Strong performance in Aerospace & Defense propels
sequential growth
- Q2 2024 sales of $1.1 billion,
up 5% from Q1 2024
- Q2 2024 net income attributable to ATI of $81.9 million, or $0.58 per share, up 26% from Q1 2024
- Aerospace & defense represent 62% of Q2 2024 sales, up
from 59% of Q1 2024 sales
- Non-GAAP Information*
- Q2 adjusted net income attributable to ATI of
$86.0 million or $0.60 per share
- Q2 2024 ATI adjusted EBITDA of $182.6 million, or 16.7% of sales
DALLAS, Aug. 6, 2024
/PRNewswire/ -- ATI Inc. (NYSE: ATI) reported second quarter 2024
results, with sales of $1.10 billion
and net income attributable to ATI of $81.9
million, or $0.58 per
share.
|
|
|
|
|
Sequential
|
|
|
|
Y-O-Y
|
|
($ in millions except
per share amounts)
|
Q2
2024
|
|
Q1
2024
|
|
Change
|
|
Q2
2023
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$1,095.3
|
|
$1,042.9
|
|
5 %
|
|
$1,046.0
|
|
5 %
|
|
Net income attributable
to ATI
|
$81.9
|
|
$66.1
|
|
24 %
|
|
$90.4
|
|
(9) %
|
|
Earnings per
share
|
$0.58
|
|
$0.46
|
|
26 %
|
|
$0.62
|
|
(6) %
|
|
Non-GAAP
information*
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to ATI*
|
$86.0
|
|
$68.4
|
|
26 %
|
|
$100.6
|
|
(15) %
|
|
Adjusted earnings per
share*
|
$0.60
|
|
$0.48
|
|
25 %
|
|
$0.69
|
|
(13) %
|
|
ATI adjusted
EBITDA*
|
$182.6
|
|
$151.0
|
|
21 %
|
|
$164.2
|
|
11 %
|
|
|
* Detailed
reconciliations of the reported information under accounting
principles generally accepted in the United States (U.S.
GAAP)
to adjusted
non-GAAP figures are included in accompanying financial
tables.
|
Adjusted earnings per share* for Q2 2024 was $0.60, and ATI adjusted EBITDA* was
$182.6 million, or 16.7% of
sales. Q2 2024 adjusted results exclude pre-tax charges of
$5.4 million consisting of
$5.5 million of inventory write-downs
related to our ongoing European restructuring and $1.8 million of start-up related costs. These
pre-tax charges were partially offset by credits of $1.9 million due to lower severance reserves
primarily for our ongoing European restructuring. Q1 2024
adjusted results exclude pre-tax charges of $3.1 million, primarily consisting of start-up
related costs. Q2 2023 adjusted results exclude pre-tax charges of
$4.5 million for start-up related
costs, $2.8 million primarily for
asset write-offs for a facility closure, $2.7 million of severance-related restructuring
charges, and $0.6 million related to
the loss on the sale of our Northbrook,
IL operation.
"ATI's strong 2024 performance continued in the second quarter,"
said Kimberly A. Fields, President
and CEO. "Growth in aerospace & defense accelerated in the
second quarter, with sales increasing sequentially by 11%. This is
due in part to the diversification in our jet engine and airframe
customer bases. ATI is on every major commercial platform flying
today," she said.
"With a strong focus on execution, we delivered on second
quarter expectations for adjusted EBITDA and adjusted earnings per
share," said Fields. "Our efforts to improve working capital
intensity yielded significant improvements in year-over-year
operating cash flow performance," she said. "Overall, consolidated
adjusted EBITDA, as a percentage of sales, was up 100 basis points
over the prior year, reflecting improving operational performance
and leverage from higher production volumes."
Operating Results by Segment
|
High Performance
Materials & Components (HPMC)
|
|
|
|
|
|
|
($ millions)
|
Q2
2024
|
|
Q1
2024
|
|
Q2
2023
|
|
Sales
|
$562.0
|
|
$529.9
|
|
$527.1
|
|
|
|
|
|
|
|
Segment
EBITDA
|
$113.8
|
|
$97.6
|
|
$109.7
|
|
% of Sales
|
20.2 %
|
|
18.4 %
|
|
20.8 %
|
- HPMC's second quarter 2024 sales increased $32 million, or 6%, compared to the first quarter
2024, primarily due to an 8% increase in aerospace & defense
sales. Overall aerospace & defense sales were 85% of total HPMC
sales in the second quarter 2024. Second quarter 2024 sales
improved 7% compared to second quarter 2023, with total aerospace
& defense related sales increasing 9% compared to the prior
year period.
- HPMC segment EBITDA was $113.8
million, or 20.2% of sales. Increased volumes on
higher-margin latest generation commercial aerospace platforms
drove sequential incremental margins.
- Second quarter 2024 results included a $3.5 million benefit from the recognition of
previously deferred employee retention credits, which were mostly
offset by higher incentive compensation costs.
|
Advanced Alloys &
Solutions (AA&S)
|
|
|
|
|
|
|
($ millions)
|
Q2
2024
|
|
Q1
2024
|
|
Q2
2023
|
|
Sales
|
$533.3
|
|
$513.0
|
|
$518.9
|
|
|
|
|
|
|
|
Segment
EBITDA
|
$87.5
|
|
$71.8
|
|
$74.1
|
|
% of Sales
|
16.4 %
|
|
14.0 %
|
|
14.3 %
|
- AA&S second quarter 2024 sales increased $20 million, or 4%, compared to the first quarter
2024, a result of increased aerospace & defense and specialty
energy sales. These increases were partially offset by lower
conventional energy sales. Overall aerospace & defense sales
were 39% of total AA&S sales in the second quarter 2024. Second
quarter 2024 sales increased 3% compared to the second quarter
2023. Higher sales to aerospace & defense, specialty energy and
medical end markets were partially offset by lower conventional
energy sales.
- AA&S segment EBITDA was $87.5
million, or 16.4% of sales. Sequential margin improvement
was primarily due to improved sales mix from increased deliveries
of titanium.
- Second quarter 2024 results included a $5.1 million benefit from the recognition of
previously deferred employee retention credits, which were mostly
offset by higher incentive compensation costs.
Corporate Items and Cash
- Restructuring and other charges:
- Second quarter 2024: $5.4 million
includes pre-tax charges of $5.5
million of inventory write-downs related to our ongoing
European restructuring and $1.8
million of start-up related costs. These pre-tax charges
were partially offset by credits of $1.9
million due to lower severance reserves primarily for our
ongoing European restructuring.
- First quarter 2024: $3.1 million
for start-up and restructuring related costs.
- Second quarter 2023: $9.2 million
includes pre-tax charges of $4.5
million for start-up related costs, $2.8 million primarily for asset write-offs for a
facility closure, of which $0.8
million was accelerated depreciation on fixed assets, and
$2.7 million of severance-related
restructuring charges.
- Corporate expenses in the second quarter 2024 were $19.4 million, compared to $17.1 million in the first quarter 2024, and
$17.7 million in the prior year
quarter. The increase in second quarter 2024 was due to higher
incentive compensation costs compared to prior periods.
- Closed operations and other income/expense was income of
$0.7 million in the second quarter
2024, compared to expense of $1.3
million in the first quarter 2024, and expense of
$1.9 million in the prior year
quarter. The second quarter 2024 included a $2.3 million gain from the sale of our previously
idled Houston, PA facility.
- Second quarter 2024 results include a $25.3 million income tax provision, or an
effective tax rate of 22.8%. First quarter 2024 results include a
$16.9 million income tax provision,
or an effective tax rate of 19.8%. Second quarter 2023 results
include a tax provision of $3.7
million, or an effective tax rate of 3.8%. The effective tax
rate for the second quarter 2024 increased compared to the first
quarter 2024 primarily due to lower discrete tax benefits. The
Company's effective tax rate for second quarter 2023 was lower than
the second quarter 2024 due to the net valuation allowance position
in the U.S.
- For the second quarter of 2024, cash provided by operating
activities was $101 million, and cash
provided by operating activities was $2
million on a year-to-date basis. Second quarter 2024 managed
working capital as a percent of sales was 35.5%, which was down
slightly from 35.9% in the first quarter 2024. Capital expenditures
for the second quarter 2024 were $60
million.
- Cash on hand at June 30, 2024 was
$426 million, and available
additional liquidity under the asset-based lending (ABL) credit
facility was approximately $556
million. As of June 30, 2024,
we had no outstanding borrowings on the ABL credit facility. ATI
has no significant debt maturities until the second quarter
2025.
Outlook
"Our execution and ability to capitalize on market opportunities
allows us to drive increased margins and generate strong operating
cash flow," said Fields. "ATI's capabilities, long-term agreements
and backlog positions us to reaffirm our full year outlook. Our
clear strategy of leading in aerospace & defense and
'aero-like' markets puts us on track us to meet our 2024 guidance.
We continue to be confident in our ability to deliver our 2025 and
2027 financial targets. Our recently announced new sales
commitments of $4 billion from the
Farnborough International Airshow, which are predominantly for
nickel alloys, include $550 million
of revenue for 2027. This further demonstrates that we remain on
track to exceed both $5 billion in
revenue and $1 billion in adjusted
EBITDA by 2027."
***********
ATI will conduct a conference call with investors and analysts
on Tuesday, August 6, 2024, at 8:30
a.m. ET to discuss the financial results. The conference
call will be broadcast, and accompanying presentation slides will
be available, at ATImaterials.com. To access the broadcast, click
on "Conference Call." Replay of the conference call will be
available on the ATI website.
This news release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Certain statements in this news release relate to future
events and expectations and, as such, constitute forward-looking
statements. Forward-looking statements, which may contain such
words as "anticipates," "believes," "estimates," "expects,"
"would," "should," "will," "will likely result," "forecast,"
"outlook," "projects," and similar expressions, are based on
management's current expectations and include known and unknown
risks, uncertainties and other factors, many of which we are unable
to predict or control. Our performance or achievements may differ
materially from those expressed or implied in any forward-looking
statements due to the following factors, among others: (a) material
adverse changes in economic or industry conditions generally,
including global supply and demand conditions and prices for our
specialty materials; (b) material adverse changes in the markets we
serve; (c) our inability to achieve the level of cost savings,
productivity improvements, synergies, growth or other benefits
anticipated by management from strategic investments and the
integration of acquired businesses; (d) volatility in the price and
availability of the raw materials that are critical to the
manufacture of our products; (e) declines in the value of our
defined benefit pension plan assets or unfavorable changes in laws
or regulations that govern pension plan funding; (f) labor disputes
or work stoppages; (g) equipment outages; (h) business and economic
disruptions associated with extraordinary events beyond our
control, such as war, terrorism, international conflicts, public
health issues, such as epidemics or pandemics, natural disasters
and climate-related events that may arise in the future and (i)
other risk factors summarized in our Annual Report on Form 10-K for
the year ended December 31, 2023, and in other reports filed with
the Securities and Exchange Commission. We assume no duty to update
our forward-looking statements.
ATI: Proven to Perform.
ATI (NYSE: ATI) is a global producer of high performance
materials and solutions for the global aerospace & defense
markets, and critical applications in electronics, medical and
specialty energy. We're solving the world's most difficult
challenges through materials science. We partner with our customers
to deliver extraordinary materials that enable their greatest
achievements: their products fly higher and faster, burn hotter,
dive deeper, stand stronger and last longer. Our proprietary
process technologies, unique customer partnerships and commitment
to innovation deliver materials and solutions for today and the
evermore challenging environments of tomorrow. We are proven
to perform anywhere. Learn more at ATImaterials.com.
|
ATI
Inc.
Consolidated
Statements of Operations
(Unaudited, dollars
in millions, except per share amounts)
|
|
|
Fiscal Quarter
Ended
|
|
Fiscal
Year-To-Date
Period
Ended
|
|
June
30,
|
|
March
31,
|
|
July
2,
|
|
June
30,
|
|
July
2,
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
1,095.3
|
|
$ 1,042.9
|
|
$
1,046.0
|
|
$
2,138.2
|
|
$
2,084.1
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
867.9
|
|
845.5
|
|
836.9
|
|
1,713.4
|
|
1,681.8
|
|
Gross profit
|
227.4
|
|
197.4
|
|
209.1
|
|
424.8
|
|
402.3
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses
|
88.9
|
|
82.0
|
|
85.4
|
|
170.9
|
|
166.0
|
|
Restructuring charges
(credits)
|
(1.9)
|
|
0.2
|
|
2.7
|
|
(1.7)
|
|
2.7
|
|
Loss (gain) on asset
sales and sales of businesses, net
|
(2.2)
|
|
—
|
|
0.7
|
|
(2.2)
|
|
0.7
|
|
Operating
income
|
142.6
|
|
115.2
|
|
120.3
|
|
257.8
|
|
232.9
|
|
Nonoperating retirement
benefit expense
|
(3.7)
|
|
(3.7)
|
|
(2.5)
|
|
(7.4)
|
|
(4.9)
|
|
Interest expense,
net
|
(28.4)
|
|
(26.6)
|
|
(21.3)
|
|
(55.0)
|
|
(41.2)
|
|
Other income,
net
|
0.4
|
|
0.4
|
|
0.7
|
|
0.8
|
|
1.3
|
|
Income before income
taxes
|
110.9
|
|
85.3
|
|
97.2
|
|
196.2
|
|
188.1
|
|
Income tax
provision
|
25.3
|
|
16.9
|
|
3.7
|
|
42.2
|
|
8.0
|
|
Net
income
|
$
85.6
|
|
$
68.4
|
|
$
93.5
|
|
$
154.0
|
|
$
180.1
|
|
Less: Net income
attributable to noncontrolling interests
|
3.7
|
|
2.3
|
|
3.1
|
|
6.0
|
|
5.2
|
|
Net income
attributable to ATI
|
$
81.9
|
|
$
66.1
|
|
$
90.4
|
|
$
148.0
|
|
$
174.9
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
attributable to ATI per common share
|
$
0.66
|
|
$
0.52
|
|
$
0.70
|
|
$
1.18
|
|
$
1.36
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
attributable to ATI per common share
|
$
0.58
|
|
$
0.46
|
|
$
0.62
|
|
$
1.04
|
|
$
1.20
|
|
ATI
Inc.
Sales and EBITDA by
Business Segment
(Unaudited, dollars
in millions)
|
|
|
Fiscal Quarter
Ended
|
|
Fiscal
Year-To-Date
Period
Ended
|
|
June
30,
|
|
March
31,
|
|
July
2,
|
|
June
30,
|
|
July
2,
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
High Performance
Materials & Components
|
$
562.0
|
|
$
529.9
|
|
$
527.1
|
|
$
1,091.9
|
|
$
998.2
|
|
Advanced Alloys &
Solutions
|
533.3
|
|
513.0
|
|
518.9
|
|
1,046.3
|
|
1,085.9
|
|
Total external
sales
|
$
1,095.3
|
|
$
1,042.9
|
|
$
1,046.0
|
|
$
2,138.2
|
|
$
2,084.1
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
High Performance
Materials & Components
|
$
113.8
|
|
$
97.6
|
|
$
109.7
|
|
$ 211.4
|
|
$
191.3
|
|
% of Sales
|
20.2 %
|
|
18.4 %
|
|
20.8 %
|
|
19.4 %
|
|
19.2 %
|
|
Advanced Alloys &
Solutions
|
87.5
|
|
71.8
|
|
74.1
|
|
159.3
|
|
157.8
|
|
% of Sales
|
16.4 %
|
|
14.0 %
|
|
14.3 %
|
|
15.2 %
|
|
14.5 %
|
|
Total segment
EBITDA
|
201.3
|
|
169.4
|
|
183.8
|
|
370.7
|
|
349.1
|
|
% of Sales
|
18.4 %
|
|
16.2 %
|
|
17.6 %
|
|
17.3 %
|
|
16.8 %
|
|
Corporate
expenses
|
(19.4)
|
|
(17.1)
|
|
(17.7)
|
|
(36.5)
|
|
(34.6)
|
|
Closed operations and
other income (expense)
|
0.7
|
|
(1.3)
|
|
(1.9)
|
|
(0.6)
|
|
(3.2)
|
|
ATI Adjusted
EBITDA
|
$
182.6
|
|
$
151.0
|
|
$
164.2
|
|
$ 333.6
|
|
$
311.3
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation &
amortization (a)
|
(37.9)
|
|
(36.0)
|
|
(35.9)
|
|
(73.9)
|
|
(71.0)
|
|
Interest expense,
net
|
(28.4)
|
|
(26.6)
|
|
(21.3)
|
|
(55.0)
|
|
(41.2)
|
|
Restructuring and other
charges
|
(5.4)
|
|
(3.1)
|
|
(9.2)
|
|
(8.5)
|
|
(10.4)
|
|
Loss on asset sales and
sales of businesses, net
|
—
|
|
—
|
|
(0.6)
|
|
—
|
|
(0.6)
|
|
Income before income
taxes
|
$
110.9
|
|
$
85.3
|
|
$
97.2
|
|
$ 196.2
|
|
$
188.1
|
|
|
|
|
|
|
|
|
|
|
|
(a) The following
is depreciation & amortization by each business
segment:
|
|
|
|
|
|
Fiscal Quarter
Ended
|
|
Fiscal
Year-To-Date
Period Ended
|
|
June
30,
|
|
March
31,
|
|
July
2,
|
|
June
30,
|
|
July
2,
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
High Performance
Materials & Components
|
$
17.9
|
|
$
16.3
|
|
$
17.9
|
|
$ 34.2
|
|
$
35.3
|
|
Advanced Alloys &
Solutions
|
18.3
|
|
18.0
|
|
16.2
|
|
36.3
|
|
32.3
|
|
Other
|
1.7
|
|
1.7
|
|
1.8
|
|
3.4
|
|
3.4
|
|
Total depreciation
& amortization
|
$
37.9
|
|
$
36.0
|
|
$
35.9
|
|
$ 73.9
|
|
$
71.0
|
|
ATI
Inc.
Condensed
Consolidated Balance Sheets
(Unaudited, dollars
in millions)
|
|
|
June
30,
|
|
December
31
|
|
2024
|
|
2023
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
425.6
|
|
$
743.9
|
|
Accounts receivable,
net of allowances for doubtful accounts
|
719.8
|
|
625.0
|
|
Short-term contract
assets
|
87.6
|
|
59.1
|
|
Inventories,
net
|
1,317.5
|
|
1,247.5
|
|
Prepaid expenses and
other current assets
|
102.4
|
|
62.2
|
|
Total
Current Assets
|
2,652.9
|
|
2,737.7
|
|
|
|
|
|
Property, plant and
equipment, net
|
1,705.5
|
|
1,665.9
|
|
Goodwill
|
227.2
|
|
227.2
|
|
Other assets
|
335.8
|
|
354.3
|
|
|
|
|
|
Total
Assets
|
$
4,921.4
|
|
$
4,985.1
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
$
524.5
|
|
$
524.8
|
|
Short-term contract
liabilities
|
160.9
|
|
163.6
|
|
Short-term debt and
current portion of long-term debt
|
316.8
|
|
31.9
|
|
Other current
liabilities
|
243.4
|
|
256.8
|
|
Total
Current Liabilities
|
1,245.6
|
|
977.1
|
|
|
|
|
|
Long-term
debt
|
1,854.0
|
|
2,147.7
|
|
Accrued postretirement
benefits
|
167.2
|
|
175.2
|
|
Pension
liabilities
|
37.9
|
|
39.7
|
|
Other long-term
liabilities
|
148.8
|
|
164.9
|
|
Total
Liabilities
|
3,453.5
|
|
3,504.6
|
|
|
|
|
|
Total ATI stockholders'
equity
|
1,355.2
|
|
1,373.0
|
|
Noncontrolling
interests
|
112.7
|
|
107.5
|
|
Total
Equity
|
1,467.9
|
|
1,480.5
|
|
|
|
|
|
Total Liabilities
and Equity
|
$
4,921.4
|
|
$
4,985.1
|
|
ATI
Inc.
Condensed
Consolidated Statements of Cash Flows
(Unaudited, dollars
in millions)
|
|
|
Fiscal Year-To-Date
Period Ended
|
|
|
June
30,
|
|
July
2,
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
Operating
Activities:
|
|
|
|
|
Net income
|
$
154.0
|
|
$
180.1
|
|
|
|
|
|
|
Depreciation and
amortization
|
73.9
|
|
71.0
|
|
Share-based
compensation
|
17.2
|
|
14.1
|
|
Deferred
taxes
|
30.3
|
|
0.6
|
|
Net gain from disposal
of property, plant and equipment
|
(2.1)
|
|
(0.3)
|
|
Loss (gain) on sales of
businesses
|
—
|
|
0.6
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Inventories
|
(94.2)
|
|
(184.7)
|
|
Accounts
receivable
|
(103.4)
|
|
(131.2)
|
|
Accounts
payable
|
16.7
|
|
(66.3)
|
|
Pension plan
contributions
|
—
|
|
(50.0)
|
|
Retirement
benefits
|
(5.7)
|
|
(8.5)
|
|
Accrued liabilities
and other
|
(84.4)
|
|
(42.5)
|
|
Cash provided by
(used in) operating activities
|
2.3
|
|
(217.1)
|
|
Investing
Activities:
|
|
|
|
|
Purchases of property,
plant and equipment
|
(126.0)
|
|
(103.3)
|
|
Proceeds from disposal
of property, plant and equipment
|
5.9
|
|
1.6
|
|
Transaction costs for
sales of businesses, net of proceeds
|
—
|
|
(0.3)
|
|
Other
|
3.0
|
|
1.2
|
|
Cash used in
investing activities
|
(117.1)
|
|
(100.8)
|
|
Financing
Activities:
|
|
|
|
|
Payments on long-term
debt and finance leases
|
(14.1)
|
|
(11.3)
|
|
Net borrowings
(payments) under credit facilities
|
(4.9)
|
|
33.2
|
|
Purchase of treasury
stock
|
(150.0)
|
|
(10.1)
|
|
Taxes on share-based
compensation and other
|
(24.9)
|
|
(10.8)
|
|
Cash provided by
(used in) financing activities
|
(193.9)
|
|
1.0
|
|
Less: Cash
held for sale
|
(9.6)
|
|
—
|
|
Decrease in cash and
cash equivalents
|
(318.3)
|
|
(316.9)
|
|
Cash and cash
equivalents at beginning of period
|
743.9
|
|
584.0
|
|
Cash and cash
equivalents at end of period
|
$
425.6
|
|
$
267.1
|
|
ATI
Inc.
Revenue by
Market
(Unaudited, dollars
in millions)
|
|
|
Fiscal Quarter
Ended
|
|
Fiscal
Year-To-Date
Period
Ended
|
|
June
30,
|
|
March
31,
|
|
July
2,
|
|
June
30,
|
|
July
2,
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace &
Defense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jet Engines-
Commercial
|
$
352.8
|
32 %
|
|
$
311.2
|
30 %
|
|
$
340.9
|
32 %
|
|
$
664.0
|
31 %
|
|
$
651.8
|
31 %
|
|
Airframes-
Commercial
|
210.8
|
19 %
|
|
190.1
|
18 %
|
|
164.2
|
16 %
|
|
400.9
|
19 %
|
|
334.1
|
16 %
|
|
Defense
|
120.3
|
11 %
|
|
114.4
|
11 %
|
|
101.7
|
10 %
|
|
234.7
|
11 %
|
|
196.6
|
10 %
|
|
Total Aerospace &
Defense
|
$
683.9
|
62 %
|
|
$
615.7
|
59 %
|
|
$
606.8
|
58 %
|
|
$
1,299.6
|
61 %
|
|
$
1,182.5
|
57 %
|
|
Energy:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conventional
Energy
|
66.1
|
6 %
|
|
102.5
|
10 %
|
|
111.3
|
11 %
|
|
168.6
|
8 %
|
|
238.8
|
12 %
|
|
Specialty Energy
|
76.6
|
7 %
|
|
56.1
|
5 %
|
|
68.2
|
6 %
|
|
132.7
|
6 %
|
|
150.9
|
7 %
|
|
Total Energy
|
142.7
|
13 %
|
|
158.6
|
15 %
|
|
179.5
|
17 %
|
|
301.3
|
14 %
|
|
389.7
|
19 %
|
|
Automotive
|
70.8
|
7 %
|
|
56.0
|
5 %
|
|
52.8
|
5 %
|
|
126.8
|
6 %
|
|
112.2
|
5 %
|
|
Medical
|
61.7
|
6 %
|
|
59.1
|
6 %
|
|
41.9
|
4 %
|
|
120.8
|
6 %
|
|
76.9
|
4 %
|
|
Construction/Mining
|
44.2
|
4 %
|
|
27.2
|
3 %
|
|
48.4
|
5 %
|
|
71.4
|
3 %
|
|
88.8
|
4 %
|
|
Electronics
|
40.8
|
4 %
|
|
52.9
|
5 %
|
|
36.0
|
3 %
|
|
93.7
|
4 %
|
|
70.4
|
3 %
|
|
Food Equipment &
Appliances
|
16.2
|
1 %
|
|
11.9
|
1 %
|
|
20.9
|
2 %
|
|
28.1
|
1 %
|
|
42.4
|
2 %
|
|
Other
|
35.0
|
3 %
|
|
61.5
|
6 %
|
|
59.7
|
6 %
|
|
96.5
|
5 %
|
|
121.2
|
6 %
|
|
Total
|
$
1,095.3
|
100 %
|
|
$
1,042.9
|
100 %
|
|
$
1,046.0
|
100 %
|
|
$
2,138.2
|
100 %
|
|
$
2,084.1
|
100 %
|
|
ATI
Inc.
Selected Financial
Data
(Unaudited)
|
|
|
Fiscal Quarter
Ended
|
|
Fiscal
Year-To-Date
Period
Ended
|
|
June
30,
|
|
March
31,
|
|
July
2,
|
|
June
30,
|
|
July
2,
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Percentage of Total
ATI Sales
|
|
|
|
|
|
|
|
|
|
Nickel-based alloys and
specialty alloys
|
44 %
|
|
45 %
|
|
52 %
|
|
44 %
|
|
52 %
|
|
Titanium and titanium-based
alloys
|
20 %
|
|
18 %
|
|
14 %
|
|
19 %
|
|
14 %
|
|
Precision forgings, castings
and components
|
19 %
|
|
19 %
|
|
17 %
|
|
19 %
|
|
16 %
|
|
Precision rolled strip
products
|
9 %
|
|
8 %
|
|
9 %
|
|
9 %
|
|
10 %
|
|
Zirconium and related
alloys
|
8 %
|
|
10 %
|
|
8 %
|
|
9 %
|
|
8 %
|
|
Total
|
100 %
|
|
100 %
|
|
100 %
|
|
100 %
|
|
100 %
|
|
|
Note:
Hot-Rolling and Processing Facility conversion service sales in the
AA&S segment are excluded from this
presentation.
|
|
ATI
Inc.
Computation of Basic
and Diluted Earnings Per Share Attributable to ATI
(Unaudited, dollars
in millions, except per share amounts)
|
|
|
|
Fiscal Quarter
Ended
|
|
Fiscal
Year-To-Date
Period
Ended
|
|
|
June
30,
|
|
March
31,
|
|
July
2,
|
|
June
30,
|
|
July
2,
|
|
|
2024
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Numerator for Basic net
income per common share -
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to ATI
|
$
81.9
|
|
$
66.1
|
|
$
90.4
|
|
$
148.0
|
|
$
174.9
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
3.5% Convertible Senior
Notes due 2025
|
2.2
|
|
2.1
|
|
2.6
|
|
4.3
|
|
5.2
|
|
Numerator for Diluted
net income per common share -
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to ATI after assumed conversions
|
$
84.1
|
|
$
68.2
|
|
$
93.0
|
|
$
152.3
|
|
$
180.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for Basic
net income per common share -
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
124.4
|
|
126.2
|
|
128.5
|
|
125.3
|
|
128.5
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
3.1
|
|
2.5
|
|
2.8
|
|
2.8
|
|
2.8
|
|
3.5% Convertible Senior
Notes due 2025
|
18.8
|
|
18.8
|
|
18.8
|
|
18.8
|
|
18.8
|
|
Denominator for Diluted
net income per common share -
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted
average shares assuming conversions
|
146.3
|
|
147.5
|
|
150.1
|
|
146.9
|
|
150.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income
attributable to ATI per common share
|
$
0.66
|
|
$
0.52
|
|
$
0.70
|
|
$
1.18
|
|
$
1.36
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
attributable to ATI per common share
|
$
0.58
|
|
$
0.46
|
|
$
0.62
|
|
$
1.04
|
|
$
1.20
|
|
|
|
|
|
|
|
|
|
|
|
ATI Inc.
Non-GAAP Financial
Measures
(Unaudited, dollars in millions, except per
share amounts)
The Company reports its financial results in accordance with
accounting principles generally accepted in the United States of America ("GAAP").
However, management believes that certain non-GAAP financial
measures, used in managing the business, may provide users of this
financial information with additional meaningful comparisons
between current results and results in prior periods. For
example, EBITDA and Adjusted EBITDA are measures utilized by
management to analyze the performance and result of our
business. Further, we believe these measures are useful to
investors and industry analysts because these measures are commonly
used to analyze companies on the basis of operating performance,
leverage and liquidity. EBITDA and Adjusted EBITDA are not
intended to be measures of free cash flow for management's
discretionary use, as they do not consider certain cash
requirements such as interest payments, tax payments and capital
expenditures. Non-GAAP financial measures should be viewed in
addition to, and not as an alternative for, the Company's reported
results prepared in accordance with GAAP. The following table
provides the calculation of the non-GAAP financial measures
discussed in this press release:
|
Fiscal Quarter
Ended
|
|
June 30,
2024
|
March 31,
2024
|
July 2,
2023
|
|
|
|
|
|
Net income attributable
to ATI
|
$
81.9
|
$
66.1
|
$
90.4
|
|
Adjustments for special
items, pre-tax:
|
|
|
|
|
Restructuring and other
charges (a)
|
5.4
|
3.1
|
10.0
|
|
Loss on sale of
business (b)
|
—
|
—
|
0.6
|
|
Total pre-tax
adjustments
|
5.4
|
3.1
|
10.6
|
|
|
|
|
|
Income tax on pre-tax
adjustments for special items
|
(1.3)
|
(0.8)
|
(0.4)
|
|
|
|
|
|
Net income attributable
to ATI excluding special items
|
$
86.0
|
$
68.4
|
$
100.6
|
|
|
|
|
|
|
Fiscal Quarter
Ended
|
Fiscal Quarter
Ended
|
Fiscal Quarter
Ended
|
|
|
June 30,
2024
|
|
March 31,
2024
|
|
July 2,
2023
|
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Numerator for Basic net
income per common share -
|
|
|
|
|
|
|
|
|
|
Net income attributable
to ATI
|
$
81.9
|
$
86.0
|
|
$
66.1
|
$
68.4
|
|
$
90.4
|
$
100.6
|
|
Effect of dilutive
securities
|
2.2
|
2.2
|
|
2.1
|
2.1
|
|
2.6
|
2.6
|
|
Numerator for Diluted
net income per common share -
|
|
|
|
|
|
|
|
|
|
Net income attributable
to ATI after assumed conversions
|
$
84.1
|
$
88.2
|
|
$
68.2
|
$
70.5
|
|
$
93.0
|
$
103.2
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for Basic
net income per common share -
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
124.4
|
124.4
|
|
126.2
|
126.2
|
|
128.5
|
128.5
|
|
Effect of dilutive
securities
|
21.9
|
21.9
|
|
21.3
|
21.3
|
|
21.6
|
21.6
|
|
Denominator for Diluted
net income per common share -
|
|
|
|
|
|
|
|
|
|
Adjusted weighted
average shares assuming conversions
|
146.3
|
146.3
|
|
147.5
|
147.5
|
|
150.1
|
150.1
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
attributable to ATI per common share
|
$
0.58
|
$
0.60
|
|
$
0.46
|
$
0.48
|
|
$
0.62
|
$
0.69
|
|
Earnings before
interest, taxes, depreciation and amortization
(EBITDA)
|
|
Fiscal Quarter
Ended
|
|
June 30,
2024
|
|
March 31,
2024
|
|
July 2,
2023
|
|
Net income attributable
to ATI
|
$
81.9
|
|
$
66.1
|
|
$
90.4
|
|
Net income attributable
to noncontrolling interests
|
3.7
|
|
2.3
|
|
3.1
|
|
Net income
|
85.6
|
|
68.4
|
|
93.5
|
|
(+) Depreciation and
Amortization
|
37.9
|
|
36.0
|
|
35.9
|
|
(+) Interest
Expense
|
28.4
|
|
26.6
|
|
21.3
|
|
(+) Income Tax
Provision
|
25.3
|
|
16.9
|
|
3.7
|
|
(+) Restructuring and
other charges (a)
|
5.4
|
|
3.1
|
|
9.2
|
|
(+) Loss on sale of
business (b)
|
—
|
|
—
|
|
0.6
|
|
ATI Adjusted
EBITDA
|
$
182.6
|
|
$
151.0
|
|
$
164.2
|
|
Corporate
expenses
|
19.4
|
|
17.1
|
|
17.7
|
|
Closed operations and
other expense (income)
|
(0.7)
|
|
1.3
|
|
1.9
|
|
Total segment
EBITDA
|
$
201.3
|
|
$
169.4
|
|
$
183.8
|
|
|
|
(a)
|
Second fiscal quarter
2024 includes pre-tax charges totaling $5.4 million, which include
$5.5 million of inventory write-downs related to our
ongoing
European restructuring
and $1.8 million of start-up costs. These pre-tax charges were
partially offset by credits of $1.9 million primarily due to
lower
severance reserves for
our ongoing European restructuring. First fiscal quarter 2024
includes pre-tax charges totaling $3.1 million, which
include
$2.9 million for start
up costs and $0.2 million for severance-related restructuring
charges. Second fiscal quarter 2023 includes pre-tax
charges
totaling $10.0 million,
which include $4.5 million for start-up costs, $2.8 million
primarily for asset write-offs for a facility closure, of which
$0.8 million
was accelerated
depreciation on fixed assets and is included in depreciation and
amortization in the above table, and $2.7 million of
severance-related
restructuring
charges.
|
|
(b)
|
Second fiscal quarter
2023 includes a $0.6 million loss on the sale of our Northbrook, IL
operation.
|
Free Cash Flow
Free cash flow as defined by ATI includes the total of cash
provided by (used in) operating activities and investing activities
as presented on the consolidated statements of cash flows, adjusted
to exclude cash contributions to the Company's U.S. qualified
defined benefit pension plan.
|
Fiscal Quarter
Ended
|
|
Fiscal
Year-To-Date
Period
Ended
|
|
June 30,
2024
|
July 2,
2023
|
|
June 30,
2024
|
July 2,
2023
|
|
Cash provided by (used
in) operating activities
|
$
101.1
|
$
68.1
|
|
$
2.3
|
$
(217.1)
|
|
Add back: cash
contributions to U.S. qualified defined
benefit pension
plan
|
—
|
—
|
|
—
|
50.0
|
|
Cash provided by (used
in) operating activities excluding
pension
contributions
|
101.1
|
68.1
|
|
2.3
|
(167.1)
|
|
Cash used in investing
activities
|
(53.3)
|
(41.5)
|
|
(117.1)
|
(100.8)
|
|
Free Cash Flow as
defined by ATI
|
$
47.8
|
$
26.6
|
|
$
(114.8)
|
$
(267.9)
|
Managed Working Capital
As part of managing the performance of our business, we focus on
Managed Working Capital, which we define as gross accounts
receivable, short-term contract assets and gross inventories, less
accounts payable and short-term contract liabilities. We
exclude the effects of inventory valuation reserves and reserves
for uncollectible accounts receivable when computing this non-GAAP
performance measure, which is not intended to replace Working
Capital or to be used as a measure of liquidity. We assess
Managed Working Capital performance as a percentage of the prior
three months annualized sales to evaluate the asset intensity of
our business. The June 30, 2024
amounts include management working capital balances that are
classified as held for sale.
|
June
30,
|
|
March
31,
|
|
December
31,
|
|
|
2024
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
$
719.8
|
|
$
720.5
|
|
$
625.0
|
|
|
Short-term contract
assets
|
87.6
|
|
65.3
|
|
59.1
|
|
|
Inventory
|
1,317.5
|
|
1,284.9
|
|
1,247.5
|
|
|
Accounts
payable
|
(524.5)
|
|
(482.6)
|
|
(524.8)
|
|
|
Short-term contract
liabilities
|
(160.9)
|
|
(161.6)
|
|
(163.6)
|
|
|
Subtotal
|
1,439.5
|
|
1,426.5
|
|
1,243.2
|
|
|
|
|
|
|
|
|
|
Allowance for doubtful
accounts
|
2.7
|
|
3.1
|
|
3.2
|
|
|
Inventory
reserves
|
71.6
|
|
69.1
|
|
75.5
|
|
|
Net managed working
capital held for sale
|
$
39.8
|
|
$
—
|
|
$
—
|
|
|
Managed working
capital
|
$
1,553.6
|
|
$
1,498.7
|
|
$
1,321.9
|
|
|
|
|
|
|
|
|
|
Annualized prior 3
months sales
|
$
4,381.1
|
|
$
4,171.6
|
|
$
4,255.8
|
|
|
|
|
|
|
|
|
|
Managed working capital
as a
|
|
|
|
|
|
|
|
% of annualized
sales
|
35.5 %
|
|
35.9 %
|
|
31.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in managed
working capital:
|
|
|
|
|
|
|
|
Year-to-date
2024
|
$
231.7
|
|
|
|
|
|
|
Q2 2024
|
$
54.9
|
|
|
|
|
|
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SOURCE ATI