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Precision Castparts Management Discusses Q1 2013 Results - Earnings Call Transcript

If I look sequentially, the 2 significant changes where we did have a slight increase in aerospace, we did have more upside in the aerospace. But certainly, the press outage had an impact on the ability to capture as much of that upside as we wanted to. And we also add in the quarter, sequentially. We got the benefit of RathGibson versus Q4.

If I look operationally, we've kind of talked about this, we did have some headwinds. We talked last quarter about the additional pension expense. It's the last time we're going to kind of give a baseline to this, but if I compare it to last year and, again, to Q4, it was roughly an $8-million impact in the quarter. And the current estimate of the cost of the 29K outage in Q1, we estimate to be $4 million to $5 million in the quarter. And this was more from the lost absorption. Certainly, the initial maintenance and certainly some lost sales all played into that number.

And even though we did get contribution from both Centra and Rath, up from the margin standpoint, certainly, we're dilutive as most of our acquisitions are on the day we take them over, but certainly, the number of opportunities to move that forward. I think, counting all this, we saw a very solid incremental drop-through in our base businesses, upgraded them 50%. We continued to find numerous opportunities, productivities, scrap and rework, revert utilization, and we're by no means at the end of that. But we did see a strong year-on-year improvement in terms of that performance aspect.

And from a dollar standpoint, we obviously did see the additional benefit from the acquisitions. And from a Primus standpoint, we're not only seeing the impact of not being in Q1 last year and in the Q1 this year, but they've also seen strong operational improvements as they've gone through the last 12 months. So from that standpoint, we're kind of getting a double hit, positive hit as we get with Primus.

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