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 comprised of the expected return on plan assets, interest costs on the projected benefit obligations of the plans, and amortization of actuarial gains and losses and prior service costs and is included in other expense (income), net.
PRELIMINARY
NON-GAAP FINANCIAL MEASURES
(in millions, except per share data)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| ADJUSTED OPERATING MARGIN EXCLUDING SURCHARGE REVENUE AND SPECIAL ITEMS | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net sales | $ | 690.1 | $ | 489.0 | $ | 1,792.1 | $ | 1,272.6 | ||||||||
| Less: surcharge revenue | 198.6 | 120.0 | 504.1 | 275.7 | ||||||||||||
| Net sales excluding surcharge revenue | $ | 491.5 | $ | 369.0 | $ | 1,288.0 | $ | 996.9 | ||||||||
| Operating income (loss) | $ | 39.3 | $ | 1.1 | $ | 70.2 | $ | (49.5 | ) | |||||||
| Special items: | ||||||||||||||||
| COVID-19 costs | — | 2.0 | — | 5.3 | ||||||||||||
| Acquisition-related contingent liability release | — | (4.7 | ) | — | (4.7 | ) | ||||||||||
| Adjusted operating income (loss) | $ | 39.3 | $ | (1.6 | ) | $ | 70.2 | $ | (48.9 | ) | ||||||
| Operating margin | 5.7 | % | 0.2 | % | 3.9 | % | (3.9)% | |||||||||
| Adjusted operating margin excluding surcharge revenue and special items | 8.0 | % | (0.4)% | 5.5 | % | (4.9)% | ||||||||||
