ATI Announces Second Quarter 2026 Results
Rhea-AI Summary
ATI (NYSE: ATI) reported second quarter 2026 sales of $1.26 billion, up 11% year-over-year, with net income attributable to ATI of $151 million and diluted EPS of $1.09, up 56%. Adjusted net income was $170 million, adjusted EPS $1.23, and adjusted EBITDA $284 million, up 37%, for a 22.6% margin. Results included a $9.9 million gain from a facility sale and excluded $23.6 million in special charges.
ATI raised full-year 2026 guidance to adjusted EBITDA of $1.135–$1.185 billion (from $1.010–$1.060 billion), adjusted EPS of $4.90–$5.18 (from $4.20–$4.48), and adjusted free cash flow of $550–$600 million (from $465–$525 million). Backlog reached a record $4.4 billion, up 18% year-over-year. The company repurchased $50 million of stock in Q2 at an average price of $159.53.
Positive
- Sales $1.26B, up 11% YoY; diluted EPS $1.09, up 56%
- Adjusted EBITDA $284M, up 37% YoY; margin expanded to 22.6%
- Backlog $4.4B, an 18% year-over-year increase
- Full-year 2026 adjusted EBITDA guidance raised to $1.135–$1.185B from $1.010–$1.060B
- Full-year adjusted EPS guidance increased to $4.90–$5.18 from $4.20–$4.48
- AA&S segment sales up 17% YoY; EBITDA margin improved to 23.7%
Negative
- $23.6M in Q2 2026 pre-tax special charges (start-up, transformation, restructuring, receivables losses)
- HPMC EBITDA margin declined sequentially to 24.1% from 24.9% due to higher manufacturing and period costs
- Effective tax rate rose sequentially to 20.0% from 11.8%, reducing net earnings leverage
News Explained
At June 28, ATI reported Q2 operating cash of $131.8 million against $68.6 million of capital spending.
ATI reported second-quarter 2026 results on
Cash provided by operating activities was
Cash and cash equivalents were
Market reaction after 2Q26 earnings report: ATI +7.26%
Following this news, ATI has gained 7.26%, reflecting a notable positive market reaction. Our momentum scanner has triggered 4 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $220.00.
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Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Jul 14 | Earnings webcast notice | Neutral | +3.1% | Scheduled Q2 results release and conference call ahead of August 6 |
| Apr 30 | Q1 earnings report | Positive | +6.3% | Raised full-year guidance alongside improved sales, earnings and cash flow |
| Apr 02 | Earnings webcast notice | Neutral | -3.0% | Scheduled Q1 results publication and earnings conference call |
| Feb 03 | Q4 earnings report | Positive | +5.4% | Reported fourth-quarter and fiscal-year results with FY2026 guidance |
| Dec 22 | Earnings webcast notice | Neutral | +2.2% | Scheduled fourth-quarter and full-year results conference call |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
ATI's prior substantive earnings releases produced positive reactions, while earnings webcast notices produced mixed reactions.
Key Terms
gaap financial
non-gaap financial
adjusted ebitda financial
adjusted free cash flow financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
ATI Exceeds the High End of Q2 Guidance and Raises Full-Year Outlook
GAAP diluted EPS up
Net income attributable to ATI increased
Adjusted EBITDA margin expanded 440 basis points to
Second Quarter 2026 GAAP Financial Results
- Sales of
$1.26 billion 11% year-over-year, driven by a13% aerospace & defense increase - Net income attributable to ATI of
$151 million 50% year-over-year - Earnings per share of
$1.09 $0.70
Second Quarter 2026 Non-GAAP Financial Information(a)
- Adjusted net income attributable to ATI(a) of
$170 million , up60% year-over-year - Adjusted earnings per share(a) of
$1.23 $0.74 - Adjusted EBITDA(a) of
$284 million , an increase of37% year-over-year - Adjusted EBITDA(a) as a percentage of sales of
22.6% , compared to18.2% in second quarter 2025
Guidance
The Company is providing third quarter and updated full-year 2026 guidance in the table below.
Current Guidance | Prior Guidance | ||
Q3 2026 | Full Year 2026 | Full Year 2026 | |
Adjusted EBITDA(b) | |||
Adjusted Earnings Per Share(b) | |||
Adjusted Free Cash Flow(b) | |||
(a) Reconciliations of the reported information under accounting principles generally accepted in |
(b) Detailed reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures are not available without unreasonable effort due to the complexity of the excluded components. |
Sequential | Y-O-Y | ||||||||
($ in millions except per share amounts) | Q2 2026 | Q1 2026 | Change | Q2 2025 | Change | ||||
Sales | 10 % | 11 % | |||||||
Net income attributable to ATI | 28 % | 50 % | |||||||
Earnings per share | 28 % | 56 % | |||||||
Non-GAAP information(a) | |||||||||
Adjusted net income attributable to ATI(a) | 22 % | 59 % | |||||||
Adjusted earnings per share(a) | 23 % | 66 % | |||||||
ATI adjusted EBITDA(a) | 23 % | 37 % |
Second quarter 2026 GAAP earnings per share were
Second quarter 2026 adjusted results exclude pre-tax charges of
First quarter 2026 adjusted results exclude pre-tax charges of
"We delivered another solid quarter, with results above the high end of our guidance and adjusted EBITDA up
"Momentum is carrying into the second half, and we are again raising our full-year guidance for adjusted earnings, EBITDA and free cash flow," Fields added. "Our outlook is supported by contracted pricing improvements, a richer product mix and increasing production volumes as targeted investments and operational execution expand our available capacity."
Operating Results by Segment
High Performance Materials & Components (HPMC) | |||||
($ millions) | Q2 2026 | Q1 2026 | Q2 2025 | ||
Sales | |||||
Segment EBITDA(a) | |||||
% of Sales | 24.1 % | 24.9 % | 23.7 % | ||
- HPMC's second quarter 2026 sales increased
$22.8 million 4% , compared to first quarter 2026, primarily due to strong demand and pricing for commercial jet engine products. Aerospace & defense sales represented93% of total HPMC sales in second quarter 2026, unchanged from first quarter 2026. - Second quarter 2026 sales increased
5% compared to second quarter 2025, primarily driven by a10% increase in commercial jet engine sales due to strong demand and pricing. - HPMC second quarter 2026 segment EBITDA(a) was
$153.5 million 24.1% of sales. The sequential decline in segment EBITDA margin was primarily due to higher manufacturing and period costs, including costs associated with revised qualification requirements for our new facility inMexico and titanium electron-beam furnace. The higher costs were partially offset by increased volume and favorable pricing of jet engine nickel products. The year-over-year increase in the segment EBITDA margin rate was primarily due to higher volume and favorable pricing, partially offset by higher manufacturing and period costs.
Advanced Alloys & Solutions (AA&S) | |||||
($ millions) | Q2 2026 | Q1 2026 | Q2 2025 | ||
Sales | |||||
Segment EBITDA(a) | |||||
% of Sales | 23.7 % | 18.1 % | 14.4 % |
- AA&S second quarter 2026 sales increased
$86.8 million 16% , compared to first quarter 2026, primarily due to higher sales in the aerospace & defense and conventional energy markets. Aerospace & defense sales increased19% , driven by higher demand and pricing and represented44% of total AA&S sales in the second quarter of 2026. The increase in conventional energy sales was mostly due to demand timing. - Second quarter 2026 sales increased
$92.4 million 17% , compared to the prior year quarter, primarily due to higher sales to the aerospace & defense and conventional energy markets. On a year-over-year basis, aerospace & defense sales grew by34% , including a90% increase in defense sales, reflecting both higher demand and pricing. - AA&S second quarter 2026 segment EBITDA(a) was
$147.6 million 23.7% of sales, inclusive of a$9.9 million
Corporate Items and Cash
- Restructuring and other charges:
- Second quarter 2026:
$23.6 million $10.1 million $7.0 million $3.9 million $2.6 million - First quarter 2026:
$26 $11 $8 $4 $2 - Second quarter 2025:
$8.7 million $7.1 million $1.6 million $1.3 million
- Second quarter 2026:
- Corporate expenses in the second quarter 2026 were
$14.9 million $17.0 million $15.4 million - Closed operations and other income/expense was an expense of
$1.8 million $1.2 million $2.4 million $1.8 million $1.1 million - The second quarter 2026 effective tax rate was
20.0% , compared to an effective tax rate of11.8% in first quarter 2026 and22% in second quarter 2025. The higher effective tax rate on a sequential basis was primarily due to the timing and amount of discrete tax benefits, mostly for share-based compensation. The year-over-year comparison was also affected by tax law changes from the One Big Beautiful Bill Act. - Cash provided by operating activities was
$131 $68.6 million - Managed working capital as a percent of annualized sales was
34.3% at the end of second quarter 2026, a decrease of 50 basis points compared to the end of first quarter 2026. - In the second quarter 2026, the Company repurchased
$50 million $159.53 $495 million
ATI will conduct a conference call with investors and analysts on Thursday, August 6, 2026, 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." A 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 28, 2025, 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 | ||||||||
June 28, | March 29, | June 29, | June 28, | June 29, | |||||
2026 | 2026 | 2025 | 2026 | 2025 | |||||
Sales | $ 1,261.1 | $ 1,151.5 | $ 1,140.4 | $ 2,412.6 | $ 2,284.8 | ||||
Cost of sales | 951.3 | 888.6 | 897.9 | 1,839.9 | 1,806.5 | ||||
Gross profit | 309.8 | 262.9 | 242.5 | 572.7 | 478.3 | ||||
Selling and administrative expenses | 95.7 | 92.1 | 82.8 | 187.8 | 167.8 | ||||
Restructuring (credits) charges | 3.9 | 7.0 | (1.3) | 10.9 | (1.3) | ||||
(Gain) loss on asset sales and sales of | (9.8) | — | — | (9.8) | 3.9 | ||||
Operating income | 220.0 | 163.8 | 161.0 | 383.8 | 307.9 | ||||
Nonoperating retirement benefit expense | (4.3) | (4.3) | (4.1) | (8.6) | (8.0) | ||||
Interest expense, net | (23.9) | (23.7) | (25.4) | (47.6) | (48.4) | ||||
Other income, net | 1.1 | 0.8 | 1.8 | 1.9 | 3.3 | ||||
Income before income taxes | 192.9 | 136.6 | 133.3 | 329.5 | 254.8 | ||||
Income tax provision | 38.6 | 16.1 | 29.3 | 54.7 | 50.3 | ||||
Net income | $ 154.3 | $ 120.5 | $ 104.0 | $ 274.8 | $ 204.5 | ||||
Less: Net income attributable to noncontrolling | 3.3 | 2.3 | 3.3 | 5.6 | 6.8 | ||||
Net income attributable to ATI | $ 151.0 | $ 118.2 | $ 100.7 | $ 269.2 | $ 197.7 | ||||
Basic net income attributable to ATI per | $ 1.11 | $ 0.86 | $ 0.72 | $ 1.97 | $ 1.40 | ||||
Diluted net income attributable to ATI per | $ 1.09 | $ 0.85 | $ 0.70 | $ 1.94 | $ 1.38 | ||||
ATI Inc. Selected Financial Data (Unaudited, dollars in millions) | |||||||||
Fiscal Quarter Ended | Fiscal Year-To-Date | ||||||||
June 28, | March 29, | June 29, | June 28, | June 29, | |||||
2026 | 2026 | 2025 | 2026 | 2025 | |||||
Sales: | |||||||||
High Performance Materials & Components | $ 637.1 | $ 614.3 | $ 608.8 | ||||||
Advanced Alloys & Solutions | 624.0 | 537.2 | 531.6 | 1,161.2 | 1,091.9 | ||||
Total external sales | |||||||||
Segment EBITDA(a): | |||||||||
High Performance Materials & Components | $ 153.5 | $ 152.9 | $ 144.0 | $ 306.4 | $ 275.0 | ||||
% of Sales | 24.1 % | 24.9 % | 23.7 % | 24.5 % | 23.1 % | ||||
Advanced Alloys & Solutions | 147.6 | 97.0 | 76.7 | 244.6 | 160.1 | ||||
% of Sales | 23.7 % | 18.1 % | 14.4 % | 21.1 % | 14.7 % | ||||
Corporate, Closed Operations and Other (Income) Expense(b): | |||||||||
Corporate expense | $ 14.9 | $ 17.0 | $ 15.4 | $ 31.9 | $ 32.8 | ||||
Closed operations and other (income) expense | 1.8 | 1.2 | (2.4) | 3.0 | — | ||||
Total Corporate, Closed Operations and | $ 16.7 | $ 18.2 | $ 13.0 | $ 34.9 | $ 32.8 | ||||
Depreciation & Amortization: | |||||||||
High Performance Materials & Components | $ 20.6 | $ 19.6 | $ 20.9 | $ 40.2 | $ 40.6 | ||||
Advanced Alloys & Solutions | 21.8 | 23.7 | 19.1 | 45.5 | 38.6 | ||||
Other | 1.6 | 1.7 | 1.6 | 3.3 | 3.2 | ||||
Total depreciation & amortization | $ 44.0 | $ 45.0 | $ 41.6 | $ 89.0 | $ 82.4 | ||||
Percentage of Total ATI Sales(c): | |||||||||
Nickel-based alloys and specialty alloys | 51 % | 49 % | 48 % | 50 % | 48 % | ||||
Precision forgings, castings and components | 18 % | 20 % | 21 % | 19 % | 21 % | ||||
Titanium and titanium-based alloys | 15 % | 17 % | 17 % | 16 % | 18 % | ||||
Zirconium and related alloys | 11 % | 9 % | 9 % | 10 % | 8 % | ||||
Precision rolled strip products | 5 % | 5 % | 5 % | 5 % | 5 % | ||||
Total | 100 % | 100 % | 100 % | 100 % | 100 % | ||||
(a) The Company's Chief Operating Decision Maker ("CODM") utilizes Segment EBITDA as a key metric to evaluate segment performance. Our measure of segment EBITDA, which we use to analyze the performance and results of our business segments, excludes net interest expense, income taxes, depreciation and amortization, special charges, unallocated corporate expenses, closed operations and other income (expense). See the Company's Form 10-Q for the reconciliation of Segment EBITDA to Income before taxes. |
(b) Amounts exclude depreciation & amortization expense. |
(c) Hot-Rolling and Processing Facility conversion service sales in the AA&S segment are excluded from this presentation. |
ATI Inc. Condensed Consolidated Balance Sheets (Unaudited, dollars in millions) | |||
June 28, | December 28, | ||
2026 | 2025 | ||
ASSETS | |||
Current Assets: | |||
Cash and cash equivalents | $ 783.0 | $ 416.7 | |
Accounts receivable, net of allowances for doubtful accounts | 646.6 | 686.1 | |
Short-term contract assets | 95.9 | 72.8 | |
Inventories, net | 1,667.5 | 1,403.2 | |
Prepaid expenses and other current assets | 87.4 | 101.2 | |
Total Current Assets | 3,280.4 | 2,680.0 | |
Property, plant and equipment, net | 1,980.7 | 1,940.6 | |
Goodwill | 225.2 | 225.2 | |
Other assets | 252.6 | 253.8 | |
Total Assets | $ 5,738.9 | $ 5,099.6 | |
LIABILITIES AND EQUITY | |||
Current Liabilities: | |||
Accounts payable | $ 656.6 | $ 568.2 | |
Accrued liabilities | 208.9 | 240.5 | |
Short-term contract liabilities | 143.5 | 146.4 | |
Short-term debt and current portion of long-term debt | 383.6 | 31.1 | |
Other current liabilities | 17.1 | 20.1 | |
Total Current Liabilities | 1,409.7 | 1,006.3 | |
Long-term debt | 1,808.4 | 1,718.3 | |
Accrued postretirement benefits | 150.8 | 158.5 | |
Pension liabilities | 43.2 | 41.4 | |
Other long-term liabilities | 328.6 | 258.4 | |
Total Liabilities | 3,740.7 | 3,182.9 | |
Total ATI stockholders' equity | 1,876.7 | 1,804.5 | |
Noncontrolling interests | 121.5 | 112.2 | |
Total Equity | 1,998.2 | 1,916.7 | |
Total Liabilities and Equity | $ 5,738.9 | $ 5,099.6 | |
ATI Inc. Condensed Consolidated Statements of Cash Flows (Unaudited, dollars in millions) | ||||
Fiscal Year-To-Date Period Ended | ||||
June 28, | June 29, | |||
2026 | 2025 | |||
Operating Activities: | ||||
Net income | $ 274.8 | $ 204.5 | ||
Depreciation and amortization | 89.0 | 82.4 | ||
Non-cash restructuring charges, net | 5.1 | — | ||
Share-based compensation | 14.1 | 14.6 | ||
Deferred taxes | 17.5 | 33.5 | ||
Net gain from disposal of property, plant and equipment | (9.8) | 0.2 | ||
Net loss on sales of businesses | 3.7 | |||
Changes in operating assets and liabilities: | ||||
Inventories | (266.0) | (50.6) | ||
Accounts receivable | 39.8 | (71.9) | ||
Accounts payable | 90.2 | (56.0) | ||
Retirement benefits | (3.2) | (4.1) | ||
Accrued liabilities and other | 8.5 | (87.3) | ||
Cash provided by operating activities | 260.0 | 69.0 | ||
Investing Activities: | ||||
Purchases of property, plant and equipment | (123.8) | (125.4) | ||
Proceeds from disposal of property, plant and equipment | 5.6 | 0.1 | ||
Proceeds from sales of businesses, net of transaction costs | 1.4 | 2.0 | ||
Other | — | 4.1 | ||
Cash used in investing activities | (116.8) | (119.2) | ||
Financing Activities: | ||||
Proceeds from issuance of senior notes | 450.0 | — | ||
Repayment of finance lease obligations | (16.7) | (16.3) | ||
Net borrowings under international credit facilities | 2.5 | — | ||
Debt issuance costs | (5.7) | — | ||
Purchase of treasury stock | (125.0) | (320.0) | ||
Taxes on share-based compensation and other | (81.7) | (29.5) | ||
Cash provided by (used in) financing activities | 223.4 | (365.8) | ||
Effect of exchange rate changes on cash and cash equivalents | (0.3) | 14.4 | ||
Increase (decrease) in cash and cash equivalents | 366.3 | (401.6) | ||
Cash and cash equivalents at beginning of period | 416.7 | 721.2 | ||
Cash and cash equivalents at end of period | $ 783.0 | $ 319.6 | ||
ATI Inc. Revenue by Market (Unaudited, dollars in millions) | ||||||||||||||
Fiscal Quarter Ended | Fiscal Year-To-Date Period | |||||||||||||
June 28, | March 29, | June 29, | June 28, | June 29, | ||||||||||
2026 | 2026 | 2025 | 2026 | 2025 | ||||||||||
Aerospace & Defense: | ||||||||||||||
Jet Engines- | 40 % | 41 % | 39 % | 41 % | 38 % | |||||||||
Airframes- Commercial | 191.7 | 15 % | 186.6 | 16 % | 195.2 | 17 % | 378.3 | 16 % | 401.0 | 17 % | ||||
Defense | 162.0 | 13 % | 139.0 | 12 % | 118.8 | 11 % | 301.0 | 12 % | 246.0 | 11 % | ||||
Total Aerospace & | 862.0 | 68 % | 797.6 | 69 % | 761.8 | 67 % | 1,659.6 | 69 % | 1,516.2 | 66 % | ||||
Other Markets: | ||||||||||||||
Specialty Energy | 59.2 | 5 % | 61.6 | 5 % | 63.5 | 6 % | 120.8 | 5 % | 114.0 | 5 % | ||||
Electronics | 38.2 | 3 % | 28.3 | 3 % | 43.7 | 4 % | 66.5 | 3 % | 83.3 | 4 % | ||||
Medical | 23.0 | 2 % | 27.5 | 3 % | 38.9 | 3 % | 50.5 | 2 % | 81.3 | 4 % | ||||
Automotive | 72.3 | 6 % | 61.5 | 5 % | 64.8 | 6 % | 133.8 | 5 % | 125.4 | 5 % | ||||
Conventional Energy | 103.5 | 8 % | 84.2 | 7 % | 92.9 | 8 % | 187.7 | 8 % | 214.7 | 9 % | ||||
Construction/Mining | 34.9 | 3 % | 39.0 | 3 % | 33.3 | 3 % | 73.9 | 3 % | 66.2 | 3 % | ||||
Other | 68.0 | 5 % | 51.8 | 5 % | 41.5 | 3 % | 119.8 | 5 % | 83.7 | 4 % | ||||
Total Other Markets | 32 % | 31 % | 33 % | 31 % | 34 % | |||||||||
Total | $ 1,261.1 | 100 % | $ 1,151.5 | 100 % | $ 1,140.4 | 100 % | $ 2,412.6 | 100 % | $ 2,284.8 | 100 % | ||||
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 | |||||||||
June 28, | March 29, | June 29, | June 28, | June 29, | ||||||
2026 | 2026 | 2025 | 2026 | 2025 | ||||||
Numerator for Basic net income per common share - | ||||||||||
Net income attributable to ATI | $ 151.0 | $ 118.2 | $ 100.7 | $ 269.2 | $ 197.7 | |||||
Denominator for Basic net income per common share - | ||||||||||
Weighted average shares outstanding | 136.3 | 136.7 | 139.8 | 136.5 | 140.7 | |||||
Effect of dilutive securities: | ||||||||||
Share-based compensation | 2.0 | 1.9 | 3.3 | 2.0 | 3.0 | |||||
Denominator for Diluted net income per common | ||||||||||
Adjusted weighted average shares and assumed | 138.3 | 138.6 | 143.1 | 138.5 | 143.7 | |||||
Basic net income attributable to ATI per common share | $ 1.11 | $ 0.86 | $ 0.72 | $ 1.97 | $ 1.40 | |||||
Diluted net income attributable to ATI per common | $ 1.09 | $ 0.85 | $ 0.70 | $ 1.94 | $ 1.38 | |||||
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
Adjusted net income attributable to ATI and related Adjusted EPS are calculated by adjusting net income attributable to ATI for the tax-effected impact of special items. We define Adjusted EBITDA as net income, excluding net interest expense, income taxes, depreciation and amortization, and special items. Our measure of segment EBITDA, which we use to analyze the performance and results of our business segments, excludes net interest expense, income taxes, depreciation and amortization, special charges, corporate expenses, closed operations and other income (expense). Our methods of calculating Adjusted free cash flow and Managed working capital are discussed in greater detail below under the headings "Adjusted Free Cash Flow" and "Managed Working Capital," respectively.
Management believes presenting these non-GAAP financial measures is useful to investors because it (1) provides investors with meaningful supplemental information regarding financial and operating performance by excluding certain items management believes do not directly impact the Company's core operations, (2) permits investors to view performance using the same metrics that management uses to forecast, evaluate performance, and make operating and strategic decisions, and (3) provides additional information on a period-to-period consistent basis using measures commonly used to analyze companies' operating performance. Management believes that consideration of these non-GAAP financial measures, together with our GAAP financial measures and the corresponding reconciliations, provides investors with a better understanding of the Company's performance and trends that would be absent such disclosures.
Non-GAAP financial measures should be viewed in addition to, and not superior to or as an alternative for, the Company's reported results prepared in accordance with GAAP. The following tables provide the calculation of the non-GAAP financial measures discussed in this press release:
Net Income Attributable to ATI | |||||||||||
Fiscal Quarter Ended | |||||||||||
June 28, 2026 | March 29, 2026 | June 29, 2025 | |||||||||
EPS | EPS | EPS | |||||||||
Net income attributable to ATI | $ 151.0 | $ 1.09 | $ 118.2 | $ 0.85 | $ 100.7 | $ 0.70 | |||||
Adjustments for special items, pre-tax: | |||||||||||
Restructuring and other charges(a) | 23.6 | 26.4 | 7.4 | ||||||||
Pension remeasurement loss(b) | — | — | — | ||||||||
Loss (gain) on sales of businesses(c) | — | — | — | ||||||||
Total pre-tax adjustments for special items | 23.6 | 0.17 | 26.4 | 0.19 | 7.4 | 0.05 | |||||
Income tax on adjustments for special items | (4.9) | (0.03) | (5.4) | (0.04) | (1.7) | (0.01) | |||||
Adjusted Net income attributable to ATI | $ 169.7 | $ 1.23 | $ 139.2 | $ 1.00 | $ 106.4 | $ 0.74 | |||||
Earnings before interest, taxes, depreciation and amortization | |||||
Fiscal Quarter Ended | |||||
June 28, 2026 | March 29, 2026 | June 29, 2025 | |||
Net income attributable to ATI | $ 151.0 | $ 118.2 | $ 100.7 | ||
Net income attributable to noncontrolling | 3.3 | 2.3 | 3.3 | ||
Net income | 154.3 | 120.5 | 104.0 | ||
(+) Depreciation and amortization | 44.0 | 45.0 | 41.6 | ||
(+) Interest expense | 23.9 | 23.7 | 25.4 | ||
(+) Income tax provision | 38.6 | 16.1 | 29.3 | ||
EBITDA | 260.8 | 205.3 | 200.3 | ||
Adjustments for special items, pre-tax: | |||||
(+) Restructuring and other charges(a) | 23.6 | 26.4 | 7.4 | ||
(+) Pension remeasurement loss(b) | — | — | — | ||
(+/-) Loss (gain) on sales of businesses(c) | — | — | — | ||
Adjusted EBITDA | $ 284.4 | $ 231.7 | $ 207.7 | ||
(a) Second quarter 2026 includes pre-tax charges of |
Adjusted Free Cash Flow
Management uses a non-GAAP measure, Adjusted free cash flow, to assess the cash flow generation of the Company's operations. Adjusted free cash flow is defined as the total 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
Management utilizes this measure to assess the cash flow generation performance of its business as it excludes cash contributions to the Company's
Fiscal Quarter Ended | Fiscal Year-To-Date Period | ||||||
June 28, 2026 | June 29, 2025 | June 28, 2026 | June 29, 2025 | ||||
Cash provided by operating activities | $ 131.8 | $ 161.5 | $ 260.0 | $ 69.0 | |||
Add back: Cash contributions to | — | — | — | — | |||
Cash provided by operating activities | 131.8 | 161.5 | 260.0 | 69.0 | |||
Cash used in investing activities | (63.2) | (68.6) | (116.8) | (119.2) | |||
Adjusted Free Cash Flow | $ 68.6 | $ 92.9 | $ 143.2 | $ (50.2) | |||
Managed Working Capital
As part of managing the performance of our business, we focus on Managed working capital, a non-GAAP financial measure that we define as gross accounts receivable, short-term contract assets and gross inventories, excluding the effects of reserves for uncollectible accounts receivable and inventory valuation reserves, less accounts payable and short-term contract liabilities. We assess Managed working capital performance as a percentage of the prior three months' annualized sales. Managed working capital is not intended to replace working capital or other GAAP financial measures or to be used as a measure of liquidity.
Management believes this non-GAAP financial measure focuses on the assets and liabilities most closely attributable to our core operations, allowing Management to quantify and evaluate the asset intensity of our business. Further, Management believes this non-GAAP financial measure provides investors with additional insights into the Company's effectiveness in balancing the need to maintain appropriate asset levels to support sales growth and operations while deploying our cash effectively.
June 28, | March 29, | December 28, | |||
2026 | 2026 | 2025 | |||
Accounts receivable | $ 646.6 | $ 664.4 | $ 686.1 | ||
Short-term contract assets | 95.9 | 63.1 | 72.8 | ||
Inventory | 1,667.5 | 1,580.3 | 1,403.2 | ||
Accounts payable | (656.6) | (654.9) | (568.2) | ||
Short-term contract liabilities | (143.5) | (154.4) | (146.4) | ||
Subtotal | 1,609.9 | 1,498.5 | 1,447.5 | ||
Allowance for doubtful accounts | 4.2 | 3.9 | 4.2 | ||
Inventory reserves | 117.2 | 100.0 | 80.4 | ||
Net managed working capital held for sale | — | — | — | ||
Managed working capital | $ 1,731.3 | $ 1,602.4 | $ 1,532.1 | ||
Annualized prior 3 months sales | $ 5,044.5 | $ 4,606.0 | $ 4,708.2 | ||
Managed working capital as a | |||||
% of annualized sales | 34.3 % | 34.8 % | 32.5 % | ||
Change in managed working capital: | |||||
Year-to-date 2026 | $ 199.2 | ||||
Q2 2026 | $ 128.9 |
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SOURCE ATI