Haynes International, Inc. Reports Fourth Quarter and Fiscal 2020 Financial Results
- Increase in net cash of
$11.8 million during the fourth quarter. Combined third and fourth quarter net cash increase of$24.8 million . The Company is expecting to continue to generate cash through inventory reductions during fiscal 2021. - Sequentially, gross margins improved from
3.3% in the third quarter to4.9% in the fourth quarter, despite lower volumes. The Company continues to successfully focus on cost, yield and pricing improvement initiatives. Fourth quarter gross margins were below fourth quarter of fiscal 2019 gross margins of16.4% with significant gross margin compression due to unfavorable fixed cost absorption caused by the low volumes produced in our facilities.
- Fourth quarter net revenues of
$79.9 million compared to net revenues of$129.6 million for the same period of fiscal 2019, driven by the continued impact of the COVID-19 pandemic which is most pronounced in the aerospace market. Fiscal year 2020 net revenues of$380.5 million compared to net revenues of$490.2 million for fiscal 2019.
- Fourth quarter net loss of
$(5.7) million , or$(0.46) per diluted share, compared to net income of$6.0 million , or$0.48 per diluted share, for the same period of fiscal 2019. Fiscal year 2020 net loss of$(6.5) million , or$(0.53) per diluted share, compared to net income of$9.7 million , or$0.78 per diluted share, for fiscal 2019. - Strong total liquidity of approximately
$167.2 million with cash at September 30, 2020 of$47.2 million and approximately$120 million available on the credit facility. Subsequent to year-end, the Company replaced the$120 million credit facility with a new three year$100 million facility. - Backlog of
$153.3 million at September 30, 2020, a decrease of12.2% from$174.6 million at June 30, 2020, and a decrease of34.8% from$235.2 million at September 30, 2019. - Capital investment in fiscal 2020 of
$9.4 million and forecast for capital spending in fiscal 2021 of$10.0 million . - Regular quarterly cash dividend of
$0.22 per outstanding share of the Company’s common stock declared.
KOKOMO, Ind., Nov. 19, 2020 (GLOBE NEWSWIRE) -- Haynes International, Inc. (NASDAQ GM: HAYN) (the “Company”), a leading developer, manufacturer and marketer of technologically advanced high-performance alloys, today reported financial results for the fourth quarter and fiscal year ended September 30, 2020. In addition, the Company announced that its Board of Directors has authorized a regular quarterly cash dividend of
“Despite our low COVID-19 impacted volumes, we generated
4th Quarter Results
Net Revenues. Net revenues were
Cost of Sales. Cost of sales was
Gross Profit. As a result of the above factors, gross profit was
Selling, General and Administrative Expense. Selling, general and administrative expense was
Research and Technical Expense. Research and technical expense was
Operating Income/(Loss). As a result of the above factors, operating loss in the fourth quarter of fiscal 2020 was (
Nonoperating retirement benefit expense. Nonoperating retirement benefit expense was
Income Taxes. Income tax benefit was
Net Income/(Loss). As a result of the above factors, net loss in the fourth quarter of fiscal 2020 was (
Fiscal Year Results
Net Revenues. Net revenues were
Cost of Sales. Cost of sales was
Gross Profit. As a result of the above factors, gross margin was
Selling, General and Administrative Expense. Selling, general and administrative expense was
Research and Technical Expense. Research and technical expense was
Operating Income/(Loss). As a result of the above factors, operating income in fiscal 2020 was
Nonoperating retirement benefit expense. Nonoperating retirement benefit expense was
Income Taxes. Income tax benefit was
Net Income/(Loss). As a result of the above factors, net loss for fiscal 2020 was
Volumes, Competition and Pricing
At the end of fiscal 2019, volume shipped in the fourth quarter was 5.4 million pounds, the Company’s highest quarterly volume in four and a half years. Moving into the first half of fiscal 2020, volumes were negatively impacted by the grounding and subsequent production halt of the Boeing 737 MAX aircraft combined with low oil prices, which impacted volumes sold into the chemical processing market. Volumes in the first and second quarter of fiscal 2020 were 4.2 million and 4.3 million pounds, respectively. The second half of fiscal 2020 was then significantly impacted by the global COVID-19 pandemic, which lowered volumes in the third and fourth quarter to 3.2 million and 2.9 million pounds, respectively. This put fiscal 2020 volume at 14.7 million pounds, which is the lowest since fiscal 2003 and represents a
Pounds shipped by market in the fourth quarter of fiscal 2020 compared to the same quarter last year declined
The product average selling price per pound in fiscal 2020 was
The average market price of nickel as reported by the London Metals Exchange for the 30-days ending September 30, 2020 was
Gross Profit Margin Trend Performance
The significant drop in volumes resulting from the COVID-19 pandemic compressed margins significantly in the third and fourth quarters of fiscal 2020. Particularly challenging is reducing spending commensurate with volume reductions in this environment. In the third and fourth quarter, the Company charged
Backlog
While the Company has experienced low order entry levels primarily due to the global COVID-19 pandemic, order entry rates slightly increased in the fourth quarter of fiscal 2020 compared to the third quarter, but still below shipment rates. Backlog was
Backlog decreased by
Capital Spending
Capital spending was
Working Capital
Controllable working capital, which includes accounts receivable, inventory, accounts payable and accrued expenses, was
Liquidity
The Company had cash and cash equivalents of
Net cash provided by operating activities was
Net cash used in investing activities was
Repayment of Draw and Refinancing Credit Facility
During the second quarter of fiscal 2020 the Company borrowed
Dividend Declared
On November 19, 2020, the Company announced that the Board of Directors declared a regular quarterly cash dividend of
Valuation of the Pension Plan and the Retiree Healthcare Plan
The actuarial valuation of the pension and retiree healthcare plans on September 30, 2020 included an unfavorable reduction in the discount rates used to measure the plan liabilities, however the reduction was offset by favorable items including higher than expected return on plan assets and favorable retiree health care spending. This development is expected to reduce expense in fiscal 2021 by
COVID-19 Pandemic
COVID-19 related disruptions negatively impacted the Company’s financial and operating results in the second half of fiscal 2020. In particular, the pandemic negatively impacted the aerospace supply chain which is absorbing significant downward adjustments to its forecasted demand. The Company has accepted, with select aerospace customers, order push-outs and in some cases cancellations. Markets other than aerospace have also been depressed with uncertainty and tight cash management impacting customer ordering patterns. The Company has taken significant actions to position itself to manage through the current market disruption caused by COVID-19. Due to the current unprecedented market and economic conditions in the U.S. and internationally, the extent of the impact of the COVID-19 pandemic on the Company’s operations going forward cannot be reasonably estimated. In general, however, we expect to continue to face challenging operating conditions for the foreseeable future until meaningful progress is made in curtailing the pandemic and its impact on the aerospace and other markets
Guidance
The Company continues to experience market uncertainty driven by the COVID-19 global pandemic. The Company expects revenue in the first quarter of fiscal 2021 to be lower than the fourth quarter of fiscal 2020 due to the ongoing impact of the pandemic, as well as the typical end of year holiday related business slowdown, maintenance schedules and customers managing their calendar year-end balance sheets. Earnings for the first quarter cannot be estimated during this time of unprecedented market and economic conditions, low volumes and unfavorable fixed cost absorption. The Company expects to continue to generate cash from inventory reduction in fiscal 2021, and the Company continues to position itself favorably for the recovery.
Earnings Conference Call
The Company will host a conference call on Friday, November 20, 2020 to discuss its results for the fourth quarter of fiscal 2020. Michael Shor, President and Chief Executive Officer, and Daniel Maudlin, Vice President of Finance and Chief Financial Officer, will host the call and be available to answer questions.
To participate, please dial the teleconferencing number shown below five minutes prior to the scheduled conference time.
Date: | Friday, November 20, 2020 | Dial-In Numbers: | 844-369-8770 (Domestic) |
Time: | 9:00 a.m. Eastern Time | 862-298-0840 (International) |
A live Webcast of the conference call will be available at www.haynesintl.com.
For those unable to participate, a teleconference replay will be available from Friday, November 20st at 11:00 a.m. ET, through 11:59 p.m. ET on Friday, December 18, 2020. To listen to the replay, please dial:
Replay: | 877-481-4010 |
Conference Pin: | 38595 |
A replay of the Webcast will also be available for one year at www.haynesintl.com.
About Haynes International
Haynes International, Inc. is a leading developer, manufacturer and marketer of technologically advanced, high performance alloys, primarily for use in the aerospace, industrial gas turbine and chemical processing industries.
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. All statements other than statements of historical fact, including statements regarding market and industry prospects and future results of operations or financial position, made in this press release are forward-looking. In many cases, you can identify forward-looking statements by terminology, such as “may”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. The forward-looking information may include, among other information, statements concerning the Company’s outlook for fiscal 2020 and beyond, overall volume and pricing trends, cost reduction strategies and their anticipated results, capital expenditures, dividends and the impact of COVID-19 on the economy, demand for our products and our operations, including the measures taken by governmental authorities to address it, which may precipitate or exacerbate other risks and/or uncertainties. There may also be other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of various factors, many of which are beyond the Company’s control.
The Company has based these forward-looking statements on its current expectations and projections about future events, including our expectations of the impact of the recent COVID-19 pandemic. Although the Company believes that the assumptions on which the forward-looking statements contained herein are based are reasonable, any of those assumptions could prove to be inaccurate. As a result, the forward-looking statements based upon those assumptions also could be incorrect. Risks and uncertainties may affect the accuracy of forward-looking statements. Some, but not all, of these risks are described in Item 1A. of Part 1 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020.
The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Schedule 1 | |||||||||||||||
HAYNES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data) | |||||||||||||||
Three Months Ended September 30, | Year Ended September 30, | ||||||||||||||
2019 | 2020 | 2019 | 2020 | ||||||||||||
Net revenues | $ | 129,640 | $ | 79,938 | $ | 490,215 | $ | 380,530 | |||||||
Cost of sales | 108,330 | 75,984 | 424,712 | 335,898 | |||||||||||
Gross profit | 21,310 | 3,954 | 65,503 | 44,632 | |||||||||||
Selling, general and administrative expense | 11,419 | 8,191 | 44,195 | 40,307 | |||||||||||
Research and technical expense | 1,069 | 936 | 3,592 | 3,713 | |||||||||||
Operating income (loss) | 8,822 | (5,173 | ) | 17,716 | 612 | ||||||||||
Nonoperating retirement benefit expense | 878 | 1,722 | 3,446 | 6,822 | |||||||||||
Interest income | (33 | ) | (9 | ) | (86 | ) | (44 | ) | |||||||
Interest expense | 230 | 368 | 986 | 1,332 | |||||||||||
Income (loss) before income taxes | 7,747 | (7,254 | ) | 13,370 | (7,498 | ) | |||||||||
Provision for (benefit from) income taxes | 1,710 | (1,537 | ) | 3,625 | (1,020 | ) | |||||||||
Net income (loss) | $ | 6,037 | $ | (5,717 | ) | $ | 9,745 | $ | (6,478 | ) | |||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | 0.48 | $ | (0.46 | ) | $ | 0.78 | $ | (0.53 | ) | |||||
Diluted | $ | 0.48 | $ | (0.46 | ) | $ | 0.78 | $ | (0.53 | ) | |||||
Weighted Average Common Shares Outstanding | |||||||||||||||
Basic | 12,452 | 12,474 | 12,445 | 12,471 | |||||||||||
Diluted | 12,503 | 12,474 | 12,481 | 12,471 | |||||||||||
Dividends declared per common share | $ | 0.22 | $ | 0.22 | $ | 0.88 | $ | 0.88 | |||||||
Schedule 2 | |||||||
HAYNES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share data) | |||||||
September 30, | September 30, | ||||||
2019 | 2020 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 31,038 | $ | 47,238 | |||
Accounts receivable, less allowance for doubtful accounts of | 76,979 | 51,118 | |||||
Inventories | 258,802 | 246,124 | |||||
Income taxes receivable | 1,757 | 3,770 | |||||
Other current assets | 3,297 | 3,285 | |||||
Total current assets | 371,873 | 351,535 | |||||
Property, plant and equipment, net | 169,966 | 159,819 | |||||
Deferred income taxes | 34,132 | 30,551 | |||||
Other assets | 7,756 | 8,974 | |||||
Goodwill | 4,789 | 4,789 | |||||
Other intangible assets, net | 5,284 | 5,056 | |||||
Total assets | $ | 593,800 | $ | 560,724 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 34,497 | $ | 17,555 | |||
Accrued expenses | 18,833 | 14,757 | |||||
Accrued pension and postretirement benefits | 4,250 | 3,403 | |||||
Deferred revenue—current portion | 2,500 | 2,500 | |||||
Total current liabilities | 60,080 | 38,215 | |||||
Long-term obligations (less current portion) | 8,609 | 8,509 | |||||
Deferred revenue (less current portion) | 15,329 | 12,829 | |||||
Deferred income taxes | 2,016 | 2,131 | |||||
Operating lease liabilities | — | 1,719 | |||||
Accrued pension benefits (less current portion) | 101,812 | 105,788 | |||||
Accrued postretirement benefits (less current portion) | 109,679 | 90,032 | |||||
Total liabilities | 297,525 | 259,223 |
Haynes International, Inc.
NASDAQ:HAYNHAYN RankingsHAYN Latest NewsHAYN Stock Data
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Iron and Steel Mills and Ferroalloy Manufacturing
Manufacturing
United States of America
KOKOMO
About HAYNhaynes international, inc. is a leading developer, manufacturer, and distributor of hastelloy® and haynes® high-performance alloys for use in high-temperature and corrosion applications. our primary markets include: aerospace, chemical processing, and industrial gas turbine industries. the story of haynes international spans a century of products, processes and, most of all, people. formed in kokomo, indiana in october, 1912, the more than 100-year history of haynes’ continuous operation also captures the historic growth of many well-known nickel- and cobalt-base superalloy families. these unique materials have been used in world wars, rockets to mars, the statue of liberty, and in our daily lives. alloy development is at the very heart of what we do. since fiscal year 2000, our technical programs have yielded nine new proprietary alloys, five of which are currently commercially available and four of which are being scaled-up to be brought to market. our highly-trained staff and techni
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