Carpenter Technology Corp (CRS) 2024 Q3 法說會逐字稿

Good morning, and welcome to the Carpenter Technology Corporation Third Quarter 2024 Fiscal Conference Call. (Operator Instructions) Please note this event is being recorded.

早安，歡迎參加 Carpenter Technology Corporation 2024 年第三季財務電話會議。 （操作員說明）請注意此事件正在被記錄。

I would now like to turn the conference over to John Huyette, Vice President of Investor Relations. Please go ahead.

現在我想將會議交給投資者關係副總裁 John Huyette。請繼續。

Thank you, operator. Good morning, everyone, and welcome to the Carpenter Technology earnings conference call for the fiscal 2024 third quarter ended March 31, 2024. This call is also being broadcast over the Internet, along with presentation slides. Please note, for those of you listening by phone, you may experience a time delay in slide movement.

謝謝你，接線生。大家早安，歡迎參加 Carpenter Technology 截至 2024 年 3 月 31 日的 2024 財年第三季財報電話會議。請注意，對於那些透過電話收聽的人，您可能會遇到幻燈片移動的時間延遲。

Speakers on the call today are Tony Thene, President and Chief Executive Officer; and Tim Lain, Senior Vice President and Chief Financial Officer.

今天電話會議的發言人是總裁兼執行長 Tony Thene；提姆‧萊恩 (Tim Lain)，資深副總裁兼財務長。

Statements made by management during this presentation that are forward-looking statements are based on current expectations. Risk factors that could cause actual results to differ materially from these forward-looking statements can be found in Carpenter Technology's most recent SEC filings, including the company's report on Form 10-K for the year ended June 30, 2023, Forms 10-Q for the quarters ended September 30, 2023, and December 31, 2023, and the exhibits attached to those filings.

管理階層在本簡報中發表的前瞻性聲明是基於目前的預期。可能導致實際結果與這些前瞻性陳述有重大差異的風險因素可以在Carpenter Technology 最近向SEC 提交的文件中找到，包括該公司截至2023 年6 月30 日的10-K 表格報告、截至2023 年6 月30 日的10-Q 表格報告。

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

另請注意，在下面的討論中，除非另有說明，否則當管理層討論銷售額或收入時，該參考內容不包括附加費。當提及營業利潤時，這是基於調整後的營業收入，不包括特殊項目和銷售額，不包括附加費。

I'll now turn the call over to Tony.

我現在把電話轉給托尼。

Thank you, John, and good morning to everyone on the call today. I will begin on Slide 4 with a review of our safety performance. Through the third quarter of fiscal year 2024, our total case incident rate was 1.7. This marks an improvement over the last quarter, reflecting the impact of ongoing employee engagement programs. We continue to diligently work towards our goal of a 0 injury workplace.

謝謝約翰，今天參加電話會議的每個人都早安。我將從投影片 4 開始回顧我們的安全績效。截至 2024 財年第三季度，我們的總病例發生率為 1.7。這標誌著上一季的進步，反映了正在進行的員工敬業度計畫的影響。我們持續努力實現零傷害工作場所的目標。

Now let's turn to Slide 5 for an overview of our financial performance and outlook. Our third quarter performance was exceptional. And has set us up for an unprecedented finish to fiscal year 2024. We beat our third quarter guidance by approximately 18%, generating $90 million in adjusted operating income. This was our most profitable quarter on record, up 29% from the second quarter of fiscal year 2024, and we expect to take another historic step forward in the fourth quarter.

現在讓我們轉向投影片 5，概述我們的財務表現和前景。我們第三季的業績非常出色。並為我們以前所未有的方式結束 2024 財年做好了準備。這是我們有史以來利潤最高的季度，比 2024 財年第二季成長 29%，我們預計第四季將再向前邁出歷史性一步。

We are raising our guidance for the fourth quarter to a range of $110 million to $115 million in operating income. This marks an 8% increase over our previous fourth quarter guidance and a 25% increase over our all-time record third quarter performance just achieved.

我們將第四季營業收入指引提高至 1.1 億至 1.15 億美元。這標誌著比我們之前第四季的指導成長了 8%，比我們剛剛實現的歷史記錄第三季業績成長了 25%。

With our third quarter earnings beat and increased fourth quarter guidance, we expect to end fiscal year 2024 with $339 million to $344 million in adjusted operating income, which would be an annual earnings record for Carpenter Technology.

隨著第三季獲利超出預期以及第四季指引的提高，我們預計 2024 財年結束時調整後營業收入將達到 3.39 億美元至 3.44 億美元，這將創下 Carpenter Technology 的年度獲利記錄。

Let's move to the next slide for additional detail on third quarter performance. The strong beat for the third quarter is the result of continuing improvement in productivity, product mix optimization and pricing actions.

讓我們轉到下一張投影片，以了解有關第三季業績的更多詳細資訊。第三季的強勁表現是生產力、產品組合優化和定價行動持續改善的結果。

Notably, the SAO segment exceeded expectations, delivering $103.5 million in operating income, well above the outlook we provided on last quarter's call and 24% above the second quarter performance. In addition, SAO continued to expand margins, achieving an adjusted operating margin of 21.4%, a step up from the 20% in the previous quarter.

值得注意的是，SAO 部門超出了預期，實現了 1.035 億美元的營業收入，遠高於我們在上季度電話會議中提供的預期，比第二季度的業績高出 24%。此外，SAO持續擴大利潤率，調整後營業利潤率達到21.4%，較上一季的20%有所提高。

Importantly, we generated $61.9 million of free cash flow during the quarter, as this quarter serves as a clear turning point into a period of significant free cash flow generation. And to wrap up this slide, we continue to see strong current and future demand for our impressive portfolio of solutions.

重要的是，我們在本季產生了 6,190 萬美元的自由現金流，因為本季是進入自由現金流大量產生時期的明顯轉折點。最後，我們繼續看到當前和未來對我們令人印象深刻的解決方案組合的強勁需求。

Let's turn to Slide 7 and take a closer look at our third quarter sales and market dynamics. In the third quarter of fiscal year 2024, sales increased 14% sequentially on higher volumes, improving product mix and pricing actions. Across our end-use markets, we continue to see demand for our premium material solutions well above supply levels.

讓我們轉向幻燈片 7，仔細看看我們第三季的銷售和市場動態。 2024 財年第三季度，銷售量較上季成長 14%，銷售量增加，產品組合與定價行動得到改善。在我們的最終用途市場中，我們繼續看到對我們優質材料解決方案的需求遠高於供應水準。

In the third quarter, the increased productivity at key (inaudible) centers was a primary driver of our performance. We continue to remain focused on allocating capacity to where customers value it most and over the last quarter, realized higher sales to aerospace and defense and medical end-use markets.

第三季度，關鍵（聽不清楚）中心生產力的提升是我們業績的主要驅動力。我們繼續專注於將產能分配給客戶最重視的地方，並在上個季度實現了航空航太、國防和醫療最終用途市場的更高銷售。

In our aerospace market, customers continue to stress their near- and long-term supply needs. Customers remain focused on surety of supply, with increasing requests to extend or secure long-term agreements with us. Additionally, MRO-related needs have emerged as very acute. And we are actively prioritizing areas to help customers mitigate line-down situations.

在我們的航空航太市場，客戶繼續強調他們的近期和長期供應需求。客戶仍然關注供應的保證，越來越多地要求與我們延長或簽訂長期協議。此外，與 MRO 相關的需求也變得非常迫切。我們正在積極優先考慮幫助客戶緩解停線情況的領域。

In the defense market, our customers remain very active, given ongoing world events. Our defense customers remain highly concerned with long lead times and are asking for more of our capacity to serve them. We have worked over the last quarter to accommodate emergency drop-in needs for critical defense applications. We will continue efforts to prioritize critical defense orders given the essential nature of our support.

在國防市場，鑑於世界各地正在發生的事件，我們的客戶仍然非常活躍。我們的國防客戶仍然高度關注較長的交貨時間，並要求我們提供更多的服務能力。上個季度我們一直在努力滿足關鍵國防應用的緊急需求。鑑於我們支持的本質，我們將繼續努力優先考慮關鍵的國防訂單。

Altogether, sales to our aerospace and defense customers, 57% of revenue for the current quarter were up 28% sequentially and up 30% year-over-year. Our long-term outlook for aerospace and defense continues to remain strong given fundamentals of increasing air travel and air demand as well as defense needs.

總的來說，我們的航空航太和國防客戶的銷售額佔本季收入的 57%，較上季成長 28%，較去年同期成長 30%。鑑於航空旅行和航空需求以及國防需求不斷增長的基本面，我們對航空航太和國防的長期前景繼續保持強勁。

Moving to our medical end-use market. Our customers continue to see strong forward market demand and maintain very positive outlooks based on robust patient backlogs.

轉向我們的醫療最終用途市場。我們的客戶繼續看到強勁的遠期市場需求，並基於強勁的患者積壓保持非常積極的前景。

As in aerospace, lead times for premium medical products are very extended. More and more, our medical customers are discussing with us the need for tight engagement to secure their supplies. And view specialty material supply as a key strategic area.

與航空航太業一樣，優質醫療產品的交貨時間非常長。我們的醫療客戶越來越多地與我們討論需要緊密合作以確保他們的供應。並將特種材料供應視為關鍵策略領域。

In addition to surety of supply, our medical customers also remain focused on new product innovations driven by increasing use of robotics, minimally-invasive surgeries and alloy sensitivity among others. Engagement with customers on new products and applications remains high, with multiple product areas we supply seeing high-growth projections.

除了供應保證之外，我們的醫療客戶還繼續關注由機器人技術、微創手術和合金敏感性等的使用增加所驅動的新產品創新。客戶對新產品和應用的參與度仍然很高，我們提供的多個產品領域預計將出現高成長。

Altogether, our medical sales in the quarter were 15% of total revenue, increasing 15% sequentially and 35% year-over-year. This was another record quarter for medical sales following a very strong first half and reflects concerted efforts to accelerate shipments.

總的來說，我們本季的醫療銷售額佔總營收的 15%，較上季成長 15%，較去年同期成長 35%。繼上半年強勁表現之後，本季醫療產品銷售又創歷史新高，反映出各方為加快出貨量所做的共同努力。

Taken together, our aerospace and defense and medical end-use markets are nearly 3/4 of our overall business.

總的來說，我們的航空航太、國防和醫療最終用途市場占我們整體業務的近 3/4。

Across our other end-use markets, customer engagement is high and demand for our premium solutions remains positive. We continue to see strong bookings and increasing lead times. In addition, our backlog remains at record levels despite ongoing efforts to limit order intake. Specifically, backlog is up 3% sequentially and 12% year-over-year, currently at 3x the pre-COVID level.

在我們的其他最終用途市場中，客戶參與度很高，對我們優質解決方案的需求仍然積極。我們繼續看到強勁的預訂量和不斷增加的交貨時間。此外，儘管我們不斷努力限制訂單量，但我們的積壓訂單仍處於創紀錄水平。具體而言，積壓訂單季增 3%，年增 12%，目前是新冠疫情爆發前水準的 3 倍。

Altogether, the near- and long-term demand outlook for Carpenter Technology remains very positive. Bottom line is that we are operating in a strong market environment right now, and we anticipate that to continue and expand in the near and long term. We are reminded every day of the critical role we play in supply chains across our markets, and we'll proudly continue to work to deliver high-quality solutions that our customers rely on to drive performance.

總而言之，Carpenter Technology 的近期和長期需求前景仍然非常樂觀。最重要的是，我們目前正在強勁的市場環境中運營，我們預計這種情況將在短期和長期內持續並擴大。我們每天都在提醒自己，我們在整個市場的供應鏈中發揮關鍵作用，我們將自豪地繼續努力提供高品質的解決方案，讓我們的客戶依靠這些解決方案來提高績效。

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

現在我將把財務摘要交給提姆。

Thanks, Tony. Good morning, everyone. I'll start on Slide 9, the income statement summary. Net sales in the third quarter were $684.9 million, with sales excluding surcharge totaling $553.8 million. Sales excluding surcharge increased 14% sequentially on 2% higher volume. The growth in net sales in excess of volume growth is the result of the ongoing shift in product mix as we continue to focus our capacity on more complex, higher-value materials. As Tony highlighted in his remarks, this is driving the significant growth in our key end-use markets of aerospace and defense and medical.

謝謝，托尼。大家，早安。我將從投影片 9 開始，即損益表摘要。第三季淨銷售額為 6.849 億美元，不含附加費的銷售額總計 5.538 億美元。附加費的銷售額較上季成長 14%，銷量成長 2%。淨銷售額的成長超過銷售量的成長是產品結構持續轉變的結果，因為我們持續將產能集中在更複雜、更高價值的材料上。正如托尼在演講中所強調的那樣，這正在推動我們的航空航太、國防和醫療等關鍵最終用途市場的顯著成長。

Gross profit was $147 million in the current quarter compared to $122.6 million in our recent second quarter. SG&A expenses were $57 million in the third quarter, up roughly $4 million sequentially. Note the SG&A line includes corporate costs, which totaled $23.3 million in the recent third quarter. As we look ahead to the upcoming fourth quarter of fiscal year 2024, we expect corporate costs to remain at approximately $23 million.

本季的毛利為 1.47 億美元，而最近第二季的毛利為 1.226 億美元。第三季的銷售、管理及行政費用為 5,700 萬美元，較上一季增加約 400 萬美元。請注意，SG&A 專案包括公司成本，最近第三季總計 2,330 萬美元。展望即將到來的 2024 財年第四季度，我們預計企業成本將維持在約 2,300 萬美元。

Operating income was $75.9 million in the current quarter or $90 million of adjusted operating income, which is 29% higher than the $69.8 million in our recent second quarter of fiscal year 2024. The record adjusted operating income results for the quarter reflects the impact of an improving product mix, ongoing pricing actions and our focused efforts to increase productivity across our manufacturing operations. And it continues the momentum we've been building over the last several quarters going back to the start of fiscal year 2023.

本季營業收入為 7,590 萬美元，調整後營業收入為 9,000 萬美元，比 2024 財年第二季的 6,980 萬美元高出 29%。持續的定價行動以及我們為提高整個製造業務的生產力而付出的努力。它延續了我們自 2023 財年開始以來的過去幾季所建立的勢頭。

Notably, we continue to expand our operating margins, reaching adjusted operating margin of 16.3% in the current quarter. Although we are pleased with the results, we continue to see opportunities to carry this momentum even further, as you can see from the outlook we provided for our upcoming fourth quarter.

值得注意的是，我們繼續擴大營業利潤率，本季調整後的營業利潤率達到 16.3%。儘管我們對結果感到滿意，但我們仍然看到進一步保持這一勢頭的機會，正如您從我們為即將到來的第四季度提供的前景中看到的那樣。

Moving on to our effective tax rate. For the recent third quarter, our effective tax rate was 37.6%. When excluding the impact of the special items, the effective rate for the quarter is closer to 21%. The adjusted rate is slightly lower than our expectations due to benefits associated with certain changes in prior year tax positions taken in the current quarter. For the upcoming fourth quarter, we expect the effective tax rate to be in the range of 21% to 23%.

接下來討論我們的有效稅率。最近第三季度，我們的有效稅率為 37.6%。當排除特殊項目的影響時，本季的有效利率接近21%。調整後的稅率略低於我們的預期，因為本季採取的上一年稅收狀況的某些變化帶來了好處。對於即將到來的第四季度，我們預計有效稅率將在 21% 至 23% 之間。

Adjusted earnings per share was $1.19 for the current quarter. The adjusted earnings per share results exclude the impact of noncash charges for goodwill impairment related to our distribution business in the PEP segment, as well as a noncash pension settlement charge. I will highlight that the pension settlement charge is the result of proactive risk reduction steps we took in the current quarter to annuitize a portion of future pension obligations. The adjusted earnings per share results for the quarter of $1.19 demonstrate our improving profitability, driven by solid execution in a strong demand environment.

本季調整後每股收益為 1.19 美元。調整後的每股盈餘結果不包括與我們 PEP 部門的經銷業務相關的商譽減損非現金費用以及非現金退休金結算費用的影響。我要強調的是，退休金結算費用是我們在本季採取的主動降低風險措施的結果，目的是將未來退休金義務的一部分年化。本季調整後每股收益為 1.19 美元，這表明我們的獲利能力不斷提高，這得益於強勁需求環境下的穩健執行。

Now turning to Slide 10 and our SAO segment results. Net sales, excluding surcharge for the third quarter were $483 million, up 16% sequentially on slightly higher volume. The improvement in net sales was driven by the impact of a favorable product mix and pricing actions across our key end-use markets, as Tony reviewed earlier.

現在轉向幻燈片 10 和我們的 SAO 部分結果。第三季淨銷售額（不含附加費）為 4.83 億美元，季增 16%，銷量略有增加。正如托尼早些時候評論的那樣，淨銷售額的成長是由我們主要最終用途市場的有利產品組合和定價行動的影響所推動的。

Moving to operating results. SAO reported operating income of $103.5 million in our recent third quarter, which outpaced our expectations and represents a significant new record in the history of SAO. As shown on the slide for context, SAO operating income improved by $54.5 million, more than doubling profitability from the same quarter last year. And on a sequential basis, operating income improved by $20.2 million or a 24% increase.

轉向經營業績。 SAO 公佈的第三季營業收入為 1.035 億美元，超出了我們的預期，創下了 SAO 歷史上的重要新紀錄。如背景幻燈片所示，SAO 營業收入增加了 5,450 萬美元，獲利能力比去年同期翻了一倍多。與上一季相比，營業收入增加了 2,020 萬美元，即成長 24%。

The improvements in productivity, product mix and pricing are evident in the adjusted operating margin, which has increased to 21.4% in the current quarter. Again, these operating results for the quarter for SAO represent record levels by historical standards, and we believe they are only milestones on the path towards our future profitability goals. The SAO team remains focused on executing actions to further increase production levels and to continue to actively manage the product mix to maximize capacity for high-value products.

生產力、產品組合和定價方面的改善在調整後的營業利潤率中體現得淋漓盡致，本季營業利潤率已增至 21.4%。同樣，SAO 本季的這些經營業績代表了歷史標準的創紀錄水平，我們相信它們只是我們實現未來獲利目標道路上的里程碑。 SAO 團隊仍專注於執行行動，進一步提高生產水平，並繼續積極管理產品組合，以最大限度地提高高價值產品的產能。

Looking ahead to our upcoming fourth quarter of fiscal year 2024, we anticipate SAO will generate operating income in the range of $124 million to $127 million which would represent a 20% growth over our third quarter results.

展望即將到來的 2024 財年第四季度，我們預計 SAO 將產生 1.24 億至 1.27 億美元的營業收入，這將比我們第三季度的業績增長 20%。

Now turning to Slide 11 and our PEP segment results. Net sales, excluding surcharge in the third quarter of fiscal year 2024 were $94.6 million, up 8% sequentially. In the current quarter, PEP reported operating income of $9.2 million, up from $7.1 million in the second quarter of fiscal year 2024.

現在轉向幻燈片 11 和我們的 PEP 部分結果。 2024 財年第三季的淨銷售額（不含附加費）為 9,460 萬美元，較上一季成長 8%。 PEP 本季的營業收入為 920 萬美元，高於 2024 財年第二季的 710 萬美元。

Sequential sales and profitability growth is primarily driven by our Dynamet titanium business, which like SAO is seeing strong demand in key end-use markets and is working to further increase production rates across the operations.

銷售額和獲利能力的連續成長主要是由我們的 Dynamet 鈦業務推動的，該業務與 SAO 一樣，看到了關鍵最終用途市場的強勁需求，並正在努力進一步提高整個業務的生產力。

With that in mind, we currently anticipate that the PEP segment will deliver operating income in the range of $9.5 million to $11 million for the upcoming fourth quarter of fiscal year 2024.

考慮到這一點，我們目前預計 PEP 部門在即將到來的 2024 財年第四季將實現 950 萬至 1,100 萬美元的營業收入。

Now turning to Slide 12 and a review of adjusted free cash flow. In the current quarter, we generated $83.4 million of cash from operating activities compared to $14.6 million in our recent second quarter. As we outlined last quarter, for the first half of fiscal year 2024, we increased in process inventory as we continue to ramp manufacturing activity to meet the strong demand environment while we focused our efforts on increasing production rates across our operations. And as planned, we held inventory relatively flat in the third quarter, driven by higher activity and sales levels.

現在轉向投影片 12，回顧調整後的自由現金流。在本季度，我們從經營活動中產生了 8,340 萬美元的現金，而最近第二季度的現金為 1,460 萬美元。正如我們上季所述，2024 財年上半年，我們繼續增加製造活動以滿足強勁的需求環境，同時專注於提高整個業務的生產力，從而增加了流程庫存。按照計劃，在較高的活動和銷售水準的推動下，我們第三季的庫存相對持平。

This was also driven by increased productivity at key work centers, improving the flow of material through our facilities. The inventory management focus, combined with increased profitability, drove the significant improvement in cash flow from operations.

這也是由於關鍵工作中心生產力的提高以及透過我們設施的物料流動的改善所推動的。庫存管理的重點加上獲利能力的提高，推動了營運現金流的顯著改善。

With those details in mind, we reported adjusted free cash flow of $62 million in the third quarter of fiscal year 2024.

考慮到這些細節，我們報告 2024 財年第三季調整後自由現金流為 6,200 萬美元。

The strong results for the third quarter more than offset the negative free cash flow in the first half of fiscal year '24 and resulted in year-to-date free cash flow generation of $37 million compared to negative $212 million in the same period last year.

第三季的強勁業績足以抵銷 24 財年上半年的負自由現金流，導致年初至今的自由現金流產生 3,700 萬美元，而去年同期為負 2.12 億美元。

As we look ahead to the upcoming fourth quarter of fiscal year 2024, we anticipate inventory levels to trend down further to finish out the fiscal year. We expect to spend about $100 million in capital expenditures for the full fiscal year 2024, which is down from our previously communicated target of $125 million.

展望即將到來的 2024 財年第四季度，我們預計庫存水準將在本財年結束時進一步下降。我們預計 2024 年整個財年的資本支出約為 1 億美元，低於我們先前公佈的 1.25 億美元的目標。

With our outlook for earnings and working capital, we expect to increase our liquidity even further and generate over $100 million in adjusted free cash flow in the upcoming fourth quarter of fiscal year 2024.

根據我們對獲利和營運資本的展望，我們預計將進一步增加流動性，並在即將到來的 2024 財年第四季產生超過 1 億美元的調整後自由現金流。

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

說完，我會把電話轉回給東尼。

Thanks, Tim. So far on this call, Tim and I have provided the details of our record financial performance in the third quarter and how that is expected to continue into the fourth quarter.

謝謝，蒂姆。到目前為止，在這次電話會議上，蒂姆和我已經提供了我們第三季度創紀錄的財務業績的詳細信息，以及預計這種情況將如何持續到第四季度。

For those of you who have been following our story, the strong performance and outlook is probably not a surprise. We are executing against the plan we communicated a year ago. And for those of you who are new to our story, I'd like to take a moment to review Carpenter Technology's unique value proposition. We are a capabilities company committed to our strategy of serving customers with high-value applications in high-growth markets that value our unique material solutions.

對於那些一直關注我們故事的人來說，強勁的業績和前景可能並不令人驚訝。我們正在按照一年前傳達的計劃執行。對於那些不熟悉我們故事的人，我想花點時間回顧一下 Carpenter Technology 的獨特價值主張。我們是一家能力公司，致力於為重視我們獨特材料解決方案的高成長市場中的客戶提供高價值應用的策略。

For the end markets that we serve, the near-term and longer-term demand outlook is strong as evidenced by our record backlogs. In particular, we continued to experience meaningful growth in the aerospace and defense and medical end-use markets, as detailed earlier in the call.

對於我們服務的終端市場，近期和長期需求前景強勁，我們創紀錄的積壓訂單證明了這一點。特別是，我們在航空航太、國防和醫療最終用途市場上繼續經歷了有意義的成長，正如電話會議前面詳細介紹的那樣。

To create our unique portfolio of material solutions, we have leading capabilities with a difficult-to-replicate system of assets. Further, we are qualified to supply material for applications with significant and highly stringent qualification standards in the aerospace and defense and medical industries. As a result, over the last several quarters, we have consistently delivered strong financial performance with expanding margins quarter after quarter.

為了創建我們獨特的材料解決方案組合，我們擁有領先的能力和難以複製的資產系統。此外，我們有資格為航空航太、國防和醫療行業具有重要且高度嚴格的資格標準的應用提供材料。因此，在過去的幾個季度中，我們始終保持強勁的財務業績，利潤率逐季擴大。

By continuing to improve our productivity, optimize our capacity and expand our profit margins, we have a strong growth outlook in both the near term and longer term, with opportunities to further accelerate and increase profitability.

透過持續提高生產力、優化產能和擴大利潤率，我們在短期和長期內擁有強勁的成長前景，並有機會進一步加速和提高獲利能力。

Let's move to the next slide and review how we are accelerating our earnings growth. As you can see from the chart on the left, we are rapidly accelerating quarterly earnings performance. Multiple initiatives such as improved productivity, product mix optimization and pricing actions are exceeding expectations and driving this quickly accelerating performance.

讓我們轉到下一張投影片，回顧一下我們如何加速獲利成長。從左圖可以看出，我們正在迅速加快季度獲利表現。提高生產力、優化產品組合和定價行動等多項措施超出了預期，推動了業績的快速成長。

The third quarter adjusted operating income of $90 million was up 29% sequentially and is the highest in the history of Carpenter Technology. And we increased our fourth quarter guidance to be another significant sequential increase of 25%, which would be another quarterly earnings record.

第三季調整後營業收入為 9,000 萬美元，季增 29%，是 Carpenter Technology 史上最高的。我們將第四季度的指導值提高到了 25% 的環比大幅增長，這將是另一個季度獲利記錄。

Moving to the chart on the right, you can see that given the strong third quarter performance, and our fourth quarter guidance, we are increasing our full year adjusted operating income guidance to a range of $339 million to $344 million. As I stated earlier, this would be an annual earnings record for Carpenter Technology.

轉到右側圖表，您可以看到，鑑於第三季度的強勁表現以及我們第四季度的指導，我們將全年調整後營業收入指導提高到 3.39 億美元至 3.44 億美元的範圍。正如我之前所說，這將是卡彭特科技的年度獲利記錄。

It is clear to see that fiscal year 2024 will be a meaningful step towards the current FY '27 goal, realizing approximately 60% of the opportunity in the first year of a 4-year goal. Concerning the FY '27 target, it is also clear that it has proven to be conservative based on our current profitability and near-term outlook. With that in mind, we are taking the incremental step of pulling forward the FY '27 target by 1 year at this time.

很明顯，2024 財年將是朝著當前 27 財年目標邁出的有意義的一步，在 4 年目標的第一年實現約 60% 的機會。關於 27 財年目標，根據我們目前的獲利能力和近期前景，事實證明該目標是保守的。考慮到這一點，我們目前正在採取漸進的步驟，將 27 財年的目標提前一年。

This update maintains our conservative approach to our external guidance and the importance we place on doing what we say. We do see a path to pulling the FY '27 target and even sooner than the 1 year, and we'll certainly keep you updated as we continue to accelerate performance.

此次更新保持了我們對外部指導的保守態度以及我們言出必行的重要性。我們確實看到了實現 27 財年目標的途徑，甚至早於 1 年，隨著我們繼續加快績效，我們一定會及時向您通報最新情況。

In closing, let me leave you with 5 big takeaways from this call: one, we beat our guidance for the third quarter, up 29% sequentially off an already strong second quarter; 2, we increased our guidance for the fourth quarter, guiding to be up another 25% sequentially off a record third quarter; 3, we generated meaningful cash flow for the current quarter, and we expect to increase cash flow in the fourth quarter; 4, due to our exceptional performance and strong outlook, we are pulling forward our FY '27 guidance by 1 year at this time, maintaining our conservative approach to external guidance; and 5, in terms of earnings growth, we are just getting started and early in our cycle. We have beat guidance, raised guidance and pull forward an aggressive 4-year target and we have line of sight to even exceeding that by staying focused on our execution and living our values.

最後，讓我從這次電話會議中得出 5 個重要結論：第一，我們第三季度的業績預期比本已強勁的第二季度增長了 29%；第三季度我們超出了預期。 2.我們提高了第四季的指引，指引比創紀錄的第三季再成長 25%； 3、我們本季產生了有意義的現金流，我們預期第四季現金流將增加； 4.由於我們卓越的業績和強勁的前景，我們目前將 27 財年的指引提前一年，保持對外部指引的保守態度； 5，就獲利成長而言，我們才剛開始，處於週期的早期。我們超越了指導，提高了指導，並推進了積極的 4 年目標，並且我們有信心透過專注於我們的執行和實踐我們的價值觀來超越這一目標。

Thank you for your attention. I will now turn the call back to the operator.

感謝您的關注。我現在將把電話轉回給接線生。

(Operator Instructions) The first question comes from Gautam Khanna with TD Cowen.

（操作員說明）第一個問題來自 Gautam Khanna 和 TD Cowen。

Was wondering if you could just frame for us any impact you've seen whatsoever from the lower production rates on the 737 MAX and the 787, if at all. And...

我想知道您是否可以向我們描述您所看到的 737 MAX 和 787 生產率下降帶來的任何影響（如果有的話）。和...

We see no impact near term and anticipate no impact longer term. As you all know, there's always going to be disruptions in the supply chain. It's this large and complex. And then when you're in this environment where demand significantly outpaces supply, any gaps caused by such disruptions, they're immediately filled. Whether in this case, it's with increased MRO, other platforms ramping, competing markets, but absolutely no impact in the near term, and we see none going forward.

我們認為近期不會產生影響，預計長期不會產生影響。眾所周知，供應鏈總是會中斷。它是如此龐大和複雜。然後，當您處於需求明顯超過供應的環境時，此類中斷造成的任何缺口都會立即得到填補。無論是在這種情況下，還是隨著 MRO 的增加、其他平台的增加、市場的競爭，但短期內絕對不會產生影響，而且我們認為未來不會有任何影響。

And could you talk a little bit about the various end markets within aerospace and defense. So like the engine channel, I assume that's where you're referencing it, but what about fasteners? What about some of the structural deals you make and the like?

您能談談航空航太和國防領域的各種終端市場嗎？就像引擎通道一樣，我認為這就是您引用它的地方，但是緊固件呢？您進行的一些結構性交易等怎麼樣？

I think maybe a couple of numbers there, Gautam, to answer that question. On the engine submarket, sales up 29% sequentially, 40% year-over-year. Fasteners up 25% sequentially, up 35% year-over-year. So strong bookings across all of our submarkets inside of aerospace continue, and we see that continuing going forward.

高塔姆，我想也許有幾個數字可以回答這個問題。在引擎子市場，銷量較上季成長29%，較去年同期成長40%。緊固件環比成長 25%，年增 35%。我們航空航太領域所有子市場的預訂量持續強勁，我們預計這種情況將持續下去。

Did you guys see any participations in orders, though, with respect to -- I understand you may be able to backfill with other demand if like lease-related orders were a little softer. Did you see any change to order intake that was unusual relative to a typical quarter? Or -- I'm just curious if you actually saw some and then are just being backfilled by better wide-body demand, MRO demand or if you haven't seen any in the first instance. Any change in the lease?

不過，你們有沒有看到任何訂單參與，我知道，如果與租賃相關的訂單稍微軟一點，你們可能能夠用其他需求來補充。您是否發現訂單量發生了與典型季度相比不尋常的變化？或者——我只是好奇你是否真的看到了一些，然後只是被更好的寬體需求、MRO 需求所填補，或者如果你一開始沒有看到任何需求。租約有變化嗎？

Yes, there's always adjustments that are being made across the supply chain, as you know well, there's many levels. So there could be people out there that are making slight adjustments. I will say that a lot of that though is backed by the fact that nobody needs to get out of line. Nobody wants to pull an order off. You see instead of taking an order off, it's some type of repositioning of that order. So we just did not see that at a high level.

是的，整個供應鏈總是在進行調整，如您所知，有很多層次。因此可能有人正在做出細微的調整。我要說的是，其中很多都是基於這樣一個事實：沒有人需要越界。沒有人願意取消訂單。您會看到，這不是取消訂單，而是對該訂單進行某種類型的重新定位。所以我們只是沒有在高層次上看到這一點。

I appreciate that, Tony. And just given your comments on pulling forward the $6 to $7 earnings target by a year. Do you have any preliminary view on the September or December quarters? Any way you want to frame it, whether it's kind of not -- typical seasonality relative to the June quarter or however you want to (inaudible) if you can.

我很感激，托尼。剛剛給出了您關於將 6 美元至 7 美元的盈利目標提前一年的評論。您對 9 月或 12 月季度有什麼初步看法嗎？任何你想要的方式來描述它，無論它是否是相對於六月季度的典型季節性，或者如果可以的話你想要的（聽不清楚）。

I was about 100% sure, Gautam, you were going to ask that question. So I'm prepared for you. I mean, certainly, you understand you've been around this business for some time, the magnitude of these results that we just submitted and then what we say we're going to do for the fourth quarter. It is a significant step change in where we're going from a financial performance standpoint for this company and certainly is -- should cause a reset in the valuation for this company. I mean this is a significant turning point.

我大約 100% 確定，高塔姆，你會問這個問題。所以我已經為你準備好了。我的意思是，當然，您知道您從事這項業務已經有一段時間了，我們剛剛提交的這些結果的規模以及我們所說的第四季度將要做的事情。從這家公司的財務表現角度來看，這是一個重大的轉變，而且肯定會導致該公司估值的重置。我的意思是這是一個重要的轉捩點。

And to get more specific to your question, as you noted, historically, our first quarter of the fiscal year has been down due to seasonality. Sometimes that dip has been significant. Also, as you remember, last year, we broke that norm. And in fact, our first quarter I believe the numbers were about 10% higher than the fourth quarter. So you saw us move past that because demand was so strong. I can tell you that.

為了更具體地回答你的問題，正如你所指出的，從歷史上看，我們本財年第一季的業績一直因季節性而下降。有時這種下降幅度很大。另外，正如您所記得的，去年我們打破了這個規範。事實上，我相信第一季的數字比第四季高出約 10%。所以你看到我們超越了這一點，因為需求如此強勁。我可以告訴你。

Next quarter, as we always do, we will give you guidance for the fourth -- for the first quarter by segment. But at a high level, Gautam, I can tell you that it's going to be in line with the fourth quarter, plus or minus 10%. But just to put that into context. I just told you that the fourth quarter is going to be $110 million to $115 million, 25% higher than what we just did in the third quarter. And now I'm telling you that the -- our first quarter of fiscal year 2025 is going to be in line with that. I mean that is off the chart type of performance. And I'm sure you of all people recognize just the massive step change that, that is.

下個季度，一如既往，我們將為您提供第四季度（第一季）的細分指導。但從高水準來看，Gautam，我可以告訴你，這將與第四季保持一致，正負 10%。但只是將其放在上下文中。我剛剛告訴過你，第四季的營收將達到 1.1 億至 1.15 億美元，比第三季高出 25%。現在我告訴你們，我們 2025 財年第一季將與此一致。我的意思是，這超出了圖表類型的表現。我相信你們所有人都認識到這一巨大的進步。

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

下一個問題來自 Benchmark Company 的 Josh Sullivan。

Congratulations on the results here. Just as far as the free cash flow yield expectations on the new long-term guidance, what are some moving factors there? What do you think the long-term naturalized yield is at this point?

在這裡恭喜你的結果。就新的長期指引中的自由現金流收益率預期而言，有哪些推動因素？您認為目前的長期歸化報酬率是多少？

Let me just stay at a high level with the free cash flow. We obviously almost a year ago at our Investor Day, not only gave an operating income target, which is the most talked about target. We also gave free cash flow. So as you see us moving this in for now, I would say, you can keep that same type of relationship, right? As far as you're going to see that exploration also of the free cash flow. So keep the same type of relationship that you've had from our last Investor Day.

讓我的自由現金流保持在較高水準。顯然，大約一年前，我們在投資者日不僅給出了營業收入目標，這是最受關注的目標。我們也提供了自由現金流。因此，當您看到我們現在正在推進這一點時，我想說，您可以保持同樣類型的關係，對吧？就你將看到的自由現金流的探索而言。因此，請保持上次投資者日所建立的相同類型的關係。

And as we go forward, too, I mean there's a lot of moving parts here as we're accelerating a bit quickly. As I said in my prepared comments, a lot of our initiatives we are overexceeding on. So we're continuously updating all of those guidance points, if you will. And we'll give you some more over the next coming quarters as we see that come together. But for now, keep free cash flow (inaudible) operating income, as we've said before.

當我們前進時，我的意思是這裡有很多移動部件，因為我們加速得有點快。正如我在準備好的評論中所說，我們的許多舉措都超出了預期。因此，如果您願意，我們將不斷更新所有這些指導點。當我們看到這些情況時，我們將在接下來的幾個季度為您提供更多資訊。但目前，正如我們之前所說，保持自由現金流（聽不清楚）營業收入。

And then what do lead times look like? What are some of the moving parts there? Previously, you talked about the fact that you didn't really want to extend them, if you could, the pricing that you were getting. Any comments you can give us just kind of on lead times at this point.

那麼交貨時間是什麼樣的呢？那裡有哪些活動部件？之前，您談到了這樣一個事實：如果可以的話，您真的不想延長您所獲得的定價。此時，您可以向我們提供有關交貨時間的任何意見。

Last quarter, I believe I said 65 plus in terms of weeks, and we always use engine, build it as the proxy. And we're standing there now, if not a little bit more extended. So 65-plus weeks, in some cases, maybe some specific products even a little longer.

上個季度，我相信我說的是 65 週以上，我們總是使用引擎，將其建構成代理。我們現在就站在那裡，如果不是再延長一點的話。因此，在某些情況下，65 週以上，某些特定產品甚至可能更長一些。

Got it. And then just one last one. Did I hear you right on the production and CapEx expectations for this year? Just what's changing in the schedule. And then maybe what are your thoughts on capacity expansion and what you would need from the industry to think about that at some point?

知道了。然後只有最後一張。我沒聽錯您對今年生產和資本支出的預期嗎？只是日程安排發生了變化。那麼，也許您對產能擴張有何看法，以及您需要行業在某個時候做出什麼考慮？

Yes. I'll let Tim take the first one on CapEx, and then I'll come back.

是的。我會讓提姆承擔第一個資本支出，然後我會回來。

Yes, Josh, you heard me correctly, the number for fiscal '24 is about $100 million for the full year. That's down from the $125 million when we started the year. It's more a function of timing, a lot of good projects in there, but getting those projects complete and getting the materials we need and subcontractors and things like that. It's pushing the timing a little bit. So that's why we're reducing expectations to about $100 million this year.

是的，喬什，你沒聽錯，24 財年全年的數字約為 1 億美元。這比年初時的 1.25 億美元有所下降。這更多的是一個時間的函數，裡面有很多好的項目，但是要完成這些項目並獲得我們需要的材料和分包商之類的東西。時間有點推後了。因此，我們將今年的預期降低至約 1 億美元。

And then, Josh, I'll come back to your question around adding capacity. Again, as you all know, you're very familiar with the market. This is very complex capacity that takes a long time to build, install and then qualify. So it is difficult from a financial return standpoint, to make the numbers work on some of this capacity. And even if you have -- even if you can make that work, the process knowledge that has taken decades to accumulate to be able to make these very stringent products, there's only a few people in the world that can do it, as you well know.

然後，喬什，我將回到你關於增加容量的問題。再說一遍，眾所周知，您對市場非常熟悉。這是非常複雜的能力，需要很長時間來建造、安裝然後進行資格認證。因此，從財務回報的角度來看，讓這些數字在某些容量上發揮作用是很困難的。即使你擁有——即使你能夠做到這一點，需要數十年積累的工藝知識才能製造出這些非常嚴格的產品，世界上只有少數人可以做到，就像你一樣知道。

Now with that said, we've talked about the fact that over the next couple of years, we're going to be generating a lot of cash. What do we want to do with that cash? We've been very clear that we want to look at growth projects for us, but also a return of cash to shareholders. So those are our 2 priorities.

話雖如此，我們已經討論了這樣一個事實：在接下來的幾年裡，我們將產生大量現金。我們想用這些現金做什麼？我們非常明確地表示，我們希望為我們尋找成長項目，同時也為股東提供現金回報。所以這是我們的兩個優先事項。

When it comes to capacity adding, they're going to have to be very strong returns and accretive very quickly. So we're looking at different areas that we can do that in, in very specific areas. And certainly, if any of those come to fruition, we'll let everyone know.

當談到產能增加時，它們必須獲得非常強勁的回報並且成長非常快。因此，我們正在尋找可以在非常具體的領域中做到這一點的不同領域。當然，如果其中任何一項取得成果，我們會讓所有人知道。

The next question comes from Michael Leshock with KeyBanc Capital Markets.

下一個問題來自 KeyBanc Capital Markets 的 Michael Leshock。

I wanted to ask on the aftermarket. You had alluded to strength in aerospace MRO markets. It sounds like that strong demand could last for several years. So I'm just wondering what are the biggest opportunities for Carpenter within aftermarket going forward? Is that price and mix or volumes? Any way you could frame that opportunity?

我想問一下售後。您曾提到航空航太 MRO 市場的實力。聽起來強勁的需求可能會持續幾年。所以我只是想知道卡本特在售後市場未來最大的機會是什麼？是價格、組合還是數量？你有什麼辦法可以建構這個機會嗎？

Well, Michael, I think the overall aerospace and defense market in total is growing and going to be growing for quite some time. I agree with the phrase some people use as we're in a super cycle, and I agree with that. And I think any time we see even build rates being pushed out, that just extends the super cycle. So there is demand across all subsegments of aerospace.

好吧，邁克爾，我認為整個航空航太和國防市場正在成長，並且將持續成長相當長的一段時間。我同意一些人使用的短語，因為我們正處於超級週期，我也同意這一點。我認為任何時候我們看到建造率被推遲，這只會延長超級週期。因此，航空航太的所有細分領域都有需求。

As you know, I believe in Carpenter, we supply to OEM, MRO, narrowbody, widebody, Boeing, Airbus, what it might be. So from our standpoint, you're (inaudible) effectively sold out, right now. And I don't see that changing over the next, near or longer term.

如您所知，我相信 Carpenter，我們向 OEM、MRO、窄體機、寬體機、波音、空中巴士等供應。因此，從我們的角度來看，您現在（聽不清楚）實際上已售罄。我認為這種情況在未來、短期或長期都不會改變。

And then just on your guidance, you came in well above your prior guide and raised 4Q, what were the main moving pieces that exceeded your expectations versus 3 months ago? Is that primarily a function of more favorable mix? Or is there something else? And then as we look forward, what could potentially drive results above your revised expectations?

然後，根據您的指導，您的表現遠遠高於先前的指導，並提出了第四季度的目標，與 3 個月前相比，超出您預期的主要變化是什麼？這主要是因為更有利的組合嗎？或是還有別的什麼嗎？然後，當我們展望未來時，什麼可能會使結果超出您修改後的預期？

Well, as I said in the prepared comments, it's really 3 main drivers, and we're exceeding on all of them. We're improving productivity. I mean improving productivity is the name of the game in this environment right now. Capacity is hard to bring on, I should say, new capacity. So we're trying to get everything we can out of our existing equipment. And at the same time, (inaudible) doing all the preventive maintenance that we need to do. It's all about productivity and running new (inaudible) Has been quicker than what we had anticipated. That's good news.

嗯，正如我在準備好的評論中所說，這實際上是 3 個主要驅動因素，而且我們在所有方面都取得了突破。我們正在提高生產力。我的意思是，提高生產力是目前這種環境下的首要任務。我應該說，新產能很難引進。因此，我們正在努力充分利用現有設備。同時，（聽不清楚）進行我們需要做的所有預防性維護。這一切都與生產力和運行新的（聽不清楚）比我們預期的要快。那是好消息。

From a product mix standpoint, we continue to push on that and (inaudible) our facility as efficiently as possible. That's good news. And also on the pricing action you continue to see. And this is a reflection of the tight market improvements above what we had anticipated in that area as well. So it's really all 3 of those, working together to get that exceeding that performance.

從產品組合的角度來看，我們繼續盡可能有效率地推動這一點和（聽不清楚）我們的設施。那是好消息。還有您繼續看到的定價行為。這反映出該領域市場的改善程度也超出了我們的預期。因此，這實際上是這三者共同努力才能獲得超越該性能的結果。

What we're going to push in the fourth quarter and as we go forward over the next couple of years (inaudible) all those 3. And the good (inaudible) technology is, as I said at the end, we're not maxed out. There's a lot of runway in front of us. There's a lot of opportunities that we see out on the (inaudible) on how we can get better, how we can become more efficient. So that's great news for current and future shareholders of Carpenter Technology.

我們將在第四季度以及未來幾年（聽不清楚）中推動的所有這些 3。我們前面有很長的跑道。我們在（聽不清楚）中看到了很多關於如何變得更好、如何變得更有效率的機會。因此，這對 Carpenter Technology 目前和未來的股東來說是個好消息。

This concludes our question-and-answer session. I would like to turn the conference back over to John Huyette for any closing remarks.

我們的問答環節到此結束。我想將會議轉回約翰·休耶特（John Huyette）發表閉幕詞。

Thank you, operator, and thank you, everyone, for joining us in our fiscal year 2024 third quarter conference call. Have a great rest of your day.

謝謝營運商，也謝謝大家參加我們的 2024 財年第三季電話會議。祝您有個愉快的一天。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。