Carpenter Technology Corporation announced financial results for the second quarter ended December 31, 2014. Carpenter reported net income of $24.1 million or $0.45 per diluted share.
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Excluding a discrete tax charge of $1.6 million ($0.03 per diluted share) related to the enactment of the Tax Increase Prevention Act of 2014, earnings per diluted share would have been $0.48 in the quarter. This compares to $29.5 million or $0.55 per diluted share in the same quarter last year.
Net sales for the second quarter of fiscal year 2015 were $548.4 million, and net sales excluding surcharge were $445.7 million, an increase of $31.1 million (or 8 percent) from the same quarter last year, on flat shipments.
Operating income was $45.0 million, a decrease of $2.5 million from the second quarter of the prior year. Operating income—excluding pension earnings, interest and deferrals (EID)—was $47.4 million, a decrease of $3.9 million (or 8 percent) from the second quarter of the prior year.
This reduction in operating income versus the prior year is primarily due to the Reading press outage in November, higher SAO operating costs, and the additional depreciation expense of the Athens facility, which were all partially offset by lower variable compensation expense and a stronger mix of products.
Cash flow from operations was $12.5 million, which included a $54.2 million increase in working capital and $1.2 million of pension contributions. This compares to a cash flow from operations of $23.6 million in the prior year’s second quarter, which included a $25.0 million increase in working capital and $1.5 million of pension contributions.
Free cash flow in the second quarter of fiscal year 2015 was negative $65.5 million, compared to negative $99.9 million in the same quarter last year. Capital spending in the second quarter, which included $34.6 million related to the construction of the Athens facility, was $68.4 million, compared to $114.2 million in the prior year’s second quarter, which included $94.7 million related to Athens.
Total liquidity, including cash and available revolver balance, was $484 million at the end of the second quarter. This consisted of $29 million of cash, and $455 million of available revolver. ■