Carpenter Technology Corporation (NYSE:CRS) Q2 2023 Earnings Call Transcript

Tony Thene : Yeah. Three things, not in any particular order. One, yeah, we increase our productivity. And remember, part of that increased productivity is our Athens facility. So we have that. So we know demand is going to go higher. We have organic productivity at our existing plants, and then we have Athens. We have mixed management, as you see some of these markets like aerospace and medical get stronger and stronger. You’ll see us move more towards those markets and cut off the tail, if you will, even more than we have in the past. And then the third big driver is price. We’ve been able to increase price significantly. And even if you do some math, quick math and SAO with — take the sales and we give you shipments by pound, do the math, you’re probably a pound higher than you were in FY ’19, which was one of our best financial years ever.

So pricing is a big item that a lot of people tend to forget about because they all want to know how are you going to get more productivity, where is the capacity, the price and the mix management is a big factor in that.

Joshua Sullivan : Yeah. And then just on the defense impact you mentioned, can you just highlight some of the dynamics there? What types of alloys or defense products is that impacting? And then how might we see that rebound?

Tony Thene : Sometimes, it’s such a small piece, you sometimes wonder whether that’s even really relevant in the whole scheme of our earnings release. I don’t see any issues there. You know the areas that we that we provide in defense were more on the munition side than armament, but we have a variety of alloys that we sell into defense. And quite frankly, we see defense as a growth area for us going forward. But because of the dynamics, you’ll see some variability up and down every quarter. It was only a couple of quarters ago, I think that it was a big increase in defense, and I said not to get too excited about that, that’s just the normal variability inside the defense submarket.

Joshua Sullivan : Yeah. Thank you for the time.

Tony Thene : Thank you.

Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Brad Edwards for any closing remarks.

Brad Edwards: Thanks, Jason. I appreciate it. Thanks, everyone, for joining us today for our fiscal 2023 second quarter conference call. We appreciate your time and support and look forward to connecting with all of you in the near future. Thanks again, and have a great rest of your day.

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