CARPENTER TECHNOLOGY REPORTS THIRD QUARTER
FISCAL YEAR 2026 RESULTS
Delivered Another Record Quarterly Operating Income, Up 20 Percent Sequentially
Drove Adjusted Operating Margins in Specialty Alloys Operations Segment to Record 35.6 Percent
Exceeded Third Quarter Operating Income Guidance for Specialty Alloys Operations Segment
Demand Accelerating in Aerospace and Defense End-Use Market
Generated $193.5 million of Cash from Operations; $124.8 Million in Adjusted Free Cash Flow
Increased Operating Income and Adjusted Free Cash Flow Outlook for Fiscal Year 2026
PHILADELPHIA, April 29, 2026 (GLOBE NEWSWIRE) — Carpenter Technology Corporation (NYSE: CRS) (the “Company”) today announced financial results for the fiscal third quarter ended March 31, 2026. For the quarter, the Company reported operating income of $186.5 million and earnings per diluted share of $2.77.
Third Quarter Fiscal Year 2026 Highlights
•Delivered $186.5 million of operating income, up 20 percent sequentially, 35 percent year-over-year and a record result
•Realized adjusted earnings per diluted share of $2.77 in the quarter
•Generated $193.5 million of cash from operating activities
•Exceeded expectations in Specialty Alloys Operations (“SAO”) segment with record operating income of $208.0 million, up 19 percent sequentially and 37 percent year-over-year
•Delivered adjusted operating margin of 35.6 percent in the SAO segment, up from 33.1 percent sequentially and 29.1 in the prior year third quarter
•Bookings for Commercial Aerospace structural sub-market up sequentially
•Executed $52.7 million in share repurchases against $400.0 million repurchase program
Outlook
•For the fourth quarter of fiscal year 2026, anticipate between $205 million to $210 million in operating income
•Increasing operating income guidance for fiscal year 2026 to be in the range of $700 million to $705 million, representing at least a 33 percent increase over fiscal year 2025
•Increasing adjusted free cash flow outlook to approximately $350 million in fiscal year 2026
•Well-positioned for continued growth in fiscal year 2027 and beyond with strong market demand outlook for our broad portfolio of specialized solutions, increasing productivity, optimizing product mix and pricing actions
“The third quarter of fiscal year 2026 represents yet another record setting quarter.” said Tony R. Thene, Chairman and CEO of Carpenter Technology. “Increasing operating income 20 percent sequentially, over what was a record quarter in a market that is accelerating, speaks to our focus on industry leading execution. The profitability improvement was accompanied by meaningful cash generation, reflecting higher earnings, and continued discipline in working capital management.”
“The SAO segment drove the results, delivering $208.0 million of operating income in the quarter and expanding adjusted operating margins to 35.6 percent, both significant increases over the previous quarter. Margin expansion was driven by a combination of continued productivity gains, pricing realization across both long-term and transactional business, and improved product mix. These factors enabled SAO to deliver its strongest quarterly operating performance to date.”
“Looking ahead, demand in our Aerospace and Defense end-use market continues to accelerate as customers gain confidence in higher build rates. As a result, we saw sequential growth in bookings for the commercial aerospace structural sub-market during the quarter. Structural demand is closely tied to new production activity and is a clear indication of growing confidence in the aerospace supply chain. And as customers prioritize security of supply for these critical applications, we continue to advance long-term agreements that support volume visibility and pricing consistency, reinforcing our outlook for sustained growth.”
“With the record third quarter performance and strengthening outlook, we have raised our operating income and adjusted free cash flow expectations for fiscal year 2026. We expect operating income to be in the range of $700 million to $705 million, with adjusted free cash flow to be approximately $350 million.”
“Carpenter Technology just delivered record earnings at a time when the Aerospace and Defense end-use market is at the beginning of the growth cycle. With demand accelerating, we believe Carpenter Technology is well positioned to deliver sustained performance and continue to generate long-term value. We remain focused on supporting our customer needs, operational execution and living our Values as we drive to exceptional near-term and long-term performance.”
Financial Highlights
| | | | | | | | | | | | | | | | | | | | | |
| | Q3 | | Q2 | | Q3 | |
| ($ in millions, except per share amounts) | | FY2026 | | FY2026 | | FY2025 | |
| Net sales | | $ | 811.5 | | | $ | 728.0 | | | $ | 727.0 | | |
| Net sales excluding surcharge (a) | | $ | 655.6 | | | $ | 589.1 | | | $ | 597.0 | | |
| Operating income | | $ | 186.5 | | | $ | 155.2 | | | $ | 137.8 | | |
| | | | | | | |
| Net income | | $ | 139.6 | | | $ | 105.3 | | | $ | 95.4 | | |
| Earnings per diluted share | | $ | 2.77 | | | $ | 2.09 | | | $ | 1.88 | | |
| Adjusted earnings per diluted share (a) | | $ | 2.77 | | | $ | 2.33 | | | $ | 1.88 | | |
| Net cash provided from operating activities | | $ | 193.5 | | | $ | 132.2 | | | $ | 74.2 | | |
| Adjusted free cash flow (a) | | $ | 124.8 | | | $ | 85.9 | | | $ | 34.0 | | |
| | | | | | | |
| (a) Non-GAAP financial measures explained in the attached tables | |
Net sales for the third quarter of fiscal year 2026 were $811.5 million, compared with $727.0 million in the third quarter of fiscal year 2025, an increase of $84.5 million (or 12 percent). Net sales excluding surcharge were $655.6 million for the current quarter, an increase of $58.6 million (or 10 percent) from the same period a year ago.
Operating income for the third quarter of fiscal year 2026 was $186.5 million compared to operating income of $137.8 million in the prior year period. Earnings per diluted share for the third quarter of fiscal year 2026 was $2.77 compared to earnings of $1.88 per diluted share in the prior year third quarter.
Cash provided from operating activities in the third quarter of fiscal year 2026 was $193.5 million, compared to $74.2 million in the same quarter last year. Adjusted free cash flow in the third quarter of fiscal year 2026 was $124.8 million, compared to $34.0 million in the same quarter last year. The increase in operating cash flow in the third quarter of fiscal year 2026 reflects higher earnings and improvements in working capital. The improvement in adjusted free cash flow reflects higher operating cash flow partially offset by increased capital expenditures compared to the prior year period, namely from the brownfield expansion. Capital expenditures were $68.7 million in the third quarter of fiscal year 2026 compared to $40.2 million in the same quarter last year.
Under the Company's authorized share repurchase program of up to $400.0 million, the Company purchased 145,000 shares of its common stock on the open market for an aggregate of $52.7 million during the quarter ended March 31, 2026. As of March 31, 2026, $164.2 million remains available for future purchases.
Total liquidity, including cash and available revolver balance, was $793.8 million at the end of the third quarter of fiscal year 2026. This consisted of $294.8 million of cash and $499.0 million of available borrowings under the Company’s Credit Facility.
Conference Call and Webcast Presentation
Carpenter Technology will host a conference call and webcast presentation today, April 29, 2026, at 10:00 a.m. ET, to discuss the financial results of operations for the third quarter of fiscal year 2026. Please dial +1 (646) 307-1963 for access to the live conference call. Access to the live webcast will be available at Carpenter Technology’s website (https://www.carpentertechnology.com), and a replay will soon be made available at https://www.carpentertechnology.com. Presentation materials used during this conference call will be available for viewing and download at https://www.carpentertechnology.com.
Non-GAAP Financial Measures
This press release includes discussions of financial measures that have not been determined in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). A reconciliation of the non-GAAP financial measures to their most directly comparable financial measures prepared in accordance with GAAP, accompanied by reasons why the Company believes the non-GAAP measures are important, are included in the attached schedules.
About Carpenter Technology
Carpenter Technology Corporation is a recognized leader in high-performance specialty alloy materials and process solutions for critical applications in the aerospace and defense, medical, energy, transportation, and industrial and consumer markets. Founded in 1889, Carpenter Technology has evolved to become a pioneer in premium specialty alloys including nickel, cobalt, and titanium and material process capabilities that solve our customers' current and future material challenges. More information about Carpenter Technology can be found at https://www.carpentertechnology.com.
Forward-Looking Statements
This press release contains 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 Technology's filings with the Securities and Exchange Commission, including its report on Form 10-K for the fiscal year ended June 30, 2025, Form 10-Q for the fiscal quarters ended September 30, 2025, and December 31, 2025, and the exhibits attached to those filings. They include but are not limited to: (1) the cyclical nature of the specialty materials business and certain end-use markets, including aerospace, defense, medical, energy, transportation, industrial and consumer, or other influences on Carpenter Technology's business such as new competitors, the consolidation of competitors, customers, and suppliers or the transfer of manufacturing capacity from the United States to foreign countries; (2) the ability of Carpenter Technology to achieve cash generation, growth, earnings, profitability, operating income, cost savings and reductions, qualifications, productivity improvements or process changes; (3) the ability to recoup increases in the cost of energy, raw materials, freight or other factors; (4) domestic and foreign excess manufacturing capacity for certain metals; (5) fluctuations in currency exchange and interest rates; (6) the effect of government trade actions, including tariffs; (7) the valuation of the assets and liabilities in Carpenter Technology's pension trusts and the accounting for pension plans; (8) possible labor disputes or work stoppages; (9) the potential that our customers may substitute alternate materials or adopt different manufacturing practices that replace or limit the suitability of our products; (10) the ability to successfully acquire and integrate acquisitions; (11) the availability of credit facilities to Carpenter Technology, its customers or other members of the supply chain; (12) the ability to obtain energy or raw materials, especially from suppliers located in countries that may be subject to unstable political or economic conditions; (13) Carpenter Technology's manufacturing processes are dependent upon highly specialized equipment located primarily in facilities in Reading and Latrobe, Pennsylvania and Athens, Alabama for which there may be limited alternatives if there are significant equipment failures or a catastrophic event; (14) the ability to hire and retain a qualified workforce and key personnel, including members of the executive management team, management, metallurgists and other skilled personnel; (15) fluctuations in oil and gas prices and production; (16) the impact of potential cyber attacks and information technology or data security breaches; (17) the ability of suppliers to meet obligations due to supply chain disruptions or otherwise; (18) the ability to meet increased demand, production targets or commitments; (19) the ability to manage the impacts of natural disasters, climate change, pandemics and outbreaks of contagious diseases and other adverse public health developments; (20) geopolitical, economic, and regulatory risks relating to our global business, including geopolitical and diplomatic tensions, instabilities and conflicts, such as the war in Iran, the war in Ukraine, the war between Israel and HAMAS, the war between Israel and Hezbollah, Houthi attacks on commercial shipping vessels and other naval vessels as well as compliance with U.S. and foreign trade and tax laws, sanctions, embargoes and other regulations; (21) challenges affecting the commercial aviation industry or key participants including, but not limited to production and other challenges at The Boeing Company; and (22) the consequences of the announcement, maintenance or use of Carpenter Technology’s share repurchase program. Any of these factors could have an adverse and/or fluctuating effect on Carpenter Technology'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 (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this press release or as of the dates otherwise indicated in such forward-looking statements. Carpenter Technology undertakes no obligation to update or revise any forward-looking statements.
PRELIMINARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | March 31, | | March 31, |
| | 2026 | | 2025 | | 2026 | | 2025 |
| | | | | | | | |
| NET SALES | | $ | 811.5 | | | $ | 727.0 | | | $ | 2,273.2 | | | $ | 2,121.5 | |
| Cost of sales | | 559.7 | | | 526.2 | | | 1,586.6 | | | 1,566.9 | |
| | | | | | | | |
| Gross profit | | 251.8 | | | 200.8 | | | 686.6 | | | 554.6 | |
| | | | | | | | |
| Selling, general and administrative expenses | | 65.3 | | | 63.0 | | | 191.5 | | | 180.6 | |
| Restructuring and asset impairment charges | | — | | | — | | | — | | | 3.6 | |
| | | | | | | | |
| Operating income | | 186.5 | | | 137.8 | | | 495.1 | | | 370.4 | |
| | | | | | | | |
| Interest expense, net | | 8.7 | | | 12.0 | | | 30.3 | | | 36.6 | |
| Debt extinguishment losses | | — | | | — | | | 15.6 | | | — | |
| | | | | | | | |
| Other expense (income), net | | 1.1 | | | 3.8 | | | (2.3) | | | 5.6 | |
| | | | | | | | |
| Income before income taxes | | 176.7 | | | 122.0 | | | 451.5 | | | 328.2 | |
| Income tax expense | | 37.1 | | | 26.6 | | | 84.1 | | | 63.9 | |
| | | | | | | | |
| NET INCOME | | $ | 139.6 | | | $ | 95.4 | | | $ | 367.4 | | | $ | 264.3 | |
| | | | | | | | |
| EARNINGS PER COMMON SHARE: | | | | | | | | |
| Basic | | $ | 2.79 | | | $ | 1.90 | | | $ | 7.34 | | | $ | 5.27 | |
| Diluted | | $ | 2.77 | | | $ | 1.88 | | | $ | 7.29 | | | $ | 5.21 | |
| | | | | | | | |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | | | | | | | | |
| Basic | | 50.0 | | | 50.2 | | | 50.1 | | | 50.2 | |
| Diluted | | 50.3 | | | 50.7 | | | 50.4 | | | 50.7 | |
| | | | | | | | |
| Cash dividends per common share | | $ | 0.20 | | | $ | 0.20 | | | $ | 0.60 | | | $ | 0.60 | |
| | | | | | | | |
PRELIMINARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
| | | | | | | | | | | | | | |
| | Nine Months Ended |
| | March 31, |
| | 2026 | | 2025 |
| OPERATING ACTIVITIES | | | | |
| Net income | | $ | 367.4 | | | $ | 264.3 | |
| Adjustments to reconcile net income to net cash provided from operating activities: | | | | |
| Depreciation and amortization | | 108.8 | | | 103.6 | |
| | | | |
| | | | |
| Noncash restructuring and asset impairment charges | | — | | | 2.5 | |
| | | | |
| Debt extinguishment losses | | 15.6 | | | — | |
| Deferred income taxes | | 12.8 | | | (12.3) | |
| Net pension expense | | 10.8 | | | 18.6 | |
| Share-based compensation expense | | 18.6 | | | 16.2 | |
| Net loss on disposals of property, plant and equipment | | 0.6 | | | 0.9 | |
| | | | |
| Changes in working capital and other: | | | | |
| Accounts receivable | | (106.9) | | | (39.4) | |
| Inventories | | (45.1) | | | (93.3) | |
| Other current assets | | 1.5 | | | 10.2 | |
| Accounts payable | | 33.6 | | | (10.6) | |
| Accrued liabilities | | (31.0) | | | (14.0) | |
| Pension plan contributions | | (17.1) | | | (58.5) | |
| Other postretirement plan contributions | | (3.0) | | | (2.8) | |
| Other, net | | (1.7) | | | (3.1) | |
| Net cash provided from operating activities | | 364.9 | | | 182.3 | |
| INVESTING ACTIVITIES | | | | |
| Purchases of property, plant, equipment and software | | (157.6) | | | (96.3) | |
| Proceeds from disposals of property, plant and equipment | | — | | | 0.1 | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| Net cash used for investing activities | | (157.6) | | | (96.2) | |
| FINANCING ACTIVITIES | | | | |
| | | | |
| | | | |
| | | | |
| Proceeds from issuance of long-term debt, net of offering costs | | 692.1 | | | — | |
| Payments on long-term debt | | (700.0) | | | — | |
| Payments for debt extinguishment costs | | (11.4) | | | — | |
| Payments for debt issue costs | | (4.1) | | | — | |
| Dividends paid | | (30.2) | | | (30.2) | |
| Purchases of treasury stock | | (133.9) | | | (77.8) | |
| | | | |
| | | | |
| Proceeds from stock options exercised | | 13.9 | | | 12.2 | |
| Withholding tax payments on share-based compensation awards | | (55.9) | | | (36.6) | |
| | | | |
| Net cash used for financing activities | | (229.5) | | | (132.4) | |
| Effect of exchange rate changes on cash and cash equivalents | | 1.5 | | | (1.3) | |
| DECREASE IN CASH AND CASH EQUIVALENTS | | (20.7) | | | (47.6) | |
| Cash and cash equivalents at beginning of year | | 315.5 | | | 199.1 | |
| Cash and cash equivalents at end of period | | $ | 294.8 | | | $ | 151.5 | |
| | | | |
PRELIMINARY
CONSOLIDATED BALANCE SHEETS
(in millions)
(Unaudited)
| | | | | | | | | | | | | | |
| | March 31, | | June 30, |
| | 2026 | | 2025 |
| | | | |
| ASSETS | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 294.8 | | | $ | 315.5 | |
| Accounts receivable, net | | 682.0 | | | 575.5 | |
| Inventories | | 839.2 | | | 793.8 | |
| | | | |
| Other current assets | | 81.6 | | | 79.9 | |
| Total current assets | | 1,897.6 | | | 1,764.7 | |
| Property, plant, equipment and software, net | | 1,433.3 | | | 1,359.4 | |
| Goodwill | | 227.3 | | | 227.3 | |
| Other intangibles, net | | 5.3 | | | 9.5 | |
| Deferred income taxes | | 8.0 | | | 7.8 | |
| Other assets | | 107.6 | | | 118.1 | |
| Total assets | | $ | 3,679.1 | | | $ | 3,486.8 | |
| | | | |
| LIABILITIES | | | | |
| Current liabilities: | | | | |
| | | | |
| | | | |
| Accounts payable | | $ | 322.6 | | | $ | 267.4 | |
| | | | |
| Accrued liabilities | | 185.7 | | | 216.3 | |
| Total current liabilities | | 508.3 | | | 483.7 | |
| | | | |
| Long-term debt | | 690.4 | | | 695.4 | |
| Accrued pension liabilities | | 134.7 | | | 146.9 | |
| Accrued postretirement benefits | | 10.9 | | | 12.5 | |
| Deferred income taxes | | 176.4 | | | 162.8 | |
| Other liabilities | | 90.8 | | | 98.5 | |
| Total liabilities | | 1,611.5 | | | 1,599.8 | |
| | | | |
| STOCKHOLDERS' EQUITY | | | | |
| Common stock | | 286.7 | | | 286.2 | |
| Capital in excess of par value | | 349.9 | | | 354.3 | |
| Reinvested earnings | | 2,047.4 | | | 1,710.2 | |
| Common stock in treasury, at cost | | (548.9) | | | (395.8) | |
| Accumulated other comprehensive loss | | (67.5) | | | (67.9) | |
| Total stockholders' equity | | 2,067.6 | | | 1,887.0 | |
| Total liabilities and stockholders' equity | | $ | 3,679.1 | | | $ | 3,486.8 | |
| | | | |
PRELIMINARY
SEGMENT FINANCIAL DATA
(in millions, except pounds sold)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| March 31, | | March 31, |
| 2026 | | 2025 | | 2026 | | 2025 |
| | | | | | | |
| Pounds sold ('000): | | | | | | | |
| Specialty Alloys Operations | 51,832 | | | 44,584 | | | 143,418 | | | 139,400 | |
| Performance Engineered Products | 2,602 | | | 2,584 | | | 7,104 | | | 7,424 | |
| Intersegment | (960) | | | (672) | | | (2,226) | | | (2,590) | |
| Consolidated pounds sold | 53,474 | | | 46,496 | | | 148,296 | | | 144,234 | |
| | | | | | | |
| Net sales: | | | | | | | |
| Specialty Alloys Operations | | | | | | | |
| Net sales excluding surcharge | $ | 585.0 | | | $ | 519.4 | | | $ | 1,646.1 | | | $ | 1,509.9 | |
| Surcharge | 150.1 | | | 123.5 | | | 410.2 | | | 379.6 | |
| Specialty Alloys Operations net sales | 735.1 | | | 642.9 | | | 2,056.3 | | | 1,889.5 | |
| | | | | | | |
| Performance Engineered Products | | | | | | | |
| Net sales excluding surcharge | 90.6 | | | 96.8 | | | 255.0 | | | 275.3 | |
| Surcharge | 7.1 | | | 8.1 | | | 19.5 | | | 25.5 | |
| Performance Engineered Products net sales | 97.7 | | | 104.9 | | | 274.5 | | | 300.8 | |
| | | | | | | |
| Intersegment | | | | | | | |
| Net sales excluding surcharge | (20.0) | | | (19.2) | | | (53.3) | | | (62.8) | |
| Surcharge | (1.3) | | | (1.6) | | | (4.3) | | | (6.0) | |
| Intersegment net sales | (21.3) | | | (20.8) | | | (57.6) | | | (68.8) | |
| | | | | | | |
| Consolidated net sales | $ | 811.5 | | | $ | 727.0 | | | $ | 2,273.2 | | | $ | 2,121.5 | |
| | | | | | | |
| Operating income (loss): | | | | | | | |
| Specialty Alloys Operations | $ | 208.0 | | | $ | 151.4 | | | $ | 553.2 | | | $ | 421.5 | |
| Performance Engineered Products | 6.7 | | | 10.9 | | | 23.0 | | | 25.3 | |
| Corporate | (27.3) | | | (24.4) | | | (80.1) | | | (76.0) | |
| | | | | | | |
| Intersegment | (0.9) | | | (0.1) | | | (1.0) | | | (0.4) | |
| Consolidated operating income | $ | 186.5 | | | $ | 137.8 | | | $ | 495.1 | | | $ | 370.4 | |
| | | | | | | |
The Company has two reportable segments, Specialty Alloys Operations (“SAO”) and Performance Engineered Products (“PEP”).
The SAO segment is comprised of Carpenter'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 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. It is our belief this model will ultimately drive overall revenue and profit growth. The pounds sold data above for the PEP segment includes only the Dynamet and Additive businesses.
Corporate costs are comprised of executive and director compensation, and other corporate facilities and administrative expenses not allocated to the segments. Also included are items that management considers not representative of ongoing operations and other specifically-identified income or expense items.
The service cost component of net pension expense, which represents the estimated cost of future pension liabilities earned associated with active employees, is included in the operating results of the business segments. The residual net pension expense is included in other expense (income), net, and is comprised of the expected return on plan assets, interest costs on the projected benefit obligations of the plans, amortization of actuarial gains and losses and prior service costs.
PRELIMINARY
NON-GAAP FINANCIAL MEASURES
(in millions, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| ADJUSTED OPERATING MARGIN EXCLUDING SURCHARGE REVENUE AND SPECIAL ITEM | | Three Months Ended | | Nine Months Ended |
| March 31, | | March 31, |
| 2026 | | 2025 | | 2026 | | 2025 |
| | | | | | | | |
| Net sales | | $ | 811.5 | | $ | 727.0 | | $ | 2,273.2 | | $ | 2,121.5 |
| Less: surcharge revenue | | 155.9 | | 130.0 | | 425.4 | | 399.1 |
| Net sales excluding surcharge revenue | | $ | 655.6 | | $ | 597.0 | | $ | 1,847.8 | | $ | 1,722.4 |
| | | | | | | | |
| Operating income | | $ | 186.5 | | $ | 137.8 | | $ | 495.1 | | $ | 370.4 |
| | | | | | | | |
| Special item: | | | | | | | | |
| Restructuring and asset impairment charges | | — | | — | | — | | 3.6 |
| | | | | | | | |
| Adjusted operating income | | $ | 186.5 | | $ | 137.8 | | $ | 495.1 | | $ | 374.0 |
| | | | | | | | |
| Operating margin | | 23.0 | % | | 19.0 | % | | 21.8 | % | | 17.5 | % |
| | | | | | | | |
| Adjusted operating margin excluding surcharge revenue and special item | | 28.4 | % | | 23.1 | % | | 26.8 | % | | 21.7 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| ADJUSTED SEGMENT OPERATING MARGIN EXCLUDING SURCHARGE REVENUE | | Three Months Ended | | Nine Months Ended |
| March 31, | | March 31, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Specialty Alloys Operations | | | | | | | | |
| Net sales | | $ | 735.1 | | $ | 642.9 | | $ | 2,056.3 | | $ | 1,889.5 |
| Less: surcharge revenue | | 150.1 | | 123.5 | | 410.2 | | 379.6 |
| Net sales excluding surcharge revenue | | $ | 585.0 | | $ | 519.4 | | $ | 1,646.1 | | $ | 1,509.9 |
| | | | | | | | |
| Operating income | | $ | 208.0 | | $ | 151.4 | | $ | 553.2 | | $ | 421.5 |
| | | | | | | | |
| Operating margin | | 28.3 | % | | 23.5 | % | | 26.9 | % | | 22.3 | % |
| | | | | | | | |
| Adjusted operating margin excluding surcharge revenue | | 35.6 | % | | 29.1 | % | | 33.6 | % | | 27.9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| ADJUSTED SEGMENT OPERATING MARGIN EXCLUDING SURCHARGE REVENUE | | Three Months Ended | | Nine Months Ended |
| March 31, | | March 31, |
| 2026 | | 2025 | | 2026 | | 2025 |
| Performance Engineered Products | | | | | | | | |
| Net sales | | $ | 97.7 | | $ | 104.9 | | $ | 274.5 | | $ | 300.8 |
| Less: surcharge revenue | | 7.1 | | 8.1 | | 19.5 | | 25.5 |
| Net sales excluding surcharge revenue | | $ | 90.6 | | $ | 96.8 | | $ | 255.0 | | $ | 275.3 |
| | | | | | | | |
| Operating income | | $ | 6.7 | | $ | 10.9 | | $ | 23.0 | | $ | 25.3 |
| | | | | | | | |
| Operating margin | | 6.9 | % | | 10.4 | % | | 8.4 | % | | 8.4 | % |
| | | | | | | | |
| Adjusted operating margin excluding surcharge revenue | | 7.4 | % | | 11.3 | % | | 9.0 | % | | 9.2 | % |
| | | | | | | | |
Management believes that removing the impact of raw material surcharge from operating margin provides a more consistent basis for comparing results of operations from period to period, thereby permitting management to evaluate performance and investors to make decisions based on the ongoing operations of the Company. In addition, management believes that excluding the impact of special items from operating margin is helpful in analyzing the operating performance of the Company, as these items are not indicative of ongoing operating performance. Management uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company’s board of directors and others.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| ADJUSTED EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEM | | Earnings Before Income Taxes | | Income Tax Expense | | Net Income | | Earnings Per Diluted Share* |
| | | | | | | | |
Three Months Ended March 31, 2026, as reported | | $ | 176.7 | | | $ | (37.1) | | | $ | 139.6 | | | $ | 2.77 | |
| Special item: | | | | | | | | |
| None reported | | — | | | — | | | — | | | — | |
| | | | | | | | |
| | | | | | | | |
Three Months Ended March 31, 2026, as adjusted | | $ | 176.7 | | | $ | (37.1) | | | $ | 139.6 | | | $ | 2.77 | |
| | | | | | | | |
* Impact per diluted share calculated using weighted average common shares outstanding of 50.3 million for the three months ended March 31, 2026. |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| ADJUSTED EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEM | | Earnings Before Income Taxes | | Income Tax Expense | | Net Income | | Earnings Per Diluted Share* |
| | | | | | | | |
Three Months Ended March 31, 2025, as reported | | $ | 122.0 | | | $ | (26.6) | | | $ | 95.4 | | | $ | 1.88 | |
| | | | | | | | |
| Special item: | | | | | | | | |
| | | | | | | | |
| None reported | | — | | | — | | | — | | | — | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Three Months Ended March 31, 2025, as adjusted | | $ | 122.0 | | | $ | (26.6) | | | $ | 95.4 | | | $ | 1.88 | |
| | | | | | | | |
* Impact per diluted share calculated using weighted average common shares outstanding of 50.7 million for the three months ended March 31, 2025. |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| ADJUSTED EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEM | | Earnings Before Income Taxes | | Income Tax Expense | | Net Income | | Earnings Per Diluted Share* |
| | | | | | | | |
Nine Months Ended March 31, 2026, as reported | | $ | 451.5 | | | $ | (84.1) | | | $ | 367.4 | | | $ | 7.29 | |
| Special item: | | | | | | | | |
| Debt extinguishment losses | | 15.6 | | | (3.6) | | | 12.0 | | | 0.24 | |
| | | | | | | | |
| | | | | | | | |
Nine Months Ended March 31, 2026, as adjusted | | $ | 467.1 | | | $ | (87.7) | | | $ | 379.4 | | | $ | 7.53 | |
| | | | | | | | |
* Impact per diluted share calculated using weighted average common shares outstanding of 50.4 million for the nine months ended March 31, 2026. |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| ADJUSTED EARNINGS PER DILUTED SHARE EXCLUDING SPECIAL ITEM | | Earnings Before Income Taxes | | Income Tax Expense | | Net Income | | Earnings Per Diluted Share* |
| | | | | | | | |
Nine Months Ended March 31, 2025, as reported | | $ | 328.2 | | | $ | (63.9) | | | $ | 264.3 | | | $ | 5.21 | |
| Special item: | | | | | | | | |
| Restructuring and asset impairment charges | | 3.6 | | | (0.9) | | | 2.7 | | | 0.06 | |
| | | | | | | | |
Nine Months Ended March 31, 2025, as adjusted | | $ | 331.8 | | | $ | (64.8) | | | $ | 267.0 | | | $ | 5.27 | |
| | | | | | | | |
* Impact per diluted share calculated using weighted average common shares outstanding of 50.7 million for the nine months ended March 31, 2025. |
Management believes that earnings per share adjusted to exclude the impact of the special items is helpful in analyzing the operating performance of the Company, as these items are not indicative of ongoing operating performance. Management uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company’s board of directors and others.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | March 31, | | March 31, |
| ADJUSTED FREE CASH FLOW | | 2026 | | 2025 | | 2026 | | 2025 |
| | | | | | | | |
| Net cash provided from operating activities | | $ | 193.5 | | | $ | 74.2 | | | $ | 364.9 | | | $ | 182.3 | |
| Purchases of property, plant, equipment and software | | (68.7) | | | (40.2) | | | (157.6) | | | (96.3) | |
| Proceeds from disposals of property, plant and equipment | | — | | | — | | | — | | | 0.1 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Adjusted free cash flow | | $ | 124.8 | | | $ | 34.0 | | | $ | 207.3 | | | $ | 86.1 | |
| | | | | | | | |
Management believes that the presentation of adjusted free cash flow provides useful information to investors regarding our financial condition because it is a measure of cash generated which management evaluates for alternative uses. It is management's current intention to use excess cash to fund investments in capital equipment, acquisition opportunities and consistent dividend payments. Additionally, we will discretionarily use excess cash for a share repurchase program up to $400.0 million of our outstanding common stock. Adjusted free cash flow is not a U.S. GAAP financial measure and should not be considered in isolation of, or as a substitute for, cash flows calculated in accordance with U.S. GAAP.
PRELIMINARY
SUPPLEMENTAL SCHEDULE
(in millions)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | March 31, | | March 31, |
| NET SALES BY END-USE MARKET | | 2026 | | 2025 | | 2026 | | 2025 |
| | | | | | | | |
| End-Use Market Excluding Surcharge Revenue: | | | | | | | | |
| Aerospace and Defense | | $ | 435.6 | | | $ | 373.2 | | | $ | 1,209.0 | | | $ | 1,056.8 | |
| Medical | | 51.7 | | | 72.4 | | | 170.2 | | | 219.3 | |
| Energy | | 50.5 | | | 35.0 | | | 131.5 | | | 106.6 | |
| Transportation | | 19.3 | | | 21.9 | | | 54.5 | | | 64.4 | |
| Industrial and Consumer | | 78.1 | | | 72.4 | | | 227.4 | | | 212.2 | |
| Distribution | | 20.4 | | | 22.1 | | | 55.2 | | | 63.1 | |
| | | | | | | | |
| Total net sales excluding surcharge revenue | | 655.6 | | | 597.0 | | | 1,847.8 | | | 1,722.4 | |
| | | | | | | | |
| Surcharge revenue | | 155.9 | | | 130.0 | | | 425.4 | | | 399.1 | |
| | | | | | | | |
| Total net sales | | $ | 811.5 | | | $ | 727.0 | | | $ | 2,273.2 | | | $ | 2,121.5 | |
| | | | | | | | |
| | | | | | | | |
Investor Inquiries: |
| Media Inquiries: |
John Huyette |
| Heather Beardsley |
+1 610-208-2061 |
| +1 610-208-2278 |
jhuyette@cartech.com |
| hbeardsley@cartech.com |
