ATI (ATI) Q4 2021 earnings summary

Executive summary

• 2021 returned to operating income of $117.6M from a $1.30B loss in 2020; Q4 delivered the year's highest quarterly revenue and margins as demand improved, led by commercial jet engines.

• Transformation continued through standard stainless sheet exit, asset sales and capacity upgrades; year-end backlog rose to $2.1B from $1.4B, supporting recovery and growth plans.

Financial highlights

• Sales fell 6% YoY to $2.80B; gross profit rose 14% to $333.2M, with gross margin of 11.9% versus 9.8% in 2020.

• Net loss attributable to ATI was $38.2M, or $0.30/share; adjusted net income was $17M, or $0.13/share, excluding specified special items.

• Adjusted EBITDA increased to $290.9M, or 10.4% of sales, from $196.3M, or 6.6%, in 2020; operating income was $117.6M.

• 2021 results included $39.5M of net pretax charges, including $65.5M debt extinguishment and $63.2M strike costs, offset by retirement-benefit settlement and asset-sale gains.

Outlook and guidance

• HPMC expected strong YoY revenue and earnings growth in 2022, primarily from continued commercial aerospace recovery; long-term aero demand fundamentals were viewed as intact despite uneven recovery.

• Standard stainless sheet sales exit and SRP footprint transformation were targeted for completion in H1 2022; 2021 AA & S sales were 93% high-value products versus 86% in 2020.

• About 80% of year-end backlog was expected to ship in 2022; HPMC expected to fulfill ~75% of its backlog and AA & S ~95%.