[10-Q] ATI INC Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
ATI Inc. reported stronger Q3 results. Sales were $1,125.5 million versus $1,051.2 million a year ago as aerospace and defense demand led growth. Operating income rose to $162.4 million from $142.2 million. Diluted EPS increased to $0.78 from $0.57.
Year-to-date, revenue reached $3,410.3 million (up from $3,189.4 million) and diluted EPS was $2.16 (from $1.61). Cash provided by operating activities improved to $298.5 million from $26.3 million, while capital spending was $187.9 million. The company repurchased $470.0 million of stock year-to-date, reducing cash to $372.2 million from $721.2 million at year‑end.
Backlog was $3.6 billion at September 28, 2025, with approximately 70% expected to be satisfied within 12 months. ATI completed the sale of its East Hartford, CT operation for $20.5 million, recognizing a $1.1 million gain, and earlier divested two small European operations. Shares outstanding were 135,863,661 as of October 10, 2025.
ATI Inc. ha riportato risultati più solidi nel trimestre 3. Le vendite sono state di $1,125.5 milioni rispetto a $1,051.2 milioni un anno fa, poiché la domanda nei settori aerospaziale e della difesa ha trainato la crescita. L"utile operativo è salito a $162.4 milioni da $142.2 milioni. L"EPS diluito è aumentato a $0.78 da $0.57.
Da inizio anno, i ricavi hanno raggiunto $3,410.3 milioni (in aumento rispetto a $3,189.4 milioni) e l"EPS diluito era $2.16 (da $1.61). Il flusso di cassa fornito dalle attività operative è migliorato a $298.5 milioni da $26.3 milioni, mentre la spesa in capitale è stata di $187.9 milioni. La società ha riacquistato azioni per $470.0 milioni dall"inizio dell"anno, riducendo la cassa a $372.2 milioni da $721.2 milioni al termine dell"anno.
Il backlog era di $3.6 miliardi al 28 settembre 2025, con circa 70% previsto essere soddisfatto entro 12 mesi. ATI ha completato la vendita della sua operazione East Hartford, CT per $20.5 milioni, registrando un guadagno di $1.1 milioni, e in precedenza ha ceduto due piccole operazioni europee. Le azioni in circolazione erano 135,863,661 al 10 ottobre 2025.
ATI Inc. informó resultados más sólidos en el tercer trimestre. Las ventas fueron de $1,125.5 millones frente a $1,051.2 millones hace un año, ya que la demanda en aeroespacial y defensa impulsó el crecimiento. El ingreso operativo aumentó a $162.4 millones desde $142.2 millones. Las ganancias por acción diluidas subieron a $0.78 desde $0.57.
Año hasta la fecha, los ingresos alcanzaron $3,410.3 millones (frente a $3,189.4 millones) y las ganancias por acción diluidas fueron $2.16 (desde $1.61). El efectivo generado por las actividades operativas mejoró a $298.5 millones desde $26.3 millones, mientras que la inversión en capital fue de $187.9 millones. La empresa recompró $470.0 millones de acciones en lo que va del año, reduciendo el efectivo a $372.2 millones desde $721.2 millones al cierre del año.
El backlog fue de $3.6 mil millones al 28 de septiembre de 2025, con aproximadamente 70% esperado satisfacer dentro de 12 meses. ATI completó la venta de su operación en East Hartford, CT por $20.5 millones, registrando una ganancia de $1.1 millones, y previamente desinvirtió dos pequeñas operaciones europeas. Las acciones en circulación eran 135,863,661 a 10 de octubre de 2025.
ATI Inc.는 3분기 실적이 더 강했다. 매출은 전년 동기 $1,051.2백만에 비해 $1,125.5백만으로 증가했고, 항공우주 및 방산 수요가 성장을 이끌었다. 영업이익은 $162.4백만으로 상승했고, 희석된 주당순이익은 $0.78로 올랐다(이전 $0.57).
연간 누적 매출은 $3,410.3백만으로 증가했고 ($3,189.4백만에서), 희석된 EPS는 $2.16으로 증가했다($1.61에서). 운영활동으로 인한 현금 흐름은 $298.5백만으로 개선되었고 자본지출은 $187.9백만이었다. 회사는 연초 이후 주식 매입으로 $470.0백만을 매입해 현금을 $372.2백만으로 감소시키고 연말에는 $721.2백만이었다.
백로그(backlog)는 2025년 9월 28일 기준 $3.6십억으로, 약 70%가 12개월 이내에 충족될 것으로 예상된다. ATI는 East Hartford, CT의 사업장을 $20.5백만에 매각했고 $1.1백만의 이익을 인식했으며, 이전에 두 개의 소규모 유럽 사업도 매각했다. 2025년 10월 10일 기준 발행주식수는 135,863,661주였다.
ATI Inc. a affiché des résultats plus solides au T3. Les ventes se sont établies à $1,125.5 millions contre $1,051.2 millions il y a un an, la demande dans l’aérospatiale et la défense ayant soutenu la croissance. Le résultat opérationnel a augmenté à $162.4 millions contre $142.2 millions. Le BPA dilué est passé à $0.78 contre $0.57.
À ce jour, le chiffre d’affaires cumulé est de $3,410.3 millions (contre $3,189.4 millions) et le BPA dilué est de $2.16 (contre $1.61). Le flux de trésorerie provenant des activités opérationnelles s’est amélioré à $298.5 millions contre $26.3 millions, tandis que les dépenses d’investissement se montent à $187.9 millions. L’entreprise a racheté pour $470.0 millions d’actions cette année, réduisant la trésorerie à $372.2 millions contre $721.2 millions à la fin de l’exercice.
Le carnet de commandes était de $3.6 milliards au 28 septembre 2025, avec environ 70% prévu d’être satisfait dans les 12 mois. ATI a finalisé la vente de son opération East Hartford, CT pour $20.5 millions, enregistrant un gain de $1.1 million, et avait auparavant cédé deux petites opérations européennes. Le nombre d’actions en circulation était de 135,863,661 au 10 octobre 2025.
ATI Inc. meldete stärkere Q3-Ergebnisse. Der Umsatz belief sich auf $1,125.5 Millionen gegenüber $1,051.2 Millionen vor einem Jahr, da die Nachfrage im Luft- und Raumfahrt- sowie Verteidigungsbereich das Wachstum angetrieben hat. Das Betriebsergebnis stieg auf $162.4 Millionen von $142.2 Millionen. Der verwässerte Gewinn pro Aktie stieg auf $0.78 von $0.57.
Jahresbilanz-zur-Stellung, der Umsatz erreichte $3,410.3 Millionen (von $3,189.4 Millionen) und der verwässerte EPS betrug $2.16 (von $1.61). Der operative Cashflow verbesserte sich auf $298.5 Millionen von $26.3 Millionen, während die Kapitalausgaben $187.9 Millionen betrugen. Das Unternehmen hat in diesem Jahr Aktien im Wert von $470.0 Millionen zurückgekauft, wodurch der Cash-Bestand auf $372.2 Millionen von $721.2 Millionen am Jahresende sank.
Der Auftragsbestand lag am 28. September 2025 bei $3.6 Milliarden, wobei ungefähr 70% voraussichtlich innerhalb von 12 Monaten erfüllt werden. ATI schloss den Verkauf seines East Hartford, CT-Betriebs für $20.5 Millionen ab und realisierte einen Gewinn von $1.1 Million; zuvor wurden zwei kleine europäische Operationen verkauft. Die Anzahl der ausstehenden Aktien betrug zum 10. Oktober 2025 135,863,661.
ATI Inc. أعلنت عن نتائج أقوى في الربع الثالث. بلغت المبيعات $1,125.5 مليون مقارنة بـ $1,051.2 مليون قبل عام، حيث دفعت الطلب في مجالي الفضاء والدفاع النمو. ارتفع الربح التشغيلي إلى $162.4 مليون من $142.2 مليون. ارتفع EPS المخفف إلى $0.78 من $0.57.
حتى تاريخه، وصلت الإيرادات إلى $3,410.3 مليون (مقارنة بـ $3,189.4 مليون) وكان EPS المخفف $2.16 (من $1.61). تحسن النقد الناتج عن الأنشطة التشغيلية إلى $298.5 مليون من $26.3 مليون، فيما بلغت النفقات الرأسمالية $187.9 مليون. قامت الشركة بإعادة شراء أسهم بقيمة $470.0 مليون حتى تاريخه، مما قلل النقد إلى $372.2 مليون من $721.2 مليون في نهاية السنة.
كان رصيد الأعمال المتبقية $3.6 مليار في 28 سبتمبر 2025، مع توقع أن حوالي 70% سيتم تلبيتها خلال 12 شهراً. أكملت ATI بيع عمليتها في East Hartford، CT مقابل $20.5 مليون، مسجلةً ربحاً قدره $1.1 مليون، وقد باعت سابقاً عمليتين أوروبا. عدد الأسهم القائمة كان 135,863,661 حتى 10 أكتوبر 2025.
Positive
- None.
Negative
- None.
Insights
Solid Q3; aerospace drives growth and cash generation.
ATI posted Q3 sales of
Year-to-date operating cash flow of
Backlog stood at
ATI Inc. ha riportato risultati più solidi nel trimestre 3. Le vendite sono state di $1,125.5 milioni rispetto a $1,051.2 milioni un anno fa, poiché la domanda nei settori aerospaziale e della difesa ha trainato la crescita. L"utile operativo è salito a $162.4 milioni da $142.2 milioni. L"EPS diluito è aumentato a $0.78 da $0.57.
Da inizio anno, i ricavi hanno raggiunto $3,410.3 milioni (in aumento rispetto a $3,189.4 milioni) e l"EPS diluito era $2.16 (da $1.61). Il flusso di cassa fornito dalle attività operative è migliorato a $298.5 milioni da $26.3 milioni, mentre la spesa in capitale è stata di $187.9 milioni. La società ha riacquistato azioni per $470.0 milioni dall"inizio dell"anno, riducendo la cassa a $372.2 milioni da $721.2 milioni al termine dell"anno.
Il backlog era di $3.6 miliardi al 28 settembre 2025, con circa 70% previsto essere soddisfatto entro 12 mesi. ATI ha completato la vendita della sua operazione East Hartford, CT per $20.5 milioni, registrando un guadagno di $1.1 milioni, e in precedenza ha ceduto due piccole operazioni europee. Le azioni in circolazione erano 135,863,661 al 10 ottobre 2025.
ATI Inc. informó resultados más sólidos en el tercer trimestre. Las ventas fueron de $1,125.5 millones frente a $1,051.2 millones hace un año, ya que la demanda en aeroespacial y defensa impulsó el crecimiento. El ingreso operativo aumentó a $162.4 millones desde $142.2 millones. Las ganancias por acción diluidas subieron a $0.78 desde $0.57.
Año hasta la fecha, los ingresos alcanzaron $3,410.3 millones (frente a $3,189.4 millones) y las ganancias por acción diluidas fueron $2.16 (desde $1.61). El efectivo generado por las actividades operativas mejoró a $298.5 millones desde $26.3 millones, mientras que la inversión en capital fue de $187.9 millones. La empresa recompró $470.0 millones de acciones en lo que va del año, reduciendo el efectivo a $372.2 millones desde $721.2 millones al cierre del año.
El backlog fue de $3.6 mil millones al 28 de septiembre de 2025, con aproximadamente 70% esperado satisfacer dentro de 12 meses. ATI completó la venta de su operación en East Hartford, CT por $20.5 millones, registrando una ganancia de $1.1 millones, y previamente desinvirtió dos pequeñas operaciones europeas. Las acciones en circulación eran 135,863,661 a 10 de octubre de 2025.
ATI Inc.는 3분기 실적이 더 강했다. 매출은 전년 동기 $1,051.2백만에 비해 $1,125.5백만으로 증가했고, 항공우주 및 방산 수요가 성장을 이끌었다. 영업이익은 $162.4백만으로 상승했고, 희석된 주당순이익은 $0.78로 올랐다(이전 $0.57).
연간 누적 매출은 $3,410.3백만으로 증가했고 ($3,189.4백만에서), 희석된 EPS는 $2.16으로 증가했다($1.61에서). 운영활동으로 인한 현금 흐름은 $298.5백만으로 개선되었고 자본지출은 $187.9백만이었다. 회사는 연초 이후 주식 매입으로 $470.0백만을 매입해 현금을 $372.2백만으로 감소시키고 연말에는 $721.2백만이었다.
백로그(backlog)는 2025년 9월 28일 기준 $3.6십억으로, 약 70%가 12개월 이내에 충족될 것으로 예상된다. ATI는 East Hartford, CT의 사업장을 $20.5백만에 매각했고 $1.1백만의 이익을 인식했으며, 이전에 두 개의 소규모 유럽 사업도 매각했다. 2025년 10월 10일 기준 발행주식수는 135,863,661주였다.
ATI Inc. a affiché des résultats plus solides au T3. Les ventes se sont établies à $1,125.5 millions contre $1,051.2 millions il y a un an, la demande dans l’aérospatiale et la défense ayant soutenu la croissance. Le résultat opérationnel a augmenté à $162.4 millions contre $142.2 millions. Le BPA dilué est passé à $0.78 contre $0.57.
À ce jour, le chiffre d’affaires cumulé est de $3,410.3 millions (contre $3,189.4 millions) et le BPA dilué est de $2.16 (contre $1.61). Le flux de trésorerie provenant des activités opérationnelles s’est amélioré à $298.5 millions contre $26.3 millions, tandis que les dépenses d’investissement se montent à $187.9 millions. L’entreprise a racheté pour $470.0 millions d’actions cette année, réduisant la trésorerie à $372.2 millions contre $721.2 millions à la fin de l’exercice.
Le carnet de commandes était de $3.6 milliards au 28 septembre 2025, avec environ 70% prévu d’être satisfait dans les 12 mois. ATI a finalisé la vente de son opération East Hartford, CT pour $20.5 millions, enregistrant un gain de $1.1 million, et avait auparavant cédé deux petites opérations européennes. Le nombre d’actions en circulation était de 135,863,661 au 10 octobre 2025.
ATI Inc. meldete stärkere Q3-Ergebnisse. Der Umsatz belief sich auf $1,125.5 Millionen gegenüber $1,051.2 Millionen vor einem Jahr, da die Nachfrage im Luft- und Raumfahrt- sowie Verteidigungsbereich das Wachstum angetrieben hat. Das Betriebsergebnis stieg auf $162.4 Millionen von $142.2 Millionen. Der verwässerte Gewinn pro Aktie stieg auf $0.78 von $0.57.
Jahresbilanz-zur-Stellung, der Umsatz erreichte $3,410.3 Millionen (von $3,189.4 Millionen) und der verwässerte EPS betrug $2.16 (von $1.61). Der operative Cashflow verbesserte sich auf $298.5 Millionen von $26.3 Millionen, während die Kapitalausgaben $187.9 Millionen betrugen. Das Unternehmen hat in diesem Jahr Aktien im Wert von $470.0 Millionen zurückgekauft, wodurch der Cash-Bestand auf $372.2 Millionen von $721.2 Millionen am Jahresende sank.
Der Auftragsbestand lag am 28. September 2025 bei $3.6 Milliarden, wobei ungefähr 70% voraussichtlich innerhalb von 12 Monaten erfüllt werden. ATI schloss den Verkauf seines East Hartford, CT-Betriebs für $20.5 Millionen ab und realisierte einen Gewinn von $1.1 Million; zuvor wurden zwei kleine europäische Operationen verkauft. Die Anzahl der ausstehenden Aktien betrug zum 10. Oktober 2025 135,863,661.
ATI Inc. أعلنت عن نتائج أقوى في الربع الثالث. بلغت المبيعات $1,125.5 مليون مقارنة بـ $1,051.2 مليون قبل عام، حيث دفعت الطلب في مجالي الفضاء والدفاع النمو. ارتفع الربح التشغيلي إلى $162.4 مليون من $142.2 مليون. ارتفع EPS المخفف إلى $0.78 من $0.57.
حتى تاريخه، وصلت الإيرادات إلى $3,410.3 مليون (مقارنة بـ $3,189.4 مليون) وكان EPS المخفف $2.16 (من $1.61). تحسن النقد الناتج عن الأنشطة التشغيلية إلى $298.5 مليون من $26.3 مليون، فيما بلغت النفقات الرأسمالية $187.9 مليون. قامت الشركة بإعادة شراء أسهم بقيمة $470.0 مليون حتى تاريخه، مما قلل النقد إلى $372.2 مليون من $721.2 مليون في نهاية السنة.
كان رصيد الأعمال المتبقية $3.6 مليار في 28 سبتمبر 2025، مع توقع أن حوالي 70% سيتم تلبيتها خلال 12 شهراً. أكملت ATI بيع عمليتها في East Hartford، CT مقابل $20.5 مليون، مسجلةً ربحاً قدره $1.1 مليون، وقد باعت سابقاً عمليتين أوروبا. عدد الأسهم القائمة كان 135,863,661 حتى 10 أكتوبر 2025.
ATI Inc. 报告了第三季度业绩更强劲。销售额为 $1,125.5 百万美元，比上一年的 $1,051.2 百万美元 增长，航空航天与防务需求推动增长。经营利润提升至 $162.4 百万美元，此前为 $142.2 百万美元。摊薄后每股收益提升至 $0.78，此前为 $0.57。
年初至今，收入达到 $3,410.3 百万美元（高于 $3,189.4 百万美元），摊薄后每股收益为 $2.16（来自 $1.61）。运营活动产生的现金流改善至 $298.5 百万美元，资本支出为 $187.9 百万美元。公司年初至今回购股票价值 $470.0 百万美元，现金减少至 $372.2 百万美元，年末为 $721.2 百万美元。
截至2025年9月28日，未完待执行订单 backlog 为 $3.6 十亿美元，约 70% 预计在12个月内完成。ATI 已完成对东哈特福德（East Hartford, CT）业务的出售，金额为 $20.5 百万美元，确认了 $1.1 百万美元的收益，此前还处置了两家小型欧洲业务。截至2025年10月10日，流通在外的股票数量为 135,863,661 股。
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the Quarterly Period Ended September 28, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the Transition Period From to
Commission File Number 1-12001
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | ||||||||||
| incorporation or organization) | Identification No.) | ||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||
(800 ) 289-7454
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
At October 10, 2025, the registrant had outstanding 135,863,661 shares of its Common Stock.
ATI INC.
SEC FORM 10-Q
Quarter Ended September 28, 2025
INDEX
| Page No. | |||||
| PART I. - FINANCIAL INFORMATION | |||||
| Item 1. Financial Statements | |||||
| Consolidated Balance Sheets | 1 | ||||
| Consolidated Statements of Operations | 2 | ||||
| Consolidated Statements of Comprehensive Income (Loss) | 3 | ||||
| Consolidated Statements of Cash Flows | 4 | ||||
| Statements of Changes in Consolidated Equity | 5 | ||||
| Notes to Consolidated Financial Statements | 6 | ||||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 | ||||
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 42 | ||||
| Item 4. Controls and Procedures | 45 | ||||
| PART II. - OTHER INFORMATION | |||||
| Item 1. Legal Proceedings | 45 | ||||
| Item 1A. Risk Factors | 45 | ||||
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 47 | ||||
| Item 5. Other Information | 48 | ||||
| Item 6. Exhibits | 48 | ||||
| SIGNATURES | 49 | ||||
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ATI Inc. and Subsidiaries
Consolidated Balance Sheets
(In millions, except share and per share amounts)
(Current period unaudited)
| September 28, 2025 | December 29, 2024 | ||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Short-term contract assets | |||||||||||
| Inventories, net | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total Current Assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other assets | |||||||||||
| Total Assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Short-term contract liabilities | |||||||||||
| Short-term debt and current portion of long-term debt | |||||||||||
| Other current liabilities | |||||||||||
| Total Current Liabilities | |||||||||||
| Long-term debt | |||||||||||
| Accrued postretirement benefits | |||||||||||
| Pension liabilities | |||||||||||
| Other long-term liabilities | |||||||||||
| Total Liabilities | |||||||||||
| Equity: | |||||||||||
| ATI Stockholders’ Equity: | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
Treasury stock: | ( | ( | |||||||||
| Accumulated other comprehensive loss, net of tax | ( | ( | |||||||||
| Total ATI stockholders’ equity | |||||||||||
| Noncontrolling interests | |||||||||||
| Total Equity | |||||||||||
| Total Liabilities and Equity | $ | $ | |||||||||
The accompanying notes are an integral part of these statements.
1
ATI Inc. and Subsidiaries
Consolidated Statements of Operations
(In millions, except per share amounts)
(Unaudited)
| Quarter ended | Year-to-date period ended | ||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | ||||||||||||||||||||
| Sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling and administrative expenses | |||||||||||||||||||||||
| Restructuring (credits) charges | ( | ( | ( | ||||||||||||||||||||
| (Gain) loss on asset sales and sales of businesses, net | ( | ( | ( | ||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Nonoperating retirement benefit expense | ( | ( | ( | ( | |||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Other income, net | |||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | |||||||||||||||||||||||
| Net income attributable to ATI | $ | $ | $ | $ | |||||||||||||||||||
| Basic net income attributable to ATI per common share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted net income attributable to ATI per common share | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these statements.
2
ATI Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income (Loss)
(In millions)
(Unaudited)
| Quarter ended | Year-to-date period ended | ||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | ||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Currency translation adjustment | |||||||||||||||||||||||
| Unrealized net change arising during the period | ( | ||||||||||||||||||||||
| Reclassification adjustment included in net income | |||||||||||||||||||||||
| Total | ( | ||||||||||||||||||||||
| Derivatives | |||||||||||||||||||||||
| Net derivatives loss on hedge transactions | ( | ( | ( | ( | |||||||||||||||||||
| Reclassification to net income of net realized loss | |||||||||||||||||||||||
| Income taxes on derivative transactions | ( | ||||||||||||||||||||||
| Total | ( | ||||||||||||||||||||||
| Postretirement benefit plans | |||||||||||||||||||||||
| Actuarial loss | |||||||||||||||||||||||
| Amortization of net actuarial loss | |||||||||||||||||||||||
| Prior service cost | |||||||||||||||||||||||
| Amortization to net income of net prior service credits | ( | ( | ( | ( | |||||||||||||||||||
| Income taxes on postretirement benefit plans | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | ( | ||||||||||||||||||||||
| Comprehensive income | |||||||||||||||||||||||
| Less: Comprehensive income attributable to noncontrolling interests | |||||||||||||||||||||||
| Comprehensive income attributable to ATI | $ | $ | $ | $ | |||||||||||||||||||
The accompanying notes are an integral part of these statements.
3
ATI Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In millions)
(Unaudited)
| Year-to-date period ended | |||||||||||
| September 28, 2025 | September 29, 2024 | ||||||||||
| Operating Activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Share-based compensation | |||||||||||
| Deferred taxes | |||||||||||
| Net gain from disposal of property, plant and equipment | ( | ( | |||||||||
| Net loss on sales of businesses | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Inventories | ( | ( | |||||||||
| Accounts receivable | ( | ||||||||||
| Accounts payable | ( | ||||||||||
| Retirement benefits | ( | ( | |||||||||
| Accrued liabilities and other | ( | ( | |||||||||
| Cash provided by operating activities | |||||||||||
| Investing Activities: | |||||||||||
| Purchases of property, plant and equipment | ( | ( | |||||||||
| Proceeds from disposal of property, plant and equipment | |||||||||||
| Proceeds from sales of businesses, net of transaction costs | |||||||||||
| Other | |||||||||||
| Cash used in investing activities | ( | ( | |||||||||
| Financing Activities: | |||||||||||
| Payments on long-term debt and finance leases | ( | ( | |||||||||
| Net borrowings (payments) under credit facilities | ( | ||||||||||
| Receipt of convertible note capped call | |||||||||||
| Purchase of treasury stock | ( | ( | |||||||||
| Shares repurchased for income tax withholding on share-based compensation and other | ( | ( | |||||||||
| Cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | |||||||||||
| Less: Cash held for sale | ( | ||||||||||
| Decrease in cash and cash equivalents | ( | ( | |||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
The accompanying notes are an integral part of these statements.
4
ATI Inc. and Subsidiaries
Statements of Changes in Consolidated Equity
(In millions)
(Unaudited)
| ATI Stockholders | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Conversion of convertible notes | ( | — | — | ||||||||||||||||||||||||||||||||||||||
| Convertible note capped call | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Employee stock plans | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance, September 29, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| Balance, June 29, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Employee stock plans | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance, September 28, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| ATI Stockholders | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Conversion of convertible notes | ( | — | — | ||||||||||||||||||||||||||||||||||||||
| Convertible note capped call | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Employee stock plans | ( | — | — | ||||||||||||||||||||||||||||||||||||||
| Balance, September 29, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| Balance, December 29, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Employee stock plans | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Balance, September 28, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these statements.
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
Note 1. Accounting Policies
The interim consolidated financial statements include the accounts of ATI Inc. and its subsidiaries. Unless the context requires otherwise, “ATI” and “the Company” refer to ATI Inc. and its subsidiaries.
The Company follows a 4-4-5 or 5-4-4 fiscal calendar, whereby each fiscal quarter consists of thirteen weeks grouped into two four-week months and one five-week month, and its fiscal year ends on the Sunday closest to December 31. Unless otherwise stated, references to years and quarters in this Quarterly Report on Form 10-Q relate to fiscal years and quarters, rather than calendar years and quarters.
New Accounting Pronouncements Adopted
In November 2023, the Financial Accounting Standards Board (FASB) issued new accounting guidance related to segment reporting disclosures. This guidance requires additional disclosures on an annual and interim basis of segment information, including significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and the presentation and composition of other segment items, which is the difference between segment revenue less segment expenses and the measure of segment profit or loss. The guidance also requires that all current segment disclosures required on an annual basis be provided on an interim basis and requires disclosure of the title and position of the CODM and how the CODM uses the reported measure of segment profit or loss in assessing performance and allocating resources. This guidance does not change how an entity identifies its reportable segments. This new guidance, with the exception of interim disclosures, was effective for the Company in fiscal year 2024, and the Company adopted this new accounting guidance for annual disclosures effective January 1, 2024. The interim disclosures are effective for the Company in fiscal year 2025. The adoption of these changes did not have an impact on the Company’s consolidated financial statements other than disclosure requirements which are included in Note 11.
Pending Accounting Pronouncements
In December 2023, the FASB issued new accounting guidance related to income tax disclosures. This guidance requires an entity to disclose specific categories in its annual rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. This guidance also requires additional annual disclosures for income taxes paid and requires disaggregation of income before tax, between domestic and foreign, and income tax expense, between federal, state and foreign. This guidance also eliminates several current disclosure requirements related to: (1) the nature and estimate of the range of the reasonably possible change in the unrecognized tax benefits balance in the next 12 months, (2) making a statement that an estimate of the range cannot be made, and (3) disclosing the cumulative amount of each type of temporary difference when a deferred tax liability is not recognized because of the exceptions to comprehensive recognition of deferred taxes related to subsidiaries and corporate joint ventures. This new guidance includes annual disclosure requirements that will be effective for the Company for fiscal year 2025 and must be applied on a prospective basis with retrospective application permitted. The Company does not expect these changes to have an impact on the Company’s consolidated financial statements other than disclosure requirements.
In November 2024, the FASB issued new accounting guidance related to expense disaggregation disclosures. This guidance requires entities to disclose specified information about certain costs and expenses including (1) the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization, (2) include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same disclosure as the other disaggregation requirements, (3) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and (4) the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. This new guidance for annual disclosures will be effective for the Company for fiscal year 2027
6
and for interim disclosures will be effective for the Company for fiscal year 2028. The guidance can be applied prospectively or retrospectively and early adoption is permitted. The Company does not expect to early adopt this guidance and does not expect these changes to have an impact on the Company’s consolidated financial statements other than disclosure requirements.
Note 2. Revenue from Contracts with Customers
Disaggregation of Revenue
The Company operates in two business segments: High Performance Materials & Components (HPMC) and Advanced Alloys & Solutions (AA&S). Revenue is disaggregated within these two business segments by diversified global markets, primary geographical markets and diversified products. Comparative information regarding the Company’s overall revenues by global and geographical markets for the quarters and year-to-date periods ended September 28, 2025 and September 29, 2024 is included in the following tables.
| (in millions) | Quarter ended | |||||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | |||||||||||||||||||||||||
| HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
| Diversified Global Markets: | ||||||||||||||||||||||||||
| Aerospace & Defense: | ||||||||||||||||||||||||||
| Jet Engines- Commercial | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Airframes- Commercial | ||||||||||||||||||||||||||
| Defense | ||||||||||||||||||||||||||
| Total Aerospace & Defense | ||||||||||||||||||||||||||
| Specialty Energy | ||||||||||||||||||||||||||
| Electronics | ||||||||||||||||||||||||||
| Medical | ||||||||||||||||||||||||||
| Other Core Markets | ||||||||||||||||||||||||||
| Core End Markets | ||||||||||||||||||||||||||
| Automotive | ||||||||||||||||||||||||||
| Conventional Energy | ||||||||||||||||||||||||||
| Construction/Mining | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Industrial Markets | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
7
| (in millions) | Year-to-date period ended | |||||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | |||||||||||||||||||||||||
| HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
| Diversified Global Markets: | ||||||||||||||||||||||||||
| Aerospace & Defense: | ||||||||||||||||||||||||||
| Jet Engines- Commercial | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Airframes- Commercial | ||||||||||||||||||||||||||
| Defense | ||||||||||||||||||||||||||
| Total Aerospace & Defense | ||||||||||||||||||||||||||
| Specialty Energy | ||||||||||||||||||||||||||
| Electronics | ||||||||||||||||||||||||||
| Medical | ||||||||||||||||||||||||||
| Other Core Markets | ||||||||||||||||||||||||||
| Core End Markets | ||||||||||||||||||||||||||
| Conventional Energy | ||||||||||||||||||||||||||
| Automotive | ||||||||||||||||||||||||||
| Construction/Mining | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Industrial Markets | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| (in millions) | Quarter ended | |||||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | |||||||||||||||||||||||||
| HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
| Primary Geographical Market: | ||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Europe | ||||||||||||||||||||||||||
| Asia | ||||||||||||||||||||||||||
| Canada | ||||||||||||||||||||||||||
| South America, Middle East and other | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| (in millions) | Year-to-date period ended | |||||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | |||||||||||||||||||||||||
| HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
| Primary Geographical Market: | ||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
| Europe | ||||||||||||||||||||||||||
| Asia | ||||||||||||||||||||||||||
| Canada | ||||||||||||||||||||||||||
| South America, Middle East and other | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
8
Comparative information regarding the Company’s major products based on their percentages of sales is included in the following table. Hot-Rolling and Processing Facility (HRPF) conversion service sales in the AA&S segment are excluded from this presentation.
| Quarter ended | ||||||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | |||||||||||||||||||||||||
| HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
| Diversified Products and Services: | ||||||||||||||||||||||||||
| Nickel-based alloys and specialty alloys | % | % | % | % | % | % | ||||||||||||||||||||
| Precision forgings, castings and components | % | % | % | % | % | % | ||||||||||||||||||||
| Titanium and titanium-based alloys | % | % | % | % | % | % | ||||||||||||||||||||
| Zirconium and related alloys | % | % | % | % | % | % | ||||||||||||||||||||
| Precision rolled strip products | % | % | % | % | % | % | ||||||||||||||||||||
| Total | % | % | % | % | % | % | ||||||||||||||||||||
| Year-to-date period ended | ||||||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | |||||||||||||||||||||||||
| HPMC | AA&S | Total | HPMC | AA&S | Total | |||||||||||||||||||||
| Diversified Products and Services: | ||||||||||||||||||||||||||
| Nickel-based alloys and specialty alloys | % | % | % | % | % | % | ||||||||||||||||||||
| Precision forgings, castings and components | % | % | % | % | % | % | ||||||||||||||||||||
| Titanium and titanium-based alloys | % | % | % | % | % | % | ||||||||||||||||||||
| Zirconium and related alloys | % | % | % | % | % | % | ||||||||||||||||||||
| Precision rolled strip products | % | % | % | % | % | % | ||||||||||||||||||||
| Total | % | % | % | % | % | % | ||||||||||||||||||||
The Company maintained a backlog of confirmed orders totaling $3.6 billion and $3.9 billion at September 28, 2025 and September 29, 2024, respectively. Due to the structure of the Company’s long-term agreements, approximately 70 % of this backlog at September 28, 2025 represented booked orders with performance obligations that will be satisfied within the next 12 months. The backlog does not reflect any elements of variable consideration.
Contract balances
As of September 28, 2025 and December 29, 2024, accounts receivable from customers were $714.6 million and $724.2 million, respectively. The following represents the rollforward of accounts receivable - reserve for doubtful accounts and contract assets and liabilities for the year-to-date periods ended September 28, 2025 and September 29, 2024:
| (in millions) | ||||||||
| Accounts Receivable - Reserve for Doubtful Accounts | September 28, 2025 | September 29, 2024 | ||||||
| Balance as of beginning of year | $ | $ | ||||||
| Expense to increase the reserve | ||||||||
| Write-offs and recoveries of uncollectible accounts | ( | ( | ||||||
| Balance as of period end | $ | $ | ||||||
| (in millions) | ||||||||
| Contract Assets | ||||||||
| Short-term | September 28, 2025 | September 29, 2024 | ||||||
| Balance as of beginning of year | $ | $ | ||||||
| Recognized in current year | ||||||||
| Reclassified to accounts receivable | ( | ( | ||||||
| Balance as of period end | $ | $ | ||||||
9
| (in millions) | ||||||||
| Contract Liabilities | ||||||||
| Short-term | September 28, 2025 | September 29, 2024 | ||||||
| Balance as of beginning of year | $ | $ | ||||||
| Recognized in current year | ||||||||
| Amounts in beginning balance reclassified to revenue | ( | ( | ||||||
| Current year amounts reclassified to revenue | ( | ( | ||||||
| Other | ( | |||||||
| Reclassification to/from long-term | ||||||||
| Balance as of period end | $ | $ | ||||||
| Long-term (a) | September 28, 2025 | September 29, 2024 | ||||||
| Balance as of beginning of year | $ | $ | ||||||
| Recognized in current year | ||||||||
| Amounts in beginning balance reclassified to revenue | ( | |||||||
| Other | ( | |||||||
| Reclassification to/from short-term | ( | ( | ||||||
| Balance as of period end | $ | $ | ||||||
(a) Long-term contract liabilities are included in other long-term liabilities on the consolidated balance sheets.
Contract costs for obtaining and fulfilling a contract were $14.2 million and $12.0 million as of September 28, 2025 and December 29, 2024, respectively, and are reported in other long-term assets on the consolidated balance sheet. Contract cost amortization expense for the quarter and year-to-date period ended September 28, 2025 was $0.3 million and $1.2 million, respectively. Contract cost amortization expense for the quarter and year-to-date period ended September 29, 2024 was $0.2 million and $0.8 million, respectively.
Note 3. Inventories
Inventories at September 28, 2025 and December 29, 2024 were as follows (in millions):
| September 28, 2025 | December 29, 2024 | ||||||||||
| Raw materials and supplies | $ | $ | |||||||||
| Work-in-process | |||||||||||
| Finished goods | |||||||||||
| Inventory valuation reserves | ( | ( | |||||||||
| Total inventories, net | $ | $ | |||||||||
Note 4. Property, Plant and Equipment
Property, plant and equipment at September 28, 2025 and December 29, 2024 was as follows (in millions):
| September 28, 2025 | December 29, 2024 | ||||||||||
| Land | $ | $ | |||||||||
| Buildings and leasehold improvements | |||||||||||
| Equipment | |||||||||||
| Accumulated depreciation and amortization | ( | ( | |||||||||
| Total property, plant and equipment, net | $ | $ | |||||||||
10
Note 5. Divestitures
During the third quarter of 2025, the Company completed the sale of its East Hartford, CT operations, an immaterial, non-core operation that was part of the Forged Products business unit, for $20.5 million. With $2.0 million of goodwill allocated to this operation from ATI’s Forged Products reporting unit, the Company recognized a $1.1 18.1 million in the third quarter of 2025, which is reported as an investing activity on the consolidated statements of cash flows, and expects to receive an additional $1.5 million cash consideration on the sale of this operation by the end of fiscal year 2025. In fiscal year 2024, this operation had external sales of approximately $37.0 million and income before tax of approximately $2.9 million.
During the first quarter of 2025, the Company completed the sale of certain immaterial, non-core operations in Birmingham, UK and Dusseldorf, Germany, which were part of our European business in the HPMC Segment. A $3.7 million loss on sale of these operations is reported in gain/loss on asset sales and sales of businesses, net, on the consolidated statement of operations for the year-to-date period ended September 28, 2025, and is excluded from segment results. The Company received proceeds, net of transaction costs, of $3.1 million during the year-to-date period ended September 28, 2025, which is reported as an investing activity on the consolidated statement of cash flows. The Company will receive additional proceeds of approximately $6.7 million over the next 12 months for this sale, which is reported as an other receivable in prepaid expenses and other current assets on the consolidated balance sheet at September 28, 2025. In fiscal year 2024, these operations had external sales of approximately $39.1 million and income before tax of approximately $2.4 million.
Note 6. Joint Ventures
The financial results of majority-owned joint ventures are consolidated into the Company’s operating results and financial position, with the minority ownership interest recognized in the consolidated statements of operations as net income attributable to noncontrolling interests, and as equity attributable to the noncontrolling interests within total stockholders’ equity. Investments in which the Company exercises significant influence, but which it does not control (generally a 20% to 50% ownership interest), are accounted for under the equity method of accounting.
Majority-Owned Joint Ventures
STAL:
11
Note 7. Supplemental Financial Statement Information
Other income (expense), net for the quarters and year-to-date periods ended September 28, 2025 and September 29, 2024 was as follows:
| (in millions) | Quarter ended | Year-to-date period ended | |||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | ||||||||||||||||||||
| Rent and royalty income | $ | $ | $ | $ | |||||||||||||||||||
| Gains from disposal of property, plant and equipment, net | |||||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||
| Total other income, net | $ | $ | $ | $ | |||||||||||||||||||
Gains from disposal of property, plant and equipment, net include $10.5 3.7
Restructuring
Restructuring charges were a credit of $0.4 million for the quarter ended September 28, 2025 and represent a reduction in severance-related reserves for the Company’s European restructuring. Restructuring charges were a credit of $1.7 million for the year-to-date period ended September 28, 2025, primarily for a reduction in severance-related reserves for approximately 40 employees for a previous restructuring in the AA&S segment. Restructuring charges were $0.5 million for the quarter ended September 29, 2024 and represent severance for the involuntary reduction of several domestic employees. Restructuring charges were a credit of $1.2 million for the year-to-date period ended September 29, 2024, primarily for a reduction in severance-related reserves for approximately 80 employees based on revised workforce reduction estimates, which included the restructuring for the Company’s European operations. These amounts are presented as restructuring charges/credits in the consolidated statements of operations and are excluded from segment results.
Restructuring reserves for severance cost activity is as follows:
| Severance and Employee | |||||
| Benefit Costs | |||||
| Balance at December 29, 2024 | $ | ||||
| Adjustments | ( | ||||
| Divestitures | ( | ||||
| Payments | ( | ||||
| Balance at September 28, 2025 | $ | ||||
During the year-to-date period ended September 28, 2025, the Company derecognized $0.5 million of restructuring reserves in connection with the sale of non-core operations in Birmingham, UK and Dusseldorf, Germany (see Note 5 for further explanation). The $1.2 million restructuring reserve balance at September 28, 2025 is recorded in other current liabilities on the consolidated balance sheet.
Supplier Financing
The Company participates in supplier financing programs with two financial institutions to offer its suppliers the option for access to payment in advance of an invoice due date. Under such programs, these financial institutions provide early payment to suppliers at their request for invoices that ATI has confirmed as valid at a predetermined discount rate commensurate with the creditworthiness of ATI. As of September 28, 2025 and December 29, 2024, the Company had $42.1 million and $34.8 million, respectively, reported in accounts payable on the consolidated balance sheets under such programs.
Accounts Receivable Securitization
On September 19, 2025, ATI Specialty Materials, LLC (“Specialty Materials”) and its indirect wholly owned subsidiary, ATI Securitization LLC (“ATI Securitization”) entered into a three-year , $125.0 million Receivables Purchase and Financing Agreement (the “Receivables Facility”) with PNC Bank, National Association, as Administrative Agent, and certain Purchasers/Lenders party thereto. Under the Receivables Facility, Specialty Materials sells or contributes, on an ongoing basis, certain of its trade accounts receivable, together with related security and interests in the proceeds thereof, to its wholly owned
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subsidiary, ATI Securitization Holdings LLC (ATI Holdings). ATI Holdings subsequently sells or contributes those receivable and related security and interests to ATI Securitization, its wholly owned subsidiary, which is a consolidated bankruptcy-remote special purpose entity created for the sole purpose of transacting under the Receivables Facility. ATI Securitization may borrow from, and/or sell receivables under the Receivables Facility at fair value and will secure its obligations with a pledge of undivided interests in such receivables, together with related security and interest in the proceeds thereof. In all instances, Specialty Materials retains the servicing of the accounts receivable transferred, which includes collection and administrative activities. ATI has agreed to guarantee the performance of Specialty Materials obligations under the Receivables Facility.
The maximum aggregate funding available under the Receivables Facility is $125.0 million at any one time, subject to the availability of eligible receivables and other customary factors and conditions as well as covenants as set forth in the Receivables Facility. Amounts outstanding under the Receivables Facility accrue interest at an adjusted SOFR plus the applicable margin. The Receivables Facility also requires the maintenance of a minimum utilization level equal to 50 % of the facility amount.
ATI Securitization is a separate legal entity with its own creditors. In the event of a liquidation of ATI Securitization, its creditors would be entitled to be satisfied out of the assets of ATI Securitization prior to any assets or value becoming available to creditors or equity holders for other ATI entities. The assets of ATI Securitization, including any funds of ATI Securitization that may be commingled with funds of any of its affiliates for purposes of cash management and related efficiencies, are not available to pay creditors of ATI or any affiliate thereof, except to the extent collections of receivables are in excess of the amounts owed by ATI Securitization under the Receivables Facility.
Sales of accounts receivable under the Receivables Facility meet the sale criteria under ASC 860, Transfers and Servicing (“ASC 860”), and are derecognized from the consolidated balance sheet. Cash receipts, received at the time of the sale of receivables under the Receivables Facility, are classified as cash flow from operating activities in the consolidated statement of cash flows. As the Company retains the servicing rights of the receivables sold, the Company assessed the associated servicing liability under ASC 860 and determined that the liability is immaterial to the Company’s financial statements.
For the three and nine months ended September 28, 2025, ATI Securitization sold $80.0 80.0 0.9 million charge associated with the sale of the accounts receivable within selling and administrative expenses on its consolidated statement of operations. As of September 28, 2025, $80.0 million of the sold accounts receivable remained outstanding, which represents our maximum potential exposure under the guarantee.
There were no
Sale of Receivables Program
During the fourth quarter of 2024, the Company entered into an accounts receivables purchase agreement (Receivables Purchase Agreement) with a third-party financial institution to periodically sell certain accounts receivable at a discount. These accounts receivable sales are accounted for as a sale of assets under ASC 860, Transfers and Servicing, as the Company’s continuing involvement is limited to servicing the accounts receivable, collecting the payments for the underlying accounts receivable and remitting such collections to the financial institution. The financial institution is responsible for any credit risk associated with the sold accounts receivable. The Company receives the purchase price, equal to the accounts receivable less the discount, at the time of the sale.
The Company sold $26.0 million and $94.2 million of its receivables under this program during the quarter and year-to-date periods ended September 28, 2025, respectively, resulting in de-recognition of the receivables from the Company’s consolidated balance sheet. The Company had no amounts collected on behalf of the financial institution under the Receivables Purchase Agreement at September 28, 2025. The losses associated with these transactions of $0.2 million and $0.7 million are reflected in the Company’s consolidated statement of operations for the quarter and year-to-date periods ended September 28, 2025, respectively, and are excluded from segment results. The cash received on these sales of accounts receivable during the year-to-date period ended September 28, 2025 is presented in changes in receivables within operating activities in the consolidated statement of cash flows.
Other Customer Receivable Sales
In the third quarter and year-to-date period ended September 28, 2025, the Company sold $107.0 million and $271.1 million, respectively, of certain customers’ accounts receivable through programs established by those customers with third-party financial institutions. In the third quarter and year-to-date period ended September 29, 2024, the Company sold $69.8 million and $212.1 million, respectively, of certain customers’ accounts receivable through programs established by those customers with third-party financial institutions. These customers have extended payment terms and provide the programs to enable
13
suppliers to receive more timely payments. The Company has no continuing involvement with the receivables sold under these programs, including no servicing requirement. The proceeds from these transactions are presented as changes in receivables within operating activities in the consolidated statement of cash flows. The losses associated with these transactions of $1.4 million and $4.1 million for the quarter and year-to-date periods ended September 28, 2025, respectively, and $1.4 million and $4.3 million for the quarter and year-to-date periods ended September 29, 2024, respectively, are reflected in the Company’s consolidated statements of operations and are excluded from segment results.
Note 8. Debt
Debt at September 28, 2025 and December 29, 2024 was as follows (in millions):
| September 28, 2025 | December 29, 2024 | ||||||||||
| $ | $ | ||||||||||
| ABL Term Loan | |||||||||||
| U.S. revolving credit facility | |||||||||||
| Foreign credit facilities | |||||||||||
| Finance leases and other | |||||||||||
| Debt issuance costs | ( | ( | |||||||||
| Debt | |||||||||||
| Short-term debt and current portion of long-term debt | |||||||||||
| Long-term debt | $ | $ | |||||||||
(a) The payment obligations of these debentures issued by Allegheny Ludlum, LLC are fully and unconditionally guaranteed by ATI.
Revolving Credit Facility
On June 13, 2025, the Company amended its Asset Based Lending (ABL) Credit Facility, which is collateralized by the accounts receivable and inventory of the Company’s operations. This amendment extended the ABL facility through June 2030. The amended ABL includes a $600 million revolving credit facility, a letter of credit sub-facility of up to $200 million, a $200 million term loan (Term Loan), and a swing loan facility of up to $60 million. Additionally, the amendment gives the Company the ability, through June 13, 2026 and as long as no default or event of default has occurred and is continuing, to borrow an additional term loan of up to $100 million in total, using one or two draws (the Delayed-Draw Term Loan). The Term Loan and Delayed-Draw Term Loan each bear interest at rate of 2.0 % above the adjusted Secured Overnight Financing Rate (SOFR) and can be prepaid in increments of $25 million if certain minimum liquidity conditions are satisfied. In addition, the Company has the right to request an increase of up to $300 million in the maximum amount available under the revolving credit facility for the duration of the ABL. The ABL facility also provides the Company with the option of including certain machinery and equipment as additional collateral for purposes of determining availability under the facility.
The applicable interest rate for revolving credit borrowings under the ABL facility includes interest rate spreads based on available borrowing capacity that range between 1.25 % and 1.75 % for SOFR-based borrowings and between 0.25 % and 0.75 % for base rate borrowings. The ABL facility contains a financial covenant whereby the Company must maintain a fixed charge coverage ratio of not less than 1.00 :1.00 after an event of default has occurred and is continuing or if the undrawn availability under the ABL revolving credit portion of the facility is less than the greater of (i) 10 % of the then applicable maximum loan amount under the revolving credit portion of the ABL and the outstanding Term Loan balance, or (ii) $60.0 million. The Company was in compliance with the fixed charge coverage ratio as of September 28, 2025. Additionally, the Company must demonstrate minimum liquidity specified by the facility during the 90 -day period immediately preceding the stated maturity date of its 6.95 2.8 million, and are being amortized to interest expense over the extended term of the facility ending June 2030, along with $1.9 million of unamortized deferred costs previously recorded for the ABL. The ABL, as amended, also contains customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company’s
14
ability to incur additional indebtedness or liens or to enter into investments, mergers and acquisitions, dispositions of assets and transactions with affiliates, some of which are more restrictive at any time during the term of the ABL when the Company’s fixed charge coverage ratio is less than 1.00 :1.00 and its undrawn availability under the revolving portion of the ABL is less than the greater of (a) $120 million or (b) 20 % of the sum of the maximum loan amount under the revolving credit portion of the ABL and the outstanding Term Loan balance.
As of September 28, 2025, there were no outstanding borrowings under the revolving portion of the ABL facility, and $29.4 million was utilized to support the issuance of letters of credit. There were average revolving credit borrowings of $3.5 million bearing an average annual interest rate of 6.5 % under the ABL facility for the year-to-date period ended September 28, 2025. There were no revolving credit borrowings under the ABL facility during the year-to-date period ended September 29, 2024. The Company also has foreign credit facilities, primarily in China, that total $72.1 million based on September 28, 2025 foreign exchange rates, $11.4 million of which was drawn as of September 28, 2025. There were no amounts drawn under foreign credit facilities as of December 29, 2024.
Note 9. Derivative Financial Instruments and Hedging
As part of its risk management strategy, the Company, from time-to-time, utilizes derivative financial instruments to manage its exposure to changes in raw material prices, energy costs, foreign currencies, and interest rates. In accordance with applicable accounting standards, the Company accounts for most of these contracts as hedges.
The Company sometimes uses futures and swap contracts to manage exposure to changes in prices for forecasted purchases of raw materials, such as nickel, and natural gas. Under these contracts, which are generally accounted for as cash flow hedges, the price of the item being hedged is fixed at the time that the contract is entered into, and the Company is obligated to make or entitled to receive a payment equal to the net change between this fixed price and the market price at the date the contract matures.
The majority of ATI’s products are sold under contractual arrangements that include raw material surcharges and index mechanisms. However, as of September 28, 2025, the Company had entered into financial hedging arrangements, primarily at the request of its customers related to firm orders, for an aggregate notional amount of approximately 1 million pounds of nickel with hedge dates through 2027. The aggregate notional amount hedged is approximately 2 % of a single year’s estimated nickel raw material purchase requirements. These derivative instruments are used to hedge the variability of a selling price that is based on the London Metal Exchange (LME) index for nickel, as well as to hedge the variability of the purchase cost of nickel based on this LME index. Any gain or loss associated with these hedging arrangements is included in sales or cost of sales, depending on whether the underlying risk being hedged is the variable selling price or the variable raw material cost, respectively.
At September 28, 2025, the outstanding financial derivatives used to hedge the Company’s exposure to energy cost volatility consisted of natural gas cost hedges. At September 28, 2025, the Company hedged approximately 60 % of its forecasted domestic requirements for natural gas for the remainder of 2025 and approximately 35 % for 2026.
While most of the Company’s direct export sales are transacted in U.S. dollars, it uses foreign currency exchange contracts, from time-to-time, to limit transactional exposure to changes in currency exchange rates for those transactions denominated in a non-U.S. currency. The Company sometimes purchases foreign currency forward contracts that permit it to sell specified amounts of foreign currencies it expects to receive from its export sales for pre-established U.S. dollar amounts at specified dates. In addition, the Company may also hedge forecasted capital expenditures and designate cash balances held in foreign currencies as hedges of forecasted foreign currency transactions. At September 28, 2025, the Company had no material outstanding foreign currency forward contracts.
The Company may enter into derivative interest rate contracts to maintain a reasonable balance between fixed- and floating-rate debt. There were no outstanding derivative interest rate contracts at September 28, 2025.
There are no credit risk-related contingent features in the Company’s derivative contracts, and the contracts contain no provisions under which the Company has posted, or would be required to post, collateral. The counterparties to the Company’s derivative contracts are substantial and creditworthy commercial banks that are recognized market makers. The Company controls its credit exposure by diversifying across multiple counterparties and by monitoring credit ratings and credit default swap spreads of its counterparties. The Company also enters into master netting agreements with counterparties when possible.
15
The fair values of the Company’s derivative financial instruments are presented below, representing the gross amounts recognized which are not offset by counterparty or by type of item hedged. All fair values for these derivatives were measured using Level 2 information as defined by the accounting standard hierarchy, which includes quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs derived principally from or corroborated by observable market data.
(In millions) Asset derivatives | Balance sheet location | September 28, 2025 | December 29, 2024 | |||||||||||||||||
| Derivatives designated as hedging instruments: | ||||||||||||||||||||
| Natural gas contracts | Prepaid expenses and other current assets | $ | $ | |||||||||||||||||
| Nickel and other raw material contracts | Prepaid expenses and other current assets | |||||||||||||||||||
| Foreign exchange contracts | Prepaid expenses and other current assets | |||||||||||||||||||
| Nickel and other raw material contracts | Other assets | |||||||||||||||||||
| Natural gas contracts | Other assets | |||||||||||||||||||
| Total derivatives designated as hedging instruments | $ | $ | ||||||||||||||||||
| Liability derivatives | Balance sheet location | |||||||||||||||||||
| Derivatives designated as hedging instruments: | ||||||||||||||||||||
| Nickel and other raw material contracts | Other current liabilities | $ | $ | |||||||||||||||||
| Natural gas contracts | Other current liabilities | |||||||||||||||||||
| Natural gas contracts | Other long-term liabilities | |||||||||||||||||||
| Nickel and other raw material contracts | Other long-term liabilities | |||||||||||||||||||
| Total derivatives designated as hedging instruments | $ | $ | ||||||||||||||||||
For derivative financial instruments that are designated as cash flow hedges, the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged item affects earnings. For derivative financial instruments that are designated as fair value hedges, changes in the fair value of these derivatives are recognized in current period results. There were no outstanding fair value hedges as of September 28, 2025. The cash flow impact for all derivative financial instruments is reported in cash flows provided by operating activities on the consolidated statement of cash flows. The Company did not use net investment hedges for the periods presented. The effects of derivative instruments in the tables below are presented net of related income taxes, excluding any impacts of changes to income tax valuation allowances affecting results of operations or other comprehensive income, when applicable (see Note 15 for further explanation).
Assuming market prices remain constant with those at September 28, 2025, a pre-tax loss of $1.1 million is expected to be recognized over the next 12 months.
Activity for derivatives designated as cash flow hedges for the quarters and year-to-date periods ended September 28, 2025 and September 29, 2024 was as follows (in millions):
| Amount of Gain (Loss) Recognized in OCI on Derivatives | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (a) | ||||||||||||||||||||||
| Quarter ended | Quarter ended | ||||||||||||||||||||||
| Derivatives in Cash Flow Hedging Relationships | September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | |||||||||||||||||||
| Nickel and other raw material contracts | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
| Natural gas contracts | ( | ( | ( | ( | |||||||||||||||||||
| Foreign exchange contracts | ( | ||||||||||||||||||||||
| Interest rate swap | |||||||||||||||||||||||
| Total | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
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| Amount of Gain (Loss) Recognized in OCI on Derivatives | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (a) | ||||||||||||||||||||||
| Year-to-date period ended | Year-to-date period ended | ||||||||||||||||||||||
| Derivatives in Cash Flow Hedging Relationships | June 29, 2025 | June 30, 2024 | June 29, 2025 | June 30, 2024 | |||||||||||||||||||
| Nickel and other raw material contracts | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Natural gas contracts | ( | ( | ( | ( | |||||||||||||||||||
| Foreign exchange contracts | ( | ||||||||||||||||||||||
| Interest rate swap | |||||||||||||||||||||||
| Total | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
The disclosures of gains or losses presented above for nickel and other raw material contracts and foreign currency contracts do not consider the anticipated underlying transactions. Since these derivative contracts represent hedges, the net effect of any gain or loss on results of operations may be fully or partially offset.
The Company may also use derivative instruments that are not designated as hedges to protect the Company’s results from certain fluctuations in foreign exchange rates, as well as to offset a portion of the foreign currency gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies. Changes in the fair value of these foreign exchange contract derivatives not designated as hedging instruments are recorded in cost of sales or selling, general and administrative expenses on the consolidated statement of operations, and the Company recognized $0.6 million of expense and $2.3 million of income, net, for settled foreign currency forward contracts that were not designated as hedges during the third quarter and year-to-date period ended September 28, 2025, respectively, and $1.0 million and $0.5 million of income, net, during the third quarter and year-to-date period ended September 29, 2024, which offset foreign currency gains/losses in the relevant currency. We have no significant outstanding hedges that are not designated as of September 28, 2025.
Note 10. Fair Value of Financial Instruments
The estimated fair value of financial instruments at September 28, 2025 was as follows:
| Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
| (In millions) | Total Carrying Amount | Total Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | |||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Derivative financial instruments: | |||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Debt (a) | |||||||||||||||||||||||
The estimated fair value of financial instruments at December 29, 2024 was as follows:
| Fair Value Measurements at Reporting Date Using | |||||||||||||||||||||||
| (In millions) | Total Carrying Amount | Total Estimated Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Observable Inputs (Level 2) | |||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Derivative financial instruments: | |||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Debt (a) | |||||||||||||||||||||||
17
In accordance with accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards established three levels of a fair value hierarchy that prioritize the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.
The availability of observable market data is monitored to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period.
The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments:
Cash and cash equivalents: Fair value was determined using Level 1 information.
Derivative financial instruments: Fair values for derivatives were measured using exchange-traded prices for the hedged items. The fair value was determined using Level 2 information, including consideration of counterparty risk and the Company’s credit risk.
Short-term and long-term debt: The fair values of the Company’s publicly traded debt were based on Level 1 information. The fair values of the other short-term and long-term debt were determined using Level 2 information.
Note 11. Business Segments
The Company operates under two
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Following is certain financial information with respect to the Company’s business segments for the periods indicated (in millions):
| Quarter ended September 28, 2025 | Quarter ended September 29, 2024 | ||||||||||||||||||||||
| HPMC | AA&S | Total | HPMC | AA&S | Total | ||||||||||||||||||
| Sales to external customers | $ | $ | $ | $ | $ | $ | |||||||||||||||||
| Intersegment sales | |||||||||||||||||||||||
| Total sales | |||||||||||||||||||||||
| Reconciliation of sales | |||||||||||||||||||||||
| Elimination of intersegment sales | ( | ( | |||||||||||||||||||||
| Total consolidated sales | $ | $ | |||||||||||||||||||||
Less(1): | |||||||||||||||||||||||
| Allocated corporate overhead | |||||||||||||||||||||||
Other segment items(2) | |||||||||||||||||||||||
| Segment EBITDA | |||||||||||||||||||||||
| Reconciliation of segment EBITDA | |||||||||||||||||||||||
| Corporate expenses | ( | ( | |||||||||||||||||||||
| Closed operations and other income | |||||||||||||||||||||||
| Depreciation & amortization | ( | ( | |||||||||||||||||||||
| Interest expense, net | ( | ( | |||||||||||||||||||||
| Restructuring and other charges | ( | ( | |||||||||||||||||||||
| Gain on sales of businesses | |||||||||||||||||||||||
| Income before taxes | $ | $ | |||||||||||||||||||||
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| Year-to-date period ended September 28, 2025 | Year-to-date period ended September 29, 2024 | ||||||||||||||||||||||
| HPMC | AA&S | Total | HPMC | AA&S | Total | ||||||||||||||||||
| Sales to external customers | $ | $ | $ | $ | $ | $ | |||||||||||||||||
| Intersegment sales | |||||||||||||||||||||||
| Total sales | |||||||||||||||||||||||
| Reconciliation of sales | |||||||||||||||||||||||
| Elimination of intersegment sales | ( | ( | |||||||||||||||||||||
| Total consolidated sales | $ | $ | |||||||||||||||||||||
Less(1): | |||||||||||||||||||||||
| Allocated corporate overhead | |||||||||||||||||||||||
Other segment items(2) | |||||||||||||||||||||||
| Segment EBITDA | |||||||||||||||||||||||
| Reconciliation of segment EBITDA | |||||||||||||||||||||||
| Corporate expenses | ( | ( | |||||||||||||||||||||
| Closed operations and other income | |||||||||||||||||||||||
| Depreciation & amortization | ( | ( | |||||||||||||||||||||
| Interest expense, net | ( | ( | |||||||||||||||||||||
| Restructuring and other charges | ( | ( | |||||||||||||||||||||
| Loss on sales of businesses, net | ( | ||||||||||||||||||||||
| Income before taxes | $ | $ | |||||||||||||||||||||
(1) The CODM is regularly provided with allocated corporate overhead and segment EBITDA, which is used to assess operating performance. Therefore, the significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown.
(2) Other segment items for each reportable segment include: cost of sales, general and administrative expenses, and gain/loss on asset sales. General & administrative expenses consist of non-manufacturing payroll and benefits, office expenses, professional service and legal expenses, occupancy expenses including rent and lease expense, and travel expense.
Total international sales for the quarter and year-to-date period ended September 28, 2025 were $445.3 million and $1,435.9 million, respectively, and $425.7 million and $1,353.8 million for the quarter and year-to-date period ended September 29, 2024, respectively. Of these amounts, sales by operations in the U.S. to customers in other countries for the third quarter and year-to-date period ended September 28, 2025 were $348.6 million and $1,156.9 million, respectively, and $333.5 million and $1,050.1 million for the third quarter and year-to-date period ended September 29, 2024, respectively.
Restructuring and other charges of $12.9 million for the quarter ended September 28, 2025 include $7.2 million of start-up and transaction-related costs, which are primarily included within cost of sales on the consolidated statements of operations, and $3.6 million of transformation-related costs and $2.5 million of losses on the sale of accounts receivable, which are included within selling and administrative expenses on the consolidated statements of operations. These charges were partially offset by credits of $0.4 million due to a reduction in severance-related reserves for our European restructuring (see Note 7). Restructuring and other charges of $25.9 million for the year-to-date period ended September 28, 2025 include $17.2 million of start-up and transaction-related costs, which are primarily included within cost of sales on the consolidated statements of operations, and $4.7 million of transformation-related costs and $5.7 million of losses on the sale of accounts receivable, which are included within selling and administrative expenses on the consolidated statements of operations. These charges were partially offset by credits of $1.7 million primarily due to a reduction in severance-related reserves for a previous restructuring in the AA&S segment (see Note 7).
Restructuring and other charges of $4.3 million for the quarter ended September 29, 2024 include $2.5 million of start-up costs, partially offset by a $0.4 million credit for adjustments to inventory reserves related to the Company’s European restructuring, both of which are included within cost of sales on the consolidated statements of operations. These charges also include $1.7 million of transaction costs, which are included within selling and administrative expenses on the consolidated statements of
20
operations, and restructuring charges of $0.5 million (see Note 7). Restructuring and other charges of $12.8 million for the year-to-date period ended September 29, 2024 include $7.2 million of start-up costs and $5.1 million of inventory write-downs related to the Company’s European restructuring, both of which are included within cost of sales on the consolidated statements of operations. These charges also include $1.7 million of transaction costs, which are included within selling and administrative expenses on the consolidated statements of operations, and restructuring credits of $1.2 million primarily for revised workforce reduction estimates (see Note 7).
Certain additional information regarding the Company’s business segments is presented below:
| Quarter ended | Year-to-date period ended | |||||||||||||||||||||||||
| (In millions) | September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | ||||||||||||||||||||||
| Depreciation and amortization: | ||||||||||||||||||||||||||
| High Performance Materials & Components | $ | $ | $ | $ | ||||||||||||||||||||||
| Advanced Alloys & Solutions | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | $ | ||||||||||||||||||||||
| Capital expenditures: | ||||||||||||||||||||||||||
| High Performance Materials & Components | $ | $ | $ | $ | ||||||||||||||||||||||
| Advanced Alloys & Solutions | ||||||||||||||||||||||||||
| Corporate | ||||||||||||||||||||||||||
| Total capital expenditures | $ | $ | $ | $ | ||||||||||||||||||||||
| Identifiable assets: | September 28, 2025 | December 29, 2024 | ||||||||||||
| High Performance Materials & Components | $ | $ | ||||||||||||
| Advanced Alloys & Solutions | ||||||||||||||
| Corporate: | ||||||||||||||
| Deferred Taxes | ||||||||||||||
| Cash and cash equivalents and other | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| ($ in millions) | September 28, 2025 | Percent of total | December 29, 2024 | Percent of total | ||||||||||||||||||||||
| Total assets: | ||||||||||||||||||||||||||
| United States | $ | % | $ | % | ||||||||||||||||||||||
| China | % | % | ||||||||||||||||||||||||
| Other | % | % | ||||||||||||||||||||||||
| Total Assets | $ | % | $ | % | ||||||||||||||||||||||
Note 12. Retirement Benefits
The Company has defined contribution retirement plans or defined benefit pension plans covering substantially all employees. Company contributions to defined contribution retirement plans are generally based on either a percentage of eligible pay or on hours worked. Benefits under the defined benefit pension plans are generally based on years of service and/or final average pay. The Company funds the U.S. pension plans in accordance with the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended. The Company also sponsors several postretirement plans covering certain collectively bargained salaried and hourly employees. The plans provide health care and life insurance benefits for eligible retirees. In most retiree health care plans, Company contributions towards premiums are capped based on the cost as of a certain date, thereby creating a defined contribution. All defined benefit pension and retiree health care plans are closed to new entrants.
For the quarters ended September 28, 2025 and September 29, 2024, the components of pension and other postretirement benefit expense for the Company’s defined benefit plans included the following (in millions):
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| Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||
| Quarter ended | Quarter ended | ||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | ||||||||||||||||||||
| Service cost - benefits earned during the year | $ | $ | $ | $ | |||||||||||||||||||
| Interest cost on benefits earned in prior years | |||||||||||||||||||||||
| Expected return on plan assets | ( | ( | |||||||||||||||||||||
| Amortization of prior service cost (credit) | ( | ( | |||||||||||||||||||||
| Amortization of net actuarial loss | |||||||||||||||||||||||
| Total retirement benefit expense | $ | $ | $ | $ | |||||||||||||||||||
For the year-to-date periods ended September 28, 2025 and September 29, 2024, the components of pension and other postretirement benefit expense for the Company’s defined benefit plans included the following (in millions):
| Pension Benefits | Other Postretirement Benefits | ||||||||||||||||||||||
| Year-to-date period ended | Year-to-date period ended | ||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | ||||||||||||||||||||
| Service cost - benefits earned during the year | $ | $ | $ | $ | |||||||||||||||||||
| Interest cost on benefits earned in prior years | |||||||||||||||||||||||
| Expected return on plan assets | ( | ( | |||||||||||||||||||||
| Amortization of prior service cost (credit) | ( | ( | |||||||||||||||||||||
| Amortization of net actuarial loss | |||||||||||||||||||||||
| Total retirement benefit expense | $ | $ | $ | $ | |||||||||||||||||||
Note 13. Income Taxes
For the quarter and year-to-date period ended September 28, 2025, the Company’s effective tax rate was 21.4 % and 20.4 %, respectively, resulting in an income tax provision of $31.0 million and $81.3 million, respectively. For the quarter and year-to-date period ended September 29, 2024, the Company’s effective tax rate was 24.6 % and 22.7 %, respectively, resulting in an income tax provision of $28.3 million and $70.5 million, respectively. The effective tax rate for the quarter ended September 28, 2025 included discrete tax expense of $2.8 million, primarily related to return-to-provision adjustments for limitations of permanent benefits due to decreased taxable income, and the effective tax rate for the year-to-date period ended September 28, 2025 included discrete tax benefits of $1.7 million, primarily for share-based compensation. Excluding discrete tax impacts, the Company’s effective tax rate for the quarter and year-to-date period ended September 28, 2025 was 19.5 % and 20.8 %, respectively. The effective tax rate for the quarter ended September 29, 2024 included discrete tax expense of $0.2 million and the effective tax rate for the year-to-date period ended September 29, 2024 included discrete tax benefits of $4.5 million. Excluding discrete tax impacts, the Company’s effective tax rate for the quarter and year-to-date period ended September 29, 2024 was 24.5 % and 24.1 %, respectively.
On July 4, 2025, the One Big Beautiful Bill Act, which includes permanent extensions of most expiring Tax Cuts and Jobs Act provisions and international tax changes, was enacted. Pursuant to ASC 740, Income Taxes, the effects of changes in tax law are recognized in the period of enactment, the impact of which are not material and are reflected in the Company’s effective tax rate in the quarter. The Company anticipates that the impacts related to the tax law changes will be favorable to future years’ cash tax payments due to changes in bonus depreciation, domestic research expensing and certain international provisions.
22
Note 14. Per Share Information
The following table sets forth the computation of basic and diluted income per common share:
| (In millions, except per share amounts) | Quarter ended | Year-to-date period ended | |||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Numerator for basic income per common share – | |||||||||||||||||||||||
| Net income attributable to ATI | $ | $ | $ | $ | |||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Numerator for diluted net income per common share – | |||||||||||||||||||||||
| Net income attributable to ATI after assumed conversions | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Denominator for basic net income per common share – weighted average shares | |||||||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Share-based compensation | |||||||||||||||||||||||
| Denominator for diluted net income per common share – adjusted weighted average shares and assumed conversions | |||||||||||||||||||||||
| Basic net income attributable to ATI per common share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted net income attributable to ATI per common share | $ | $ | $ | $ | |||||||||||||||||||
Common stock that would have been issuable upon the assumed conversion of the Company’s 3.5% Convertible Senior Notes due 2025 (the “2025 Convertible Notes”), prior to their redemption during the third quarter of 2024, and other option equivalents and contingently issuable shares are excluded from the computation of contingently issuable shares, and therefore, from the denominator for diluted earnings per share, if the effect of inclusion is anti-dilutive. There were no
Periodically, the Company’s Board of Directors authorizes the repurchase of ATI common stock (the “Share Repurchase Program”), most recently authorizing the repurchase of up to $700 million, as announced in September 2024. Repurchases under these programs are made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs. Open market repurchases are structured to occur within the pricing and volume requirements of SEC Rule 10b-18. In the quarter and year-to-date period ended September 28, 2025, ATI used $150.0 million and $470.0 million, respectively, to repurchase 2.0 million and 6.4 million, respectively, of its common stock under the Share Repurchase Program. At September 28, 2025, the Company has utilized $580 million of the $700 million currently authorized under the Share Repurchase Program. In the quarter and year-to-date period ended September 29, 2024, ATI used $40.0 million and $190.0 million, respectively, to repurchase 0.7 million and 4.1 million, respectively, of its common stock under the Share Repurchase Program.
23
Note 15. Accumulated Other Comprehensive Income (Loss)
The changes in AOCI by component, net of tax, for the quarter ended September 28, 2025 were as follows (in millions):
| Post- retirement benefit plans | Currency translation adjustment | Derivatives | Deferred Tax Asset Valuation Allowance | Total | |||||||||||||||||||||||||||||||||||||
| Attributable to ATI: | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 29, 2025 | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||||||||||||
| OCI before reclassifications | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | (a) | (c) | (d) | (e) | |||||||||||||||||||||||||||||||||||||
| Net current-period OCI | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
| Balance, September 28, 2025 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||
| Attributable to noncontrolling interests: | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 29, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
| OCI before reclassifications | |||||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | (c) | ||||||||||||||||||||||||||||||||||||||||
| Net current-period OCI | |||||||||||||||||||||||||||||||||||||||||
| Balance, September 28, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
The changes in AOCI by component, net of tax, for the year-to-date period ended September 28, 2025 were as follows (in millions):
| Post- retirement benefit plans | Currency translation adjustment | Derivatives | Deferred Tax Asset Valuation Allowance | Total | |||||||||||||||||||||||||||||||||||||
| Attributable to ATI: | |||||||||||||||||||||||||||||||||||||||||
| Balance, December 29, 2024 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||
| OCI before reclassifications | ( | ||||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | (a) | (b) | (d) | (e) | |||||||||||||||||||||||||||||||||||||
| Net current-period OCI | |||||||||||||||||||||||||||||||||||||||||
| Balance, September 28, 2025 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||
| Attributable to noncontrolling interests: | |||||||||||||||||||||||||||||||||||||||||
| Balance, December 29, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
| OCI before reclassifications | |||||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | (c) | ||||||||||||||||||||||||||||||||||||||||
| Net current-period OCI | |||||||||||||||||||||||||||||||||||||||||
| Balance, September 28, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
(a)Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 12).
(b)Amounts were included in gain/loss of asset sales and sales of businesses, net, as part of the loss on sale of the Birmingham, UK and Dusseldorf, Germany operations (see Note 5).
(c)No amounts were reclassified to earnings.
(d)Amounts related to derivatives are included in sales, cost of goods sold or interest expense in the period or periods the hedged item affects earnings (see Note 9).
(e)Represents the net change in deferred tax asset valuation allowances on changes in AOCI balances between the balance sheet dates.
24
The changes in AOCI by component, net of tax, for the quarter ended September 29, 2024 were as follows (in millions):
| Post- retirement benefit plans | Currency translation adjustment | Derivatives | Deferred Tax Asset Valuation Allowance | Total | |||||||||||||||||||||||||||||||||||||
| Attributable to ATI: | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||
| OCI before reclassifications | ( | ||||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | (a) | (b) | (c) | (d) | |||||||||||||||||||||||||||||||||||||
| Net current-period OCI | |||||||||||||||||||||||||||||||||||||||||
| Balance, September 29, 2024 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||
| Attributable to noncontrolling interests: | |||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
| OCI before reclassifications | |||||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | (b) | ||||||||||||||||||||||||||||||||||||||||
| Net current-period OCI | $ | ||||||||||||||||||||||||||||||||||||||||
| Balance, September 29, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
The changes in AOCI by component, net of tax, for the year-to-date period ended September 29, 2024 were as follows (in millions):
| Post- retirement benefit plans | Currency translation adjustment | Derivatives | Deferred Tax Asset Valuation Allowance | Total | |||||||||||||||||||||||||||||||||||||
| Attributable to ATI: | |||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||
| OCI before reclassifications | ( | ||||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | (a) | (b) | (c) | (d) | ( | ||||||||||||||||||||||||||||||||||||
| Net current-period OCI | ( | ||||||||||||||||||||||||||||||||||||||||
| Balance, September 29, 2024 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||
| Attributable to noncontrolling interests: | |||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
| OCI before reclassifications | |||||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from AOCI | (b) | ||||||||||||||||||||||||||||||||||||||||
| Net current-period OCI | $ | ||||||||||||||||||||||||||||||||||||||||
| Balance, September 29, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
(a)Amounts were included in net periodic benefit cost for pension and other postretirement benefit plans (see Note 12).
(b)No amounts were reclassified to earnings.
(c)Amounts related to derivatives are included in sales, cost of goods sold or interest expense in the period or periods the hedged item affects earnings (see Note 9).
Other comprehensive income (loss) amounts (OCI) reported above by category are net of applicable income tax expense (benefit) for each period presented. Income tax expense (benefit) on OCI items is recorded as a change in a deferred tax asset or liability. Amounts recognized in OCI include the impact of any deferred tax asset valuation allowances, when applicable. Foreign currency translation adjustments, including those pertaining to noncontrolling interests, are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries.
25
Reclassifications out of AOCI for the quarters and year-to-date periods ended September 28, 2025 and September 29, 2024 were as follows:
Details about AOCI Components (In millions) | Three months ended September 28, 2025 | Three months ended September 29, 2024 | Year-to-date period ended September 28, 2025 | Year-to-date period ended September 29, 2024 | Affected line item in the statements of operations | ||||||||||||||||||||||||
| Postretirement benefit plans | |||||||||||||||||||||||||||||
| Prior service credit | $ | $ | (a) | ||||||||||||||||||||||||||
| Actuarial losses | ( | ( | ( | ( | (a) | ||||||||||||||||||||||||
| ( | ( | ( | ( | (d) | Total before tax | ||||||||||||||||||||||||
| ( | ( | ( | ( | Tax benefit (e) | |||||||||||||||||||||||||
| $ | ( | $ | ( | $ | ( | $ | ( | Net of tax | |||||||||||||||||||||
| Currency translation adjustment | $ | $ | $ | ( | $ | (b,d) | |||||||||||||||||||||||
| Derivatives | |||||||||||||||||||||||||||||
| Nickel and other raw material contracts | $ | ( | $ | ( | $ | ( | $ | ( | (c) | ||||||||||||||||||||
| Natural gas contracts | ( | ( | ( | ( | (c) | ||||||||||||||||||||||||
| Foreign exchange contracts | (c) | ||||||||||||||||||||||||||||
| Interest rate swap | (c) | ||||||||||||||||||||||||||||
| ( | ( | ( | ( | (d) | Total before tax | ||||||||||||||||||||||||
| ( | ( | ( | ( | Tax benefit (e) | |||||||||||||||||||||||||
| $ | ( | $ | ( | $ | ( | $ | ( | Net of tax | |||||||||||||||||||||
(a)Amounts are reported in nonoperating retirement benefit expense (see Note 12).
(b)Amounts in 2025 were included in gain/loss on asset sales and sales of businesses, net, as part of the loss on sale of the Birmingham, UK and Dusseldorf, Germany operations (see Note 5).
(c)Amounts related to derivatives, with the exception of the interest rate swap, are included in sales or cost of goods sold in the period or periods the hedged item affects earnings. Amounts related to the interest rate swap are included in interest expense in the same period as the interest expense on the Term Loan is recognized in earnings (see Note 9).
(d)For pre-tax items, positive amounts are income and negative amounts are expense in terms of the impact to net income. Tax effects are presented in conformity with ATI’s presentation in the consolidated statements of operations.
(e)These amounts exclude the impact of any deferred tax asset valuation allowances, when applicable.
Note 16. Commitments and Contingencies
The Company is subject to various domestic and international environmental laws and regulations that govern the discharge of pollutants and disposal of wastes, and which may require that it investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations. The Company could incur substantial cleanup costs, fines, and civil or criminal sanctions, third party property damage or personal injury claims as a result of violations or liabilities under these laws or noncompliance with environmental permits required at its facilities. The Company is currently involved in the investigation and remediation of a number of its current and former sites, as well as third party sites.
Environmental liabilities are recorded when the Company’s liability is probable and the costs are reasonably estimable. In many cases, however, the Company is not able to determine whether it is liable or, if liability is probable, to reasonably estimate the loss or range of loss. Estimates of the Company’s liability remain subject to additional uncertainties, including the nature and extent of site contamination, available remediation alternatives, the extent of corrective actions that may be required, and the number, participation, and financial condition of other potentially responsible parties (PRPs). The Company adjusts its accruals to reflect new information as appropriate. Future adjustments could have a material adverse effect on the Company’s
26
consolidated results of operations in a given period, but the Company cannot reliably predict the amounts of such future adjustments.
At September 28, 2025, the Company’s reserves for environmental remediation obligations totaled approximately $15 million, of which $6 million was included in other current liabilities. The reserve includes estimated probable future costs of $3 million for federal Superfund and comparable state-managed sites; $6 million for formerly owned or operated sites for which the Company has remediation or indemnification obligations; and $6 million for owned or controlled sites at which Company operations have been or plan to be discontinued. The timing of expenditures depends on a number of factors that vary by site. The Company expects that it will expend present accruals over many years and that remediation of all sites with which it has been identified will be completed within thirty years. The Company continues to evaluate whether it may be able to recover a portion of past and future costs for environmental liabilities from third parties and to pursue such recoveries where appropriate.
Based on currently available information, it is reasonably possible that costs for recorded matters may exceed the Company’s recorded reserves by as much as $16 million. Future investigation or remediation activities may result in the discovery of additional hazardous materials or potentially higher levels of contamination than discovered during prior investigation and may impact costs associated with the success or lack thereof in remedial solutions. Therefore, future developments, administrative actions or liabilities relating to environmental matters could have a material adverse effect on the Company’s consolidated financial condition or results of operations and cash flows.
A number of other lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its currently and formerly owned businesses, including those pertaining to product liability, environmental, health and safety matters and occupational disease (including as each relates to alleged asbestos exposure), as well as patent infringement, commercial, government contracting, construction, employment, employee and retiree benefits, taxes, environmental, and stockholder and corporate governance matters. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s consolidated results of operations for that period.
The Company received employee retention tax credits under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) during the fiscal year ended December 31, 2022. Due to the complex nature of the employee retention credit computations, the Company deferred recognition of a portion of the tax credits pending the completion of any potential audit or examination, or the expiration of the related statute of limitations. During the year-to-date period ended September 28, 2025, the Company recognized a benefit of approximately $7 million in cost of sales on the consolidated statement of operations due to the expiration of the statute of limitations for a portion of these credits. As of September 28, 2025, The Company has approximately $5 million of remaining deferred retention tax credits, of which the statute of limitations expires in 2028.
In August 2024, the Company received notice that it and certain of its affiliates are parties to two lawsuits captioned (1) William L. Schoen, Mary J. Nesbit, Robin L. Rosewicz, George E. Poole and James E. Swartz, Jr., individually and as representatives of a class of participants and beneficiaries of the Allegheny Technologies Incorporated Pension Plan v. ATI Inc., The Allegheny Technologies Incorporated Pension Plan Administrative Committee, State Street Global Advisors Trust Co., and John Does 1-5 (Case No. 2:24-cv-01109) and (2) John Souza and Karen Souza, individually and as representatives on behalf of a class of similarly situated persons v. ATI Inc. and State Street Global Advisors Trust Co. (Case No. 2:24-cv-01214), both of which are filed in federal district court for the Western District of Pennsylvania. These lawsuits, which were consolidated in late 2024, assert various claims associated with the Company’s October 2023 purchase of group annuity contracts to transfer a portion of its U.S. qualified defined benefit pension plan obligations to Athene Annuity and Life Company and Athene Annuity & Life Assurance of New York. The Company filed a Motion to Dismiss the consolidated claims in January 2025. Following an August 2025 hearing on the Motion to Dismiss, the magistrate judge overseeing the Motion issued a report recommending that all of the plaintiffs’ claims be dismissed for lack of standing. The recommendation remains subject to review and disposition by the presiding judge. The Company disputes and intends to vigorously defend against these claims, but given the preliminary nature of these matters, cannot predict their outcome or estimate any range of reasonably possible loss at this time.
27
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||
Overview
ATI is a global manufacturer of technically advanced specialty materials and complex components. Our largest market is aerospace & defense, representing 68% of sales for the year-to-date period ended September 28, 2025, led by products for jet engines and airframes. Additionally, we have a strong presence in the specialty energy, medical and electronics markets. In aggregate, these markets represented 80% of our sales for the year-to-date period ended September 28, 2025. ATI is a market leader in manufacturing differentiated products that require our materials science capabilities and unique process technologies, including our new product development competence. Our capabilities range from cast/wrought and powder alloy development to final production of highly engineered finished components, including those used in latest generation jet engines and 3D-printed aerospace products.
ATI follows a 4-4-5 or 5-4-4 fiscal calendar, whereby each fiscal quarter consists of thirteen weeks grouped into two four-week months and one five-week month, and its fiscal year ends on the Sunday closest to December 31. Unless otherwise stated, references to years and quarters in this Quarterly Report on Form 10-Q relate to fiscal years and quarters, rather than calendar years and quarters.
Results of Operations
Sales
Third quarter 2025 sales increased 7% to $1.13 billion, compared to $1.05 billion of sales for the third quarter 2024, primarily due to increased demand in the aerospace & defense market, partially offset by a decline in sales to our other core and industrial markets. In aggregate, ATI’s aerospace & defense market sales increased 21% to $792.7 million, or 70% of total sales in the third quarter 2025, compared to $653.8 million, or 62% of total sales in the third quarter 2024. The increase in aerospace & defense market sales was partially offset by sales declines in other core and industrial markets of 23% and 11%, respectively.
Sales for the year-to-date period ended September 28, 2025 increased 7% to $3.41 billion, compared to sales of $3.19 billion for the comparable 2024 period. The increase in sales was primarily due to an 18% increase in sales to the aerospace & defense market, partially offset by sales declines in other core and industrial markets of 21% and 4%, respectively.
28
Comparative information regarding our overall revenues (in millions) by end market and their respective percentages of total revenues for the quarters and year-to-date periods ended September 28, 2025 and September 29, 2024 is shown below.
| Quarter ended | Quarter ended | ||||||||||||||||||||||
| Markets | September 28, 2025 | September 29, 2024 | |||||||||||||||||||||
| Aerospace & Defense: | |||||||||||||||||||||||
| Jet Engines- Commercial | $ | 433.6 | 38 | % | $ | 365.9 | 35 | % | |||||||||||||||
| Airframes- Commercial | 197.7 | 18 | % | 180.8 | 17 | % | |||||||||||||||||
| Defense | 161.4 | 14 | % | 107.1 | 10 | % | |||||||||||||||||
| Total Aerospace & Defense | 792.7 | 70 | % | 653.8 | 62 | % | |||||||||||||||||
| Specialty Energy | 53.9 | 5 | % | 69.9 | 7 | % | |||||||||||||||||
| Electronics | 48.4 | 4 | % | 49.1 | 5 | % | |||||||||||||||||
| Medical | 30.9 | 3 | % | 53.1 | 5 | % | |||||||||||||||||
| Other Core Markets | 133.2 | 12 | % | 172.1 | 17 | % | |||||||||||||||||
| Core End Markets | 925.9 | 82 | % | 825.9 | 79 | % | |||||||||||||||||
| Automotive | 61.3 | 6 | % | 63.8 | 6 | % | |||||||||||||||||
| Conventional Energy | 56.8 | 5 | % | 72.6 | 7 | % | |||||||||||||||||
| Construction/Mining | 36.8 | 3 | % | 41.8 | 4 | % | |||||||||||||||||
| Other | 44.7 | 4 | % | 47.1 | 4 | % | |||||||||||||||||
| Industrial Markets | 199.6 | 18 | % | 225.3 | 21 | % | |||||||||||||||||
| Total | $ | 1,125.5 | 100 | % | $ | 1,051.2 | 100 | % | |||||||||||||||
| Year-to-date period ended | Year-to-date period ended | ||||||||||||||||||||||
| Markets | September 28, 2025 | September 29, 2024 | |||||||||||||||||||||
| Aerospace & Defense: | |||||||||||||||||||||||
| Jet Engines- Commercial | $ | 1,302.8 | 38 | % | $ | 1,029.9 | 32 | % | |||||||||||||||
| Airframes- Commercial | 598.7 | 18 | % | 581.7 | 18 | % | |||||||||||||||||
| Defense | 407.4 | 12 | % | 341.8 | 11 | % | |||||||||||||||||
| Total Aerospace & Defense | 2,308.9 | 68 | % | 1,953.4 | 61 | % | |||||||||||||||||
| Specialty Energy | 167.9 | 5 | % | 202.6 | 6 | % | |||||||||||||||||
| Electronics | 131.7 | 4 | % | 142.8 | 4 | % | |||||||||||||||||
| Medical | 112.2 | 3 | % | 173.9 | 6 | % | |||||||||||||||||
| Other Core Markets | 411.8 | 12 | % | 519.3 | 16 | % | |||||||||||||||||
| Core End Markets | 2,720.7 | 80 | % | 2,472.7 | 77 | % | |||||||||||||||||
| Conventional Energy | 271.5 | 8 | % | 241.2 | 8 | % | |||||||||||||||||
| Automotive | 186.7 | 5 | % | 190.6 | 6 | % | |||||||||||||||||
| Construction/Mining | 103.0 | 3 | % | 113.2 | 4 | % | |||||||||||||||||
| Other | 128.4 | 4 | % | 171.7 | 5 | % | |||||||||||||||||
| Industrial Markets | 689.6 | 20 | % | 716.7 | 23 | % | |||||||||||||||||
| Total | $ | 3,410.3 | 100 | % | $ | 3,189.4 | 100 | % | |||||||||||||||
For the third quarter 2025, international sales increased to $445 million, or 40% of total sales, from $426 million, or 40% of total sales, in the third quarter 2024. ATI’s international sales are mostly to our core end markets.
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Comparative information regarding our major products based on their percentages of revenues are shown below. HRPF conversion service sales in the AA&S segment are excluded from this presentation.
| Quarter ended | Year-to-date period ended | ||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | ||||||||||||||||||||
| Nickel-based alloys and specialty alloys | 44 | % | 46 | % | 47 | % | 45 | % | |||||||||||||||
| Precision forgings, castings and components | 22 | % | 20 | % | 21 | % | 19 | % | |||||||||||||||
| Titanium and titanium-based alloys | 19 | % | 17 | % | 18 | % | 18 | % | |||||||||||||||
| Zirconium and related alloys | 9 | % | 8 | % | 9 | % | 9 | % | |||||||||||||||
| Precision rolled strip products | 6 | % | 9 | % | 5 | % | 9 | % | |||||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
Gross Profit
Gross profit for the third quarter of 2025 was $255.3 million, or 22.7% of sales, compared to $224.8 million, or 21.4% of sales, for the third quarter 2024. Third quarter 2025 gross profit includes $7.0 million of start-up and transaction-related costs, which are excluded from Adjusted EBITDA. Third quarter 2024 gross profit includes a benefit of $4.8 million related to the recognition of previously deferred employee retention tax credits, of which $2.9 million related to the HPMC segment and $1.9 million related to the AA&S segment. Third quarter 2024 gross profit also includes $2.5 million of start-up costs, partially offset by a $0.4 million credit for adjustments to inventory reserves related to our European restructuring, which are excluded from Adjusted EBITDA.
Our gross profit was $733.6 million, or 21.5% of sales, for the year-to-date period ended September 28, 2025, compared to $649.6 million, or 20.4% of sales for the year-to-date period ended September 29, 2024. Year-to-date 2025 gross profit includes a benefit of $7.2 million related to the recognition of previously deferred employee retention tax credits, of which $4.4 million related to the HPMC segment and $2.8 million related to the AA&S segment. Year-to-date 2025 gross profit also includes start-up and transaction-related costs of $17.0 million, which are excluded from Adjusted EBITDA. Year-to-date 2024 gross profit includes a benefit of $13.4 million related to the recognition of previously deferred employee retention tax credits, of which $6.4 million related to the HPMC segment and $7.0 million related to the AA&S segment. Year-to-date 2024 gross profit also includes $7.2 million of start-up costs and $5.1 million of charges for inventory write-downs related to our European restructuring, which are excluded from Adjusted EBITDA.
Selling and Administrative Expenses
Selling and administrative expenses for the third quarter 2025 were $94.6 million, an increase of 15% compared to $82.4 million for the third quarter 2024. The increase was primarily due to higher incentive compensation costs, foreign exchange losses compared to gains in the prior year period, and higher research and development expenses. Third quarter 2025 includes $3.8 million of transformation and transaction-related costs and $2.5 million of losses on the sale of customer accounts receivable, which are excluded from Adjusted EBITDA. Third quarter 2024 includes $1.7 million of transaction costs, which are excluded from Adjusted EBITDA.
Selling and administrative expenses for the year-to-date 2025 period were $262.4 million, an increase of 4% compared to $253.3 million for the 2024 year-to-date period. The increase was primarily due to higher incentive compensation costs, foreign exchange losses, and higher research and development expenses. Year-to-date 2025 includes $4.9 million of transformation and transaction-related costs and $5.7 million of losses on the sale of customer accounts receivable, which are excluded from Adjusted EBITDA. Year-to-date 2024 includes $1.7 million of transaction costs, which are excluded from Adjusted EBITDA.
Restructuring (Credits) Charges
Third quarter 2025 included restructuring credits of $0.4 million due to a reduction in severance-related reserves primarily for our previous European restructuring. Third quarter 2024 included restructuring charges of $0.5 million for severance-related reserves for the involuntary reduction of several domestic employees.
The year-to-date periods ended September 28, 2025 and September 29, 2024 included restructuring credits of $1.7 million and $1.2 million, respectively, primarily due to reductions in severance-related reserves for previous European and AA&S restructuring activities.
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(Gain) Loss on Asset Sales and Sales of Businesses, net
Gain on asset sales and sales of businesses, net of $1.3 million for the third quarter of 2025 primarily includes a $1.1 million gain on the sale of our East Hartford, CT operations, an immaterial, non-core operation that was part of the Forged Products business unit in the HPMC segment. The year-to-date period ended September 28, 2025 loss on asset sales and sales of businesses, net of $2.6 million also includes a $3.7 million loss for the sale of certain immaterial, non-core operations in Birmingham, UK and Dusseldorf, Germany, which were part of our European business in the HPMC Segment.
Gains on asset sales and sales of businesses, net of $2.5 million for the year-to-date 2024 period was mostly comprised of a $2.3 million gain on the sale of our idled Houston, PA facility.
Interest Expense, Net
Interest expense, net decreased to $26.1 million in the third quarter of 2025 compared to $28.0 million in the third quarter of 2024. Capitalized interest reduced interest expense by $2.4 million in the third quarter 2025 and $2.9 million in the third quarter 2024. In addition, interest expense, net in the year-to-date period ended September 28, 2025 decreased to $74.5 million compared to $83.0 million in the year-to-date period ended September 29, 2024. For the year-to-date periods ended September 28, 2025 and September 29, 2024, capitalized interest was $7.6 million and $8.8 million, respectively. The decrease in interest expense, net in both the quarter and year-to-date periods was primarily due to the redemption of the 2025 Convertible Notes in the third quarter of 2024.
Other Income, Net
Other income, net for the third quarter and year-to date period ended September 28, 2025 of $12.2 million and $15.5 million, respectively, included a gain of $10.5 million from the sale of certain oil and gas rights. Other income, net for the third quarter and year-to date period ended September 29, 2024 of $4.4 million and $5.2 million, respectively, included a gain of $3.7 million from the sale of certain oil and gas rights.
Income Taxes
Our effective tax rate for the third quarter of 2025 was 21.4%, resulting in an income tax provision of $31.0 million, and our effective tax rate for the third quarter of 2024 was 24.6%, resulting in an income tax provision of $28.3 million. The effective tax rate for the third quarter of 2025 includes discrete tax expense of $2.8 million, primarily related to return-to-provision adjustments for limitations of permanent benefits due to decreased taxable income. The effective tax rate for the third quarter of 2024 includes discrete tax expense of $0.2 million. Excluding the discrete tax items, the Company’s effective tax rates for the third quarter of 2025 and 2024 were 19.5% and 24.5%, respectively. The decline in the effective tax rate was primarily due to deductions previously limited by net operating losses.
Our effective tax rate for the year-to-date period ended September 28, 2025 was 20.4%, resulting in an income tax provision of $81.3 million. Our effective tax rate for the year-to-date period ended September 29, 2024 was 22.7%, resulting in an income tax provision of $70.5 million. The effective tax rate for the year-to-date period ended September 28, 2025 includes discrete tax benefits of $1.7 million, inclusive of $4.1 million for share-based compensation. The effective tax rate for the year-to-date period ended September 29, 2024 includes discrete tax benefits of $4.5 million, inclusive of $3.3 million for share-based compensation, as well as the impact from the recognition of a stranded deferred tax valuation allowance in accumulated other comprehensive loss due to the maturity of our interest rate swap. Excluding the discrete tax items, the Company’s effective tax rate for the year-to-date periods ended September 28, 2025 and September 29, 2024 was 20.8% and 24.1%, respectively. The decline in the effective tax rate was primarily due to deductions previously limited by net operating losses.
On July 4, 2025, the One Big Beautiful Bill Act, which includes permanent extensions of most expiring Tax Cuts and Jobs Act provisions and international tax changes, was enacted. Pursuant to ASC 740, Income Taxes, the effects of changes in tax law are recognized in the period of enactment, the impact of which are not material and are reflected in the Company’s effective tax rate in the quarter. The Company anticipates that the impacts related to the tax law changes will be favorable to future years’ cash tax payments due to changes in bonus depreciation, domestic research expensing and certain international provisions.
Net Income
Net income attributable to ATI was $110.0 million, or $0.78 per share, in the third quarter of 2025, compared to $82.7 million, or $0.57 per share, for the third quarter of 2024.
Net income attributable to ATI was $307.7 million, or $2.16 per share, in the year-to-date period ended September 28, 2025, compared to a net income attributable to ATI of $230.7 million, or $1.61 per share, for the prior year period.
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Business Segment Results
Comparative financial information (in millions) for our segments and corporate operations for the quarters and year-to-date periods ended September 28, 2025 and September 29, 2024 is shown below.
| Quarter Ended | Year-to-date period ended | ||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | ||||||||||||||||||||
| Sales: | |||||||||||||||||||||||
| High Performance Materials & Components | $ | 602.9 | $ | 552.4 | $ | 1,795.8 | $ | 1,644.3 | |||||||||||||||
| Advanced Alloys & Solutions | 522.6 | 498.8 | 1,614.5 | 1,545.1 | |||||||||||||||||||
| Total external sales | $ | 1,125.5 | $ | 1,051.2 | $ | 3,410.3 | $ | 3,189.4 | |||||||||||||||
Segment EBITDA(a): | |||||||||||||||||||||||
| High Performance Materials & Components | $ | 145.8 | $ | 123.2 | $ | 420.8 | $ | 334.6 | |||||||||||||||
| % of Sales | 24.2 | % | 22.3 | % | 23.4 | % | 20.4 | % | |||||||||||||||
| Advanced Alloys & Solutions | 90.4 | 73.6 | 250.5 | 232.9 | |||||||||||||||||||
| % of Sales | 17.3 | % | 14.8 | % | 15.5 | % | 15.1 | % | |||||||||||||||
Corporate, Closed Operations and Other (income) expense(b): | |||||||||||||||||||||||
| Corporate expense | $ | 15.6 | $ | 13.4 | $ | 48.4 | $ | 49.9 | |||||||||||||||
| Closed operations and other (income) expense | (4.5) | (2.3) | (4.5) | (1.7) | |||||||||||||||||||
| Total Corporate, Closed Operations and Other expense | $ | 11.1 | $ | 11.1 | $ | 43.9 | $ | 48.2 | |||||||||||||||
| Depreciation & Amortization: | |||||||||||||||||||||||
| High Performance Materials & Components | $ | 21.2 | $ | 18.6 | $ | 61.8 | $ | 52.8 | |||||||||||||||
| Advanced Alloys & Solutions | 19.7 | 18.2 | 58.3 | 54.5 | |||||||||||||||||||
| Other | 1.7 | 1.7 | 4.9 | 5.1 | |||||||||||||||||||
| Total depreciation & amortization | $ | 42.6 | $ | 38.5 | $ | 125.0 | $ | 112.4 | |||||||||||||||
(a)The Company’s Chief Operating Decision Maker (“CODM”) utilizes the 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 Note 11 for the reconciliation of Segment EBITDA to Income before taxes.
(b)Amounts exclude depreciation and amortization.
32
High Performance Materials & Components Segment
Third quarter 2025 sales were $602.9 million, an increase of $50.5 million, or 9%, compared to the third quarter 2024, primarily due to a $79.2 million, or 17%, increase in sales to the aerospace & defense market. The increase in aerospace & defense sales was primarily driven by strong demand for commercial jet engine and defense products. This increase was partially offset by a decline in sales to the medical, specialty energy, and industrial markets, inclusive of a $9 million negative impact due to the first quarter 2025 disposition of certain non-core operations in Europe.
Comparative information for our HPMC segment revenues (in millions) by market and their respective percentages of the segment’s overall revenues for the quarters ended September 28, 2025 and September 29, 2024 is as follows:
| Quarter ended | Quarter ended | ||||||||||||||||||||||
| Markets | September 28, 2025 | September 29, 2024 | |||||||||||||||||||||
| Aerospace & Defense: | |||||||||||||||||||||||
| Jet Engines- Commercial | $ | 399.3 | 66 | % | $ | 341.9 | 62 | % | |||||||||||||||
| Airframes- Commercial | 71.0 | 12 | % | 84.1 | 15 | % | |||||||||||||||||
| Defense | 83.8 | 14 | % | 48.9 | 9 | % | |||||||||||||||||
| Total Aerospace & Defense | 554.1 | 92 | % | 474.9 | 86 | % | |||||||||||||||||
| Specialty Energy | 19.4 | 3 | % | 26.3 | 5 | % | |||||||||||||||||
| Medical | 11.8 | 2 | % | 28.6 | 5 | % | |||||||||||||||||
| Electronics | — | — | % | — | — | % | |||||||||||||||||
| Other Core Markets | 31.2 | 5 | % | 54.9 | 10 | % | |||||||||||||||||
| Core End Markets | 585.3 | 97 | % | 529.8 | 96 | % | |||||||||||||||||
| Construction/Mining | 5.3 | 1 | % | 4.9 | 1 | % | |||||||||||||||||
| Automotive | 1.7 | — | % | 4.6 | 1 | % | |||||||||||||||||
| Conventional Energy | 1.1 | — | % | 2.4 | — | % | |||||||||||||||||
| Other | 9.5 | 2 | % | 10.7 | 2 | % | |||||||||||||||||
| Industrial Markets | 17.6 | 3 | % | 22.6 | 4 | % | |||||||||||||||||
| Total | $ | 602.9 | 100 | % | $ | 552.4 | 100 | % | |||||||||||||||
International sales represented 44% of total segment sales for the third quarter 2025, compared to 48% in the prior year period. Comparative information for the HPMC segment’s major product categories, based on their percentages of revenue for the quarters ended September 28, 2025 and September 29, 2024, is as follows:
| Quarter ended | |||||||||||
| September 28, 2025 | September 29, 2024 | ||||||||||
| Nickel-based alloys and specialty alloys | 44 | % | 43 | % | |||||||
| Precision forgings, castings and components | 40 | % | 36 | % | |||||||
| Titanium and titanium-based alloys | 16 | % | 21 | % | |||||||
| Total | 100 | % | 100 | % | |||||||
Segment EBITDA in the third quarter 2025 was $145.8 million, or 24.2% of total sales, compared to $123.2 million, or 22.3% of total sales, for the third quarter 2024. The increase in segment EBITDA, as a percentage of sales, was primarily due to higher sales and favorable pricing of nickel-based and specialty alloys. Results in the third quarter of 2024 included a benefit of $2.9 million from the recognition of previously deferred employee retention tax credits.
Sales for the year-to-date period ended September 28, 2025 were $1,795.8 million, an increase of $151.5 million, or 9%, compared to the year-to-date period ended September 29, 2024, primarily due to a $255.3 million, or 18%, increase in sales to the aerospace & defense market. The increase in aerospace & defense sales was primarily due to strong demand for commercial jet engine and defense products. This increase was partially offset by a decline in sales to the medical, industrial, and specialty energy markets, inclusive of a $39 million negative impact due to the first quarter 2025 disposition of certain non-core operations in Europe.
33
Comparative information for our HPMC segment revenues (in millions) by market and their respective percentages of the segment’s overall revenues for the year-to-date periods ended September 28, 2025 and September 29, 2024 is as follows:
| Year-to-date period ended | Year-to-date period ended | ||||||||||||||||||||||
| Markets | September 28, 2025 | September 29, 2024 | |||||||||||||||||||||
| Aerospace & Defense: | |||||||||||||||||||||||
| Jet Engines- Commercial | $ | 1,216.2 | 68 | % | $ | 970.6 | 59 | % | |||||||||||||||
| Airframes- Commercial | 230.1 | 13 | % | 263.5 | 16 | % | |||||||||||||||||
| Defense | 204.0 | 11 | % | 160.9 | 10 | % | |||||||||||||||||
| Total Aerospace & Defense | 1,650.3 | 92 | % | 1,395.0 | 85 | % | |||||||||||||||||
| Specialty Energy | 46.5 | 3 | % | 67.0 | 4 | % | |||||||||||||||||
| Medical | 43.0 | 2 | % | 97.5 | 6 | % | |||||||||||||||||
| Electronics | — | — | % | 3.0 | — | % | |||||||||||||||||
| Other Core Markets | 89.5 | 5 | % | 167.5 | 10 | % | |||||||||||||||||
| Core End Markets | 1,739.8 | 97 | % | 1,562.5 | 95 | % | |||||||||||||||||
| Construction/Mining | 20.5 | 1 | % | 19.9 | 1 | % | |||||||||||||||||
| Automotive | 5.9 | — | % | 13.4 | 1 | % | |||||||||||||||||
| Conventional Energy | 4.2 | — | % | 8.3 | 1 | % | |||||||||||||||||
| Other | 25.4 | 2 | % | 40.2 | 2 | % | |||||||||||||||||
| Industrial Markets | 56.0 | 3 | % | 81.8 | 5 | % | |||||||||||||||||
| Total | $ | 1,795.8 | 100 | % | $ | 1,644.3 | 100 | % | |||||||||||||||
International sales represented 44% of total segment sales for the 2025 year-to-date period. Comparative information for the HPMC segment’s major product categories, based on their percentages of revenue for the year-to-date periods ended September 28, 2025 and September 29, 2024, is as follows:
| Year-to-date period ended | |||||||||||
| September 28, 2025 | September 29, 2024 | ||||||||||
| Nickel-based alloys and specialty alloys | 43 | % | 41 | % | |||||||
| Precision forgings, castings and components | 39 | % | 36 | % | |||||||
| Titanium and titanium-based alloys | 18 | % | 23 | % | |||||||
| Total | 100 | % | 100 | % | |||||||
Segment EBITDA in the year-to-date period ended September 28, 2025 increased to $420.8 million, or 23.4% of total sales, compared to $334.6 million, or 20.4% of total sales, for the year-to-date period ended September 29, 2024. The increase in segment EBITDA, as a percentage of sales, was primarily due to higher sales and favorable pricing of nickel-based and specialty alloys. Results for the year-to-date periods ended September 28, 2025 and September 29, 2024 included benefits of $4.4 million and $6.4 million, respectively, from the recognition of previously deferred employee retention tax credits.
The Company’s investments to increase capacity and focus on continuous improvement are driving improvements to our work-flow processes and operations. HPMC results for 2025 reflected year-over-year improved operating leverage and pricing as we continued to experience increasing demand from the aerospace & defense market, especially for commercial jet engines. Although macro risks and uncertainty continue, we believe our capabilities, strong backlog and long-term agreements with aerospace market OEMs for our specialty materials, including powders, parts and components, position the HPMC segment for profitable growth for the next several years. ATI has prepared for the potential risks of tariffs for many years, and we have taken actions to minimize the impact of tariffs in our contracts and supply chains. While we expect continued, near-term challenges, we believe the backlog of commercial aircraft production, increasing requirements for maintenance, repair, and operations, and the current OEM production forecasts support our long-term growth expectations in this end market.
34
Advanced Alloys & Solutions Segment
Third quarter 2025 sales were $522.6 million, an increase of $23.8 million, or 5%, compared to the third quarter 2024. Sales to the aerospace & defense market increased $59.7 million, or 33%, due to higher commercial airframe and jet engine sales of $40.3 million and a $19.4 million increase in sales of defense products. Aerospace & defense sales were 46% of the total AA&S sales in the third quarter 2025 compared to 36% in third quarter 2024. The sales increase for aerospace & defense was partially offset by declines in sales to our other core markets, primarily specialty energy and medical, of $14.5 million, or 21%.
Comparative information regarding our AA&S segment revenues (in millions) by market and their respective percentages of the segment’s overall revenues for the quarters ended September 28, 2025 and September 29, 2024 is shown below.
| Quarter ended | Quarter ended | ||||||||||||||||||||||
| Markets | September 28, 2025 | September 29, 2024 | |||||||||||||||||||||
| Aerospace & Defense: | |||||||||||||||||||||||
| Jet Engines- Commercial | $ | 34.3 | 7 | % | $ | 24.0 | 5 | % | |||||||||||||||
| Airframes- Commercial | 126.7 | 24 | % | 96.7 | 19 | % | |||||||||||||||||
| Defense | 77.6 | 15 | % | 58.2 | 12 | % | |||||||||||||||||
| Total Aerospace & Defense | 238.6 | 46 | % | 178.9 | 36 | % | |||||||||||||||||
| Electronics | 48.4 | 9 | % | 49.1 | 10 | % | |||||||||||||||||
| Specialty Energy | 34.5 | 7 | % | 43.6 | 9 | % | |||||||||||||||||
| Medical | 19.1 | 3 | % | 24.5 | 5 | % | |||||||||||||||||
| Other Core Markets | 102.0 | 19 | % | 117.2 | 24 | % | |||||||||||||||||
| Core End Markets | 340.6 | 65 | % | 296.1 | 60 | % | |||||||||||||||||
| Automotive | 59.6 | 11 | % | 59.2 | 12 | % | |||||||||||||||||
| Conventional Energy | 55.7 | 11 | % | 70.2 | 14 | % | |||||||||||||||||
| Construction/Mining | 31.5 | 6 | % | 36.9 | 7 | % | |||||||||||||||||
| Other | 35.2 | 7 | % | 36.4 | 7 | % | |||||||||||||||||
| Industrial Markets | 182.0 | 35 | % | 202.7 | 40 | % | |||||||||||||||||
| Total | $ | 522.6 | 100 | % | $ | 498.8 | 100 | % | |||||||||||||||
International sales represented 35% of total segment sales for the third quarter of 2025, compared to 32% in the prior year’s third quarter. Comparative information regarding the AA&S segment’s major product categories, based on their percentages of revenue for the quarters ended September 28, 2025 and September 29, 2024, is presented in the following table. HRPF conversion service sales are excluded from this presentation.
| Quarter ended | |||||||||||
| September 28, 2025 | September 29, 2024 | ||||||||||
| Nickel-based alloys and specialty alloys | 45 | % | 50 | % | |||||||
| Titanium and titanium-based alloys | 22 | % | 12 | % | |||||||
| Zirconium and related alloys | 20 | % | 17 | % | |||||||
| Precision rolled strip products | 13 | % | 21 | % | |||||||
| Total | 100 | % | 100 | % | |||||||
Segment EBITDA was $90.4 million, or 17.3% of sales, for the third quarter 2025, compared to segment EBITDA of $73.6 million, or 14.8% of sales, for the third quarter 2024. The margin increase compared to the prior year was primarily due to favorable sales mix and pricing of exotic alloys. Third quarter 2024 included a $1.9 million benefit from the recognition of previously deferred employee retention tax credits.
Sales for the year-to-date period ended September 28, 2025 were $1,614.5 million, an increase of $69.4 million or 5% compared to the year-to-date period ended September 29, 2024. Sales to the aerospace & defense market increased by $100.2 million, or 18%, due to higher commercial airframe and jet engine sales of $77.7 million and a $22.5 million increase in
35
defense sales. The increase in aerospace & defense sales was partially offset by a decline in sales to our other core markets of $29.5 million, or 8%. Sales to industrial markets were essentially flat compared to the prior year period.
Comparative information regarding our AA&S segment revenues (in millions) by market and their respective percentages of the segment’s overall revenues for the year-to-date periods ended September 28, 2025 and September 29, 2024 is shown below.
| Year-to-date period ended | Year-to-date period ended | ||||||||||||||||||||||
| Markets | September 28, 2025 | September 29, 2024 | |||||||||||||||||||||
| Aerospace & Defense: | |||||||||||||||||||||||
| Jet Engines- Commercial | $ | 86.6 | 5 | % | $ | 59.3 | 4 | % | |||||||||||||||
| Airframes- Commercial | 368.6 | 23 | % | 318.2 | 20 | % | |||||||||||||||||
| Defense | 203.4 | 13 | % | 180.9 | 12 | % | |||||||||||||||||
| Total Aerospace & Defense | 658.6 | 41 | % | 558.4 | 36 | % | |||||||||||||||||
| Electronics | 131.7 | 8 | % | 139.8 | 9 | % | |||||||||||||||||
| Specialty Energy | 121.4 | 8 | % | 135.6 | 9 | % | |||||||||||||||||
| Medical | 69.2 | 4 | % | 76.4 | 5 | % | |||||||||||||||||
| Other Core Markets | 322.3 | 20 | % | 351.8 | 23 | % | |||||||||||||||||
| Core End Markets | 980.9 | 61 | % | 910.2 | 59 | % | |||||||||||||||||
| Conventional Energy | 267.3 | 17 | % | 232.9 | 15 | % | |||||||||||||||||
| Automotive | 180.8 | 11 | % | 177.2 | 11 | % | |||||||||||||||||
| Construction/Mining | 82.5 | 5 | % | 93.3 | 6 | % | |||||||||||||||||
| Other | 103.0 | 6 | % | 131.5 | 9 | % | |||||||||||||||||
| Industrial Markets | 633.6 | 39 | % | 634.9 | 41 | % | |||||||||||||||||
| Total | $ | 1,614.5 | 100 | % | $ | 1,545.1 | 100 | % | |||||||||||||||
International sales represented 40% of total segment sales for the year-to-date period ended September 28, 2025, compared to 33% the prior year. Comparative information regarding the AA&S segment’s major product categories, based on their percentages of revenue for the quarters ended September 28, 2025 and September 29, 2024, is presented in the following table. HRPF conversion service sales are excluded from this presentation.
| Year-to-date period ended | |||||||||||
| September 28, 2025 | September 29, 2024 | ||||||||||
| Nickel-based alloys and specialty alloys | 51 | % | 50 | % | |||||||
| Zirconium and related alloys | 19 | % | 18 | % | |||||||
| Titanium and titanium-based alloys | 19 | % | 13 | % | |||||||
| Precision rolled strip products | 11 | % | 19 | % | |||||||
| Total | 100 | % | 100 | % | |||||||
Segment EBITDA was $250.5 million, or 15.5% of sales, for the year-to-date period ended September 28, 2025, compared to segment EBITDA of $232.9 million, or 15.1% of sales, for the year-to-date period ended September 29, 2024. The margin increase compared to the prior year was primarily due to higher sales, a favorable sales mix, and pricing of exotic alloys. Results for the year-to-date period ended September 28, 2025 include a benefit of $2.8 million from the recognition of previously deferred employee retention tax credits and a benefit of $2.6 million due to a customer recovery for previously reserved accounts receivable. Results for the year-to-date period ended September 29, 2024 includes a benefit of $7.0 million from the recognition of previously deferred employee retention tax credits.
Margins for our AA&S segment increased on a year-over-year basis, as expected, through improved sales mix and operating performance. We continue to closely monitor macro risks and uncertainty, and have taken actions to minimize the impact of tariffs in our contracts and supply chains.
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Corporate Items
Corporate expenses for the third quarter of 2025 were $15.6 million, compared to $13.4 million for the third quarter 2024. The increase in corporate expenses for the quarter ended September 28, 2025 was primarily due to higher incentive compensation costs. For the year-to-date period ended September 28, 2025, corporate expenses were $48.4 million, compared to $49.9 million for the year-to-date period ended September 29, 2024. The decrease in corporate expenses for the year-to-date period ended September 28, 2025 was primarily due to lower incentive compensation costs.
Closed operations and other income/expense for the third quarter 2025 was income of $4.5 million, compared to income of $2.3 million for the third quarter 2024. For the year-to-date period ended September 28, 2025, closed operations and other income/expense was income $4.5 million, compared to income of $1.7 million for the year-to-date period ended September 29, 2024. Closed operations and other income/expense for the quarter and year-to-date periods ended September 28, 2025 and September 29, 2024 includes gains of $10.5 million and $3.7 million, respectively, on the sale of certain oil and gas rights, included within other income, net, on the consolidated statements of operations.
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.
We employ several strategies to actively manage our Managed working capital, seeking to effectively balance the need to maintain appropriate levels of Managed working capital to support our growth and operations while deploying our cash efficiently. Our strategies include, but are not limited to, taking advantage of favorable customer and supplier payment terms, participating in supplier financing programs, accounts receivable factoring arrangements and other customer financing programs, managing the timing of purchases of raw materials, and leveling manufacturing process throughput and shipping to limit periodic increases in Managed working capital.
At September 28, 2025, Managed working capital increased as a percentage of annualized sales to 36.4% compared to 30.9% at December 29, 2024. The increase in Managed working capital as a percentage of annualized sales was primarily due to seasonal inventory builds to support increased operating levels and the timing of shipments, which impacts days sales outstanding, and vendor payments in the quarter. Days sales outstanding, which measures actual collection timing for accounts receivable, worsened by 5% as of September 28, 2025 compared to year end 2024. Gross inventory turns, which measures how many times we turn over our inventory relative to cost of sales in a year, worsened by 8% as of September 28, 2025 compared to year end 2024.
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The computations of Managed working capital at September 28, 2025 and December 29, 2024, reconciled to the financial statement line items as computed under U.S. GAAP, were as follows. The December 29, 2024 amounts include management working capital balances that are classified as held for sale.
| September 28, | December 29, | ||||||||||
| (In millions) | 2025 | 2024 | |||||||||
| Accounts receivable | $ | 709.9 | $ | 709.2 | |||||||
| Short-term contract assets | 94.3 | 75.6 | |||||||||
| Inventory | 1,405.6 | 1,353.0 | |||||||||
| Accounts payable | (493.5) | (609.1) | |||||||||
| Short-term contract liabilities | (159.2) | (169.4) | |||||||||
| Subtotal | 1,557.1 | 1,359.3 | |||||||||
| Allowance for doubtful accounts | 4.7 | 15.0 | |||||||||
| Inventory valuation reserves | 77.5 | 68.5 | |||||||||
| Net managed working capital held for sale | — | 8.5 | |||||||||
| Managed working capital | $ | 1,639.3 | $ | 1,451.3 | |||||||
| Annualized prior 3 months sales | $ | 4,502.2 | $ | 4,690.5 | |||||||
| Managed working capital as a % of annualized sales | 36.4 | % | 30.9 | % | |||||||
Liquidity and Financial Condition
On June 13, 2025, we amended our Asset Based Lending (ABL) Credit Facility, which is collateralized by the accounts receivable and inventory of our operations. This amendment extended the ABL facility through June 2030. The amended ABL includes a $600 million revolving credit facility, a letter of credit sub-facility of up to $200 million, a $200 million term loan (Term Loan), and a swing loan facility of up to $60 million. Additionally, the amendment gives the Company the ability, through June 13, 2026 and as long as no default or event of default has occurred and is continuing, to borrow an additional term loan of up to $100 million in total, using one or two draws (the Delayed-Draw Term Loan). The ABL facility also provides us with the option of including certain machinery and equipment as additional collateral for purposes of determining availability under the facility.
As of September 28, 2025, there were no outstanding borrowings under the revolving portion of the ABL facility, and $29.4 million was utilized to support the issuance of letters of credit. At September 28, 2025, we had $372.2 million of cash and cash equivalents, available additional liquidity under the ABL facility of approximately $570 million, and up to $100 million of availability under the Delayed-Draw Term Loan. Our next significant debt maturity is in the fourth quarter of this year and relates to the 6.95% Debentures due 2025 issued by our wholly owned subsidiary, Allegheny Ludlum LLC.
Periodically, our Board of Directors authorizes the repurchase of ATI common stock (the “Share Repurchase Program”), the most recent of which was $700 million that was announced in September 2024. Repurchases under these programs are made in the open market or in privately negotiated transactions, with the amount and timing of repurchases depending on market conditions and corporate needs. Open market repurchases are structured to occur within the pricing and volume requirements of SEC Rule 10b-18. In the quarter and year-to-date period ended September 28, 2025, ATI used $150 million and $470 million, respectively, to repurchase 2.0 million and 6.4 million, respectively, of its common stock under the Share Repurchase Program. At September 28, 2025, the Company has utilized $580 million of the $700 million currently authorized under the Share Repurchase Program.
We believe that internally generated funds, current cash on hand and available borrowings under the ABL facility will be adequate to meet our liquidity needs. In the event we decide to obtain additional financing, the cost and terms and conditions of such borrowings may be influenced by our credit rating. In addition, we regularly review our capital structure, various financing alternatives, and conditions in the debt and equity markets in order to opportunistically enhance our capital structure. As a result, we may seek to refinance or retire existing indebtedness, incur new or additional indebtedness or issue equity or equity-linked securities, in each case, depending on market and other conditions. We have no off-balance sheet arrangements as defined in Item 303(a)(4) of SEC Regulation S-K.
In managing our overall capital structure, we focus on the ratio of net debt to Adjusted EBITDA, which we use as a measure of our ability to repay our incurred debt. We define net debt as the total principal balance of our outstanding indebtedness excluding deferred financing costs, net of cash, at the balance sheet date. See above for our definition of Adjusted EBITDA, which is a non-GAAP measure and is not intended to represent, and should not be considered more meaningful than, or as an alternative to, a measure of operating performance as determined in accordance with U.S. GAAP. Our ratio of net debt to
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Adjusted EBITDA (Adjusted EBITDA Leverage Ratio) measures net debt at the balance sheet date to Adjusted EBITDA as calculated on the trailing twelve-month period from this balance sheet date.
Our Total Debt to Adjusted EBITDA Leverage ratio improved in the third quarter of 2025 compared to year end 2024, while our Net Debt to Adjusted EBITDA Leverage ratio worsened in the third quarter of 2025 compared to year end 2024, largely due to a lower cash balance. The reconciliations of our Adjusted EBITDA Leverage Ratios to the balance sheet and income statement amounts as reported under U.S. GAAP are as follows:
| Quarter ended | Trailing 12-month period ended | Year ended | ||||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | September 28, 2025 | December 29, 2024 | |||||||||||||||||||||||
| Net income attributable to ATI | $ | 110.0 | $ | 82.7 | $ | 444.8 | $ | 367.8 | ||||||||||||||||||
| Net income attributable to noncontrolling interests | 3.6 | 3.9 | 15.4 | 14.9 | ||||||||||||||||||||||
| Net income | 113.6 | 86.6 | 460.2 | 382.7 | ||||||||||||||||||||||
| Interest expense | 26.1 | 28.0 | 99.7 | 108.2 | ||||||||||||||||||||||
| Depreciation and amortization | 42.6 | 38.5 | 164.1 | 151.5 | ||||||||||||||||||||||
| Income tax provision (benefit) | 31.0 | 28.3 | 114.2 | 103.4 | ||||||||||||||||||||||
| Pension remeasurement loss | — | — | 14.1 | 14.1 | ||||||||||||||||||||||
| Restructuring and other charges | 12.9 | 4.3 | 35.2 | 22.1 | ||||||||||||||||||||||
| Gain on asset sales and sale of businesses, net | (1.1) | — | (50.3) | (52.9) | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 225.1 | $ | 185.7 | $ | 837.2 | $ | 729.1 | ||||||||||||||||||
| Debt | $ | 1,906.9 | $ | 1,895.3 | ||||||||||||||||||||||
| Add: Debt issuance costs | 12.2 | 14.2 | ||||||||||||||||||||||||
| Total debt | 1,919.1 | 1,909.5 | ||||||||||||||||||||||||
| Less: Cash | (372.2) | (721.2) | ||||||||||||||||||||||||
| Net debt | $ | 1,546.9 | $ | 1,188.3 | ||||||||||||||||||||||
| Total Debt to Adjusted EBITDA | 2.29 | 2.62 | ||||||||||||||||||||||||
| Net Debt to Adjusted EBITDA | 1.85 | 1.63 | ||||||||||||||||||||||||
Cash Flow
Cash provided by operations was $298.5 million in the year-to-date period ended September 28, 2025, a significant improvement compared to $26.3 million in the year-to-date period ended September 29, 2024. The 2025 period improvement was due to higher net income and improved working capital changes compared to the 2024 period, including cash flows from accounts receivable and inventory balances. Accounts receivable were positively impacted by the sale of $80 million of accounts receivable in exchange for cash under the new Receivables Facility. Working capital balances, and consequently cash from operations, can fluctuate throughout any operating period based upon the timing of receipts from customers and payments to vendors. Other significant 2025 and 2024 operating cash flow items included payment of the annual cash incentive compensation.
Cash used in investing activities was $149.0 million in the year-to-date period ended September 28, 2025, which included $187.9 million for capital expenditures primarily to support various growth projects in our aerospace & defense and other core markets. Cash used in investing activities was $178.2 million in the year-to-date period ended September 29, 2024, reflecting $191.8 million in capital expenditures. Proceeds from disposals of property, plant and equipment in the year-to-date period ended September 28, 2025 of $10.9 million mostly relates to $10.5 million of proceeds on the sale of certain oil and gas rights. Proceeds from disposals of property, plant and equipment in the year-to-date period ended September 29, 2024 of $10.6 million related to $3.7 million of proceeds on the sale of certain oil and gas rights and $3.5 million of proceeds received for the sale of assets for our idled Houston, PA facility. We expect to fund our capital expenditures with cash on hand and cash flow generated from our operations and, if needed, borrowings under the ABL facility.
Cash used in financing activities was $512.6 million in the year-to-date period ended September 28, 2025, which included $470.0 million to repurchase 6.4 million shares of ATI stock under our Share Repurchase Program. For the year-to-date period
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ended September 29, 2024, cash used in financing activities was $166.2 million, which included $190.0 million to repurchase 4.1 million shares of ATI stock under our Share Repurchase Program.
At September 28, 2025, cash and cash equivalents on hand totaled $372.2 million, a decrease of $349.0 million from year end 2024. Cash and cash equivalents held by our foreign subsidiaries was $179.1 million at September 28, 2025, of which $99.1 million was held by the STAL joint venture.
Reconciliation of Adjusted EBITDA to Net Income
ATI utilizes Adjusted EBITDA, which is a non-GAAP financial measure, to assist in assessing operating performance on a consistent basis across multiple reporting periods by removing the impact of special items, which can vary from period to period, that management does not believe are directly reflective of the Company’s core operations. The Company defines special items as significant non-recurring or non-operational charges or credits, including restructuring charges or credits, gains or losses on the sale of accounts receivable, strike related costs, goodwill and long-lived asset impairments, debt extinguishment charges, pension remeasurement gains and losses, other postretirement/pension curtailment and settlement gains and losses, and gains or losses on sales of businesses.
We define Adjusted EBITDA as net income, excluding net interest expense, income taxes, depreciation and amortization, and special items.
Management believes presenting this non-GAAP financial measure 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 useful to investors on a period-to-period consistent basis that are commonly used to analyze companies’ operating performance. Management believes that consideration of Adjusted EBITDA, together with Net Income, and the corresponding reconciliation, provides investors with additional 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 table provides the reconciliation of net income attributable to ATI to the Adjusted EBITDA non-GAAP financial measures:
| Quarter Ended | Year-to-date period ended | ||||||||||||||||||||||
| September 28, 2025 | September 29, 2024 | September 28, 2025 | September 29, 2024 | ||||||||||||||||||||
| Net income attributable to ATI | $ | 110.0 | $ | 82.7 | $ | 307.7 | $ | 230.7 | |||||||||||||||
| Net income attributable to noncontrolling interests | 3.6 | 3.9 | 10.4 | 9.9 | |||||||||||||||||||
| Net income | 113.6 | 86.6 | 318.1 | 240.6 | |||||||||||||||||||
| (+) Depreciation and amortization | 42.6 | 38.5 | 125.0 | 112.4 | |||||||||||||||||||
| (+) Interest expense | 26.1 | 28.0 | 74.5 | 83.0 | |||||||||||||||||||
| (+) Income tax provision | 31.0 | 28.3 | 81.3 | 70.5 | |||||||||||||||||||
| EBITDA | $ | 213.3 | $ | 181.4 | $ | 598.9 | $ | 506.5 | |||||||||||||||
| Adjustments for special items, pre-tax: | |||||||||||||||||||||||
(+) Restructuring and other charges(a) | 12.9 | 4.3 | 25.9 | 12.8 | |||||||||||||||||||
(-/+) (Gain) loss on sales of businesses, net(b) | (1.1) | — | 2.6 | — | |||||||||||||||||||
| Adjusted EBITDA | $ | 225.1 | $ | 185.7 | $ | 627.4 | $ | 519.3 | |||||||||||||||
| Adjusted EBITDA as a % of sales | 20.0 | % | 17.7 | % | 18.4 | % | 16.3 | % | |||||||||||||||
(a)Third quarter 2025: Restructuring and other charges of $12.9 million include $7.2 million of start-up and transaction-related costs, which are primarily reported within cost of sales on the consolidated statements of operations, and $3.6 million of transformation-related costs and $2.5 million for losses on sale of accounts receivable, which are reported in selling and administrative expenses on the consolidated statements of operations. These charges were partially offset by credits of $0.4 million due to a reduction in severance-related reserves for our European restructuring.
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Third quarter 2024: Restructuring and other charges of $4.3 million include $2.5 million of start-up costs, partially offset by a $0.4 million credit for adjustments to inventory reserves related to our European restructuring, both of which are reported within cost of sales on the consolidated statements of operations. These charges also included $1.7 million of transaction costs, which are reported in selling and administrative expense on the consolidated statements of operation, and restructuring charges of $0.5 million.
Year-to-date 2025: Restructuring and other charges of $25.9 million include $17.2 million of start-up and transaction-related costs, which are primarily reported within cost of sales on the consolidated statements of operations, and $4.7 million of transformation-related costs and $5.7 million for losses on sale of accounts receivable, which are reported in selling and administrative expenses on the consolidated statement of operations. These charges were partially offset by credits of $1.7 million due to a reduction in severance-related reserves primarily for a previous restructuring in the AA&S segment.
Year-to-date 2024: Restructuring and other charges of $12.8 million include $7.2 million of start-up costs and $5.1 million of inventory write-downs related to our European restructuring, both of which are reported within cost of sales on the consolidated statements of operations. These charges also include $1.7 million of transaction costs, which are reported within selling and administrative expenses on the consolidated statements of operations, and restructuring credits $1.2 million primarily for revised workforce reduction estimates.
(b)(Gain) loss on sales of businesses, net, for the third quarter of 2025 includes a $1.1 million gain on the sale of a non-core operation from the Forged Products business unit, which is part of the HPMC segment. (Gain) loss on sales of businesses, net, of $2.6 million for the year-to-date period ended September 28, 2025 also includes a $3.7 million loss on the sale of certain non-core European operations from the HPMC segment.
Critical Accounting Policies
Our critical accounting policies are discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 1 to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 29, 2024.
The preparation of the financial statements in accordance with U.S. generally accepted accounting principles requires us to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets and liabilities. Significant areas of uncertainty that require judgments, estimates and assumptions include the accounting for derivatives, retirement plans, income taxes, environmental and other contingencies, as well as asset impairment, inventory valuation and collectability of accounts receivable. We use historical and other information that we consider to be relevant to make these judgments and estimates. However, actual results may differ from those estimates and assumptions that are used to prepare our financial statements.
Pending Accounting Pronouncements
See Note 1 of the Notes to Consolidated Financial Statements for information on new and pending accounting pronouncements.
Forward-Looking and Other Statements
From time to time, we have made and may continue to make “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this report relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements include those containing such words as “anticipates,” “believes,” “estimates,” “expects,” “would,” “should,” “will,” “will likely result,” “forecast,” “outlook,” “projects,” and similar expressions. Forward-looking statements 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, that may cause our actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) material adverse changes in economic or industry conditions generally, including global supply and demand conditions and prices for our specialty materials and changes in international trade duties and other aspects of international trade policy; (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) the risks of business and economic
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disruption 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 29, 2024, and in other reports filed with the Securities and Exchange Commission. We assume no duty to update our forward-looking statements.
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| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | ||||
As part of our risk management strategy, we utilize derivative financial instruments, from time to time, to hedge our exposure to changes in energy and raw material prices, foreign currencies, and interest rates. We monitor the third-party financial institutions which are our counterparties to these financial instruments daily and diversify our transactions among counterparties to minimize exposure to any one of these entities. Fair values for derivatives were measured using exchange-traded prices for the hedged items including consideration of counterparty risk and the Company’s credit risk. Our exposure to volatility in interest rates is presently not material, as nearly all of our debt is at fixed interest rates.
Volatility of Interest Rates. We may enter into derivative interest rate contracts to maintain a reasonable balance between fixed- and floating-rate debt. Any gain or loss associated with this hedging arrangement was included in interest expense. There are no outstanding derivative interest rate contracts at September 28, 2025.
Volatility of Energy Prices. Energy resource markets are subject to conditions that create uncertainty in the prices and availability of energy resources. The prices for and availability of electricity, natural gas, oil and other energy resources are subject to volatile market conditions. These market conditions often are affected by political and economic factors beyond our control. Increases in energy costs, or changes in costs relative to energy costs paid by competitors, have and may continue to adversely affect our profitability. To the extent that these uncertainties cause suppliers and customers to be more cost sensitive, increased energy prices may have an adverse effect on our results of operations and financial condition. We use approximately 6 to 8 million MMBtu’s of natural gas annually, depending upon business conditions, in the manufacture of our products. These purchases of natural gas expose us to the risk of higher gas prices. For example, a hypothetical $1.00 per MMBtu increase in the price of natural gas would result in increased annual energy costs of approximately $6 to $8 million. We use several approaches to minimize any material adverse effect on our results of operations or financial condition from volatile energy prices. These approaches include incorporating an energy surcharge on many of our products and using financial derivatives to reduce exposure to energy price volatility.
At September 28, 2025, the outstanding financial derivatives used to hedge our exposure to energy cost volatility consisted of natural gas hedges covering approximately 60% of our forecasted domestic requirements for natural gas for the remainder of 2025 and approximately 35% for 2026. At September 28, 2025, the net mark-to-market valuation of these outstanding natural gas hedges was an unrealized pre-tax loss of $0.1 million, comprised of $0.4 million in prepaid expenses and other current assets, $0.2 million in other long-term assets and $0.7 million in other current liabilities on the balance sheet. For the quarter ended September 28, 2025, natural gas hedging activity increased cost of sales by $0.4 million.
Volatility of Raw Material Prices. We use raw material surcharge and index mechanisms to offset the impact of increased raw material costs; however, competitive factors in the marketplace can limit our ability to institute such mechanisms, and there can be a delay between the increase in the price of raw materials and the realization of the benefit of such mechanisms. For example, in 2024, we used approximately 70 million pounds of nickel; therefore, a hypothetical change of $1.00 per pound in nickel prices would result in increased costs of approximately $70 million. While we enter into raw materials futures contracts from time-to-time to hedge exposure to price fluctuations, such as for nickel, we cannot be certain that our hedge position adequately reduces exposure. We believe that we have adequate controls to monitor these contracts, but we may not be able to accurately assess exposure to price volatility in the markets for critical raw materials.
The majority of our products are sold utilizing raw material surcharges and index mechanisms. However, as of September 28, 2025, we had entered into financial hedging arrangements, primarily at the request of our customers related to firm orders, for an aggregate notional amount of approximately 1 million pounds of nickel with hedge dates through 2027. The aggregate notional amount hedged is approximately 2% of a single year’s estimated nickel raw material purchase requirements. These derivative instruments are used to hedge the variability of a selling price that is based on the London Metal Exchange (LME) index for nickel, as well as to hedge the variability of the purchase cost of nickel based on this LME index. Any gain or loss associated with these hedging arrangements is included in sales or cost of sales, depending on whether the underlying risk being hedged was the variable selling price or the variable raw material cost, respectively. At September 28, 2025, the net mark-to-market valuation of our outstanding raw material hedges was an unrealized pre-tax loss of $0.9 million, comprised of $0.1 million in prepaid expenses and other current assets, $0.1 million in other long-term assets, $1.0 million in other current liabilities and $0.1 million in other long-term liabilities on the balance sheet.
Foreign Currency Risk. Foreign currency exchange contracts are used, from time-to-time, to limit transactional exposure to changes in currency exchange rates. We sometimes purchase foreign currency forward contracts that permit us to sell specified amounts of foreign currencies we expect to receive from our export sales for pre-established U.S. dollar amounts at specified dates. In addition, we may also hedge forecasted capital expenditures and designate cash balances held in foreign currencies as hedges of forecasted foreign currency transactions. At September 28, 2025, we had no material outstanding foreign currency forward contracts.
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We may also use derivative instruments that are not designated as hedges to protect our results from certain fluctuations in foreign exchange rates, as well as to offset a portion of the foreign currency gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies. Changes in the fair value of these foreign exchange contract derivatives not designated as hedging instruments are recorded in cost of sales or selling, general and administrative expenses on the consolidated statement of operations, and we recognized $0.6 million of expense and $2.3 million of income, net, for settled foreign currency forward contracts that were not designated as hedges during the third quarter and year-to-date period ended September 28, 2025, respectively, and $1.0 million and $0.5 million of income, net, during the third quarter and year-to-date period ended September 29, 2024, respectively, which offset foreign currency gains/losses in the relevant currency. We have no significant outstanding hedges that are not designated as of September 28, 2025.
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| Item 4. | Controls and Procedures | ||||
(a) Evaluation of Disclosure Controls and Procedures
Our Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of September 28, 2025, and they concluded that these disclosure controls and procedures are effective.
(b) Changes in Internal Controls
There was no change in our internal controls over financial reporting identified in connection with the evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of September 28, 2025 conducted by our Chief Executive Officer and Chief Financial Officer, that occurred during the quarter ended September 28, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
| Item 1. | Legal Proceedings | ||||
A number of lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its currently or formerly owned businesses, including those pertaining to product liability, environmental, health and safety matters and occupational disease (including as each relates to alleged asbestos exposure), as well as patent infringement, commercial, government contracting, construction, employment, employee and retiree benefits, taxes, environmental, and stockholder and corporate governance matters. Certain of such lawsuits, claims and proceedings are described in our Annual Report on Form 10-K for the year ended December 29, 2024, and addressed in Note 16 to the unaudited interim financial statements included herein. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s results of operations for that period.
Pension Annuitization Litigation. In August 2024, the Company received notice that it and certain of its affiliates are parties to two lawsuits captioned (1) William L. Schoen, Mary J. Nesbit, Robin L. Rosewicz, George E. Poole and James E. Swartz, Jr., individually and as representatives of a class of participants and beneficiaries of the Allegheny Technologies Incorporated Pension Plan v. ATI Inc., The Allegheny Technologies Incorporated Pension Plan Administrative Committee, State Street Global Advisors Trust Co., and John Does 1-5 (Case No. 2:24-cv-01109) and (2) John Souza and Karen Souza, individually and as representatives on behalf of a class of similarly situated persons v. ATI Inc. and State Street Global Advisors Trust Co. (Case No. 2:24-cv-01214), both of which are filed in federal district court for the Western District of Pennsylvania. These lawsuits, which were consolidated in late 2024, assert various claims associated with the Company’s October 2023 purchase of group annuity contracts to transfer a portion of its U.S. qualified defined benefit pension plan obligations to Athene Annuity and Life Company and Athene Annuity & Life Assurance of New York. The Company filed a Motion to Dismiss the consolidated claims in January 2025. Following an August 2025 hearing on the Motion to Dismiss, the magistrate judge overseeing the Motion issued a report recommending that all of the plaintiffs’ claims be dismissed for lack of standing. The recommendation remains subject to review and disposition by the presiding judge. The Company disputes and intends to vigorously defend against these claims, but given the preliminary nature of these matters, cannot predict their outcome or estimate any range of reasonably possible loss at this time.
| Item 1A. | Risk Factors | ||||
The following is an update to and should be read in conjunction with Item 1A. Risk Factors contained in the Company’s Annual Report on Form 10-K for the year ended December 29, 2024. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10- K for the year ended December 29, 2024, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties
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not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Labor Matters. We have approximately 7,600 active employees, of which approximately 10% are located outside the United States. Approximately 35% of our workforce is covered by various collective bargaining agreements (“CBAs”), predominantly with the USW. At various times, our CBAs expire and are subject to renegotiation. Generally, CBAs that expire may be terminated after notice by the union. After termination, the union may authorize a strike. A labor dispute, which could lead to a strike, lockout, or other work stoppage by the employees covered by one or more of the collective bargaining agreements, could have a material adverse effect on production at one or more of our facilities and, depending upon the length of such dispute or work stoppage, on our operating results. There can be no assurance that we will succeed in concluding collective bargaining agreements to replace those that expire. On April 22, 2025, we reached agreements with the USW for new CBAs that cover nearly 1,000 USW represented full-time employees within our AA&S operations for a six-year term that extends through February 28, 2031.
Risks Associated with Current or Future Litigation and Claims. A number of lawsuits, claims and proceedings have been or may be asserted against us relating to the conduct of our currently and formerly owned businesses, including those pertaining to product liability, patent infringement, commercial disputes, government contracting, employment matters, employee and retiree benefits, taxes, environmental matters, health and safety and occupational disease, and stockholder and corporate governance matters. Due to the uncertainties of litigation, we can give no assurance that we will prevail on all claims made against us in the lawsuits that we currently face or that additional claims will not be made against us in the future. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to us, we do not believe that the disposition of any such pending matters is likely to have a material adverse effect on our financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on our results of operations for that period. Also, we can give no assurance that any other claims brought in the future will not have a material effect on our financial condition, liquidity or results of operations.
In August 2024, the Company received notice that it and certain of its affiliates are parties to two lawsuits, filed in federal district court for the Western District of Pennsylvania, that assert various claims associated with the Company’s October 2023 purchase of group annuity contracts to transfer a portion of its U.S. qualified defined benefit pension plan obligations to Athene Annuity and Life Company and Athene Annuity & Life Assurance of New York. These two lawsuits were consolidated in late 2024. In January 2025, we filed a Motion to Dismiss the consolidated claims, and following an August 2025 hearing on the Motion to Dismiss, the magistrate judge overseeing the Motion issued a report recommending that all of the plaintiffs’ claims be dismissed for lack of standing. The recommendation remains subject to review and disposition by the presiding judge. We intend to vigorously defend against these claims, but given the preliminary nature of these matters, cannot predict their outcome or estimate any range of reasonably possible loss at this time.
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| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||||
Set forth below is information regarding the Company’s stock repurchases during the period covered by this report, comprised of shares repurchased by ATI under the $700 million Share Repurchase Program authorized by the Company’s Board of Directors in September 2024 and shares repurchased by ATI from employees to satisfy employee-owed taxes on share-based compensation. The Company’s current Stock Repurchase Program has no time limit, does not obligate the Company to repurchase any specific number of shares, and may be modified, suspended, or terminated at any time by the Board of Directors without prior notice.
Period | Total Number of Shares (or Units) Purchased (a) | Average Price Paid per Share (or Unit) (b) (c) | Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
| June 30, 2025 - August 3, 2025 | — | $ | — | — | $ | 270,000,178 | ||||||||||||||||||||
| August 4, 2025 - August 31, 2025 | 1,273,739 | $ | 75.51 | 1,271,623 | $ | 174,000,402 | ||||||||||||||||||||
| September 1, 2025 - September 28, 2025 | 700,728 | $ | 77.08 | 700,713 | $ | 120,000,228 | ||||||||||||||||||||
| Total | 1,974,467 | $ | 76.07 | 1,972,336 | $ | 120,000,228 | ||||||||||||||||||||
(a) Includes shares repurchased by ATI from employees to satisfy employee-owed taxes on share based compensation.
(b) Share repurchases are inclusive of amounts for any relevant commissions.
(c) Excludes excise taxes incurred on share repurchases
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| Item 5. | Other Information | ||||
During the fiscal quarter ended September 28, 2025, Robert S. Wetherbee , the Company’s Executive Chairman , entered into a pre-arranged stock trading plan on August 15, 2025 , which provides for the potential sale of up to 300,000 shares of the Company’s common stock between November 18, 2025 and August 14, 2026 for his personal tax and estate planning purposes. Additionally, Timothy J. Harris , the Company’s Senior Vice President and Chief Digital and Information Officer , entered into a pre-arranged stock trading plan on August 6, 2025 , which provides for the potential sale of up to 42,170 shares of the Company’s common stock between November 4, 2025 and January 30, 2026 for his personal tax and estate planning purposes. These trading plans were entered into during an open insider trading window and are intended to satisfy the affirmative defense criteria articulated by Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, as well as the Company’s policies and procedures pertaining to transactions in Company securities.
| Item 6. | Exhibits | ||||
(a) Exhibits
| 10.1 | Receivables Purchase and Financing Agreement, dated as of September 19, 2025, by and among the ATI Securitization LLC, the Purchasers and Lenders from time to time party thereto, ATI Specialty Materials LLC, PNC Bank, National Association, as Administrative Agent, and PNC Capital Markets LLC, as Structuring Agent (filed herewith).* | |||||||
| 10.2 | First Tier Purchase and Sale Agreement, dated as of September 19, 2025, between ATI Specialty Materials LLC, as Servicer and ATI Securitization Holdings LLC (filed herewith). | |||||||
| 10.3 | Second Tier Purchase and Sale Agreement, dated as of September 19, 2025, between ATI Specialty Materials LLC, as Servicer, ATI Securitization Holdings LLC and ATI Securitization LLC (filed herewith). | |||||||
| 10.4 | Retirement and Consulting Agreement, dated as of October 27, 2025, between the Company and Donald P. Newman (filed herewith). | |||||||
| 31.1 | Certification of Chief Executive Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a) (filed herewith). | |||||||
| 31.2 | Certification of Chief Financial Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a) (filed herewith). | |||||||
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350 (furnished herewith). | |||||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
* Schedules and certain exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant agrees to furnish supplementally a copy of the omitted schedules and exhibits to the SEC upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
ATI INC.
(Registrant)
| Date: | October 28, 2025 | By | /s/ Donald P. Newman | ||||||||||||||
| Donald P. Newman | |||||||||||||||||
| Executive Vice President, Finance and Chief Financial Officer (Principal Financial Officer) | |||||||||||||||||
| Date: | October 28, 2025 | By | /s/ Michael B. Miller | ||||||||||||||
| Michael B. Miller | |||||||||||||||||
| Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer) | |||||||||||||||||
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FAQ
How did ATI (ATI) perform in Q3 2025?
Sales were $1,125.5 million, operating income was $162.4 million, and diluted EPS was $0.78.
What drove ATI’s revenue mix in Q3 2025?
Aerospace & Defense totaled $792.7 million, led by Jet Engines—Commercial at $433.6 million.
What was ATI’s backlog at quarter-end?
Backlog was $3.6 billion, with approximately 70% expected to be satisfied within 12 months.
How strong was ATI’s cash flow year-to-date?
Operating cash flow was $298.5 million year-to-date, versus $26.3 million a year earlier.
How much stock did ATI repurchase in 2025 year-to-date?
ATI repurchased $470.0 million of its stock year-to-date.
What divestitures did ATI complete in 2025?
ATI sold its East Hartford, CT operation for $20.5 million (gain $1.1 million) and exited two small European operations earlier in the year.
How many ATI shares were outstanding recently?
Shares outstanding were 135,863,661 as of October 10, 2025.
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