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, 2022~~March 31, 2023


☐	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 $0.001 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 28, 2022,~~May 1, 2023, the registrant had ~~12,462,478~~12,731,248 shares of Common Stock, $0.001 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	2

	Consolidated Balance Sheets (Unaudited) as of September 30, ~~2021~~2022 and ~~June 30, 2022~~March 31, 2023	2

	Consolidated Statements of Operations (Unaudited) for the Three and ~~Nine~~Six Months Ended ~~June 30, 2021~~March 31, 2022 and 20223	3

	Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the Three and ~~Nine~~Six Months Ended ~~June 30, 2021~~March 31, 2022 and 20223	4

	Consolidated ~~Statement~~Statements of Stockholders’ Equity (Unaudited) for the Three and ~~Nine~~Six Months Ended ~~June 30, 2021~~March 31, 2022 and 20223	5

	Consolidated Statements of Cash Flows (Unaudited) for the ~~Nine~~Six Months Ended ~~June 30, 2021~~March 31, 2022 and 20223	6

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1716

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2725

Item 4.	Controls and Procedures	2725

PART II	OTHER INFORMATION	2826

Item 1.	Legal Proceedings	2826

Item 1A.	Risk Factors	2826

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 6.	Exhibits	2927

	Index to Exhibits	2927

	Signatures	3028

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,		September 30,		March 31,
	2021		2022		2022		2023
ASSETS
Current assets:
Cash and cash equivalents	$	47,726	$	9,438	$	8,440	$	16,859
Accounts receivable, less allowance for doubtful accounts of $553 and $739 at September 30, 2021 and June 30, 2022, respectively		57,964		79,562
Accounts receivable, less allowance for credit losses of $428 and $846 at September 30, 2022 and March 31, 2023, respectively						94,912		99,729
Inventories		248,495		344,088		357,556		397,481
Income taxes receivable		1,292		12		—		2,152
Other current assets		6,129		4,595		3,514		3,658
Total current assets		361,606		437,695		464,422		519,879
Property, plant and equipment, net		147,248		144,216		142,772		142,686
Deferred income taxes		16,397		12,077		5,680		5,858
Other assets		10,829		10,708		9,723		9,514
Goodwill		4,789		4,789		4,789		4,789
Other intangible assets, net		5,586		5,039		4,909		4,938
Total assets	$	546,455	$	614,524	$	632,295	$	687,664
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	47,680	$	66,437	$	54,886	$	51,167
Accrued expenses		20,100		17,871		19,294		18,146
Income taxes payable		379		1,751		828		677
Accrued pension and postretirement benefits		3,554		3,554		3,371		3,371
Revolving credit facilities		—		46,500
Deferred revenue—current portion		2,500		2,500		2,500		2,500
Total current liabilities		74,213		138,613		80,879		75,861
Revolving credit facilities - Long-term						74,721		108,000
Long-term obligations (less current portion)		8,301		8,030		7,848		7,701
Deferred revenue (less current portion)		10,329		8,454		7,829		6,579
Deferred income taxes		3,459		3,361		3,103		3,285
Operating lease liabilities		664		764		576		486
Accrued pension benefits (less current portion)		26,663		20,698		21,090		18,079
Accrued postretirement benefits (less current portion)		79,505		80,531		60,761		61,914
Total liabilities		203,134		260,451		256,807		281,905
Commitments and contingencies		—		—		—		—
Stockholders’ equity:
Common stock, $0.001 par value (40,000,000 shares authorized, 12,757,778 and 12,825,922 shares issued and 12,562,140 and 12,462,478 shares outstanding at September 30, 2021 and June 30, 2022, respectively)		13		13
Common stock, $0.001 par value (40,000,000 shares authorized, 12,854,773 and 13,123,811 shares issued and 12,479,741 and 12,731,248 shares outstanding at September 30, 2022 and March 31, 2023, respectively)						13		13
Preferred stock, $0.001 par value (20,000,000 shares authorized, 0 shares issued and outstanding)		—		—		—		—
Additional paid-in capital		262,057		265,154		266,193		275,962
Accumulated earnings		101,015		121,495		135,040		149,514
Treasury stock, 195,638 shares at September 30, 2021 and 363,444 shares at June 30, 2022		(7,423)		(14,218)
Treasury stock, 375,032 shares at September 30, 2022 and 392,563 shares at March 31, 2023						(14,666)		(15,591)
Accumulated other comprehensive loss		(12,341)		(18,371)		(11,092)		(4,139)
Total stockholders’ equity		343,321		354,073		375,488		405,759
Total liabilities and stockholders’ equity	$	546,455	$	614,524	$	632,295	$	687,664

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,				Three Months Ended March 31,				Six Months Ended March 31,
	2021		2022		2021		2022		2022		2023		2022		2023
Net revenues	$	88,143	$	130,165	$	242,383	$	346,651	$	117,056	$	152,786	$	216,486	$	285,459
Cost of sales		74,485		96,943		219,353		272,239		93,643		121,908		175,296		231,543
Gross profit		13,658		33,222		23,030		74,412		23,413		30,878		41,190		53,916
Selling, general and administrative expense		11,475		11,847		32,465		34,991		11,782		12,702		23,144		23,654
Research and technical expense		831		957		2,482		2,806		944		1,047		1,849		2,020
Operating income (loss)		1,352		20,418		(11,917)		36,615
Operating income										10,687		17,129		16,197		28,242
Nonoperating retirement benefit expense (income)		359		(1,088)		1,077		(3,264)		(1,088)		(365)		(2,176)		(731)
Interest income		(4)		(1)		(9)		(15)		(6)		(10)		(14)		(16)
Interest expense		298		750		900		1,564		514		1,865		814		3,366
Income (loss) before income taxes		699		20,757		(13,885)		38,330
Provision for (benefit from) income taxes		277		5,149		(2,648)		9,579
Net income (loss)	$	422	$	15,608	$	(11,237)	$	28,751
Net income (loss) per share:
Income before income taxes										11,267		15,639		17,573		25,623
Provision for income taxes										2,783		3,290		4,430		5,535
Net income									$	8,484	$	12,349	$	13,143	$	20,088
Net income per share:
Basic	$	0.03	$	1.25	$	(0.91)	$	2.30	$	0.68	$	0.98	$	1.05	$	1.59
Diluted	$	0.03	$	1.24	$	(0.91)	$	2.28	$	0.67	$	0.96	$	1.04	$	1.56
Weighted Average Common Shares Outstanding
Basic		12,515		12,339		12,507		12,346		12,331		12,544		12,350		12,522
Diluted		12,676		12,459		12,507		12,507		12,474		12,787		12,531		12,766

Dividends declared per common share	$	0.22	$	0.22	$	0.66	$	0.66	$	0.22	$	0.22	$	0.44	$	0.44

The accompanying notes are an integral part of these financial ~~statements~~.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,				Three Months Ended March 31,				Six Months Ended March 31,
	2021		2022		2021		2022		2022		2023		2022		2023
Net income (loss)	$	422	$	15,608	$	(11,237)	$	28,751
Net income									$	8,484	$	12,349	$	13,143	$	20,088
Other comprehensive income (loss), net of tax:
Pension and postretirement		1,528		—		4,583		(1)		(1)		(393)		(1)		(786)
Foreign currency translation adjustment		827		(5,169)		5,409		(6,029)		(1,429)		1,935		(860)		7,739
Other comprehensive income (loss)		2,355		(5,169)		9,992		(6,030)		(1,430)		1,542		(861)		6,953
Comprehensive income (loss)	$	2,777	$	10,439	$	(1,245)	$	22,721
Comprehensive income									$	7,054	$	13,891	$	12,282	$	27,041

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, 2021 and 2022

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Accumulated

Treasury

Comprehensive

Stockholders’


Shares

Par

Capital

Earnings

Stock

Income (Loss)

Equity
Balance March 31, 2021

12,688,730

$
13

259,796

$
103,721

$
(2,675)

$
(66,964)

$
293,891
Net income (loss)

422

422
Dividends paid and accrued ($0.22 per share)

(2,814)

(2,814)
Other comprehensive income (loss)

2,355

2,355
Stock compensation

1,158

1,158
Balance June 30, 2021

12,688,730

$
13

$
260,954

$
101,329

$
(2,675)

$
(64,609)

$
295,012

Balance March 31, 2022

12,458,953

$
13

$
264,098

$
108,619

$
(14,218)

$
(13,202)

$
345,310
Net income (loss)

15,608

15,608
Dividends paid and accrued ($0.22 per share)

(2,732)

(2,732)
Other comprehensive income (loss)

(5,169)

(5,169)
Exercise of stock options

3,025

124

124
Issue restricted stock (less forfeitures)

500

—
Stock compensation

932

932
Balance June 30, 2022

12,462,478

$
13

$
265,154

$
121,495

$
(14,218)

$
(18,371)

$
354,073


	Three Months Ended March 31, 2022 and 2023
										Accumulated
				Additional						Other		Total
	Common Stock			Paid-in		Accumulated		Treasury		Comprehensive		Stockholders’
	Shares	Par		Capital		Earnings		Stock		Income (Loss)		Equity
Balance December 31, 2021	12,455,839	$	13	$	263,126	$	102,865	$	(14,023)	$	(11,772)	$	340,209
Net income							8,484						8,484
Dividends paid and accrued ($0.22 per share)							(2,730)						(2,730)
Other comprehensive income											(1,430)		(1,430)
Exercise of stock options	2,883				109								109
Issue restricted stock (less forfeitures)	(6,522)												—
Vesting of restricted stock	11,993												—
Purchase of treasury stock	(5,240)								(195)				(195)
Stock compensation					863								863
Balance March 31, 2022	12,458,953	$	13	$	264,098	$	108,619	$	(14,218)	$	(13,202)	$	345,310

Balance December 31, 2022	12,597,607	$	13	$	270,340	$	139,976	$	(15,504)	$	(5,681)	$	389,144
Net income							12,349						12,349
Dividends paid and accrued ($0.22 per share)							(2,811)						(2,811)
Other comprehensive income (loss)											1,542		1,542
Exercise of stock options	130,889				4,851								4,851
Issue restricted stock (less forfeitures)	4,300												—
Purchase of treasury stock	(1,548)								(87)				(87)
Stock compensation					771								771
Balance March 31, 2023	12,731,248	$	13	$	275,962	$	149,514	$	(15,591)	$	(4,139)	$	405,759

Nine Months Ended June 30, 2021 and 2022

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Accumulated

Treasury

Comprehensive

Stockholders’


Shares

Par

Capital

Earnings

Stock

Income (Loss)

Equity
Balance September 30, 2020

12,622,371

$
13

$
257,583

$
120,943

$
(2,437)

$
(74,601)

$
301,501
Net income (loss)

(11,237)

(11,237)
Dividends paid and accrued ($0.66 per share)

(8,377)

(8,377)
Other comprehensive income (loss)

9,992

9,992
Issue restricted stock (less forfeitures)

55,518

—
Vesting of restricted stock

21,280

—
Purchase of treasury stock

(10,439)

(238)

(238)
Stock compensation

3,371

3,371
Balance June 30, 2021

12,688,730

$
13

$
260,954

$
101,329

$
(2,675)

$
(64,609)

$
295,012

Balance September 30, 2021

12,562,140

$
13

$
262,057

$
101,015

$
(7,423)

$
(12,341)

$
343,321
Net income (loss)

28,751

28,751
Dividends paid and accrued ($0.66 per share)

(8,271)

(8,271)
Other comprehensive income (loss)

(6,030)

(6,030)
Exercise of stock options

9,558

347

347
Issue restricted stock (less forfeitures)

25,682

—
Vesting of restricted stock

32,904

—
Purchase of treasury stock

(167,806)

(6,795)

(6,795)
Stock compensation

2,750

2,750
Balance June 30, 2022

12,462,478

$
13

$
265,154

$
121,495

$
(14,218)

$
(18,371)

$
354,073


	Six Months Ended March 31, 2022 and 2023
										Accumulated
				Additional						Other		Total
	Common Stock			Paid-in		Accumulated		Treasury		Comprehensive		Stockholders’
	Shares	Par		Capital		Earnings		Stock		Income (Loss)		Equity
Balance September 30, 2021	12,562,140	$	13	$	262,057	$	101,015	$	(7,423)	$	(12,341)	$	343,321
Net income							13,143						13,143
Dividends paid and accrued ($0.44 per share)							(5,539)						(5,539)
Other comprehensive income (loss)											(861)		(861)
Exercise of stock options	6,533				224								224
Issue restricted stock (less forfeitures)	25,182												—
Vesting of restricted stock	32,904												—
Purchase of treasury stock	(167,806)								(6,795)				(6,795)
Stock compensation					1,817								1,817
Balance March 31, 2022	12,458,953	$	13	$	264,098	$	108,619	$	(14,218)	$	(13,202)	$	345,310

Balance September 30, 2022	12,479,741	$	13	$	266,193	$	135,040	$	(14,666)	$	(11,092)	$	375,488
Net income							20,088						20,088
Dividends paid and accrued ($0.44 per share)							(5,614)						(5,614)
Other comprehensive income (loss)											6,953		6,953
Exercise of stock options	218,576				8,228								8,228
Issue restricted stock (less forfeitures)	38,033												—
Vesting of restricted stock	12,429												—
Purchase of treasury stock	(17,531)								(925)				(925)
Stock compensation					1,541								1,541
Balance March 31, 2023	12,731,248	$	13	$	275,962	$	149,514	$	(15,591)	$	(4,139)	$	405,759

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,				Six Months Ended March 31,
	2021		2022		2022		2023
Cash flows from operating activities:
Net income (loss)	$	(11,237)	$	28,751
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Net income					$	13,143	$	20,088
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		14,383		13,810		9,252		8,932
Amortization		350		547		322		216
Pension and post-retirement expense - U.S. and U.K.		6,119		1,650		1,100		1,306
Change in long-term obligations		(24)		(15)		(16)		(41)
Stock compensation expense		3,371		2,750		1,817		1,541
Deferred revenue		(1,875)		(1,875)		(1,250)		(1,250)
Deferred income taxes		(3,865)		4,182		4,009		231
Loss on disposition of property		23		5		—		65
Change in assets and liabilities:
Accounts receivable		145		(24,312)		(17,830)		(1,134)
Inventories		18,468		(98,880)		(44,124)		(34,370)
Other assets		(275)		1,666		1,282		110
Accounts payable and accrued expenses		18,009		18,045		598		(8,888)
Income taxes		2,830		2,666		(701)		(2,346)
Accrued pension and postretirement benefits		(6,232)		(6,589)		(4,411)		(4,187)
Net cash provided by (used in) operating activities		40,190		(57,599)
Net cash used in operating activities						(36,809)		(19,727)
Cash flows from investing activities:
Additions to property, plant and equipment		(4,155)		(11,464)		(7,729)		(7,292)
Net cash used in investing activities		(4,155)		(11,464)		(7,729)		(7,292)
Cash flows from financing activities:
Revolving credit facility borrowings		—		64,500		35,000		84,128
Revolving credit facility repayments		—		(18,000)		(13,500)		(50,849)
Dividends paid		(8,395)		(8,329)		(5,587)		(5,603)
Proceeds from exercise of stock options		—		347		224		8,228
Payment for purchase of treasury stock		(238)		(6,795)		(6,795)		(925)
Payment for debt issuance cost		(997)		—		—		(245)
Payments on long-term obligations		(161)		(183)		(120)		(138)
Net cash used in financing activities		(9,791)		31,540
Net cash provided by financing activities						9,222		34,596
Effect of exchange rates on cash		682		(765)		(208)		842
Increase (decrease) in cash and cash equivalents:		26,926		(38,288)		(35,524)		8,419
Cash and cash equivalents:
Beginning of period		47,238		47,726		47,726		8,440
End of period	$	74,164	$	9,438	$	12,202	$	16,859
Supplemental disclosures of cash flow information:
Interest (net of capitalized interest)	$	654	$	1,004	$	559	$	2,951
Income taxes paid (refunded), net	$	(1,658)	$	2,521
Income taxes paid, net					$	998	$	7,568
Capital expenditures incurred but not yet paid	$	53	$	424	$	632	$	1,159
Dividends declared but not yet paid	$	121	$	152	$	161	$	210

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

Table of Contents

HAYNES INTERNATIONAL, INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(in thousands, except share and per share data)

Note 1. Basis of Presentation

Interim Financial Statements

The accompanying unaudited condensed interim consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), and such principles are applied on a basis consistent with information reflected in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021~~2022 filed with the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations promulgated by the SEC related to interim financial statements. In the opinion of management, the interim financial information includes all adjustments and accruals which are necessary for a fair presentation of results for the respective interim periods. The results of operations for the three and ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 are not necessarily indicative of the results to be expected for the full fiscal year ending September 30, ~~2022~~2023 or any other interim period.

Principles of Consolidation

The consolidated financial statements include the accounts of Haynes International, Inc. and directly or indirectly wholly-owned subsidiaries (collectively, the “Company”). All intercompany transactions and balances are eliminated.

Note 2. Recently Issued Accounting Standards

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). This new update provides optional expedients to ease the potential burden of accounting for the effects of reference rate reform as it pertains to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (“LIBOR”) or by another reference rate expected to be discontinued. These amendments are effective immediately and may be applied prospectively to modifications made or relationships entered into or evaluated on or before December 31, 2022. ~~The Company is in~~This standard did not have a material impact on the ~~process of evaluating the impact of the pronouncement.~~Company’s Consolidated Financial Statements.

Note 3. Revenues from Contracts with Customers

Contract Balances

As of September 30, ~~2021~~2022 and ~~June 30, 2022,~~March 31, 2023, accounts receivable with customers were ~~$58,517~~$95,340 and ~~$80,301~~$100,575, respectively. Allowance for ~~doubtful accounts~~credit losses as of September 30, ~~2021~~2022 and ~~June 30, 2022~~March 31, 2023 were $~~553~~428 and ~~$739~~$846, respectively, and are presented within accounts receivable, less allowance for ~~doubtful accounts~~credit losses on the Consolidated Balance Sheet.

Contract liabilities are recognized when the Company has received consideration from a customer to transfer goods or services at a future point in time when the Company performs under the purchase order or contract. As of September 30, ~~2021~~2022 and ~~June 30, 2022, no~~March 31, 2023, contract liabilities ~~have been recorded except for $12,829~~of $10,329 and ~~$10,954,~~$9,079, respectively, for the Titanium Metals Corporation agreement, as described in Note 8 to the Condensed Consolidated Financial ~~Statements~~Statement have been recorded. Additionally, contract liabilities of $700 and ~~$1,060 and $630~~$830, respectively, were recorded for accrued product returns.

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Disaggregation of Revenue

Revenue is disaggregated by end-use markets. The following table includes a breakdown of net revenues to the markets served by the Company for the three and ~~nine~~six months ended ~~June 30, 2021~~March 31, 2022 and ~~2022.~~2023.


	Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
	June 30,				June 30,				March 31,				March 31,
	2021		2022		2021		2022		2022		2023		2022		2023
Net revenues
Aerospace	$	33,950	$	60,981	$	89,106	$	162,354	$	52,918	$	66,612	$	101,373	$	131,130
Chemical processing		17,010		24,180		47,334		64,480		22,850		28,605		40,300		51,320
Industrial gas turbine		17,835		23,991		48,238		63,377		24,788		32,420		39,386		58,445
Other markets		13,709		14,518		42,034		38,760		9,755		17,550		24,242		32,272
Total product revenue		82,504		123,670		226,712		328,971		110,311		145,187		205,301		273,167
Other revenue		5,639		6,495		15,671		17,680		6,745		7,599		11,185		12,292
Net revenues	$	88,143	$	130,165	$	242,383	$	346,651	$	117,056	$	152,786	$	216,486	$	285,459

Note 4. Inventories

The following is a summary of the major classes of inventories:


	September 30,		June 30,		September 30,		March 31,
	2021		2022		2022		2023
Raw Materials	$	22,711	$	26,819	$	31,887	$	38,280
Work-in-process		138,609		231,864		226,572		232,392
Finished Goods		85,797		83,939		97,657		125,288
Other		1,378		1,466		1,440		1,521
	$	248,495	$	344,088	$	357,556	$	397,481

Note 5. Income Taxes

Income tax ~~(benefit)~~ expense for the three and ~~nine~~six months ended ~~June 30, 2021~~March 31, 2022 and ~~2022~~2023 differed from the U.S. federal statutory rate of 21.0%, primarily due to state income taxes, differing tax rates on foreign earnings and discrete tax items that impacted income tax expense (benefit) in these periods. The effective tax rate for the three months ended ~~June 30, 2022~~March 31, 2023 was ~~24.8%~~21.0% on ~~$20,757~~$15,639 of income before income taxes compared to ~~39.6%~~24.7% on income before income taxes of ~~$699~~$11,267 for the three months ended ~~June 30, 2021.~~March 31, 2022. The effective tax rate for the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 was ~~25.0%~~21.6% on ~~$38,330~~$25,623 of income before income taxes compared to ~~19.1%~~25.2% on ~~loss~~income before income taxes of ~~$(13,885)~~$17,573 for the ~~nine~~six months ended June 30, 2021. Income tax expense in the first nine months of fiscal 2021 was unfavorably impacted by the lower stock price at the time of vesting of restricted stock as compared to the price when the stock was granted, which resulted in the Company not being able to fully utilize the deferred tax assets attributable to those shares. The unfavorable tax expense resulted in a lower effective tax in a period in which the Company incurred a loss before income taxes.

March 31, 2022.

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Note 6. Pension and Post-retirement Benefits

Components of net periodic pension and post-retirement benefit cost for the three and ~~nine~~six months ended ~~June 30, 2021~~March 31, 2022 and ~~2022~~2023 were as follows:


	Three Months Ended June 30,								Nine Months Ended June 30,								Three Months Ended March 31,								Six Months Ended March 31,
	Pension Benefits				Other Benefits				Pension Benefits				Other Benefits				Pension Benefits				Other Benefits				Pension Benefits				Other Benefits
	2021		2022		2021		2022		2021		2022		2021		2022		2022		2023		2022		2023		2022		2023		2022		2023
Service cost	$	1,407	$	1,182	$	274	$	456	$	4,221	$	3,546	$	822	$	1,368	$	1,182	$	672	$	456	$	347	$	2,364	$	1,344	$	912	$	694
Interest cost		1,808		1,923		572		559		5,424		5,769		1,718		1,677		1,923		2,772		559		800		3,846		5,544		1,118		1,600
Expected return		(3,978)		(3,561)		—		—		(11,934)		(10,683)		—		—		(3,561)		(3,419)		—		—		(7,122)		(6,838)		—		—
Amortizations		1,956		51		—		(60)		5,868		153		—		(180)		51		51		(60)		(570)		102		102		(120)		(1,140)
Net periodic benefit cost	$	1,193	$	(405)	$	846	$	955	$	3,579	$	(1,215)	$	2,540	$	2,865	$	(405)	$	76	$	955	$	577	$	(810)	$	152	$	1,910	$	1,154

The Company contributed ~~$4,500~~$3,000 to Company-sponsored U.S. pension plans and ~~$2,018~~$1,141 to its other post-retirement benefit plans for the ~~nine~~six months ended ~~June 30, 2022.~~March 31, 2023. The Company expects to make contributions of ~~$1,500~~$3,000 to its U.S. pension plan and ~~$1,441~~$2,135 to its other post-retirement benefit plan for the remainder of fiscal ~~2022. Additional contributions may be made to the U.S. pension plan as part of the Company’s capital allocation strategy, however, the amounts and timing have not yet been determined.~~2023.

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Note 7. Legal, Environmental and Other Contingencies

Legal

The Company is regularly involved in litigation, both as a plaintiff and as a defendant, relating to its business and operations, including environmental, commercial, asbestos, employment and federal and/or state Equal Employment Opportunity Commission administrative actions. Future expenditures for environmental, employment, intellectual property and other legal matters cannot be determined with any degree of certainty.

Environmental

The Company has received permits from the Indiana Department of Environmental Management and the North Carolina Department of Environment and Natural Resources to close and provide post-closure environmental monitoring and care for certain areas of its Kokomo, Indiana and Mountain Home, North Carolina facilities, respectively.

The Company is required to, among other things, monitor groundwater and to continue post-closure maintenance of the former disposal areas at each site. As a result, the Company is aware of elevated levels of certain contaminants in the groundwater, and additional testing and corrective action by the Company could be required. The Company is unable to estimate the costs of any further corrective action at these sites, if required. Accordingly, the Company cannot assure that the costs of any future corrective action at these or any other current or former sites would not have a material effect on the Company’s financial condition, results of operations or liquidity.

As of both September 30, ~~2021~~2022 and ~~June 30, 2022,~~March 31, 2023, the Company ~~had~~has accrued ~~$566~~$407 for post-closure monitoring and maintenance activities, of which ~~$496~~$341 is included in long-term obligations as it is not due within one year. Accruals for these costs are calculated by estimating the cost to monitor and maintain each post-closure site and multiplying that amount by the number of years remaining in the post-closure monitoring.

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Expected maturities of post-closure monitoring and maintenance activities (discounted) included in long-term obligations are as follows at ~~June 30, 2022.~~March 31, 2023.


Expected maturities of post-closure monitoring and maintenance activities (discounted)
Year Ending September 30,
2023	$	68
2024		89	$	82
2025		67		60
2026		68		58
2027 and thereafter		204
2027				62
2028 and thereafter				79
	$	496	$	341

Note 8. Deferred Revenue

On November 17, 2006, the Company entered into a twenty-year agreement to provide conversion services to Titanium Metals Corporation (TIMET) for up to 10ten million pounds of titanium metal annually. TIMET paid the Company a $50,000 up-front fee and will also pay the Company for its processing services during the term of the agreement (20 years) at prices established by the terms of the agreement. TIMET may exercise an option to have ~~up to an~~ten million additional ~~10 million~~ pounds of titanium converted annually, provided that it offers to loan up to $12,000 to the Company for certain capital expenditures which may be required to expand capacity. In addition to the volume commitment, the Company has granted TIMET a first priority security interest in its four-high Steckel rolling mill, along with rights of access if the Company enters into bankruptcy or defaults on any financing arrangements. The Company has agreed not to manufacture titanium products (other than cold reduced titanium tubing). The Company has also agreed not to provide titanium hot-rolling conversion services to any entity other than TIMET for the term of the Conversion Services Agreement.

The agreement contains certain default provisions which could result in contract termination and damages, including liquidated damages of $25,000 and the Company being required to return the unearned portion of the up-front fee. The Company considered each provision and the likelihood of the occurrence of a default that would result in liquidated damages. Based on the nature of the events that could trigger the liquidated damages clause, and the availability of the cure periods set forth in the agreement, the Company determined and continues to believe that none of these circumstances are reasonably likely to occur. Therefore, events resulting in liquidated damages have not been factored in as a reduction to the amount of revenue recognized over the life of the contract. The cash received of $50,000 is recognized in income on a straight-line basis over the 20-year term of the agreement. If an event of default

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occurred and was not cured within any applicable grace period, the Company would recognize the impact of the liquidated damages in the period of default and re-evaluate revenue recognition under the contract for future periods. The portion of the up-front fee not recognized in income is shown as deferred revenue on the Consolidated Balance Sheet.

Note 9. Goodwill and Other Intangible Assets, Net

The Company has goodwill, trademarks, customer relationships and other intangibles. Customer relationships have a definite life and are amortized over a period of fifteen years. The Company reviews customer relationships for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the assets is measured by a comparison of the carrying amount of the asset to the undiscounted cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount exceeds the fair value of the asset.

Goodwill and trademarks (indefinite lived) are tested for impairment at least annually as of January 31 for goodwill and August 31 for trademarks (the annual impairment testing dates), and more frequently if impairment indicators exist. If the carrying value of a trademark exceeds its fair value (determined using an income approach, based upon a discounted cash flow of an assumed royalty rate), impairment of the trademark may exist resulting in a charge to earnings to the extent of the impairment. The impairment test for goodwill is performed by comparing the fair value of a reporting unit with its carrying amount and recognizing an impairment loss in the event that the carrying amount is greater than the fair value. Any goodwill impairment loss recognized would not exceed the total carrying amount of goodwill allocated to that reporting unit. ~~NaN~~No impairment has been recognized as of ~~June 30, 2022.~~March 31, 2023 because the fair value exceeds the carrying values.

During the first ~~nine~~six months of fiscal ~~2022,~~2023, there were 0no changes in the carrying amount of goodwill.

Amortization of customer relationships and other intangibles was $118 and $90 for the three-month periods ended March 31, 2022 and 2023, respectively, and $322 and $216 for the six-month periods ended March 31, 2022 and 2023 respectively. The following represents a summary of intangible assets at September 30, 2022 and March 31, 2023.


	Gross		Accumulated		Carrying
September 30, 2022	Amount		Amortization		Amount
Trademarks	$	3,800	$	—	$	3,800
Customer relationships		2,100		(1,128)		972
Other		1,100		(963)		137
	$	7,000	$	(2,091)	$	4,909


	Gross		Accumulated		Carrying
March 31, 2023	Amount		Amortization		Amount
Trademarks	$	3,800	$	—	$	3,800
Customer relationships		2,100		(1,193)		907
Other		348		(117)		231
	$	6,248	$	(1,310)	$	4,938


Estimated future Aggregate Amortization Expense:
Year Ending September 30,
2023	$	180
2024		241
2025		123
2026		120
2027		116
Thereafter		358

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Amortization of customer relationships and other intangibles was $119 and $225 for the three-month periods ended June 30, 2021 and 2022, respectively, and $350 and $547 for the nine-month periods ended June 30, 2021 and 2022, respectively. The following represents a summary of intangible assets at September 30, 2021 and June 30, 2022.

Gross

Accumulated

Carrying

September 30, 2021

Amount

Amortization

Amount

Trademarks

$
3,800

$
—

$
3,800

Customer relationships

2,100

(995)

1,105

Other

997

(316)

681

$
6,897

$
(1,311)

$
5,586

Gross

Accumulated

Carrying

June 30, 2022

Amount

Amortization

Amount

Trademarks

$
3,800

$
—

$
3,800

Customer relationships

2,100

(1,095)

1,005

Other

997

(763)

234

$
6,897

$
(1,858)

$
5,039

Estimated future Aggregate Amortization Expense:

Year Ending September 30,

2022
$
229

2023

167

2024

126

2025

123

2026

120

Thereafter

474

Note 10. Net Income (Loss) Per Share

The Company accounts for earnings per share using the two-class method. The two-class method is an earnings allocation that determines net income per share for each class of common stock and participating securities according to participation rights in undistributed earnings. Non-vested restricted stock awards that include non-forfeitable rights to dividends are considered participating securities. Basic earnings per share is computed by dividing net income available to common stockholders for the period by the weighted average number of common shares outstanding for the period. The computation of diluted earnings per share is similar to basic earnings per share, except the denominator is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.

The following table sets forth the computation of basic and diluted earnings (loss) per share for the periods indicated:


	Three Months Ended						Six Months Ended
	March 31,						March 31,
(in thousands, except share and per share data)	2022			2023			2022			2023
Numerator: Basic and Diluted
Net income	$	8,484		$	12,349		$	13,143		$	20,088
Dividends paid and accrued		(2,730)			(2,811)			(5,539)			(5,614)
Undistributed income (loss)		5,754			9,538			7,604			14,474
Percentage allocated to common shares ^(a)		99.0	%		99.2	%		99.0	%		99.2	%
Undistributed income (loss) allocated to common shares		5,697			9,463			7,525			14,361
Dividends paid on common shares outstanding		2,703			2,789			5,482			5,570
Net income available to common shares		8,400			12,252			13,007			19,931
Denominator: Basic and Diluted
Weighted average common shares outstanding		12,330,567			12,544,388			12,349,904			12,522,323
Adjustment for dilutive potential common shares		143,616			242,331			180,938			243,459
Weighted average shares outstanding - Diluted		12,474,183			12,786,719			12,530,842			12,765,782

Basic net income per share	$	0.68		$	0.98		$	1.05		$	1.59
Diluted net income per share	$	0.67		$	0.96		$	1.04		$	1.56

Number of stock option shares excluded as their effect would be anti-dilutive		306,752			214,890			271,806			223,565
Number of restricted stock shares excluded as their effect would be anti-dilutive		56,296			40,899			58,818			43,824
Number of deferred restricted stock shares excluded as their effect would be anti-dilutive		3,507			5,574			3,646			6,353
Number of performance share awards excluded as their effect would be anti-dilutive		51,326			41,400			72,059			42,280

^(a⁾ Percentage allocated to common shares - Weighted average
Common shares outstanding		12,330,567			12,544,388			12,349,904			12,522,323
Unvested participating shares		122,836			98,877			129,161			98,887
		12,453,403			12,643,265			12,479,065			12,621,210

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~~The following table sets forth the computation of basic and diluted earnings (loss) per share for the periods indicated:~~

Three Months Ended

Nine Months Ended

June 30,

June 30,

(in thousands, except share and per share data)

2021

2022

2021

2022

Numerator: Basic and Diluted

Net income (loss)

$
422

$
15,608

$
(11,237)

$
28,751

Dividends paid and accrued

(2,814)

(2,732)

(8,377)

(8,271)

Undistributed income (loss)

(2,392)

12,876

(19,614)

20,480

Percentage allocated to common shares ^(a)

100.0
%

99.0
%

100.0
%

99.0
%
Undistributed income (loss) allocated to common shares

(2,392)

12,749

(19,614)

20,271

Dividends paid on common shares outstanding

2,776

2,705

8,263

8,187

Net income (loss) available to common shares

384

15,454

(11,351)

28,458

Denominator: Basic and Diluted

Weighted average common shares outstanding

12,515,161

12,339,308

12,507,373

12,346,372

Adjustment for dilutive potential common shares

161,133

119,947

—

160,566

Weighted average shares outstanding - Diluted

12,676,294

12,459,255

12,507,373

12,506,938

Basic net income (loss) per share

$
0.03

$
1.25

$
(0.91)

$
2.30

Diluted net income (loss) per share

$
0.03

$
1.24

$
(0.91)

$
2.28

Number of stock option shares excluded as their effect would be anti-dilutive

411,917

218,787

376,203

254,133

Number of restricted stock shares excluded as their effect would be anti-dilutive

68,345

51,830

173,636

56,536

Number of deferred restricted stock shares excluded as their effect would be anti-dilutive

2,778

2,976

31,094

3,427

Number of performance share awards excluded as their effect would be anti-dilutive

48,373

47,896

62,975

51,466

^(a⁾ Percentage allocated to common shares - Weighted average

Common shares outstanding

12,515,161

12,339,308

12,507,373

12,346,372

Unvested participating shares

—

123,336

—

127,219

12,515,161

12,462,644

12,507,373

12,473,591

Note 11. Stock-Based Compensation

Restricted Stock

The following table summarizes the activity under the 2016 and 2020 Incentive Compensation Plans with respect to restricted stock for the ~~nine~~six months ended ~~June 30, 2022:~~March 31, 2023:


		Weighted			Weighted
		Average Fair			Average Fair
	Number of	Value At		Number of	Value At
	Shares	Grant Date		Shares	Grant Date
Unvested at September 30, 2021	142,269	$	26.78
Unvested at September 30, 2022				96,536	$	33.23
Granted	32,204	$	43.98	29,059	$	49.19
Forfeited / Canceled	(6,522)	$	28.79	—	$	0.00
Vested	(44,615)	$	29.88	(35,692)	$	37.06
Unvested at June 30, 2022	123,336	$	30.04
Unvested at March 31, 2023				89,903	$	36.87
Expected to vest	123,336	$	30.04	89,903	$	36.87

Compensation expense related to restricted stock for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~2022~~2023 was ~~$529~~$352 and ~~$375,~~$340, respectively and for the ~~nine~~six months ended ~~June 30, 2021~~March 31, 2022 and ~~2022~~2023 was ~~$1,547~~$744 and ~~$1,120,~~$646, respectively. The remaining unrecognized compensation expense related to restricted stock at ~~June 30, 2022~~March 31,2023 was ~~$1,593,~~$2,022, to be recognized over a weighted average period of ~~1.06~~1.65 years. During the first ~~nine~~six months of fiscal ~~2022,~~2023, the Company repurchased ~~13,798~~17,531 shares of stock from employees at an average purchase price of ~~$42.52~~$52.74 to satisfy required withholding taxes upon vesting of restricted stock-based compensation.

Deferred Restricted Stock

The following table summarizes the activity under the 2016 and 2020 Incentive Compensation Plans with respect to deferred restricted stock for the six months ended March 31, 2023.


		Weighted
		Average Fair
	Number of	Value At
	Shares	Grant Date
Unvested and deferred at September 30, 2022	3,801	$	44.07
Granted	8,974	$	49.19
Vested and deferred	(3,801)	$	44.07
Unvested and deferred at March 31, 2023	8,974	$	49.19
Vested and deferred at March 31, 2023	21,351	$	31.32

Compensation expense related to deferred restricted stock for the three months ended March 31, 2022 and 2023 was $42 and $98, respectively and for the six months ended March 31,2022 and 2023 was $84 and $157. The remaining unrecognized compensation expense related to deferred restricted stock at March 31, 2023 was $312, to be recognized over a weighted average period of 0.71 years.

Performance Shares

The following table summarizes the activity under the 2016 and 2020 Incentive Compensation Plans with respect to performance shares for the six months ended March 31, 2023.


		Weighted
		Average Fair
	Number of	Value At
	Shares	Grant Date
Unvested at September 30, 2022	76,420	$	41.37
Granted	19,555	$	69.39
Vested	(25,226)	$	42.83
Forfeited / Canceled	—	$	0.00
Unvested at March 31, 2023	70,749	$	48.60

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~~Deferred Restricted Stock~~

~~The following table summarizes the activity under the 2016 and 2020 Incentive Compensation Plans with respect to deferred restricted stock for the nine months ended June 30, 2022.~~

Weighted

Average Fair

Number of

Value At

Shares

Grant Date

Unvested and deferred at September 30, 2021

7,398

$
22.64

Granted

3,801

$
44.07

Vested and deferred

(7,398)

$
22.64

Unvested and deferred at June 30, 2022

3,801

$
44.07

Vested and deferred at June 30, 2022

20,050

$
29.23

Compensation expense related to deferred restricted stock for the three months ended June 30, 2021 and 2022 was $42 and $42, respectively, and for the nine months ended June 30, 2021 and 2022 was $146 and $126, respectively. The remaining unrecognized compensation expense related to deferred restricted stock at June 30, 2022 was $70, to be recognized over a weighted average period of 0.42 years. During the first ~~nine~~six months of fiscal ~~2022,~~2023, 25,226 performance share awards vested which resulted in the issuance of 12,429 shares of stock to certain employees. The Company repurchased ~~1,151~~5,474 shares of stock from employees at an average purchase price of ~~$41.78~~$52.41 to satisfy required withholding taxes upon release of ~~deferred restricted stock-based compensation.~~

~~Performance Shares~~

~~The following table summarizes the activity under the 2016 and 2020 Incentive Compensation Plans with respect to~~ performance ~~shares for the nine months ended June 30, 2022.~~

Weighted

Average Fair

Number of

Value At

Shares

Grant Date

Unvested at September 30, 2021

87,193

$
37.24

Granted

21,520

$
61.04

Vested

(24,121)

$
43.42

Forfeited / Canceled

(8,172)

$
42.97

Unvested at June 30, 2022

76,420

$
41.37

share awards. Compensation expense related to the performance shares for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~2022~~2023 was ~~$287~~$224 and ~~$284,~~$365, respectively and for the ~~nine~~six months ended ~~June 30, 2021~~March 31, 2022 and ~~2022~~2023 was ~~$796~~$453 and ~~$737,~~$606, respectively. The remaining unrecognized compensation expense related to performance shares at ~~June 30, 2022~~March 31, 2023 was ~~$1,527,~~$1,993 to be recognized over a weighted average period of ~~1.34~~1.61 years.

Stock Options

The Company has elected to use the Black-Scholes option pricing model to estimate fair value, which incorporates various assumptions including volatility, expected life, risk-free interest rates and dividend yields. The volatility is based on historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected term of the stock option granted. The Company uses historical volatility because management believes such volatility is representative of prospective trends. The expected term of an award is based on historical exercise data. The risk-free interest rate assumption is based upon observed interest rates appropriate for the expected term of the awards. The dividend yield assumption is based on the Company’s history and expectations regarding dividend payouts at the time of the grant. The following assumptions were used for grants during fiscal year ~~2022:~~2023:


	Fair		Dividend		Risk-free		Expected		Expected		Fair		Dividend		Risk-free		Expected		Expected
Grant Date	Value		Yield		Interest Rate		Volatility		Life		Value		Yield		Interest Rate		Volatility		Life
November 23, 2021	$	15.02	2.00	%	1.22	%	45	%	5	years
February 7, 2023											$	22.70	1.65	%	3.81	%	51	%	5	years
November 22, 2022											$	20.52	1.80	%	3.97	%	51	%	5	years

The stock-based employee compensation expense for stock options for the three months ended ~~June 30, 2021~~March 31, 2022 and ~~2022~~2023 was ~~$301~~$245 and ~~$231,~~$186, respectively and for the ~~nine~~six months ended ~~June 30, 2021~~March 31, 2022 and ~~2022~~2023 was ~~$882~~$537 and ~~$768,~~$351, respectively. The remaining unrecognized compensation expense at ~~June 30, 2022~~March 31, 2023 was ~~$886,~~$971, to be recognized over a weighted average vesting period of ~~1.23~~1.57 years.

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The following table summarizes the activity under the 2007, 2016 and 2020 Incentive Compensation Plans with respect to stock options for the ~~nine~~six months ended ~~June 30, 2022~~March 31, 2023 and provides information regarding outstanding stock options:


						Weighted							Weighted
		Aggregate		Weighted		Average			Aggregate		Weighted		Average
		Intrinsic		Average		Remaining			Intrinsic		Average		Remaining
	Number of	Value		Exercise		Contractual		Number of	Value		Exercise		Contractual
	Shares	(000s)		Prices		Life		Shares	(000s)		Prices		Life
Outstanding at September 30, 2021	702,576			$	34.68
Outstanding at September 30, 2022								697,220			$	34.75
Granted	42,080			$	44.07			32,235			$	49.01
Exercised	(9,558)				36.35			(218,576)			$	37.90
Forfeited/Canceled	(22,478)			$	42.32
Outstanding at June 30, 2022	712,620	$	1,596	$	34.97	6.33	yrs.
Surrendered								(13,081)			$	47.96
Outstanding at March 31, 2023								497,798	$	8,045	$	33.94	6.75	yrs.
Vested or expected to vest	647,629	$	1,438	$	34.97	4.13	yrs.	478,599	$	7,684	$	34.04	6.69	yrs.
Exercisable at June 30, 2022	549,696	$	640	$	36.33	5.70	yrs.
Exercisable at March 31, 2023								399,672	$	6,739	$	33.23	6.30	yrs.

Note 12. Dividend

In the first ~~second~~ and ~~third~~second quarters of fiscal ~~2022,~~2023, the Company declared and paid quarterly cash dividends of $0.22 per outstanding share of the Company’s common stock. The first quarter dividend was paid on December ~~15, 2021~~19, 2022 to stockholders of record at the close of business on December ~~1, 2021,~~5, 2022 and the second quarter dividend was paid on March 15, ~~2022~~2023 to stockholders of record at the close of business on March 1, ~~2022 and the third quarter dividend was paid on June 15, 2022 to stockholders of record at the close of business on June 1, 2022.~~2023. The dividend cash pay-outs were ~~$2,811, $2,776~~$2,796 and ~~$2,742~~$2,807 for the first ~~second~~ and ~~third~~second quarters of fiscal ~~2022, respectively.~~2023.

On ~~July 28, 2022,~~May 4, 2023, the Company announced that the Board of Directors declared a regular quarterly cash dividend of $0.22 per outstanding share of the Company’s common stock. The dividend is payable ~~September~~June 15, ~~2022~~2023 to stockholders of record at the close of business on ~~September~~June 1, ~~2022.~~2023.

Note 13. Fair Value Measurements

The fair value hierarchy has three levels based on the inputs used to determine fair value.

●

Level 1 — Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

●~~Level 1 — Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;~~13

●Table of ContentsLevel 2 — Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and

●

Level 2 — Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly; and

●

●Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

When available, the Company uses unadjusted quoted market prices to measure fair value. If quoted market prices are not available, fair value is based upon internally-developed models that use, where possible, current market-based or independently-sourced market parameters such as interest rates and currency rates. Items valued using internally-generated models are classified according to the lowest level input or value driver that is significant to the valuation. The valuation model used depends on the specific asset or liability being valued.

Fixed income securities are held as individual bonds and are valued as either level 1 assets as they are quoted in active markets or level 2 assets. U.S and International equities, and Other Investments held in the Company’s pension plan are held as individual bonds or in mutual funds and common / collective funds which are valued using net asset value (NAV) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. These investments are not classified in the fair value hierarchy in accordance with guidance included in ASU 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent).

~~Note 14. Changes in Accumulated Other Comprehensive Income (Loss) by Component~~

Comprehensive income (loss) includes changes in equity that result from transactions and economic events from non-owner sources. Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss) items, including pension, post-retirement and foreign currency translation adjustments, primarily caused by the strengthening or weakening of the U.S. dollar against the British pound sterling, net of tax when applicable.

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Note 14. Changes in Accumulated Other Comprehensive Income (Loss) by Component

Accumulated Other Comprehensive Income (Loss)


	Three Months Ended June 30, 2021								Three Months Ended March 31, 2022
	Pension		Postretirement		Foreign				Pension		Postretirement		Foreign
	Plan		Plan		Exchange		Total		Plan		Plan		Exchange		Total
Accumulated other comprehensive income (loss) as of March 31, 2021	$	(62,338)	$	613	$	(5,239)	$	(66,964)
Accumulated other comprehensive income (loss) as of December 31, 2021									$	(14,745)	$	8,971	$	(5,998)	$	(11,772)
Other comprehensive income (loss) before reclassifications		—		—		827		827		—		—		(1,429)		(1,429)
Amounts reclassified from accumulated other comprehensive income (loss)
Amortization of Pension and Postretirement Plan items ⁽¹⁾		51		—		—		51		52		—		—		52
Actuarial losses ⁽¹⁾		1,940		—		—		1,940		9		(60)		—		(51)
Tax benefit		(463)		—		—		(463)		(16)		14		—		(2)
Net current-period other comprehensive income (loss)		1,528		—		827		2,355		45		(46)		(1,429)		(1,430)
Accumulated other comprehensive income (loss) as of June 30, 2021	$	(60,810)	$	613	$	(4,412)	$	(64,609)
Accumulated other comprehensive income (loss) as of March 31, 2022									$	(14,700)	$	8,925	$	(7,427)	$	(13,202)

	Three Months Ended June 30, 2022								Three Months Ended March 31, 2023
	Pension		Postretirement		Foreign				Pension		Postretirement		Foreign
	Plan		Plan		Exchange		Total		Plan		Plan		Exchange		Total
Accumulated other comprehensive income (loss) as of March 31, 2022	$	(14,700)	$	8,925	$	(7,427)	$	(13,202)
Accumulated other comprehensive income (loss) as of December 31, 2022									$	(17,121)	$	24,020	$	(12,580)	$	(5,681)
Other comprehensive income (loss) before reclassifications		—		—		(5,169)		(5,169)		—		—		1,935		1,935
Amounts reclassified from accumulated other comprehensive income (loss)
Amortization of Pension and Postretirement Plan items ⁽¹⁾		51		—		—		51		52		—		—		52
Actuarial losses ⁽¹⁾		8		(60)		—		(52)		7		(569)		—		(562)
Tax benefit		(12)		13		—		1		(13)		130		—		117
Net current-period other comprehensive income (loss)		47		(47)		(5,169)		(5,169)		46		(439)		1,935		1,542
Accumulated other comprehensive income (loss) as of June 30, 2022	$	(14,653)	$	8,878	$	(12,596)	$	(18,371)

	Nine Months Ended June 30, 2021
	Pension		Postretirement		Foreign
	Plan		Plan		Exchange		Total
Accumulated other comprehensive income (loss) as of September 30, 2020	$	(65,393)	$	613	$	(9,821)	$	(74,601)
Other comprehensive income (loss) before reclassifications		—		—		5,409		5,409
Amounts reclassified from accumulated other comprehensive income (loss)
Amortization of Pension and Postretirement Plan items ⁽¹⁾		154		—		—		154
Actuarial losses ⁽¹⁾		5,819		—		—		5,819
Tax provision (benefit)		(1,390)		—		—		(1,390)
Net current-period other comprehensive income (loss)		4,583		—		5,409		9,992
Accumulated other comprehensive income (loss) as of June 30, 2021	$	(60,810)	$	613	$	(4,412)	$	(64,609)
Accumulated other comprehensive income (loss) as of March 31, 2023									$	(17,075)	$	23,581	$	(10,645)	$	(4,139)

	Nine Months Ended June 30, 2022								Six Months Ended March 31, 2022
	Pension		Postretirement		Foreign				Pension		Postretirement		Foreign
	Plan		Plan		Exchange		Total		Plan		Plan		Exchange		Total
Accumulated other comprehensive income (loss) as of September 30, 2021	$	(14,791)	$	9,017	$	(6,567)	$	(12,341)	$	(14,791)	$	9,017	$	(6,567)	$	(12,341)
Other comprehensive income (loss) before reclassifications		—		—		(6,029)		(6,029)		—		—		(860)		(860)
Amounts reclassified from accumulated other comprehensive income (loss)
Amortization of Pension and Postretirement Plan items ⁽¹⁾		154		—		—		154		103		—		—		103
Actuarial losses ⁽¹⁾		25		(180)		—		(155)		17		(120)		—		(103)
Tax provision (benefit)		(41)		41		—		—		(29)		28		—		(1)
Net current-period other comprehensive income (loss)		138		(139)		(6,029)		(6,030)		91		(92)		(860)		(861)
Accumulated other comprehensive income (loss) as of June 30, 2022	$	(14,653)	$	8,878	$	(12,596)	$	(18,371)
Accumulated other comprehensive income (loss) as of March 31, 2022									$	(14,700)	$	8,925	$	(7,427)	$	(13,202)

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	Six Months Ended March 31, 2023
	Pension		Postretirement		Foreign
	Plan		Plan		Exchange		Total
Accumulated other comprehensive income (loss) as of September 30, 2022	$	(17,165)	$	24,457	$	(18,384)	$	(11,092)
Other comprehensive income (loss) before reclassifications		—		—		7,739		7,739
Amounts reclassified from accumulated other comprehensive income (loss)
Amortization of Pension and Postretirement Plan items ⁽¹⁾		103		—		—		103
Actuarial losses ⁽¹⁾		14		(1,139)		—		(1,125)
Tax provision (benefit)		(27)		263		—		236
Net current-period other comprehensive income (loss)		90		(876)		7,739		6,953
Accumulated other comprehensive income (loss) as of March 31, 2022	$	(17,075)	$	23,581	$	(10,645)	$	(4,139)

(1)

These accumulated other comprehensive income components are included in the computation of net periodic pension cost.

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Note 15. Long-term Obligations

The following table sets forth the components of the Company’s Long-term obligations.


	September 30,		June 30,		September 30,		March 31,
	2021		2022		2022		2023
Finance lease obligations	$	7,613	$	7,444	$	7,384	$	7,255
Environmental post-closure monitoring and maintenance activities		566		566		407		407
Long-term disability		231		215		210		200
Deferred dividends		210		152		199		210
Less amounts due within one year		(319)		(347)		(352)		(371)
Long-term obligations (less current portion)	$	8,301	$	8,030	$	7,848	$	7,701

Note 16. Debt

U.S. revolving credit facility

As of March 31, 2023, the amounts borrowed by the Company under the Credit Agreement totaled $108.0 million which is classified as long-term on the Consolidated Balance Sheet. With the amendment executed on October 7, 2022, the Credit Agreement provides for revolving loans in the maximum amount of $160.0 million, subject to a borrowing base and certain reserves. The Credit Agreement has a remaining accordion which permits an increase in the maximum revolving loan amount from $160.0 million up to an aggregate amount of $170.0 million at the request of the borrower if certain conditions are met. Borrowings under the Credit Agreement bear interest, at the Company’s option, at either JPMorgan’s “prime rate”, plus 1.25% - 1.75% per annum, or the adjusted SOFR rate (SOFR plus 0.10%) determined by the lender, plus 2.25% - 2.75% per annum (with a SOFR floor of 0.5%).

The Company must pay monthly, in arrears, a commitment fee of 0.425% per annum on the unused amount of the U.S. revolving credit facility total commitment. For letters of credit, the Company must pay a fronting fee of 0.125% per annum as well as customary fees for issuance, amendments and processing.

The Company is subject to certain covenants as to fixed charge coverage ratios and other customary covenants, including covenants restricting the incurrence of indebtedness, the granting of liens and the sale of assets. The covenant pertaining to fixed charge coverage ratios is only effective in the event the amount of excess availability under the revolver is less than the greater of (i) 12.5% of the maximum credit revolving loan amount and (ii) $12.5 million. The Company is permitted to pay dividends and repurchase common stock if certain financial metrics are met. The Company may pay quarterly cash dividends up to $3.5 million per fiscal quarter so long as the Company is not in default under the Credit Documents. As of March 31, 2023, the Company was in compliance with the covenants

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of the Credit Agreement. To the extent that we are in default under the Credit Agreement, the Company’s liquidity could be reduced due to potential restrictions on borrowings available to the Company.

Borrowings under the Credit Agreement are collateralized by a pledge of substantially all of the U.S. assets of the Company, including the equity interests in its U.S. subsidiaries, but excluding the four-high Steckel rolling mill and related assets, which are pledged to Titanium Metals Corporation (“TIMET”) to secure the performance of the Company’s obligations under a Conversion Services Agreement with TIMET (see discussion of TIMET at Note 8). Borrowings under the Credit Agreement are also secured by a pledge of a 100% equity interest in each of the Company’s direct foreign subsidiaries.

Note ~~16.~~17. Foreign Currency Forward Contracts

The Company enters into foreign currency forward contracts to reduce income statement volatility resulting from foreign currency denominated transactions. The Company has not designated the contracts as hedges, therefore, changes in fair value are recognized in earnings. All of these contracts are designed to be settled within the same fiscal quarter they are entered into and, accordingly, as of ~~June 30, 2022,~~March 31, 2023, there were no contracts that remain unsettled. As a result, there was no impact to the balance sheet from those contracts as of September 30, ~~2021~~2022 or ~~June 30, 2022.~~March 31, 2023. Foreign exchange contract gains and losses are recorded within selling, general and administrative expenses on the Consolidated Statements of Operations along with foreign currency transactional gains and losses as follows.

Three Months Ended June 30,

Nine Months Ended June 30,


2021

2022

2021

2022

Foreign currency transactional gain (loss)

$
14

$
1,994

$
(528)

$
2,284

Foreign exchange forward contract gain (loss)

$
(176)

$
(2,183)

$
(3)

$
(3,642)

Net gain (loss) included in selling, general and administrative expense

$
(162)

$
(189)

$
(531)

$
(1,358)



	Three Months Ended March 31,				Six Months Ended March 31,
	2022		2023		2022		2023
Foreign currency transactional gain (loss)	$	510	$	(478)	$	290	$	(2,329)
Foreign exchange forward contract gain (loss)	$	(1,119)	$	113	$	(1,459)	$	1,986
Net gain (loss) included in selling, general and administrative expense	$	(609)	$	(365)	$	(1,169)	$	(343)

●

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

References to years or portions of years in Management’s Discussion and Analysis of Financial Condition and Results of Operations refer to the Company’s fiscal years ended September 30, unless otherwise indicated.

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. All statements other than statements of historical fact, including statements regarding market and industry prospects and future results of operations or financial position, made in this Form 10-Q are forward-looking. In many cases, you can identify forward-looking statements by terminology, such as “may”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. The forward-looking information may include, among other information, statements concerning the Company’s outlook for fiscal ~~2022~~2023 and beyond, overall volume and pricing trends, cost reduction strategies and their anticipated impact on our results, capital expenditures, dividends, capital allocation strategies and their expected results, operations and demand for our products and operations, dividends and the impact of COVID-19 on the economy and our business, including the measures taken by governmental authorities to address it, which may precipitate or exacerbate other risks and/or uncertainties.products. There may also be other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of various factors, many of which are beyond the Company’s control.

The Company has based these forward-looking statements on its current expectations and projections about future ~~events, including our expectations of the impact of the COVID-19 pandemic.~~ events. Although the Company believes that the assumptions on which the forward-looking statements contained herein are based are reasonable, any of those assumptions could prove to be inaccurate. As a result, the forward-looking statements based upon those assumptions also could be incorrect. Risks and uncertainties may affect the accuracy of forward-looking statements. Some, but not all, of these risks are described in Item 1A. of Part 1 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021.~~2022.

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Business Overview

Haynes International, Inc. (“Haynes”, “the Company”, “we”, “our” or ~~“the Company”~~“us”) is one of the world’s largest developers, producers, ~~of high-performance nickel~~ and ~~cobalt based alloys in sheet, coil and plate forms. The Company is focused on developing, manufacturing, marketing and distributing~~distributors of technologically advanced high-performance ~~alloys,~~nickel- and cobalt-based alloys. The Company’s products, which are sold primarily ininto the aerospace, chemical processing and industrial gas turbine ~~industries. The Company’s products~~industries, consist of high-temperature resistant alloys,

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or ~~HTA~~“HTA” products, and corrosion-resistant alloys, or ~~CRA~~“CRA” products. HTA products are used by manufacturers of equipment that is subjected to extremely high temperatures, such as jet engines for the aerospace market, gas turbine engines used for power generation and industrial heating ~~and heat treatment~~ equipment. CRA products are used in applications that require resistance to very corrosive media found in chemical processing, power plant emissions control and ~~hazardous~~ waste treatment. ~~Management believes~~ Haynes ~~is one of the principal producers of~~ high-performance alloy ~~flat products~~sales in sheet, coil and plate forms, ~~and sales of these forms,~~ in the aggregate, represented approximately ~~60%~~62% of net product revenues in fiscal ~~2021.~~2022. The Company also produces its products as seamless and welded tubulars, which represented approximately ~~14%~~13% of fiscal ~~2021~~2022 net product ~~revenue~~revenues and in wire form, which represented approximately ~~10%~~7% of fiscal ~~2021~~2022 net product ~~revenue. The Company also produces its products~~revenues, and in slab, bar and billet ~~forms and sales of these forms~~form, which, in the aggregate, represented approximately ~~16%~~18% of fiscal 2022 net product ~~revenue in fiscal 2021.~~

revenues.

The Company has manufacturing facilities in Kokomo, Indiana; Arcadia, Louisiana; and Mountain Home, North Carolina. The Kokomo facility specializes in flat products, the Arcadia facility specializes in tubular products, and the Mountain Home facility specializes in wire products. The Company’s products are sold primarily through its direct sales organization, which includes 11 service and/or sales centers in the United States, Europe and Asia. All of these centers are ~~Company operated.~~

~~Raw Material Sourcing and Availability~~

Recent geopolitical events with the Russian invasion of Ukraine have prompted economic sanctions on Russia. Prior to the war in Ukraine, the Company sourced approximately 95% of its nickel requirements from Canada with the remaining 5% from Russia. In reaction to the Russian invasion into the Ukraine, the Company has ceased all future purchases of nickel from Russia as well as other

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~~raw materials such as chrome. At this time, the Company believes it has secured sufficient supply of raw materials from sources outside of Russia to meet its nickel requirements.~~

~~COVID-19 Pandemic~~

~~COVID-19 related disruptions~~ negatively impacted the Company’s financial and operating results in the second half of fiscal 2020 and the first half of fiscal 2021. The Company returned to profitability in the third quarter of fiscal 2021 and has continued to expand profitability in the fourth quarter of fiscal 2021 and the first nine months of fiscal 2022. The Company expects continued increase in volume and profitability primarily driven by the expected continued recovery of the aerospace market. The aerospace supply chain in particular was negatively impacted by the pandemic. Based upon published projections of aircraft engine builds, the Company currently expects monthly aerospace revenues to return to pre-pandemic levels by the end of fiscal 2022.Company-operated.

Dividends Paid and Declared

In the first ~~second~~ and ~~third~~second quarters of fiscal ~~2022,~~2023, the Company declared and paid a regular quarterly cash dividend of $0.22 per outstanding share of the Company’s common stock. The first quarter dividend was paid on December ~~15, 2021~~19, 2022 to stockholders of record at the close of business on December ~~1, 2021,~~5, 2022 and the second quarter dividend was paid on March 15, ~~2022~~2023 to stockholders of record at the close of business on March 1, ~~2022 and the third quarter dividend was paid on June 15, 2022 to stockholders of record at the close of business on June 1, 2022.~~2023. The total dividend cash pay-outs in ~~each of~~both the first ~~second~~ and ~~third~~second quarters were approximately $2.8 million based on the number of shares outstanding.

Capital Spending

During the first ~~nine~~six months of fiscal ~~2022,~~2023, capital investment was ~~$11.5~~$7.3 million, and total planned capital expenditures for fiscal ~~2022~~2023 are expected to be ~~approximately $15.0~~between $18.0 million ~~which is lower than the previous estimate of $17.7 million due to equipment supply constraints. The Company does not expect any impact on operations as a result of these constraints.~~and $22.0 million.

~~Pension and Postretirement Plans~~

The Company’s U.S. pension glide path strategy, adopted in fiscal 2021, is in place with changes to the asset allocation including a customized liability-driven investing strategy, which is intended to reduce interest rate and equity risks. The Company expects significantly reduced volatility going forward related to the pension funding percentage (the U.S. pension plan is currently approximately 92% funded) and reduced pension and postretirement expense ($6.0 million less in fiscal year 2021 vs. 2022). As of the end of the third quarter of fiscal 2022, the U.S. net pension liability was approximately $20.7 million, a reduction of $85.1 million below the $105.8 million on the balance sheet at the beginning of fiscal 2021. Inclusive of the retiree healthcare liability and U.K. pension asset, the net liability decrease is $98.1 million since the beginning of fiscal year 2021.

Volume and Pricing

~~Demand continues to improve and volumes continue to increase with 4.5 million pounds~~Volume shipped in the ~~third~~second quarter of fiscal ~~2022, representing a sequential increase of 4.7% and a year-over-year increase of 21.7%. Aerospace volumes were 2.1~~2023 was 4.7 million pounds which is 7.6% higher than the same quarter in the ~~quarter, representing~~prior fiscal year. Aerospace volume increased 9.6% along with a ~~sequential~~14.8% increase ~~of 18.5% and~~in aerospace average selling price, resulting in a ~~year-over-year~~25.9% or $13.7 million aerospace revenue increase ~~of 58.2%. This quarter’s aerospace~~compared to the prior year. The volume increase was 83% of the pre-pandemic levels of the average fiscal 2019 volume (aerospace net sales were 95% of pre-pandemic 2019 average). The Company continues to expect to return to fiscal 2019 monthly run-rate shipment levelsprimarily driven by the ~~end of fiscal 2022. Chemical processing volume increased sequentially 1.4% and year-over-year 8.4% driven by continued recovery from the pandemic and higher capital spending~~single-aisle commercial aircraft recovery. Volumes in the chemical ~~sector.~~processing industry (CPI) decreased by 2.9%. However, CPI average selling price increased 28.9%, which resulted in a 25.2% or $5.8 million CPI revenue increase compared to the prior year. Industrial gas turbine ~~shipments decreased sequentially (23.0)%, after last quarter’s sequential~~(IGT) volumes were up 1.0% along with a 29.5% increase ~~of 77%~~in the IGT average selling price, which resulted in a 30.8% or $7.6 million IGT revenue increase compared to the prior year. Other markets revenue increased 79.9%, and ~~a (5.0)% decrease year-over-year, due to timing of certain shipments. Other markets sequentially~~other revenue increased ~~75.0%, due to lower shipments into the flue-gas desulphurization market in the previous quarter, and year-over-year~~ by ~~2.9%~~12.7%. ~~Overall, volumes are expected to continue to increase with the extremely high level of incoming orders.~~

The Company has an ongoing strategy of increasing margins. This is achieved by reducing processing costs as well as increasing pricing ~~and margins, recognizing~~for the high-value, differentiated products and services it offers. The Company implemented multiple price increases for contract and non-contract business as market conditions improved and in response to higher inflation. Customer long-term agreements typically have adjustors for specific raw material prices and for changes in the producer price index to help cover general inflationary items. The product average selling price per pound in the ~~third~~

~~Table of Contents~~

second quarter of fiscal ~~2022~~2023 was ~~$27.23,~~$31.11, which ~~increased 7.1% sequentially and 23.1%~~is a 22.3% increase year-over-year, primarily due to the noted price increases and raw material ~~adjustors as well as a higher value product mix.~~ adjustors.

Set forth below are selected data relating to the Company’s net revenues, gross profit, backlog, the 30-day average nickel price per pound as reported by the London Metals Exchange and a breakdown of net revenues, shipments and average selling prices to the markets served by the Company for the periods shown. The data should be read in conjunction with the consolidated financial statements and related notes thereto and the remainder of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Form 10-Q.

Table of Contents

Net Revenue and Gross Profit Margin Performance


	Comparison by Quarter of Net Revenues, Gross Profit Margin and																					Comparison by Quarter of Net Revenues, Gross Profit Margin and
	Gross Profit Margin Percentage for Fiscal 2021 and YTD 2022																					Gross Profit Margin Percentage for Fiscal 2022 and YTD 2023
	Quarter Ended
	December 31,			March 31,			June 30,			September 30,			December 31,			March 31,			June 30,			December 31,			March 31,			June 30,			September 30,			December 31,			March 31,
(dollars in thousands)	2020			2021			2021			2021			2021			2022			2022			2021			2022			2022			2022			2022			2023
Net Revenues	$	72,177		$	82,063		$	88,143		$	95,278		$	99,430		$	117,056		$	130,165		$	99,430		$	117,056		$	130,165		$	143,810		$	132,673		$	152,786
Gross Profit Margin	$	987		$	8,385		$	13,658		$	16,700		$	17,777		$	23,413		$	33,222		$	17,777		$	23,413		$	33,222		$	31,921		$	23,038		$	30,878
Gross Profit Margin %		1.4	%		10.2	%		15.5	%		17.5	%		17.9	%		20.0	%		25.5	%		17.9	%		20.0	%		25.5	%		22.2	%		17.4	%		20.2	%

~~This quarter showed~~The Company has made a significant ~~profitability leverage with increasing~~strategic effort to improve gross margins over the past few years. As a result of this strategy, the Company reduced the volume breakeven point by over 25%. The Company previously struggled to be profitable at roughly 5.0 million pounds. With the current product mix, the Company can generate profits at lower volumes ~~to 4.5 million pounds shipped, showing continued traction and momentum~~ as volumes recover along with rising raw material tailwinds. Gross margins continued to increase with a 25.5% gross margin this quarter compared to 20.0% last quarter (a 550 basis point improvement) and 15.5%first demonstrated in the third quarter of fiscal 2021, producing a positive net income at only 3.7 million pounds shipped.

Gross profit margin was 20.2% in the second quarter of fiscal 2023 compared to 20.0% in the same period last year ~~(a 1,000 basis point improvement)~~and 17.4% in first quarter of fiscal 2023. Volatility of raw materials, specifically nickel and cobalt, have impacted gross margins. During fiscal 2022 this impact was favorable due to rising raw material prices which increased gross margins; however, in the first and second quarter of fiscal 2023 this impact was unfavorable due to decreasing raw material prices which lowered gross margins. The estimated impact from raw material volatility in the first quarter of fiscal 2023 was a headwind of $5.6 million compressing gross margin percentage by approximately 4.2%. ~~The Company has implemented focus initiatives designed to increase pricing and reduce costs. These initiatives, combined with improved volumes compared~~Similarly, the estimated impact from raw material volatility in the second quarter of fiscal 2023 was a headwind of $1.7 million that compressed gross margin percentage by approximately 1.1%. This compares to the ~~same~~previous year’s estimated impact in the second quarter ~~last year, has driven growth in~~of fiscal 2022 that was a favorable tailwind of approximately $2.6 million which increased gross margins and profitability at a much lower volume breakeven point. The Company previously needed to sell more than five million pounds to be profitable. Recent quarters demonstrate the Company’s successful reduction of its breakeven pointmargin percentage by ~~roughly 25% with the current mix.~~approximately 2.2%.

Backlog


	Quarter Ended														Quarter Ended
	December 31,		March 31,		June 30,		September 30,		December 31,		March 31,		June 30,		December 31,		March 31,		June 30,		September 30,		December 31,		March 31,
	2020		2021		2021		2021		2021		2022		2022		2021		2022		2022		2022		2022		2023
Backlog⁽¹⁾
Dollars (in thousands)	$	145,143	$	140,892	$	150,915	$	175,299	$	217,477	$	280,687	$	338,178	$	217,477	$	280,687	$	338,178	$	373,736	$	408,181	$	446,749
Pounds (in thousands)		5,607		5,622		6,642		7,084		8,931		10,654		12,125		8,931		10,654		12,125		12,798		13,640		14,177
Average selling price per pound	$	25.89	$	25.06	$	22.72	$	24.75	$	24.35	$	26.35	$	27.89	$	24.35	$	26.35	$	27.89	$	29.20	$	29.93	$	31.51
Average nickel price per pound
London Metals Exchange⁽²⁾	$	7.62	$	7.47	$	8.14	$	8.80	$	9.10	$	15.47	$	11.71	$	9.10	$	15.47	$	11.71	$	10.28	$	13.08	$	10.56

⁽¹⁾

Approximately 50% of the orders in the backlog include prices that are subject to adjustment based on changes in raw material costs. Historically, approximately 70% of the backlog orders have shipped within six months and approximately 90% have shipped within 12 months. The backlog figures do not reflect that portion of the business conducted at service and sales centers on a spot or “just-in-time” basis.

⁽²⁾	Represents the average price for a cash buyer as reported by the London Metals Exchange for the 30 days ending on the last day of the period presented.

The Company experienced continued high levels of order entry over the past quarter across each of its core markets totaling $181.5 million, led by aerospace, which had a $100.1 million order entry and a 1.6 book-to-bill ratio (customer orders divided by net revenues). Backlog wasquarter. The Company established a record ~~$338.2~~backlog of $446.7 million ~~at June 30, 2022,~~as of March 31, 2023, an increase of ~~$57.5~~$38.6 million, or ~~20.5%~~9.4% from the first quarter of fiscal 2023 and an increase of $166.1 million, or 59.2%, from ~~$280.7 million at March 31, 2022.~~the same period of last year. In addition, the backlog has increased for 23 consecutive months. Backlog pounds ~~at June 30, 2022~~ increased ~~13.8%~~3.9% during the ~~third~~second quarter to approximately ~~12.1~~14.1 million pounds ~~which is~~and has increased by 33.1% from the ~~highest level~~second quarter of ~~backlog pounds~~fiscal 2022. The growth was predominately in the ~~Company’s history. The average selling price of products in the Company’s backlog increased to $27.89 per pound at June 30, 2022 from $26.35 per pound at March 30, 2022.~~aerospace and industrial gas turbine markets.

1918

Table of Contents

Quarterly Market Information


	Quarter Ended														Quarter Ended
	December 31,		March 31,		June 30,		September 30,		December 31,		March 31,		June 30,		December 31,		March 31,		June 30,		September 30,		December 31,		March 31,
	2020		2021		2021		2021		2021		2022		2022		2021		2022		2022		2022		2022		2023
Net revenues (in thousands)
Aerospace	$	24,555	$	30,601	$	33,950	$	38,966	$	48,455	$	52,918	$	60,981	$	48,455	$	52,918	$	60,981	$	67,647	$	64,518	$	66,612
Chemical processing		15,256		15,068		17,010		15,813		17,450		22,850		24,180		17,450		22,850		24,180		27,185		22,715		28,605
Industrial gas turbines		13,967		16,436		17,835		18,534		14,598		24,788		23,991		14,598		24,788		23,991		28,501		26,025		32,420
Other markets		12,779		15,546		13,709		16,056		14,487		9,755		14,518		14,487		9,755		14,518		14,946		14,722		17,550
Total product revenue		66,557		77,651		82,504		89,369		94,990		110,311		123,670		94,990		110,311		123,670		138,279		127,980		145,187
Other revenue		5,620		4,412		5,639		5,909		4,440		6,745		6,495		4,440		6,745		6,495		5,531		4,693		7,599
Net revenues	$	72,177	$	82,063	$	88,143	$	95,278	$	99,430	$	117,056	$	130,165	$	99,430	$	117,056	$	130,165	$	143,810	$	132,673	$	152,786

Shipments by markets (in thousands of pounds)
Aerospace		904		1,177		1,354		1,528		1,864		1,808		2,142		1,864		1,808		2,142		2,402		2,187		1,982
Chemical processing		601		682		814		722		794		870		882		794		870		882		921		786		845
Industrial gas turbines		798		1,064		1,147		1,178		799		1,416		1,090		799		1,416		1,090		1,242		1,289		1,430
Other markets		489		599		415		538		420		244		427		420		244		427		318		290		410
Total shipments		2,792		3,522		3,730		3,966		3,877		4,338		4,541		3,877		4,338		4,541		4,883		4,552		4,667

Average selling price per pound
Aerospace	$	27.16	$	26.00	$	25.07	$	25.50	$	26.00	$	29.27	$	28.47	$	26.00	$	29.27	$	28.47	$	28.16	$	29.50	$	33.61
Chemical processing		25.38		22.09		20.90		21.90		21.98		26.26		27.41		21.98		26.26		27.41		29.52		28.90		33.85
Industrial gas turbines		17.50		15.45		15.55		15.73		18.27		17.51		22.01		18.27		17.51		22.01		22.95		20.19		22.67
Other markets		26.13		25.95		33.03		29.84		34.49		39.98		34.00		34.49		39.98		34.00		47.00		50.77		42.80
Total product (product only; excluding other revenue)		23.84		22.05		22.12		22.53		24.50		25.43		27.23		24.50		25.43		27.23		28.32		28.12		31.11
Total average selling price (including other revenue)	$	25.85	$	23.30	$	23.63	$	24.02	$	25.65	$	26.98	$	28.66	$	25.65	$	26.98	$	28.66	$	29.45	$	29.15	$	32.74

2019

Table of Contents

Results of Operations for the Three Months Ended ~~June 30, 2022~~March 31, 2023 Compared to the Three Months Ended ~~June 30, 2021~~March 31, 2022

The following table sets forth certain financial information as a percentage of net revenues for the periods indicated and compares such information between periods.


	Three Months Ended June 30,								Change				Three Months Ended March 31,								Change
	2021				2022				Amount		%		2022				2023				Amount		%
Net revenues	$	88,143	100.0	%	$	130,165	100.0	%	$	42,022	47.7	%	$	117,056	100.0	%	$	152,786	100.0	%	$	35,730	30.5	%
Cost of sales		74,485	84.5	%		96,943	74.5	%		22,458	30.2	%		93,643	80.0	%		121,908	79.8	%		28,265	30.2	%
Gross profit		13,658	15.5	%		33,222	25.5	%		19,564	143.2	%		23,413	20.0	%		30,878	20.2	%		7,465	31.9	%
Selling, general and administrative expense		11,475	13.0	%		11,847	9.1	%		372	3.2	%		11,782	10.1	%		12,702	8.3	%		920	7.8	%
Research and technical expense		831	0.9	%		957	0.7	%		126	15.2	%		944	0.8	%		1,047	0.7	%		103	10.9	%
Operating income		1,352	1.5	%		20,418	15.7	%		19,066	1,410.2	%		10,687	9.1	%		17,129	11.2	%		6,442	60.3	%
Nonoperating retirement benefit expense (income)		359	0.4	%		(1,088)	(0.8)	%		(1,447)	(403.1)	%		(1,088)	(0.9)	%		(365)	(0.2)	%		723	(66.5)	%
Interest income		(4)	(0.0)	%		(1)	(0.0)	%		3	(75.0)	%		(6)	(0.0)	%		(10)	(0.0)	%		(4)	66.7	%
Interest expense		298	0.3	%		750	0.6	%		452	151.7	%		514	0.4	%		1,865	1.2	%		1,351	262.8	%
Income before income taxes		699	0.8	%		20,757	15.9	%		20,058	2,869.5	%		11,267	9.6	%		15,639	10.2	%		4,372	38.8	%
Provision for income taxes		277	0.3	%		5,149	4.0	%		4,872	1,758.8	%		2,783	2.4	%		3,290	2.2	%		507	18.2	%
Net income	$	422	0.5	%	$	15,608	12.0	%	$	15,186	3,598.6	%	$	8,484	7.2	%	$	12,349	8.1	%	$	3,865	45.6	%

The following table includes a breakdown of net revenues, shipments and average selling prices to the markets served by the Company for the periods shown.


	Three Months Ended								Three Months Ended
	June 30,				Change				March 31,				Change
By market	2021		2022		Amount		%		2022		2023		Amount		%
Net revenues (dollars in thousands)
Aerospace	$	33,950	$	60,981	$	27,031	79.6	%	$	52,918	$	66,612	$	13,694	25.9	%
Chemical processing		17,010		24,180		7,170	42.2	%		22,850		28,605		5,755	25.2	%
Industrial gas turbine		17,835		23,991		6,156	34.5	%		24,788		32,420		7,632	30.8	%
Other markets		13,709		14,518		809	5.9	%		9,755		17,550		7,795	79.9	%
Total product revenue		82,504		123,670		41,166	49.9	%		110,311		145,187		34,876	31.6	%
Other revenue		5,639		6,495		856	15.2	%		6,745		7,599		854	12.7	%
Net revenues	$	88,143	$	130,165	$	42,022	47.7	%	$	117,056	$	152,786	$	35,730	30.5	%
Pounds by market (in thousands)
Aerospace		1,354		2,142		788	58.2	%		1,808		1,982		174	9.6	%
Chemical processing		814		882		68	8.4	%		870		845		(25)	(2.9)	%
Industrial gas turbine		1,147		1,090		(57)	(5.0)	%		1,416		1,430		14	1.0	%
Other markets		415		427		12	2.9	%		244		410		166	68.0	%
Total shipments		3,730		4,541		811	21.7	%		4,338		4,667		329	7.6	%
Average selling price per pound
Aerospace	$	25.07	$	28.47	$	3.40	13.6	%	$	29.27	$	33.61	$	4.34	14.8	%
Chemical processing		20.90		27.41		6.51	31.1	%		26.26		33.85		7.59	28.9	%
Industrial gas turbine		15.55		22.01		6.46	41.5	%		17.51		22.67		5.16	29.5	%
Other markets		33.03		34.00		0.97	2.9	%		39.98		42.80		2.82	7.1	%
Total product (excluding other revenue)		22.12		27.23		5.11	23.1	%		25.43		31.11		5.68	22.3	%
Total average selling price (including other revenue)	$	23.63	$	28.66	$	5.03	21.3	%	$	26.98	$	32.74	$	5.76	21.3	%

Net Revenues. Net revenues were ~~$130.2~~$152.8 million in the ~~third~~second quarter of fiscal ~~2022,~~2023, an increase of ~~47.7%~~30.5% from the same period of fiscal ~~2021~~2022 due to increases in volume in ~~key~~aerospace, industrial gas turbine and other markets, combined with increases in average selling price per pound in ~~all~~each of our markets. The ~~21.7%~~ increase in pounds sold is due to ~~the demand recovery and~~ strong sales in the aerospace market, ~~which increased by 58.2%,~~ as well as our other markets, compared to the ~~chemical processing market, which increased by 8.4% from the third quarter of fiscal 2021. The product average selling price was $27.23 per pound in the third~~second quarter of fiscal 2022, ~~an increase of 23.1% from~~partially offset by lower pounds sold in the ~~same period of fiscal 2021.~~chemical processing market. The increase in product average selling price per pound largely reflects ~~higher market prices of raw materials, which increased average selling price per pound by approximately $3.40 and~~ price increases and other sales factors, which increased the product average selling price per pound by approximately ~~$1.03, along with~~$4.70. It also includes a ~~higher-value~~favorable product mix, which increased product average selling price per pound by approximately ~~$0.68.~~$1.02, partially offset by slightly lower market prices of raw materials, which decreased product average selling price per pound by approximately $0.04.

2120

Table of Contents

The aerospace market has experienced increased demand as inventory throughout the aerospace supply chain continues to be replenished in response to the expected increase in engine build rates. Additionally, demand in the third quarter of fiscal 2021 was depressed by the COVID-19 pandemic, that decreased demand for air travel resulting in decreased demand for new planes and maintenance parts.builds. The increase in average selling price per pound largely reflects price increases and other pricing factors, which increased average selling price per pound by approximately $5.01, partially offset by a change in product mix, which decreased average selling price per pound by approximately $0.40 and lower market prices of raw materials, which decreased average selling price per pound by approximately $0.27.

Volume to the chemical processing market in the second quarter of fiscal 2023 was 2.9% lower than the second quarter of fiscal 2022 primarily due to lower special project shipments. The increase in average selling price per pound in the chemical processing market reflects price increases and other sales factors, which increased average selling price per pound by approximately $3.52, and a change in product mix, which increased average selling price per pound by approximately $2.99 along with higher market prices of raw materials, which increased average selling price per pound by approximately ~~$3.36 and~~$1.08 per pound.

Volume to the industrial gas turbine market was similar to the same period in fiscal 2022. The increase in average selling price per pound reflects price increases and other ~~pricing~~sales factors, which increased average selling price per pound by approximately ~~$0.97, partially offset by~~$4.84, and a ~~lower-value~~change in product mix which ~~decreased~~increased average selling price per pound by approximately ~~$0.93.~~

~~Volume to the chemical processing market was higher as industrial activity increased~~$0.31, along with economies continuing to reopen from pandemic shutdowns as well as increases in oil prices resulting in expanded capital expenditures in the sector. The increase in average selling price per pound reflects higher market prices of raw materials, which increased average selling price per pound by approximately ~~$3.26~~$0.02 per pound.

Volume to the other markets increased the second quarter of fiscal 2023 from the same period in fiscal 2022 due to increases in a broad range of smaller markets, partially offset by lower shipments into the oil and gas and flue-gas desulfurization markets. The average selling price per pound increase to other markets reflects price increases and other sales factors, which increased average selling price per pound by approximately ~~$1.69 per pound, along with a higher-value product mix,~~$5.12, partially offset by lower market prices of raw materials, which ~~increased~~decreased average selling price per pound by ~~approximately $1.56.~~

~~The decrease~~$1.53 combined with a change in volume in the industrial gas turbine market is largely attributable to the timing of some lower-valued shipments that occurred in the second quarter of fiscal 2022 which resulted in a lower volume available to ship in the third quarter of fiscal 2022. The increase in average selling price per pound reflects higher market prices of raw materials, which increased average selling price per pound by approximately $3.57 and price increases and other sales factors, which increased average selling price per pound by approximately $0.44 per pound, along with higher-value product mix which increased average selling price per pound by approximately $2.45.

The average selling price per pound increase to other markets reflects higher market prices of raw materials and other pricing factors, which increased average selling price per pound by approximately $3.43 and $1.51, respectively, partially offset by a lower-value product mix, which decreased average selling price per pound by approximately ~~$3.97.~~$0.65.

Other Revenue. The increase in other revenue was due primarily to increased sales of ~~scrap material.~~conversion services.

Cost of Sales. ~~The 10.0% decrease in cost~~Cost of sales as a percentage of revenues was primarily attributable to variable cost saving measures that enable the Company to minimize the increase in costs in periods of higher net revenues. Additionally, higher volumes sold during the quarter improved the utilization of fixed costs and eliminated the need for fixed costs to be directly expensed, as was the case in the ~~third~~second quarter of fiscal ~~2021, which had $2.0 million~~2023 was similar to the second quarter of ~~costs directly expensed to Cost of Sales.~~fiscal 2022.

Gross Profit. AsGross profit in the second quarter of fiscal 2023 increased compared to the same quarter of the prior year as a result of variable cost saving measures and a higher utilization of fixed costs driven from greater volumes shipped, which was partially offset by higher raw material prices included in cost of sales relative to the ~~above factors, gross~~impact of raw material price adjustors in selling prices. Gross profit ~~was $33.2 million for~~in the ~~third~~second quarter of fiscal 2022 ~~an increase~~benefited from lower raw material prices included in cost of ~~$19.6 million from~~sales relative to the ~~same period~~impact of ~~fiscal 2021. Gross profit as a percentage of net revenue~~raw material price adjustors in selling prices, which increased to 25.5% in the third quarter of fiscal 2022 as compared to 15.5% in the same period of fiscal 2021. The third quarter of fiscal 2021 was adversely impacted by the COVID-19 pandemic as volumes were significantly reduced. gross profit.

Selling, General and Administrative Expense. ~~Selling,~~The decrease as a percent of net revenues from 10.1% to 8.3% for selling, general and administrative expense ~~as a percentage of net revenues decreased to 9.1% for the third quarter of fiscal 2022 compared to 13.0% for the same period of fiscal 2021,~~was largely driven by higher net revenues. ~~Investments~~The higher spend in ~~consulting~~the second quarter of fiscal 2023 as compared to the second quarter of fiscal 2022 is a result of higher spending on outside costs related to information ~~system improvements as well as general inflation were the primary drivers of the increased expense~~systems in addition to a $0.3 million loss incurred in the ~~third~~second quarter of fiscal ~~2022. Additionally, the Company increased its reserves on accounts~~2023 due to an uncollectible receivable ~~which also contributed to the increase in expense.~~from one customer. This higher spend was partially offset by lower management incentive compensation costs of $0.2 million and lower exchange rate losses of $0.2 million.

Nonoperating retirement benefit expense (income). The ~~difference~~lower benefit recorded in nonoperating retirement benefit ~~expense~~ was primarily driven by ~~a favorable~~an increase in the discount rate used in the actuarial valuation of the U.S. pension plan liability as of September 30, ~~2021 caused by a higher-than-expected return on plan assets coupled with~~2022 that resulted in a higher ~~discount rate. The amortization~~interest cost component of ~~this favorable valuation is recorded as a benefit to~~ nonoperating retirement benefit expense (income). in the second quarter of fiscal 2023 when compared to the second quarter of fiscal 2022. Partially offsetting the higher interest cost was the amortization of the actuarial gains of the U.S. pension plan liability in the second quarter of fiscal 2023.

Income Taxes. The increase in income tax expense was driven primarily by a difference in income ~~(loss)~~ before income taxes of ~~$20.1~~$4.4 million. The second quarter of fiscal 2023 benefited from a discrete tax benefit of approximately $0.3 million that was related to restricted stock vestings and option exercises that occurred during the quarter.

2221

Table of Contents

Results of Operations for the ~~Nine~~Six Months Ended ~~June 30, 2022~~March 31, 2023 Compared to the ~~Nine~~Six Months Ended ~~June 30, 2021~~March 32, 2022

Nine Months Ended June 30,

Change

2021

2022

Amount

%

Net revenues

$
242,383

100.0
%
$
346,651

100.0
%
$
104,268

43.0
%
Cost of sales

219,353

90.5
%

272,239

78.5
%

52,886

24.1
%
Gross profit

23,030

9.5
%

74,412

21.5
%

51,382

223.1
%
Selling, general and administrative expense

32,465

13.4
%

34,991

10.1
%

2,526

7.8
%
Research and technical expense

2,482

1.0
%

2,806

0.8
%

324

13.1
%
Operating income (loss)

(11,917)

(4.9)
%

36,615

10.6
%

48,532

(407.3)
%
Nonoperating retirement benefit expense (income)

1,077

0.4
%

(3,264)

(0.9)
%

(4,341)

(403.1)
%
Interest income

(9)

(0.0)
%

(15)

(0.0)
%

(6)

66.7
%
Interest expense

900

0.4
%

1,564

0.5
%

664

73.8
%
Income (loss) before income taxes

(13,885)

(5.7)
%

38,330

11.1
%

52,215

(376.1)
%
Provision for (benefit from) income taxes

(2,648)

(1.1)
%

9,579

2.8
%

12,227

(461.7)
%
Net income (loss)

$
(11,237)

(4.6)
%
$
28,751

8.3
%
$
39,988

(355.9)
%

The following table sets forth certain financial information as a percentage of net revenues for the periods indicated and compares such information between periods.

Nine Months Ended

June 30,

Change


2021

2022

Amount

%

Net revenues (dollars in thousands)

Aerospace

$
89,106

$
162,354

$
73,248

82.2
%
Chemical processing

47,334

64,480

17,146

36.2
%
Industrial gas turbine

48,238

63,377

15,139

31.4
%
Other markets

42,034

38,760

(3,274)

(7.8)
%
Total product revenue

226,712

328,971

102,259

45.1
%
Other revenue

15,671

17,680

2,009

12.8
%
Net revenues

$
242,383

$
346,651

$
104,268

43.0
%
Pounds by market (in thousands)

Aerospace

3,435

5,814

2,379

69.3
%
Chemical processing

2,097

2,546

449

21.4
%
Industrial gas turbine

3,009

3,305

296

9.8
%
Other markets

1,503

1,091

(412)

(27.4)
%
Total shipments

10,044

12,756

2,712

27.0
%
Average selling price per pound

Aerospace

$
25.94

$
27.92

$
1.98

7.6
%
Chemical processing

22.57

25.33

2.76

12.2
%
Industrial gas turbine

16.03

19.18

3.15

19.7
%
Other markets

27.97

35.53

7.56

27.0
%
Total product (excluding other revenue)

22.57

25.79

3.22

14.3
%
Total average selling price (including other revenue)

$
24.13

$
27.18

$
3.05

12.6
%


	Six Months Ended March 31,								Change
	2022				2023				Amount		%
Net revenues	$	216,486	100.0	%	$	285,459	100.0	%	$	68,973	31.9	%
Cost of sales		175,296	81.0	%		231,543	81.1	%		56,247	32.1	%
Gross profit		41,190	19.0	%		53,916	18.9	%		12,726	30.9	%
Selling, general and administrative expense		23,144	10.7	%		23,654	8.3	%		510	2.2	%
Research and technical expense		1,849	0.9	%		2,020	0.7	%		171	9.2	%
Operating income		16,197	7.5	%		28,242	9.9	%		12,045	74.4	%
Nonoperating retirement benefit expense (income)		(2,176)	(1.0)	%		(731)	(0.3)	%		1,445	(66.4)	%
Interest income		(14)	(0.0)	%		(16)	(0.0)	%		(2)	14.3	%
Interest expense		814	0.4	%		3,366	1.2	%		2,552	313.5	%
Income before income taxes		17,573	8.1	%		25,623	9.0	%		8,050	45.8	%
Provision for income taxes		4,430	2.0	%		5,535	1.9	%		1,105	24.9	%
Net income	$	13,143	6.1	%	$	20,088	7.0	%	$	6,945	52.8	%

The following table includes a breakdown of net revenues, shipments and average selling prices to the markets served by the Company for the periods shown.


	Six Months Ended
	March 31,				Change
	2022		2023		Amount		%
Net revenues (dollars in thousands)
Aerospace	$	101,373	$	131,130	$	29,757	29.4	%
Chemical processing		40,300		51,320		11,020	27.3	%
Industrial gas turbine		39,386		58,445		19,059	48.4	%
Other markets		24,242		32,272		8,030	33.1	%
Total product revenue		205,301		273,167		67,866	33.1	%
Other revenue		11,185		12,292		1,107	9.9	%
Net revenues	$	216,486	$	285,459	$	68,973	31.9	%
Pounds by market (in thousands)
Aerospace		3,672		4,169		497	13.5	%
Chemical processing		1,664		1,631		(33)	(2.0)	%
Industrial gas turbine		2,215		2,719		504	22.8	%
Other markets		664		700		36	5.4	%
Total shipments		8,215		9,219		1,004	12.2	%
Average selling price per pound
Aerospace	$	27.61	$	31.45	$	3.84	13.9	%
Chemical processing		24.22		31.47		7.25	29.9	%
Industrial gas turbine		17.78		21.50		3.72	20.9	%
Other markets		36.51		46.10		9.59	26.3	%
Total product (excluding other revenue)		24.99		29.63		4.64	18.6	%
Total average selling price (including other revenue)	$	26.35	$	30.96	$	4.61	17.5	%

Net Revenues. Net revenues were ~~$346.7~~$285.5 million in the first ~~nine~~six months of fiscal ~~2022,~~2023, an increase of ~~43.0%~~31.9% from ~~$242.4~~$216.5 million in the same period of fiscal ~~2021~~2022 due primarily to volume increases in ~~key~~the aerospace, industrial gas turbine and other markets and average selling price per pound increases in ~~all~~each of our markets. The ~~27.0%~~12.2% increase in pounds sold is due to the demand recovery and strong sales in the ~~aerospace~~industrial gas turbine market, which increased by ~~69.3%~~22.8%, as well as the ~~chemical processing~~aerospace and ~~industrial gas turbine~~other markets, which increased by ~~21.4%~~13.5% and ~~9.8%~~5.4%, respectively, from the first ~~nine~~six months of fiscal ~~2021.~~2022. The product average selling price was ~~$25.79~~$29.63 per pound in the first ~~nine~~six months of fiscal ~~2022,~~2023, an increase of ~~14.3%~~18.6% in the same period of fiscal ~~2021.~~2022. The increase in product average selling price per pound largely reflects price increases and other sales factors, which increased product average selling price per pound by approximately $4.02 and higher market prices of raw materials, which increased product average selling price per pound by approximately ~~$3.31, partially offset by a lower-value~~$0.55, along with product mix, which ~~decreased~~increased product average selling price per pound by approximately ~~$0.09.~~

$0.07.

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The aerospace market has experienced increased demand as inventory throughout the aerospace supply chain continues to be replenished in response to the expected increase in engine build rates. Additionally, demand in the first nine months of fiscal 2021 was depressed by the COVID-19 pandemic, that decreased demand for air travel resulting in decreased demand for new planes and maintenance parts.builds. The increase in average selling price per pound in the aerospace market largely reflects price increases and other pricing factors, which increased average selling price per pound by approximately $4.20 and an increase in market prices of raw materials, which increased average selling price per pound by approximately $0.49, partially offset by a change in product mix, which decreased average selling price per pound by approximately $0.85.

Volume to the chemical processing market in the first six months of fiscal 2023 was 2.0% lower than the same period of fiscal 2022 primarily due to lower special project shipments. The increase in average selling price per pound in the chemical processing market reflects price increases and other sales factors, which increased average selling price per pound by approximately $2.38 and a change in product mix, which increased average selling price per pound by approximately $3.58 along with higher market prices of raw materials, which increased average selling price per pound by approximately ~~$3.15 partially offset with a lower-value product mix, which decreased average selling price~~$1.29 per ~~pound by approximately $1.17.~~

Volume to the chemical processing market was higher as industrial activity increased with economies continuing to reopen from pandemic shutdowns as well as increases in oil prices resulting in expanded capital expenditures in the sector. The increase in average selling price per pound reflects higher market prices of raw materials, which increased average selling price per pound by approximately $3.27, partially offset by a lower-value product mix, which decreased average selling price per pound by approximately $0.51.pound.

The higher volume to the industrial gas turbine market was a result of overall increased demand in the market as well as timing of deliveries to one of the Company’s larger customers. The increase in average selling price per pound in the industrial gas turbine market reflects price increases and other sales factors, which increased average selling price per pound by approximately $3.75 and higher market prices of raw materials, which increased average selling price per pound by approximately ~~$3.39,~~$0.49, partially offset by a ~~lower-value~~change in product mix, which decreased average selling price per pound by approximately ~~$0.24.~~$0.52.

~~The decrease in volume~~Volume to the other markets ~~was primarily attributable~~increased in the first six months of fiscal 2023 from the same period in fiscal 2022 due to increases in a broad range of smaller markets, partially offset by lower shipments into the oil and gas and flue-gas ~~desulphurization market which also contributed to an improved product mix.~~desulfurization markets. The average selling price per pound increase to other markets reflects ~~higher market prices of raw materials, which increased average selling~~ price ~~per pound by approximately $4.03 as well as a higher-value product mix~~increases and other ~~pricing~~sales factors, which increased average selling price per pound by approximately ~~$3.53.~~$7.79 and a change in product mix, which increased average selling price per pound by approximately $2.41, partially offset by lower market prices of raw materials, which decreased average selling price per pound by $0.61.

Other Revenue. The ~~12.8%~~ increase in other revenue was due primarily ~~due~~ to increased sales of ~~scrap material.~~conversion services.

Cost of Sales. ~~The decrease in cost~~Cost of sales as a percentage of revenues ~~was primarily attributable to variable cost saving measures that enable the Company minimize the increase~~ in ~~costs in periods of higher net revenues. Additionally, higher volumes sold during~~ the first ~~nine~~six months of fiscal ~~2022 eliminated~~2023 was similar to the ~~need for fixed costs be directly expensed, as was the case~~ first ~~nine~~six months of fiscal ~~2021, which had $10.7 million of costs directly expensed to cost of sales.~~2022.

Gross Profit. ~~As a result~~Gross profit in the six months of fiscal 2023 was adversely affected by higher raw material prices included in cost of sales relative to the ~~above factors,~~impact of raw material price adjustors in selling prices, which lowered gross profit, ~~was $74.4 million for~~while gross profit in the first ~~nine~~six months of fiscal 2022 ~~an increase~~benefited from lower raw material prices in cost of ~~$51.4 million~~sales relative to the impact of raw material price adjustors in selling prices, which increased gross profit during that period. Partially offsetting the compression of margins due to raw material price changes was increased gross profit generated from ~~the same period~~variable cost saving measures and a higher utilization of fiscal 2021. Gross profit as a percentage of net revenue increased to 21.5% in the first nine months of fiscal 2021 as compared to 9.5% in the same period of fiscal 2021 which continued to be impacted by the COVID-19 pandemic.fixed costs driven from greater volumes shipped.

Selling, General and Administrative Expense. Selling, general and administrative expense as a percentage of net revenues decreased to ~~10.1 %~~8.3% from 10.7% for the first ~~nine~~six months of fiscal ~~2022~~2023 compared to ~~13.4%~~10.7% for the same period of fiscal ~~2021,~~2022, largely driven by a ~~43.0%~~31.9% increase in net revenues. ~~Higher foreign exchange losses as well as general inflation were the primary drivers of the increased expense~~The higher spend in the first ~~nine~~six months of fiscal ~~2022. Additionally, some temporary cost containment initiatives that were in place during~~2023 as compared to the first ~~quarter of fiscal 2021, in response to the COVID-19 pandemic, were subsequently ended, which contributed to the higher expense in the first nine~~six months of fiscal 2022 ~~as compared~~was attributable to a $0.3 million loss incurred in the ~~same period~~second quarter of fiscal ~~2021.~~2023 due to an uncollectible receivable from one customer as well as higher spend on outside costs related to information technology systems, partially offset by lower exchange losses.

Nonoperating retirement benefit expense (income). The ~~$4.3 million difference~~lower benefit recorded in nonoperating retirement benefit ~~expense (income)~~ was primarily driven by ~~a favorable~~an increase in the discount rate used in the actuarial valuation of the U.S. pension plan liability as of September 30, ~~2021 caused by a higher-than-expected return on plan assets coupled with~~2022 which resulted in a higher ~~discount rate. The amortization~~interest cost component of ~~this favorable valuation is recorded as a benefit to~~ nonoperating retirement benefit expense (income). in the first six months of fiscal 2023 when compared to the same period of fiscal 2022. Partially offsetting the higher interest cost was the amortization of the actuarial gains of the U.S. pension plan liability in the second quarter of fiscal 2023.

Income Taxes. ~~Income~~The increase in income tax expense was ~~$9.6 million in the first nine months of fiscal 2022, a $12.2 million difference from an income tax benefit of $2.7 million during the same period of fiscal 2021,~~ driven primarily by a difference in income ~~(loss)~~ before income taxes of ~~$52.2~~$8.1 million. The first six months of fiscal 2023 benefited from a discrete tax benefit of approximately $0.3 million that was related to vestings of stock-based compensation and option exercises that occurred during the year.

Working Capital

Controllable working capital, which includes accounts receivable, inventory, accounts payable and accrued expenses, was ~~$339.3~~$427.9 million ~~at June 30, 2022,~~as of March 31, 2023, an increase of ~~$100.7~~$49.6 million, or ~~42.2%~~13.1%, from ~~$238.7~~$378.3 million atas of September 30, ~~2021.~~2022. The increase resulted primarily from inventory increasing by $95.6 million and accounts receivable increasing by $21.6 million during the first nine months of fiscal 2022, partially offset by accounts payable and accrued expenses increasing by $16.5 million during the same period. The Company continued to build work-in-process inventory during the nine-month period in response to the rapidly growing backlog.

2423

Table of Contents

resulted primarily from inventory increasing by $39.9 million, accounts payable and accrued expenses decreasing by $4.9 million and accounts receivable increasing by $4.8 million during the first six months of fiscal 2023.

Liquidity and Capital Resources

Comparative cash flow analysis

The Company had cash and cash equivalents of ~~$9.4~~$16.9 million ~~at June 30, 2022,~~as of March 31, 2023, inclusive of ~~$9.1~~$9.3 million that was held by foreign subsidiaries in various currencies, compared to ~~$47.7~~$8.4 million atas of September 30, ~~2021.~~2022. Additionally, the Company had ~~$46.5~~$108.0 million of borrowings against the $160.0 million line of credit outstanding with remaining capacity available of $52.0 million as of ~~June 30, 2022.~~March 31, 2023, putting total liquidity at $68.9 million.

Net cash used in operating activities in the first ~~nine~~six months of fiscal ~~2022~~2023 was ~~$57.6~~$19.7 million compared to net cash ~~provided by~~used in operating activities of ~~$40.2~~$36.8 million in the first ~~nine~~six months of fiscal ~~2021, a difference of $97.8 million. Cash~~2022. The decrease in cash used in operating activities in the first ~~nine~~six months of fiscal ~~2022~~2023 was driven by an increase in ~~inventory~~accounts receivable of ~~$98.9~~$1.1 million ~~during the first nine months of fiscal 2022~~ as compared to ~~a decrease in inventory~~an increase of ~~$18.5~~$17.8 million during the same period of fiscal ~~2021, and~~2022, an increase in ~~accounts receivable~~inventory of ~~$24.3~~$34.4 million ~~during the first nine months of fiscal 2022~~ as compared to ~~a decrease in accounts receivable~~an increase of ~~$0.1~~$44.1 million during the same period of fiscal ~~2021. This was partially offset by~~2022 and net income of ~~$28.8~~$20.1 million infor the first ~~nine~~six months of fiscal ~~2022~~2023 as compared to net ~~loss~~income of ~~$(11.2)~~$13.1 million during the same period of fiscal ~~2021.~~2022. This was partially offset by a decrease in accounts payable and accrued expenses of $8.9 million during the first six months of fiscal 2023 as compared to an increase of $0.6 million during the same period of fiscal 2022, a difference of $9.5 million.

Net cash used in investing activities was ~~$11.5~~$7.3 million in the first ~~nine~~six months of fiscal ~~2022,~~2023, which was ~~higher than cash used in~~comparable to investing activities of ~~$4.2~~$7.7 million during the same period of fiscal ~~2021~~2022 due to ~~higher~~lower additions to property, plant and equipment. ~~Capital spending in fiscal 2022 reflects a more normal level of investment, however, below the rate of depreciation, after lower than historical levels of investment in fiscal 2021.~~

Net cash provided by financing activities was ~~$31.5~~$34.6 million in the first ~~nine~~six months of fiscal ~~2022, a difference~~2023, an increase of ~~$41.3~~$25.4 million from cash ~~used in~~provided by financing activities of ~~$9.8~~$9.2 million during the first ~~nine~~six months of fiscal ~~2021.~~2022. This difference was primarily driven by a net borrowing of ~~$46.5~~$33.3 million against the revolving line of credit during the first ~~nine~~six months of fiscal ~~2022, partially offset by share repurchases~~2023 compared to a net borrowing of ~~$6.8~~$21.5 million induring the same period of fiscal 2022. Additionally, the Company had proceeds from the exercise of stock options of $8.2 million during the first ~~nine~~six months of fiscal ~~2022~~2023 as compared to proceeds from exercise of stock options of $0.2 million during the same period of fiscal ~~2021.~~2022 and lower share repurchases of $0.9 million in the first six months of fiscal 2023 as compared to $6.8 million during the same period of fiscal 2022. Dividends paid of ~~$8.3~~$5.6 million during the first ~~nine~~six months of fiscal ~~2022~~2023 were comparable to same period of fiscal ~~2021.~~2022.

U.S. revolving credit facility

On October 19, 2020, the Company and JPMorgan Chase Bank, N.A. entered into a Credit Agreement (the “Credit Agreement”) and related Pledge and Security Agreement with certain other lenders (the “Security Agreement”, and, together with the Credit Agreement, the “Credit Documents”). The Credit Documents ~~which have~~were subsequently amended to extend the maturity of the agreement to April 19, 2024 and switch from a ~~three-year term expiring in~~LIBOR-based interest rate calculation to a SOFR-based interest rate calculation. On October ~~2023, replaced the Third Amended and Restated Loan and Security Agreement and related agreements, dated as of July 14, 2011, as amended, previously entered into between~~7, 2022, the Company ~~Wells Fargo Capital Finance, LLC and certain other lenders. The~~again amended the Credit Agreement ~~provides for revolving loans in~~to implement an accordion feature that increased the maximum borrowing amount offrom $100.0 million to $160.0 million, subject to a borrowing base and certain reserves. The Credit Agreement has a remaining accordion which permits an increase in the maximum revolving loan amount from ~~$100.0~~$160.0 million up to an aggregate amount of $170.0 million at the request of the borrower if certain conditions are met. Borrowings under the Credit Agreement bear interest, at the Company’s option, at either JPMorgan’s “prime rate”, plus 1.25% - 1.75% per annum, or the adjusted Eurodollar rate used by the lender, plus 2.25% - 2.75% per annum (with a LIBOR floor of 0.5%). As of June 30, 2022, the Credit Agreement had a $46.5 million balance.

The Company is subject to certain covenants as to fixed charge coverage ratios and other customary covenants, including covenants restricting the incurrence of indebtedness, the granting of liens and the sale of assets. The covenant pertaining to fixed charge coverage ratios is only effective in the event the amount of excess availability under the revolver is less than the greater of (i) 12.5% of the maximum credit revolving loan amount and (ii) $12.5 million. The Company is permitted to pay dividends and repurchase common stock if certain financial metrics are met. The Company may pay quarterly cash dividends up to $3.5 million per fiscal quarter so long as the Company is not in default under the Credit Documents. As of June 30, 2022, the most recent required measurement date under the Credit Agreement, management believes the Company was in compliance with all applicable financial covenants under the Credit Agreement. The Company currently believes it is not at material risk of not meeting its financial covenants over the next twelve months.

~~Table of Contents~~

Borrowings under the Credit Agreement are collateralized by a pledge of substantially all of the U.S. assets of the Company, including the equity interests in its U.S. subsidiaries, but excluding the four-high Steckel rolling mill and related assets, which are pledged to Titanium Metals Corporation (“TIMET”) to secure the performance of the Company’s obligations under a Conversion Services Agreement with TIMET (see discussion of TIMET atmet (See Note ~~8 in the Company’s Notes to Consolidated Financial Statements in this Quarterly Report on Form 10-Q)~~16). ~~Borrowings under the Credit Documents are also secured by a pledge of a 100% equity interest in each of the Company’s direct foreign subsidiaries.~~

Future sources and uses of liquidity

The Company’s sources of liquidity for the next twelve months are expected to consist primarily of cash generated from operations, cash on-hand and borrowings under the U.S. revolving credit facility. At ~~June 30, 2022,~~March 31, 2023, the Company had cash of ~~$9.4~~$16.9 million, an outstanding balance of ~~$46.5~~$108.0 million on the U.S. revolving credit facility (described above) and total remaining borrowing availability against the revolving credit facility of approximately ~~$53.5~~$52.0 million, subject to a borrowing base formula and certain reserves. Management believes that the resources described above will be sufficient to fund planned capital expenditures, any regular quarterly dividends declared and working capital requirements over the next twelve months.

The Company’s primary uses of cash over the next twelve months are expected to consist of expenditures related to:

●

Funding operations, including raw material purchases, labor costs, insurance, utilities, equipment maintenance;

●

Capital spending, including for purchases of new plant and equipment;

~~Funding operations;~~

●

Dividends to stockholders; and

Table of Contents

●

Pension and postretirement plan contributions, including an anticipated contribution to the U.S. pension plan of $3.0 million during the remainder of fiscal 2023.

●~~Capital spending;~~

●~~Dividends~~The Company’s primary uses of cash beyond the next twelve months are expected to ~~stockholders; and~~

●~~Pension and postretirement plan contributions.~~remain the same as those expenditures expected over the next twelve months.

The Company expects to fund these uses of cash with existing cash on-hand, cash generated from net income over the next twelve months and additional borrowings from the revolving credit facility.

~~Capital investment~~The Company anticipates that cash generated from net income, as a result of increased revenue as the Company works through the record backlog, will have a favorable result on the Company’s cash flow from operations in ~~the first nine months~~later quarters of fiscal ~~2022 was $11.5 million,~~2023 and ~~total forecasted capital spending in~~into fiscal ~~2022 is~~2024. Additional demands for inventory are expected to be ~~$15.0 million.~~ lower than in previous quarters as much of the necessary work-in-process inventory is currently in place. Conversely, the Company has several capital projects underway which will result in higher capital spending than amounts spent in recent quarters which are expected to be funded by cash generated from operations or increased borrowings on the U.S. credit facility, if needed.

~~Contractual Obligations~~

~~The following table sets forth the Company’s contractual obligations and anticipated material uses of cash for the periods indicated, as of June 30, 2022:~~

Payments Due by Period

Less than

More than

Contractual Obligations

Total

1 year

1-3 Years

3-5 Years

5 years

(in thousands)

Credit facility⁽¹⁾

$
49,652

$
49,521

$
131

$
—

$
—

Operating lease obligations

3,237

1,695

1,192

350

—

Finance lease obligations

13,932

1,021

2,066

2,090

8,755

Raw material contracts (primarily nickel)

43,427

43,427

—

—

—

Capital projects and other commitments

1,833

1,833

—

—

—

Pension plan⁽²⁾

20,793

6,095

12,000

2,698

—

Non-qualified pension plans

551

95

190

190

76

Other postretirement benefits⁽³⁾

83,990

3,459

6,817

6,234

67,480

Environmental post-closure monitoring

566

71

163

144

188

Total

$
217,981

$
107,217

$
22,559

$
11,706

$
76,499

⁽¹⁾	~~As of June 30, 2022, the revolver balance was $46,500. The current obligation also consists of unused line fees and interest on the revolver balance~~

⁽²⁾	The Company has a funding obligation to contribute $20,793 to the domestic pension plan. These payments will be tax deductible. All benefit payments under the domestic pension plan are provided by the plan and not the Company.

⁽³⁾	~~Represents expected post-retirement benefits only based upon anticipated timing of payments.~~

~~Table of Contents~~

New Accounting Pronouncements

See Note 2. Recently Issued Accounting Standards in the Notes to Consolidated Financial Statements.

Critical Accounting Policies and Estimates

The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Assumptions and estimates were based on the facts and circumstances known at ~~June 30, 2022.~~March 31, 2023. However, future events rarely develop exactly as forecasted and the best estimates routinely require adjustment. The accounting policies and estimates discussed in Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021~~2022 are considered by management to be the most important to an understanding of the financial statements because their application places the most significant demands on management’s judgment and estimates about the effect of matters that are inherently uncertain. ~~These~~The applicable critical policies are also discussed in Note 2 of the consolidated financial statements included in Item 8 of that report. For the quarter ended ~~June 30, 2022,~~March 31, 2023, there were no material changes to the critical accounting policies and estimates.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

As of ~~June 30, 2022,~~March 31, 2023, there were no material changes in the market risks described in “Quantitative and Qualitative Disclosures about Market Risk” in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021.~~2022.

Item 4.Controls and Procedures

The Company has performed, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness and the design and operation of the Company’s disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) and 15d-15(e)) pursuant to Rule 13a-15(b) of the Exchange Act as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of ~~June 30, 2022.~~March 31, 2023.

There were no changes in the Company’s internal control over financial reporting during the quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of certain legal proceedings, see Note 7 to the Condensed Consolidated Financial Statements included in Part I, Item 1 of the Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

In ~~addition to other~~connection with information set forth in this report, ~~you should consider~~ the risk factors ~~previously~~ disclosed in Part I Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, ~~2021 and in Part II, Item 1A Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended March 31,~~ 2022 ~~which~~should be considered. These risks and uncertainties could have a material adverse impact on our business, financial condition and operating results.

The risks described herein and in our Annual Report on Form 10-K and our Quarterly Report on Form 10-Q are not the only risks we face. New risk factors or risks that we currently deem immaterial emerge from time to time and it is not possible for us to predict all such risk factors, nor to assess the impact such risk factors might have on our business, financial condition and operating results, or the extent to which any such risk factor or combination of risk factors may impact our business, financial condition and operating results.

~~Russia’s recent invasion~~

Item 2. Unregistered Sales of ~~Ukraine~~Equity Securities and ~~the international community’s response have created substantial political and economic disruption, uncertainty and risk.~~

~~U.S. and global markets are experiencing volatility and disruption following the escalation~~Use of geopolitical tensions and the military conflict between Russia and Ukraine. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions, increased cyber-attacks and social unrest in certain regions in which we operate. Although we do not have operations in Russia or Ukraine, we are continuing to monitor the situation and assessing its potential impact on our business. Proceeds

Set forth below is information regarding the Company’s stock repurchases during the period covered by this report, comprising shares repurchased by the Company from employees to satisfy income tax obligations related to share-based compensation.


Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value[000's]) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 1-31, 2023	—	$	—	—	$	—
February 1-28, 2023	1,409		55.95	—		—
March 1-31, 2023	139		58.25	—		—
Total	1,548	$	56.16	—

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Item 6.Exhibits

Exhibits. See Index to Exhibits.

INDEX TO EXHIBITS


Exhibit Number		Description
3.1		Second Restated Certificate of Incorporation of Haynes International, Inc. (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to the Registration Statement on Form S-1, Registration No. 333-140194 filed with the SEC on ~~January 25,~~March 8, 2007).
3.2		Amended and Restated By-Laws of Haynes International, Inc., as amended (incorporated by reference to Exhibit 3.2 to the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2020 filed with the SEC on April 30, 2020).
31.1		Rule 13a-14(a)/15d-4(a) Certification of Chief Executive Officer
31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1		Section 1350 Certifications
101		The following materials from the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended ~~June 30, 2022~~March 31, 2023 formatted in Inline Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Income (Loss); (iv) the Consolidated Statements of Stockholders’ Equity; (v) the Consolidated Statements of Cash Flows; and (vi) related notes.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

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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.


	HAYNES INTERNATIONAL, INC.


	/s/ Michael Shor
	Michael Shor
	President and Chief Executive Officer
	Date: ~~July 28, 2022~~May 4, 2023


	/s/ Daniel Maudlin
	Daniel Maudlin
	Vice President — Finance and Chief Financial Officer
	Date: ~~July 28, 2022~~May 4, 2023

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Estimated future Aggregate Amortization Expense:
Year Ending September 30,
2022	$	229
2023		167
2024		126
2025		123
2026		120
Thereafter		474


	Payments Due by Period
			Less than						More than
Contractual Obligations	Total		1 year		1-3 Years		3-5 Years		5 years

	(in thousands)
Credit facility⁽¹⁾	$	49,652	$	49,521	$	131	$	—	$	—
Operating lease obligations		3,237		1,695		1,192		350		—
Finance lease obligations		13,932		1,021		2,066		2,090		8,755
Raw material contracts (primarily nickel)		43,427		43,427		—		—		—
Capital projects and other commitments		1,833		1,833		—		—		—
Pension plan⁽²⁾		20,793		6,095		12,000		2,698		—
Non-qualified pension plans		551		95		190		190		76
Other postretirement benefits⁽³⁾		83,990		3,459		6,817		6,234		67,480
Environmental post-closure monitoring		566		71		163		144		188
Total	$	217,981	$	107,217	$	22,559	$	11,706	$	76,499