Haynes Earnings 2020-03-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

10-Q 1 hayn-20200331x10q.htm 10-Q hayn_Current Folio_10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020


☐	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: 001-33288

HAYNES INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		06-1185400 (I.R.S. Employer Identification No.)

1020 West Park Avenue, Kokomo, Indiana (Address of principal executive offices)		46904-9013 (Zip Code)

Registrant’s telephone number, including area code (765) 456-6000


Securities registered pursuant to Section 12(b) of the Act:
Tile of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.001 per share	“HAYN”	NASDAQ Global Market

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 has 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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐		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 ☒

As of April 30, 2020, the registrant had 12,556,921 shares of Common Stock, $.001 par value, outstanding.

Table of Contents

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements of Haynes International, Inc. and Subsidiaries	3

	Consolidated Balance Sheets (Unaudited) as of September 30, 2019 and March 31, 2020	3

	Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended March 31, 2019 and 2020	4

	Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three and Six Months Ended March 31, 2019 and 2020	5

	Consolidated Statement of Stockholders Equity (Unaudited) for the Three and Six Months Ended March 31, 2019 and 2020	6

	Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended March 31, 2019 and 2020	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

PART II	OTHER INFORMATION	32

Item 1a.	Risk Factors COVID-19	32

Item 6.	Exhibits	32

	Index to Exhibits	33

	Signatures	34

Table of Contents

PART 1 FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements

HAYNES INTERNATIONAL, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share and per share data)


	September 30,		March 31,
	2019		2020
ASSETS
Current assets:
Cash and cash equivalents	$	31,038	$	52,406
Accounts receivable, less allowance for doubtful accounts of $441 and $697 at September 30, 2019 and March 31, 2020, respectively		76,979		65,970
Inventories		258,802		280,337
Income taxes receivable		1,757		377
Other current assets		3,297		4,440
Total current assets		371,873		403,530
Property, plant and equipment, net		169,966		164,720
Deferred income taxes		34,132		34,666
Other assets		7,756		9,895
Goodwill		4,789		4,789
Other intangible assets, net		5,284		5,184
Total assets	$	593,800	$	622,784
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	34,497	$	28,310
Accrued expenses		18,833		17,810
Income taxes payable		—		70
Accrued pension and postretirement benefits		4,250		4,250
Revolving credit facilities		—		30,000
Deferred revenue—current portion		2,500		2,500
Total current liabilities		60,080		82,940
Long-term obligations (less current portion) (Note 15)		8,609		8,598
Deferred revenue (less current portion)		15,329		14,079
Deferred income taxes		2,016		2,016
Operating lease liabilities		—		2,306
Accrued pension benefits (less current portion)		101,812		98,523
Accrued postretirement benefits (less current portion)		109,679		110,710
Total liabilities		297,525		319,172
Commitments and contingencies (Note 7)		—		—
Stockholders’ equity:
Common stock, $0.001 par value (40,000,000 shares authorized, 12,566,969 and 12,615,830 shares issued and 12,513,500 and 12,556,921 shares outstanding at September 30, 2019 and March 31, 2020, respectively)		13		13
Preferred stock, $0.001 par value (20,000,000 shares authorized, 0 shares issued and outstanding)		—		—
Additional paid-in capital		253,843		255,896
Accumulated earnings		125,296		140,297
Treasury stock, 53,469 shares at September 30, 2019 and 58,909 shares at March 31, 2020		(2,239)		(2,437)
Accumulated other comprehensive loss		(80,638)		(90,157)
Total stockholders’ equity		296,275		303,612
Total liabilities and stockholders’ equity	$	593,800	$	622,784

The accompanying notes are an integral part of these financial statements.

Table of Contents

HAYNES INTERNATIONAL, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share data)



	Three Months Ended March 31,				Six Months Ended March 31,
	2019		2020		2019		2020
Net revenues	$	127,474	$	111,563	$	234,543	$	220,016
Cost of sales		112,791		92,267		208,525		181,977
Gross profit		14,683		19,296		26,018		38,039
Selling, general and administrative expense		10,663		10,785		21,791		22,292
Research and technical expense		859		1,028		1,693		1,910
Operating income		3,161		7,483		2,534		13,837
Nonoperating retirement benefit expense		856		1,700		1,712		3,400
Interest income		(18)		(10)		(38)		(24)
Interest expense		284		296		525		547
Income before income taxes		2,039		5,497		335		9,914
Provision for income taxes		530		1,429		429		2,578
Net income (loss)	$	1,509	$	4,068	$	(94)	$	7,336
Net income (loss) per share:
Basic	$	0.12	$	0.32	$	(0.01)	$	0.58
Diluted	$	0.12	$	0.32	$	(0.01)	$	0.58
Weighted Average Common Shares Outstanding
Basic		12,449		12,474		12,440		12,467
Diluted		12,600		12,504		12,440		12,497

Dividends declared per common share	$	0.22	$	0.22	$	0.44	$	0.44

The accompanying notes are an integral part of these financial statements.

Table of Contents

HAYNES INTERNATIONAL, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands)



	Three Months Ended March 31,				Six Months Ended March 31,
	2019		2020		2019		2020
Net income (loss)	$	1,509	$	4,068	$	(94)	$	7,336
Other comprehensive income (loss), net of tax:
Pension and postretirement		579		1,720		1,159		3,439
Foreign currency translation adjustment		1,031		(3,918)		(140)		325
Other comprehensive income (loss)		1,610		(2,198)		1,019		3,764
Comprehensive income	$	3,119	$	1,870	$	925	$	11,100

The accompanying notes are an integral part of these financial statements.

Table of Contents

HAYNES INTERNATIONAL, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(in thousands, except share data)



	Three Months Ended March 31, 2019
										Accumulated
				Additional						Other		Total
	Common Stock			Paid-in		Accumulated		Treasury		Comprehensive		Stockholders’
	Shares	Par		Capital		Earnings		Stock		Income (Loss)		Equity
Balance December 31, 2018	12,517,492	$	13	$	251,718	$	122,226	$	(2,177)	$	(43,156)	$	328,624
Net income (loss)							1,509						1,509
Dividends paid and accrued ($0.22 per share)							(2,758)						(2,758)
Other comprehensive income (loss)											1,610		1,610
Issue restricted stock (less forfeitures)	(2,012)												—
Stock compensation					707								707
Balance March 31, 2019	12,515,480	$	13	$	252,425	$	120,977	$	(2,177)	$	(41,546)	$	329,692

	Three Months Ended March 31, 2020
										Accumulated
				Additional						Other		Total
	Common Stock			Paid-in		Accumulated		Treasury		Comprehensive		Stockholders’
	Shares	Par		Capital		Earnings		Stock		Income (Loss)		Equity
Balance December 31, 2019	12,556,255	$	13	$	254,999	$	139,010	$	(2,437)	$	(87,959)	$	303,626
Net income (loss)							4,068						4,068
Dividends paid and accrued ($0.22 per share)							(2,781)						(2,781)
Other comprehensive income (loss)											(2,198)		(2,198)
Issue restricted stock (less forfeitures)	666												—
Stock compensation					897								897
Balance March 31, 2020	12,556,921	$	13	$	255,896	$	140,297	$	(2,437)	$	(90,157)	$	303,612

	Six Months Ended March 31, 2019
										Accumulated
				Additional						Other		Total
	Common Stock			Paid-in		Accumulated		Treasury		Comprehensive		Stockholders’
	Shares	Par		Capital		Earnings		Stock		Income (Loss)		Equity
Balance September 30, 2018	12,504,478	$	13	$	251,053	$	126,588	$	(1,869)	$	(42,565)	$	333,220
Net income (loss)							(94)						(94)
Dividends paid and accrued ($0.44 per share)							(5,517)						(5,517)
Other comprehensive income (loss)											1,019		1,019
Exercise of stock options	12,084				215								215
Issue restricted stock (less forfeitures)	8,144												—
Purchase of treasury stock	(9,226)								(308)				(308)
Stock compensation					1,157								1,157
Balance March 31, 2019	12,515,480	$	13	$	252,425	$	120,977	$	(2,177)	$	(41,546)	$	329,692

	Six Months Ended March 31, 2020
										Accumulated
				Additional						Other		Total
	Common Stock			Paid-in		Accumulated		Treasury		Comprehensive		Stockholders’
	Shares	Par		Capital		Earnings		Stock		Income (Loss)		Equity
Balance September 30, 2019	12,513,500	$	13	$	253,843	$	125,296	$	(2,239)	$	(80,638)	$	296,275
Net income (loss)							7,336						7,336
Dividends paid and accrued ($0.44 per share)							(5,618)						(5,618)
Other comprehensive income (loss)											3,764		3,764
Exercise of stock options	12,400				422								422
Reclass due to adoption of ASU 2018-02							13,283				(13,283)		—
Issue restricted stock (less forfeitures)	36,461												—
Purchase of treasury stock	(5,440)								(198)				(198)
Stock compensation					1,631								1,631
Balance March 31, 2020	12,556,921	$	13	$	255,896	$	140,297	$	(2,437)	$	(90,157)	$	303,612

The accompanying notes are an integral part of these financial statements

Table of Contents

HAYNES INTERNATIONAL, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)



	Six Months Ended March 31,
	2019		2020
Cash flows from operating activities:
Net income (loss)	$	(94)	$	7,336
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation		9,296		9,639
Amortization		155		100
Pension and post-retirement expense - U.S. and U.K.		4,487		6,897
Change in long-term obligations		—		(24)
Stock compensation expense		1,157		1,631
Deferred revenue		(1,250)		(1,250)
Deferred income taxes		238		(1,782)
Loss on disposition of property		5		—
Change in assets and liabilities:
Accounts receivable		(7,765)		11,122
Inventories		969		(21,192)
Other assets		(846)		(961)
Accounts payable and accrued expenses		4,124		(7,668)
Income taxes		4,788		1,447
Accrued pension and postretirement benefits		(3,207)		(4,488)
Net cash provided by (used in) operating activities		12,057		807
Cash flows from investing activities:
Additions to property, plant and equipment		(5,409)		(4,100)
Net cash provided by (used in) investing activities		(5,409)		(4,100)
Cash flows from financing activities:
Revolving credit facility borrowings		16,600		30,000
Revolving credit facility repayments		(16,600)		—
Dividends paid		(5,505)		(5,523)
Proceeds from exercise of stock options		215		422
Payment for purchase of treasury stock		(308)		(198)
Payments on long-term obligation		(71)		(82)
Net cash provided by (used in) financing activities		(5,669)		24,619
Effect of exchange rates on cash		(1)		42
Increase (decrease) in cash and cash equivalents:		978		21,368
Cash, cash equivalents and restricted cash:
Beginning of period		9,802		31,038
End of period	$	10,780	$	52,406
Supplemental disclosures of cash flow information:
Interest (net of capitalized interest)	$	496	$	518
Income taxes paid (refunded), net	$	(4,636)	$	2,903
Capital expenditures incurred, but not yet paid	$	809	$	708

Price	35.63	EPS	1
Shares	13	P/E	46
MCap	446	P/FCF	10
Net Debt	-31	EBIT	13
TEV	415	TEV/EBIT	31
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-03-31	Filed 2020-04-30
10-Q	2019-12-31	Filed 2020-01-30
10-K	2019-09-30	Filed 2019-11-14
10-Q	2019-06-30	Filed 2019-08-01
10-Q	2019-03-31	Filed 2019-05-02
10-Q	2018-12-31	Filed 2019-01-31
10-K	2018-09-30	Filed 2018-11-15
10-Q	2018-06-30	Filed 2018-08-02
10-Q	2018-03-31	Filed 2018-05-03
10-Q	2017-12-31	Filed 2018-02-01
10-K	2017-09-30	Filed 2017-11-16
10-Q	2017-06-30	Filed 2017-08-03
10-Q	2017-03-31	Filed 2017-05-04
10-Q	2016-12-31	Filed 2017-02-02
10-K	2016-09-30	Filed 2016-11-17
10-Q	2016-06-30	Filed 2016-08-04
10-Q	2016-03-31	Filed 2016-05-05
10-Q	2015-12-31	Filed 2016-02-04
10-K	2015-09-30	Filed 2015-11-19
10-Q	2015-06-30	Filed 2015-08-06
10-Q	2015-03-31	Filed 2015-05-07
10-Q	2014-12-31	Filed 2015-02-05
10-K	2014-09-30	Filed 2014-11-20
10-Q	2014-06-30	Filed 2014-08-07
10-Q	2014-03-31	Filed 2014-05-08
10-Q	2013-12-31	Filed 2014-02-06
10-K	2013-09-30	Filed 2013-11-21
10-Q	2013-06-30	Filed 2013-08-08
10-Q	2013-03-31	Filed 2013-05-02
10-Q	2012-12-31	Filed 2013-01-31
10-K	2012-09-30	Filed 2012-11-15
10-Q	2012-06-30	Filed 2012-08-02
10-Q	2012-03-31	Filed 2012-05-03
10-Q	2011-12-31	Filed 2012-02-02
10-K	2011-09-30	Filed 2011-11-17
10-Q	2011-06-30	Filed 2011-08-04
10-Q	2011-03-31	Filed 2011-05-05
10-Q	2010-12-31	Filed 2011-02-03
10-K	2010-09-30	Filed 2010-11-18
10-Q	2010-06-30	Filed 2010-08-05
10-Q	2010-03-31	Filed 2010-05-06
10-Q	2009-12-31	Filed 2010-02-08

8-K	2020-05-01	Officers, Exhibits
8-K	2020-04-30	Earnings, Regulation FD, Exhibits
8-K	2020-04-07	Officers
8-K	2020-03-12	Off-BS Arrangement
8-K	2020-02-25	Officers, Shareholder Vote, Exhibits
8-K	2020-01-29	Earnings, Regulation FD, Exhibits
8-K	2019-12-23	Officers, Exhibits
8-K	2019-11-19	Officers
8-K	2019-11-14	Earnings, Regulation FD, Exhibits
8-K	2019-08-01	Earnings, Regulation FD, Exhibits
8-K	2019-05-02	Earnings, Regulation FD, Exhibits
8-K	2019-02-27	Shareholder Vote
8-K	2019-01-30	Earnings, Regulation FD, Exhibits
8-K	2018-11-18	Officers
8-K	2018-11-15	Earnings, Regulation FD, Exhibits
8-K	2018-09-01	Officers, Regulation FD, Exhibits
8-K	2018-08-02	Earnings, Regulation FD, Exhibits
8-K	2018-07-06	Regulation FD, Exhibits
8-K	2018-07-01	Regulation FD, Exhibits
8-K	2018-05-29	Officers, Regulation FD, Exhibits
8-K	2018-05-01	Earnings, Regulation FD, Exhibits
8-K	2018-02-28	Shareholder Vote
8-K	2018-02-01	Earnings, Regulation FD, Exhibits
8-K	2018-01-19	Other Events

EX-3.2	hayn-20200331ex32b647afd.htm
EX-31.1	hayn-20200331ex3117fcaa1.htm
EX-31.2	hayn-20200331ex31202dd9e.htm
EX-32.1	hayn-20200331ex321fcc492.htm

HAYN 10Q Quarterly Report

Haynes Earnings 2020-03-31