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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’s June 30, 2011 10-K, September 30, 2011 10-Q and the exhibits attached to those filings.I will now turn the call over to Bill. William Wulfsohn Thank you, Mike. Good morning, everyone. Thank you for joining us for our fiscal year 2012 second quarter earnings call. Last February we hosted an Investor Day in New York City. During that event we outlined our forward strategy. It consisted of four components: one, optimize the core business. Two, seek accretive acquisitions and joint ventures to accelerate our growth. Three, commercialize new R&D technologies; and four, strengthen our corporate foundation. At that time, given that we were just exiting the recent recession, I explained that our initial and primary focus would be to optimize the core business by returning to our historical peak EBITDA by fiscal year ‘14. Since then, we have taken extensive actions in this area to expand our premium product output and improve our profit per pound through mix management and pricing actions. As we announced our Q2 earnings today, I am pleased to report that we had another good quarter. Versus last year, we more than doubled our profit per pound. Premium product revenues, including sales of special alloys, titanium and powder metals, grew by 12% on 4% higher volume, while stainless steel revenues grew by 31% on 12% lower volume. In total, our earnings per share were $0.52 or $0.57 excluding Latrobe transaction costs. This compares to $0.21 in last year’s second quarter. We also saw positive cash flow in the context of making unprecedented investment back into our business.
Looking forward, we feel we are well on track to achieve our previously communicated financial target of achieving a 50% increase in our operating income versus a year ago, and ultimately returning to peak EBITDA at or before fiscal year ‘14.Our confidence in a bright future is bolstered by strong end market demand signals, especially in aerospace and energy. These markets are less exposed to the risks of a short-term economic downturn, and our customer backlog remains at historically high levels. Within the aerospace, engine demand remains strong, driven by high aircraft build rates. Titanium fastener demand is near record levels and is projected to hit new highs this fiscal year, and demand for our nickel and stainless fastener material has shown significant growth over the last year. We are also seeing increased use of our materials in aerospace structural components. As you will recall, this is a focus area for Carpenter, and we are pleased with our progress in giving some of our high-value proprietary materials specked into these applications. These include wind components, tail rudder and actuator applications and certain landing gear components. One example of success in this area is that 39,000 pounds of our proprietary custom 465 alloys are used on the wing flap tracks of the 747-8. Our energy business has also been strong. In the quarter, we realized revenue growth ex-surcharge of 58%. In addition, we are extremely pleased with the results of our acquisition last year of the Amega West in the oil and gas space. Roughly, 60% of our growth in the energy segment is attributable to the acquisition of Amega West. In addition, our annual EBITDA level in this business is approaching $20 million. Looking forward, we continue to grow this business, as directional drilling continues to grow, as is evidenced by the record rig count last quarter. In addition, we intend to accelerate our growth in this important strategic area through bolt-on acquisitions similar to our recent purchase of (inaudible) contractor to build the facility. We are also in the final stages of completing our other previously announced capacity additions. More specifically, we are expanding the titanium wire facility in Clearwater Florida, and we are expanding capacity in our Reading operations. Read the rest of this transcript for free on seekingalpha.com