Executive Summary

Q3 2024 delivered record aerospace revenue of $82.6M, with total net revenues up 7% year-over-year to $153.9M; gross margin compressed to 16.6% due to unfavorable nickel/cobalt impacts and lower production volumes .
Diluted EPS was $0.63 vs $0.66 in Q2 2024 and $0.68 in Q3 2023; operating income fell to $11.7M, reflecting raw-material headwinds estimated at $3.4M that reduced gross margin by ~220 bps .
Backlog declined 7.5% sequentially to $405.7M and 13.3% year-over-year, as aerospace customers reduced inventory in response to lowered Boeing build-rate expectations and shorter lead times; IGT demand remained strong .
Cash generation improved markedly: operating cash flow reached $52.5M for the first nine months (vs. -$6.1M in prior-year period), aided by inventory reductions; capex plan narrowed to $22–$26M for FY 2024 (from $22–$28M in Q2 and $25–$35M in Q1) .
No Q3 2024 earnings call transcript or 8‑K 2.02 press release was available in our document catalog; management commentary in the 10‑Q guides to Q4 CY2024 merger closing expectations with Acerinox, pending final UK/Austria approvals .

What Went Well and What Went Wrong

What Went Well

Record aerospace revenue: “The $82.6 million in quarterly aerospace revenue in the third quarter of fiscal 2024 was a company record,” driven by HAYNES® 282® and titanium tubulars; aerospace ASP rose and volumes increased 3.7% YoY .
IGT strength: Revenue up 14% YoY on higher volumes (+7.8%) and improved mix; ASP increased 5.8%, reflecting alloy/application development and customer service execution .
Operating cash flow inflection: $52.5M provided in 9M FY24 vs. $(6.1)M in prior year, driven by a $27.9M inventory decrease; liquidity of $121.2M and revolver balance down vs. September 2023 .

What Went Wrong

Margin compression: Gross margin fell to 16.6% (from 18.1% YoY and 17.7% QoQ) due to raw-material headwinds (~$3.4M impact, ~220 bps) and lower production volumes amid market uncertainty and inventory reduction actions .
Backlog decline: Backlog dollars dropped 7.5% sequentially and 13.3% YoY, with aerospace order entry softer as customers reduced inventories given Boeing build-rate expectations; shorter lead times also reduced earlier-ordering behavior .
CPI pressure: CPI revenue fell 8.1% YoY; ASP decreased 19.0% on mix shift and price factors as the company leaned into aerospace/IGT and commodity CPI competition intensified .

Financial Results

Metric	Q3 2023	Q2 2024	Q3 2024
Net Revenues ($USD Millions)	$143.9	$152.5	$153.9
Gross Profit ($USD Millions)	$26.1	$27.0	$25.5
Gross Profit Margin %	18.1%	17.7%	16.6%
Operating Income ($USD Millions)	$13.2	$12.6	$11.7
Net Income ($USD Millions)	$8.8	$8.6	$8.1
Diluted EPS ($USD)	$0.68	$0.66	$0.63

Segment net revenue breakdown:

Segment	Q3 2023 ($USD Millions)	Q3 2024 ($USD Millions)
Aerospace	$77.5	$82.6
Chemical Processing (CPI)	$17.7	$16.3
Industrial Gas Turbine (IGT)	$28.1	$32.0
Other Markets	$13.4	$14.9
Other Revenue	$7.3	$8.1
Total Net Revenues	$143.9	$153.9

KPIs and backlog:

KPI	Q3 2023	Q2 2024	Q3 2024
Total Shipments (000 lbs)	4,427	4,641	4,758
Product ASP ($/lb, excl. other rev.)	$30.87	$31.05	$30.65
Total ASP ($/lb, incl. other rev.)	$32.51	$32.85	$32.35
Backlog ($USD Thousands)	$468,132	$438,625	$405,687
Backlog Pounds (000 lbs)	14,632	12,952	12,276
Backlog ASP ($/lb)	$31.99	$33.87	$33.05

Estimate comparisons: Wall Street consensus (S&P Global) was unavailable for HAYN this quarter due to a mapping issue, so estimate vs. actual comparisons could not be provided.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Expenditures	FY 2024	$25–$35M (Q1 2024) ; $22–$28M (Q2 2024)	$22–$26M (Q3 2024)	Lowered
Dividend per Share	Q3/Q4 2024	$0.22 per quarter (maintained)	$0.22 declared, payable Sep 16, 2024	Maintained
Merger Timing (Acerinox)	Calendar 2024	Stockholder/HSR approvals obtained by Q2	Expects UK/Austria clearances; closing in Q4 CY2024	Updated timeline
Inventory/Working Capital	H2 FY 2024	Expect inventory decline; positive operating cash in H2 FY24	Inventory expected to continue declining; positive operating cash flow in Q4 FY24	Maintained

Earnings Call Themes & Trends

Note: No Q3 2024 earnings call transcript was available in our catalog. Themes below synthesize Q1/Q2 MD&A trends and current Q3 MD&A.

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2024)	Trend
Aerospace demand & Boeing build rates	Strong single-aisle demand; pipeline replenishment; Q2 shipments down slightly due to Q1 outage; book-to-bill ~1.0 (Q4 2023 call)	Record aerospace revenue; backlog/order entry reduced as customers adjust inventories to Boeing build-rate expectations; shorter lead times reduce early ordering	Demand solid; near-term order pacing softer; backlog normalizing
Raw-material impacts (nickel/cobalt)	Headwinds: Q1 ~$5.7M (3.8% margin); Q2 ~$5.3M (3.5%)	Q3 estimated ~$3.4M (2.2% margin impact)	Headwind moderating but still compressive
IGT market strength	Q1 +36% YoY; Q2 +9.8% YoY revenues; mix/ASP mixed	Q3 +14% YoY revenue; ASP +5.8%; volume +7.8%	Continuing strong demand and mix benefits
Pricing strategy & margin expansion	Multiple price increases; margin-neutral focus; breakeven point reduced in recent years	Ongoing margin expansion strategy; price increases and raw-material adjustors; product ASP $30.65	Structural margin improvement initiatives ongoing
Cash generation & inventory	Q1: OCF $17.0M; Q2: OCF $30.0M; inventory reductions begin	9M OCF $52.5M; inventory down $27.9M; liquidity $121.2M	Strengthening cash flow trajectory

Management Commentary

“The $82.6 million in quarterly aerospace revenue in the third quarter of fiscal 2024 was a company record,” driven by proprietary alloys and titanium tubular products .
“The estimated impact from raw material volatility in the third quarter of fiscal 2024 was a headwind of $3.4 million that compressed gross margin by an estimated 2.2%… margins were also compressed due to lower production volumes from uncertainty in certain markets and the Company’s cash generation and inventory reduction actions” .
“Backlog… decreased… due to lower levels of order entry in the aerospace market as customers reduce inventory levels in response to lowered expectation of Boeing build rates… reduction in manufacturing lead-times has led to lower order entry rates relative to volume sold in the industrial gas turbine market” .
Capital spending expected at $22–$26M for FY 2024; Board declared $0.22 dividend payable September 16, 2024; merger closing targeted for Q4 CY2024 pending final approvals .

Q&A Highlights

No Q3 2024 earnings call transcript was available in our catalog; therefore Q&A highlights for the period are unavailable. For context, prior Q4 2023 call discussed raw-material headwinds, margin-neutral metrics (~21%), capacity upgrades (Kokomo line), and expected revolver reduction via improved cash generation .

Estimates Context

Wall Street consensus estimates via S&P Global were not available for HAYN this quarter due to a CIQ mapping issue; as a result, we cannot provide comparisons of Q3 2024 results vs. consensus on revenue/EPS/EBITDA.*

*Values retrieved from S&P Global were unavailable due to mapping constraints.

Key Takeaways for Investors

Mix-led resilience: Record aerospace revenue and strong IGT demand offset CPI weakness, but margins remain sensitive to nickel/cobalt trajectories—expect continued margin variability until raw-material impacts normalize (~6-month lag) .
Backlog normalization: Sequential and YoY backlog declines reflect shorter lead times and aerospace inventory management tied to Boeing production pacing; watch order entry vs. shipments to gauge near-term revenue cadence .
Cash flow improving: Inventory drawdown is driving a durable operating cash inflection (9M OCF $52.5M); supports capex and dividends while positioning for potential revolver reduction .
Margin strategy intact: Price actions and higher-value product mix (e.g., HAYNES® 282®) sustain a structural margin improvement program; compression this quarter was largely exogenous (raw materials) .
Guidance converging: FY24 capex narrowed to $22–$26M; dividend maintained; merger expected to close Q4 CY2024 pending final approvals—timeline updates could be a stock catalyst .
Trading setup: Near term, watch raw-material pricing, Boeing/Airbus production commentary, and order-entry trends; medium term, thesis hinges on aerospace/IGT cycle, proprietary alloy penetration, and sustained cash generation .
Document availability caveat: No Q3 2024 8‑K 2.02 press release or call transcript was located in our catalog; analysis relies on the comprehensive Q3 10‑Q and prior-quarter filings/call .

HAYNES INTERNATIONAL INC (HAYN)·Q3 2024 Earnings Summary