Carpenter Technology Corp. (NYSE:CRS) Q3 2018 Earnings Conference Call - Preliminary Transcript

Apr 26, 2018 • 10:00 am ET


Carpenter Technology Corp. (NYSE:CRS) Q3 2018 Earnings Conference Call - Preliminary Transcript


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Good morning and welcome to the Carpenter Technology Corporation Third Quarter Fiscal Year 2018 Financial Results Conference Call. All participants will be in listen-only mode. (Operator Instructions) . Please note this event is being recorded.

I now would like to turn the conference over to Brad Edwards, Investor Relations. Please go ahead.

Brad Edwards

Thank you, operator. Good morning, everyone, and welcome to Carpenter's earnings conference call for the third quarter ended March 31, 2018. This call is also being broadcast over the Internet along with presentation slides. Please note for those of you listening by phone, you may experience a time delay in slide movement.Speakers on the call today are Tony Thene, President and Chief Executive Officer; and Damon Audia, Senior Vice President and Chief Financial Officer.

Statements made by management during this earnings presentation that are forward-looking statements are based on current expectations. Risk factors that could cause actual results to differ materially from those forward-looking statements can be found in the Carpenter's most recent SEC filings including the company's report on Form 10-K for the year ended June 30, 2017, Form 10-Q for the quarters ended September 30, 2017 and December 31, 2017, and the exhibits attached to those filings.

Please also note that in the following discussion, unless otherwise noted, when management discusses the sales or revenue, that reference excludes surcharge. When discussing operating income, that reference excludes pension earnings, interest, and deferrals or EID. When referring to operating margins, that is based on sales excluding surcharge and operating income excluding pension EID.

I will now turn the call over to Tony.

Tony Thene

Thank you, Brad, and good morning to everyone on the call today. Let's start on slide 4 and a review of our safety performance. Our total case incident rate is at 1.1 for the year-to-date fiscal year 2018. We continue to work diligently toward reaching our goal of a zero injury workplace, and our performance to-date keeps us on path to achieve our best fiscal year performance in Carpenter's history.

Last quarter, I mentioned our extensive human performance program that reinforces tools, practices, and methods to reduce or eliminate errors in safety, quality, and manufacturing. This program is focused on engaging the employee at the task level. For example, one of the concepts of human performance safety training is to empower employees to observe the environment around them, and when a potentially unsafe activity is observed, they are empowered to stop the activity by issuing a stop card. Every time a stop card is issued, a detailed action plan is assigned and tracked to closure to ensure this activity is corrected.

This may seem basic, but I'm encouraged by the fact that to-date, over 4,000 stop cards have been initiated.

Also, by completing a certification process, multiple employees have become human performance advocates who now train fellow employees in the principles of error reduction. This is true engagement in action. While we have made encouraging progress to-date, there is much more work to be done, and our