Carpenter Technology reports fourth quarter and full year 2020 results
July 30, 2020
Carpenter Technology Corporation, Philadelphia, Pennsylvania, USA, has announced financial results for its fiscal fourth quarter and year ended June 30, 2020. Over the quarter, the company reported a net loss of $118.4 million, with a net profit of $1.5 million reported over the full fiscal year 2020.
Net sales for the group’s fiscal year 2020 were reported to be $2,181.1 million, down from FY2019 which had net sales of $2,380.2 million. The company’s reported operating income for the fiscal year 2020 of $25.3 million was a considerable drop from 2019’s figure of $241.4 million.
Net sales for the fourth quarter were $437.3 million compared with $641.4 million in the fourth quarter of fiscal year 2019, a decrease of $204.1 million (32%), on 32% lower volume. The group made an operating loss of $148.2 million, compared to operating income of $67.9 million in the same period last year.
“We generated strong free cash flow in the quarter which further strengthened our already healthy liquidity position via a significant reduction in inventory,” explained Tony R Thene, president and CEO of Carpenter Technology.
“The strategic decision to accelerate our inventory reduction plan to drive cash flow negatively impacted our operating results in the quarter. We also continue to deal with the incremental operating costs and reduced productivity associated with COVID-19 and its impact on our operations.”
“With that said, our focus is clearly on protecting our near-term liquidity as we actively manage our business through the current uncertainty caused by the global pandemic,” he continued. “In addition, we have executed targeted cost reductions and portfolio restructurings expected to deliver annual cost savings in the range of $60 to $70 million.”
Thene noted that “demand patterns have been broadly impacted by COVID-19,” but stated that Carpenter is working closely with customers across its end-use markets as supply chains continue to adjust. “While COVID-19 has created headwinds for our industry,” he commented, “we have successfully enriched and extended supply agreements with key aerospace, medical and semiconductor customers.”
In the fourth quarter, Carpenter’s Specialty Alloys Operations (SAO), which manufactures premium alloys and stainless steel saw net sales of $369.4 million (2019: $532 million) and $1,831.6 million for the full year (2019: $1,967.3 million).
Carpenter’s Performance Engineered Products segment, the segment of the company that includes the Dynamet titanium business and the Carpenter Powder Products (CPP) business, achieved net sales for the fourth quarter 2020 of $77.1 million, down from $126.4 million in the fourth quarter of fiscal year 2019. For the full year 2020, the segment reported net sales of $401.1 million, down from $479.8 million in 2019.