GlobeNewswire Inc | Jul 29, 2021 08:00AM EDT

July 29, 2021

PHILADELPHIA, July 29, 2021 (GLOBE NEWSWIRE) -- Carpenter Technology Corporation (NYSE: CRS) (the Company) today announced financial results for the fiscal fourth quarter and year ended June 30, 2021. For the quarter, the Company reported a net loss of $57.1 million, or $1.18 loss per diluted share. Excluding special items, adjusted loss per diluted share was $0.28 for the quarter.

Our fourth quarter results finished ahead of our expectations as overall end-use market conditions showed further signs of recovery. We continued to actively manage our business, said Tony R. Thene, President and CEO of Carpenter Technology. We generated $43 million in free cash flow in the quarter and finished the fiscal year with $582 million in total liquidity, including $287 million of cash on hand.

Fiscal year 2021 has been a challenging yet successful year for Carpenter Technology. Over the past year we executed various portfolio initiatives and targeted cost reductions, further implemented the Carpenter Operating Model to secure notable productivity gains and generated over $130 million of free cash flow. We also expanded and further strengthened key customer relationships and added additional qualifications for our Athens facility. Our efforts will prove critical to our position as demand conditions across our end-use markets are strengthening and we believe the beginning of a broad-based recovery is taking shape. We remain a critical solutions provider for our customers and have successfully deepened our relationships during the downturn. The long-term outlook for our end-use markets remains attractive and we are well positioned given our mission-critical solutions coupled with leading capabilities and established supply chain position.

Looking ahead, our focus is centered on capitalizing on emerging opportunities across our end-use markets as conditions further improve. 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.

Financial Highlights

($ in millionsexcept per Q4 Q4 share amounts) FY2021 FY2020 FY2021 FY2020Net Sales $ 421.6 $ 437.3 $ 1,475.6 $ 2,181.1Net SalesExcluding $ 348.1 $ 375.9 $ 1,252.8 $ 1,828.7Surcharge (a)Operating $ (70.7 ) $ (148.2 ) $ (248.6 ) $ 25.3(Loss) IncomeAdjustedOperating(Loss) Income $ (12.5 ) $ (8.9 ) $ (105.5 ) $ 166.9ExcludingSpecial Items(a)Net (Loss) $ (57.1 ) $ (118.4 ) $ (229.6 ) $ 1.5Income(Loss)Earnings per $ (1.18 ) $ (2.46 ) $ (4.76 ) $ 0.02Share

Adjusted(Loss) $ (0.28 ) $ (0.16 ) $ (2.01 ) $ 2.36Earnings PerShare (a)Cash Providedfrom Operating $ 74.5 $ 136.9 $ 250.0 $ 231.8ActivitiesFree Cash Flow $ 42.6 $ 99.8 $ 132.0 $ 21.8(a)

(a)Non-GAAP financial measures explained in the attached tables

Net sales for the fourth quarter of fiscal year 2021 were $421.6 million compared with $437.3 million in the fourth quarter of fiscal year 2020, a decrease of $15.7 million (negative 3.6 percent), on flat volume. Net sales excluding surcharge were $348.1 million, a decrease of $27.8 million (negative 7.4 percent) from the same period a year ago.

Operating loss was $70.7 million compared to operating loss of $148.2 million in the prior year period. Adjusted operating loss excluding special items was $12.5 million in the recent fourth quarter compared to an adjusted operating loss of $8.9 million a year ago.

Special items excluded from adjusted operating loss in the current quarter totaled $58.2 million. This includes non-cash LIFO decrement charges totaling $52.2 million, of which $47.9 million is included in the Specialty Alloys Operations (SAO) segment operating loss and $4.3 million is included in the Performance Engineered Products (PEP) segment operating loss in the fourth quarter of fiscal year 2021. The LIFO decrement charges are non-cash charges associated with reducing inventory and liquidating LIFO layers that have historical costs in excess of the current year inventory costs. 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 Companys 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 Companys facilities.

Cash provided from operating activities in the fourth quarter of fiscal year 2021 was $74.5 million, compared to $136.9 million in the same quarter last year. Free cash flow in the fourth quarter of fiscal year 2021 was $42.6 million, compared to $99.8 millionin the same quarter last year. The decrease in operating cash flow primarily reflects the impact of lower earnings after non-cash adjustments to net income relative to the same quarter a year ago. This was partially offset by lower capital expenditures of $22.1 million in the fourth quarter of fiscal year 2021 compared to $27.4 million in the same quarter last year.

Total liquidity, including cash and available credit facility borrowings, was $582.0 million at the end of the fourth quarter of fiscal year 2021. This consisted of $287.4 million of cash and $294.6 million of available borrowings under the Companys credit facility.

Conference Call and Webcast Presentation

Carpenter Technology will host a conference call and webcast presentation today, July 29th at 10:00 a.m. ET, to discuss the financial results of operations for the fourth quarter and full fiscal year 2021. Please dial +1 412-317-9259 for access to the live conference call. Access to the live webcast will be available at Carpenter Technologys website ( http://www.carpentertechnology.com), and a replay will soon be made available at http://www.carpentertechnology.com. Presentation materials used during this conference call will be available for viewing and download at http://www.carpentertechnology.com.

Non-GAAP Financial Measures

This press release includes discussions of financial measures that have not been determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP). A reconciliation of the non-GAAP financial measures to their most directly comparable financial measures prepared in accordance with GAAP, accompanied by reasons why the Company believes the non-GAAP measures are important, are included in the attached schedules.

About Carpenter Technology

Carpenter Technology Corporation is a recognized leader in high-performance specialty alloy-based materials and process solutions for critical applications in the aerospace, defense, medical, transportation, energy, industrial, and consumer electronics markets. Founded in 1889, Carpenter Technology has evolved to become a pioneer in premium specialty alloys, including titanium, nickel, and cobalt, as well as alloys specifically engineered for additive manufacturing (AM) processes and soft magnetics applications. Carpenter Technology has expanded its AM capabilities to provide a complete end-to-end solution to accelerate materials innovation and streamline parts production. More information about Carpenter Technology can be found at www.carpentertechnology.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those projected, anticipated or implied. The most significant of these uncertainties are described in Carpenter Technologys filings with the Securities and Exchange Commission, including its report on Form 10-K for the year ended June 30, 2020, Form 10-Q for the quarters ended September 30, 2020, December 31, 2020 and March 31, 2021 and the exhibits attached to those filings. They include but are not limited to: (1) the cyclical nature of the specialty materials business and certain end-use markets, including aerospace, defense, medical, transportation, energy, industrial and consumer, or other influences on Carpenter Technologys business such as new competitors, the consolidation of competitors, customers, and suppliers or the transfer of manufacturing capacity from the United States to foreign countries; (2) the ability of Carpenter Technology to achieve cash generation, growth, earnings, profitability, operating income, cost savings and reductions, qualifications, productivity improvements or process changes; (3) the ability to recoup increases in the cost of energy, raw materials, freight or other factors; (4) domestic and foreign excess manufacturing capacity for certain metals; (5) fluctuations in currency exchange rates; (6) the effect of government trade actions; (7) the valuation of the assets and liabilities in Carpenter Technologys pension trusts and the accounting for pension plans; (8) possible labor disputes or work stoppages; (9) the potential that our customers may substitute alternate materials or adopt different manufacturing practices that replace or limit the suitability of our products; (10) the ability to successfully acquire and integrate acquisitions; (11) the availability of credit facilities to Carpenter Technology, its customers or other members of the supply chain; (12) the ability to obtain energy or raw materials, especially from suppliers located in countries that may be subject to unstable political or economic conditions; (13) Carpenter Technologys manufacturing processes are dependent upon highly specialized equipment located primarily in facilities in Reading and Latrobe, Pennsylvania and Athens, Alabama for which there may be limited alternatives if there are significant equipment failures or a catastrophic event; (14) the ability to hire and retain key personnel, including members of the executive management team, management, metallurgists and other skilled personnel; (15) fluctuations in oil and gas prices and production; (16) uncertainty regarding the return to service of the Boeing 737 MAX aircraft and the related supply chain disruption; (17) potential impacts of the COVID-19 pandemic on our operations, financial results and financial position; (18) our efforts and efforts by governmental authorities to mitigate the COVID-19 pandemic, such as travel bans, shelter in place orders and business closures, and the related impact on resource allocations and manufacturing and supply chains; (19) our status as a critical, essential or life-sustaining business in light of COVID-19 business closure laws, orders and guidance being challenged by a governmental body or other applicable authority; (20) our ability to execute our business continuity, operational, budget and fiscal plans in light of the COVID-19 pandemic; and (21) our ability to successfully carry out restructuring and business exit activities on the expected terms and timelines. Any of these factors could have an adverse and/or fluctuating effect on Carpenter Technologys results of operations. The forward-looking statements in this document are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended. Carpenter Technology undertakes no obligation to update or revise any forward-looking statements.

PRELIMINARYCONSOLIDATED STATEMENTS OF OPERATIONS(in millions, except per share data)(Unaudited)

Three Months Ended Year Ended June 30, June 30, 2021 2020 2021 2020 Net sales $ 421.6 $ 437.3 $ 1,475.6 $ 2,181.1 Cost of sales 441.3 413.4 1,470.4 1,822.4 Cost of sales - inventorywrite-downs from 1.6 29.3 4.2 29.3 restructuringGross (loss) profit (21.3 ) (5.4 ) 1.0 329.4 Selling, general and 47.9 42.0 180.2 201.0 administrative expensesRestructuring and asset 1.5 66.2 16.6 68.5 impairment chargesGoodwill impairment ? 34.6 52.8 34.6 Operating (loss) income (70.7 ) (148.2 ) (248.6 ) 25.3 Interest expense, net 9.2 4.2 32.7 19.8 Debt extinguishment ? ? 8.2 ? losses, netOther (income) expense, (0.9 ) (4.0 ) 8.4 (0.6 )net (Loss) income before (79.0 ) (148.4 ) (297.9 ) 6.1 income taxesIncome tax (benefit) (21.9 ) (30.0 ) (68.3 ) 4.6 expense Net (loss) income $ (57.1 ) $ (118.4 ) $ (229.6 ) $ 1.5 (LOSS) EARNINGS PER COMMON SHARE:Basic $ (1.18 ) $ (2.46 ) $ (4.76 ) $ 0.02 Diluted $ (1.18 ) $ (2.46 ) $ (4.76 ) $ 0.02 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:Basic 48.4 48.1 48.3 48.1 Diluted 48.4 48.1 48.3 48.2 Cash dividends per common $ 0.20 $ 0.20 $ 0.80 $ 0.80 share

PRELIMINARYCONSOLIDATED STATEMENTS OF CASH FLOWS(in millions)(Unaudited)

Year Ended June 30, 2021 2020OPERATING ACTIVITIES Net (loss) income $ (229.6 ) $ 1.5 Adjustments to reconcile net (loss) income to net cash provided from operating activities:Depreciation and amortization 123.6 123.9 Goodwill impairment charge 52.8 34.6 LIFO decrement 52.2 1.8 Non-cash inventory write-downs from restructuring 4.2 29.3 Non-cash restructuring and asset impairment charges 16.2 56.4 Debt extinguishment losses, net 8.2 ? Deferred income taxes (33.6 ) (0.4 )Net pension expense 24.6 15.3 Share-based compensation expense 10.4 10.9 Net loss on disposal of property, plant, and equipment 0.3 0.2 and assets held for saleChanges in working capital and other: Accounts receivable (14.9 ) 90.3 Inventories 238.5 29.5 Other current assets (33.9 ) (20.5 )Accounts payable 22.4 (109.9 )Accrued liabilities 33.8 (18.1 )Pension plan contributions (19.9 ) (6.5 )Other postretirement plan contributions (2.7 ) (3.5 )Other, net (2.6 ) (3.0 )Net cash provided from operating activities 250.0 231.8 INVESTING ACTIVITIES Purchases of property, plant, equipment and software (100.5 ) (171.4 )Proceeds from disposals of property, plant and 1.6 0.2 equipment and assets held for saleProceeds from divestiture of business 20.0 ? Net cash used for investing activities (78.9 ) (171.2 ) FINANCING ACTIVITIES Credit agreement borrowings ? 351.1 Credit agreement repayments ? (181.1 )Net change in short-term credit agreement borrowings (170.0 ) (19.7 )Proceeds from issuance of long-term debt, net of 395.5 ? offering costsPayments on long-term debt (250.0 ) ? Payments for debt extinguishment costs, net (8.2 ) ? Payments for debt issue costs (2.5 ) ? Dividends paid (39.1 ) (38.8 )Proceeds from stock options exercised 0.5 4.3 Withholding tax payments on share-based compensation (2.3 ) (8.0 )awardsNet cash (used for) provided from financing activities (76.1 ) 107.8 Effect of exchange rate changes on cash and cash (0.7 ) (2.3 )equivalents INCREASE IN CASH AND CASH EQUIVALENTS 94.3 166.1 Cash and cash equivalents at beginning of year 193.1 27.0 Cash and cash equivalents at end of year $ 287.4 $ 193.1

PRELIMINARYCONSOLIDATED BALANCE SHEETS(in millions)(Unaudited)

June 30, 2021 2020ASSETS Current assets: Cash and cash equivalents $ 287.4 $ 193.1 Accounts receivable, net 308.7 292.3 Inventories 425.7 724.3 Other current assets 95.6 56.6 Total current assets 1,117.4 1,266.3 Property, plant and equipment, net 1,457.5 1,498.1 Goodwill 241.4 290.4 Other intangibles, net 43.1 52.1 Deferred income taxes 5.3 4.9 Other assets 106.5 115.4 Total assets $ 2,971.2 $ 3,227.2 LIABILITIES Current liabilities: Short-term credit agreement borrowings $ ? $ 170.0 Accounts payable 142.4 124.2 Accrued liabilities 163.9 157.9 Total current liabilities 306.3 452.1 Long-term debt 694.5 551.8 Accrued pension liabilities 222.6 399.5 Accrued postretirement benefits 98.6 137.4 Deferred income taxes 156.9 130.2 Other liabilities 100.0 110.5 Total liabilities 1,578.9 1,781.5 STOCKHOLDERS' EQUITY Common stock 280.1 280.1 Capital in excess of par value 322.6 321.4 Reinvested earnings 1,299.3 1,568.0 Common stock in treasury (317.4 ) (325.8 )Accumulated other comprehensive loss (192.3 ) (398.0 )Total stockholders' equity 1,392.3 1,445.7 Total liabilities and stockholders' equity $ 2,971.2 $ 3,227.2

PRELIMINARYSEGMENT FINANCIAL DATA(in millions, except pounds sold)(Unaudited)

Three Months Ended Year Ended June 30, June 30, 2021 2020 2021 2020Pounds sold (000): Specialty Alloys Operations 47,712 46,124 166,942 221,784 Performance Engineered 2,912 2,384 7,936 12,260 ProductsIntersegment (2,656 ) (506 ) (5,172 ) (2,308 )Consolidated pounds sold 47,968 48,002 169,706 231,736 Net sales: Specialty Alloys Operations Net sales excluding $ 289.9 $ 308.6 $ 1,042.8 $ 1,483.0 surchargeSurcharge 71.6 60.8 219.4 348.6 Specialty Alloys Operations 361.5 369.4 1,262.2 1,831.6 net sales Performance Engineered ProductsNet sales excluding 75.6 76.0 255.9 395.2 surchargeSurcharge 1.9 1.1 3.9 5.9 Performance Engineered 77.5 77.1 259.8 401.1 Products net sales Intersegment Net sales excluding (17.4 ) (8.7 ) (45.9 ) (49.5 )surchargeSurcharge ? (0.5 ) (0.5 ) (2.1 )Intersegment net sales (17.4 ) (9.2 ) (46.4 ) (51.6 ) Consolidated net sales $ 421.6 $ 437.3 $ 1,475.6 $ 2,181.1 Operating (Loss) Income: Specialty Alloys Operations $ (47.3 ) $ 5.3 $ (87.4 ) $ 239.0 Performance Engineered (2.3 ) (8.4 ) (16.5 ) (10.4 )ProductsCorporate (includingrestructuring and asset (20.8 ) (146.2 ) (144.3 ) (205.0 )impairment charges)Intersegment (0.3 ) 1.1 (0.4 ) 1.7 Consolidated operating $ (70.7 ) $ (148.2 ) $ (248.6 ) $ 25.3 (loss) income

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 Companys 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.

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 (income) expense, net.

PRELIMINARYNON-GAAP FINANCIAL MEASURES(in millions, except per share data)(Unaudited)

ADJUSTED OPERATING MARGIN EXCLUDINGSURCHARGE REVENUE Three Months Ended Year EndedAND SPECIAL ITEMS June 30, June 30, 2021 2020 2021 2020 Net sales $ 421.6 $ 437.3 $ 1,475.6 $ 2,181.1 Less: surcharge 73.5 61.4 222.8 352.4 revenueNet sales excluding $ 348.1 $ 375.9 $ 1,252.8 $ 1,828.7 surcharge revenue Operating (loss) $ (70.7 ) $ (148.2 ) $ (248.6 ) $ 25.3 income Special items: LIFO decrement 52.2 1.8 52.2 1.8 COVID-19 costs 2.9 7.4 17.3 7.4 Inventorywrite-downs from 1.6 29.3 4.2 29.3 restructuringRestructuring andasset impairment 1.5 66.2 16.6 68.5 chargesGoodwill impairment ? 34.6 52.8 34.6 Operating (loss)income excluding $ (12.5 ) $ (8.9 ) $ (105.5 ) $ 166.9 special items Operating margin (16.8 ) % (33.9 ) % (16.8 ) % 1.2 % Adjusted operatingmargin excluding (3.6 ) % (2.4 ) % (8.4 ) % 9.1 %surcharge revenueand special items

Management believes that removing the impact of raw material surcharge from operating margin provides a more consistent basis for comparing results of operations from period to period, thereby permitting management to evaluate performance and investors to make decisions based on the ongoing operations of the Company. In addition, management believes that excluding the impact of special items from operating margin is helpful in analyzing the operating performance of the Company, as these items are not indicative of ongoing operating performance. Management uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Companys board of directors and others.

Loss Income Loss PerADJUSTED LOSS PER SHARE Before Tax Net Loss DilutedEXCLUDING SPECIAL ITEMS Income Benefit Share* Taxes Three months ended June $ (79.0 ) $ 21.9 $ (57.1 ) $ (1.18 )30, 2021, as reported Special items: LIFO decrement 52.2 (14.9 ) 37.3 0.77 COVID-19 costs 2.9 (0.8 ) 2.1 0.04 Inventory write-downs 1.6 (0.4 ) 1.2 0.03 from restructuringRestructuring and asset 1.5 (0.4 ) 1.1 0.02 impairment chargesPension settlement 2.5 (0.6 ) 1.9 0.04 chargesTotal impact of special 60.7 (17.1 ) 43.6 0.90 items Three months ended June $ (18.3 ) $ 4.8 $ (13.5 ) $ (0.28 )30, 2021, as adjusted * Impact per diluted share calculated using weighted average common sharesoutstanding of 48.4 million for the three months ended June 30, 2021.

ADJUSTED LOSS PER Loss Before Income Loss PerSHARE EXCLUDING Income Tax Net Loss DilutedSPECIAL ITEMS Taxes Benefit Share* Three months endedJune 30, 2020, as $ (148.4 ) $ 30.0 $ (118.4 ) $ (2.46 )reported Special items: LIFO decrement 1.8 (0.4 ) 1.4 0.03 COVID-19 costs 7.4 (1.5 ) 5.9 0.12 Inventory write-downs 29.3 (6.0 ) 23.3 0.48 from restructuringRestructuring andasset impairment 66.2 (13.5 ) 52.7 1.10 chargesGoodwill impairment 34.6 (7.1 ) 27.5 0.57 Total impact of 139.3 (28.5 ) 110.8 2.30 special items Three months endedJune 30, 2020, as $ (9.1 ) $ 1.5 $ (7.6 ) $ (0.16 )adjusted * Impact per diluted share calculated using weighted average common sharesoutstanding of 48.1 million for the three months ended June 30, 2020.

ADJUSTED LOSS PER Loss Before Income Loss PerSHARE EXCLUDING Income Tax Net Loss DilutedSPECIAL ITEMS Taxes Benefit Share* Year ended June 30, $ (297.9 ) $ 68.3 $ (229.6 ) $ (4.76 )2021, as reported Special items: LIFO decrement 52.2 (14.9 ) 37.3 0.77 COVID-19 costs 17.3 (5.0 ) 12.3 0.25 Inventory write-downs 4.2 (1.0 ) 3.2 0.07 from restructuringRestructuring andasset impairment 16.6 (4.0 ) 12.6 0.26 chargesGoodwill impairment 52.8 (0.1 ) 52.7 1.09 Debt extinguishment 8.2 (2.0 ) 6.2 0.13 losses, netPension settlement 11.4 (2.8 ) 8.6 0.18 chargesTotal impact of 162.7 (29.8 ) 132.9 2.75 special items Year ended June 30, $ (135.2 ) $ 38.5 $ (96.7 ) $ (2.01 )2021, as adjusted * Impact per diluted share calculated using weighted average common sharesoutstanding of 48.3 million for the year ended June 30, 2021.

ADJUSTED EARNINGS Income Income EarningsPER SHARE EXCLUDING Before Tax Net Income PerSPECIAL ITEMS Income Expense Diluted Taxes Share* Year ended June 30, $ 6.1 $ (4.6 ) $ 1.5 $ 0.02 2020, as reported Special Items: LIFO decrement 1.8 (0.4 ) 1.4 0.03 COVID-19 costs 7.4 (1.5 ) 5.9 0.12 Inventorywrite-downs from 29.3 (6.0 ) 23.3 0.49 restructuringRestructuring andasset impairment 68.5 (14.0 ) 54.5 1.13 chargesGoodwill impairment 34.6 (7.1 ) 27.5 0.57 Total impact of 141.6 (29.0 ) 112.6 2.34 special items Year ended June 30, $ 147.7 $ (33.6 ) $ 114.1 $ 2.36 2020 as adjusted * Impact per diluted share calculated using weighted average common sharesoutstanding of 48.2 million for the year ended June 30, 2020.

Management believes that (loss) earnings per share adjusted to exclude the impact of special items is helpful in analyzing the operating performance of the Company, as these items are not indicative of ongoing operating performance. Management uses its results excluding these amounts to evaluate its operating performance and to discuss its business with investment institutions, the Company's board of directors and others.

Three Months Ended Year Ended June 30, June 30,FREE CASH FLOW 2021 2020 2021 2020 Net cash provided from operating $ 74.5 $ 136.9 $ 250.0 $ 231.8 activitiesPurchases of property, plant, (22.1 ) (27.4 ) (100.5 ) (171.4 )equipment and softwareProceeds from disposals ofproperty, plant and equipment ? ? 1.6 0.2 and assets held for saleProceeds from divestiture of ? ? 20.0 ? businessDividends paid (9.8 ) (9.7 ) (39.1 ) (38.8 ) Free cash flow $ 42.6 $ 99.8 $ 132.0 $ 21.8

Management believes that the free cash flow measure provides useful information to investors regarding the Company's financial condition because it is a measure of cash generated which management evaluates for alternative uses.

PRELIMINARYSUPPLEMENTAL SCHEDULES(in millions)(Unaudited)

Three Months Ended Year Ended June 30, June 30,NET SALES BY END-USE 2021 2020 2021 2020MARKET End-Use MarketExcluding Surcharge Revenue:Aerospace and Defense $ 165.5 $ 213.8 $ 598.8 $ 1,072.1 Medical 38.1 42.0 128.2 177.2 Transportation 36.5 17.3 115.9 108.7 Energy 13.4 27.7 70.5 116.4 Industrial and 67.8 56.2 243.1 248.1 ConsumerDistribution 26.8 18.9 96.3 106.2 Total net salesexcluding surcharge 348.1 375.9 1,252.8 1,828.7 revenue Surcharge revenue 73.5 61.4 222.8 352.4 Total net sales $ 421.6 $ 437.3 $ 1,475.6 $ 2,181.1

Media Inquiries: Investor Inquiries:Heather Beardsley The Plunkett Group+1 610-208-2278 Brad Edwardshbeardsley@cartech.com +1 914-582-4187 brad@theplunkettgroup.com