After making significant investments in developing its own AM service and AM materials manufacturing capabilities, Carpenter Technology underwent a series of streamlining operations during the COVID-19 crisis. Now the company seems to be rebounding and ready to enter a new period of growth, led by AM and other key emerging areas such as electrification.
“Looking ahead, our focus is centered on capitalizing on emerging opportunities across our end-use markets as conditions further improve,” said Tony R. Thene, President and CEO of Carpenter Technology. “We are a leaner and more flexible company and remain a critical solutions provider across our end-use markets. Our strong position in our core business is supported by our capabilities in key emerging areas including electrification and additive manufacturing that further support our long-term growth profile.”
While the company overall recorded decreasing revenues and significant losses, both for the fiscal year close on June 30th and for Q4, the Performance Engineered Products (PEP) segment, which includes AM activities, recorded growing quarterly revenues ($77.5 million against $77.1 million in the same quarter last year) and reduced the operating loss in the fourth quarter of fiscal year 2021 from $8.4 million to $2.3 million).
The special items in the current quarter also include $1.6 million of inventory write-downs from restructuring, $1.5 million in restructuring and asset impairment charges associated with executing against plans to streamline the Company’s Additive business units and $2.9 million ($2.1 million included in SAO segment, $0.8 million included in PEP segment) of costs associated with COVID-19.
The COVID-19 costs in both periods principally consist of direct incremental operating costs including outside services to execute enhanced cleaning protocols, additional personal protective equipment, isolation pay for production employees potentially exposed to COVID-19 and various operating supplies necessary to maintain the operations while keeping employees safe against possible exposure in the Company’s facilities.
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. Effective July 1, 2020, the Company’s Carpenter Powder Products business was merged into the Carpenter Additive business. The Amega West business was also part of the PEP segment however the business was divested during the quarter ended September 30, 2020.
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.