Aerospace and Defense sales propel strong
year over year growth
- Q1 2023 sales of $1.04 billion
up 3% over Q4 2022 and 25% higher than Q1 2022
- Q1 2023 net income attributable to ATI of $70.1 million, or $0.48 per share
- Aerospace and defense represent 56% of Q1 2023 sales, up
from 53% of Q4 2022 sales and up from 44% of Q1 2022 sales
- Non-GAAP information
-
- Q1 2023 adjusted net income attributable to ATI of
$71.2 million, and adjusted EPS of
$0.49 per share
- Q1 2023 ATI adjusted EBITDA was $132.7 million, or 12.8% of sales
DALLAS, May 4, 2023
/PRNewswire/ -- ATI Inc. (NYSE: ATI) reported first quarter 2023
results, with sales of $1.04 billion
and net income attributable to ATI of $70.1
million, or $0.48 per
share.
|
|
|
|
|
Sequential
|
|
Y-O-Y
|
($ in millions except
per share amounts)
|
Q1
2023
|
|
Q4
2022
|
|
Change
|
Q1
2022
|
Change
|
|
|
|
|
|
|
|
|
Sales
|
$1,038.1
|
|
$1,010.4
|
|
3 %
|
$834.1
|
25 %
|
Net income attributable
to ATI
|
$70.1
|
|
$76.9
|
|
(9) %
|
$30.9
|
127 %
|
Earnings per
share
|
$0.48
|
|
$0.53
|
|
(9) %
|
$0.23
|
109 %
|
Non-GAAP
information
|
|
|
|
|
|
|
|
Adjusted net income
attributable to ATI*
|
$71.2
|
|
$76.9
|
|
(7) %
|
$56.7
|
26 %
|
Adjusted earnings per
share*
|
$0.49
|
|
$0.53
|
|
(8) %
|
$0.40
|
23 %
|
ATI adjusted
EBITDA*
|
$132.7
|
|
$140.1
|
|
(5) %
|
$125.0
|
6 %
|
|
|
|
|
|
|
|
|
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 $1.2
million for start-up related costs incurred as part of
restarting a titanium melt facility in Albany, Oregon. First quarter 2022
adjusted results exclude a $25.1
million loss on the sale of our Sheffield, U.K. business, a $6.8 million gain on the sale of the Pico Rivera, CA operations, an $8.6 million charge for litigation reserves, and
a $1.1 million benefit for changes to
previously recorded restructuring costs.
* Detailed reconciliations of the reported
information under accounting principles generally accepted in
the United States (U.S. GAAP) to
adjusted non-GAAP figures are included in accompanying financial
tables.
"ATI's continued strong performance across healthy markets is
confirmation that we have the right strategy and are executing
well," said Robert S. Wetherbee,
Board Chair, President and CEO. "Our transformation is
optimizing the differentiated capabilities our customers value.
We're well-positioned to capture growth in our key markets.
"Aerospace and defense sales increased within both
segments. We are maximizing the opportunities as the
aerospace ramp continues to accelerate." said Wetherbee. "We
are laser focused on increasing the efficiency of our operations to
meet the historic demand for our materials."
Operating Results by Segment
High Performance
Materials & Components (HPMC)
|
|
|
|
|
|
($ millions)
|
Q1
2023
|
|
Q4
2022
|
|
Q1
2022
|
Sales
|
$471.1
|
|
$445.9
|
|
$341.6
|
|
|
|
|
|
|
Segment
EBITDA
|
$80.1
|
|
$81.8
|
|
$68.1
|
% of Sales
|
17.0 %
|
|
18.3 %
|
|
19.9 %
|
|
|
|
|
|
|
- HPMC's first quarter 2023 sales increased $25 million, or 6%, compared to the fourth
quarter 2022, primarily driven by growth in the commercial airframe
market. Overall aerospace and defense sales were 84% of total HPMC
sales in the first quarter 2023. First quarter 2023 sales improved
38% compared to the first quarter 2022, with total aerospace and
defense related sales increasing over 50% compared to the prior
year period.
- HPMC segment EBITDA was $80.1
million, or 17.0% of sales. Strength in the HPMC segment
continues to be driven by content on next-generation commercial
aerospace platforms.
- Results in the first quarter 2022 included $21.9 million of benefits from the Aviation
Manufacturing Jobs Protection program and employee retention
credits, partially offset by labor and other costs related to ramp
readiness.
Advanced Alloys &
Solutions (AA&S)
|
|
|
|
|
|
($ millions)
|
Q1
2023
|
|
Q4
2022
|
|
Q1
2022
|
Sales
|
$567.0
|
|
$564.5
|
|
$492.5
|
|
|
|
|
|
|
Segment
EBITDA
|
$72.7
|
|
$72.1
|
|
$75.3
|
% of Sales
|
12.8 %
|
|
12.8 %
|
|
15.3 %
|
|
|
|
|
|
|
- AA&S first quarter 2023 sales and EBITDA were comparable to
the fourth quarter 2022. First quarter sales to the aerospace and
defense market as well as the energy market were both 6% higher
compared to the fourth quarter 2022. These favorable trends were
offset by 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 over 70% compared to the prior year period.
- AA&S segment EBITDA was $72.7
million, or 12.8% of sales. A stronger mix of nickel-alloy
and titanium mill products is largely offset by higher retirement
benefit costs.
- Results in the first quarter 2022 included $6.8 million of benefits from employee retention
credits, partially offset by labor and other costs related to ramp
readiness.
Corporate Items and Cash
- Corporate expenses in the first quarter 2023 were $17.3 million, compared to $14.5 million in the fourth quarter 2022, and
$17.0 million in the prior year first
quarter.
- Closed operations and other expense (income) was an expense of
$2.8 million in the first quarter
2023, compared to a benefit of $0.7
million in the fourth quarter 2022, and expense of
$1.4 million in the first quarter
2022. Higher costs in the first quarter 2023 were associated with
environmental remediation at closed operations and retirement
benefit expense.
- First quarter 2023 results include a $4.3 million income tax provision, compared to
$4.2 million in the fourth quarter
2022, and $4.9 million in the first
quarter of 2022. 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 first quarter of 2023, cash used in operating
activities was $285.2 million,
primarily related to higher accounts receivable and inventory
balances due to increasing operating levels. First quarter 2023
managed working capital as a percent of sales was 37.6%. Capital
expenditures for the first quarter 2023 were $60.4 million.
- Cash on hand at March 31, 2023
was $196 million, and available
additional liquidity under the asset-based lending (ABL) credit
facility was approximately $550
million. ATI has no significant debt maturities until
2025.
- During the first quarter of 2023, the Company repurchased stock
using the remaining $10 million of
the $150 million repurchase plan
approved by our Board of Directors in 2022. In addition, on
April 28, 2023, our Board of
Directors authorized the repurchase of an additional $75 million of ATI stock.
- As previously communicated, the Company contributed
$50 million to the U.S. defined
benefit pension plan in the first quarter of 2023.
Outlook
"We're strategically investing—with disciplined capital
allocation—to ensure we have the capabilities and capacity needed
to meet unprecedented demand," said Wetherbee. "Our deliberate
actions to transform give us resilience against potential
headwinds, reducing the impact of volatility on our business. We
expect ongoing strength in our key markets to drive profitable
revenue growth," he said. "With another quarter of solid
performance, we remain on track toward our long-term targets,
delivering for our customers, our shareholders, and our team."
ATI will conduct a conference call with investors and analysts
on Thursday, May 4, 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 metals; (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 the currently ongoing COVID-19
pandemic or other similar widespread public health crises 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
|
|
|
March
31
|
|
December
31
|
|
March
31
|
|
|
2023
|
|
2022
|
|
2022
|
|
|
|
|
|
|
|
|
Sales
|
$
1,038.1
|
|
$
1,010.4
|
|
$
834.1
|
|
|
|
|
|
|
|
|
Cost of
sales
|
844.9
|
|
824.7
|
|
664.7
|
|
Gross profit
|
193.2
|
|
185.7
|
|
169.4
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses
|
80.6
|
|
76.8
|
|
75.2
|
|
Restructuring charges
(credits)
|
—
|
|
0.2
|
|
(1.1)
|
|
Loss on asset sales and
sales of businesses, net
|
—
|
|
—
|
|
18.3
|
|
Operating
income
|
112.6
|
|
108.7
|
|
77.0
|
|
Nonoperating retirement
benefit expense
|
(16.8)
|
|
(6.5)
|
|
(5.8)
|
|
Interest expense,
net
|
(19.9)
|
|
(19.6)
|
|
(23.6)
|
|
Other income (expense),
net
|
0.6
|
|
2.8
|
|
(7.5)
|
|
Income before income
taxes
|
76.5
|
|
85.4
|
|
40.1
|
|
Income tax
provision
|
4.3
|
|
4.2
|
|
4.9
|
|
Net
income
|
$
72.2
|
|
$
81.2
|
|
$
35.2
|
|
Less: Net income
attributable to noncontrolling interests
|
2.1
|
|
4.3
|
|
4.3
|
|
Net income
attributable to ATI
|
$
70.1
|
|
$
76.9
|
|
$
30.9
|
|
|
|
|
|
|
|
|
Basic net income
attributable to ATI per common share
|
$
0.55
|
|
$
0.60
|
|
$
0.24
|
|
|
|
|
|
|
|
|
Diluted net income
attributable to ATI per common share
|
$
0.48
|
|
$
0.53
|
|
$
0.23
|
|
|
|
|
|
|
|
|
ATI
Inc.
|
Sales and EBITDA by
Business Segment
|
(Unaudited, dollars
in millions)
|
|
|
Three Months
Ended
|
|
|
March
31
|
|
December
31
|
|
March
31
|
|
|
2023
|
|
2022
|
|
2022
|
|
Sales:
|
|
|
|
|
|
|
High Performance
Materials & Components
|
$
471.1
|
|
$
445.9
|
|
$
341.6
|
|
Advanced Alloys &
Solutions
|
567.0
|
|
564.5
|
|
492.5
|
|
Total external
sales
|
$
1,038.1
|
|
$
1,010.4
|
|
$
834.1
|
|
|
|
|
|
|
|
|
EBITDA:
|
|
|
|
|
|
|
High Performance
Materials & Components
|
$
80.1
|
|
$
81.8
|
|
$
68.1
|
|
% of Sales
|
17.0 %
|
|
18.3 %
|
|
19.9 %
|
|
Advanced Alloys &
Solutions
|
72.7
|
|
72.1
|
|
75.3
|
|
% of Sales
|
12.8 %
|
|
12.8 %
|
|
15.3 %
|
|
Total segment
EBITDA
|
152.8
|
|
153.9
|
|
143.4
|
|
% of Sales
|
14.7 %
|
|
15.2 %
|
|
17.2 %
|
|
Corporate
expenses
|
(17.3)
|
|
(14.5)
|
|
(17.0)
|
|
Closed operations and
other (expense) income
|
(2.8)
|
|
0.7
|
|
(1.4)
|
|
ATI Adjusted
EBITDA
|
$
132.7
|
|
$
140.1
|
|
$
125.0
|
|
|
|
|
|
|
|
|
Depreciation &
amortization (a)
|
(35.1)
|
|
(35.8)
|
|
(35.5)
|
|
Interest expense,
net
|
(19.9)
|
|
(19.6)
|
|
(23.6)
|
|
Restructuring and other
charges
|
(1.2)
|
|
(0.2)
|
|
(7.5)
|
|
Joint venture
restructuring credit
|
—
|
|
0.9
|
|
—
|
|
Loss on asset sales and
sales of businesses, net
|
—
|
|
—
|
|
(18.3)
|
|
Income before income
taxes
|
$
76.5
|
|
$
85.4
|
|
$
40.1
|
|
|
|
|
|
|
|
|
(a) The following
is depreciation & amortization by each business
segment:
|
|
|
Three Months
Ended
|
|
|
March
31
|
|
December
31
|
|
March
31
|
|
|
2023
|
|
2022
|
|
2022
|
|
High Performance
Materials & Components
|
$
17.4
|
|
$
16.8
|
|
$
17.9
|
|
Advanced Alloys &
Solutions
|
16.1
|
|
17.4
|
|
16.2
|
|
Other
|
1.6
|
|
1.6
|
|
1.4
|
|
Total depreciation
& amortization
|
$
35.1
|
|
$
35.8
|
|
$
35.5
|
|
ATI
Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited, dollars
in millions)
|
|
|
March
31
|
|
December
31
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
196.2
|
|
$
584.0
|
Accounts receivable,
net of allowances for doubtful accounts
|
725.6
|
|
579.2
|
Short-term contract
assets
|
52.7
|
|
64.1
|
Inventories,
net
|
1,293.8
|
|
1,195.7
|
Prepaid expenses and
other current assets
|
48.0
|
|
53.4
|
Total
Current Assets
|
2,316.3
|
|
2,476.4
|
|
|
|
|
Property, plant and
equipment, net
|
1,551.8
|
|
1,549.1
|
Goodwill
|
227.2
|
|
227.2
|
Other assets
|
192.0
|
|
192.9
|
|
|
|
|
Total
Assets
|
$
4,287.3
|
|
$
4,445.6
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
447.5
|
|
$
553.3
|
Short-term contract
liabilities
|
149.7
|
|
149.1
|
Short-term debt and
current portion of long-term debt
|
24.9
|
|
41.7
|
Other current
liabilities
|
201.9
|
|
219.8
|
Total
Current Liabilities
|
824.0
|
|
963.9
|
|
|
|
|
Long-term
debt
|
1,702.1
|
|
1,706.3
|
Accrued postretirement
benefits
|
180.0
|
|
184.9
|
Pension
liabilities
|
173.8
|
|
225.6
|
Other long-term
liabilities
|
193.1
|
|
207.7
|
Total
Liabilities
|
3,073.0
|
|
3,288.4
|
|
|
|
|
Total ATI stockholders'
equity
|
1,096.5
|
|
1,045.9
|
Noncontrolling
interests
|
117.8
|
|
111.3
|
Total
Equity
|
1,214.3
|
|
1,157.2
|
|
|
|
|
Total Liabilities
and Equity
|
$
4,287.3
|
|
$
4,445.6
|
ATI
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited, dollars
in millions)
|
|
|
|
Three Months
Ended
|
|
|
March
31
|
|
March
31
|
|
|
2023
|
|
2022
|
|
|
|
|
|
Operating
Activities:
|
|
|
|
|
Net income
|
$
72.2
|
|
$
35.2
|
|
|
|
|
|
|
Depreciation and
amortization
|
35.1
|
|
35.5
|
|
Share-based
compensation
|
7.1
|
|
5.9
|
|
Deferred
taxes
|
0.9
|
|
(1.2)
|
|
Net gain from disposal
of property, plant and equipment
|
(0.3)
|
|
(0.8)
|
|
Loss on sales of
businesses
|
—
|
|
25.1
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Inventories
|
(98.1)
|
|
(181.3)
|
|
Accounts
receivable
|
(146.4)
|
|
(108.2)
|
|
Accounts
payable
|
(77.8)
|
|
35.6
|
|
Retirement
benefits
|
(40.6)
|
|
(0.7)
|
|
Accrued liabilities
and other
|
(37.3)
|
|
(62.3)
|
Cash used in
operating activities
|
(285.2)
|
|
(217.2)
|
Investing
Activities:
|
|
|
|
|
Purchases of property,
plant and equipment
|
(60.4)
|
|
(26.0)
|
|
Proceeds from disposal
of property, plant and equipment
|
0.9
|
|
0.8
|
|
Other
|
0.2
|
|
1.0
|
Cash used in
investing activities
|
(59.3)
|
|
(24.2)
|
Financing
Activities:
|
|
|
|
|
Payments on long-term
debt and finance leases
|
(5.7)
|
|
(5.0)
|
|
Net payments under
credit facilities
|
(16.8)
|
|
(14.6)
|
|
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
|
(10.7)
|
|
(5.0)
|
Cash used in
financing activities
|
(43.3)
|
|
(129.6)
|
Decrease in cash and
cash equivalents
|
(387.8)
|
|
(371.0)
|
Cash and cash
equivalents at beginning of period
|
584.0
|
|
687.7
|
Cash and cash
equivalents at end of period
|
$
196.2
|
|
$
316.7
|
ATI
Inc.
|
Revenue by
Market
|
(Unaudited, dollars
in millions)
|
|
|
Three Months
Ended
|
|
March
31
|
|
December
31
|
|
March
31
|
|
2023
|
|
2022
|
|
2022
|
Market
|
|
|
|
|
|
|
|
|
Aerospace &
Defense:
|
|
|
|
|
|
|
|
Jet Engines-
Commercial
|
$
310.9
|
30 %
|
|
$
305.6
|
30 %
|
|
$ 196.6
|
24 %
|
Airframes-
Commercial
|
169.9
|
17 %
|
|
137.7
|
14 %
|
|
93.7
|
11 %
|
Defense
|
94.9
|
9 %
|
|
97.0
|
9 %
|
|
76.5
|
9 %
|
Total Aerospace &
Defense
|
$
575.7
|
56 %
|
|
$
540.3
|
53 %
|
|
$ 366.8
|
44 %
|
Energy:
|
|
|
|
|
|
|
|
|
Oil & Gas
|
127.5
|
12 %
|
|
121.3
|
12 %
|
|
103.1
|
12 %
|
Specialty Energy
|
82.7
|
8 %
|
|
79.3
|
8 %
|
|
56.6
|
7 %
|
Total Energy
|
210.2
|
20 %
|
|
200.6
|
20 %
|
|
159.7
|
19 %
|
Automotive
|
59.4
|
6 %
|
|
66.0
|
6 %
|
|
91.0
|
11 %
|
Construction/Mining
|
40.4
|
4 %
|
|
36.7
|
4 %
|
|
52.0
|
6 %
|
Medical
|
35.0
|
3 %
|
|
40.0
|
4 %
|
|
36.2
|
5 %
|
Electronics
|
34.4
|
3 %
|
|
50.5
|
5 %
|
|
51.6
|
6 %
|
Food Equipment &
Appliances
|
21.5
|
2 %
|
|
16.6
|
2 %
|
|
34.0
|
4 %
|
Other
|
61.5
|
6 %
|
|
59.7
|
6 %
|
|
42.8
|
5 %
|
Total
|
$
1,038.1
|
100 %
|
|
$
1,010.4
|
100 %
|
|
$ 834.1
|
100 %
|
|
|
|
|
|
|
|
|
|
ATI
Inc.
|
Selected Financial
Data
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
March
31
|
|
December
31
|
|
March
31
|
|
|
2023
|
|
2022
|
|
2022
|
|
Percentage of Total
ATI Sales
|
|
|
|
|
|
Nickel-based alloys and
specialty alloys
|
53 %
|
|
50 %
|
|
50 %
|
|
Precision forgings, castings
and components
|
16 %
|
|
16 %
|
|
15 %
|
|
Titanium and titanium-based
alloys
|
14 %
|
|
14 %
|
|
10 %
|
|
Precision rolled strip
products
|
10 %
|
|
13 %
|
|
17 %
|
|
Zirconium and related
alloys
|
7 %
|
|
7 %
|
|
8 %
|
|
Total
|
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
|
|
|
|
March
31
|
|
December
31
|
|
March
31
|
|
|
|
2023
|
|
2022
|
|
2022
|
|
Numerator for Basic net
income per common share -
|
|
|
|
|
|
|
|
Net income attributable
to ATI
|
$
70.1
|
|
$
76.9
|
|
$
30.9
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
4.75% Convertible
Senior Notes due 2022
|
—
|
|
—
|
|
1.1
|
|
|
3.5% Convertible Senior
Notes due 2025
|
2.6
|
|
2.7
|
|
2.9
|
|
Numerator for Diluted
net income per common share -
|
|
|
|
|
|
|
|
Net income attributable
to ATI after assumed conversions
|
$
72.7
|
|
$
79.6
|
|
$
34.9
|
|
|
|
|
|
|
|
|
|
Denominator for Basic
net income per common share -
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
128.5
|
|
129.1
|
|
126.4
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
Share-based
compensation
|
2.8
|
|
2.5
|
|
1.8
|
|
|
4.75% Convertible
Senior Notes due 2022
|
—
|
|
—
|
|
5.8
|
|
|
3.5% Convertible Senior
Notes due 2025
|
18.8
|
|
18.8
|
|
18.8
|
|
Denominator for Diluted
net income per common share -
|
|
|
|
|
|
|
|
Adjusted weighted
average shares assuming conversions
|
150.1
|
|
150.4
|
|
152.8
|
|
|
|
|
|
|
|
|
|
Basic net income
attributable to ATI per common share
|
$
0.55
|
|
$
0.60
|
|
$
0.24
|
|
|
|
|
|
|
|
|
|
Diluted net income
attributable to ATI per common share
|
$
0.48
|
|
$
0.53
|
|
$
0.23
|
|
|
|
|
|
|
|
|
|
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
|
|
March
31
2023
|
March
31
2022
|
|
|
|
Net income attributable
to ATI
|
$
70.1
|
$
30.9
|
Adjustments for special
items, pre-tax:
|
|
|
Restructuring and other
charges (a)
|
1.2
|
7.5
|
Loss on asset sales and
sales of businesses, net (b)
|
—
|
18.3
|
Total pre-tax
adjustments
|
1.2
|
25.8
|
|
|
|
Income tax on pre-tax
adjustments for special items
|
(0.1)
|
—
|
|
|
|
Net income attributable
to ATI excluding special items
|
$
71.2
|
$
56.7
|
|
|
|
|
|
Three Months
Ended
|
Three Months
Ended
|
|
|
March 31,
2023
|
|
March 31,
2022
|
|
|
|
Reported
|
Adjusted
|
|
Reported
|
Adjusted
|
|
Numerator for Basic net
income per common share -
|
|
|
|
|
|
|
|
Net income attributable
to ATI
|
$
70.1
|
$
71.2
|
|
$
30.9
|
$
56.7
|
|
Effect of dilutive
securities
|
2.6
|
2.6
|
|
4.0
|
4.0
|
|
Numerator for Diluted
net income per common share -
|
|
|
|
|
|
|
|
Net income attributable
to ATI after assumed conversions
|
$
72.7
|
$
73.8
|
|
$
34.9
|
$
60.7
|
|
|
|
|
|
|
|
|
|
Denominator for Basic
net income per common share -
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
128.5
|
128.5
|
|
126.4
|
126.4
|
|
Effect of dilutive
securities
|
21.6
|
21.6
|
|
26.4
|
26.4
|
|
Denominator for Diluted
net income per common share -
|
|
|
|
|
|
|
|
Adjusted weighted
average shares assuming conversions
|
150.1
|
150.1
|
|
152.8
|
152.8
|
|
|
|
|
|
|
|
|
|
Diluted net income
attributable to ATI per common share
|
$
0.48
|
$
0.49
|
|
$
0.23
|
$
0.40
|
|
Earnings before
interest, taxes, depreciation and amortization
(EBITDA)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31
2023
|
|
December 31
2022
|
|
March 31
2022
|
|
Net income attributable
to ATI
|
$
70.1
|
|
$
76.9
|
|
$
30.9
|
|
Net income attributable
to noncontrolling interests
|
2.1
|
|
4.3
|
|
4.3
|
|
Net income
|
72.2
|
|
81.2
|
|
35.2
|
|
(+) Depreciation and
Amortization
|
35.1
|
|
35.8
|
|
35.5
|
|
(+) Interest
Expense
|
19.9
|
|
19.6
|
|
23.6
|
|
(+) Income Tax
Provision
|
4.3
|
|
4.2
|
|
4.9
|
|
(+) Restructuring and
other charges (a)
|
1.2
|
|
0.2
|
|
7.5
|
|
(+) Loss on asset sales
and sales of businesses, net (b)
|
—
|
|
—
|
|
18.3
|
|
(-) Joint venture
restructuring credit (c)
|
—
|
|
(0.9)
|
|
—
|
|
ATI Adjusted
EBITDA
|
$
132.7
|
|
$
140.1
|
|
$
125.0
|
|
Corporate
expenses
|
17.3
|
|
14.5
|
|
17.0
|
|
Closed operations and
other expense (income)
|
2.8
|
|
(0.7)
|
|
1.4
|
|
Total segment
EBITDA
|
$
152.8
|
|
$
153.9
|
|
$
143.4
|
|
|
(a) First quarter
2023 includes a $1.2 million pre-tax charge for costs to restart
our titanium operations in Albany, OR. Fourth quarter 2022
includes a $0.2 million pre-tax restructuring charge. First
quarter 2022 includes an $8.6 million pre-tax litigation reserve
for the case of US Magnesium, LLC v. ATI Titanium LLC, a subsidiary
of ATI Inc., partially offset by a $1.1 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) First quarter 2022
includes a $25.1 million pre-tax partial loss on the sale of our
Sheffield, UK operations and a $6.8 million pre-tax gain on the
sale of our small Pico Rivera, CA operations.
|
(c) Fourth
quarter 2022 results include a $0.9 million pre-tax credit for
ATI's 50% share of Allegheny & Tsingshan Stainless joint
venture's credit for restructuring charges.
|
|
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.
|
March
31
|
|
December
31
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
Accounts
receivable
|
$
725.6
|
|
$
579.2
|
|
Short-term contract
assets
|
52.7
|
|
64.1
|
|
Inventory
|
1,293.8
|
|
1,195.7
|
|
Accounts
payable
|
(447.5)
|
|
(553.3)
|
|
Short-term contract
liabilities
|
(149.7)
|
|
(149.1)
|
|
Subtotal
|
1,474.9
|
|
1,136.6
|
|
|
|
|
|
|
Allowance for doubtful
accounts
|
7.4
|
|
7.7
|
|
Inventory
reserves
|
79.8
|
|
70.9
|
|
Managed working
capital
|
$
1,562.1
|
|
$
1,215.2
|
|
|
|
|
|
|
Annualized prior
3 months sales
|
$
4,152.6
|
|
$
4,041.9
|
|
|
|
|
|
|
Managed working capital
as a
|
|
|
|
|
% of annualized
sales
|
37.6 %
|
|
30.1 %
|
|
|
|
|
|
|
Change in managed
working capital:
|
|
|
|
|
Year-to-date
2023
|
$
346.9
|
|
|
|
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SOURCE ATI