Strong performance in Aerospace &
Defense propels sequential and year over year growth
- Q2 2023 sales of $1.05 billion
up 1% over Q1 2023 and 9% higher than Q2 2022
- Q2 2023 net income attributable to ATI of $76.0 million, or $0.52 per share
- Aerospace and defense represent 58% of Q2 2023 sales, up
from 56% of Q1 2023 sales and up from 46% of Q2 2022 sales
- Non-GAAP information
-
- Q2 2023 adjusted net income attributable to ATI of
$86.2 million, and adjusted EPS of
$0.59 per share
- Q2 2023 ATI adjusted EBITDA was $149.8 million, or 14.3% of sales
DALLAS, Aug. 2, 2023
/PRNewswire/ -- ATI Inc. (NYSE: ATI) reported second
quarter 2023 results, with sales of $1.05
billion and net income attributable to ATI of $76.0 million, or $0.52 per share.
|
|
|
|
|
Sequential
|
|
Y-O-Y
|
($ in millions except
per share amounts)
|
Q2
2023
|
|
Q1
2023
|
|
Change
|
Q2
2022
|
Change
|
|
|
|
|
|
|
|
|
Sales
|
$1,046.0
|
|
$1,038.1
|
|
1 %
|
$959.5
|
9 %
|
Net income (loss)
attributable to ATI
|
$76.0
|
|
$70.1
|
|
8 %
|
$(38.0)
|
NM
|
Earnings (loss) per
share
|
$0.52
|
|
$0.48
|
|
8 %
|
$(0.31)
|
NM
|
Non-GAAP
information
|
|
|
|
|
|
|
|
Adjusted net income
attributable to ATI*
|
$86.2
|
|
$71.2
|
|
21 %
|
$76.7
|
12 %
|
Adjusted earnings per
share*
|
$0.59
|
|
$0.49
|
|
20 %
|
$0.54
|
9 %
|
ATI adjusted
EBITDA*
|
$149.8
|
|
$132.7
|
|
13 %
|
$143.1
|
5 %
|
Adjusted earnings per share* for Q2 2023 was $0.59, and ATI adjusted EBITDA* was
$149.8 million, or 14.3% of
sales. Q2 2023 adjusted results exclude pre-tax amounts of
$4.5 million in start-up related
costs, $2.7 million of
severance-related restructuring charges, $2.8 million
primarily for asset write-offs related to the closure of our
Robinson, PA operation and
$0.6 million related to the loss on
the sale of our Northbrook, IL
operation. Adjusted earnings per share* for Q1 2023 was
$0.49, and ATI adjusted EBITDA* was
$132.7 million, or 12.8% of
sales. Adjusted results for Q1 2023 exclude a pre-tax amount
of $1.2 million for start-up related
costs incurred as part of restarting a titanium melt facility in
Albany, OR. Q2 2022 adjusted
results exclude a $115.9 million loss
on the sale of our Sheffield, U.K.
business.
* Detailed
reconciliations of the reported information under accounting
principles generally accepted in the United States (U.S. GAAP) to
adjusted non-GAAP figures are included in accompanying financial
tables.
|
"ATI's growth as an aerospace and defense leader continues,"
said Robert S. Wetherbee, Board
Chair and CEO. "As demand accelerates, the percentage of our
revenue attributed to aerospace and defense reached 58%, up from
46% in the second quarter of 2022. We are making rapid progress
toward our aerospace and defense sales goal of 65%," he said.
"Strong execution and operational performance drove further
margin expansion in the second quarter, with our High Performance
Materials and Components segment delivering 20.5% EBITDA margins,
up from 17.0% in the prior quarter," said Wetherbee. "Overall,
consolidated margins were up 150 basis points. This reflects
improving operating leverage from higher production volumes and
incredible work by the entire ATI team."
Operating Results by Segment
High Performance
Materials & Components (HPMC)
|
|
|
|
|
|
($ millions)
|
Q2
2023
|
|
Q1
2023
|
|
Q2
2022
|
Sales
|
$527.1
|
|
$471.1
|
|
$396.1
|
|
|
|
|
|
|
Segment
EBITDA
|
$108.1
|
|
$80.1
|
|
$60.3
|
% of Sales
|
20.5 %
|
|
17.0 %
|
|
15.2 %
|
- HPMC's second quarter 2023 sales increased $56 million, or 12%, compared to the first
quarter 2023, primarily driven by growth in the commercial jet
engine market. Overall aerospace and defense sales were 83% of
total HPMC sales in the second quarter 2023. Second quarter 2023
sales improved 33% compared to the second quarter 2022, with total
aerospace and defense related sales increasing 38% compared to the
prior year period.
- HPMC segment EBITDA was $108.1
million, or 20.5% of sales. The incremental margins continue
to be driven by increased volumes on higher margin next-generation
commercial aerospace platforms.
- Results in the second quarter 2022 included $5.6 million of benefits from the Aviation
Manufacturing Jobs Protection program.
Advanced Alloys &
Solutions (AA&S)
|
|
|
|
|
|
($ millions)
|
Q2
2023
|
|
Q1
2023
|
|
Q2
2022
|
Sales
|
$518.9
|
|
$567.0
|
|
$563.4
|
|
|
|
|
|
|
Segment
EBITDA
|
$63.2
|
|
$72.7
|
|
$104.6
|
% of Sales
|
12.2 %
|
|
12.8 %
|
|
18.6 %
|
- AA&S second quarter 2023 sales decreased by $48 million, or 9% compared to the first quarter,
2023, primarily due to recessionary softness in general industrial
end markets and lingering COVID impacts associated with our Asian
precision rolled strip business. Sales of commercial aerospace
products increased by nearly 50% compared to the prior year
period.
- AA&S segment EBITDA was $63.2
million, or 12.2% of sales. Reduced deliveries of nickel
based alloys and precision rolled strip products in the second
quarter 2023 were partially offset by increases in titanium plate
deliveries. Second quarter 2022 results included a $9.9 million benefit from the settlement of
Section 232 claims as well as lower retirement benefit costs when
compared to the second quarter 2023.
Corporate Items and Cash
- Restructuring and other credits (charges) in the second quarter
2023 include pre-tax charges of $4.5
million for start-up costs, $2.7
million of severance-related restructuring charges, and
$2.8 million primarily for asset
write-offs related to the closure of our Robinson, PA operation, of which $0.8 million was accelerated depreciation on
fixed assets. First quarter 2023 results include a $1.2 million pre-tax charge for costs to restart
our titanium operations in Albany,
OR. Second quarter 2022 results include a $1.3 million pre-tax credit for restructuring
charges primarily related to lowered severance-related reserves
based on changes in planned operating rates and revised workforce
reduction estimates.
- Corporate expenses in the second quarter 2023 were $18.1 million, compared to $17.3 million in the first quarter 2023, and
$16.7 million in the prior year
quarter.
- Closed operations and other expense was $3.4 million in the second quarter 2023, compared
to $2.8 million in the first quarter
2023, and $5.1 million in the prior
year quarter. Higher costs in the second quarter 2023, compared to
the first quarter 2023, were associated with higher facility costs
at closed locations.
- Second quarter 2023 results include a $3.7 million income tax provision, compared to
$4.3 million in the first quarter
2023, and $3.4 million in the prior
year quarter. This expense is primarily related to our Asian
precision rolled strip business. ATI maintains a valuation
allowance on its U.S. deferred tax assets and does not expect to
pay any significant U.S. federal or state income taxes in 2023 due
to net operating loss carryforwards.
- For the second quarter of 2023, cash provided by operating
activities was $68.1 million, and
cash used in operating activities was $217.1
million on a year-to-date basis. Inventory levels increased
in the second quarter as a result of a strategic nickel purchase to
ensure continuity of supply, which was funded by a $50 million draw on our asset based lending
credit facility. As a result of the strategic purchase, second
quarter 2023 managed working capital as a percent of sales was
39.0%. Capital expenditures for the first half of 2023 were
$103.3 million.
- Cash on hand at June 30, 2023 was
$267 million, and available
additional liquidity under the asset-based lending (ABL) credit
facility was approximately $500
million. ATI has no significant debt maturities until
2025.
- On April 28, 2023, our Board of
Directors authorized the repurchase of $75
million of ATI stock.
Outlook
"Our laser focus on executing our commitments gives us the
opportunity to expand for the future. We're investing in both the
additional capacity our customers need, and growing our
capabilities to solve their most difficult challenges," said
Wetherbee. "With our restarted Albany,
Oregon titanium melt shop fully operational in the third
quarter, and a brownfield expansion well underway in Richland, Washington, we're well-positioned to
capitalize on market opportunities," said Wetherbee. "We are
confident in our ability to deliver for 2023 and beyond, executing
on our long-term strategy."
ATI will conduct a conference call with investors and analysts
on Wednesday, August 2, 2023, at 10:30
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 and (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, 2022, 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 and 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)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30
|
|
March
31
|
|
June
30
|
|
June
30
|
|
June
30
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
1,046.0
|
|
$
1,038.1
|
|
$
959.5
|
|
$
2,084.1
|
|
$
1,793.6
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
836.9
|
|
844.9
|
|
784.2
|
|
1,681.8
|
|
1,448.9
|
Gross profit
|
209.1
|
|
193.2
|
|
175.3
|
|
402.3
|
|
344.7
|
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses
|
85.4
|
|
80.6
|
|
72.3
|
|
166.0
|
|
147.5
|
Restructuring charges
(credits)
|
2.7
|
|
—
|
|
(1.3)
|
|
2.7
|
|
(2.4)
|
Loss on asset sales and
sales of businesses, net
|
0.7
|
|
—
|
|
115.9
|
|
0.7
|
|
134.2
|
Operating income
(loss)
|
120.3
|
|
112.6
|
|
(11.6)
|
|
232.9
|
|
65.4
|
Nonoperating retirement
benefit expense
|
(16.9)
|
|
(16.8)
|
|
(6.6)
|
|
(33.7)
|
|
(12.4)
|
Interest expense,
net
|
(21.3)
|
|
(19.9)
|
|
(23.4)
|
|
(41.2)
|
|
(47.0)
|
Other income,
net
|
0.7
|
|
0.6
|
|
10.7
|
|
1.3
|
|
3.2
|
Income (loss) before
income taxes
|
82.8
|
|
76.5
|
|
(30.9)
|
|
159.3
|
|
9.2
|
Income tax
provision
|
3.7
|
|
4.3
|
|
3.4
|
|
8.0
|
|
8.3
|
Net income
(loss)
|
$
79.1
|
|
$
72.2
|
|
$
(34.3)
|
|
$
151.3
|
|
$
0.9
|
Less: Net income
attributable to noncontrolling
interests
|
3.1
|
|
2.1
|
|
3.7
|
|
5.2
|
|
8.0
|
Net income (loss)
attributable to ATI
|
$
76.0
|
|
$
70.1
|
|
$
(38.0)
|
|
$
146.1
|
|
$
(7.1)
|
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) attributable to ATI
per common share
|
$
0.59
|
|
$
0.55
|
|
$
(0.31)
|
|
$
1.14
|
|
$
(0.06)
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) attributable to ATI
per common share
|
$
0.52
|
|
$
0.48
|
|
$
(0.31)
|
|
$
1.01
|
|
$
(0.06)
|
ATI
Inc. Sales and EBITDA by Business
Segment (Unaudited, dollars in millions)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30
|
|
March
31
|
|
June
30
|
|
June
30
|
|
June
30
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Sales:
|
|
|
|
|
|
|
|
|
|
High Performance
Materials & Components
|
$
527.1
|
|
$
471.1
|
|
$
396.1
|
|
$
998.2
|
|
$
737.7
|
Advanced Alloys &
Solutions
|
518.9
|
|
567.0
|
|
563.4
|
|
1,085.9
|
|
1,055.9
|
Total external
sales
|
$
1,046.0
|
|
$ 1,038.1
|
|
$
959.5
|
|
$
2,084.1
|
|
$
1,793.6
|
|
|
|
|
|
|
|
|
|
|
EBITDA:
|
|
|
|
|
|
|
|
|
|
High Performance
Materials & Components
|
$
108.1
|
|
$
80.1
|
|
$
60.3
|
|
$
188.2
|
|
$
128.4
|
% of Sales
|
20.5 %
|
|
17.0 %
|
|
15.2 %
|
|
18.9 %
|
|
17.4 %
|
Advanced Alloys &
Solutions
|
63.2
|
|
72.7
|
|
104.6
|
|
135.9
|
|
179.9
|
% of Sales
|
12.2 %
|
|
12.8 %
|
|
18.6 %
|
|
12.5 %
|
|
17.0 %
|
Total segment
EBITDA
|
171.3
|
|
152.8
|
|
164.9
|
|
324.1
|
|
308.3
|
% of Sales
|
16.4 %
|
|
14.7 %
|
|
17.2 %
|
|
15.6 %
|
|
17.2 %
|
Corporate
expenses
|
(18.1)
|
|
(17.3)
|
|
(16.7)
|
|
(35.4)
|
|
(33.7)
|
Closed operations and
other expense
|
(3.4)
|
|
(2.8)
|
|
(5.1)
|
|
(6.2)
|
|
(6.5)
|
ATI Adjusted
EBITDA
|
$
149.8
|
|
$
132.7
|
|
$
143.1
|
|
$
282.5
|
|
$
268.1
|
|
|
|
|
|
|
|
|
|
|
Depreciation &
amortization (a)
|
(35.9)
|
|
(35.1)
|
|
(36.0)
|
|
(71.0)
|
|
(71.5)
|
Interest expense,
net
|
(21.3)
|
|
(19.9)
|
|
(23.4)
|
|
(41.2)
|
|
(47.0)
|
Restructuring and other
credits (charges)
|
(9.2)
|
|
(1.2)
|
|
1.3
|
|
(10.4)
|
|
(6.2)
|
Loss on asset sales and
sales of businesses, net
|
(0.6)
|
|
—
|
|
(115.9)
|
|
(0.6)
|
|
(134.2)
|
Income (loss) before
income taxes
|
$
82.8
|
|
$
76.5
|
|
$
(30.9)
|
|
$
159.3
|
|
$
9.2
|
|
|
|
|
|
|
|
|
|
|
(a) The following
is depreciation & amortization by each business
segment:
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30
|
|
March
31
|
|
June
30
|
|
June
30
|
|
June
30
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
High Performance
Materials & Components
|
$
17.9
|
|
$
17.4
|
|
$
16.9
|
|
$
35.3
|
|
$
34.8
|
Advanced Alloys &
Solutions
|
16.2
|
|
16.1
|
|
16.7
|
|
32.3
|
|
32.9
|
Other
|
1.8
|
|
1.6
|
|
2.4
|
|
3.4
|
|
3.8
|
Total depreciation
& amortization
|
$
35.9
|
|
$
35.1
|
|
$
36.0
|
|
$
71.0
|
|
$
71.5
|
ATI
Inc. Condensed Consolidated Balance
Sheets (Unaudited, dollars in millions)
|
|
|
June
30
|
|
December
31
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
267.1
|
|
$
584.0
|
Accounts receivable,
net of allowances for doubtful accounts
|
710.1
|
|
579.2
|
Short-term contract
assets
|
51.8
|
|
64.1
|
Inventories,
net
|
1,380.4
|
|
1,195.7
|
Prepaid expenses and
other current assets
|
49.2
|
|
53.4
|
Total
Current Assets
|
2,458.6
|
|
2,476.4
|
|
|
|
|
Property, plant and
equipment, net
|
1,568.1
|
|
1,549.1
|
Goodwill
|
227.2
|
|
227.2
|
Other assets
|
180.8
|
|
192.9
|
|
|
|
|
Total
Assets
|
$
4,434.7
|
|
$
4,445.6
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
467.7
|
|
$
553.3
|
Short-term contract
liabilities
|
137.8
|
|
149.1
|
Short-term debt and
current portion of long-term debt
|
73.9
|
|
41.7
|
Other current
liabilities
|
218.1
|
|
219.8
|
Total
Current Liabilities
|
897.5
|
|
963.9
|
|
|
|
|
Long-term
debt
|
1,699.9
|
|
1,706.3
|
Accrued postretirement
benefits
|
176.7
|
|
184.9
|
Pension
liabilities
|
172.0
|
|
225.6
|
Other long-term
liabilities
|
179.4
|
|
207.7
|
Total
Liabilities
|
3,125.5
|
|
3,288.4
|
|
|
|
|
Total ATI stockholders'
equity
|
1,194.0
|
|
1,045.9
|
Noncontrolling
interests
|
115.2
|
|
111.3
|
Total
Equity
|
1,309.2
|
|
1,157.2
|
|
|
|
|
Total Liabilities
and Equity
|
$
4,434.7
|
|
$
4,445.6
|
|
ATI
Inc. Condensed Consolidated Statements of Cash
Flows (Unaudited, dollars in millions)
|
|
|
|
|
Six Months
Ended
|
|
|
June
30
|
|
June
30
|
|
|
2023
|
|
2022
|
|
|
|
|
|
Operating
Activities:
|
|
|
|
|
Net income
|
$
151.3
|
|
$
0.9
|
|
|
|
|
|
|
Depreciation and
amortization
|
71.0
|
|
71.5
|
|
Share-based
compensation
|
14.1
|
|
14.5
|
|
Deferred
taxes
|
0.6
|
|
(0.2)
|
|
Net gain from disposal
of property, plant and equipment
|
(0.3)
|
|
(1.0)
|
|
Loss on sales of
businesses
|
0.6
|
|
141.0
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Inventories
|
(184.7)
|
|
(265.9)
|
|
Accounts
receivable
|
(131.2)
|
|
(173.3)
|
|
Accounts
payable
|
(66.3)
|
|
62.6
|
|
Retirement
benefits
|
(29.7)
|
|
1.0
|
|
Accrued liabilities
and other
|
(42.5)
|
|
(73.5)
|
Cash used in
operating activities
|
(217.1)
|
|
(222.4)
|
Investing
Activities:
|
|
|
|
|
Purchases of property,
plant and equipment
|
(103.3)
|
|
(54.8)
|
|
Proceeds from disposal
of property, plant and equipment
|
1.6
|
|
1.0
|
|
Transaction costs for
sales of businesses, net of proceeds
|
(0.3)
|
|
(2.8)
|
|
Other
|
1.2
|
|
0.9
|
Cash used in
investing activities
|
(100.8)
|
|
(55.7)
|
Financing
Activities:
|
|
|
|
|
Payments on long-term
debt and finance leases
|
(11.3)
|
|
(11.6)
|
|
Net proceeds (payments)
under credit facilities
|
33.2
|
|
(13.4)
|
|
Purchase of treasury
stock
|
(10.1)
|
|
(89.9)
|
|
Sale to noncontrolling
interests
|
—
|
|
0.9
|
|
Dividends paid to
noncontrolling interests
|
—
|
|
(16.0)
|
|
Taxes on share-based
compensation and other
|
(10.8)
|
|
(5.6)
|
Cash provided by
(used in) financing activities
|
1.0
|
|
(135.6)
|
Decrease in cash and
cash equivalents
|
(316.9)
|
|
(413.7)
|
Cash and cash
equivalents at beginning of period
|
584.0
|
|
687.7
|
Cash and cash
equivalents at end of period
|
$
267.1
|
|
$
274.0
|
ATI
Inc. Revenue by Market (Unaudited, dollars in
millions)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30
|
|
March
31
|
|
June
30
|
|
June
30
|
|
June
30
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace &
Defense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jet Engines-
Commercial
|
$
340.9
|
32 %
|
|
$ 310.9
|
30 %
|
|
$
248.7
|
26 %
|
|
$
651.8
|
31 %
|
|
$
445.3
|
25 %
|
Airframes-
Commercial
|
164.2
|
16 %
|
|
169.9
|
17 %
|
|
106.1
|
11 %
|
|
334.1
|
16 %
|
|
199.8
|
11 %
|
Defense
|
101.7
|
10 %
|
|
94.9
|
9 %
|
|
81.6
|
9 %
|
|
196.6
|
10 %
|
|
158.1
|
9 %
|
Total Aerospace &
Defense
|
$
606.8
|
58 %
|
|
$ 575.7
|
56 %
|
|
$
436.4
|
46 %
|
|
$ 1,182.5
|
57 %
|
|
$
803.2
|
45 %
|
Energy:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil & Gas
|
111.3
|
11 %
|
|
127.5
|
12 %
|
|
125.2
|
13 %
|
|
238.8
|
12 %
|
|
228.3
|
13 %
|
Specialty Energy
|
68.2
|
6 %
|
|
82.7
|
8 %
|
|
75.1
|
8 %
|
|
150.9
|
7 %
|
|
131.7
|
7 %
|
Total Energy
|
179.5
|
17 %
|
|
210.2
|
20 %
|
|
200.3
|
21 %
|
|
389.7
|
19 %
|
|
360.0
|
20 %
|
Automotive
|
52.8
|
5 %
|
|
59.4
|
6 %
|
|
75.5
|
8 %
|
|
112.2
|
5 %
|
|
166.5
|
9 %
|
Construction/Mining
|
48.4
|
5 %
|
|
40.4
|
4 %
|
|
39.9
|
4 %
|
|
88.8
|
4 %
|
|
91.9
|
5 %
|
Medical
|
41.9
|
4 %
|
|
35.0
|
3 %
|
|
39.5
|
4 %
|
|
76.9
|
4 %
|
|
75.7
|
4 %
|
Electronics
|
36.0
|
3 %
|
|
34.4
|
3 %
|
|
49.4
|
5 %
|
|
70.4
|
3 %
|
|
101.0
|
6 %
|
Food Equipment
&
Appliances
|
20.9
|
2 %
|
|
21.5
|
2 %
|
|
62.7
|
6 %
|
|
42.4
|
2 %
|
|
96.7
|
5 %
|
Other
|
59.7
|
6 %
|
|
61.5
|
6 %
|
|
55.8
|
6 %
|
|
121.2
|
6 %
|
|
98.6
|
6 %
|
Total
|
$ 1,046.0
|
100 %
|
|
$ 1,038.1
|
100 %
|
|
$
959.5
|
100 %
|
|
$ 2,084.1
|
100 %
|
|
$ 1,793.6
|
100 %
|
ATI
Inc. Selected Financial
Data (Unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30
|
|
March
31
|
|
June
30
|
|
June
30
|
|
June
30
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Percentage of Total
ATI Sales
|
|
|
|
|
|
|
|
|
Nickel-based alloys and
specialty alloys
|
52 %
|
|
53 %
|
|
52 %
|
|
52 %
|
|
51 %
|
Precision forgings, castings
and components
|
17 %
|
|
16 %
|
|
15 %
|
|
16 %
|
|
15 %
|
Titanium and titanium-based
alloys
|
14 %
|
|
14 %
|
|
11 %
|
|
14 %
|
|
10 %
|
Precision rolled strip
products
|
9 %
|
|
10 %
|
|
14 %
|
|
10 %
|
|
15 %
|
Zirconium and related
alloys
|
8 %
|
|
7 %
|
|
8 %
|
|
8 %
|
|
9 %
|
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)
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30
|
|
March
31
|
|
June
30
|
|
June
30
|
|
June
30
|
|
|
2023
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Numerator for Basic net
income (loss) per
common share -
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to ATI
|
$
76.0
|
|
$
70.1
|
|
$
(38.0)
|
|
$
146.1
|
|
$ (7.1)
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
3.5% Convertible Senior
Notes due 2025
|
2.6
|
|
2.6
|
|
—
|
|
5.2
|
|
—
|
Numerator for Diluted
net income (loss) per
common share -
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to ATI after
assumed conversions
|
$
78.6
|
|
$
72.7
|
|
$
(38.0)
|
|
$
151.3
|
|
$ (7.1)
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for Basic
net income (loss) per
common share -
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
128.5
|
|
128.5
|
|
124.6
|
|
128.5
|
|
125.5
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
2.8
|
|
2.8
|
|
—
|
|
2.8
|
|
—
|
|
3.5% Convertible Senior
Notes due 2025
|
18.8
|
|
18.8
|
|
—
|
|
18.8
|
|
—
|
Denominator for Diluted
net income (loss) per
common share -
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted
average shares assuming
conversions
|
150.1
|
|
150.1
|
|
124.6
|
|
150.1
|
|
125.5
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss)
attributable to ATI per
common share
|
$
0.59
|
|
$
0.55
|
|
$
(0.31)
|
|
$
1.14
|
|
$ (0.06)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) attributable to ATI per
common share
|
$
0.52
|
|
$
0.48
|
|
$
(0.31)
|
|
$
1.01
|
|
$ (0.06)
|
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, we believe that EBITDA and Adjusted EBITDA are useful to
investors because these measures are commonly used to analyze
companies on the basis of operating performance, leverage and
liquidity. Furthermore, analogous measures are used by
industry analysts to evaluate operating performance. 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:
|
Three Months
Ended
|
|
June 30
2023
|
March
31
2023
|
June 30
2022
|
|
|
|
|
Net income (loss)
attributable to ATI
|
$
76.0
|
$
70.1
|
$
(38.0)
|
Adjustments for special
items, pre-tax:
|
|
|
|
Restructuring and other
charges (credits) (a)
|
10.0
|
1.2
|
(1.3)
|
Loss on asset sales and
sales of businesses, net (b)
|
0.6
|
—
|
115.9
|
Total pre-tax
adjustments
|
10.6
|
1.2
|
114.6
|
|
|
|
|
Income tax on pre-tax
adjustments for special items
|
(0.4)
|
(0.1)
|
0.1
|
|
|
|
|
Net income attributable
to ATI excluding special
items
|
$
86.2
|
$
71.2
|
$
76.7
|
|
|
Three Months
Ended
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
June 30,
2023
|
|
March 31,
2023
|
|
June 30,
2022
|
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
Numerator for Basic net
income (loss) per
common share -
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to ATI
|
$
76.0
|
$
86.2
|
|
$
70.1
|
$
71.2
|
|
$
(38.0)
|
$
76.7
|
Effect of dilutive
securities
|
2.6
|
2.6
|
|
2.6
|
2.6
|
|
—
|
4.0
|
Numerator for Diluted
net income (loss) per
common share -
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to ATI after
assumed conversions
|
$
78.6
|
$
88.8
|
|
$
72.7
|
$
73.8
|
|
$
(38.0)
|
$
80.7
|
|
|
|
|
|
|
|
|
|
|
Denominator for Basic
net income (loss)
per common share -
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
128.5
|
128.5
|
|
128.5
|
128.5
|
|
124.6
|
124.6
|
Effect of dilutive
securities
|
21.6
|
21.6
|
|
21.6
|
21.6
|
|
—
|
26.1
|
Denominator for Diluted
net income (loss)
per common share -
|
|
|
|
|
|
|
|
|
|
Adjusted weighted
average shares assuming conversions
|
150.1
|
150.1
|
|
150.1
|
150.1
|
|
124.6
|
150.7
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) attributable to
ATI per common share
|
$
0.52
|
$
0.59
|
|
$
0.48
|
$
0.49
|
|
$
(0.31)
|
$
0.54
|
Earnings before
interest, taxes, depreciation and amortization
(EBITDA)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30
2023
|
|
March 31
2023
|
|
June 30
2022
|
|
Net income (loss)
attributable to ATI
|
$
76.0
|
|
$
70.1
|
|
$
(38.0)
|
|
Net income attributable
to noncontrolling interests
|
3.1
|
|
2.1
|
|
3.7
|
|
Net income
(loss)
|
79.1
|
|
72.2
|
|
(34.3)
|
|
(+) Depreciation and
Amortization
|
35.9
|
|
35.1
|
|
36.0
|
|
(+) Interest
Expense
|
21.3
|
|
19.9
|
|
23.4
|
|
(+) Income Tax
Provision
|
3.7
|
|
4.3
|
|
3.4
|
|
(+/-) Restructuring and
other charges (credits) (a)
|
9.2
|
|
1.2
|
|
(1.3)
|
|
(+) Loss on asset sales
and sales of businesses, net (b)
|
0.6
|
|
—
|
|
115.9
|
|
ATI Adjusted
EBITDA
|
$
149.8
|
|
$
132.7
|
|
$
143.1
|
|
Corporate
expenses
|
18.1
|
|
17.3
|
|
16.7
|
|
Closed operations and
other expense (income)
|
3.4
|
|
2.8
|
|
5.1
|
|
Total segment
EBITDA
|
$
171.3
|
|
$
152.8
|
|
$
164.9
|
|
|
(a) Second
quarter 2023 includes pre-tax charges totaling $10.0 million, which
include $4.5 million for start-up costs, $2.7 million of
severance-related restructuring charges, and $2.8 million primarily
for asset write-offs related to the closure of our Robinson, PA
operation, of which $0.8 million was accelerated depreciation on
fixed assets and is included in depreciation and amortization in
the above table. First quarter 2023 includes a $1.2 million
pre-tax charge for costs to restart our titanium operations in
Albany, OR. Second quarter 2022 results include a $1.3
million pre-tax credit for restructuring charges, primarily related
to lowered severance-related reserves based on changes in planned
operating rates and revised workforce reduction
estimates.
|
(b) Second quarter 2023
includes a $0.6 million loss on the sale of our Northbrook, IL
operation. Second quarter 2022 results include a $115.9
million loss on the sale of our Sheffield, UK operations, which was
completed in the second quarter 2022. This loss includes $55.6
million related to the UK defined benefit pension plan, of which
$26.1 million was reported as a net pension asset and $29.5 million
in accumulated other comprehensive loss, and $20.0 million of
cumulative translation adjustment foreign exchange
losses.
|
Managed Working Capital
As part of managing the performance of our business, we focus on
controlling 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.
|
June
30
|
|
March
31
|
|
December
31
|
|
|
2023
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
$
710.1
|
|
$
725.6
|
|
$
579.2
|
|
Short-term contract
assets
|
51.8
|
|
52.7
|
|
64.1
|
|
Inventory
|
1,380.4
|
|
1,293.8
|
|
1,195.7
|
|
Accounts
payable
|
(467.7)
|
|
(447.5)
|
|
(553.3)
|
|
Short-term contract
liabilities
|
(137.8)
|
|
(149.7)
|
|
(149.1)
|
|
Subtotal
|
1,536.8
|
|
1,474.9
|
|
1,136.6
|
|
|
|
|
|
|
|
|
Allowance for doubtful
accounts
|
7.1
|
|
7.4
|
|
7.7
|
|
Inventory
reserves
|
88.6
|
|
79.8
|
|
70.9
|
|
Managed working
capital
|
$
1,632.5
|
|
$
1,562.1
|
|
$
1,215.2
|
|
|
|
|
|
|
|
|
Annualized prior
3 months sales
|
$
4,183.7
|
|
$
4,152.6
|
|
$
4,041.9
|
|
|
|
|
|
|
|
|
Managed working capital
as a
|
|
|
|
|
|
|
% of annualized sales
(a)
|
39.0 %
|
|
37.6 %
|
|
30.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in managed
working capital:
|
|
|
|
|
|
|
Year-to-date
2023
|
$
417.3
|
|
|
|
|
|
Q2
2023
|
$
70.4
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) As of June 30, 2023
the Company had $50 million of outstanding borrowings under its
asset based lending credit facility. These borrowings were
made to fund a strategic inventory purchase, which resulted in a
120 basis point unfavorable impact to the Managed Working Capital
as a % of Annualized Sales calculation as of June 30,
2023.
|
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multimedia:https://www.prnewswire.com/news-releases/ati-announces-second-quarter-2023-results-301890889.html
SOURCE ATI