Good day ladies and gentlemen and welcome to the Carpenter Technologies fourth quarter earnings conference call. My name is Juanita and I’ll be your coordinator for today. At this time, all participants will be in a listen only mode. After the speaker’s remarks, you’ll be invited to participate in the question-and-answer session towards the end of the call. I would now like to turn the call over to your host for today, Mr. Mike Hajost, Vice President, Treasury and Investor Relations. Please proceed.

Thank you Juanita. Good morning everyone and welcome to Carpenter’s earnings conference call for the fourth quarter ended June 30, 2011. This call is also being broadcast over the internet. With us today are Bill Wulfson, President and Chief Executive Officer and Doug Ralph, Senior Vice President and Chief Financial Officer as well as other members of the management team. Statements made by management during this conference call that are forward-looking statements are based on current expectations. Risk factors that could cause actual results to differ materially from these forward-looking statements can be found in Carpenter’s most recent SEC filings, including the company June 30, 2010 10-K and September 30th, December 31st 10-Q’s and its March 31st, 2011 10-K, and the exhibits attached to those filings. I will now turn the call over to Bill.

Thank you Mike. Good morning everyone and thank you for joining us for our fiscal year 2011 fourth quarter earnings call. About this time last year, I had just joined the Carpenter team in my current role as CEO. As you will recall, we were coming off of a challenging year, due to weak economic environment. What a difference a year makes. We have benefited from strong, sustained demand across each of our end market segments. In addition, the Carpenter team has made great progress in several important areas; starting with the customer, we’ve strengthened many of our key customer relationships, we’ve expanded our market share in key segments, and much of these gains have been driven by expanding and extending our long-term agreements. We have also dramatically increased our profit. Net income is up $69 million versus prior year. Much of this gain has been driven by volume, which increased 25% year over year. We have also made fundamental improvements in our profit per pound from pricing and our mix management actions, and we’ll discuss those more in detail later in this call. Finally, we took aggressive actions to position the business for continued growth. We took important actions to expand capacity in our titanium, power and premium alloy businesses. We also announced several key acquisitions and joint ventures, which serve to expand our scale and scope. Even with these investments, we strengthened our capital structure, and we believe these actions were essential to give us the financial flexibility to take full advantage of opportunities during this future and current business cycle to drive continued growth. I will now speak more specifically about our fourth quarter results. We continue to see strong top line momentum in the business, especially in our strategic growth markets of aerospace and energy. Overall,…

Okay, thanks Bill. We are pleased with our fourth quarter results. Our top line growth rates continue to be very strong and the spread between our volume and revenue growth rates for the past two quarters reflects good execution of our pricing and mix management initiatives as Bill had outlined. In terms of the bottom line, you’ll recall that our third quarter was influenced by some positive items, including a very low tax rate. Our fourth quarter earnings exceeded our internal forecast, driven by volume that was even higher than a very strong third quarter, continued good progress on our pricing and mix management initiatives, leading to further increases in our profit per pound, and good operating performance. This was all during a time when we had a lot on the plate with our announced acquisitions and refinancing initiatives, so a good job by the organization. With that as background, let me walk you through our fourth quarter results more specifically. Net sales in the quarter were $484 million or 33% above a year ago. Excluding raw material surcharge, sales were up 31%. The Amega West acquisition accounted for about 3% of the year to year growth. Overall pounds shipped increased 12% from a year ago. Volume of special alloy products grew 7%. Titanium products increased 15% and stainless steel products were up 13%. As you’ll remember from last quarter, we are providing volume by reporting segment to help you track our progress in improving our profit per pound, which remains a top priority. Premium alloys, or PAO segment volume was up 40% and our profit per pound improved $0.52 against the same period last year and was up $0.37 versus the third quarter. AMO segment volume was up 7% and profit per pound was $0.31 higher than the year…

Thank you. (Operator Instruction) Our first question comes from Chris Olin from Cleveland Research. Please go ahead. Chris Olin – Cleveland Research: Good morning.

Morning. Chris Olin – Cleveland Research: Curious on the stainless steel and some of your special alloy markets. Do you anticipate any impact in the first quarter associated with buyer pauses or any kind of pull back in activity since the surcharge started falling or is most of that been already kind of absorbed through the system?

Well we have some normal seasonal demand as Doug referenced due to customer shutdowns and the like. And we’ve been focusing extensively on our mix management efforts to take our available capacity and make sure it’s directed where we can get the greatest value. So we’re not seeing any significant pause as it relates overall to the demand other than just related to the normal seasonal activities. Chris Olin – Cleveland Research: Have you seen on the titanium side, the impact from 787 production ramp or inventory draw down yet? I’m just wondering how much the growth is directly tied to that platform as opposed to medical or other areas.

Right. In that area, we have seen very strong demand for titanium fasteners. We don’t see that there is any inventory effect that’s per se driving that, so the inherent demand is strong and frankly, we only see upside associated with increased build of the 787 in the future. Chris Olin – Cleveland Research: Do you have a utilization number that you could give the Dynamet operations?

This is Dave Strobel. The utilization right now is 80% to 85% for the finished operations, which is why we’ve announced a capital investment there to expand our finish operations down there in Florida. Chris Olin – Cleveland Research: Okay. Thank you.

Thank you for your question.

I would just note though, just to add that we have announced an expansion which will add significantly to our capacity and so as the market grows, we think we’re very well positioned to support the industry.

Operator next question.

Thank you. Next question comes from Gautam Khanna from Cowen and Company. Please go ahead. Gautam Khanna – Cowen and Company: Hi. Could you provide some clarity around the fastener comments? You know we saw Precision Cast Parts reported flat sequential fastener sales today and I know you guys have sort of indicated previously that you’re shipping more and so I’m wondering, do you have any sort of line of site as to whether the stuff is actually flowing through the end customer or is this kind of an inventory build by the fastener OEM’s. And then relatedly, if you could just update us on what your lead times are for the various fastener stock; you know, for titanium bar, titanium coil and then nickel and stainless pieces as well.

From a nickel based fastener viewpoint, we think that inventories in the chain downstream are declining. We did see higher demand in the second half of fiscal year ‘11 versus the first half. Right now, overall the demand is probably 75% to 85% of the previous peak and we expect that that will continue to increase when the excess supply and distribution channel begins to work its way through the system. Again, from a titanium fastener standpoint, we’re seeing record demand and we only expect that to increase further. And from a lead time standpoint, Dave Strobel will speak to that.

Yeah, the titanium side new fastener orders on forecast would be looking at very late this calendar year as far as delivery, so we have very good demand there. On the nickel base side, we’re actually booking new orders out into our third quarter or the approximately the February time frame of next year. Gautam Khanna – Cowen and Company: Okay. And is that – when you mention that, that’s for both titanium and bar, is that right? So you have about six month lead times, five month lead times?

That’d be correct. Gautam Khanna – Cowen and Company: And is that an aerospace phenomenon or is it also driven by the metal market, which apparently has been strong too.

The medical market has been strong for us and that is one of the markets where we’ve had some good success in terms of expanding our long term agreements and picking up some additional share as a result. Gautam Khanna – Cowen and Company: Okay, because what I’m trying to isolate is, do you think that this lead time extension is due kind of primarily to the aerospace demand or could it just be because medical is sort of leading the way as well? Which is kind of the greater influence on this lead time? Where is the order book stronger?

I think it’s strong in really in both of those areas. Gautam Khanna – Cowen and Company: Okay. Thank you guys.

Thank you for your question. Next question comes from Steve Levenson from Stifel. Please go ahead. Steve Levenson – Stifel: Thanks. Good morning everybody.

Morning.

Morning. Steve Levenson – Stifel: Could you give us an idea what sort of gains you think you could get by shifting production from your vim over to Latrobe’s vim? How much additional aerospace material could you deliver?

Let me comment in general and then I think Dave can give you more specific answer. Of course we have some unique production capabilities. Also, Latrobe has different unique production capabilities and we believe that they’ll be able to produce some of the materials we produce in Redding today more efficiently and vice versa. And that’s great because of course, as we mentioned, demand is high. So Dave can speak maybe more specifically on an equipment basis, but that’s really the basis of expecting to get greater output and from that, some significant synergies.

From a total premium capacity standpoint, we’re really excited to be working with their folks. In taking a look at the rim operation, as Bill mentioned, when we start to work our way through the integration process with them in detail, we’ll look at the opportunities as far as moving some of our grades to them and taking advantage of that capacity, and perhaps at the same time, the ability to improve yields and reduce costs. That’s our goal with the integration effort. We also have a nice re-melt facility there and of course we’ll be working with them to expand that as well. But we need to go through the integration details to really be able to answer that question in more detail. Steve Levenson – Stifel: Got it. Thanks.

And in terms of dimensionalizing Steve, I think that’s one of the reasons why the deal has such an attractive financial profile, so when we talk about accretive in the first year, even including transactions costs and $25 million of annual pre-tax synergies, those are all the kinds of things that are leading to those numbers. Steve Levenson – Stifel: Got it. Thanks. Secondly, with the new models of 737 and A320 now in backlog for Boeing and Airbus, are there opportunities for you to increase your content with either the same materials or different materials?

Well certainly we have strong supply positions today and as the aircraft goes through additional re-design, some of those details are being worked through and we’re working aggressively for ultimately, 2015, when the new A320 will be moving forward to ensure that we have at least the same level of demand and hopefully increase our participation. But those decisions if you will, in many cases, are ongoing right now just because of the timing of the delivery of the aircraft. Steve Levenson – Stifel: Got it. Thanks very much.

Thank you. Next question comes from Edward Marshall from Sidoti & Company. Please go ahead. Edward Marshall – Sidoti & Company: Yes, I’m wondering if you could complete the thought that you started on EPS. You started talking about some of the tax situations as well as the EID, but you’ve also had some pretty decent guidance for the operating lines. So can you kind of help us complete that thought or give more detail?

I think I’ve given a lot of detail. We did provide good guidance on the operating income line and because there is a lot of puts and calls on the EPS line, we just really wanted to help you by calling out some of those significant puts and calls. Edward Marshall – Sidoti & Company: What would be the breakdown of the pension expense as it would run through EID and what would run through the segments? Can you give us a little bit more color on that then?

Sure, do we have that Tom? So the EID portion Ed, that we’re looking at for fiscal year ‘12 is about $14.5 million and the balance would be in the service costs. Edward Marshall – Sidoti & Company: Okay. And then if you could just quickly – I’m assuming that $2.4 million for Latrobe was say lower fees or other closing fees, onetime expenses so to speak?

Yeah. So we had investment banking fees. You have legal fees. We had some third party fees associated with our due diligence process and then looking ahead into the current quarter and what we would anticipate there, you’d have the remainder of investment banking fees, some additional legal fees, some asset appraisal fees. Those are the things that are making up that cost. Edward Marshall – Sidoti & Company: Do you have estimates on the intangible write off or the inventory write ups yet?

They are estimates because they were developed as part of our due diligence but once we get closer to closing we can refine those. But we estimate that we would have total write-ups in the magnitude of $135 million that would then be taken over a number of years and then we would also have a onetime write up in inventory of about $10 million that would be written off over one inventory turn cycle. Edward Marshall – Sidoti & Company: Okay. Thank you guys.

You’re welcome.

Thank you. Next question comes from Mark Parr from Keybanc. Please go ahead. Mark Parr – Keybanc: Thank you kind operator. Good morning.

Morning. Mark Parr – Keybanc: Hey, I was curious about your 2012 commentary a bit. You know the base business X Latrobe and two what extent may the 10% growth that you’re looking as kind of a base line. Is there any pricing in that or is that all volume? Is that an equivalent mix? Anything in that 10% growth that might enrich Carpenter’s mix or maybe lower it a bit?

Yeah, we just characterize Mark that we think much of that is going to be revenue growth and I think the key of getting volume... Mark Parr – Keybanc: Do you mean by volume instead of pricing? Is that what you’re meaning?

Well through pricing and mix management efforts. And so revenue growth in excess of 10% will be driven largely by revenue and excessive volume growth and in order to move the needle up on that overall revenue growth, it’s going to be getting more volume out through our efforts on internal productivity improvements, some of the capacity increases and then ultimately when we close, the benefits of the Latrobe acquisition. Mark Parr – Keybanc: Okay. In terms of – again this is – I appreciate that. Another question I had is, as you look to combining Latrobe and Carpenter from a marketing perspective, and yeah you kind of look at Latrobe’s kind of outsized aerospace and defense exposure. I’m just curious. Would you anticipate some of the early revenue synergies to be coming more from aerospace or more from energy markets or industrial? I mean is there something in particular that really excites you that you think could create some better revenue momentum sooner as opposed to later?

Well the good news is we do see a demand really across all of our end market segments and they’ve done a nice job to build up an attractive business mix for their base businesses as we have. And so I think once we’re to the point where we can share greater details with each other, we’ll be looking really to see if we can’t raise the overall ability to meet all of the end market output, and it won’t necessarily be disproportionally focused on any particular segment. Mark Parr – Keybanc: Okay. Well congratulations on the results and good luck with this exciting period you’re embarking on.

Thank you.

Next question comes from Brian Yu from Citi. Please go ahead. Brian Yu – Citi: Great. Thanks and congratulations on a solid quarter. Bill, if I look at volumes that you’re accomplishing right now and you’re pretty close to capacity and compare it to where you were the last cycle, you have more melt capacity. The profits obviously haven’t returned to where they are, and you guys are making good progress along the way. When you look at your competitors out there, do you think that they’re operating at as high of a rate as where you are? And then follow up question on that would be at what point do you think we could see everyone within the industry start to get more pricing power. Basically the market is really tightening up not just for yourself but for the whole industry.

Sure. In that respect, we do perceive overall that capacity is pretty tight, especially in the nickel based alloy area, which is why we’ve really focused so much of our attention, focused not just on mix management; and by mix management we mean moving more and more of our nickel based capacity to produce nickel based product, but in addition to that, to expanding our capacity. And we believe that that’s the right solution for us and it will help alleviate some of the supply demand pressures that exist in the industry today. That’s a very important move. So you get some pricing leverage in that respect, but our real goal is to enhance our mix and to increase our output. Brian Yu – Citi: Okay. Do you think the rest of the industry is operating at as high of a rate where you’re at today?

Well, it would depend upon which area. Again, in the nickel based area, I think that you would tend to find that things are overall tighter than in the general stainless arena. Brian Yu – Citi: Okay. And if you look at your guidance for next year, it seems like you’re probably looking at a number close to $200 million operating profit before EID expenses and that’s not too far for where you’re running at today. When you look at your guidance relative to the range of probability – I know I’m trying to pin you down a little bit – would that be on the lower end of what you would expect to achieve or is that right in the middle?

Brian, I think that’s a realistic estimate and as you know, we’re focused on return to our prior peak and I think that would represent a significant step in closing that gap to prior peak. Brian Yu – Citi: All right. Thank you.

Next question comes from Tim Hayes from Davenport & Company. Please go ahead. Tim Hayes – Davenport & Company: Good morning. Could you give the sequential change in volumes in the June quarter for your six end markets please?

Sure Tim. Aerospace was actually down 5%, energy up 22%, our medical business up 8%; industrial down 1%, automotive plus 3%, consumer minus 3%, so overall we were essentially flat across the corporation quarter to quarter volume. Tim Hayes – Davenport & Company: All right. Thank you.

You’re welcome.

Your next question in the queue from Gautam Khanna from Cowen and Company. Please go ahead. Gautam Khanna – Cowen and Company: Yes, just a couple follow ups. I wanted to ask about that fastener order pattern during the quarter. Did you see a pick up through the quarter, June quarter is better than May and April or could you comment on kind of the flow and how they’re trending in July. And I have another one as well.

From my standpoint, on the operations side, what we’re seeing right now is very similar to what we had reported on during the call last quarter. We’re seeing the customer lead times for new orders out in that six to eight month time frame. But channel checks have been strong and I think the right way to look at this is that there has been a gradual and continual increase in the overall demand pattern. I wouldn’t describe it as a spike. And our forecast going forward is that we expect that that pattern will continue. Gautam Khanna – Cowen and Company: Okay. I guess the question is at some point during the quarter, I thought you remarked that titanium coil lead times were six to eight weeks. They weren’t as long as the bar lead times. I was wondering if that’s changed.

Let me just comment a little bit further on that. When I’m giving you these lead times in regards to the six to eight months, that type of thing, that’s for a new unforecasted demand that we have coming in from a customer. So our shops as far as new orders coming in would be busy out to that time frame. From a manufacturing lead time perspective, as far as once we have an order and have it in process, that’s very much different versus new orders coming in to the order books. Do you follow that? Gautam Khanna – Cowen and Company: Yes I do and has that metric changed through the quarter, the manufacturing lead time.

The manufacturing lead times, I’d say that with some of the work that was done from an execution standpoint on the nickel based side, and I know that titanium side we’re working on the same thing, and with the additional capacity we’ll be putting in there, those manufacturing lead times, our goal is to bring that down. A couple days there helps a lot. Gautam Khanna – Cowen and Company: Okay. Sure. Two other quick ones. Just if you could comment – you mentioned about working on customer relationships since you’ve been there Bill and you obviously have done a great job. I just wondered if you could comment on the relationship at Carlton Forge and if you’ve seen any drop in business year on year. Any risk of kind of future drops in business at that customer?

Speaking generally to PCC as a customer and as a company, it’s impressive what they’ve done and their growth pattern that they’ve had both organically as well as through acquisition and as I’ve mentioned before, our goal is to be their best external supplier. I know they have an internal supply and because their business is growing, we’ve actually seen opportunities to grow with them as their demand patterns have increased. So that’s a good question probably for your 10:00 o’clock call, which I know is coming up here with PCC and so forth, but I think what we’re seeing is that we’re working on the assumption that Carlton volume will be in a similar range year over year, but there is opportunity that we could see some growth. Gautam Khanna – Cowen and Company: Okay. And you guys have been telegraphing some landing gear opportunity that you’ve been pursuing for a while. Could you update us on the status and when we might have something more formal to announce?

Sure. There is as you know, a general interest in moving to alternative materials which don’t required cadmium coatings because of concerns that exist, specifically in Europe with (inaudible) legislation. And with that, we’ve been focusing on trying to provide a stainless solution which not only would meet the corrosion and performance needs, but would allow the landing gear not to have to be redesigned, but essentially be dropped into existing models. And with that, there of course, is a long and extended testing period required on both the OEM part as well as on our part and we’re as frequent flyers, very happy about that. So we continue to see positive indications and signs coming from our customers in terms of their interest and the results of our tests. But in terms of when they’re prepared to make a comment or commitment to put it into flight, while we think it’s a great idea and we’re pushing to see that move forward to certain degree, that’s really in their court. So I can just tell you that we continue to see positive signs and are very encouraged and we hope that over the course of this fiscal year, we’ll have some very – some more specifics that we share with you on that front. But it’s a little bit difficult to predict just because of dynamic I mentioned. Gautam Khanna – Cowen and Company: Thank you.

Thank you. We have no further questions coming through.

Okay. Well thank you again for participating in today’s call. It’s been a great year for Carpenter, but we recognize we’ve got a lot more work to do and we look forward to speaking with you again next quarter. Thank you and goodbye.

Thank you. Ladies and gentlemen that completes your conference call for today. You may now disconnect. Thank you for joining and have a great day. Thank you.