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As filed with the Securities and Exchange Commission
April 3, 1998
Registration No. 333-43017
__________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CARPENTER TECHNOLOGY CORPORATION
--------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-0458500
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(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
101 WEST BERN STREET
READING, PENNSYLVANIA 19601
(610) 208-2000
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(Address, including zip code, and
telephone number, including area code, of
registrant's principal executive offices)
JOHN R. WELTY, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
CARPENTER TECHNOLOGY CORPORATION
101 WEST BERN STREET
READING, PENNSYLVANIA 19601
(610) 208-2000
------------------------------------------
(Name, address, including zip code, and
telephone number, including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after this registration statement becomes effective.
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SUBJECT TO COMPLETION DATED APRIL 3, 1998
PROSPECTUS
278,650 SHARES
CARPENTER TECHNOLOGY CORPORATION
COMMON STOCK
(PAR VALUE $5 PER SHARE)
This Prospectus provides for the offering by the Selling Stockholder named
herein (the "Selling Stockholder") of up to an aggregate of 278,650 shares (the
"Shares") of the Common Stock, par value $5 per share ("Common Stock"), of
Carpenter Technology Corporation (the "Company" OR "Carpenter"). The Shares
were issued by the Company on February 28, 1997 pursuant to the terms of an
Agreement and Plan of Merger (the "Merger Agreement") among the Company, Dynamet
Incorporated ("DI") and the shareholders of DI ("DI Shareholders") dated January
6, 1997. See "Selling Stockholder."
The Shares may be offered or sold by or for the account of the Selling
Stockholder from time to time on one or more exchanges or otherwise, at prices
and on terms to be determined at the time of sale, to purchasers directly or by
or through brokers or dealers, who may receive compensation in the form of
discounts, commissions or concessions. The Selling Stockholder and/or any such
brokers or dealers may be deemed to be "underwriters" within the meaning of the
United States Securities Act of 1933, as amended (the "Securities Act"), and any
discounts, concessions and commissions received by any such brokers and dealers
may be deemed to be underwriting commissions or other discounts under the
Securities Act. The Company will not receive any of the proceeds from any sale
of the Shares offered hereby. See "Use of Proceeds," "Selling Stockholder" and
"Plan of Distribution."
The Common Stock is listed on the New York Stock Exchange (the "NYSE") and
traded under the symbol "CRS". The last reported sale price of the Common Stock
on the NYSE on APRIL 2, 1998 was $54.625 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
APRIL ____, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR
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TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF SUCH STATE.
No person has been authorized to give any information or to make any
representations other than those contained in this prospectus, and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the company since the date hereof or that the information contained
herein is correct as of any time subsequent to its date.
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the United
States Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports, proxy solicitation materials and
other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy solicitation materials and other information
can be inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's Regional Offices located at Seven World Trade Center,
Suite 1300, New York, New York 10048, and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such materials can
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. Such reports, proxy and information statements and other information
may be found at http://www.sec.gov. The Common Stock is listed on the NYSE. Such
reports, proxy solicitation materials and other information can also be
inspected and copied at the NYSE at 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission a registration statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the
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Securities Act with respect to the offering made hereby. This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain portions of which are omitted in accordance with the rules and
regulations of the Commission. Such additional information may be obtained from
the Commission's principal office in Washington, D.C. as set forth above. For
further information, reference is hereby made to the Registration Statement,
including the exhibits which are filed as a part thereof. Statements made in
this Prospectus as to the contents of any document are not necessarily complete,
and in each instance reference is made to the applicable exhibit for a more
complete description and each such statement is modified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (File No. 1-5828) with the
Commission pursuant to the Exchange Act are incorporated by reference: (i) the
Company's Annual Report on Form 10-K for the fiscal year ended June 30,
1997; (ii) the Company's Current Report on Form 8-K filed on September 30, 1997;
(iii) the Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30 and December 31, 1997; (iv) the Company's Current Report on Form 8-
K filed on March 27, 1997, as amended by Amendment No. 1 thereto on Form 8-K/A
filed on May 13, 1997; (v) the Company's Current Report on Form 8-K filed on
December 15, 1997, as amended by Amendment No. 1 thereto on Form 8-K/A filed on
January 22, 1998 and as further amended by Amendment No. 2 thereto on Form 8-K/A
filed on February 12, 1998; (vi) the Company's Current Report on Form 8-K filed
on February 26, 1998; (vii) the Company's Current Report on Form 8-K filed on
March 16, 1998, as amended by Amendment No. 1 thereto on Form 8-K/A filed on
March 19, 1998; and (viii) the description of the Common Stock contained in the
Company's Registration Statement on Form 8-A, as the same has been and may be
amended.
All documents and reports filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference herein. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed document
which is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
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The Company will provide to each person to whom a copy of this Prospectus is
delivered, upon the written or oral request of such person, without charge, a
copy of any or all of the documents that are incorporated herein by reference,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Requests should be directed to
Carpenter Technology Corporation, 101 West Bern Street, Reading, Pennsylvania
19601, Attention: Corporate Secretary, telephone number (610) 208-2000.
THE COMPANY
Carpenter, a specialty materials company, is a leading manufacturer of stainless
steel and specialty alloys, including titanium alloys, and various engineered
products.
The Company's principal executive offices are located at 101 West Bern Street,
Reading, Pennsylvania 19601, and its telephone number is (610) 208-2000.
Reference herein to the Company refers to Carpenter Technology Corporation and
its subsidiaries, unless the context requires otherwise.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements under the caption "Risk Factors" in this Prospectus and
certain statements under the captions "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" in the documents
incorporated by reference constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements, which represent the Company's expectations or beliefs concerning
future events, include, among other matters, statements concerning future
revenues and continued growth in various market segments. These statements are
based on current expectations that involve a number of risks and uncertainties
which could cause actual results to differ from those of such forward-looking
statements. These risks include the following: (i) the cyclical nature of the
specialty materials business and certain end use markets, including, but not
limited to, aerospace, automotive and consumer durables, which are subject to
changes in general economic conditions; (ii) the critical importance of certain
raw materials used by the Company, some of which can only be acquired from
foreign sources and some of which are located in countries subject to unstable
political and economic conditions which may affect the prices or supply of these
materials; (iii) the susceptibility of export sales to the effects of export
controls, changes in legal and regulatory requirements, policy changes affecting
the markets, changes in tax laws and tariffs, exchange rate fluctuations,
political and
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economic instability and accounts receivable collection; and (iv) the effects on
operations of changes in domestic and foreign governmental laws and public
policy, including environmental regulations. Any of these factors could have an
adverse effect on the Company's business, financial condition or results of
operations.
RISK FACTORS
CYCLICAL NATURE OF SPECIALTY MATERIALS BUSINESS
Demand for certain of Carpenter's products, such as titanium and high-
temperature alloys, is highly cyclical in nature and demand for certain other of
the Company's products, such as stainless steel, is sensitive to general
economic conditions. The prices of certain of Carpenter's products have had,
and in the future may have, significant fluctuations as a result of general
economic conditions and other factors beyond Carpenter's control. The demand
for Carpenter's products and thus its financial performance generally are
affected by domestic economic fluctuations, as well as changes in the world
economy. Because of the comparatively high level of fixed costs associated with
Carpenter's manufacturing processes, changes in production volumes can result in
significant variations in net income. Any significant decrease in demand for
Carpenter's products or a decline in prices for such products could have a
material adverse effect on Carpenter's business, financial condition or results
of operations.
DEPENDENCE ON AEROSPACE INDUSTRY
Demand for certain of Carpenter's products is affected by the strength of the
aerospace industry. Shipments to the aerospace industry, Carpenter's largest
end-use market, accounted for approximately 30% of net sales for the six months
ended December 31, 1997. These sales consist primarily of premium grade, higher
margin alloys. The Company's acquisition of Dynamet in February, 1997 increased
its dependence on the aerospace industry. There can be no assurance that future
sales to the aerospace industry or profit margins will equal historic
levels.
The demand by commercial airlines for new aircraft historically has been closely
related to the financial condition and performance of the U.S and world
economies. The large number of aircraft delivered in the late 1980s and early
1990s, the U.S. economic recession in the early 1990s and the Persian Gulf War
created excess capacity in the air carrier system. After this period, airlines
and leasing companies deferred existing orders for new aircraft and, to a lesser
degree, canceled existing orders. These deferrals and cancellations adversely
affected the
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volume and price of orders placed with manufacturers of commercial aircraft
engine and other components and their suppliers, including Carpenter. Recently,
the commercial airline industry has generally been profitable, excess capacity
has been reduced and the backlog for new aircraft reported by major aircraft
manufacturers is at high levels. However, there can be no assurance that the
improved operating performance of the commercial aircraft industry will continue
or that deliveries of commercial aircraft will not be deferred or canceled in
the future. Any developments in the aerospace market resulting in a significant
reduction in future aircraft deliveries, including cancellations and deferrals
of scheduled deliveries, could have a material adverse effect on Carpenter's
business, financial condition or results of operations.
DEPENDENCE ON AUTOMOTIVE INDUSTRY
Certain of the Company's products are used for applications in the automotive
market. The demand for such products is closely linked to trends in sales of
motor vehicles. For the six months ended December 31, 1997, shipments to the
automotive industry accounted for 13% of Carpenter's net sales. Sales by the
Company to automotive markets may be affected generally by economic conditions
and particularly by levels of consumer confidence, discretionary spending and
interest rates. Over the past several years, the annual U.S. production rate of
automobiles and light trucks has been relatively stable at approximately 15
million units per year. However, there can be no assurance that the automotive
industry will not experience sustained periods of decline in vehicle sales in
the future and that such decline would not have a material adverse effect on
Carpenter's business, financial condition or results of operations.
NET ASSETS HELD FOR SALE
Carpenter plans to divest both the government products and services segment and
the industrial products segment of Talley Industries, Inc. ("Talley"). Although
management believes that it will be able to sell these businesses for the values
assumed in its financial statements and within one year of the acquisition, no
assurance can be given that the businesses in these segments can be sold on a
timely basis or that Carpenter will realize the values it has estimated for
these businesses. If the businesses cannot be sold on a timely basis, Carpenter
will be required to support a higher level of indebtedness than it would
otherwise have. Existing management and employees of the businesses to be sold
may not wish to stay at these companies and could pursue other opportunities
before the companies are sold. In addition, while Carpenter owns these
businesses, managing them may place additional demands on Carpenter's personnel
and other resources. The businesses held for sale are
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in a variety of industries in which Carpenter's management generally has no
experience. If these businesses are not managed effectively, their value,
financial condition, results of operations, cash flows or prospects could be
materially and adversely affected. During the period of time these businesses
are held for sale, overall economic conditions or the competitive environment
for these businesses could change and could reduce the value of any one or all
of these businesses. See "Acquisition Strategy."
COMPETITION
Generally, the markets in which Carpenter participates are competitive.
Carpenter competes with companies located throughout the world. The competitive
nature of the markets in the future could have an adverse effect on Carpenter's
business, financial condition or results of operations. Carpenter competes
generally on the basis of quality, the ability to meet customers' product
specifications, price requirements and delivery schedules. Price competition
could increase as a result of the devaluation of foreign currencies,
particularly in Asia. Currently, there is worldwide excess capacity for certain
alloys which Carpenter produces and markets. This excess capacity could result
in increased competition based on price and delivery. The competitive nature of
the industries in which Carpenter participates may in the future exert downward
pressure on prices for certain of Carpenter's products. Although Carpenter
believes it is well positioned to compete in its markets, competitors may
develop new products or production processes that reduce or impair Carpenter's
competitiveness. In addition, Carpenter has joined other domestic producers in
filing dumping and countervailing duty claims in the United States against
competitors from seven foreign countries. A determination of such claims,
adversely to Carpenter, may make it more difficult for Carpenter to compete in
certain markets.
ACQUISITION STRATEGY
Carpenter continues to investigate acquisitions of businesses that expand or
complement its business or product offerings. Acquisitions may result in
dilution in the value of the Company's securities because of the issuance of
equity securities, additional debt, increased amortization of expenses related
to goodwill and other assets or other charges to operations.
Acquisitions could involve numerous additional risks, including unsuccessful
integration with Carpenter's existing operations and lower operating margins and
return on investment in such acquired operations. Acquisitions will require,
among other things, continued development of Carpenter's financial and
management controls and training of personnel. Moreover, Carpenter's
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results of operations may be affected by the timing of acquisitions, the costs
of integrating such acquisitions and the extent to and the rate at which the
economic benefits of integration are realized. There can be no assurance that
Carpenter will be successful in realizing operating and financial improvements
from acquisitions. In addition, the availability of acquisition financing in the
future cannot be assured and, depending on the terms of such additional
acquisitions, may be restricted by Carpenter's debt agreements.
Carpenter completed the acquisition of Talley on February 19, 1998. Carpenter
plans to retain two Talley operations, Talley Metals Technology, Inc. ("Talley
Metals"), which operates a stainless steel mini-mill located in Hartsville,
South Carolina, and Amcan Specialty Steels, Inc. ("Amcan"), which is a stainless
steel master distributor. No assurance can be given that Talley Metals and
Amcan will be successfully integrated with Carpenter's existing operations or
that Carpenter will be able to achieve the operating and financial improvements
which it contemplates for these operations. Carpenter plans to divest Talley's
government products and services and industrial products segments. See "-Net
Assets Held for Sale."
MANAGEMENT OF GROWTH
Carpenter's growth, both in its existing businesses and through acquisitions,
has placed demands on its personnel and other resources. Although Carpenter
believes that it has successfully managed growth in the past, future growth may
place additional demands on Carpenter's personnel and other resources, including
increased responsibilities for management personnel. Carpenter's ability to
manage growth effectively will require continued improvement in its operational,
management and financial systems and controls and successful training,
motivation and management of its employees. If Carpenter cannot manage growth
effectively, it could have a material adverse effect on Carpenter's business,
financial condition or results of operations.
SIGNIFICANT CAPITAL REQUIREMENTS
As a result of Carpenter's acquisitions, capacity expansion and regular
maintenance programs, Carpenter's business operations are capital intensive and
will require substantial capital expenditures in the future. Continued access
to capital with acceptable terms is necessary to assure the success of the
future growth of Carpenter's business. There can be no assurance that Carpenter
will be able to secure such additional capital or that the expense of such
capital will not increase. There also can be no assurance that Carpenter will
fully utilize new or expanded facilities or that such facilities will earn an
adequate return on investment. Carpenter's inability to adequately utilize
such
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facilities or to earn an adequate return on investment could have a material
adverse effect on Carpenter's business, financial condition or results of
operations.
ENVIRONMENTAL MATTERS
Like similar companies, Carpenter's operations and properties are subject to
various stringent federal, state, local and foreign environmental laws and
regulations governing, among other things, the use, storage, handling,
generation, treatment, emission, release, discharge, disposal or remediation of
certain materials, substances and wastes (collectively, "Environmental Laws").
There is a risk that these governmental environmental requirements, or
enforcement thereof, may become even more restrictive in the future and that
Carpenter may be subject to future regulatory scrutiny or legal proceedings
brought by private parties or government agencies with respect to environmental
matters. Although Carpenter believes that it is currently in substantial
compliance with current Environmental Laws, there can be no assurance that
material costs will not be incurred in connection with limitations imposed by,
or compliance with, or claims or liabilities arising under current or future
Environmental Laws or that the costs of compliance or of liabilities would not
have a material adverse effect on Carpenter's business, financial condition or
results of operations.
Carpenter accrues amounts for environmental costs which represent management's
best estimates of the probable and reasonably estimable costs relating to
environmental remediation. However, there can be no assurance that these
amounts are adequate. See Note 6 to Carpenter's Interim Consolidated Financial
Statements contained in Carpenter's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1997 which is incorporated by reference herein.
LABOR MATTERS
Most of Carpenter's facilities are nonunion, and Carpenter believes that its
relations with its employees are good. A significant portion of Carpenter's
workforce is located in Reading, Pennsylvania, a nonunion facility. Dynamet has
a union workforce at its principal titanium processing facility in Washington,
Pennsylvania. The union contract for this facility expires in August, 2001.
Carpenter historically has not experienced work stoppages or strikes at its
existing facilities. Although Carpenter believes that it will continue to
maintain good relations with its employees, there can be no assurance that this
will be the case, that the cost of labor will not increase or that a disruption
in operations resulting from disagreements with employees will not result.
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DEPENDENCE ON ESSENTIAL MACHINERY AND EQUIPMENT
Carpenter's manufacturing processes are dependent on the reliable operation of
its machinery and equipment. The repair or replacement of certain critical
pieces of machinery and equipment could disrupt operations for a significant
period of time, and substitutes may not be readily available on commercially
acceptable terms. Any such disruption in Carpenter's production or distribution
could have a material adverse effect on Carpenter's business, financial
condition or results of operations.
Carpenter's principal manufacturing facilities, located in Reading,
Pennsylvania, have been operating at near capacity for several quarters.
Carpenter believes that it maintains adequate property damage insurance to
provide for reconstruction of damaged equipment, as well as business
interruption insurance to mitigate losses resulting from any production shutdown
caused by an insured loss; however, there can be no assurance that such
insurance coverage will be adequate to cover such losses.
SUPPLY AND COST OF RAW MATERIALS
Carpenter purchases substantial quantities of raw materials, principally nickel,
chromium, cobalt and titanium. Although Carpenter believes that raw materials
are available in adequate quantities at prevailing market prices, the
availability of these materials may be curtailed or prices increased due to,
among other things, new laws or regulations, suppliers' allocations to other
purchasers, interruptions in production by suppliers and changes in exchange
rates and worldwide price levels. Raw materials are generally purchased
directly from producers. Commercial deposits of certain metals used by
Carpenter are found in only a few parts of the world, and their availability may
be affected by political or other developments in those areas. Any protracted
interruption in the supply of raw materials, or substantial increases in their
costs, could have a material adverse effect on Carpenter's business, financial
condition or results of operations.
As described above, a substantial portion of the raw materials used in
Carpenter's manufacturing processes are commodities, such as nickel, that are
subject to wide price fluctuations. Although certain of Carpenter's sales are
pursuant to product orders which provide for price adjustments to reflect
changes in the price of raw materials, some of Carpenter's product orders
currently are and in the future are expected to be made under firm price
contracts which do not provide for raw material price adjustments. To attempt
to mitigate the risks associated with raw material price fluctuations and to
match raw material
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purchases with firm price product orders, Carpenter sometimes enters into firm
price contracts for the purchase of raw materials from suppliers and also hedges
the price of nickel. Although Carpenter uses commercially reasonable efforts to
collect cancellation penalties if a customer cancels a firm price purchase
order, there can be no assurance that Carpenter will receive cancellation
penalties which are adequate to cover any raw material losses. There can be no
assurance that the hedging and other techniques implemented by Carpenter will be
successful in eliminating or reducing the effects of fluctuation in the price of
Carpenter's raw materials or that Carpenter will not incur losses on certain
transactions.
PRODUCT LIABILITY RISK; POSSIBLE INSUFFICIENCY OF INSURANCE
Carpenter's business involves the risk of product liability claims, particularly
in connection with its sales to the aerospace, automotive, medical device and
nuclear power industries. Carpenter maintains product liability insurance at
coverage levels which it deems commercially reasonable; however, there can be no
assurance that product liability or other claims will not exceed such insurance
coverage limits or that such insurance will continue to be available on
commercially acceptable terms, or at all. Carpenter periodically evaluates the
amounts and types of its product liability insurance coverage, but even if
Carpenter obtains additional product liability insurance, there can be no
assurance that such coverage would prove adequate or that a product liability
claim or claims, individually or in the aggregate, insured or uninsured, would
not have a material adverse effect on Carpenter's business, financial condition
or results of operations. Even if a product liability claim is not successful,
the time and expense of defending against such a claim may adversely affect
Carpenter's business, financial condition or results of operations.
FOREIGN ECONOMIC CONDITIONS AND GOVERNMENT POLICIES
Carpenter has operations in Mexico and may in the future have operations in
other emerging market countries, such as India. As of December 31, 1997,
approximately 2% of Carpenter's total assets were located in Mexico. Emerging
market countries may experience social, political and economic disturbances and
instability from time to time, which could have an adverse impact on Carpenter's
operations. Carpenter does not have and does not intend to obtain political
risk insurance in the countries in which it currently conducts business.
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EXCHANGE RATES AND FOREIGN SALES
Carpenter sells its products in a number of countries. For the six months ended
December 31, 1997, approximately 15% of Carpenter's net sales including export
sales were outside the United States. Approximately 8% of Carpenter's net sales
were in Canada and Europe. Carpenter's strategy is to increase sales in faster
growing markets throughout the world. Fluctuations in exchange rates could have
an adverse impact on Carpenter's sales outside the United States, and there can
be no assurance that such sales will continue at current levels, that Carpenter
will achieve its planned increase in sales outside the United States or that
profits on such sales will not be reduced.
USE OF PROCEEDS
The Selling Stockholder will receive all of the net proceeds from any sale of
the Shares offered hereby, and none of such proceeds will be available for use
by the Company or otherwise for the Company's benefit.
SELLING STOCKHOLDER
The Shares that may be offered pursuant to this Prospectus will be offered by or
for the account of the Peter C. and Ada E. Rossin 1997 Charitable Remainder
Unitrust (the "Selling Stockholder"). The Shares were acquired by Peter C.
Rossin and Ada E. Rossin, his wife, jointly on February 28, 1997, pursuant to
the Merger Agreement. Concurrently with the effectiveness of the Registration
Statement, the Shares were contributed to the Selling Stockholder. Mr. Rossin
and his wife beneficially owned an aggregate of 2,387,494 shares of Common
Stock, including the Shares, on April 2, 1998 representing 10.39% of the shares
of Common Stock outstanding on such date. Following the offering, Mr. Rossin and
his wife will continue to beneficially own the remaining 2,108,844 shares of
Common Stock, or 9.18% of the shares outstanding on April 2, 1998.
Mr. Rossin is a director of the Company. Pursuant to the Merger Agreement, for
a period ending on the earlier of February 28, 2007, or the date when the
aggregate voting power held by the DI Shareholders is less than 5% of the voting
power of all outstanding voting securities of the Company (the "Standstill
Term"), the Company has agreed to include Mr. Rossin or another designee of the
DI Shareholders in the slate of nominees of the Board of Directors of the
Company for election as a director on a tri-annual basis. The Standstill Term
will terminate if the Company breaches the foregoing obligation or upon a change
of control of the Company (as defined in the Merger Agreement).
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Each DI Shareholder has agreed during the Standstill Term not to transfer (other
than to certain permitted transferees or in a registered offering) to a single
purchaser or related or affiliated group of purchasers more than the maximum
number of shares of Common Stock that could be sold or transferred thereto in a
single transaction in compliance with Rule 144(e)(1), unless (if capital gain
treatment would be available) that DI Shareholder has first offered the Company
the opportunity to purchase such shares at the same price. Throughout the
Standstill Term, subject to certain exceptions, the DI Shareholders have agreed
not to acquire additional shares of the Common Stock, any other voting
securities of the Company, or any rights to acquire the same. In addition,
subject to certain exceptions, the DI Shareholders have agreed during the
Standstill Term not to effect or propose any tender or exchange offer or
business combination involving the Company or any of its subsidiaries or a
recapitalization, restructuring, dissolution or other extraordinary transaction
involving the Company, nor to participate in any proxy solicitation with respect
to the Company or participate in a "group" with respect to any voting securities
of the Company or execute any written consent in lieu of a meeting of holders of
Company voting securities. Other than as described herein, neither the Selling
Stockholder nor Mr. Rossin has, or within the past three years has had, any
position, office or other material relationship with the Company or any of its
predecessors or affiliates. None of the restrictions or rights described in this
paragraph will be applicable to any person who purchases Shares pursuant to this
Prospectus.
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time by or for the account of
the Selling Stockholder on one or more exchanges or otherwise; directly to
purchasers in negotiated transactions; by or through brokers or dealers in
ordinary brokerage transactions or transactions in which a broker or dealer
solicits purchases; in block trades in which brokers or dealers will attempt to
sell Shares as agent but may position and resell a portion of the block as
principal; in transactions in which a broker or dealer purchases as principal
for resale for its own account; or in any combination of the foregoing methods.
Shares may be sold at a fixed offering price, which may be changed, at the
prevailing market price at the time of sale, at prices related to such
prevailing market price or at negotiated prices. Brokers or dealers may arrange
for others to participate in any such transaction and may receive compensation
in the form of discounts, commissions or concessions payable by the Selling
Stockholder and/or the purchasers of Shares. If required at the time that a
particular offering of Shares is made, a supplement to this Prospectus will be
delivered that describes any material
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<PAGE>
arrangements for the distribution of Shares and the terms of the offering,
including, without limitation, any discounts, commissions or concessions and
other items constituting compensation from the Selling Stockholder or otherwise.
The Company may agree to indemnify participating brokers or dealers against
certain civil liabilities, including liabilities under the Securities Act.
The Selling Stockholder and/or any such brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act, in which event any
discounts, commissions or concessions received by such brokers or dealers and
any profit on the resale of the Shares purchased by such brokers or dealers may
be deemed to be underwriting commissions or discounts under the Securities Act.
Any Shares covered by this Prospectus which qualify for sale pursuant to Rule
144 under the Securities Act may be sold under that Rule rather than pursuant to
this Prospectus. There can be no assurance that the Selling Stockholder will
sell any of the Shares. The Selling Stockholder may transfer or gift Shares by
other means not described herein.
The Selling Stockholder will reimburse the Company for all costs and expenses
incurred by the Company in connection with the offering contemplated hereby.
VALIDITY OF COMMON STOCK
The validity of the shares of Common Stock offered hereby will be passed upon
for the Company by Dechert Price & Rhoads, Philadelphia, Pennsylvania.
EXPERTS
The consolidated financial statements and related consolidated financial
statement schedule of the Company, included in the Company's Annual Report on
Form 10-K for fiscal year end June 30, 1997, incorporated by reference in this
Prospectus, have been incorporated herein in reliance on the reports of Coopers
& Lybrand L.L.P., independent accountants, given on the authority of that firm
as experts in accounting and auditing.
The financial statements of Dynamet Incorporated incorporated in this Prospectus
by reference to the audited historical financial statements included in the
Company's Form 8-K/A dated May 13, 1997 have been so incorporated in reliance
on the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
-14-
<PAGE>
The financial statements of Talley Industries, Inc. Incorporated in this
Prospectus by reference to the audited historical financial statements included
in the Company's Form 8-K/A dated February 12, 1998, have been so incorporated
in reliance on the report of Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
-15-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Company in connection with the
distribution of the Securities being registered are as follows:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission Filing Fee $ 4,620
Accounting Fees and Expenses................. $ 4,000
Legal Fees and Expenses...................... $ 5,000
Miscellaneous Expenses....................... $ 500
Total.............$14,120
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 7(a) of the registrant's Restated Certificate of Incorporation provides
for the elimination of liability of directors to the fullest extent permitted by
Section 102(b)(7) of the Delaware General Corporation Law (the "GCL"). Section
102(b)(7) allows a corporation in its original Certificate of Incorporation or
an amendment thereto to eliminate or limit the personal liability of a director
for violations of the director's fiduciary duty, except (i) for the breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the GCL (providing for
liability of directors for unlawful payment of dividends or unlawful stock
purchases or redemptions), or (iv) for any transaction from which the director
derived an improper personal benefit.
Article 7(b) of the registrant's Restated Certificate of Incorporation and
Article 6.4 of the registrant's By-Laws provide for indemnification of
directors, officers, employees and agents to the fullest extent permitted by
Section 145 of the GCL.
Section 145 provides that a corporation may indemnify any persons, including
officers and directors, who are threatened to be made parties to any threatened,
pending or completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative, other than an action by or in the right of the
corporation by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation, as a director, officer, employee or agent of another
corporation enterprise. The indemnification may include expenses
II-1
<PAGE>
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with such action,
suit or proceeding if the person acted in good faith and in a manner believed to
be in or not opposed to the best interest of the corporation and had no
reasonable cause to believe his or her conduct was unlawful.
A corporation may indemnify officers and directors in actions by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the person is adjudged to be liable to
the corporation. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify that person against expenses actually and reasonably incurred. Under
the registrant's By-Laws, for indemnification purposes, an employee or agent
shall be deemed to have acted in good faith only if his or her actions were
within the scope of employment as defined by an agreement with the registrant or
the rules and regulations established by the registrant or an authorized officer
thereof.
The registrant has in effect a directors and officers liability insurance policy
which, with certain general and specific exclusions, indemnifies each person who
was, is or may hereafter be a director or officer of the registrant and such
person's heirs and assigns, against any payment by an insured (except fines and
penalties) in respect of any legal liability, whether actual or asserted,
arising from any claim made against an insured by reason of any breach of duty,
neglect, error, misstatement, misleading statement, omission or other act done
or wrongfully attempted by the insured, in his or her capacity as a director or
officer of the registrant, or any of the foregoing so alleged by any claimant,
or any matter claimed against an insured solely by reason of his or her being or
having been a director or officer of the registrant. The policy may be canceled
by the insurer upon 60 days' written notice to the registrant. To the extent
that such insurance covers liabilities arising under the Securities Act of 1933,
no waivers or undertakings are made by the registrant with respect thereto,
except as set forth in Item 17 of this Registration Statement.
The registrant is a party to indemnity agreements with its officers and
directors which provide indemnification to the fullest extent permitted by law
in the event the indemnitee is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other
participant in any threatened, pending or completed action, suit or proceeding,
or any inquiry or investigation, whether instituted by the registrant or any
other party, that the indemnitee in good faith believes might lead to the
institution of any such action, suit or proceeding, whether civil, criminal,
administrative,
II-2
<PAGE>
investigative or other by reason of (or arising in part out of) any event or
occurrence related to the fact that such person is or was a director, officer,
employee, agent or fiduciary of the registrant, or is or was serving at the
request of the registrant as a director, officer, employee, trustee, agent or
fiduciary of another corporation, partnership, joint venture, employee benefit
plan, trust or other enterprise, or by reason of anything done or not done by
the indemnitee in any such capacity. The indemnification includes any and all
expenses (including attorneys' fees), judgments, fines, penalties and amounts
paid in settlement (including all interest, assessments and other charges paid
or payable in connection with or in respect of such expenses, judgments, fines,
penalties or amounts paid in settlement). However, the indemnitee is not
entitled to indemnity payments or expense advances in connection with any
threatened, pending or completed action, suit or proceeding, or any inquiry or
investigation initiated by the indemnitee unless the Board of Directors of the
registrant has authorized or consented to the initiation of such claim. In the
event of a Change in Control (as defined in such agreements) that has not been
approved by a majority of the registrant's Board of Directors who were directors
immediately prior to such Change in Control, then with respect to all matters
thereafter arising concerning the rights of the indemnitee to indemnity payments
and expense advances under the indemnification agreement, any other agreement,
Certificate of Incorporation or By-Law provision in effect, the registrant is
required to seek legal advice from independent legal counsel selected by the
indemnitee and approved by the registrant (which approval shall not be
unreasonably withheld) which legal advice includes the rendering of an opinion
to the registrant and indemnitee as to whether and to what extent the indemnitee
would be permitted to be indemnified under applicable law.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Reference is made to the Exhibit Index which appears at page II-8 of this
Registration Statement for a detailed list of the exhibits filed as a part
thereof.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the
II-3
<PAGE>
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the registration
statement.
Provided, however, that paragraphs (a)(1)(I) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's
II-4
<PAGE>
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Reading, Commonwealth of Pennsylvania,
on April 3, 1998.
CARPENTER TECHNOLOGY CORPORATION
By: *
-------------------------
Robert W. Cardy
Chairman of the Board,
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1
to the Registration Statement has been signed on April 3, 1998, by the following
persons in the capacities indicated.
Signature Capacity
--------- --------
* Chairman of the Board,
- ------------------------- President and Chief
Robert W. Cardy Executive Officer
Director
/s/G. Walton Cottrell Senior Vice President Finance
- --------------------- and Chief Financial Officer
G. Walton Cottrell
/s/Edward B. Bruno Controller
- ---------------------
Edward B. Bruno
* Director
- ----------------------
Marcus C. Bennett
* Director
- ----------------------
William S. Dietrich II
II-6
<PAGE>
* Director
- ---------------------------
C. McCollister Evarts, M.D.
* Director
- ---------------------------
J. Michael Fitzpatrick
* Director
- ---------------------------
William J. Hudson, Jr.
* Director
- ---------------------------
Edward W. Kay
* Director
- ---------------------------
Robert J. Lawless
* Director
- ---------------------------
Marlin Miller, Jr.
* Director
- ---------------------------
Peter C. Rossin
* Director
- ---------------------------
Kathryn C. Turner
* Director
- ---------------------------
Kenneth L. Wolfe
*By /s/G. Walton Cottrell
-----------------------
G. Walton Cottrell
Attorney-in-Fact,
Pursuant to Power of Attorney
II-7
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
2.01 Agreement and Plan of Merger dated January 6, 1997, by and
among Dynamet Incorporated, the Shareholders of Dynamet
Incorporated and the Registrant (Incorporated herein by
reference to Exhibit A found in the Preamble Section to
the Registrant's Current Report on Form 8-K filed on March
27, 1997)
(*) 5.01 Opinion of Dechert Price & Rhoads as to the legality of
the securities being registered.
(*) 23.01 Consent of Dechert Price & Rhoads (included in Exhibit
5.01).
(**) 23.02 Consent of Coopers & Lybrand L.L.P.
(**) 23.03 Consents of Price Waterhouse LLP
(*) 24.01 Powers of Attorney
________________________
(*) Previously filed.
(**) Filed with this amendment.
II-8
<PAGE>
Exhibit 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-3 of our reports dated July 28, 1997, on our audits of the consolidated
financial statements and the consolidated financial statement schedule of
Carpenter Technology Corporation and subsidiaries as of June 30, 1997 and 1996
and for each of the three years in the period ended June 30, 1997, which reports
are included in the Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1997. We also consent to the reference to our Firm under the
caption "Experts".
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
April 2, 1998
<PAGE>
Exhibit 23.03
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Carpenter
Technology Corporation of our report dated March 3, 1997, relating to the
financial statements of Dynamet Incorporated, which appears in the Current
Report on Form 8-K/A of Carpenter Technology Corporation dated May 13, 1997. We
also consent to the reference to us under the heading "Experts" in such
Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Pittsburgh, Pennsylvania
April 2, 1998
<PAGE>
EXHIBIT 23.03
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of Carpenter
Technology Corporation of our report dated February 17, 1997, except as to the
notes titled "Significant Accounting Policies -- Basis of Presentation,"
"Discontinued Operations" and "Segment Operations" which are as of February 3,
1998, relating to the financial statements of Talley Industries, Inc., which
appears in the Current Report on Form 8-K/A of Carpenter Technology Corporation
dated February 12, 1998. We also consent to the reference to us under the
heading "Experts" in such prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Phoenix, Arizona
April 2, 1998
