Haynes Earnings 2020-06-30

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

UNITED STATES

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 June 30, 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 July 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 June 30, 2020	3

	Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended June 30, 2019 and 2020	4

	Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three and Nine Months Ended June 30, 2019 and 2020	5

	Consolidated Statement of Stockholders Equity (Unaudited) for the Three and Nine Months Ended June 30, 2019 and 2020	6

	Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended June 30, 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	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	30

PART II	OTHER INFORMATION	32

Item 1a.	Risk Factors COVID-19	32

Item 6.	Exhibits	33

	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,		June 30,
	2019		2020
ASSETS
Current assets:
Cash and cash equivalents	$	31,038	$	65,466
Accounts receivable, less allowance for doubtful accounts of $441 and $602 at September 30, 2019 and June 30, 2020, respectively		76,979		52,285
Inventories		258,802		263,885
Income taxes receivable		1,757		5,071
Other current assets		3,297		3,816
Total current assets		371,873		390,523
Property, plant and equipment, net		169,966		162,634
Deferred income taxes		34,132		31,669
Other assets		7,756		9,263
Goodwill		4,789		4,789
Other intangible assets, net		5,284		5,134
Total assets	$	593,800	$	604,012
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	34,497	$	19,986
Accrued expenses		18,833		17,710
Income taxes payable		—		279
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		74,725
Long-term obligations (less current portion) (Note 15)		8,609		8,573
Deferred revenue (less current portion)		15,329		13,454
Deferred income taxes		2,016		2,052
Operating lease liabilities		—		1,984
Accrued pension benefits (less current portion)		101,812		96,879
Accrued postretirement benefits (less current portion)		109,679		111,221
Total liabilities		297,525		308,888
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 June 30, 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		256,754
Accumulated earnings		125,296		129,408
Treasury stock, 53,469 shares at September 30, 2019 and 58,909 shares at June 30, 2020		(2,239)		(2,437)
Accumulated other comprehensive loss		(80,638)		(88,614)
Total stockholders’ equity		296,275		295,124
Total liabilities and stockholders’ equity	$	593,800	$	604,012

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 June 30,				Nine Months Ended June 30,
	2019		2020		2019		2020
Net revenues	$	126,032	$	80,576	$	360,575	$	300,592
Cost of sales		107,857		77,937		316,382		259,914
Gross profit		18,175		2,639		44,193		40,678
Selling, general and administrative expense		10,985		9,824		32,776		32,116
Research and technical expense		830		867		2,523		2,777
Operating income (loss)		6,360		(8,052)		8,894		5,785
Nonoperating retirement benefit expense		856		1,700		2,568		5,100
Interest income		(15)		(11)		(53)		(35)
Interest expense		231		417		756		964
Income before income taxes		5,288		(10,158)		5,623		(244)
Provision for income taxes		1,486		(2,061)		1,915		517
Net income (loss)	$	3,802	$	(8,097)	$	3,708	$	(761)
Net income (loss) per share:
Basic	$	0.30	$	(0.65)	$	0.29	$	(0.06)
Diluted	$	0.30	$	(0.65)	$	0.29	$	(0.06)
Weighted Average Common Shares Outstanding
Basic		12,450		12,475		12,443		12,470
Diluted		12,592		12,475		12,591		12,470

Dividends declared per common share	$	0.22	$	0.22	$	0.66	$	0.66

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 June 30,				Nine Months Ended June 30,
	2019		2020		2019		2020
Net income (loss)	$	3,802	$	(8,097)	$	3,708	$	(761)
Other comprehensive income (loss), net of tax:
Pension and postretirement		580		1,719		1,739		5,158
Foreign currency translation adjustment		(1,803)		(176)		(1,943)		149
Other comprehensive income (loss)		(1,223)		1,543		(204)		5,307
Comprehensive income	$	2,579	$	(6,554)	$	3,504	$	4,546

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 June 30, 2019
										Accumulated
				Additional						Other		Total
	Common Stock			Paid-in		Accumulated		Treasury		Comprehensive		Stockholders’
	Shares	Par		Capital		Earnings		Stock		Income (Loss)		Equity
Balance March 31, 2019	12,515,480	$	13		252,425	$	120,977	$	(2,177)	$	(41,546)	$	329,692
Net income (loss)							3,802						3,802
Dividends paid and accrued ($0.22 per share)							(2,760)						(2,760)
Other comprehensive income (loss)											(1,223)		(1,223)
Purchase of treasury stock	(2,130)								(62)				(62)
Stock compensation					691								691
Balance June 30, 2019	12,513,350	$	13	$	253,116	$	122,019	$	(2,239)	$	(42,769)	$	330,140


	Three Months Ended June 30, 2020
										Accumulated
				Additional						Other		Total
	Common Stock			Paid-in		Accumulated		Treasury		Comprehensive		Stockholders’
	Shares	Par		Capital		Earnings		Stock		Income (Loss)		Equity
Balance March 31, 2020	12,556,921	$	13	$	255,896	$	140,297	$	(2,437)	$	(90,157)	$	303,612
Net income (loss)							(8,097)						(8,097)
Dividends paid and accrued ($0.22 per share)							(2,792)						(2,792)
Other comprehensive income (loss)											1,543		1,543
Issue restricted stock (less forfeitures)													—
Stock compensation					858								858
Balance June 30, 2020	12,556,921	$	13	$	256,754	$	129,408	$	(2,437)	$	(88,614)	$	295,124


	Nine Months Ended June 30, 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)							3,708						3,708
Dividends paid and accrued ($0.66 per share)							(8,277)						(8,277)
Other comprehensive income (loss)											(204)		(204)
Exercise of stock options	12,084				215								215
Issue restricted stock (less forfeitures)	8,144												—
Purchase of treasury stock	(11,356)								(370)				(370)
Stock compensation					1,848								1,848
Balance June 30, 2019	12,513,350	$	13	$	253,116	$	122,019	$	(2,239)	$	(42,769)	$	330,140


	Nine Months Ended June 30, 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)							(761)						(761)
Dividends paid and accrued ($0.66 per share)							(8,410)						(8,410)
Other comprehensive income (loss)											5,307		5,307
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					2,489								2,489
Balance June 30, 2020	12,556,921	$	13	$	256,754	$	129,408	$	(2,437)	$	(88,614)	$	295,124

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)



	Nine Months Ended June 30,
	2019		2020
Cash flows from operating activities:
Net income (loss)	$	3,708	$	(761)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation		14,090		14,588
Amortization		205		150
Pension and post-retirement expense - U.S. and U.K.		6,733		10,342
Change in long-term obligations		—		(21)
Stock compensation expense		1,848		2,489
Deferred revenue		(1,875)		(1,875)
Deferred income taxes		1,036		633
Loss on disposition of property		13		—
Change in assets and liabilities:
Accounts receivable		(5,044)		24,815
Inventories		2,470		(4,956)
Other assets		(409)		(20)
Accounts payable and accrued expenses		6,049		(15,929)
Income taxes		4,902		(3,041)
Accrued pension and postretirement benefits		(5,457)		(6,733)
Net cash provided by (used in) operating activities		28,269		19,681
Cash flows from investing activities:
Additions to property, plant and equipment		(7,316)		(7,142)
Net cash provided by (used in) investing activities		(7,316)		(7,142)
Cash flows from financing activities:
Revolving credit facility borrowings		16,600		30,000
Revolving credit facility repayments		(16,600)		—
Dividends paid		(8,258)		(8,285)
Proceeds from exercise of stock options		215		422
Payment for purchase of treasury stock		(370)		(198)
Payments on long-term obligation		(106)		(140)
Net cash provided by (used in) financing activities		(8,519)		21,799
Effect of exchange rates on cash		(191)		90
Increase (decrease) in cash and cash equivalents:		12,243		34,428
Cash, cash equivalents and restricted cash:
Beginning of period		9,802		31,038
End of period	$	22,045	$	65,466
Supplemental disclosures of cash flow information:
Interest (net of capitalized interest)	$	712	$	865

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	2020-06-30	Filed 2020-07-31
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	2020-07-30	Earnings, Regulation FD, Exhibits
8-K	2020-05-01
8-K	2020-04-30
8-K	2020-04-07
8-K	2020-03-12
8-K	2020-02-25
8-K	2020-01-29
8-K	2019-12-23
8-K	2019-11-19
8-K	2019-11-14
8-K	2019-08-01
8-K	2019-05-02
8-K	2019-02-27
8-K	2019-01-30
8-K	2018-11-18
8-K	2018-11-15
8-K	2018-09-01
8-K	2018-08-02
8-K	2018-07-06
8-K	2018-07-01
8-K	2018-05-29
8-K	2018-05-01
8-K	2018-02-28
8-K	2018-02-01
8-K	2018-01-19

EX-31.1	hayn-20200630xex31d1.htm
EX-31.2	hayn-20200630xex31d2.htm
EX-32.1	hayn-20200630xex32d1.htm

HAYN 10Q Quarterly Report

Haynes Earnings 2020-06-30