ATI Announces Third Quarter 2024 Results
ATI Inc. reported Q3 2024 results with sales of $1.05 billion and net income of $82.7 million ($0.57 per share). Adjusted earnings were $0.60 per share with adjusted EBITDA of $185.7 million (17.7% of sales). Aerospace & defense represented 62% of Q3 sales. The company faced challenges due to industry-wide slowing of aircraft production and supply chain disruptions. ATI updated its 2024 guidance, reducing adjusted EBITDA forecast to $700M-$710M from previous $720M-$750M. The company announced a new $700 million share repurchase authorization and redeemed its 2025 Convertible Notes.
ATI Inc. ha riportato i risultati del terzo trimestre del 2024 con vendite di $1,05 miliardi e un utile netto di $82,7 milioni ($0,57 per azione). Gli utili rettificati sono stati di $0,60 per azione, con un EBITDA rettificato di $185,7 milioni (17,7% delle vendite). L'area aerospaziale e della difesa ha rappresentato il 62% delle vendite del terzo trimestre. L'azienda ha affrontato sfide a causa del rallentamento della produzione di aeromobili a livello settoriale e delle interruzioni della catena di approvvigionamento. ATI ha aggiornato le previsioni per il 2024, riducendo la previsione dell'EBITDA rettificato a $700M-$710M rispetto ai precedenti $720M-$750M. L'azienda ha annunciato una nuova autorizzazione per il riacquisto di azioni da $700 milioni e ha rimborsato le sue Note Convertibili del 2025.
ATI Inc. reportó los resultados del tercer trimestre de 2024 con ventas de $1.05 mil millones y un ingreso neto de $82.7 millones ($0.57 por acción). Las ganancias ajustadas fueron de $0.60 por acción con un EBITDA ajustado de $185.7 millones (17.7% de las ventas). Aeronáutica y defensa representaron el 62% de las ventas del tercer trimestre. La compañía enfrentó retos debido a la desaceleración de la producción de aeronaves en toda la industria y las interrupciones en la cadena de suministro. ATI actualizó su guía para 2024, reduciendo la previsión de EBITDA ajustado a $700M-$710M desde los anteriores $720M-$750M. La compañía anunció una nueva autorización de recompra de acciones por $700 millones y redimió sus Notas Convertibles de 2025.
ATI Inc.는 2024년 3분기 실적을 발표했으며, 매출액은 $10.5억 달러, 순이익은 $8270만 달러($0.57 주당)입니다. 조정된 수익은 주당 $0.60이며, 조정된 EBITDA는 $1.857억 달러(매출의 17.7%)입니다. 항공 및 방위 부문은 3분기 매출의 62%를 차지했습니다. 회사는 업계 전반의 항공기 생산 둔화와 공급망 중단으로 어려움을 겪었습니다. ATI는 2024년 전망을 업데이트하여 조정된 EBITDA 예측을 이전의 $7.2억-$7.5억에서 $7억-$7.1억으로 하향 조정했습니다. 이 회사는 새로운 7억 달러 규모의 자사주 매입 승인을 발표하고 2025년 전환사채를 상환했습니다.
ATI Inc. a annoncé les résultats du troisième trimestre 2024 avec des ventes de 1,05 milliard de dollars et un bénéfice net de 82,7 millions de dollars (0,57 $ par action). Les bénéfices ajustés étaient de 0,60 $ par action avec un EBITDA ajusté de 185,7 millions de dollars (17,7 % des ventes). L'aérospatiale et la défense ont représenté 62 % des ventes du troisième trimestre. L'entreprise a fait face à des défis en raison du ralentissement général de la production d'avions et des perturbations de la chaîne d'approvisionnement. ATI a mis à jour ses prévisions pour 2024, réduisant la prévision d'EBITDA ajusté à 700 millions de dollars - 710 millions de dollars contre 720 millions de dollars - 750 millions de dollars auparavant. L'entreprise a annoncé une nouvelle autorisation de rachat d'actions de 700 millions de dollars et a racheté ses Obligations Convertibles 2025.
ATI Inc. hat die Ergebnisse des 3. Quartals 2024 veröffentlicht, mit einem Umsatz von 1,05 Milliarden US-Dollar und einem Nettogewinn von 82,7 Millionen US-Dollar (0,57 USD pro Aktie). Das bereinigte Ergebnis betrug 0,60 USD pro Aktie, mit einem bereinigten EBITDA von 185,7 Millionen US-Dollar (17,7 % des Umsatzes). Der Luft- und Verteidigungsbereich machte 62 % des Quartalsumsatzes aus. Das Unternehmen sah sich Herausforderungen aufgrund des branchenweiten Rückgangs der Flugzeugproduktion und Störungen der Lieferkette gegenüber. ATI hat seine Prognose für 2024 aktualisiert und die Schätzung für das bereinigte EBITDA von zuvor 720 Millionen USD - 750 Millionen USD auf 700 Millionen USD - 710 Millionen USD reduziert. Das Unternehmen gab eine neue Genehmigung für den Rückkauf von Aktien in Höhe von 700 Millionen USD bekannt und hat seine Wandelanleihen 2025 zurückgezahlt.
- Ninth consecutive quarter with sales over $1 billion
- ATI adjusted EBITDA margin improved 100 basis points sequentially to 17.7%
- $700 million share repurchase authorization announced
- 14% year-over-year increase in adjusted EBITDA to $185.7 million
- Sales decreased 4% sequentially to $1.05 billion
- Net income declined 8% year-over-year
- Lowered full-year 2024 guidance for adjusted EBITDA and earnings per share
- Managed working capital increased to 40.0% of sales from 35.5% in Q2
Insights
Q3 2024 results show mixed performance with some concerning trends. While maintaining
Key concerns include aerospace customer uncertainty, production slowdowns and supply chain disruptions. The reduced full-year guidance is notable, with adjusted EBITDA now expected at
The aerospace & defense segment remains robust at
The aerospace sector dynamics reveal important trends. While next-generation commercial jet engine demand remains strong, the slowdown in commercial airframe production is concerning. The HPMC segment, heavily aerospace-focused at
The industry-wide aircraft production ramp slowdown and supply chain work stoppage are significant challenges that could persist into early 2025. This market uncertainty is reflected in the reduced guidance and suggests a temporary plateau in the aerospace recovery cycle. However, long-term fundamentals remain strong, with continued demand for next-generation aircraft and engines supporting future growth potential.
Ninth consecutive quarter with sales in excess of
- Q3 2024 sales of
$1.05 billion - Q3 2024 net income attributable to ATI of
, or$82.7 million per share$0.57 - Aerospace & defense represent
62% of Q3 2024 sales - Full year 2024 guidance updated
- Non-GAAP Information*
- Q3 adjusted net income attributable to ATI of
, or$85.9 million per share$0.60 - Q3 2024 ATI adjusted EBITDA of
, or$185.7 million 17.7% of sales, up 100 basis points sequentially
- Q3 adjusted net income attributable to ATI of
Sequential | Y-O-Y | ||||||||
($ in millions except per share amounts) | Q3 2024 | Q2 2024 | Change | Q3 2023 | Change | ||||
Sales | (4) % | 2 % | |||||||
Net income attributable to ATI | 1 % | (8) % | |||||||
Earnings per share | (2) % | (8) % | |||||||
Non-GAAP information* | |||||||||
Adjusted net income attributable to ATI* | — % | (9) % | |||||||
Adjusted earnings per share* | — % | (6) % | |||||||
ATI adjusted EBITDA* | 2 % | 14 % |
* Detailed reconciliations of the reported information under accounting principles generally accepted in |
Adjusted earnings per share* for Q3 2024 were
"Our third quarter results reflected year-over-year growth in sales and EBITDA, yet this rate of growth fell short of our expectations," said Kimberly A. Fields, President and CEO. "We remain confident in both long-term demand and our ability to deliver for our customers and shareholders. We're actively addressing uncertainty across our aerospace customer base due to an industry-wide slowing of the aircraft production ramp, exacerbated by a work stoppage in the supply chain. These impacts, along with unplanned outages and transportation issues related to Hurricane Helene, delayed certain shipments during the third quarter," she said.
"As we proactively address these challenges in demand and production, we are focusing on those areas within our control, targeting improved performance for the remainder of 2024 and beyond," said Fields. "In terms of operating efficiency, we were pleased to see consolidated adjusted EBITDA margin, as a percentage of sales, increase 100 basis points over the second quarter. We also announced the early redemption of our 2025 Convertible Notes and a new
Operating Results by Segment
High Performance Materials & Components (HPMC) | |||||
($ millions) | Q3 2024 | Q2 2024 | Q3 2023 | ||
Sales | |||||
Segment EBITDA | |||||
% of Sales | 22.3 % | 20.2 % | 21.7 % |
- HPMC's third quarter 2024 sales decreased
, or$10 million 2% , compared to the second quarter 2024, primarily due to lower sales to medical and general industrial markets. Further, lower sales for commercial airframe products were offset by increased demand for next generation commercial jet engine products. Overall aerospace & defense sales represented86% of total HPMC sales in the third quarter 2024, an increase from85% in the second quarter of 2024. Third quarter 2024 sales improved2% compared to third quarter 2023, with total aerospace & defense related sales increasing4% compared to the prior year period, primarily due to next generation commercial jet engine demand, which offset a decline in sales of commercial airframe products. - HPMC third quarter 2024 segment EBITDA was
, or$123.2 million 22.3% of sales. Continued growth in sales for next generation commercial jet engines drove sequential margin growth. - Third quarter 2024 and second quarter 2024 results included benefits of
and$2.9 million , respectively, from the recognition of previously deferred employee retention credits.$3.5 million
Advanced Alloys & Solutions (AA&S) | |||||
($ millions) | Q3 2024 | Q2 2024 | Q3 2023 | ||
Sales | |||||
Segment EBITDA | |||||
% of Sales | 14.8 % | 16.4 % | 12.7 % |
- AA&S third quarter 2024 sales decreased
, or$35 million 7% , compared to the second quarter 2024, due to lower aerospace & defense, primarily for commercial airframe products, and specialty energy sales. These decreases were partially offset by higher sales to the electronics end market. Overall aerospace & defense sales were36% of total AA&S sales in the third quarter 2024. Third quarter 2024 sales increased3% compared to the third quarter 2023. Higher year-over-year sales to aerospace & defense, medical, and electronics end markets were partially offset by lower conventional energy and general industrial markets sales. - AA&S third quarter 2024 segment EBITDA was
, or$73.6 million 14.8% of sales. The sequential decline in margins was primarily due to lower deliveries of titanium and exotic alloys. - Third quarter 2024 and second quarter 2024 results included benefits of
and$1.9 million , respectively, from the recognition of previously deferred employee retention credits.$5.1 million
Corporate Items and Cash
- Restructuring and other charges:
- Third quarter 2024:
includes pre-tax charges consisting primarily of$4.3 million of start-up costs and$2.5 million of transaction related costs.$1.7 million - Second quarter 2024:
includes pre-tax charges of$5.4 million of inventory write-downs related to our ongoing European restructuring and$5.5 million of start-up costs. These pre-tax charges were partially offset by credits of$1.8 million due to lower severance reserves primarily for our ongoing European restructuring.$1.9 million - Third quarter 2023:
includes pre-tax charges of$4.2 million of start-up costs and$2.8 million of costs associated with an unplanned outage at our Lockport, NY melt facility, partially offset by$1.9 million pre-tax credit for restructuring charges, primarily related to lowered severance-related reserves based on changes in planned operating rates and revised workforce reduction estimates.$0.5 million
- Third quarter 2024:
- Corporate expenses in the third quarter 2024 were
, compared to$13.4 million in the second quarter 2024, and$19.4 million in the prior year quarter. The decrease in corporate expenses in third quarter 2024 compared to second quarter 2024, was primarily due to lower incentive compensation costs.$12.5 million - Closed operations and other income/expense was income of
in the third quarter 2024, compared to income of$2.3 million in the second quarter 2024, and expense of$0.7 million in the prior year quarter. The third quarter 2024 included a$3.6 million gain from the sale of oil & gas rights. The second quarter 2024 included a$3.7 million gain from the sale of our previously idled$2.3 million Houston, PA facility. - Third quarter 2024 results include a
income tax provision, or an effective tax rate of$28.3 million 24.6% . Second quarter 2024 results include a income tax provision, or an effective tax rate of$25.3 million 22.8% . Third quarter 2023 results include a tax provision of , or an effective tax rate of$4.9 million 4.9% . The effective tax rate for the third quarter 2024 increased compared to the second quarter 2024 primarily due to lower discrete tax benefits. The Company's effective tax rate for third quarter 2023 was lower than the third quarter 2024 due to the net valuation allowance position in theU.S. - Cash provided by operating activities was
and$24 million for the third quarter and year-to-date 2024, respectively. Third quarter 2024 managed working capital as a percent of sales was$26 million 40.0% , which increased from35.5% in the second quarter 2024. Capital expenditures for the third quarter 2024 were .$66 million - During the third quarter of 2024, the Company redeemed for shares of its common stock the
outstanding principal of ATI's$291.4 million 3.5% Convertible Senior Notes due 2025 by issuing 18.8 million shares of ATI stock. In addition, the Company received cash proceeds of to settle the capped call associated with these notes.$76 million - Cash on hand at September 29, 2024 was
, and available additional liquidity under the asset-based lending (ABL) credit facility was approximately$407 million . As of September 29, 2024, we had no outstanding borrowings on the ABL credit facility. ATI has no significant debt maturities until the fourth quarter 2025.$551 million - During the third quarter 2024, ATI's Board of Directors authorized the repurchase of
of ATI common stock. In the third quarter 2024, the company repurchased$700 million of common stock at an average price of$40 million , retiring approximately 0.7 million shares. As of September 29, 2024, total share repurchase authorization remaining was$59.37 .$660 million
Outlook
"The third quarter presented challenges and we expect to continue to see uncertainty with our most critical customers through the remainder of 2024 and first part of 2025. That said, the demand in our end markets remains very strong and our strategy of leading in aerospace & defense and 'aero-like' markets will deliver growth and continued margin expansion," said Fields. "We remain committed to creating lasting shareholder value."
The company is updating its full year 2024 guidance. The table below includes the current and prior guidance:
2024 Full Year Guidance | |||
Current Update | July 2024 | ||
Adjusted EBITDA** | |||
Adjusted Earnings Per Share** | |||
Free Cash Flow** | |||
Capital Expenditures |
**Detailed reconciliations of the forward-looking non-GAAP figures to the most directly comparable |
***********
ATI will conduct a conference call with investors and analysts on Tuesday, October 29, 2024, at 8:30 a.m. ET to discuss the financial results. The conference call will be broadcast, and accompanying presentation slides will be available, at ATImaterials.com. To access the broadcast, click on "Conference Call." Replay of the conference call will be available on the ATI website.
This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this news release relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements, which may contain such words as "anticipates," "believes," "estimates," "expects," "would," "should," "will," "will likely result," "forecast," "outlook," "projects," and similar expressions, are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which we are unable to predict or control. Our performance or achievements may differ materially from those expressed or implied in any forward-looking statements due to the following factors, among others: (a) material adverse changes in economic or industry conditions generally, including global supply and demand conditions and prices for our specialty materials; (b) material adverse changes in the markets we serve; (c) our inability to achieve the level of cost savings, productivity improvements, synergies, growth or other benefits anticipated by management from strategic investments and the integration of acquired businesses; (d) volatility in the price and availability of the raw materials that are critical to the manufacture of our products; (e) declines in the value of our defined benefit pension plan assets or unfavorable changes in laws or regulations that govern pension plan funding; (f) labor disputes or work stoppages; (g) equipment outages; (h) business and economic disruptions associated with extraordinary events beyond our control, such as war, terrorism, international conflicts, public health issues, such as epidemics or pandemics, natural disasters and climate-related events that may arise in the future and (i) other risk factors summarized in our Annual Report on Form 10-K for the year ended December 31, 2023, and in other reports filed with the Securities and Exchange Commission. We assume no duty to update our forward-looking statements.
ATI: Proven to Perform.
ATI (NYSE: ATI) is a global producer of high performance materials and solutions for the global aerospace & defense markets, and critical applications in electronics, medical and specialty energy. We're solving the world's most difficult challenges through materials science. We partner with our customers to deliver extraordinary materials that enable their greatest achievements: their products fly higher and faster, burn hotter, dive deeper, stand stronger and last longer. Our proprietary process technologies, unique customer partnerships and commitment to innovation deliver materials and solutions for today and the evermore challenging environments of tomorrow. We are proven to perform anywhere. Learn more at ATImaterials.com.
ATI Inc. Consolidated Statements of Operations (Unaudited, dollars in millions, except per share amounts) | |||||||||
Fiscal Quarter Ended | Fiscal Year-To-Date Period | ||||||||
September 29, | June 30, | October 1, | September 29, | October 1, | |||||
2024 | 2024 | 2023 | 2024 | 2023 | |||||
Sales | $ 1,051.2 | $ 1,095.3 | $ 1,025.6 | $ 3,189.4 | $ 3,109.7 | ||||
Cost of sales | 826.4 | 867.9 | 831.0 | 2,539.8 | 2,512.8 | ||||
Gross profit | 224.8 | 227.4 | 194.6 | 649.6 | 596.9 | ||||
Selling and administrative expenses | 82.4 | 88.9 | 69.8 | 253.3 | 235.8 | ||||
Restructuring charges (credits) | 0.5 | (1.9) | (0.5) | (1.2) | 2.2 | ||||
Loss (gain) on asset sales and sales of businesses, net | (0.3) | (2.2) | 0.1 | (2.5) | 0.8 | ||||
Operating income | 142.2 | 142.6 | 125.2 | 400.0 | 358.1 | ||||
Nonoperating retirement benefit expense | (3.7) | (3.7) | (2.4) | (11.1) | (7.3) | ||||
Interest expense, net | (28.0) | (28.4) | (23.8) | (83.0) | (65.0) | ||||
Other income, net | 4.4 | 0.4 | — | 5.2 | 1.3 | ||||
Income before income taxes | 114.9 | 110.9 | 99.0 | 311.1 | 287.1 | ||||
Income tax provision | 28.3 | 25.3 | 4.9 | 70.5 | 12.9 | ||||
Net income | $ 86.6 | $ 85.6 | $ 94.1 | $ 240.6 | $ 274.2 | ||||
Less: Net income attributable to noncontrolling interests | 3.9 | 3.7 | 3.9 | 9.9 | 9.1 | ||||
Net income attributable to ATI | $ 82.7 | $ 81.9 | $ 90.2 | $ 230.7 | $ 265.1 | ||||
Basic net income attributable to ATI per common share | $ 0.64 | $ 0.66 | $ 0.70 | $ 1.82 | $ 2.06 | ||||
Diluted net income attributable to ATI per common share | $ 0.57 | $ 0.58 | $ 0.62 | $ 1.61 | $ 1.82 | ||||
ATI Inc. Sales and EBITDA by Business Segment (Unaudited, dollars in millions) | |||||||||
Fiscal Quarter Ended | Fiscal Year-To-Date Period | ||||||||
September 29, | June 30, | October 1, | September 29, | October 1, | |||||
2024 | 2024 | 2023 | 2024 | 2023 | |||||
Sales: | |||||||||
High Performance Materials & Components | $ 552.4 | $ 562.0 | $ 539.5 | $ 1,644.3 | $ 1,537.7 | ||||
Advanced Alloys & Solutions | 498.8 | 533.3 | 486.1 | 1,545.1 | 1,572.0 | ||||
Total external sales | $ 1,051.2 | $ 1,095.3 | $ 1,025.6 | $ 3,189.4 | $ 3,109.7 | ||||
EBITDA: | |||||||||
High Performance Materials & Components | $ 123.2 | $ 113.8 | $ 117.2 | $ 334.6 | $ 308.5 | ||||
% of Sales | 22.3 % | 20.2 % | 21.7 % | 20.4 % | 20.1 % | ||||
Advanced Alloys & Solutions | 73.6 | 87.5 | 61.5 | 232.9 | 219.3 | ||||
% of Sales | 14.8 % | 16.4 % | 12.7 % | 15.1 % | 14.0 % | ||||
Total segment EBITDA | 196.8 | 201.3 | 178.7 | 567.5 | 527.8 | ||||
% of Sales | 18.7 % | 18.4 % | 17.4 % | 17.8 % | 17.0 % | ||||
Corporate expenses | (13.4) | (19.4) | (12.5) | (49.9) | (47.1) | ||||
Closed operations and other income (expense) | 2.3 | 0.7 | (3.6) | 1.7 | (6.8) | ||||
ATI Adjusted EBITDA | $ 185.7 | $ 182.6 | $ 162.6 | $ 519.3 | $ 473.9 | ||||
Depreciation & amortization (a) | (38.5) | (37.9) | (35.6) | (112.4) | (106.6) | ||||
Interest expense, net | (28.0) | (28.4) | (23.8) | (83.0) | (65.0) | ||||
Restructuring and other charges | (4.3) | (5.4) | (4.2) | (12.8) | (14.6) | ||||
Loss on asset sales and sales of businesses, net | — | — | — | — | (0.6) | ||||
Income before income taxes | $ 114.9 | $ 110.9 | $ 99.0 | $ 311.1 | $ 287.1 | ||||
(a) The following is depreciation & amortization by each business segment: | |||||||||
Fiscal Quarter Ended | Fiscal Year-To-Date Period | ||||||||
September 29, | June 30, | October 1, | September 29, | October 1, | |||||
2024 | 2024 | 2023 | 2024 | 2023 | |||||
High Performance Materials & Components | $ 18.6 | $ 17.9 | $ 16.5 | $ 52.8 | $ 51.8 | ||||
Advanced Alloys & Solutions | 18.2 | 18.3 | 17.3 | 54.5 | 49.6 | ||||
Other | 1.7 | 1.7 | 1.8 | 5.1 | 5.2 | ||||
Total depreciation & amortization | $ 38.5 | $ 37.9 | $ 35.6 | $ 112.4 | $ 106.6 |
ATI Inc. Condensed Consolidated Balance Sheets (Unaudited, dollars in millions) | |||
September 29, | December 31 | ||
2024 | 2023 | ||
ASSETS | |||
Current Assets: | |||
Cash and cash equivalents | $ 406.6 | $ 743.9 | |
Accounts receivable, net of allowances for doubtful accounts | 730.2 | 625.0 | |
Short-term contract assets | 90.5 | 59.1 | |
Inventories, net | 1,414.5 | 1,247.5 | |
Prepaid expenses and other current assets | 136.6 | 62.2 | |
Total Current Assets | 2,778.4 | 2,737.7 | |
Property, plant and equipment, net | 1,746.5 | 1,665.9 | |
Goodwill | 227.2 | 227.2 | |
Other assets | 313.7 | 354.3 | |
Total Assets | $ 5,065.8 | $ 4,985.1 | |
LIABILITIES AND EQUITY | |||
Current Liabilities: | |||
Accounts payable | $ 528.5 | $ 524.8 | |
Short-term contract liabilities | 146.5 | 163.6 | |
Short-term debt and current portion of long-term debt | 27.9 | 31.9 | |
Other current liabilities | 242.4 | 256.8 | |
Total Current Liabilities | 945.3 | 977.1 | |
Long-term debt | 1,855.5 | 2,147.7 | |
Accrued postretirement benefits | 163.8 | 175.2 | |
Pension liabilities | 37.1 | 39.7 | |
Other long-term liabilities | 152.1 | 164.9 | |
Total Liabilities | 3,153.8 | 3,504.6 | |
Total ATI stockholders' equity | 1,791.4 | 1,373.0 | |
Noncontrolling interests | 120.6 | 107.5 | |
Total Equity | 1,912.0 | 1,480.5 | |
Total Liabilities and Equity | $ 5,065.8 | $ 4,985.1 |
ATI Inc. Condensed Consolidated Statements of Cash Flows (Unaudited, dollars in millions) | ||||
Fiscal Year-To-Date Period Ended | ||||
September 29, | October 1, | |||
2024 | 2023 | |||
Operating Activities: | ||||
Net income | $ 240.6 | $ 274.2 | ||
Depreciation and amortization | 112.4 | 106.6 | ||
Share-based compensation | 26.6 | 21.5 | ||
Deferred taxes | 56.5 | 2.2 | ||
Net gain from disposal of property, plant and equipment | (6.0) | (0.1) | ||
Loss (gain) on sales of businesses | — | 0.6 | ||
Changes in operating assets and liabilities: | ||||
Inventories | (198.4) | (158.2) | ||
Accounts receivable | (111.3) | (104.0) | ||
Accounts payable | 20.2 | (108.2) | ||
Pension plan contributions | — | (272.0) | ||
Retirement benefits | (7.9) | (12.3) | ||
Accrued liabilities and other | (106.4) | (81.6) | ||
Cash provided by (used in) operating activities | 26.3 | (331.3) | ||
Investing Activities: | ||||
Purchases of property, plant and equipment | (191.8) | (147.3) | ||
Proceeds from disposal of property, plant and equipment | 10.6 | 3.3 | ||
Transaction costs for sales of businesses, net of proceeds | — | (0.3) | ||
Other | 3.0 | 1.1 | ||
Cash used in investing activities | (178.2) | (143.2) | ||
Financing Activities: | ||||
Borrowings on long-term debt | — | 425.0 | ||
Payments on long-term debt and finance leases | (21.9) | (22.0) | ||
Net payments under credit facilities | (5.1) | (7.3) | ||
Receipt of convertible note capped call | 76.1 | — | ||
Debt issuance costs | — | (6.1) | ||
Purchase of treasury stock | (190.0) | (55.1) | ||
Taxes on share-based compensation and other | (25.3) | (11.1) | ||
Cash provided by (used in) financing activities | (166.2) | 323.4 | ||
Less: Cash held for sale | (19.2) | — | ||
Decrease in cash and cash equivalents | (337.3) | (151.1) | ||
Cash and cash equivalents at beginning of period | 743.9 | 584.0 | ||
Cash and cash equivalents at end of period | $ 406.6 | $ 432.9 |
ATI Inc. Revenue by Market (Unaudited, dollars in millions) | ||||||||||||||
Fiscal Quarter Ended | Fiscal Year-To-Date Period | |||||||||||||
September 29, | June 30, | October 1, | September 29, | October 1, | ||||||||||
2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||
Market | ||||||||||||||
Aerospace & Defense: | ||||||||||||||
Jet Engines- Commercial | $ 365.9 | 35 % | $ 352.8 | 32 % | $ 329.4 | 32 % | $ 1,029.9 | 32 % | $ 981.2 | 32 % | ||||
Airframes- Commercial | 180.8 | 17 % | 210.8 | 19 % | 203.6 | 20 % | 581.7 | 18 % | 537.7 | 17 % | ||||
Defense | 107.1 | 10 % | 120.3 | 11 % | 92.8 | 9 % | 341.8 | 11 % | 289.4 | 9 % | ||||
Total Aerospace & Defense | $ 653.8 | 62 % | $ 683.9 | 62 % | $ 625.8 | 61 % | $ 1,953.4 | 61 % | $ 1,808.3 | 58 % | ||||
Energy: | ||||||||||||||
Conventional Energy | 72.6 | 7 % | 66.1 | 6 % | 87.0 | 8 % | 241.2 | 8 % | 325.8 | 10 % | ||||
Specialty Energy | 69.9 | 7 % | 76.6 | 7 % | 61.9 | 6 % | 202.6 | 6 % | 212.8 | 7 % | ||||
Total Energy | 142.5 | 14 % | 142.7 | 13 % | 148.9 | 14 % | 443.8 | 14 % | 538.6 | 17 % | ||||
Automotive | 63.8 | 6 % | 70.8 | 7 % | 48.1 | 5 % | 190.6 | 6 % | 160.3 | 5 % | ||||
Medical | 53.1 | 5 % | 61.7 | 6 % | 47.5 | 5 % | 173.9 | 6 % | 124.4 | 4 % | ||||
Electronics | 49.1 | 5 % | 40.8 | 4 % | 44.8 | 4 % | 142.8 | 4 % | 115.2 | 4 % | ||||
Construction/Mining | 41.8 | 4 % | 44.2 | 4 % | 40.0 | 4 % | 113.2 | 4 % | 128.8 | 4 % | ||||
Food Equipment & Appliances | 12.9 | 1 % | 16.2 | 1 % | 16.2 | 2 % | 41.0 | 1 % | 58.6 | 2 % | ||||
Other | 34.2 | 3 % | 35.0 | 3 % | 54.3 | 5 % | 130.7 | 4 % | 175.5 | 6 % | ||||
Total | $ 1,051.2 | 100 % | $ 1,095.3 | 100 % | $ 1,025.6 | 100 % | $ 3,189.4 | 100 % | $ 3,109.7 | 100 % |
ATI Inc. Selected Financial Data (Unaudited) | |||||||||
Fiscal Quarter Ended | Fiscal Year-To-Date Period | ||||||||
September 29, | June 30, | October 1, | September 29, | October 1, | |||||
2024 | 2024 | 2023 | 2024 | 2023 | |||||
Percentage of Total ATI Sales | |||||||||
Nickel-based alloys and specialty alloys | 46 % | 44 % | 47 % | 45 % | 50 % | ||||
Precision forgings, castings and components | 20 % | 19 % | 18 % | 19 % | 17 % | ||||
Titanium and titanium-based alloys | 17 % | 20 % | 19 % | 18 % | 16 % | ||||
Precision rolled strip products | 9 % | 9 % | 9 % | 9 % | 9 % | ||||
Zirconium and related alloys | 8 % | 8 % | 7 % | 9 % | 8 % | ||||
Total | 100 % | 100 % | 100 % | 100 % | 100 % | ||||
Note: Hot-Rolling and Processing Facility conversion service sales in the AA&S segment are excluded from this presentation. |
ATI Inc. Computation of Basic and Diluted Earnings Per Share Attributable to ATI (Unaudited, dollars in millions, except per share amounts) | ||||||||||
Fiscal Quarter Ended | Fiscal Year-To-Date Period | |||||||||
September 29, | June 30, | October 1, | September 29, | October 1, | ||||||
2024 | 2024 | 2023 | 2024 | 2023 | ||||||
Numerator for Basic net income per common share - | ||||||||||
Net income attributable to ATI | $ 82.7 | $ 81.9 | $ 90.2 | $ 230.7 | $ 265.1 | |||||
Effect of dilutive securities: | ||||||||||
1.7 | 2.2 | 2.7 | 6.0 | 7.9 | ||||||
Numerator for Diluted net income per common share - | ||||||||||
Net income attributable to ATI after assumed conversions | $ 84.4 | $ 84.1 | $ 92.9 | $ 236.7 | $ 273.0 | |||||
Denominator for Basic net income per common share - | ||||||||||
Weighted average shares outstanding | 128.7 | 124.4 | 128.1 | 126.5 | 128.4 | |||||
Effect of dilutive securities: | ||||||||||
Share-based compensation | 3.7 | 3.1 | 3.3 | 3.1 | 2.9 | |||||
14.4 | 18.8 | 18.8 | 17.3 | 18.8 | ||||||
Denominator for Diluted net income per common share - | ||||||||||
Adjusted weighted average shares assuming conversions | 146.8 | 146.3 | 150.2 | 146.9 | 150.1 | |||||
Basic net income attributable to ATI per common share | $ 0.64 | $ 0.66 | $ 0.70 | $ 1.82 | $ 2.06 | |||||
Diluted net income attributable to ATI per common share | $ 0.57 | $ 0.58 | $ 0.62 | $ 1.61 | $ 1.82 | |||||
ATI Inc.
Non-GAAP Financial Measures
(Unaudited, dollars in millions, except per share amounts)
The Company reports its financial results in accordance with accounting principles generally accepted in
Fiscal Quarter Ended | |||||
September 29, | June 30, | October 1, | |||
Net income attributable to ATI | $ 82.7 | $ 81.9 | $ 90.2 | ||
Adjustments for special items, pre-tax: | |||||
Restructuring and other charges (a) | 4.3 | 5.4 | 4.2 | ||
Total pre-tax adjustments | 4.3 | 5.4 | 4.2 | ||
Income tax on pre-tax adjustments for special items | (1.1) | (1.3) | (0.2) | ||
Net income attributable to ATI excluding special items | $ 85.9 | $ 86.0 | $ 94.2 |
Fiscal Quarter Ended | |||||||||
September 29, 2024 | June 30, 2024 | October 1, 2023 | |||||||
Reported | Adjusted | Reported | Adjusted | Reported | Adjusted | ||||
Numerator for Basic net income per common share - | |||||||||
Net income attributable to ATI | $ 82.7 | $ 85.9 | $ 81.9 | $ 86.0 | $ 90.2 | $ 94.2 | |||
Effect of dilutive securities | 1.7 | 1.7 | 2.2 | 2.2 | 2.7 | 2.7 | |||
Numerator for Diluted net income per common share - | |||||||||
Net income attributable to ATI after assumed conversions | $ 84.4 | $ 87.6 | $ 84.1 | $ 88.2 | $ 92.9 | $ 96.9 | |||
Denominator for Basic net income per common share - | |||||||||
Weighted average shares outstanding | 128.7 | 128.7 | 124.4 | 124.4 | 128.1 | 128.1 | |||
Effect of dilutive securities | 18.1 | 18.1 | 21.9 | 21.9 | 22.1 | 22.1 | |||
Denominator for Diluted net income per common share - | |||||||||
Adjusted weighted average shares assuming conversions | 146.8 | 146.8 | 146.3 | 146.3 | 150.2 | 150.2 | |||
Diluted net income attributable to ATI per common share | $ 0.57 | $ 0.60 | $ 0.58 | $ 0.60 | $ 0.62 | $ 0.64 |
Earnings before interest, taxes, depreciation and amortization (EBITDA) | |||||
Fiscal Quarter Ended | |||||
September 29, | June 30, | October 1, | |||
Net income attributable to ATI | $ 82.7 | $ 81.9 | $ 90.2 | ||
Net income attributable to noncontrolling interests | 3.9 | 3.7 | 3.9 | ||
Net income | 86.6 | 85.6 | 94.1 | ||
(+) Depreciation and Amortization | 38.5 | 37.9 | 35.6 | ||
(+) Interest Expense | 28.0 | 28.4 | 23.8 | ||
(+) Income Tax Provision | 28.3 | 25.3 | 4.9 | ||
(+) Restructuring and other charges (a) | 4.3 | 5.4 | 4.2 | ||
ATI Adjusted EBITDA | $ 185.7 | $ 182.6 | $ 162.6 | ||
Corporate expenses | 13.4 | 19.4 | 12.5 | ||
Closed operations and other expense (income) | (2.3) | (0.7) | 3.6 | ||
Total segment EBITDA | $ 196.8 | $ 201.3 | $ 178.7 |
(a) Third fiscal quarter 2024 includes pre-tax charges totaling |
Free Cash Flow
Free cash flow as defined by ATI includes the total of cash provided by (used in) operating activities and investing activities as presented on the consolidated statements of cash flows, adjusted to exclude cash contributions to the Company's
Fiscal Quarter Ended | Fiscal Year-To-Date Period | ||||||
September 29, | October 1, | September 29, | October 1, | ||||
Cash provided by (used in) operating activities | $ 24.0 | $ (114.2) | $ 26.3 | $ (331.3) | |||
Add back: cash contributions to | — | 222.0 | — | 272.0 | |||
Cash provided by (used in) operating activities excluding pension contributions | 24.0 | 107.8 | 26.3 | (59.3) | |||
Cash used in investing activities | (61.1) | (42.4) | (178.2) | (143.2) | |||
Free Cash Flow as defined by ATI | $ (37.1) | $ 65.4 | $ (151.9) | $ (202.5) |
Managed Working Capital
As part of managing the performance of our business, we focus on Managed Working Capital, which we define as gross accounts receivable, short-term contract assets and gross inventories, less accounts payable and short-term contract liabilities. We exclude the effects of inventory valuation reserves and reserves for uncollectible accounts receivable when computing this non-GAAP performance measure, which is not intended to replace Working Capital or to be used as a measure of liquidity. We assess Managed Working Capital performance as a percentage of the prior three months annualized sales to evaluate the asset intensity of our business. The September 29, 2024 and June 30, 2024 amounts include management working capital balances that are classified as held for sale.
September 29, | June 30, | December 31, | ||||
2024 | 2024 | 2023 | ||||
Accounts receivable | $ 730.2 | $ 719.8 | $ 625.0 | |||
Short-term contract assets | 90.5 | 87.6 | 59.1 | |||
Inventory | 1,414.5 | 1,317.5 | 1,247.5 | |||
Accounts payable | (528.5) | (524.5) | (524.8) | |||
Short-term contract liabilities | (146.5) | (160.9) | (163.6) | |||
Subtotal | 1,560.2 | 1,439.5 | 1,243.2 | |||
Allowance for doubtful accounts | 2.6 | 2.7 | 3.2 | |||
Inventory reserves | 71.7 | 71.6 | 75.5 | |||
Net managed working capital held for sale | $ 47.3 | $ 39.8 | $ — | |||
Managed working capital | $ 1,681.8 | $ 1,553.6 | $ 1,321.9 | |||
Annualized prior 3 months sales | $ 4,205.1 | $ 4,381.1 | $ 4,255.8 | |||
Managed working capital as a | ||||||
% of annualized sales | 40.0 % | 35.5 % | 31.1 % | |||
Change in managed working capital: | ||||||
Year-to-date 2024 | $ 359.9 | |||||
Q3 2024 | $ 128.2 |
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SOURCE ATI
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