Carpenter(CRS) - 2024 Q4 - Annual Results

Financial Performance - Carpenter Technology achieved record adjusted operating income of $354.1 million for FY24, a 166% increase compared to FY23[11]. - Q4 FY24 net sales reached $798.7 million, up 40.6% year-over-year, with net sales excluding surcharge revenue at $635.8 million, a 75.8% increase from Q4 FY23[18]. - The SAO segment reported a 25.2% adjusted operating margin in Q4 FY24, up from 21.4% in Q3 FY24, driven by improved productivity and pricing actions[19]. - Q4 FY24 adjusted operating income reached $125.2 million, with an adjusted operating margin of 19.7%[43]. - Projecting operating income of $460 million to $500 million for FY25, pulling the original FY27 goal into FY25[32]. - Projecting $114 million to $120 million in operating income for Q1 FY25[41]. Cash Flow and Liquidity - Adjusted free cash flow for FY24 was $179.0 million, significantly up from a negative $67.6 million in FY23, with Q4 FY24 adjusted free cash flow at $142.4 million[25]. - The company generated $169.5 million in cash from operations in Q4 FY24, reflecting strong operational performance[13]. - Total liquidity at the end of Q4 FY24 was $547.9 million, providing a strong financial position for future investments[25]. - Anticipating adjusted free cash flow of $250 million to $300 million in FY25, representing approximately 85% conversion rate[32]. - Generated $142.4 million in adjusted free cash flow in Q4 FY24[46]. Market Segments - Aerospace and Defense and Medical markets contributed approximately 73% of net sales excluding surcharge in Q4 FY24, with sales in these segments increasing significantly[16]. Tax and Capital Expenditures - Carpenter Technology's effective tax rate ex. special items improved to 17.0% in Q4 FY24, down from 21.3% in Q3 FY24[18]. - Effective tax rate anticipated to be between 21-23% for FY25[48]. - Capital expenditures targeted at $125 million for FY25[34]. Growth Strategy - The company is pulling forward its FY27 earnings growth goal to FY25, indicating an accelerated growth strategy[27]. - Achieved over 60% of growth in the first year of the original four-year goal[32]. - Maintaining a share repurchase program of up to $400 million to offset dilution[33].