- Record backlog of $338.2 million as of June 30, 2022, up 20.5% from previous quarter and up 124.1% year-over-year. Order entry of $181.5 million for the quarter, with aerospace order entry of $100.1 million and 3.2 million pounds, one of the best in the Company’s history in both dollars and pounds.
- Net revenue of $130.2 million, up 11.2% versus previous quarter and 47.7% over same period last year. Revenue strength driven by Aerospace net revenues of $61.0 million, up 15.2% versus previous quarter and 79.6% over the same period last year. Aerospace revenue at 95% of pre-pandemic 2019 average.
- Gross margin continued to improve to 25.5%, up 550 basis points from the previous quarter and 1,000 basis points from the third quarter of last year. Raw material tailwinds estimated to be $4.1 million or 3.1 margin points. Excluding estimated raw material impacts from both this year and last year, the gross margin improvement is 930 basis points.
- Operating income of $20.4 million leading to Adjusted EBITDA of $26.1 million, 20.0% of revenue, exceeding a $100 million annual run-rate, as the 25% lower volume breakeven point providing profitability leverage as volumes increase (See schedule 6).
- Net income of $15.6 million, up from the previous quarter’s $8.5 million. Diluted earnings per share of $1.24, up 85% from $0.67 of the previous quarter.
- Revolver balance of $46.5 million, with increase driven by the strong backlog growth as investments in work-in-process inventory required to fuel revenue growth. Revolver utilization 46.5% with liquidity remaining solid at $62.9 million.
- U.S pension plan at approximately 92% funded with net liability at $20.2 million, down from $105.8 million beginning of last fiscal year.
- Capital investment in the first nine months of fiscal year 2022 of $11.5 million. Revised estimate for fiscal 2022 capital expenditures of $15.0 million, down from $17.7 million due to equipment supply chain constraints.
- Regular quarterly cash dividend of $0.22 per outstanding share of the Company’s common stock declared.
KOKOMO, Ind., July 28, 2022 (GLOBE NEWSWIRE) -- Haynes International, Inc. (NASDAQ GM: HAYN) (the “Company”), a leading developer, manufacturer and marketer of technologically advanced high-performance alloys, today reported financial results for the third quarter ended June 30, 2022. In addition, the Company announced that its Board of Directors has authorized a regular quarterly cash dividend of $0.22 per outstanding share.
“Our core markets are growing and we’ve executed very well on our key initiatives. The result is a quarter that finished with a record backlog, double-digit revenue growth, 25.5% gross margin, rapidly increasing earnings, and an Adjusted EBITDA of $26 million,” said Michael L. Shor, President and Chief Executive Officer. “As we look forward, we are very encouraged by increasing demand across all of our major markets, including a record $100 million in aerospace order entry in our third quarter. This provides enthusiasm for our future, especially when combined with the bottom line impact of our ongoing relentless focus on innovation, high-value differentiated products and services, and our operational improvements.”
3rd Quarter Results
Net Revenues. Net revenues were $130.2 million in the third quarter of fiscal 2022, an increase of 47.7% from $88.1 million in the same period of fiscal 2021 due to increases in volume in key markets, combined with increases in average selling price per pound in all markets. Volume was 4.5 million pounds in the third quarter of fiscal 2022, an increase of 21.7% from 3.7 million pounds in the same period of fiscal 2021. The increase in pounds sold is due to the demand recovery and strong sales in the aerospace market, which increased by 58.2%, as well as the chemical processing market, which increased by 8.4% from the third quarter of fiscal 2021. The product average selling price was $27.23 per pound in the third quarter of fiscal 2022, an increase of 23.1% from $22.12 per pound in the same period of fiscal 2021. The increase in product average selling price per pound largely reflects higher market prices of raw materials, which increased average selling price per pound by approximately $3.40 and price increases and other sales factors, which increased average selling price per pound by approximately $1.03, along with a higher-value product mix, which increased average selling price per pound by approximately $0.68.
Cost of Sales. Cost of sales was $96.9 million, or 74.5% of net revenues, in the third quarter of fiscal 2022 compared to $74.5 million, or 84.5% of net revenues, in the same period of fiscal 2021. The 100 basis point decrease in cost of sales as a percentage of revenues was primarily attributable to variable cost saving measures that enable the Company to minimize the increase in costs in periods of higher net revenues. Additionally, higher volumes sold during the quarter improved the utilization of fixed costs and eliminated the need for fixed costs to be directly expensed, as was the case in the third quarter of fiscal 2021, which had $2.0 million of costs directly expensed to Cost of Sales.
Gross Profit. As a result of the above factors, gross profit was $33.2 million for the third quarter of fiscal 2022, an increase of $19.6 million from the same period of fiscal 2021. Gross profit as a percentage of net revenue increased to 25.5% in the third quarter of fiscal 2022 as compared to 15.5% in the same period of fiscal 2021. The third quarter of fiscal 2021 was adversely impacted by the COVID-19 pandemic as volumes were significantly reduced.
Selling, General and Administrative Expense. Selling, general and administrative expense was $11.8 million for the third quarter of fiscal 2022, an increase of $0.4 million, or 3.2%, from the same period of fiscal 2021. Selling, general and administrative expense as a percentage of net revenues decreased to 9.1% for the third quarter of fiscal 2022 compared to 13.0% for the same period of fiscal 2021, largely driven by higher net revenues. Investments in consulting costs related to information system improvements as well as general inflation were the primary drivers of the increased expense in the third quarter of fiscal 2022. Additionally, the Company increased its reserves on accounts receivable which also contributed to the increase in expense.
Research and Technical Expense. Research and technical expense was $1.0 million, or 0.7% of net revenue, for the third quarter of fiscal 2022, compared to $0.8 million, or 0.9% of net revenue, in the same period of fiscal 2021.
Operating Income/(Loss). As a result of the above factors, including increased sales volume and higher pricing as well as improved gross profit, operating income in the third quarter of fiscal 2022 was $20.4 million compared to $1.4 million in the same period of fiscal 2021.
Nonoperating retirement benefit expense. Nonoperating retirement benefit expense was a benefit of $1.1 million in the third quarter of fiscal 2022 compared to an expense of $0.4 million in the same period of fiscal 2021. The difference was primarily driven by a favorable actuarial valuation of the U.S. pension plan liability as of September 30, 2021 caused by a higher-than-expected return on plan assets coupled with a higher discount rate. The amortization of this favorable valuation is recorded as a benefit to nonoperating retirement benefit expense (income).
Income Taxes. Income tax expense was $5.2 million, or 24.8% of income before income taxes, in the third quarter of fiscal 2022 compared to $0.3 million in the same period of fiscal 2021 driven primarily by a difference in income (loss) before income taxes of $20.1 million.
Net Income/(Loss). As a result of the above factors, net income in the third quarter of fiscal 2022 was $15.6 million, compared to $0.4 million in the same period of fiscal 2021.
Volumes and Pricing
Demand continues to improve and volumes continue to increase with 4.5 million pounds shipped in the third quarter of fiscal 2022, representing a sequential increase of 4.7% and a year-over-year increase of 21.7%. Aerospace volumes were 2.1 million pounds in the quarter, representing a sequential increase of 18.5% and a year-over-year increase of 58.2%. This quarter’s aerospace volume was 83% of the pre-pandemic levels of the average fiscal 2019 volume (aerospace net sales were 95% of pre-pandemic 2019 average). The Company continues to expect to return to fiscal 2019 monthly run-rate shipment levels by the end of fiscal 2022. Chemical processing volume increased sequentially 1.4% and year-over-year 8.4% driven by continued recovery from the pandemic and higher capital spending in the chemical sector. Industrial gas turbine shipments decreased sequentially (23.0)%, after last quarter’s sequential increase of 77%, and a (5.0)% decrease year-over-year, due to timing of certain shipments. Other markets sequentially increased 75.0%, due to lower shipments into the flue-gas desulphurization market in the previous quarter, and year-over-year by 2.9%. Overall, volumes are expected to continue to increase with the extremely high level of incoming orders.
The Company has an ongoing strategy of increasing pricing and margins, recognizing the high-value, differentiated products and services it offers. The Company implemented multiple price increases for contract and non-contract business as market conditions improved and in response to higher inflation. Customer long-term agreements 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 third quarter of fiscal 2022 was $27.23, which increased 7.1% sequentially and 23.1% year-over-year due to the noted price increases, raw material adjustors as well as a higher value product mix.
Gross Profit Margin Trend Performance
This quarter showed significant profitability leverage with increasing volumes to 4.5 million pounds shipped, showing continued traction and momentum as volumes recover along with rising raw material tailwinds. Gross margins continued to increase with a 25.5% gross margin this quarter compared to 20.0% last quarter (a 550 basis point improvement) and 15.5% in the third quarter of last year (a 1,000 basis point improvement). The Company has implemented focus initiatives designed to increase pricing and reduce costs. These initiatives, combined with improved volumes compared to the same quarter last year, has driven growth in gross margins and profitability at a much lower volume breakeven point. The Company previously needed to sell more than five million pounds to be profitable. Recent quarters demonstrate the Company’s successful reduction of its breakeven point by roughly 25% with the current mix.
Backlog
The Company experienced continued high levels of order entry over the past quarter across each of its core markets totaling $181.5 million, led by aerospace, which had a $100.1 million order entry and a 1.6 book-to-bill ratio (customer orders divided by net revenues). Backlog was a record $338.2 million at June 30, 2022, an increase of $57.5 million, or 20.5%, from $280.7 million at March 31, 2022. Backlog pounds at June 30, 2022 increased 13.8% during the third quarter to approximately 12.1 million pounds, which is the highest level of backlog pounds in the Company’s history. The average selling price of products in the Company’s backlog increased to $27.89 per pound at June 30, 2022 from $26.35 per pound at March 30, 2022.
Capital Spending
During the first nine months of fiscal 2022, capital investment was $11.5 million, and total planned capital expenditures for fiscal 2022 are expected to be approximately $15.0 million, which is lower than the previous estimate of $17.7 million due to equipment supply constraints. The Company does not expect any impact on operations as a result of these constraints.
Pension and Postretirement Plans
The Company’s U.S. pension glide path strategy, adopted in fiscal 2021, is in place with changes to the asset allocation including a customized liability-driven investing strategy, which is intended to reduce interest rate and equity risks. The Company expects significantly reduced volatility going forward related to the pension funding percentage (the U.S. pension plan is currently approximately 92% funded) and reduced pension and postretirement expense ($6.0 million less in fiscal year 2021 vs. 2022). As of the end of the third quarter of fiscal 2022, the U.S. net pension liability was approximately $20.7 million, a reduction of $85.1 million below the $105.8 million on the balance sheet at the beginning of fiscal 2021. Inclusive of the retiree healthcare liability and U.K. pension asset, the net liability decrease is $98.1 million since the beginning of fiscal year 2021.
Working Capital
Controllable working capital, which includes accounts receivable, inventory, accounts payable and accrued expenses, was $339.3 million at June 30, 2022, an increase of $100.7 million, or 42.2%, from $238.7 million at September 30, 2021. The increase resulted primarily from inventory increasing by $95.6 million and accounts receivable increasing by $21.6 million during the first nine months of fiscal 2022, partially offset by accounts payable and accrued expenses increasing by $16.5 million during the same period. The Company continued to build work-in-process inventory during the nine-month period in response to the rapidly growing backlog.
Liquidity
The Company had cash and cash equivalents of $9.4 million at June 30, 2022, compared to $47.7 million at September 30, 2021. Additionally, the Company had $46.5 million of borrowings against the line of credit outstanding as of June 30, 2022.
Net cash used in operating activities in the first nine months of fiscal 2022 was $57.6 million compared to net cash provided by operating activities of $40.2 million in the first nine months of fiscal 2021, a difference of $97.8 million. Cash used in operating activities in the first nine months of fiscal 2022 was driven by an increase in inventory of $98.9 million during the first nine months of fiscal 2022 as compared to a decrease in inventory of $18.5 million during the same period of fiscal 2021, and an increase in accounts receivable of $24.3 million during the first nine months of fiscal 2022 as compared to a decrease in accounts receivable of $0.1 million during the same period of fiscal 2021. This was partially offset by net income of $28.8 million in the first nine months of fiscal 2022 as compared to net loss of $(11.2) million during the same period of fiscal 2021.
Net cash used in investing activities was $11.5 million in the first nine months of fiscal 2022, which was higher than cash used in investing activities of $4.2 million during the same period of fiscal 2021 due to higher additions to property, plant and equipment. Capital spending in fiscal 2022 reflects a more normal level of investment, however, below the rate of depreciation, after lower than historical levels of investment in fiscal 2021.
Net cash provided by financing activities was $31.5 million in the first nine months of fiscal 2022, a difference of $41.3 million from cash used in financing activities of $9.8 million during the first nine months of fiscal 2021. This difference was primarily driven by a net borrowing of $46.5 million against the revolving line of credit during the first nine months of fiscal 2022, partially offset by share repurchases of $6.8 million in the first nine months of fiscal 2022 as compared to $0.2 million during the same period of fiscal 2021. Dividends paid of $8.3 million during the first nine months of fiscal 2022 were comparable to same period of fiscal 2021.
Dividend Declared
On July 28, 2022, the Company announced that 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 September 15, 2022 to stockholders of record at the close of business on September 1, 2022.
Guidance
The company intends to continue the ramp up of both production and sales levels in response to the record backlog growth. We expect revenue and earnings in our fourth quarter of fiscal year 2022 to be slightly above the results from the third-quarter of fiscal year 2022.
Earnings Conference Call
The Company will host a conference call on Friday, July 29, 2022 to discuss its results for the third quarter of fiscal 2022. Michael Shor, President and Chief Executive Officer, and Daniel Maudlin, Vice President of Finance and Chief Financial Officer, will host the call and be available to answer questions.
To participate, please dial the teleconferencing number shown below five minutes prior to the scheduled conference time.
| Date: | Friday, July 29, 2022 | Dial-In Numbers: | 888-506-0062 (Domestic) | |
| Time: | 9:00 a.m. Eastern Time | 973-528-0011 (International) | ||
| Access Code: | 408289 | |||
A live Webcast of the conference call will be available at www.haynesintl.com.
For those unable to participate, a teleconference replay will be available from Friday, July 29th at 11:00 a.m. ET, through 11:59 p.m. ET on Sunday, August 28, 2022. To listen to the replay, please dial:
| Replay: | 877-481-4010 (Domestic) 919-882-2331 (International) |
| Replay Passcode: | 45910 |
A replay of the Webcast will also be available for one year at www.haynesintl.com.
Non-GAAP Financial Measures
This press release includes discussions of a financial measure, Adjusted EBITDA, that has not been determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP). A reconciliation of Adjusted EBITDA to its most directly comparable financial measure prepared in accordance with GAAP, accompanied by reasons why the Company believes the non-GAAP measure is important, is included in the attached schedules.
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 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 outlook for fiscal 2022 and beyond, overall volume and pricing trends, cost reduction strategies and their anticipated results on our results, capital expenditures, demand for our products and operations, dividends and the impact of COVID-19 on the economy and our business, including the measures taken by governmental authorities to address it, which may precipitate or exacerbate other risks and/or uncertainties.. 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, including our expectations of the impact of the recent COVID-19 pandemic. 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, 2021.
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 SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data) | ||||||||||||||||
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2021 | 2022 | 2021 | 2022 | |||||||||||||
| Net revenues | $ | 88,143 | $ | 130,165 | $ | 242,383 | $ | 346,651 | ||||||||
| Cost of sales | 74,485 | 96,943 | 219,353 | 272,239 | ||||||||||||
| Gross profit | 13,658 | 33,222 | 23,030 | 74,412 | ||||||||||||
| Selling, general and administrative expense | 11,475 | 11,847 | 32,465 | 34,991 | ||||||||||||
| Research and technical expense | 831 | 957 | 2,482 | 2,806 | ||||||||||||
| Operating income (loss) | 1,352 | 20,418 | (11,917 | ) | 36,615 | |||||||||||
| Nonoperating retirement benefit expense (income) | 359 | (1,088 | ) | 1,077 | (3,264 | ) | ||||||||||
| Interest income | (4 | ) | (1 | ) | (9 | ) | (15 | ) | ||||||||
| Interest expense | 298 | 750 | 900 | 1,564 | ||||||||||||
| Income (loss) before income taxes | 699 | 20,757 | (13,885 | ) | 38,330 | |||||||||||
| Provision for (benefit from) income taxes | 277 | 5,149 | (2,648 | ) | 9,579 | |||||||||||
| Net income (loss) | $ | 422 | $ | 15,608 | $ | (11,237 | ) | $ | 28,751 | |||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | 0.03 | $ | 1.25 | $ | (0.91 | ) | $ | 2.30 | |||||||
| Diluted | $ | 0.03 | $ | 1.24 | $ | (0.91 | ) | $ | 2.28 | |||||||
| Weighted Average Common Shares Outstanding | ||||||||||||||||
| Basic | 12,515 | 12,339 | 12,507 | 12,346 | ||||||||||||
| Diluted | 12,676 | 12,459 | 12,507 | 12,507 | ||||||||||||
| Dividends declared per common share | $ | 0.22 | $ | 0.22 | $ | 0.66 | $ | 0.66 | ||||||||
| Schedule 2 | ||||||||
| HAYNES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share data) | ||||||||
| September 30, | June 30, | |||||||
| 2021 | 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 47,726 | $ | 9,438 | ||||
| Accounts receivable, less allowance for doubtful accounts of $553 and $739 at September 30, 2021 and June 30, 2022, respectively | 57,964 | 79,562 | ||||||
| Inventories | 248,495 | 344,088 | ||||||
| Income taxes receivable | 1,292 | 12 | ||||||
| Other current assets | 6,129 | 4,595 | ||||||
| Total current assets | 361,606 | 437,695 | ||||||
| Property, plant and equipment, net | 147,248 | 144,216 | ||||||
| Deferred income taxes | 16,397 | 12,077 | ||||||
| Other assets | 10,829 | 10,708 | ||||||
| Goodwill | 4,789 | 4,789 | ||||||
| Other intangible assets, net | 5,586 | 5,039 | ||||||
| Total assets | $ | 546,455 | $ | 614,524 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 47,680 | $ | 66,437 | ||||
| Accrued expenses | 20,100 | 17,871 | ||||||
| Income taxes payable | 379 | 1,751 | ||||||
| Accrued pension and postretirement benefits | 3,554 | 3,554 | ||||||
| Revolving credit facilities | — | 46,500 | ||||||
| Deferred revenue—current portion | 2,500 | 2,500 | ||||||
| Total current liabilities | 74,213 | 138,613 | ||||||
| Long-term obligations (less current portion) | 8,301 | 8,030 | ||||||
| Deferred revenue (less current portion) | 10,329 | 8,454 | ||||||
| Deferred income taxes | 3,459 | 3,361 | ||||||
| Operating lease liabilities | 664 | 764 | ||||||
| Accrued pension benefits (less current portion) | 26,663 | 20,698 | ||||||
| Accrued postretirement benefits (less current portion) | 79,505 | 80,531 | ||||||
| Total liabilities | 203,134 | 260,451 | ||||||
| Commitments and contingencies | — | — | ||||||
| Stockholders’ equity: | ||||||||
| Common stock, $0.001 par value (40,000,000 shares authorized, 12,757,778 and 12,825,922 shares issued and 12,562,140 and 12,462,478 shares outstanding at September 30, 2021 and June 30, 2022, respectively) | 13 | 13 | ||||||
| Preferred stock, $0.001 par value (20,000,000 shares authorized, 0 shares issued and outstanding) | — | — | ||||||
| Additional paid-in capital | 262,057 | 265,154 | ||||||
| Accumulated earnings | 101,015 | 121,495 | ||||||
| Treasury stock, 195,638 shares at September 30, 2021 and 363,444 shares at June 30, 2022 | (7,423 | ) | (14,218 | ) | ||||
| Accumulated other comprehensive loss | (12,341 | ) | (18,371 | ) | ||||
| Total stockholders’ equity | 343,321 | 354,073 | ||||||
| Total liabilities and stockholders’ equity | $ | 546,455 | $ | 614,524 | ||||
| Schedule 3 | ||||||||
| HAYNES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) | ||||||||
| Nine Months Ended June 30, | ||||||||
| 2021 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (11,237 | ) | $ | 28,751 | |||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | 14,383 | 13,810 | ||||||
| Amortization | 350 | 547 | ||||||
| Pension and post-retirement expense - U.S. and U.K. | 6,119 | 1,650 | ||||||
| Change in long-term obligations | (24 | ) | (15 | ) | ||||
| Stock compensation expense | 3,371 | 2,750 | ||||||
| Deferred revenue | (1,875 | ) | (1,875 | ) | ||||
| Deferred income taxes | (3,865 | ) | 4,182 | |||||
| Loss on disposition of property | 23 | 5 | ||||||
| Change in assets and liabilities: | ||||||||
| Accounts receivable | 145 | (24,312 | ) | |||||
| Inventories | 18,468 | (98,880 | ) | |||||
| Other assets | (275 | ) | 1,666 | |||||
| Accounts payable and accrued expenses | 18,009 | 18,045 | ||||||
| Income taxes | 2,830 | 2,666 | ||||||
| Accrued pension and postretirement benefits | (6,232 | ) | (6,589 | ) | ||||
| Net cash provided by (used in) operating activities | 40,190 | (57,599 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Additions to property, plant and equipment | (4,155 | ) | (11,464 | ) | ||||
| Net cash used in investing activities | (4,155 | ) | (11,464 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Revolving credit facility borrowings | — | 64,500 | ||||||
| Revolving credit facility repayments | — | (18,000 | ) | |||||
| Dividends paid | (8,395 | ) | (8,329 | ) | ||||
| Proceeds from exercise of stock options | — | 347 | ||||||
| Payment for purchase of treasury stock | (238 | ) | (6,795 | ) | ||||
| Payment for debt issuance cost | (997 | ) | — | |||||
| Payments on long-term obligations | (161 | ) | (183 | ) | ||||
| Net cash used in financing activities | (9,791 | ) | 31,540 | |||||
| Effect of exchange rates on cash | 682 | (765 | ) | |||||
| Increase (decrease) in cash and cash equivalents: | 26,926 | (38,288 | ) | |||||
| Cash and cash equivalents: | ||||||||
| Beginning of period | 47,238 | 47,726 | ||||||
| End of period | $ | 74,164 | $ | 9,438 | ||||
| Schedule 4 | ||||||||||||||||
| Quarterly Data | ||||||||||||||||
| The unaudited quarterly results of operations of the Company for the most recent five quarters are as follows. | ||||||||||||||||
| Quarter Ended | ||||||||||||||||
| June 30, | September 30, | December 31, | March 31, | June 30, | ||||||||||||
| (dollars in thousands) | 2021 | 2021 | 2021 | 2022 | 2022 | |||||||||||
| Net revenues | $ | 88,143 | $ | 95,278 | $ | 99,430 | $ | 117,056 | $ | 130,165 | ||||||
| Gross profit margin | 13,658 | 16,700 | 17,777 | 23,413 | 33,222 | |||||||||||
| Gross profit margin % | 15.5 | % | 17.5 | % | 17.9 | % | 20.0 | % | 25.5 | % | ||||||
| Net income (loss) | 422 | 2,554 | 4,659 | 8,484 | 15,608 | |||||||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | 0.03 | $ | 0.20 | $ | 0.37 | $ | 0.68 | $ | 1.25 | ||||||
| Diluted | $ | 0.03 | $ | 0.20 | $ | 0.37 | $ | 0.67 | $ | 1.25 | ||||||
| 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 | ||||||||||||||||||||
| June 30, | September 30, | December 31, | March 31, | June 30, | ||||||||||||||||
| 2021 | 2021 | 2021 | 2022 | 2022 | ||||||||||||||||
| Net revenues (in thousands) | ||||||||||||||||||||
| Aerospace | $ | 33,950 | $ | 38,966 | $ | 48,455 | $ | 52,918 | $ | 60,981 | ||||||||||
| Chemical processing | 17,010 | 15,813 | 17,450 | 22,850 | 24,180 | |||||||||||||||
| Industrial gas turbines | 17,835 | 18,534 | 14,598 | 24,788 | 23,991 | |||||||||||||||
| Other markets | 13,709 | 16,056 | 14,487 | 9,755 | 14,518 | |||||||||||||||
| Total product revenue | 82,504 | 89,369 | 94,990 | 110,311 | 123,670 | |||||||||||||||
| Other revenue | 5,639 | 5,909 | 4,440 | 6,745 | 6,495 | |||||||||||||||
| Net revenues | $ | 88,143 | $ | 95,278 | $ | 99,430 | $ | 117,056 | $ | 130,165 | ||||||||||
| Shipments by markets (in thousands of pounds) | ||||||||||||||||||||
| Aerospace | 1,354 | 1,528 | 1,864 | 1,808 | 2,142 | |||||||||||||||
| Chemical processing | 814 | 722 | 794 | 870 | 882 | |||||||||||||||
| Industrial gas turbines | 1,147 | 1,178 | 799 | 1,416 | 1,090 | |||||||||||||||
| Other markets | 415 | 538 | 420 | 244 | 427 | |||||||||||||||
| Total shipments | 3,730 | 3,966 | 3,877 | 4,338 | 4,541 | |||||||||||||||
| Average selling price per pound | ||||||||||||||||||||
| Aerospace | $ | 25.07 | $ | 25.50 | $ | 26.00 | $ | 29.27 | $ | 28.47 | ||||||||||
| Chemical processing | 20.90 | 21.90 | 21.98 | 26.26 | 27.41 | |||||||||||||||
| Industrial gas turbines | 15.55 | 15.73 | 18.27 | 17.51 | 22.01 | |||||||||||||||
| Other markets | 33.03 | 29.84 | 34.49 | 39.98 | 34.00 | |||||||||||||||
| Total product (product only; excluding other revenue) | 22.12 | 22.53 | 24.50 | 25.43 | 27.23 | |||||||||||||||
| Total average selling price (including other revenue) | $ | 23.63 | $ | 24.02 | $ | 25.65 | $ | 26.98 | $ | 28.66 | ||||||||||
| Schedule 6 | ||||||||||||||||
| HAYNES INTERNATIONAL, INC. AND SUBSIDIARIES ADJUSTED EBITDA – NON-GAAP FINANCIAL MEASURE (Unaudited) (in thousands, except share data) | ||||||||||||||||
| Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
| 2021 | 2022 | 2021 | 2022 | |||||||||||||
| Operating income (loss) | $ | 1,352 | $ | 20,418 | $ | (11,917 | ) | $ | 36,615 | |||||||
| Depreciation | 4,795 | 4,558 | 14,383 | 13,810 | ||||||||||||
| Amortization | 119 | 225 | 350 | 547 | ||||||||||||
| Stock compensation expense | 1,158 | 933 | 3,371 | 2,750 | ||||||||||||
| Adjusted EBITDA | $ | 7,424 | $ | 26,134 | $ | 6,187 | $ | 53,722 | ||||||||
Management believes that Adjusted EBITDA 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.
| Contact: | Daniel Maudlin | |
| Vice President of Finance and Chief Financial Officer | ||
| Haynes International, Inc. | ||
| 765-456-6102 |
