Exhibit 99
Carpenter Technology Reports Fourth Quarter and Year-End Results
WYOMISSING, Pa.--(BUSINESS WIRE)--July 23, 2004--Carpenter
Technology Corporation (NYSE:CRS) today reported fourth quarter
results, which reflected strong broad based demand, continued
improvement in its operating performance and a significant increase in
net income versus a year ago.
Net sales for the fourth fiscal quarter ended June 30, 2004 were
$296.8 million, compared with $212.4 million for the same period a
year ago.
Net income in the fourth quarter was $17.7 million or $.73 per
diluted share, compared to net income of $5.5 million or $.23 per
diluted share a year ago.
Net income in the fourth quarter included non-cash pension and
retiree medical expenses of $3.6 million or $.09 per diluted share. In
the fourth quarter a year ago, Carpenter had non-cash net pension
income of $0.8 million or $.02 per diluted share.
Also in the fourth quarter a year ago, Carpenter incurred a
pre-tax special charge of $3.6 million or $.09 per diluted share
related primarily to the early repayment of debt.
Free cash flow, defined as net cash provided before financing
activities but after dividends and excluding the effects of marketable
securities, was $9.4 million in the fourth quarter. This amount was
after the company's decision to make a $25 million contribution to a
VEBA trust that funds post-retirement medical expenses. Free cash flow
in last year's fourth quarter was $31.7 million.
At the end of the fourth quarter, total debt net of cash was
$249.7 million. Carpenter's net debt amount was $16.0 million lower
than at the end of the previous quarter and $106.6 million lower than
a year ago.
Fiscal Year Results
Net sales for fiscal 2004 were $1.0 billion, compared with $871.1
million in the previous fiscal year.
Net income for fiscal 2004 was $36.0 million or $1.49 per diluted
share, compared to a net loss of $10.9 million or $.56 per diluted
share a year ago.
Net income for fiscal 2004 included non-cash pension and retiree
medical expenses of $16.1 million or $.42 per diluted share and a
pre-tax special charge of $2.3 million or $.06 per diluted share
associated with the early repayment of debt.
The net loss a year ago included non-cash pension income of $3.4
million or $.09 per diluted share as well as pre-tax special charges
of $30.6 million or $.82 per diluted share related primarily to the
company's cost reduction efforts and the early redemption of debt.
For fiscal 2004, the company generated $88.4 million of free cash
flow after the $25 million contribution to the VEBA trust versus $80.2
million of free cash flow in the previous fiscal year.
Fourth Quarter - Operating Summary
"Our continued focus on lean and variation reduction combined with
strong demand across all major markets allowed us to achieve the
highest level of quarterly earnings in four years," said Robert J.
Torcolini, chairman, president and chief executive officer. "While we
are encouraged by our performance in fiscal 2004, there remains
significantly more opportunity to improve profitability. We will
continue to focus on operational excellence and to direct our efforts
toward leveraging our higher value products."
Carpenter sales increased 40 percent in the fourth quarter from a
year ago, reflecting strong demand, selective market share gains,
increased base selling prices and surcharges that were implemented to
help recover escalating raw material and energy costs. Approximately
one-third of the sales increase was derived from surcharges.
All major end-use markets experienced year-over-year sales
increases during the fourth quarter. Industrial markets sales
increased 53 percent; aerospace and power generation market sales, a
combined 39 percent; consumer market sales, 20 percent; automotive
market sales, 47 percent; and medical market sales, 29 percent.
Geographically, sales outside the United States increased 51
percent from a year ago and represented 27 percent of fourth quarter
sales. Sales outside the United States benefited from the effects of a
weaker U.S. dollar, market share gains and stronger demand from most
end-use markets.
Carpenter's gross profit in the fourth quarter increased to $62.3
million or 21.0 percent of sales from $48.3 million or 22.7 percent of
sales a year ago. During the recent fourth quarter, Carpenter's
Specialty Alloys Operations initiated a process change for the
disposition of aged inventory as part of its complexity reduction
initiative. As a result of the more comprehensive practice for
recognizing aged inventory, the gross profit was reduced by $2.4
million or 0.8 percent of sales.
The gross profit in the recent fourth quarter also included
non-cash pension and retiree medical expenses of $2.5 million or 0.8
percent of sales. In addition, the gross profit as a percentage of
sales was negatively impacted from the dilution caused by the direct
pass through of increased raw material prices.
The combined effect of these three items reduced gross profit as a
percentage of sales by approximately 370 basis points.
In the fourth quarter a year ago, the gross profit reflected
non-cash pension income of $1.0 million or 0.5 percent of sales.
Strong sales growth, increased productivity and cost reduction
attributed to Carpenter's continued focus on lean and variation
reduction were the primary contributors to the gross profit
improvement.
Carpenter's fourth quarter income before other income and expense
(net sales less cost of sales and selling and administrative expenses)
increased to $31.2 million or 10.5 percent of sales from $19.8 million
or 9.3 percent of sales a year ago.
Excluding the effects of the non-cash pension and retiree medical
expenses, income before other income and expense increased to $34.8
million or 11.7 percent of sales from $19.0 million or 8.9 percent of
sales a year ago.
Outlook
"We expect to build on the momentum generated in fiscal 2004 by
intensifying our efforts in lean and variation reduction," Torcolini
said. "We also expect additional benefits from our strategy to price
products and services for the value delivered to our customers and
from our initiative to reduce complexity by eliminating less
profitable products. We anticipate that our fiscal 2005 operating
performance will also benefit from strong demand across our major
end-use markets, including aerospace."
Accordingly, Carpenter expects that its operating performance will
continue to show year-over-year quarterly improvements throughout the
current fiscal year ending June 30, 2005.
Additionally, the company anticipates continued strong free cash
flow for fiscal 2005. The company estimates that free cash flow will
be in excess of $60 million, which is after capital expenditures of
approximately $20 - $25 million.
Segment Results - Fourth Quarter
Specialty Metals
Net sales for the quarter ended June 30, 2004 for the Specialty
Metals segment, which includes the Specialty Alloys Operations (SAO),
Dynamet, and Carpenter Powder Products (CPP) business units, were
$268.3 million as compared to $191.0 million in the same quarter a
year ago.
SAO sales increased 44 percent from the same quarter a year ago
due to strong demand across all markets, selective market share gains
and pricing actions, including the pass through of escalating raw
material and energy costs. In addition, SAO volume increased 22
percent.
Dynamet's sales increased 7 percent in the fourth quarter versus a
year ago, largely related to stronger demand and share gains in the
medical market. CPP's sales were 33 percent higher than a year ago due
to increased demand from the industrial market and pricing actions.
Income for the Specialty Metals segment was $36.4 million,
compared to $23.0 million a year ago. The increase in income reflected
the effects of higher sales, a better product mix and realized
operating efficiencies, including better yields and improved
productivity.
Engineered Products Segment
Net sales for this segment, which includes sales of fabricated
metal and ceramic components, were $29.0 million, compared to $22.1
million a year ago. Sales in this segment benefited from increased
sales to the nuclear power, automotive and industrial markets.
Income for the Engineered Products segment increased to $4.0
million in the fourth quarter from $1.5 million a year ago. The sales
increase combined with improved operating efficiencies from lean and
variation reduction initiatives were the primary contributors to the
improvement in income.
Segment Results - Fiscal Year
Specialty Metals
Fiscal 2004 net sales for the Specialty Metals segment were $909.1
million, compared to $760.2 million for the previous fiscal year.
SAO sales increased 21 percent from a year ago, due to stronger
demand, selective market share gains and pricing actions. Throughout
most of fiscal 2004, SAO focused on operational excellence through
complexity reduction and on eliminating the sale of less profitable
products. As a result, SAO had a 3 percent increase in volume from a
year ago.
In fiscal 2004, Dynamet's sales increased 14 percent from a year
ago. The increase was due primarily to higher volumes sold to the
medical market and pricing actions. CPP's sales were 15 percent higher
than a year ago due to increased demand from the industrial market and
pricing actions.
Fiscal 2004 income for the Specialty Metals segment was $86.8
million compared to $38.8 million a year ago. Increased sales combined
with lower costs through realized operating efficiencies, including
better yields and improved productivity, were the primary contributors
to the improvement in income.
Engineered Products Segment
Net sales for this segment in fiscal 2004 were $110.0 million,
compared to $113.3 million for the same period a year ago. The
previous fiscal year included $12.9 million from businesses that were
subsequently divested. This group of companies benefited from stronger
demand from the automotive, medical, aerospace and power generation
markets.
Income for the Engineered Products segment for fiscal 2004 was
$15.2 million versus $10.9 million a year ago. The increase in income
was primarily associated with cost savings from lean and variation
reduction initiatives.
Net Pension Expense / Income
In the fourth quarter of fiscal 2004, Carpenter had non-cash
pension and retiree medical expenses of $3.6 million or $.09 per
diluted share. This compares to non-cash net pension income of $0.8
million or $.02 per diluted share for the same quarter a year ago.
For fiscal 2004, the company's non-cash pension and retiree
medical expenses were $16.1 million or $.42 per diluted share. For the
same period a year ago, Carpenter had non-cash net pension income of
$3.4 million or $.09 per diluted share.
The net pension amount is actuarially determined as of each June
30 and typically held constant throughout the fiscal year. Certain
events such as legislative actions may result in changes to the
pension amounts during the fiscal year.
On December 8, 2003, the Medicare Prescription Drug, Improvement
and Modernization Act of 2003 (the Act) was signed into legislation.
This Act introduces a prescription drug benefit under Medicare Part D,
as well as a federal subsidy to sponsors of retiree health care
benefit plans, like Carpenter, that provide benefits that are equal to
or better than those under Medicare Part D.
In May 2004 the Financial Accounting Standards Board issued a
staff position on accounting for the effects of the new Act.
Accordingly, Carpenter reduced its non-cash pension and retiree
medical expenses in the fourth quarter by $0.8 million or $.03 per
diluted share.
In addition to the fourth quarter adjustment, the company also
recognized a retroactive reduction to its third quarter non-cash
pension and retiree medical expenses in the amount of $0.8 million or
$.03 per diluted share as a result of the new Act, which is reflected
in fiscal 2004 net income.
In fiscal 2005, Carpenter expects that it will have pension income
related to its defined benefit pension plans of approximately $2.4
million. This amount will be more than offset by post-retirement
medical expenses, net of the favorable effects of Medicare Part D, of
$4.8 million.
As a result, Carpenter will incur a $2.4 million net pension
expense or $.01 per diluted share in fiscal 2005.
The reduction in expense from fiscal 2004 reflects several factors
including higher returns on assets in the company's largest pension
plan, an increase in the discount rate to 6.25% from 6.0% as a result
of a higher interest rate environment and the full year favorable
effects of Medicare Part D. The company's defined benefit pension plan
remains well funded and, as in prior years, the company is not
required to make a cash contribution to the plan.
Special Charges
In fiscal 2004, Carpenter incurred a special charge of $2.3
million or $.06 per diluted share. The charge was incurred as a result
of a $20 million open market purchase of medium-term notes previously
issued by the company and the unwinding of interest rate swaps
associated with the partial repayment of foreign currency loans.
In the last fiscal year, Carpenter incurred pre-tax special
charges of $30.6 million or $.82 per diluted share. The charges were
primarily related to the company's cost reduction initiatives and the
early repayment of debt.
Other Items
In the fourth quarter of fiscal 2004, selling and administrative
expenses of $31.1 million were 10.5 percent of sales versus $28.5
million or 13.4 percent of sales in the same quarter a year ago.
Selling and administrative expenses included non-cash pension and
retiree medical expenses of $1.1 million in the current fourth quarter
versus $0.3 million in the quarter a year ago. The increase in selling
and administrative expenses reflected higher employee variable
compensation costs and the increased non-cash pension and retiree
medical expenses from a year ago, partially offset by lower
depreciation and reduced professional fees.
For fiscal 2004, selling and administrative expenses of $118.7
million were 11.7 percent of sales compared to $118.8 million or 13.6
percent of sales in the previous fiscal year. Non-cash pension and
retiree medical expenses included in fiscal 2004 selling and
administrative expenses were $4.8 million versus $1.0 million a year
ago.
Interest expense for the quarter was $5.6 million as compared to
$7.5 million in the quarter a year ago, due to reduced debt levels and
lower interest rates. For fiscal 2004, interest expense was $23.7
million or $7.3 million lower than the previous fiscal year.
Other income for the fourth quarter was $0.7 million, compared to
an expense of $0.6 million a year ago. For fiscal 2004, other income
was $8.9 million versus $3.8 million for the previous fiscal year. The
increase in other income primarily reflected an increase in the
receipt of funds under the "Continued Dumping and Subsidy Offset Act
of 2000," reduced losses on the sale of certain assets and the
favorable settlement of a litigation matter.
Cash Flow and Liquidity
Carpenter has maintained the ability to provide cash to meet its
needs through cash flow from operations, management of working capital
and the flexibility to use outside sources of financing to supplement
internally generated funds.
Free cash flow for the fourth quarter was $9.4 million, compared
to $31.7 million a year ago. Free cash flow in the recent fourth
quarter was after a $25 million voluntary contribution to a VEBA trust
that funds post-retirement medical benefits.
For fiscal 2004, free cash flow was $88.4 million after the $25
million VEBA contribution compared to $80.2 million for the previous
fiscal year.
Carpenter believes that its current financial resources, both from
internal and external sources, will be more than adequate to meet its
foreseeable needs. At the end of the fourth quarter, Carpenter had
approximately $180 million available under its credit facilities.
Conference Call
Carpenter will host a conference call and webcast on Friday, July
23, at 10 a.m., Eastern Time, to discuss the results of operations for
the fourth quarter.
Please call 610-208-2800 for details of the conference call.
Access to the call will also be made available at Carpenter's web site
(www.cartech.com) and through CCBN (www.ccbn.com).
Carpenter produces and distributes specialty alloys, including
stainless steels, titanium alloys and superalloys, and various
engineered products. Information about Carpenter can be found on the
Internet at www.cartech.com, with selected products sold online at
www.carpenterdirect.com.
Except for historical information, all other information in this
news release consists of forward-looking statements within the meaning
of the Private Securities Litigation Act of 1995. These
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ from those projected, anticipated
or implied. The most significant of these uncertainties are described
in Carpenter's filings with the Securities and Exchange Commission
including its annual report on Form 10-K for the year ended June 30,
2003, its Form 10-Q for the third quarter and its most recent
registration statement on Form S-4, filed on September 16, 2003, as
amended on October 3, 2003. They include but are not limited to: 1)
the cyclical nature of the specialty materials business and certain
end-use markets, including aerospace, power generation, automotive,
industrial and consumer, all of which are subject to changes in
general economic and financial market conditions; 2) the ability of
Carpenter to ensure adequate supplies of raw materials and to recoup
increased costs of electricity, natural gas, and raw materials, such
as nickel, through increased prices and surcharges; 3) domestic and
foreign excess manufacturing capacity for certain metals that
Carpenter produces; 4) fluctuations in currency exchange rates,
resulting in increased competition and downward pricing pressure on
certain Carpenter products; 5) the degree of success of government
trade actions; 6) fluctuations in capital markets that could impact
the valuation of the assets and liabilities in Carpenter's pension
trusts and the accounting for pension plans; 7) the potential cost
advantages that new competitors or competitors who have reorganized
through bankruptcy may have; 8) the transfer of manufacturing capacity
from the United States to foreign countries; 9) the consolidation of
customers and suppliers; and 10) the potential that our customers may
substitute alternate materials or adopt different manufacturing
practices that replace or limit the suitability of our products. Any
of these factors could have an adverse and/or fluctuating effect on
Carpenter's results of operations. The forward-looking statements in
this document are intended to be subject to the safe harbor protection
provided by Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Carpenter undertakes no obligation to update or revise any
forward-looking statements.
CONSOLIDATED STATEMENT OF INCOME
(in Millions, Except per Share Data)
Three Months Ended Year Ended
June 30 June 30
------------------ ------------------
2004 2003 2004 2003
--------- -------- --------- --------
NET SALES $296.8 $212.4 $1,016.7 $871.1
Cost of sales 234.5 164.1 831.2 717.4
--------- -------- --------- --------
Gross profit 62.3 48.3 185.5 153.7
Selling and administrative
expenses 31.1 28.5 118.7 118.8
Special charge -- 3.6 2.3 30.6
Interest expense 5.6 7.5 23.7 31.0
Other (income) expense, net (0.7) 0.6 (8.9) (3.8)
--------- -------- --------- --------
Income (loss) before income taxes 26.3 8.1 49.7 (22.9)
Income tax expense (benefit) 8.6 2.6 13.7 (12.0)
--------- -------- --------- --------
NET INCOME (LOSS) $17.7 $5.5 $36.0 ($10.9)
========= ======== ========= ========
EARNINGS (LOSS) PER COMMON SHARE:
Basic $0.75 $0.23 $1.51 ($0.56)
========= ======== ========= ========
Diluted $0.73 $0.23 $1.49 ($0.56)
========= ======== ========= ========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic 22.8 22.4 22.5 22.3
========= ======== ========= ========
Diluted 23.7 23.1 23.4 22.3
========= ======== ========= ========
Cash dividends per common share $0.0825 $0.0825 $0.3300 $0.5775
========= ======== ========= ========
Certain reclassifications of prior year's amounts have been made to
conform with current year's presentation.
PRELIMINARY
CONSOLIDATED STATEMENT OF CASH FLOWS
(in Millions)
Year Ended
June 30
--------------
2004 2003
------ -------
OPERATIONS:
Net income (loss) $36.0 ($10.9)
Adjustments to reconcile net income (loss) to
net cash provided from operations:
Depreciation 49.2 53.3
Amortization 7.9 10.7
Deferred income taxes 6.5 (14.7)
Net pension expense (income) 16.1 (3.4)
Net loss on asset disposals 0.1 0.2
Special charge -- 24.6
Changes in working capital and other:
Receivables (40.5) 18.7
Net change in accounts receivable purchase
facility (10.0) --
Inventories (4.3) 8.2
Other current assets (0.1) 9.8
Accounts payable 44.5 (11.7)
Accrued current liabilities 28.2 (2.2)
Income tax refund 0.6 18.3
Contribution to VEBA (25.0) --
Other, net (15.1) (8.7)
------ -------
Net cash provided from operations 94.1 92.2
------ -------
INVESTING ACTIVITIES:
Purchases of plant, equipment and software (8.0) (8.5)
Proceeds from sale of business -- 8.5
Proceeds from disposals of plant and equipment 1.6 2.5
Purchases of marketable securities (70.0) --
Sales of marketable securities 41.2 --
------ -------
Net cash (used for) provided from investing activities (35.2) 2.5
------ -------
FINANCING ACTIVITIES:
Net change in short-term debt (15.7) (1.7)
Proceeds from issuance of long-term debt -- 98.0
Payments on long-term debt (20.2) (145.8)
Checks not cleared (3.7) 3.7
Dividends paid (9.3) (14.5)
Proceeds from issuance of common stock 12.8 --
------ -------
Net cash used for financing activities (36.1) (60.3)
------ -------
Effect of exchange rate changes on cash and cash
equivalents 0.3 0.4
------ -------
INCREASE IN CASH AND CASH EQUIVALENTS 23.1 34.8
Cash and cash equivalents at beginning of period 53.5 18.7
------ -------
Cash and cash equivalents at end of period $76.6 $53.5
====== =======
Certain reclassifications of prior year's amounts have been made to
conform with current year's presentation.
PRELIMINARY
CONSOLIDATED BALANCE SHEET
(in Millions)
June 30 June 30
2004 2003
--------- ---------
ASSETS
Current Assets:
Cash and cash equivalents $76.6 $53.5
Marketable securities 28.8 --
Accounts receivable, net 165.2 113.8
Inventories 185.0 180.9
Other current assets 36.2 21.1
--------- ---------
Total current assets 491.8 369.3
Property, plant and equipment, net 608.7 651.7
Prepaid pension cost 247.0 253.7
Goodwill 46.4 46.4
Trademarks and trade names, net 24.3 25.4
Other assets 38.0 53.4
--------- ---------
Total assets $1,456.2 $1,399.9
========= =========
LIABILITIES
Current liabilities:
Short-term debt $2.2 $17.1
Accounts payable 109.0 68.2
Accrued compensation 26.1 13.5
Accrued income taxes 10.3 6.1
Accrued liabilities 51.4 40.6
Deferred income taxes 10.9 4.3
Current portion of long-term debt 20.2 0.1
--------- ---------
Total current liabilities 230.1 149.9
Long-term debt, net of current portion 332.7 378.9
Accrued postretirement benefits 143.5 182.4
Deferred income taxes 175.6 166.7
Other liabilities 36.3 47.4
--------- ---------
Total liabilities 918.2 925.3
--------- ---------
STOCKHOLDERS' EQUITY
Convertible preferred stock 20.8 10.2
Common stock 120.7 117.3
Capital in excess of par value - common stock 215.1 199.8
Reinvested earnings 230.4 203.7
Common stock in treasury, at cost (38.0) (38.3)
Deferred compensation (9.5) (3.8)
Accumulated other comprehensive income (loss) (1.5) (14.3)
--------- ---------
Total stockholders' equity 538.0 474.6
--------- ---------
Total liabilities and stockholders' equity $1,456.2 $1,399.9
========= =========
Certain reclassifications of prior year's amounts have been made to
conform with current year's presentation.
PRELIMINARY
SEGMENT FINANCIAL DATA
(in Millions)
Three Months Ended Year Ended
June 30 June 30
------------------ ------------------
2004 2003 2004 2003
---------- ------- --------- --------
Net sales:
Specialty Metals $268.3 $191.0 $909.1 $760.2
Engineered Products 29.0 22.1 110.0 113.3
Intersegment (0.5) (0.7) (2.4) (2.4)
---------- ------- --------- --------
Consolidated net sales $296.8 $212.4 $1,016.7 $871.1
========== ======= ========= ========
Operating results:
Specialty Metals $36.4 $23.0 $86.8 $38.8
Engineered Products 4.0 1.5 15.2 10.9
Net pension (expense) income (3.6) 0.8 (16.1) 3.4
Corporate costs (5.6) (5.5) (19.1) (18.2)
Special charge -- (3.6) (2.3) (30.6)
Interest expense (5.6) (7.5) (23.7) (31.0)
Other income (expense), net 0.7 (0.6) 8.9 3.8
---------- ------- --------- --------
Consolidated income (loss)
before income taxes $26.3 $8.1 $49.7 ($22.9)
========== ======= ========= ========
Carpenter is organized in the following business units: Specialty
Alloys Operations, Dynamet, Carpenter Powder Products and Engineered
Products. For segment reporting, the Specialty Alloys Operations,
Dynamet and Carpenter Powder Products operating segments have been
aggregated into one reportable segment, Specialty Metals, because of
the similarities in products, processes, customers, distribution
methods and economic characteristics.
Certain reclassifications of prior year's amounts have been made to
conform with current year's presentation.
PRELIMINARY
SELECTED FINANCIAL MEASURES
(in Millions)
Three Months Ended Year Ended
June 30 June 30
------------------- ------------------
FREE CASH FLOW 2004 2003 2004 2003
--------- --------- --------- --------
Net cash provided from
operations $4.4 $35.5 $94.1 $92.2
Net change in accounts
receivable purchase facility 10.0 -- 10.0 --
Purchases of plant, equipment
and software (2.8) (1.7) (8.0) (8.5)
Proceeds from sale of business -- -- -- 8.5
Proceeds from disposals of plant
and equipment 0.2 0.2 1.6 2.5
Dividends paid (2.4) (2.3) (9.3) (14.5)
--------- --------- --------- --------
Free cash flow $9.4 $31.7 $88.4 $80.2
========= ========= ========= ========
Free cash flow is a measure of cash generated which management
evaluates for alternative uses and has chosen to apply to debt
repayment.
June 30 March 31 June 30
NET DEBT 2004 2004 2003
--------- --------- ---------
Accounts receivable purchase
facility $--- $10.0 $10.0
Short-term debt 2.2 2.6 17.1
Current portion of long-term
debt 20.2 0.1 0.1
Long-term debt, net of current
portion 332.7 357.5 378.9
--------- --------- ---------
Total Debt 355.1 370.2 406.1
Cash (76.6) (85.3) (53.5)
Checks not cleared -- -- 3.7
Marketable securities (28.8) (19.2) --
--------- --------- ---------
Net Debt $249.7 $265.7 $356.3
========= ========= =========
Accumulated cash and marketable securities are expected to be used for
debt repayment until a targeted debt to capital ratio is achieved.
Three Months Ended Year Ended
June 30 June 30
------------------- ------------------
NET SALES ADJUSTED FOR
DIVESTED COMPANIES 2004 2003 2004 2003
--------- --------- --------- --------
Net sales $296.8 $212.4 $1,016.7 $871.1
Divested companies -- -- -- (12.9)
--------- --------- --------- --------
Net sales adjusted for divested
companies $296.8 $212.4 $1,016.7 $858.2
========= ========= ========= ========
PRELIMINARY
SELECTED FINANCIAL MEASURES
(in Millions, Except per Share Data)
Three Months Ended Year Ended
June 30 June 30
------------------- ------------------
NET PENSION EXPENSE (INCOME) 2004 2003 2004 2003
--------- --------- --------- --------
Pension plan expense (income) $2.2 ($4.1) $8.8 ($16.4)
Other postretirement benefit
expense 1.4 3.3 7.3 13.0
--------- --------- --------- --------
3.6 (0.8) 16.1 (3.4)
Income tax (benefit) expense (1.5) 0.3 (6.3) 1.4
--------- --------- --------- --------
Net pension expense (income) $2.1 ($0.5) $9.8 ($2.0)
========= ========= ========= ========
Pension expense (income) per
share $0.09 ($0.02) $0.42 ($0.09)
========= ========= ========= ========
Weighted average diluted common
shares 23.7 23.1 23.4 22.3
========= ========= ========= ========
Three Months Ended Year Ended
June 30 June 30
------------------- ------------------
SPECIAL CHARGE 2004 2003 2004 2003
--------- --------- --------- --------
Premium on early retirement of
debt -- $4.5 $2.3 $4.5
Reductions in workforce -- -- -- 17.4
Pension plan curtailment loss -- -- -- 6.7
Writedown of certain assets -- (0.9) -- 2.0
--------- --------- --------- --------
Special charge -- 3.6 2.3 30.6
Income tax benefit -- (1.4) (0.8) (12.2)
--------- --------- --------- --------
Special charge, net of income
taxes -- $2.2 $1.5 $18.4
========= ========= ========= ========
Special charge per share -- $0.09 $0.06 $0.82
========= ========= ========= ========
Weighted average diluted common
shares 23.7 23.1 23.4 22.3
========= ========= ========= ========
Three Months Ended Year Ended
June 30 June 30
------------------- ------------------
INCOME BEFORE OTHER INCOME 2004 2003 2004 2003
--------- --------- --------- --------
AND EXPENSE
Net sales $296.8 $212.4 $1,016.7 $871.1
Cost of sales (234.5) (164.1) (831.2) (717.4)
Selling and administrative
expenses (31.1) (28.5) (118.7) (118.8)
--------- --------- --------- --------
Income before other income and
expense $31.2 $19.8 $66.8 $34.9
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CONTACT: Carpenter Technology Corporation
Investor and Media Inquiries:
Jaime Vasquez, 610-208-2165
jvasquez@cartech.com