Haynes International, Inc. (NASDAQ GS: HAYN) (the “Company”), a
leading developer, manufacturer and marketer of technologically
advanced high-performance alloys, today reported financial results
for the second quarter ended March 31, 2024. In addition, the
Company announced that its Board of Directors has authorized a
regular quarterly cash dividend of $0.22 per outstanding share.
“Our ongoing focus on the aerospace and
industrial gas turbine markets resulted in the two being over 83%
of volume shipped this quarter. In addition, we continue to gain
production momentum after last quarter’s unplanned three-week
outage at our Kokomo hot rolling mill, with product flow through
our Kokomo facility improving. Significant raw material
headwinds persisted through the quarter, but are expected to begin
to ease,” said Michael L. Shor, President and Chief Executive
Officer. “We continue to make progress towards our proposed
merger with North American Stainless, a subsidiary of Acerinox, as
our shareholders approved the transaction at our special meeting of
shareholders held on April 16th. In addition, the regulatory
process is proceeding and we continue to expect to complete the
merger in the third calendar quarter.”
2nd Quarter Results
Net Revenues. Net revenues were
$152.5 million in the second quarter of fiscal 2024, a decrease of
$0.3 million or 0.2% from the same period of fiscal 2023 due to a
decrease in pounds sold of 0.03 million or 0.6% and a decrease in
product average selling price per pound of $0.06 or 0.2%, partially
offset by higher other revenue of $0.8 million. The small decrease
in product average selling price per pound largely reflected lower
market prices of raw materials, which decreased product average
selling price per pound by approximately $2.53 compared to the
second quarter of fiscal 2023. This was partially offset by a
favorable product mix, which increased product average selling
price per pound by approximately $1.43 and price increases and
other pricing factors, which increased average selling price per
pound by approximately $1.04.
Cost of Sales. Cost of sales was $125.4 million,
or 82.3% of net revenues, in the second quarter of fiscal 2024
compared to $121.9 million, or 79.8% of net revenues, in the same
period of fiscal 2023. Cost of sales as a percentage of revenues in
the second quarter of fiscal 2024 was higher than the second
quarter of fiscal 2023 due to higher raw material prices included
in cost of sales relative to the impact of raw material price
adjustors in selling prices.
Gross Profit. Gross profit was $27.0
million for the second quarter of fiscal 2024, a decrease of $3.9
million from the same period of fiscal 2023. Gross profit as a
percentage of net revenues declined by 250 basis points, primarily
due to an estimated $5.3 million unfavorable impact of nickel and
cobalt fluctuations in the second quarter of fiscal 2024 compared
to an estimated $1.7 million unfavorable impact of nickel and
cobalt fluctuations in the same period of fiscal 2023.
Selling, General and Administrative
Expense. Selling, general and administrative expense
was $13.4 million for the second quarter of fiscal 2024, an
increase of $0.7 million from the same period of fiscal 2023. The
increase in selling, general and administrative expense in the
second quarter of fiscal 2024 as compared to the second quarter of
fiscal 2023 was largely driven by $0.5 million of costs incurred as
a result of the proposed merger with Acerinox S.A. and $0.2 million
of losses on the disposal of capital equipment.
Research and Technical Expense. Research and
technical expense was $1.1 million, or 0.7% of net revenue, for the
second quarter of fiscal 2024, compared to $1.0 million, or 0.7% of
net revenue, in the same period of fiscal 2023.
Operating Income. The above factors
resulted in operating income in the second quarter of fiscal 2024
of $12.6 million, compared to $17.1 million in the same period of
fiscal 2023.
Nonoperating retirement benefit expense
(income). Nonoperating retirement benefit expense
(income) was a benefit of $0.5 million in the second quarter of
fiscal 2024 compared to a benefit of $0.4 million in the same
period of fiscal 2023. The higher nonoperating retirement benefit
recorded was primarily driven by a decrease in the discount rate
used in the actuarial valuation of the U.S. pension plan liability
as of September 30, 2023, which resulted in higher amortization of
actuarial gains in the second quarter of fiscal 2024 when compared
to the second quarter of fiscal 2023. This was partially offset by
a higher interest cost component of nonoperating retirement benefit
income in the second quarter of fiscal 2024 when compared to the
second quarter of fiscal 2023.
Interest expense. Interest expense was $2.0
million in the second quarter of fiscal 2024 compared to $1.9
million in the same period of fiscal 2023 primarily driven by
higher average borrowings on the Company’s revolving credit
facility and higher interest rates.
Income Taxes. Income tax expense was
$2.5 million during the second quarter of fiscal 2024, a decrease
of $0.8 million from expense of $3.3 million in the same period of
fiscal 2023. The decrease in income tax expense was primarily
driven by the decrease in income before income taxes of $4.6
million. Income tax expense in the second quarter of fiscal 2024 as
a percentage of income before income taxes was 22.8% as compared to
21.0% in the second quarter of fiscal 2023.
Net Income. As a result of the above factors,
net income in the second quarter of fiscal 2024 was $8.6 million, a
decrease of $3.8 million from net income of $12.3 million in the
same period of fiscal 2023.
Volumes and Pricing
Volume shipped in the second quarter of fiscal
2024 was 4.6 million pounds, which was 0.6% lower than the second
quarter of fiscal 2023 and was 1.9% lower sequentially than the
first quarter of fiscal 2024. During the first quarter of fiscal
2024, we had an unplanned three-week outage at our 4-high hot
rolling mill which delayed production and impacted shipments during
the second quarter of fiscal 2024; however, a significant portion
of the delayed shipments are expected to be made up in the second
half of fiscal 2024.
Aerospace volume increased by 8.9% and the
aerospace average selling price per pound increased by 6.3% during
the second quarter of fiscal 2024 compared to last year’s second
quarter, resulting in a 15.8%, or $10.5 million, aerospace revenue
increase compared to the prior year. Single-aisle commercial
aircraft demand remains strong. Industrial gas turbine (IGT)
volumes increased by 19.5% compared to last year’s second quarter;
however, IGT average selling price decreased 8.2%, resulting in a
9.8%, or $3.2 million, IGT revenue increase compared to the prior
year. Volume and sales growth in IGT was a result of solid customer
demand and the Company’s market share growth strategy. The combined
shipped pounds of aerospace and IGT exceeded 83% of the total
pounds shipped for the quarter. Volumes in the chemical processing
industry (CPI) decreased by 41.8% year-over-year, partially offset
by CPI average selling price increasing 6.1%. The net resulted in a
38.2%, or $10.9 million, CPI revenue decrease compared to the prior
year. Other markets revenue decreased 22.0%; however, other revenue
increased by 10.2%. The revenue decreases in CPI and Other Markets
were due to mix management actions related to low-margin
commoditized products as well as the three-week 4-high mill outage
during the first quarter of fiscal 2024 which adversely impacted
product available to sell in the second quarter of fiscal 2024.
The Company has an ongoing strategy of
increasing margins. This has been achieved by reducing processing
costs as well as increasing pricing for the high-value,
differentiated products and services it offers. The Company
implemented multiple price increases for its contract and
non-contract business as market conditions improved and in response
to higher inflation. Customer long-term agreements typically have
adjustors for specific raw material prices and for changes in the
producer price index to help cover general inflationary items. The
product average selling price per pound in the second quarter of
fiscal 2024 was $31.05, which was a 4.1% increase over the first
quarter of fiscal 2024, primarily due to the noted price increases,
raw material adjustors and product mix changes.
Gross Profit Margin Trend
Performance
The Company has made a significant strategic
effort to improve gross margins over the past few years. As a
result of this strategy, the Company reduced the volume breakeven
point by over 25%. The Company previously struggled to be
profitable at roughly 5.0 million pounds per quarter. With the
current product mix, the Company can generate profits at lower
volumes as first demonstrated in the third quarter of fiscal 2021,
producing a positive net income at only 3.7 million pounds
shipped.
Gross profit margin was 17.7% in the second
quarter of fiscal 2024 compared to 20.2% in the same period last
year and 16.8% in the first quarter of fiscal 2024. Volatility of
raw materials, specifically nickel and cobalt, have impacted gross
margins. During fiscal 2022 this impact was favorable due to rising
raw material prices that drove increased gross margins; however, in
fiscal 2023 the raw material impact turned unfavorable primarily
due to cobalt prices decreasing. The raw material impact continued
to be unfavorable in the first and second quarters of fiscal 2024
due to nickel prices decreasing which lowered gross margins. The
estimated impact from raw material volatility in the second quarter
of fiscal 2024 was a headwind of $5.3 million that compressed gross
margin by an estimated 3.5%, compared to last year’s second quarter
which had a lower raw material impact of $1.7 million that
compressed gross margin by only 1.1%. Gross profit margin,
excluding the impact of raw material prices was very similar in the
second quarter of fiscal 2024 compared to last year’s second
quarter.
Backlog
Backlog was $438.6 million at March 31, 2024, a
decrease of $10.2 million, or 2.3% from the end of the first
quarter of fiscal 2024 and a decrease of $8.1 million, or 1.8% from
the same period of fiscal 2023. Backlog pounds decreased 5.8%
during the second quarter of fiscal 2024 from the end of the first
quarter of fiscal 2024 to approximately 13.0 million pounds,
predominantly due to reduced production lead times on certain
products thereby reducing the amount of orders needing to be placed
further out in the year.
Capital Spending
Capital investment in the first six months of
fiscal 2024 was $10.9 million, and total planned capital
spending for fiscal 2024 is expected to be between $22.0 million
and $28.0 million.
Working Capital
Controllable working capital, which includes
accounts receivable, inventory, accounts payable and accrued
expenses, was $444.1 million as of March 31, 2024, a decrease of
$5.2 million, or 1.2%, from $449.4 million as of September 30,
2023. The decrease resulted primarily from inventory decreasing by
$7.0 million and accounts receivable decreasing by $5.6 million,
partially offset by accounts payable and accrued expenses
decreasing by $7.3 million during the first six months of fiscal
2024.
Liquidity
The Company had cash and cash equivalents of
$11.5 million as of March 31, 2024 compared to $10.7 million as of
September 30, 2023. Additionally, the Company had $103.2
million of borrowings against the $200.0 million line of credit
outstanding with remaining capacity available of $96.8 million as
of March 31, 2024, putting total liquidity at $108.3 million.
Net cash provided by operating activities in the
first six months of fiscal 2024 was $30.0 million compared to net
cash used in operating activities of $19.7 million in the first six
months of fiscal 2023. This year-over-year change in operating cash
flow was driven by a decrease in inventory of $8.8 million during
the first six months of fiscal 2024 compared to an increase of
$34.4 million during the same period of fiscal 2023, a decrease in
accounts receivable of $6.6 million as compared to an increase of
$1.1 million during the same period of fiscal 2023 and a decrease
in accounts payable and accrued expenses of $7.3 million during the
first six months of fiscal 2024 as compared to a decrease of $8.9
million during the same period of fiscal 2023, partially offset by
decreased net income of $16.3 million during the first six months
of fiscal 2024 as compared to $20.1 million in the same period of
fiscal 2023.
Net cash used in investing activities was $10.9
million in the first six months of fiscal 2024, which was higher
than net cash used in investing activities of $7.3 million during
the same period of fiscal 2023 due to higher additions to property,
plant and equipment.
Net cash used in financing activities was $18.5
million in the first six months of fiscal 2024, a difference of
$53.1 million from cash provided by financing activities of $34.6
million during the first six months of fiscal 2023. This difference
was primarily driven by a net repayment of $11.6 million against
the Company’s credit facilities during the first six months of
fiscal 2024 compared to a net borrowing of $33.3 million during the
same period of fiscal 2023. Additionally, there were no proceeds
from the exercise of stock options during the first six months of
fiscal 2024 compared to $8.2 million of proceeds from the exercise
of stock options during the same period of fiscal 2023 and share
repurchases were $0.6 million higher in the first six months of
fiscal 2024 compared to the same period of fiscal 2023. Dividends
paid of $5.7 million during the first six months of fiscal 2024
were higher than dividends paid of $5.6 million during the same
period of fiscal 2023.
Dividend Declared
On May 1, 2024, the Board of Directors declared
a regular quarterly cash dividend of $0.22 per outstanding share of
the Company’s common stock. The dividend is payable June 14, 2024
to stockholders of record at the close of business on May 31,
2024. Any future dividends will be at the discretion of the Board
of Directors.
Guidance
The significant raw material headwind
encountered in the second quarter is expected to persist in the
third quarter, but at a lower level, as inventory containing a
higher cost of nickel is sold. Based on continued production
momentum and the strength of both our aerospace and industrial gas
turbine markets, the Company believes that revenue and earnings are
expected to be higher in the third quarter compared to the second
quarter of fiscal 2024.
Proposed Merger Transaction with Acerinox
S.A.
On February 5, 2024, the Company entered into a
merger agreement with a subsidiary of Acerinox S.A. (the “Merger
Agreement”), pursuant to which (and subject to the terms and
conditions in the Merger Agreement) such subsidiary of Acerinox
S.A. will acquire all of the outstanding shares of the Company’s
common stock in a transaction structured as a merger of an indirect
wholly-owned subsidiary of Acerinox S.A. with and into the Company,
with the Company continuing as a surviving corporation (the
“Merger”). Acerinox S.A. is providing a full performance guaranty
with respect to its subsidiaries’ obligations under the Merger
Agreement.
Under the terms of the Merger Agreement, at the
effective time of the Merger (the “Effective Time”), each share of
the Company's common stock that is issued and outstanding as of
immediately prior to the Effective Time (other than shares of
common stock (i) held by the Company as treasury stock as of
immediately prior to the Effective Time, (ii) owned by such
subsidiary of Acerinox S.A. or any of its subsidiaries as of
immediately prior to the Effective Time or (iii) owned by
stockholders who have properly exercised appraisal rights under
Delaware law) will be automatically cancelled, extinguished and
converted into the right to receive $61.00 per share in cash,
without interest thereon.
As a result of the Merger, the Company will
become an indirect wholly-owned subsidiary of Acerinox S.A. The
completion of the Merger is subject to certain customary closing
conditions, including, among others, the adoption of the Merger
Agreement by the Company's stockholders, which was adopted on April
16, 2024, and the expiration or termination of the applicable
waiting period under the HSR Act, which expired on March 18, 2024,
and the receipt of regulatory clearances pursuant to certain other
antitrust and foreign investment laws applicable to the Merger.
Non-GAAP Financial Measures
This press release includes certain financial
measures, including Adjusted EBITDA for the fiscal quarters ended
March 31, 2023 and 2024 and Adjusted gross profit and Adjusted
gross profit % – excluding the estimated impact of nickel and
cobalt fluctuations for the fiscal quarters ended March31, 2022 and
2023 that have not been calculated in accordance with U.S.
Generally Accepted Accounting Principles (“GAAP”).
The Company believes that these non-GAAP
measures provide useful information to investors. Among other
things, they may help investors evaluate the Company’s ongoing
operations. They can assist in making meaningful period-over-period
comparisons and in identifying operating trends that would
otherwise be masked or distorted by the items subject to
adjustments. Management uses these non-GAAP measures internally to
evaluate the performance of the business, including to allocate
resources. Investors should consider these non-GAAP measures as
supplemental and in addition to, not as a substitute for or
superior to, measures of financial performance prepared in
accordance with GAAP.
Management has chosen to provide this
supplemental information to investors, analysts, and other
interested parties to enable them to perform additional analyses of
our results and to illustrate our results giving effect to the
non-GAAP adjustments. Management strongly encourages investors to
review the Company's consolidated financial statements and publicly
filed reports in their entirety and cautions investors that the
non-GAAP measures used by the Company may differ from similar
measures used by other companies, even when similar terms are used
to identify such measures.
Reconciliations of Adjusted EBITDA, Adjusted
gross profit and Adjusted gross profit % – excluding estimated
impacts of nickel and cobalt fluctuations to their most directly
comparable financial measure prepared in accordance with GAAP,
accompanied by reasons why the Company believes the non-GAAP
measures are important, are included in Schedules 6 and 7.
About Haynes International
Haynes International, Inc. is a leading
developer, manufacturer and marketer of technologically advanced,
high performance alloys, primarily for use in the aerospace,
industrial gas turbine and chemical processing industries.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains statements that
constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, each as amended. All statements other than
statements of historical fact, including statements regarding
market and industry trends and prospects and future results of
operations or financial position, made in this press release are
forward-looking. In many cases, you can identify forward-looking
statements by terminology, such as “may”, “should”, “expects”,
“intends”, “plans”, “anticipates”, “believes”, “estimates”,
“predicts”, “potential” or “continue” or the negative of such terms
and other comparable terminology. The forward-looking information
may include, among other information, statements concerning the
Company’s guidance and outlook for fiscal 2024 and beyond, overall
volume and pricing trends, cost reduction strategies and their
anticipated impact on our results, gross margin and gross margin
trends, capital expenditures, demand for our products and
operations, expected borrowings under the Company’s revolving
credit facility, dividends, the benefits of the proposed
acquisition of the Company by a subsidiary of Acerinox S.A. and the
associated integration plans, capital expenditure commitments,
anticipated future operating performance and results of the
Company, the expected management and governance of the Company
following the acquisition and expected timing of the closing of the
proposed acquisition and other transactions contemplated by the
merger agreement governing the proposed acquisition (the “Merger
Agreement”). There may also be other statements of
expectations, beliefs, future plans and strategies, anticipated
events or trends and similar expressions concerning matters that
are not historical facts. Readers are cautioned that any
such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties. Actual results may
differ materially from those in the forward-looking statements as a
result of various factors, many of which are beyond the Company’s
control.
The Company has based these forward-looking
statements on its current expectations and projections about future
events. Although the Company believes that the assumptions on
which the forward-looking statements contained herein are based are
reasonable, any of those assumptions could prove to be inaccurate.
As a result, the forward-looking statements based upon those
assumptions also could be incorrect. Risks and uncertainties
may affect the accuracy of forward-looking statements. Some, but
not all, of these risks are described in Item 1A. of Part 1 of
the Company’s Annual Report on Form 10-K for the fiscal year
ended September 30, 2023.
The Company undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
|
Schedule 1 |
|
HAYNES INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)(in
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
Net Revenues |
|
$ |
152,786 |
|
|
$ |
152,458 |
|
|
$ |
285,459 |
|
|
$ |
299,815 |
|
|
Cost of Sales |
|
|
121,908 |
|
|
|
125,444 |
|
|
|
231,543 |
|
|
|
248,093 |
|
|
Gross Profit |
|
|
30,878 |
|
|
|
27,014 |
|
|
|
53,916 |
|
|
|
51,722 |
|
|
Selling, general and administrative expense |
|
|
12,702 |
|
|
|
13,361 |
|
|
|
23,654 |
|
|
|
25,832 |
|
|
Research and technical expense |
|
|
1,047 |
|
|
|
1,098 |
|
|
|
2,020 |
|
|
|
2,200 |
|
|
Operating income |
|
|
17,129 |
|
|
|
12,555 |
|
|
|
28,242 |
|
|
|
23,690 |
|
|
Nonoperating retirement benefit income |
|
|
(365 |
) |
|
|
(498 |
) |
|
|
(731 |
) |
|
|
(996 |
) |
|
Interest income |
|
|
(10 |
) |
|
|
(26 |
) |
|
|
(16 |
) |
|
|
(49 |
) |
|
Interest expense |
|
|
1,865 |
|
|
|
2,008 |
|
|
|
3,366 |
|
|
|
4,247 |
|
|
Income before income taxes |
|
|
15,639 |
|
|
|
11,071 |
|
|
|
25,623 |
|
|
|
20,488 |
|
|
Provision for income taxes |
|
|
3,290 |
|
|
|
2,520 |
|
|
|
5,535 |
|
|
|
4,235 |
|
|
Net Income |
|
$ |
12,349 |
|
|
$ |
8,551 |
|
|
$ |
20,088 |
|
|
$ |
16,253 |
|
|
Net Income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.98 |
|
|
$ |
0.67 |
|
|
$ |
1.59 |
|
|
$ |
1.28 |
|
|
Diluted |
|
$ |
0.96 |
|
|
$ |
0.66 |
|
|
$ |
1.56 |
|
|
$ |
1.26 |
|
|
Weighted Average Common Shares Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
12,544 |
|
|
|
12,658 |
|
|
|
12,522 |
|
|
|
12,650 |
|
|
Diluted |
|
|
12,787 |
|
|
|
12,851 |
|
|
|
12,766 |
|
|
|
12,825 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share |
|
$ |
0.22 |
|
|
$ |
0.22 |
|
|
$ |
0.44 |
|
|
$ |
0.44 |
|
|
Schedule 2 |
|
HAYNES INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(Unaudited) (in thousands,
except share data) |
|
|
|
|
|
September 30, |
|
March 31, |
|
|
|
2023 |
|
|
2024 |
|
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
10,723 |
|
|
$ |
11,529 |
|
|
Accounts receivable, less allowance for credit losses of $459 and
$489 at September 30, 2023 and March 31, 2024, respectively |
|
|
106,292 |
|
|
|
100,736 |
|
|
Inventories |
|
|
414,077 |
|
|
|
407,103 |
|
|
Income taxes receivable |
|
|
2,372 |
|
|
|
2,856 |
|
|
Other current assets |
|
|
5,702 |
|
|
|
6,340 |
|
|
Total current assets |
|
|
539,166 |
|
|
|
528,564 |
|
|
Property, plant and equipment, net |
|
|
142,540 |
|
|
|
143,855 |
|
|
Deferred income taxes |
|
|
3,608 |
|
|
|
3,787 |
|
|
Other assets |
|
|
10,523 |
|
|
|
11,408 |
|
|
Goodwill |
|
|
4,789 |
|
|
|
4,789 |
|
|
Other intangible assets, net |
|
|
5,655 |
|
|
|
5,457 |
|
|
Total assets |
|
$ |
706,281 |
|
|
$ |
697,860 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
52,812 |
|
|
$ |
44,888 |
|
|
Accrued expenses |
|
|
18,201 |
|
|
|
18,812 |
|
|
Income taxes payable |
|
|
336 |
|
|
|
172 |
|
|
Accrued pension and postretirement benefits |
|
|
2,940 |
|
|
|
2,940 |
|
|
Deferred revenue - current portion |
|
|
2,500 |
|
|
|
2,500 |
|
|
Total current liabilities |
|
|
76,789 |
|
|
|
69,312 |
|
|
Revolving credit facilities - Long-term |
|
|
114,843 |
|
|
|
103,213 |
|
|
Long term debt |
|
|
— |
|
|
|
520 |
|
|
Long-term obligations (less current portion) |
|
|
7,448 |
|
|
|
7,189 |
|
|
Deferred revenue (less current portion) |
|
|
5,329 |
|
|
|
4,079 |
|
|
Deferred income taxes |
|
|
3,686 |
|
|
|
3,757 |
|
|
Operating lease liabilities |
|
|
362 |
|
|
|
1,417 |
|
|
Accrued pension benefits (less current portion) |
|
|
14,019 |
|
|
|
11,631 |
|
|
Accrued postretirement benefits (less current portion) |
|
|
49,481 |
|
|
|
50,362 |
|
|
Total liabilities |
|
|
271,957 |
|
|
|
251,480 |
|
|
Commitments and contingencies |
|
|
— |
|
|
|
— |
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
Common stock, $0.001 par value (40,000,000 shares authorized;
13,124,401 and 13,208,307 shares issued and 12,731,661 and
12,782,892 shares outstanding at September 30, 2023 and
March 31, 2024, respectively) |
|
|
13 |
|
|
|
13 |
|
|
Preferred stock, $0.001 par value (20,000,000 shares authorized,
none issued) |
|
|
— |
|
|
|
— |
|
|
Additional paid-in capital |
|
|
277,713 |
|
|
|
279,699 |
|
|
Accumulated earnings |
|
|
165,825 |
|
|
|
176,446 |
|
|
Treasury stock, (392,740 and 425,415 shares at September 30,
2023 and March 31, 2024, respectively) |
|
|
(15,600 |
) |
|
|
(17,141 |
) |
|
Accumulated other comprehensive income |
|
|
6,373 |
|
|
|
7,363 |
|
|
Total stockholders’ equity |
|
|
434,324 |
|
|
|
446,380 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
706,281 |
|
|
$ |
697,860 |
|
|
Schedule 3 |
|
HAYNES INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)(in
thousands) |
|
|
|
|
|
|
|
|
|
Six Months Ended March 31, |
|
|
|
2023 |
|
|
2024 |
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
Net income |
|
$ |
20,088 |
|
|
$ |
16,253 |
|
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities: |
|
|
|
|
|
|
|
Depreciation |
|
|
8,932 |
|
|
|
8,507 |
|
|
Amortization |
|
|
216 |
|
|
|
198 |
|
|
Pension and post-retirement expense |
|
|
1,306 |
|
|
|
1,089 |
|
|
Change in long-term obligations |
|
|
(41 |
) |
|
|
(28 |
) |
|
Stock compensation expense |
|
|
1,541 |
|
|
|
1,986 |
|
|
Deferred revenue |
|
|
(1,250 |
) |
|
|
(1,250 |
) |
|
Deferred income taxes |
|
|
231 |
|
|
|
251 |
|
|
Loss on disposition of property |
|
|
65 |
|
|
|
239 |
|
|
Change in assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,134 |
) |
|
|
6,565 |
|
|
Inventories |
|
|
(34,370 |
) |
|
|
8,801 |
|
|
Other assets |
|
|
110 |
|
|
|
(432 |
) |
|
Accounts payable and accrued expenses |
|
|
(8,888 |
) |
|
|
(7,327 |
) |
|
Income taxes |
|
|
(2,346 |
) |
|
|
(639 |
) |
|
Accrued pension and postretirement benefits |
|
|
(4,187 |
) |
|
|
(4,180 |
) |
|
Net cash provided by (used in) operating activities |
|
|
(19,727 |
) |
|
|
30,033 |
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
(7,292 |
) |
|
|
(10,896 |
) |
|
Net cash used in investing activities |
|
|
(7,292 |
) |
|
|
(10,896 |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
Revolving credit facility borrowings |
|
|
84,128 |
|
|
|
65,855 |
|
|
Revolving credit facility repayments |
|
|
(50,849 |
) |
|
|
(77,485 |
) |
|
Long term debt borrowings |
|
|
— |
|
|
|
520 |
|
|
Dividends paid |
|
|
(5,603 |
) |
|
|
(5,714 |
) |
|
Proceeds from exercise of stock options |
|
|
8,228 |
|
|
|
— |
|
|
Payment for purchase of treasury stock |
|
|
(925 |
) |
|
|
(1,541 |
) |
|
Payment for debt issuance cost |
|
|
(245 |
) |
|
|
— |
|
|
Payments on long-term obligations |
|
|
(138 |
) |
|
|
(157 |
) |
|
Net cash provided by (used in) financing activities |
|
|
34,596 |
|
|
|
(18,522 |
) |
|
Effect of exchange rates on cash |
|
|
842 |
|
|
|
191 |
|
|
Increase in cash and cash equivalents: |
|
|
8,419 |
|
|
|
806 |
|
|
Cash and cash equivalents: |
|
|
|
|
|
|
|
Beginning of period |
|
|
8,440 |
|
|
|
10,723 |
|
|
End of period |
|
$ |
16,859 |
|
|
$ |
11,529 |
|
Schedule 4
Quarterly Data
The unaudited quarterly results of operations of
the Company for the most recent five quarters are as follows.
|
|
|
Quarter Ended |
|
|
|
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
|
March 31, |
|
|
(dollars in thousands) |
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2024 |
|
|
Net revenues |
|
$ |
152,786 |
|
$ |
143,901 |
|
$ |
160,596 |
|
$ |
147,357 |
|
$ |
152,458 |
|
|
Gross profit margin |
|
|
30,878 |
|
|
26,062 |
|
|
29,782 |
|
|
24,708 |
|
|
27,014 |
|
|
Gross profit margin % |
|
|
20.2 |
% |
|
18.1 |
% |
|
18.5 |
% |
|
16.8 |
% |
|
17.7 |
% |
|
Adjusted gross profit margin(1) |
|
|
32,578 |
|
|
27,562 |
|
|
33,582 |
|
|
30,408 |
|
|
32,314 |
|
|
Adjusted gross profit margin %(1) |
|
|
21.3 |
% |
|
19.2 |
% |
|
20.9 |
% |
|
20.6 |
% |
|
21.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
12,349 |
|
|
8,759 |
|
|
13,128 |
|
|
7,702 |
|
|
8,551 |
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.98 |
|
$ |
0.69 |
|
$ |
1.03 |
|
$ |
0.60 |
|
$ |
0.67 |
|
|
Diluted |
|
$ |
0.96 |
|
$ |
0.68 |
|
$ |
1.02 |
|
$ |
0.60 |
|
$ |
0.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted gross profit margin and
adjusted gross profit margin percentage exclude estimated impact of
nickel and cobalt fluctuations (See Schedule 7 for reconciliation
to Gross profit margin).
Schedule 5
Sales by Market
The unaudited revenues, pounds shipped and
average selling price per pound of the Company for the most recent
five quarters are as follows.
|
|
|
Quarter Ended |
|
|
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
|
March 31, |
|
|
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
2024 |
|
Net revenues (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
66,612 |
|
$ |
77,456 |
|
$ |
81,805 |
|
$ |
73,346 |
|
$ |
77,140 |
|
Chemical processing |
|
|
28,605 |
|
|
17,696 |
|
|
23,003 |
|
|
20,779 |
|
|
17,669 |
|
Industrial gas turbines |
|
|
32,420 |
|
|
28,073 |
|
|
34,213 |
|
|
35,383 |
|
|
35,587 |
|
Other markets |
|
|
17,550 |
|
|
13,416 |
|
|
14,599 |
|
|
11,507 |
|
|
13,687 |
|
Total product revenue |
|
|
145,187 |
|
|
136,641 |
|
|
153,620 |
|
|
141,015 |
|
|
144,083 |
|
Other revenue |
|
|
7,599 |
|
|
7,260 |
|
|
6,976 |
|
|
6,342 |
|
|
8,375 |
|
Net revenues |
|
$ |
152,786 |
|
$ |
143,901 |
|
$ |
160,596 |
|
$ |
147,357 |
|
$ |
152,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipments by markets (in thousands of pounds) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
|
1,982 |
|
|
2,376 |
|
|
2,533 |
|
|
2,154 |
|
|
2,159 |
|
Chemical processing |
|
|
845 |
|
|
462 |
|
|
653 |
|
|
670 |
|
|
492 |
|
Industrial gas turbines |
|
|
1,430 |
|
|
1,311 |
|
|
1,412 |
|
|
1,693 |
|
|
1,709 |
|
Other markets |
|
|
410 |
|
|
278 |
|
|
269 |
|
|
213 |
|
|
281 |
|
Total shipments |
|
|
4,667 |
|
|
4,427 |
|
|
4,867 |
|
|
4,730 |
|
|
4,641 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average selling price per pound |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
33.61 |
|
$ |
32.60 |
|
$ |
32.30 |
|
$ |
34.05 |
|
$ |
35.73 |
|
Chemical processing |
|
|
33.85 |
|
|
38.30 |
|
|
35.23 |
|
|
31.01 |
|
|
35.91 |
|
Industrial gas turbines |
|
|
22.67 |
|
|
21.41 |
|
|
24.23 |
|
|
20.90 |
|
|
20.82 |
|
Other markets |
|
|
42.80 |
|
|
48.26 |
|
|
54.27 |
|
|
54.02 |
|
|
48.71 |
|
Total product (product only; excluding other
revenue) |
|
$ |
31.11 |
|
$ |
30.87 |
|
$ |
31.56 |
|
$ |
29.81 |
|
$ |
31.05 |
|
Total average selling price (including other
revenue) |
|
$ |
32.74 |
|
$ |
32.51 |
|
$ |
33.00 |
|
$ |
31.15 |
|
$ |
32.85 |
Schedule 6
HAYNES INTERNATIONAL, INC. AND
SUBSIDIARIESNON-GAAP FINANCIAL MEASURE - ADJUSTED
EBITDA ADJUSTED EBITDA AS A PERCENTAGE OF NET
REVENUES(Unaudited) (in
thousands, except share data)
Adjusted EBITDA and Adjusted EBITDA as a
Percentage of Net Revenues
Adjusted EBITDA as reported herein refers to a
financial measure that excludes from consolidated operating income
(loss) non-cash charges for depreciation, amortization and stock
compensation expense. Management believes that Adjusted EBITDA and
Adjusted EBITDA as a percentage of net revenues provides a relevant
indicator of the Company’s value by eliminating the impact of
financing and other non-cash impacts of past investments.
Management uses its results excluding these non-cash amounts to
evaluate its operating performance.
|
|
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|
|
|
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
|
Operating income |
|
$ |
17,129 |
|
$ |
12,555 |
|
$ |
28,242 |
|
$ |
23,690 |
|
|
Depreciation |
|
|
4,485 |
|
|
4,319 |
|
|
8,932 |
|
|
8,507 |
|
|
Amortization (excluding debt issuance costs recorded in interest
expense) |
|
|
32 |
|
|
31 |
|
|
65 |
|
|
64 |
|
|
Stock compensation expense |
|
|
771 |
|
|
1,108 |
|
|
1,541 |
|
|
1,986 |
|
|
Adjusted EBITDA |
|
$ |
22,417 |
|
$ |
18,013 |
|
$ |
38,780 |
|
$ |
34,247 |
|
|
Adjusted EBITDA as a percentage of Net revenues |
|
|
14.7 |
% |
|
11.8 |
% |
|
13.6 |
% |
|
11.4 |
% |
Schedule 7
HAYNES INTERNATIONAL, INC. AND
SUBSIDIARIESNON-GAAP FINANCIAL MEASURE - ADJUSTED
GROSS PROFIT MARGIN – EXCLUDING THE ESTIMATED IMPACTS OF NICKEL AND
COBALT FLUCTUATIONS(Unaudited)
(in thousands, except share data)
Adjusted Gross Profit and Adjusted Gross
Profit % – Excluding the estimated impact of nickel and cobalt
fluctuations
Management believes that Adjusted Gross profit
margin and Adjusted Gross profit % – Excluding the estimated impact
of nickel and cobalt fluctuations provide relevant indicator of the
Company’s profitability by eliminating the impact of fluctuating
impacts of nickel and cobalt prices which can compress or expand
gross profit margin. The estimated gross profit and gross profit %
impact from nickel and cobalt price fluctuations is derived from a
model developed by the Company to measure how the price changes
flow through net revenues and cost of sales. This model
incorporates flow across each different type of pricing mechanism
and the timing of how the cost of nickel and cobalt flows to cost
of sales including the impacts of the commodity price exposure of
the Company’s scrap cycle. Management uses its results
excluding these nickel and cobalt price impacts to evaluate its
operating performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
|
|
March 31, |
|
|
June 30, |
|
|
September 30, |
|
|
December 31, |
|
|
March 31, |
|
|
(dollars in thousands) |
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2024 |
|
|
Gross profit margin |
|
$ |
30,878 |
|
|
$ |
26,062 |
|
|
$ |
29,782 |
|
|
$ |
24,708 |
|
|
$ |
27,014 |
|
|
Gross profit margin % |
|
|
20.2 |
% |
|
|
18.1 |
% |
|
|
18.5 |
% |
|
|
16.8 |
% |
|
|
17.7 |
% |
|
Estimated impact of nickel and cobalt fluctuations |
|
|
1,700 |
|
|
|
1,500 |
|
|
|
3,800 |
|
|
|
5,700 |
|
|
|
5,300 |
|
|
Adjusted gross profit margin - excluding estimated impact of nickel
and cobalt fluctuations |
|
$ |
32,578 |
|
|
$ |
27,562 |
|
|
$ |
33,582 |
|
|
$ |
30,408 |
|
|
$ |
32,314 |
|
|
Adjusted gross profit margin % - excluding estimated impact of
nickel and cobalt fluctuations |
|
|
21.3 |
% |
|
|
19.2 |
% |
|
|
20.9 |
% |
|
|
20.6 |
% |
|
|
21.2 |
% |
|
|
|
|
|
Contact: |
|
Daniel Maudlin |
|
|
|
Vice President of Finance and Chief Financial Officer |
|
|
|
Haynes International, Inc. |
|
|
|
765-456-6102 |
Haynes (NASDAQ:HAYN)
過去 株価チャート
から 10 2024 まで 11 2024
Haynes (NASDAQ:HAYN)
過去 株価チャート
から 11 2023 まで 11 2024
