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Carpenter Increases Quarterly Cash Dividend by 50%
WYOMISSING, Pa.--(BUSINESS WIRE)--Aug. 24, 2006--The Board of Directors of Carpenter Technology Corporation (NYSE:CRS), at its meeting today, declared a 50 percent increase in its quarterly cash dividend from $0.15 per share of common stock to $0.225 per share. The company also affirmed its expectation for record earnings in fiscal 2007 and free cash flow in excess of $200 million.
Robert J. Torcolini, chairman, president and chief executive officer, stated "Over the last several years, we have transformed Carpenter into a results oriented company by focusing on the production of higher value products while at the same time lowering our cost structure. This operating model has strengthened our overall competitiveness and allowed us to generate returns in excess of our cost of capital.
"We believe that our company is well positioned to generate substantial free cash flows throughout the business cycle. The increase in the dividend, which is an important component in driving shareholder value, reflects our positive business outlook. This marks the fourth dividend increase in the last two years and further demonstrates our commitment to shareholders."
The company believes that the new annualized dividend of $0.90 per share provides shareholders with a return that is competitive with other materials stocks and relevant indices. The dividend increase is a component of the company's strategy to enhance total shareholder return. The company will provide more details of its strategy in September.
The company's expectation for significant free cash flow generation, continued improvement in profitability, and a strong balance sheet provides the basis for offering a more attractive dividend to shareholders. Subject to approval by the Board of Directors, Carpenter expects that future dividend increases will be made at a measured pace and dependent upon business conditions.
The cash dividend of $0.225 per share of common stock will be payable on September 8, 2006, to shareholders of record on September 5, 2006. The ex-dividend date (the date the common stock trades without the dividend) is August 31, 2006.
Carpenter produces and distributes specialty alloys, including stainless steels, titanium alloys, and superalloys, and various engineered products. Information about Carpenter can be found on the Internet at www.cartech.com.
Except for historical information, all other information in this news release consists of 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's filings with the Securities and Exchange Commission including its annual report on Form 10-K for the year ended June 30, 2005, its subsequent Form 10-Q 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, industrial, automotive, consumer, medical, and energy including power generation, or other influences on Carpenter's business such as new competitors, the consolidation of customers, and suppliers or the transfer of manufacturing capacity from the United States to foreign countries; 2) the ability of Carpenter to achieve cost savings, productivity improvements or process changes; 3) the ability to recoup increases in the cost of energy and raw materials or other factors; 4) domestic and foreign excess manufacturing capacity for certain metals; 5) fluctuations in currency exchange rates; 6) the degree of success of government trade actions; 7) the valuation of the assets and liabilities in Carpenter's pension trusts and the accounting for pension plans; 8) possible labor disputes or work stoppages; and 9) the potential that our customers may substitute alternate materials or adopt different manufacturing practices that replace or limit the suitability of our products. Any of these factors could have an adverse and/or fluctuating effect on Carpenter's 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, and Section 21E of the Securities Exchange Act of 1934, as amended. Carpenter undertakes no obligation to update or revise any forward-looking statements.
CONTACT: Carpenter Technology Corporation
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