Haynes International (HAYN) investor relations material

Executive summary

• Net revenues for Q3 2024 increased 7% year-over-year to $153.9 million, driven by record aerospace sales reaching $82.6 million, nearly 54% of total revenue.

• Net income for Q3 2024 was $8.1 million ($0.63 diluted EPS), down from $8.8 million ($0.68 EPS) in Q3 2023, mainly due to margin compression from raw material volatility and higher SG&A expenses.

• The company is being acquired by Acerinox S.A./North American Stainless, with the merger expected to close in Q4 2024, pending UK and Austria regulatory approvals.

Financial highlights

• Gross profit margin for Q3 2024 was 16.6%, down from 18.1% in Q3 2023, impacted by unfavorable nickel and cobalt price fluctuations; adjusted gross margin was 18.8%.

• Operating income for Q3 2024 was $11.7 million, a decrease from $13.2 million in Q3 2023.

• Adjusted EBITDA for Q3 2024 was $17.1 million (11.1% of net revenues), down from $18.7 million (13.0%) last year.

• Backlog at June 30, 2024 was $405.7 million, down 13.3% year-over-year.

• Cash provided by operating activities was $52.5 million for the first nine months of 2024, enabling a $24.2 million paydown of the credit facility.

Outlook and guidance

• The merger with Acerinox S.A./North American Stainless is expected to close in Q4 2024, with all major regulatory approvals except the UK and Austria already obtained.

• Q4 2024 revenue and earnings are expected to be similar to Q3, with continued impact from lower production volumes due to Boeing build rate slowdown and inventory reduction.

• Capital spending for fiscal 2024 is projected between $22 million and $26 million.

• Management anticipates continued inventory reduction and positive cash flow from operations in the last quarter of fiscal 2024.

• Management remains optimistic about long-term demand fundamentals despite current reduced order entry.