Earnings call transcript Q4 2023

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Operator

Good day, and welcome to the Carpenter Technology Corporation Fourth Quarter 2023 Conference Call. Today all participants will be in a listen-only mode. [Operator Instructions]. Please note that today's event is being recorded.

At this time, I would like to turn the conference over to John Huyette, Vice President, Investor Relations. sir. ahead, go Please

John Huyette

being Good conference and XXXX call XX, is ended operator. with Internet Carpenter slides. presentation fourth to Technology June also call This earnings for XXXX. over morning, you, the welcome along everyone, the quarter broadcast Thank the fiscal

President note, of Chief are today Vice by are management Statements Lain, Tony President and you expectations. Please Officer; Officer. phone, a and experience Senior call may on for based presentation on Chief in delay the those Executive made Tim this time current during statements slide that listening Financial you and movement. Speakers Thene, forward-looking are by earnings

that Form XXXX, and forward-looking September XX, filings, year recent filings. factors materially SEC XX, XX, cause be XX-K differ to ended the December March June Technology's attached to from the statements XX, report company's quarters for most Risk including these the ended exhibits XXXX, the XXXX and those and on actual found could Forms results can in for XX-Q XXXX Carpenter

excluding based sales, Please adjusted following to otherwise discusses management operating when I'm revenue, discussion, that excludes sales the excluding or margins, surcharge. is note noted, the that income, referring and unless operating reference that special in items surcharge. on

to I over now will turn the Tony. call

Tony Thene

with morning review of everyone Thank you, I performance. X on on and John, a Slide will to our good the call begin today. safety

rate X.X. incident For case fiscal year our XXXX, was total

come it Carpenter expect rank at would not or rate injury of we've safest manufacturing X.X one to Technology. is Although the metal a rate as companies, accept

either new increased to increase rate or is transfers employees into quarters, due roles. we've As previous hires discussed undertaking tasks new new in the as the largely

employee a additional with invest training or and follow-up. for in task to continue new to any frequent monitoring job We

continue workplace. tirelessly goal. injury this achieve to Our and will that we we is the zero increase continues to be invest year, to and believe a it Despite possible, goal work

quarter. on XXXX and end year More ago, X the basis the return year the a rate set XXXX. than run out to Slide review fourth goal profitability year we a of fiscal fiscal to turn let's of Now by a pre-pandemic to

important of Not fiscal marking we growth our did we our on goal achieve doubling XXXX. quarter, we $XX mix and by the year with demonstrated operating the product for the the in above that that It a of million. it. accelerating to trajectory. on million way provided income milestone, $XX only income prices, trajectory quarter, growth the higher million Most segment momentum realization exceeded productivity, fourth increased was operating significantly $XX exceeded an delivering point SAO notably, And improved to we outlook in expectations

up quarter selling end-use XX.X%, excluding the continued sales, were increasing margin With realized our SAO and sequentially of of performance higher XX% high sales the XX.X% our increased last markets. in net a and across XX% facilities, for the Net an productivity across product Further, each previous levels from surcharge mix the compared operating demand, Driving improving of quarter. to were prices. step-up year. improvements

we quarter, we in in cash with quarter the $XXX the flow. finished generated strengthens operations adjusted In addition million $XXX further in liquidity. of as cash liquidity the and to This strong total our $XXX profitability from million million free

X Slide Now let's market move to and end-use update. the

for end-use the were quarter. The markets that in up and of first is year-over-year the takeaway all sales sequentially

record the this positive for markets end-use levels near-term and backlog outlook. remains long-term and each of Our outlook support

ramp meet supply to was and planes the of and defense XX% ramp pushing demand. chain Our production quarter increase, the sales of continues to new Global sequentially continues XX% for current XX% aerospace year-over-year. to up accounting and aerospace market, the end-use to in growing traffic

of demand, growing to material continue shipments submarkets our possible. higher request aerospace the commercial as customers across support as To soon

saw increase submarket by defense a the next-generation rotorcraft and sales In platforms. basis, in on missile, addition, sequential fixed-wing driven an

X% to was strong market, quarter customer accounting up XX% the manufacturing sequentially in be positive to The sales continued end-use medical to year are procedures meet sales current of elective overall for patient The XX% demand and expected surgeries. for driven outlook the in year-over-year. supported throughout the by The activity XXXX, was procedures up as by increase backlog. continues a medical strong grow calendar

With for The sales inventories and light-duty low and transportation was XXXX. second year total XX% half to rates sequentially current of last throughout end-use remain of X% expected market are up of build quarter X% the vehicles, calendar year. in the high compared accounting to strong up demand

of quarter and sequentially The energy X% for accounting market the current XX% to XX% compared last up sales in end-use was up year.

supply, in With a capital exceed And with for is energy investment our as solutions for will growth increase. to demand the rise to result, material continuing it. demand expected the

market, the industrial in sales end-use In used The end-use consumer accounting X% material and quarter, XX% we sequentially our business, high-growth on focused consumer market, fabrication year-over-year. remain current of high-margin, this and including in solutions and semiconductor up up XX% for electronics. was

financial Now I'll to over for Tim turn summary. it the

Timothy Lain

the morning, sales Slide on Good ago were quarter in X% excluding period XX% X, Sales, income Thanks, were totaled the everyone. volume. surcharge, fourth statement a up a start XX% $XXX.X and higher million, year volume. $XXX on the million. Tony. Sequentially, sales increased on XX% higher sales, excluding same I'll summary. Net from surcharge

last by prices. across strong volumes sales growth outpace throughput higher to operations. by growth demand year-over-year volume sequentially the both with driven continues our and were driven mix by increased product our improving several and an quarters, improving and base Consistent The productivity and

quarter current in the in quarter quarter year of last XXXX. same gross to million profit fourth SG&A increases. million the were from and sequentially. roughly improvement by same Gross last primarily the million ago SG&A and the The of profit in up and same cost was improving is year the million driven $X by to same the and investments accruals. higher sales the in increase compared primarily Gross is year prices, up $XX.X year period a The $X profit selling increased expenses quarter variable fiscal by $XX.X compared is inflationary year driven in and in product million quarter mix third $XX expenses in compensation current XX% last sequentially. higher quarter XX% higher about up and million offset partially versus $XXX the quarter,

SG&A The recent $XX.X costs, the line includes which million totaled in corporate fourth quarter.

was million. first the items be prior million operating look third we excluding upcoming was to to recent When As in income year to our the corporate $XX.X the income million. million. Operating quarter, in And adjusted ahead costs current XXXX, $XX.X quarter, we $XX year in of of expect quarter was $XX special about million quarter. impact the $XX.X income fiscal operating

and benefits. Again, being volumes increasing profitability the is by price the improvement enabling higher with driven mix along in productivity,

was tax for Earnings effective which quarter fourth the recent was current roughly per rate the per full-year Our of share. XX%, slightly is the rate share quarter effective XX%. for $X.XX below tax

continued The results supported demonstrate demand improving by productivity our momentum and strong a environment.

Slide on XX% net to Net surcharge, and fourth $XXX.X turning the sales, million segment increased excluding higher SAO XX% for X% quarter last or same Compared net $XXX X increased sales sales excluding results. volumes. on Sequentially, million period XX% year, were our volumes. to surcharge. Now higher surcharge the excluding

product shipment due markets strengthened market net an Sequentially, driven has drove momentum operating combined key drive by continue of even The sales mix Tony productivity stronger demand was mix impacts with the on slide. higher the as higher reviewed we further, efficiencies to as volumes a in higher prices end-use the our gains, net to as of sales year-over-year volumes improving improvement across in and products.

and operating to of recent SAO year-over-year and our with SAO our price improvement expectations sales strong results. Moving driven income versus also performance. our reported $XX was of increased significant On million due operating in operating improvement recent income an quarter. same both improving last the cost by resulting in a production mix quarter, million third levels, increases. $XX is quarter largely outpacing fourth product to This a adjusted coupled improved basis, demand which and and year the higher

the are to ago. adjusted evident operations driven same margin increased as improved we improvements operating increased a meet compared in continue our XX.X% year strong $XX in a improvement period to volumes the as the the operating current On income basis, The was demand. which in to period million. ramp has sequential These X.X% by to

and production schedules managing SAO focused performed. the increasing remains ahead, maximize while on is ensure maintenance team to flow the mix levels preventative production production Looking to high-value product for capacity

current fiscal in upcoming the generate coming SAO this and anticipate Given increases area strength of we to accelerate improvements first targets the XXXX. $XX in income productivity preventative million of and maintenance, the expectations, operating including year range a our to million in productivity represents of the in planned demand, further $XX significant quarter will for incremental on our we're exceed Based quarters. pushing to opportunity profitability,

Now turning segment our to and PEP Slide results. XX

a year excluding business. defense surcharge, primarily growth net same in by both million, fourth or quarter our XXXX sales, Dynamet fiscal increased markets ago. Dynamet specifically, $XXX.X The our were Titanium increased increased from sales sequentially. net the X% excluding the quarter in More volumes same driven and year sales business, demand the strong sales and year XX% aerospace year-over-year in conditions, end-use Titanium reflects from Net in quarter million in Net surcharge last and the of revenue. medical $XXX.X

income in income In in is the year in increase timing of the Dynamet in quarter Titanium sales ago The end-use quarter, million costs reduction versus fiscal Dynamet $X.X flow Titanium defense of production sales increases reported the $XX.X operating third our operating year the in aerospace This of operating and primarily both adjusted to of the $X.X sequential result same the compares operating million. in to reflects net business. operating The income in market. of additive XXXX. PEP quarter near-term quarter current current and sales and of primarily a million income

continues deliver fiscal of to more the upcoming the spending productivity on improving demand year to I activities XXXX. income $XX operating and operations. to closely via we million We the the anticipate mentioned, materials align materials matching for of carefully quarter and million that flow $XX of are PEP range in will for As first Dynamet production strengthen, to segment focused throughout our

$XXX combined $XX inventory to review to increase quarter, the a cash fourth is generated turning where largely The earnings million we XX improvement. of attributable a of of and Now current free the operating reduction cash sequential million quarter. higher $XXX from current an In with in adjusted the Slide activities flow. million

inventory As more the improving the details flow balanced million $XXX a we had we In in million productivity with XXXX. we fiscal and $XX those the in finished flow generated expenditures expenditures. quarter With million on year of capital $XX year capital mind, second fourth we spent cash operations. fiscal in our across the materials of free by quarter XXXX, strong driven of reduced of fiscal shipments, of year half in and signaled, year, fourth fiscal 'XX adjusted

note, As this definition we've to a the in consistent presentation. adjusted have dividends current free prior periods of flow to updated cash exclude modified with the quarter, and be new

healthy, remains of under $XXX we liquidity liquidity quarter million million, with total and our credit including ended of the current facility. cash and $XX Our available borrowings million of $XXX

talk fiscal move guidance. selected to year Let's about Slide XXXX to XX

We're flat from fiscal and providing XXXX. to help in our year $XXX be is XXXX to million fiscal year this amortization XXXX. for selected essentially fiscal modeling year expected Depreciation information or

for spend continue to year CapEx as normalized $XXX about operations in fiscal spend capital up. to ramp expect to view expenditures our this $XXX We as XXXX. We million a in million annual business

as in amounts select CapEx capabilities to opportunities can for make capacity but areas investments where we includes flow well targeted estimate for necessary also maintenance-type in constrained as path. expand allows expand This

contributions. pension to Moving

pension We $XX to qualified our contributions million of expect XXXX. in U.S. fiscal to plan make

net pension fiscal to to pension compared year in million $XX million noncash expense increase net expect For $XX expense, of we pension XXXX. expense to

reported income million the approximately to expense fiscal operating included will about For expense the be will similar million fiscal $XX year The other clarity, year $XX balance next through of next income year. be XXXX. for pension in or in

to Next, $XX lower interest to remain $XX XXXX. slightly in about estimated is at year million flat expense to million fiscal

rate XX% XXXX. fiscal was our about in full-year Lastly, year effective reported tax

expect in range the XX% we to rate tax XX%. XXXX, year fiscal of be to effective For the

the call turn Tony. will back With to that, I

Tony Thene

to income communicated $XX.X improved quarter's results ago. significant income previous momentum. forward demonstrating capacity million The optimization, operating the we mix basis year SAO of our pre-pandemic to XXXX. of levels Thanks, of our the higher in we run productivity operating end profitability quarter's exceeded operating product rate recap stronger year a year return Driving $XX.X the of A With by Tim. goal fiscal current fourth on and And XXXX. over now increasing was of fiscal performance and represented quarter goal million, a segment. a to realized particularly prices from step the a

We of are markets. we continue operating sales of strong With productivity, from the end-use aerospace with $XXX of further recovery. long-term to accelerate each and across markets. demand in improved end-use each strengthening outlooks a Notably, the strengthening position. positive near-term their submarkets cash and environment saw million the our demand increase generated we operations, And liquidity in

volumes, with increasing improving productivity. all together, mix improving prices Taken increasing and

are accelerating momentum We into year fiscal our heading XXXX.

and turn the a take next near-term at to long-term our Let's slide closer and look outlook.

let's sequential of of fiscal earnings the fiscal representing a first a over First, the sequentially last improvement operating that call, XXXX, trend year decline. to significant quarter On for historical our flat I year income outlook expected review said of in be XXXX. we first quarter QX our the

million of we to XXXX, income. be For range fiscal $XX $XX million of the in the quarter to operating first expect of year

in sequential of fourth profit would of and recent most first compared the represent income the quarter fiscal meaningful XXXX, despite expectations. fact step fiscal historical history. trend And our that decline first the the to profitable in first from put the This outperformed sequentially in quarter the quarter to this it Again, exceed year operating year. us the up would we up of a would quarter slightly flat a

builds the quarter. generated we last momentum outlook in the This

strengthening As across in improve significant and discussed we driving demand sooner. material the facilities. step-up throughout productivity further output are quarter wanting see to this more last markets saw We end-use with a our customers call, across

managing quarter preventive maintenance year, historically to we have fiscal protect while shipments. environment, first maximizing actively assets the also more significant is schedules This are Our demand unique we maintenance performed preventive or activities. our given when

at look longer-term a take let's growth the Now earnings projection.

XXXX XXXX. Day fiscal our from the our in year Investor and trajectory earnings discussed recall you If I May, between year of growth fiscal

year the that. that wasn't from demonstrates XXXX. that goal growth These noted income on and significant fiscal fiscal a strong very target. we chart be to expected also XXXX, XXXX The through this year this year XX% progress toward a the figures imply loaded operating going on to fiscal I make right back-end growth in CAGR

quarter And this meaningful clearly, to fiscal and with setting year that our up first ourselves step results, fourth quarter from towards momentum strong goal XXXX. are we in guidance, take

fiscal half, push XXXX gains to to And expect first half earnings even stronger we the historical year second consistent Additionally, are is of accelerate working we performance. to be which than with the productivity higher. our

our Carpenter Macro end-use our for trends time specialized are increased broad solutions. driving across of portfolio exciting an is This Technology. demand markets for

a capture We productivity system demand. unlock difficult-to-replicate have capabilities with assets, of to we and continue the leading drive to improved additional to capacity

operations. This to quarter, our on we And demonstrated long-term improvement way are looking ahead, a Thank you. our significant we goal. our well in achieving

turn call And back operator. I'll the now to the

Operator

you. Thank

begin comes TD We Cowen. with first [Operator proceed. session. Please will Today's now question Khanna question-and-answer Gautam Instructions]. the from

Gautam Khanna

Hey, thank guys. you. morning, Good

Tony Thene

Good morning, Gautam.

Gautam Khanna

sequential the questions, in Tony. but missed it trend had that I couple of did remarks, Maybe a maybe backlog the the in I opening or... how quarter,

Tony Thene

because just book we've a flow. couple the Yes. relevant, Gautam, times to sequentially, already going less The to the That backlog closed control now is was of up number XX% X% become year-over-year. order

strong So level for very quite time. there anticipate at you're staying and a some

Gautam Khanna

And hate maintenance to but have any helpful. the seasonal you Tony, you December directional the just the you're dynamics. commentary given do just but That's kind of -- that Okay. on in quarter, then have September not ask, I you're bucking trends then normal quarter, do

for thinking curious December what directionally? So are you I'm just

Tony Thene

we Yes. would the guided Directionally, floor our quarter goal be just first is that the to to.

jump In that in. productivity. the know, what especially for many the demand is here is we that's ways, locked half since really to you Again, us, Gautam, drives historically, be message the see there. in As significant is all ramps going second a up

to ability improve So it's all to continue productivity. the our really about

hitting a So another our goal anticipate step half second then up for good is would -- I the and in very position.

Gautam Khanna

explained And the the happened comments, what What up of in increase? productivity just sequentially? productivity? the changed on following throughput What kind

Tony Thene

Yes.

we're quite were the Specifically is flow. that. people just lot are of different have really Remember, in the XXXX. to the different now than they moved eliminating products in team a diameters. job SAO, that understanding A what doing don't realize bottlenecks, nice Customers making

made for number how that top was another that just two, that's another just We've able testing the belt now they quarter. great learning in That's big been and different specifications, required get a it under great to and that different bit. to numbers. challenge changes the operators There's operate of on see got some you they've a And their production hires, some system, quarter learning safely, through quite come of. it

Gautam Khanna

the you Performance what It explained segment. a was the Could to expectation out. on little And on laid lastly, that? you bit elaborate Engineering below

Tony Thene

That's quite we that's company, as with Yes. big with PEP, the a whole never I Gautam FY the But And see just cost the market it that PEP about, material. their in we we speak PEP, in a flow. It's one items 'XX misaligned problem. through size improvement coming was, back. those little getting production a see the of that and wasn't frankly, frankly, it see profitability. could of and not quite get

flags, So for with our the no product but the quarter, issue. way not disappointing, paced an back quarter. we next not happy we'll flow get red It's that

Gautam Khanna

back. Okay, turn it will I

Tony Thene

Thanks.

Operator

Please with comes Benchmark Sullivan The next question from Company. Josh The proceed.

Josh Sullivan

good morning. Hey,

Tony Thene

morning, Good Josh.

Josh Sullivan

it? -- to to is book, order Is it follow-up that book. close about meeting gating the just your it customers comment When you what's wanted price? order closing factor Just wanted the the supply? ability your to to on Or reopen

Tony Thene

example, by in about So XX it's okay, back say, it's out -- now time Neither out those once, your one, right? it up it it's months how open to are, and another goes up for in advance far about really we'll orders again. open quarter

of timing orders standpoint, far too far get not to us a ahead from there. to really So it's out too get

Josh Sullivan

about, did of follow-up issue? The a it supplied talking as just volume Carpenter that titanium to that cost the wire impact dynamic was related on the it PEP market? Or then was you're more to well. And

Tony Thene

out just story issue sales. at Not us. you quarter. works. It's is for the of process this just an the flow small It a -- have PEP This where stands to Again, because We out. the the our here smaller event. all really sales impact and Yes. it not so got isn't and have how your the a accounting cost segment, we didn't product

Josh Sullivan

how What's more then non-aerospace pricing And with more talk share, aerospace it. products that of ceiling when historically, those maybe non-aerospace take commanding the and on or capacity. of was shift Got aerospace Can out markets. significant can get about you your just push you mix mix how high-value your of a far could you markets? much

Tony Thene

Well, I'll answer it way. this

We outside of excellent looking We're have margins, forefront. the markets customers. at our for some very grow business Medical ways to medical aerospace. excellent attractive being now,

to to market. So continue we want grow that

the the time mill energy competing side, example. now customers, get with have you aerospace On to on for customers

we So the Josh. XXXX, energy margins back saw have up what Different gone in in significantly from XXXX. market,

a aerospace, a as market, very market well. active look that's So at our us those lower when we'll submarkets And level at good industrial in, to for you stay albeit are that for much continue sure. than then

high-end and fittings we very see valves in So very complex unique and applications.

the So key that happy insulates of think difficult pyramid very from us we're And Very to a that environment. very, at is the the going have we're always we changes. macro broad it applications. portfolio. unique We very in top operate very different

and higher that we supply of up how even markets looking we're across chain. So move can all our

Josh Sullivan

last one one just free maybe cash on And flow.

Any just or throughout Just any there Thank would XXXX? you. you about thoughts the cadence think difference be do great. what

Tony Thene

amount the we talked as cash. generate Day to in of significant Yes. have Investor we as know, opportunity, the you well Well,

ability, want because customers we're Now make our environment. of especially serve the best proven sure be to throughout the in this year we to going we our to

we'll to because ends a the that. there be in And a And inventory quarter that do in quarter, going times have way we build could opportunity our schedules. the some that we're

because you just see of So some down bit the quarters or could that a are opposite. that

to want -- the the customers our mean, we we want to we end serve I So can. at of the day, best

over three better generation. that that's You period, know be cash most than to four to significant going this year

to look think that's best at the way I it. So

Josh Sullivan

Great, for thank time. the you

Tony Thene

Thank you, Josh.

Operator

[Operator Instructions].

Leshock Michael with Capital Our KeyBanc next question comes Markets. proceed. Please from

Michael Leshock

morning guys. good Hey,

Tony Thene

morning. Good

Michael Leshock

to typically know as planned XQ planned you seasonality. maintenance maintenance called a And I ask priority. First, heavier wanted I guidance. on and out your that's a quarter weaker

taking? seasonality EBIT I some maintenance So that Is volume element guide. maybe mix, side be understand moving of want the to pieces given better going offset on be there that flat by up just the drive planned that's sort to to going to you're the pricing of of some that

Tony Thene

I a think because quarter question, sequentially XX to usually, off answers seasonality I significantly right? very Well, strong to the saying of mean, fourth now first it's is we're the XX quarter, of down your guiding up. flat

off of around So that seasonality. takes issues plate the any kind

Michael Leshock

the and is to to But volume seasonality on pricing going side offset going that? is in what the past the seen be to mix similar you've the and

Tony Thene

as seasonality I said, rest this It's the -- I think to for puts No. any quarter. just first

are that material much now customers wanting as got sooner. as You've we them get can

just Of or some our demand overshadows now whatever some there's work but they to course, from environment those, do that. customers stoppages of going as the be

I So that. see don't

I outages. as the of the results the productivity. so over several factor take difference going when you as can factor well one strategically is factors if produce. gating next to That's to the the quarter-to-quarter a And demand be be from robust driving I I going many look everything increase because preventive ship or of times, that between quarters I maintenance is continuing think

Michael Leshock

very then lag. And quarter. fiscal SAO, a you Got strong see you XQ know do progressing on it. 'XX, have on through increases some throughout was flowing a how And I price there margins

just needs that do progressing? wondering occur to And further much you SAO to how see for what So happen? margins

Tony Thene

market SAO pandemic, of we're ways right and to line which get equipment of of productivity, to Well, to the that. range. where I in of so margins. to point -- at more get think to capacity, target above we're was out continue strong, it running a And That's Prior nameplate we'll this manner. sight where percentage to translation our our ability have back there. is it more time. approximately XX% find really That's was And in the is quarter-over-quarter the increase and now, very the higher five pieces is drive efficient the a our many equipment that we about

So is that get more we know day that's the on system out out that more very trying have it. what they every customers want manufacturing we good and do to of floor because

Michael Leshock

And then you for or me the sales. that lastly engine on jet provide sequentially year-over-year? either quarter, Could for number

Tony Thene

Jet XX% XX% sequentially. engines, up year-over-year,

Michael Leshock

Okay, all right. guys. Thanks

Tony Thene

Thank you.

Operator

question The Cowen. from follow-up next is with a Please proceed. Khanna TD Gautam

Gautam Khanna

you mentioned pretty the Yes. XXX feedstock? What medical strong. demand of being Tony, and are fastener aerospace non-titanium you titanium seeing terms demand, in related

Tony Thene

those increasing submarket can up are Gautam. year-over-year, you was XXX%. sequentially, us, tell of Both that for fastener I XX%

Gautam Khanna

absolute Okay. you least at rise? at to to to continue And continue? I expect levels that mean, these

Tony Thene

think -- to off. fall I that looking to sequential, a cases, the start very quarters, low year Well, In look year-over-year obviously, we're year-over-year, many is right, because at compared you'll still we'll going ago.

aerospace the roll as those sequential at satisfying top as know growth, of far there submarkets. we're we as but on demand not off, the across focus the So I we'll think many

Gautam Khanna

talked be over pricing remind business being on engine business you've Tony, potential what too to out quoting a not how far long-term give contract? just much you year every the Could more year-over-year? And of sense would us tailwind that advance of much is the of a pricing? in And terms how about result. for business in side, under maybe as the And in favorable and turns us

Tony Thene

all the year, significant up. that long-term difficult are is contract differently. some the comes us. a form like primary there of are years, question. largest industry would contracts under that one X.X It the The or spaced I out will consider most you seems customers customers, with the in a strategic of it's tell Yes, every you

Gautam Khanna

that, expect as months, kind et you guess pricing had or a given the cetera to kind we to of XX I tailwind here of Okay. be out continue and reset XX months, -- move just state? from do so we

Tony Thene

some next year over will that the Yes, reset. there's still

still So next months. there are over negotiated to be XX contracts the significant

Gautam Khanna

I you next system major where any the with the like over at expect update know production Athens. do but us you much be you And how across view where output to can on three Athens give utilization the you levels, year? sense and respect an are to facilities, for

Tony Thene

we're through there. business we about Yes, business our amount still up do well. energy that giving The I subset through and as run there a spoke there. we of ramping of aerospace earlier, more conversion Athens. a work Obviously, fair attention

now, terms would Athens. ramping you still right of people up, are we hiring tell In I at

have able amount So people more of in now, to want the another XX% fair even volume a be we that still plant. out of that Athens we workforce to on push maybe to hire right current

Gautam Khanna

facility have kind it? it still as And to of is it a you be lower-cost ramping been Is way? that out proving

Tony Thene

lower-cost more straight because just the a it's a and Well, more facility It's much is much line. efficient. flow compact

some of But a when to energy and So that and it They that. itself over by costs same from is efficient. certainly advantages gives us our facilities. supplies more flow other share the standpoint, some of comes

Gautam Khanna

you know they had medical -- wire switching where to kind seen in not Okay. bar And traction of coil inroads on lastly of a or... just over with VSMPO the being, titanium of, customers displaced. you're I But maybe have beneficiary the kind Carpenter huge some any world,

Tony Thene

We of in what's regardless titanium on large going in the see increase a side our with demand VSMPO.

driving market we're mainly not I So share of we're because out Certainly, that titanium. of the market. solutions melters we in there the provide. mean

plays to melt scenario entities really seeing titanium this a certainly, shift whole areas there. you're VSMPO that So and

Gautam Khanna

ago. but years up facility Yes, stood downstream so they the eight on a not where seven, much

Tony Thene

they're and customers at Technology wanting growing, nothing just have do more Carpenter to to VSMPO. It's is it market to with looking be sure, has not sold-out that I'm a we levels, we're good supplier. that and The product.

Gautam Khanna

me. for one Last

and magnetics on guys... automotive Just update you soft there. any penetration What

Tony Thene

that I up so of really lost gets EVTOL lot that dynamic aerospace mill from FAA quicker. to thanks. lot certification filling of well far But Reading, a appreciate even as as A as right Yes, the now. new the in we're doing try interest there because question. is get companies crowd these

to term But longer the very the So market and we some period there, more involved today. enhance significant than activity Obviously, have the you're past forward. us there. lot important have happy other seeing we're feel submarkets always these that it's little XX-month with a going we pace continue looking aerospace in for a current that's at we're maybe our to always of to that will be growth earnings

Gautam Khanna

Thanks a it. guys. Appreciate lot

Tony Thene

for the questions. thanks Gautam,

Operator

question proceed. Josh Company. follow-up is with Please a The Benchmark next The Sullivan from

Josh Sullivan

as just well. wanted to that follow I up on

So the the mill? is you the something EVTOL that strip for out in called presentation, consumer electronics else that is demand hot or

Tony Thene

that's the a different, electrification right. on side. just to certification. That's you right that's But that one get know, immediate same that's area until growth. impact. side, the mode, forward. attractive they obviously. it's lot area. And very In more the for on not more muted that's really traditional There's, of volume And it's now, Well, it's FAA is still some because that one going electrification going strong. I not as driving having that's areas in semiconductor us of be well area it's EVTOL on the mentioned the

Josh Sullivan

providers market. semiconductor as a on mean, And out softer have material I that called others the some side, have

the where of semiconductor just there, builds? are the So capital new strength? these market, that some in seeing you the you're is seeing strength curious on Or just

Tony Thene

equipment our manufacturing the semiconductor. makes Yes. that I've Remember, seen the goes product We've that at then experienced that. not all. into

product harsh in goes softness a where not any area. we've our and So very And that's environment, into. seen that

Josh Sullivan

Okay. Thank you.

Tony Thene

thank you. Yes,

Operator

turn conclude to any now and I I'm this the closing remarks. no questioners showing back to time, this in like session. does conference question-and-answer for the John further our At would Huyette queue, over

John Huyette

XXXX us everyone operator, quarter thank for you, rest a fiscal joining year day. you conference of and today Have your for great call. fourth Thank our

Operator

concluded. disconnect. presentation, now you Thank attending now you today's The and may conference has for

Carpenter Technology (CRS) 27 Jul 232023 Q4 Earnings call transcript