200,000 | $ 298,200,000 | $ 298,200,000 | ||||||
Borrowing rate | 5.12% | 5.12% | 5.12% | ||||||
Required interest coverage ratio one | 200% | 2 | |||||||
Required interest coverage ratio two | 3 | 300% | |||||||
Asset coverage ratio | Rate | 110% | ||||||||
Revolving Credit Facility | Line of Credit | Forecast | |||||||||
Debt Instrument [Line Items] | |||||||||
Required interest coverage ratio two | 3.50 | ||||||||
Revolving Credit Facility | Line of Credit | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate margin | 2% | ||||||||
Revolving Credit Facility | Line of Credit | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate margin | 1% | ||||||||
Revolving Credit Facility | Line of Credit | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee rate | 0.275% | ||||||||
Revolving Credit Facility | Line of Credit | Minimum | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate margin | 1.25% | ||||||||
Revolving Credit Facility | Line of Credit | Minimum | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate margin | 0.25% | ||||||||
Revolving Credit Facility | Line of Credit | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee rate | 0.375% | ||||||||
Revolving Credit Facility | Line of Credit | Maximum | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate margin | 2.25% | ||||||||
Revolving Credit Facility | Line of Credit | Maximum | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate margin | 1.25% | ||||||||
Letters of credit | Line of Credit | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 40,000,000 | ||||||||
Letter of credit fees | 2% | ||||||||
Letters of credit | Line of Credit | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Letter of credit fees | 1.25% | ||||||||
Letters of credit | Line of Credit | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Letter of credit fees | 2.25% | ||||||||
Senior unsecured notes, 7.625% due March 2030 | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | ||||
Interest rate | 7.625% | 7.625% | 7.625% | 7.625% | 7.625% | ||||
Long-term debt | $ 296,100,000 | $ 296,100,000 | $ 296,100,000 | $ 295,900,000 | |||||
Senior unsecured notes, 4.45% due March 2023 | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount | $ 300,000,000 | ||||||||
Interest rate | 4.45% | 4.45% | |||||||
Long-term debt | $ 300,000,000 |
Debt - Schedule of long-term de
Debt - Schedule of long-term debt outstanding (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 16, 2022 |
Debt Instrument [Line Items] | |||
Total debt | $ 692,100,000 | $ 691,800,000 | |
Less: amounts due within one year | 0 | 0 | |
Long-term debt, net of current portion | $ 692,100,000 | $ 691,800,000 | |
Senior unsecured notes, 6.375% due July 2028 | |||
Debt Instrument [Line Items] | |||
Interest rate | 6.375% | 6.375% | |
Face amount | $ 400,000,000 | $ 400,000,000 | |
Total debt | $ 396,000,000 | $ 395,900,000 | |
Senior unsecured notes, 7.625% due March 2030 | |||
Debt Instrument [Line Items] | |||
Interest rate | 7.625% | 7.625% | 7.625% |
Face amount | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 |
Total debt | $ 296,100,000 | $ 295,900,000 |
Contingencies and Commitments (
Contingencies and Commitments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Decrease of liabilities of environmental remediation costs of a company-owned former operating site | $ (0.1) | |
Environmental remediation liability | $ 18.4 | $ 18.3 |
Leases - Summary of lease cost
Leases - Summary of lease cost (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Leases [Abstract] | |||
Operating lease cost | $ 2.8 | $ 2.5 | |
Short-term lease cost | 0.9 | 0.8 | |
Variable lease cost | 0 | 0.2 | |
Sublease income | (0.2) | (0.2) | |
Total lease cost | 3.5 | 3.3 | |
Operating cash flow payments from operating leases | 3.1 | 2.8 | |
Non-cash ROU assets obtained in exchange for lease obligations | $ 0.2 | $ 0.2 | |
Weighted-average remaining lease term - operating leases | 8 years 4 months 24 days | 8 years 6 months | |
Weighted-average discount rate - operating leases | 3.70% | 3.70% |
Leases - Narrative (Details)
Leases - Narrative (Details) | Sep. 30, 2022 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, remaining lease term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, remaining lease term | 15 years |
Leases - Summary of right-of-us
Leases - Summary of right-of-use assets and lease liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Operating lease assets: | ||
Other assets | $ 40.2 | $ 42.9 |
Operating lease liabilities: | ||
Accrued liabilities | 9.5 | 9.9 |
Other liabilities | 40.2 | 42.7 |
Total operating lease liabilities | $ 49.7 | $ 52.6 |
Leases - Schedule of minimum le
Leases - Schedule of minimum lease payments for operating leases expiring (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Leases [Abstract] | ||
2023 (remaining period of fiscal year) | $ 8.6 | |
2024 | 8.9 | |
2025 | 6.3 | |
2026 | 5 | |
2027 | 4.9 | |
Thereafter | 24.9 | |
Total future minimum lease payments | 58.6 | |
Less imputed interest | (8.9) | |
Total | $ 49.7 | $ 52.6 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of fair value of assets and liabilities measured on a recurring basis (Details) - Level 2 - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Assets: | ||
Derivative financial instruments | $ 12 | $ 16.6 |
Liabilities: | ||
Derivative financial instruments | $ 2 | $ 0.4 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of carrying amounts and estimated fair values of financial instruments not recorded at fair value in the financial statements (Details) - Level 2 - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Carrying Value | ||
Carrying amounts and estimated fair values of financial instruments not recorded at fair value | ||
Long-term debt | $ 692.1 | $ 691.8 |
Company-owned life insurance | 21.9 | 22.9 |
Fair Value | ||
Carrying amounts and estimated fair values of financial instruments not recorded at fair value | ||
Long-term debt | 660 | 641.5 |
Company-owned life insurance | $ 21.9 | $ 22.9 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities - Narrative (Details) lb in Millions | 3 Months Ended | ||
Sep. 30, 2022 USD ($) lb | Sep. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | |
Fair value of derivatives | |||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest expense, net | Interest expense, net | |
Total asset derivatives | $ 17,500,000 | ||
Total liability derivatives | 7,500,000 | ||
Cash collateral held by counterparties | 0 | $ 0 | |
Net derivative gains included in AOCI expected to be reclassified into earnings | $ 2,500,000 | ||
Commodity contracts | Cash flow hedges | |||
Fair value of derivatives | |||
Amounts of raw materials to be purchased from forward contracts (in pounds) | lb | 5.2 | ||
Interest Rate Swaps | Cash flow hedges | |||
Fair value of derivatives | |||
Interest rate swaps net gains (losses) | $ 0 | $ 100,000 |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities - Schedule of fair value and location of outstanding derivative contracts recorded in consolidated balance sheets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 |
Liability Derivatives: | ||
Total liability derivatives | $ 7.5 | |
Designated as Hedging Instrument | ||
Asset Derivatives: | ||
Total asset derivatives | 12 | $ 16.6 |
Liability Derivatives: | ||
Total liability derivatives | 2 | 0.4 |
Foreign exchange contracts | Designated as Hedging Instrument | ||
Asset Derivatives: | ||
Total asset derivatives | 5.5 | 2.6 |
Liability Derivatives: | ||
Total liability derivatives | 0 | 0.2 |
Commodity contracts | Designated as Hedging Instrument | ||
Asset Derivatives: | ||
Total asset derivatives | 6.5 | 14 |
Liability Derivatives: | ||
Total liability derivatives | 2 | 0.2 |
Other current assets | Designated as Hedging Instrument | ||
Asset Derivatives: | ||
Total asset derivatives | 5.9 | 11.5 |
Other current assets | Foreign exchange contracts | Designated as Hedging Instrument | ||
Asset Derivatives: | ||
Total asset derivatives | 0.5 | 0 |
Other current assets | Commodity contracts | Designated as Hedging Instrument | ||
Asset Derivatives: | ||
Total asset derivatives | 5.4 | 11.5 |
Other assets | Designated as Hedging Instrument | ||
Asset Derivatives: | ||
Total asset derivatives | 6.1 | 5.1 |
Other assets | Foreign exchange contracts | Designated as Hedging Instrument | ||
Asset Derivatives: | ||
Total asset derivatives | 5 | 2.6 |
Other assets | Commodity contracts | Designated as Hedging Instrument | ||
Asset Derivatives: | ||
Total asset derivatives | 1.1 | 2.5 |
Accrued liabilities | Designated as Hedging Instrument | ||
Liability Derivatives: | ||
Total liability derivatives | 1.9 | 0.3 |
Accrued liabilities | Foreign exchange contracts | Designated as Hedging Instrument | ||
Liability Derivatives: | ||
Total liability derivatives | 0 | 0.2 |
Accrued liabilities | Commodity contracts | Designated as Hedging Instrument | ||
Liability Derivatives: | ||
Total liability derivatives | 1.9 | 0.1 |
Other liabilities | Designated as Hedging Instrument | ||
Liability Derivatives: | ||
Total liability derivatives | 0.1 | 0.1 |
Other liabilities | Foreign exchange contracts | Designated as Hedging Instrument | ||
Liability Derivatives: | ||
Total liability derivatives | 0 | 0 |
Other liabilities | Commodity contracts | Designated as Hedging Instrument | ||
Liability Derivatives: | ||
Total liability derivatives | $ 0.1 | $ 0.1 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities - Summary of the gains (losses) related to cash flow hedges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Loss Recognized in AOCI on Derivatives | $ (0.2) | $ (0.3) |
Amount of (Loss) Gain Reclassified from AOCI into Income | 6.7 | (1.7) |
Commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Loss Recognized in AOCI on Derivatives | (0.2) | (0.3) |
Commodity contracts | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Loss) Gain Reclassified from AOCI into Income | 6.7 | (1.8) |
Commodity contracts | Interest expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Loss) Gain Reclassified from AOCI into Income | 0 | 0 |
Interest Rate Swaps | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Loss) Gain Reclassified from AOCI into Income | 0 | 0 |
Interest Rate Swaps | Interest expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of (Loss) Gain Reclassified from AOCI into Income | $ 0 | $ 0.1 |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities - Summary of effect of derivative instruments on income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Cost of sales | $ 468.1 | $ 362.4 |
Interest expense, net | 12.6 | 10.2 |
Amount of gain reclassified from AOCI to income | 6.7 | (1.7) |
Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gain (loss) | 6.7 | (1.8) |
Interest expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gain (loss) | 0 | 0.1 |
Commodity contracts | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain reclassified from AOCI to income | 6.7 | (1.8) |
Commodity contracts | Interest expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain reclassified from AOCI to income | 0 | 0 |
Interest Rate Swaps | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain reclassified from AOCI to income | 0 | 0 |
Interest Rate Swaps | Interest expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of gain reclassified from AOCI to income | $ 0 | $ 0.1 |
Other Expense (Income), Net (De
Other Expense (Income), Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Other Income and Expenses [Abstract] | ||
Unrealized losses on company-owned life insurance contracts and investments held in rabbi trusts | $ 1 | $ 0.2 |
Foreign exchange loss | 0.1 | 0.3 |
Interest income | (0.1) | 0 |
Pension earnings, interest and deferrals expense (income) | 2.5 | (4.5) |
Other | 0 | (0.1) |
Total other expense (income), net | $ 3.5 | $ (4.1) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit | $ 0.9 | $ 10.4 | $ 10.4 |
Income tax benefit as a percent of pre-tax income (loss) | 11.50% | (41.30%) | |
Discrete tax benefits associated with legislative changes | $ (0.6) | ||
Tax expense (benefit) attributable to employee share-based compensation | $ (0.3) |
Business Segments - Narrative (
Business Segments - Narrative (Details) | 3 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Business Segments - Schedule of
Business Segments - Schedule of results of operation, depreciation and amortization, capital expenditures and total assets by reportable segments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | |
Net Sales: | |||
Consolidated net sales | $ 522.9 | $ 387.6 | |
Operating Income (Loss): | |||
Consolidated operating income (loss) | 8.3 | (19.1) | |
Depreciation and Amortization: | |||
Consolidated depreciation and amortization | 32.3 | 32.5 | |
Capital Expenditures: | |||
Consolidated capital expenditures | 13.5 | 14.4 | |
Total Assets: | |||
Consolidated total assets | 2,939.9 | $ 2,932.3 | |
Operating | Specialty Alloys Operations | |||
Net Sales: | |||
Consolidated net sales | 447.3 | 331.9 | |
Operating Income (Loss): | |||
Consolidated operating income (loss) | 19.9 | (5.9) | |
Depreciation and Amortization: | |||
Consolidated depreciation and amortization | 27.1 | 27.2 | |
Capital Expenditures: | |||
Consolidated capital expenditures | 11.4 | 12.1 | |
Total Assets: | |||
Consolidated total assets | 2,339.3 | 2,262.4 | |
Operating | Performance Engineered Products | |||
Net Sales: | |||
Consolidated net sales | 93.2 | 74.6 | |
Operating Income (Loss): | |||
Consolidated operating income (loss) | 6.3 | 0.6 | |
Depreciation and Amortization: | |||
Consolidated depreciation and amortization | 3.8 | 3.9 | |
Capital Expenditures: | |||
Consolidated capital expenditures | 2 | 1.3 | |
Total Assets: | |||
Consolidated total assets | 433.2 | 418.9 | |
Corporate | |||
Operating Income (Loss): | |||
Consolidated operating income (loss) | (17.1) | (14.2) | |
Depreciation and Amortization: | |||
Consolidated depreciation and amortization | 1.4 | 1.4 | |
Capital Expenditures: | |||
Consolidated capital expenditures | 0.1 | 1 | |
Total Assets: | |||
Consolidated total assets | 163.9 | 248.9 | |
Intersegment | |||
Net Sales: | |||
Consolidated net sales | (17.6) | (18.9) | |
Operating Income (Loss): | |||
Consolidated operating income (loss) | (0.8) | $ 0.4 | |
Total Assets: | |||
Consolidated total assets | $ 3.5 | $ 2.1 |
Reclassifications from Accumu_3
Reclassifications from Accumulated Other Comprehensive Loss - Schedule of changes in AOCI by component, net of tax (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balances at the beginning of the period | $ 1,330.5 | $ 1,392.3 |
Other comprehensive gain (loss) before reclassifications | (3.5) | (2.3) |
Amounts reclassified from AOCI | (4.1) | 2.4 |
Other comprehensive (loss) income, net of tax | (7.6) | 0.1 |
Balances at the end of the period | 1,306.8 | 1,367.6 |
AOCI Attributable to Parent | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balances at the beginning of the period | (173.5) | (192.3) |
Balances at the end of the period | (181.1) | (192.2) |
Cash flow hedging items | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balances at the beginning of the period | 5.5 | 6.9 |
Other comprehensive gain (loss) before reclassifications | (0.2) | (0.2) |
Amounts reclassified from AOCI | (5.1) | 1.3 |
Other comprehensive (loss) income, net of tax | (5.3) | 1.1 |
Balances at the end of the period | 0.2 | 8 |
Pension and other postretirement benefit plan items | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balances at the beginning of the period | (132.9) | (159.1) |
Other comprehensive gain (loss) before reclassifications | 0 | 0 |
Amounts reclassified from AOCI | 1 | 1.1 |
Other comprehensive (loss) income, net of tax | 1 | 1.1 |
Balances at the end of the period | (131.9) | (158) |
Foreign currency items | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balances at the beginning of the period | (46.1) | (40.1) |
Other comprehensive gain (loss) before reclassifications | (3.3) | (2.1) |
Amounts reclassified from AOCI | 0 | 0 |
Other comprehensive (loss) income, net of tax | (3.3) | (2.1) |
Balances at the end of the period | $ (49.4) | $ (42.2) |
Reclassifications from Accumu_4
Reclassifications from Accumulated Other Comprehensive Loss - Schedule of amounts reclassified from AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense, net | $ 12.6 | $ 10.2 | |
(Loss) gain | (3.5) | 4.1 | |
Total before tax | (7.8) | (25.2) | |
Tax (expense)/benefit | 0.9 | 10.4 | $ 10.4 |
Net loss | (6.9) | (14.8) | |
Amount Reclassified from AOCI | Cash flow hedging items | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | 6.7 | (1.7) | |
Tax (expense)/benefit | (1.6) | 0.4 | |
Net loss | 5.1 | (1.3) | |
Amount Reclassified from AOCI | Pension and other postretirement benefit plan items | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Total before tax | (1.5) | (1.5) | |
Tax (expense)/benefit | 0.5 | 0.4 | |
Net loss | (1) | (1.1) | |
Amount Reclassified from AOCI | Net actuarial loss | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
(Loss) gain | (2) | (1.9) | |
Amount Reclassified from AOCI | Prior service benefit | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
(Loss) gain | 0.5 | 0.4 | |
Commodity contracts | Amount Reclassified from AOCI | Cash flow hedging items | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Cost of sales | 6.7 | (1.8) | |
Forward interest rate swaps | Amount Reclassified from AOCI | Cash flow hedging items | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Interest expense, net | $ 0 | $ 0.1 |