Allegheny (ATI)

Scott Minder Vice President, Investor Relations
Robert Wetherbee President and Chief Executive Officer
Don Newman Senior Vice President, Finance and Chief Financial Officer
Richard Safran Seaport Global
Philip Gibbs KeyBanc Capital Markets
Gautam Khanna Cowen
Paretosh Misra Berenberg Capital Markets
Call transcript
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Good morning everyone and welcome to the ATI announces First Quarter 2021 Result Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note today's event is being recorded. At this time, I would like to turn the conference call over to Scott Minder, Vice President, Treasurer of Investor Relations. Please go ahead sir.

Scott Minder

you. Thank welcome Technologies and Earnings Quarter the Call. to morning, First Allegheny XXXX Good being website on discussion broadcast Today's is our at atimetals.com. Participating President and Newman, are Bob Officer; call and Don Officer. President Senior in and Vice Financial Chief today's Executive Chief Wetherbee, on Don highlights and first and Bob our messages. quarter focus will key additional outlook. are Slides provide on on details website, our and available our and atimetals.com, color results and will prepared the line remarks, we open our After questions. for

earnings statements forward-looking as a subject and various assumptions slide all caveats the As and noted in presentation. to are release the in reminder,

I over Now to will Bob. turn the call

Robert Wetherbee

Scott, our ready us operate. sharpened to welcome the for safe, strengthen quickly, people recovery on Thanks, our our and Navigating has need keep to we We've all reduce sheet costs consistently clarity joined pandemic and protect absolute remain how today. our and who've followed focus our balance provided and customers. principles, through guiding

Focusing decline on the been the of have and resulting to ATI's impact the on critical mitigating these principles global financial economic pandemic results.

end key show in & share. improved recovery, of is amplified markets to our High gains especially That new Materials segment. per As still we our loss said, a for coming business by the significantly Performance These are and awards, positioned margins. recent Components signs ATI reported $X.XX share for of our began quarter

to the will bottom our and commitment for and the each value actions help to recovery. than of actions as in a taken and significant result during with defined are of cost team. employees our capital. results relentless greater pandemic team of efforts a generate clear global the our achieved And generate that. impact profitability hard coming strategy, The Thanks work. objective, Our dedication, have entire the far their of improve all public line competitiveness to to companies, their of level We our so we the do is passionate

four address in and reviews to I quarter detail, financial want important our first topics. performance Don outlook Before

First, it current environment business what my the and for means view ATI. of

share on business some progress update and recent on strategic news transformation good Second, a and few commitment to awards.

by outlook the Specialty Third, and and my strike our Rolled on end performance unit; at views market. ongoing finally, several address in by USW-represented share our Products the facilities business employees

the begin but of in what for optimism speedy environment XXXX it what Let's rollout context and with the current ended increased vaccination steady began vaccine with supply to travel the moving business seeing sky improved for are the like encouraging the U.S. in progress optimism of future. we're We're and across thing. great next means in possible the predictors slow The seeing XXXX jet and in Europe the much ATI. a may airplanes accelerates. More normal. domestic not-too-distant statistics a engine demand leisure be what is as chain

while in produced the grapples And Europe, effects products for mixed demand with be across to U.S., vary we're the infection strong, surge. a of the Beyond signals India in continues vaccination China rates as major region. seeing COVID

been laser-focused duration. global improving, key we've storm that below those weather improve to on conditions Since XXXX. streamlining our cost our a competitiveness While of of our demand healthy remain to markets and cash the levels do unpredictable structures are we maintaining acknowledge balances XXXX, within

between a share stronger orders company. and they'll balances per to long continue mentioned us actions working range loss an I will takes On cash support lead economic $X.XX lost share and basis, versus earnings customer our forward, our fund of recovery earlier, Looking Self-improvement we as capital time $X.XX the $X.XX. guidance hold. make per as a

quarter recovery. drivers results There that growing a for related Our key economic outperformance, to were dedication achieving aligning financial more to a additional our expectations. the with two capacity global contributor to near-term both closely expectation demand of was exceeded first

and Nickel, values, favorable within in prices are timing to First and lower ferrochrome led higher leading our pricing cobalt inventory business. increases and foremost, selling outside raw are of year-over-year sustainable. the predictable and and material neither higher largely control to nor and significantly Specialty quarter. between our up prices tailwinds surcharge These Products rose Rolled

metal metal over favorable and per quarter, prices This a more provided for total stabilized. used but guidance. the assumptions $XX or retreated have Early QX million price $X.XX of in in share benefit $X.XX about recently than metal our QX, prices

As a from raw the quarter. materials modest a headwind anticipate we result, in second

STAL, business expectations its in in the Strip with our quarterly Precision Second, China, history. as earnings strongest exceeded Rolled Specialty known

instead significant in Lunar local XXXX, report Our diligently in region. major the Chinese order serving the our which is our Year strong that to I'm avoid holiday, worked over capacity, online travel to well, third backlog. demand performing increment the customer New customer continued team following came fulfill to of government's recommendation pleased

were earlier, range. largely guidance original our signs As first accounted our recovery the engine seeing in I continued mentioned we're signs of positive demand for recovery Those our modest and for forgings other jet materials. jet engine for

recovery to within While markets will dampen a what's on Don provide a control making our will on details additional financial results, minutes. few an our focus extended our in difference. continue in is our our performance

to within shift ATI. let's going what's on Now

we discussed XXXX, cost actions. structural benefited As from reduction often decisive in our margins decremental our and

significant to project possible segment. visible sustainable capabilities XX% make and I Most isothermal jet It's and were engine metric ATI few share date. testing this potential. quarters. The support capabilities. to advanced to for are team a each including margins Prior facility results new are maintained our ramp, up significant were testing technologies. recent operational. term. in to were we've expands forging below and the growth executing its ATI significant, and machining First The a pandemic, and importantly, who we new its full prior are ago, project future required the members trend worth for welcome Don weeks and Appleton, Wisconsin the related in narrowbody-related this the capabilities they're required XX% began XXXX, capital and treating, by impactful. capacity our long and HPMC that and the This impressed comprehensive from quarter pandemic-impacted heat overall, It's a quarter improvement year-over-year noting it bringing actions visited key machining machining this decremental marking to demand, new We our gain. within

assets bottom portions by to for industry top this to solid two the will completed. time, demand multiyear on quarters, investment provide rate. investments come. for a new years Over At production in growth of These additional seeing possible for uptick be next line ahead line its improve track the well components same made we're and growth HPMC's new are of these

more than objective strike threshold transformation, The has year. our change Products it The meet will meet complete exiting portfolio in low-margin this its standard future. This complete this in the Products footprint standard struggled the does plans not associated half profitability profit-making business by line. of eliminating structures a aligned to products units this Rolled Moving to consistently capability. Steelworkers Specialty investment business, cost to stainless Specialty some Rolled United plans the the AA&S must Without a sheet basis. costs segment. our our second rationalization across remain and having foreseeable for of We announced capital transform We or of In on December, our our to track earn we on to and business the its time. business current Each time stand-alone means and dispassionately over investments. industry capital cost not apply cycle. this

wither value taking action. When profitable So our confirms die. will end Otherwise, that our we're of quarter markets. just The business it. not high strategic survive, Specialty and we thrive business, streamlined, fix the is course on against right and actions key decisively competitors. the have to focused successfully continue but transformation to This critical over a Rolled delivering necessary to last we'll performance transformed, is the the to Products thriving in more global

utilization includes Our materials in to at HRPF. progress AA&S growth in pleased objectives I'm increased both XXXX. strategy report transformation on our rates high-value also and

roughly the of of a AA&S two As alloy and million going in customer result for team's will materials nickel hard off a a benefit contract for wins significant were that $XX operational and commercial We ATI we specialty work, forward. use pipeline the awarded segment our with of sheet value the success activity second in expect we quarters. of and expect product this We're Bidding next coast XXXX. of active, market space customer continued of America. over process testing the half South several deliver full in the finalizing in and contract to the earned the the remains

operating extension This term segments. a Boeing Second, mill through our agreement we multiyear for over gain with opportunity provides titanium contract emergent agreement share supply products to demand. to our the of both signed the share-based existing long-term to

the term removes mill Our prices raw throughout the the product associated agreement. place Boeing with material over material to remains in providing this inputs supply long-term our raw This agreement, the variability titanium extension. of chain,

the subdued While from market widebody submarket airframe position, until improves. important production financial we for aircraft long-term our expect benefits

our within or leadership a this money, at not families. strike, employees Now We to I'll table. the come first the several Products contract not not premium incredibly Rolled course strike union modestly address we USW-represented by offering Beginning the USW-represented their we're their action. in facilities free as our year that know customers, a possible. four-year the our work. losing well healthcare annual have of unit. employees one them time chose contribute four, raises healthcare business as proposal disappointed We're wins No communities, Specialty three it's a contract employees ongoing back when cost. At want plan We to to years. for generous in on a asking to we're We're

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will pipeline absolutely I our to new want winning prioritizing run time project on at delivering with are production We're the required dedicated jobs, ATI's to say and and They're alloys moment to for for very June. we in to energy implement, as take fully investing group our against them capacity, opportunity who to return to businesses, ATI to quoting understand Their dedication USW-represented commitment. rate thank salaried, customers nickel and While our temporary hard and take business. this high-value thank future. these the the facilities momentum, have We've a their the protecting the levels. time speak. earlier. most I their operations orders quality what's of needs and We're employees, their employees, strike plan and in them. and includes running expect chosen the provides I This other projected to you work the for I business, goals their to. customers mentioned our to gaining partnered reach families to their our critical from our for

we competitors fail. Our hoping we I'm won't. are confident

me be between us. conclude USW rather our by place? continued resolution. emphasize and we my the operating ready is Absolutely. why outlook issues employees more our that, me worked opening whenever we've let end performance point. look on to We USW-represented improved with comments to And throughout in with a offer and Would and with negotiations That's perspective forward the Let repeatedly one welcome longtime discussion market. reaching hard address our

for most our and isothermal specialty continued with XXXX's specifically of engine improvement advanced trend faster forgings our modest Let's significant material. and improving with The market, quarter materials. our jet than commercial aerospace, our fourth sales start forgings hot-die

year sequentially. XX% sales quarter, jet they declined grew Although robust nearly significantly prior versus engine a

As engine reminder, finished times with our are a materials. forgings our to shorter other lead components more compared

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by increasing rates. narrow All production driven of body this is

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and again, across We implemented by expect driven continue engine to product our actions. related and gains mainly earnings share margin increases, production XXXX, jet improving previously improvement narrowbody our sales

due our rates. expected, continued airframes. production to sales. sales, international These demand, impacting saw Moving titanium consume travel We lower as year-over-year to total large a airframe planes percentage widebody lackluster of

offsetting new at the business agree global continue projections OEM, year. time. an industry low that levels XXXX, with our for the half production We expect to widebody of our partially from OEM primary decline accordingly. will cost in adjusted destock remain extended another customer analysts' second with We large We've structure across to the

defense. to Turning

year-over-year We continue sales to XXXX. growth adding see gains to our double-digit in

sales for products, aerospace robust quarter very engines, was including airframes First rotorcraft. and military growth jet

As a primary our expected, in ground product steep of a this initial completed phase customer decline was the vehicle offset plate by as partially armor program. large

XXXX. a but Shifting market growth beyond versus in military recent demand than new broader in the to our driving but quarters. see previous including at products. material. in increase our the for an as and growth program We'll to for Looking support and in declined pollution ongoing demand and commerce armor for ahead, needed energy year, kicking traditional naval we continued our nuclear sales levels to in growth in off is production prior Sales markets. we aerospace quarters. Improving applications, and to markets at later nuclear In second in double-digit activity. rate new slower travel gas and declined we defense advance XXXX overall customers. than pace of total, markets upstream slower in robust a anticipate Sales specialty customer Sales fuel control year-over-year and oil expect most energy expanded materials energy lower and quarter a solid expand

continues Additionally, the to gain clad market pipe for momentum. applications

of be earlier, noted million and the alloy for in worth XXXX. won I clad materials pipe roughly second shipped half recently to As $XX nickel contract a we produced

oil market quarter. smaller the expect anticipate and first improve a electronics We markets, mixed conditions energy slower as markets, ongoing economic growth medical compared likely In with we to in continue and recovery. ahead, Looking results. gas specialty to our QX to pace the coming produced at

both next-generation growing side, On our a vehicles variety Asia powders Precision for Specialty wide strong the we The computing. specialty Strip customer ongoing saw including products, alloy latter autonomous materials and XG networks, of demand globally. in in positive Rolled electronics used for are advanced and consumer

but that pace both continued year-over-year surgery In implant continued in XXXX, expect material than restricted at markets, We a hospitals and the negatively first to to electronics medical impacted in our quarter, quarter. MRI volume. be sales growth by lower challenges market elective included the and first slower access COVID

As we enter QX, commitments. we're order seeing increased forward

the in sales this second market of medical improve year. the We to expect half in our

likely materials and that travel the and currently benefit is in The indirectly a two people, U.S. airplanes, goods. for program ATI's cars and spending consumer another ATI national This Finally, discretionary delivery leading plan create first, potentially aerospace significant of largest in markets, this would fuel. development energy. ways: and products benefit infrastructure improvement jobs, two consume unfolding trucks require will increased to will

and ATI indirectly benefit Second, material increased opportunistically, consumption. from will building

who basic link these supply a key produce not does ATI cost-effective materials, While for in chain those we're a do.

Don call from Our the rolling quarter for cash forward HRPF over I'll thoughts flow I'll results the generate that, After lines to turn questions. first quarter concludes, the full positioned financial to is and increased final carbon With cover to few producers. to and domestic offer slabs a uniquely to steel Don? our he your in for look year. opening detail and outlook second provide for our

Don Newman

Bob. Thanks,

During few minutes, the thoughts key provide next several I'll areas. in my

third, First, our second, on performance; on our XXXX outlook. an our financial an liquidity and levels; updated view QX update

in the expected have of take economic share reflected commercial end the largest per recovery, our quarter. XXXX particularly our whole, The coming market. ATI us advantage our $X.XX QX, our aerospace, performance reductions positioned As of ways, range benefits loss financial cost actions. heading to lost cost within from into a well many ahead In global

Airbus giving increase Boeing to rates. and production increased domestic confidence the seeing we our travel noted, Bob HPMC turn, In narrowbody by signals for rates the produced demand materials are early specialty and are segment. As forgings

to the we some color a sales HPMC pre-pandemic prior nearly in add sign jet we that But compared uptick a we in QX LEAP encouraging expanding engines. share them forgings as expect sequential rates To me in have growth Let decreased military significant for robust market, that minority engine and as engine we to an seen across Within XX% results. led continue sales end, the and XXXX, demand. a gain nearly from domestic trends defense forgings a year and travel pickup to HPMC XX% our commercial quarter. bottom, increased largely sales are these jet moved components. forge by sales. This engines, on saw several sequentially. the defense to XX% was year-over-year engine that growth majority materials to by have note jet a We're pleased increase. isothermal to and was In attributable encouraged

As continued highly earnings the customer up to growth materials in destocking. two significantly profitable improved expected, due engine to forgings comprised next-generations sales, jet respectively. product ongoing from favorable and over mix. Sequentially, prior revenue lag our margins to quarters, airframe total, of and Within and XX% the sales HPMC due XX% XX% QX

a enhancements rapidly renewed In momentum the in aerospace transitory Overall, rising Airbus addition by trends to QX. Boeing encouraged tailwind narrowbody as units expect margin we're increase from to continue during mix, as included in production our LTAs and prices product improving HPMC did volumes. both provided benefit gain and to business cobalt

year-over-year decline Rolled year-over-year, JV electronics XX% STAL at SRP, consumer markets, Turning a in all decrease Specialty except in by decreased XX% was due largely across sales. elevated to Products, segment our by AA&S, Sales in and fueled revenues The automotive to for SRP business demand increased or automotive. China. major XX% sales over production unit

EBITDA segment improved X%, by sequential due earnings. STAL sales SRP's standard profit. generate record increase products, led stainless in AA&S improved sequentially, year-over-year change, revenue value at to AA&S Looking XX% the minimal largely which and

SRP to business of advantage nearly product contributor The QX is is first this take why consistent to about that and a make generate cost business has X% along reminder solid needs be acceptable continued footprint Components, business. due lesser or that be SRP EBITDA is product within an be to positioned little benefit The degree, to SRP are in also & structures ferrochrome that the well unit, to this products quarter. needed a SRP news margin. returns, no percentage margins. margin story. a this and It's exactly transform considering unit and to capabilities. done SRP's note we The improved. does production good flow, Standard into profitable was growth business results EBITDA cost earned business; of potential of a of depreciation removed, interest allow and Products, the SRP with structure XX% ATI's STAL loss markets. are double-digit Alloys EBITDA and demand to Sheet quarter. the many important generate exit positive transformation maximize the Those quarter to in Specialty we consolidate what prices respective nickel to charges. If far mix need the posted know generated not Stainless coming in their too units Our appropriately The and for rising outstanding unpredictable fixed a the to and, SRP a streamline after an to SA&C, or

it. on are We

transformational meaningful out transformation as about profits. look to generate the keep different hitting we the are unfolds. in in the SRP's We our good performance these loop no dependent We're luck changes, and milestones optimistic in metal on prices dramatically from will will longer XXXX, laid you plan.

Before the that margins XX% highlight decremental quarter. this sheet, year-over-year we've balance to want to I limited jumping to

by structure incremental decremental should to shift and cost aerospace conversation from driven ongoing the outsized Soon, reductions. increasing margins, volumes margins

maturity balance and reshaped maturity beyond our to interest mid-XXXX, our and generate XXXX's annual debt lowered Looking sheet us. significant to shifting income continues preserve statement, to profile, strengthen our our we've next and the benefit We costs. cash groundwork

an XXXX progress overcame decline result, expense. in of traditional reducing combination in asset base in burden and the year U.S. the rates. XXXX our The discount improved and from pension Beyond on returns debt, The benefit contributions calendar we contributions pension strong plan reduction funding financial and made pension status required defined XXXX.

seasonal first quarter about cash in million chaos, our and with year-end QX. market to of roughly strong This total ABL million usage the a below due we've maintained is in anticipated $XXX ending During liquidity, cash availability. the XXXX $XXX levels

will We profile manage debt continue quarters. maturity actively the coming in to our

cash profile leverage and further We will long-term our liquidity profitability. available leverage and to improve our

over our provide quarter to year and Bob I update Before outlook I for turn the XXXX full want remarks, expectations. to closing call second for back

for As and we've both jet earnings demand. We said materials. times and commercial engine by revenue and sequential growth improving defense today, fundamentals underpinning the aerospace, in improving our anticipate driven HPMC's QX, several business energy are forgings

STAL XXXX. exciting demand including elevated visibility what and a to higher with an to can result predict, for clouds expectations our in business. and eliminated from respond if some Asia road. solid we'll Within ongoing demand we've continued the fulfill by We share and levels, degrades As in half of strike due line strong. see SRP for on remains expected is are anticipate needed driven we sight outlook, performance And strength ramp we the near-term QX. all accurately business, defense markets, from isothermal mainly to forgings to for be customer planned in continues. facility STAL sales. earnings second SA&C the Sticking improvement lastly, the USW the have but of improved AA&S, revenues of increased as strike as preparing coming QX and our expect the developments we this we market end into SA&C, gains, the production ramp SRP unable outages customer But The in USW we end the capitalize

fewer SRP QX. result, and in materials we ship produce did will a QX than in As

results nickel JV. business has with continued QX segment, quarter expect solid HPMC in STAL our and date. our of aggregate, modest improvements headwind the Additionally, we declined from financial SA&C expect sequential a In as material we raw to price along

strike. guidance However, QX to earnings by due we able the are provide to the not USW uncertainty caused

actionable guidance, with QX to able pension free as remain to confidence. return XXXX million, quarterly year guidance confident providing so provide our earnings soon do to cadence $XX range we being our Despite $XX cash full earnings guidance will as can normal of flow million we cash in calendar in not release the a We levers excluding year predictable. rebuilt a quarter when be in will are contributions. second offset new after longer labor make flow anticipate more time horizon From a agreement cadence perspective, working likely this that inventories achieving the capital A metric we reached. is within and

Now pension. let's quarter, announced contributing we $XX the we to that plans the discuss in XXXX. Last anticipated calendar pension million

first quarter, new the During required to new in be plan federal pension government minimum any passed pension the would legislation, requirements. contribution XXXX. not make effectively we further reducing XXXX Under our contributions rules,

to While in handful flexibility our a appreciate pension committed our markets. provide, the of years, the we pension rules funded we key recovery want are to path. intend clear, within that fully obligation a be to net our status given new glide We I end to anticipated manage

evaluate throughout in any, made will XXXX. We the year additional if will what, be contributions

plans future quarters. in We with those will you share

contributions pension further efficient year as no allocation in business. assume ensure we capital being, time this the the For

that up our financial coupled path results. to the this right transform direction by aggressive Four its XXXX business market ATI have with SRP conditions, moving in of was out the confirmed the the on need Let business units squarely team's QX wrap recovery. me put five are to efforts, and saying improving our reduction by cost

are we and same, the remains Star North the future. about excited Our

of enterprise, the its within that business is a earns more SRP specifically, not to and does into current For growing consistent cost line out SRP capital profitable, and temporary. business production commitment change It one or our portfolio. reshape the competes investment for disruption our time

successful the this We With will back over call in that, to I will turn Bob. be effort.

Robert Wetherbee

Thanks, ATI. across by excitement being Don. for work future. our I great some lot for A hard-working globe people really agree of with done you the the regarding

to survive We're on global Scott? SRP its align not financial footprint and competes aerospace can Demand cost cost of more create has successfully our against results profitable be sequential is structures and ATI, showed saying the in opportunities With for a and rationalize earns stronger, intensifying aerospace belief quarter our broad an focused changes on HPMC the momentum business I'm our and new conditions company. when significant the building market clear shares set leaner, Scott. investment Without that structure, building is the product for planes Rolled portfolio, back our substantial will future. levels, continuously Improving first within and growth we've from out that over With is benefit solid aerospace economic of our profitable commercial to Specialty that structural growth-focused that, feel commercial at a we that I'll as turn company, close business. our and business and our company. to capital, by coming volumes more segment. benefit streamlined outsized our to team, a fuel-efficient reinforced recovery. action critical ATI particularly return is growing, will Our on and improvement competition. higher recovery taking cost accelerate even programs. Transformation to strategy track I'll we'll profitable have customer ATI for these pre-pandemic Products horizon. confident within innovative an it we're

Scott Minder

there Q&A parameters a Bob. Thanks, few Quickly, session. for today's are

questions two yourself ensure analysts all time limit questions. to please for to First,

Operator, strike labor we avoid questions Second, for in the ongoing seeking to of quantify impact advance. this for are your since USW we're the a and in call. on of midst to please contract question. the strike's understanding negotiation, our ready proposals first the labor financial Thanks cost


today first ahead Seaport with your go question from Richard Please Instructions] [Operator Safran question. Global. Our from comes

Richard Safran

you? How good Don, Bob, are morning. Scott,

Robert Wetherbee

Richard. morning Good

Richard Safran

of your union aerospace the if here. holding concern on is wanted to everyone. why is a remarks So Could understand, I it? from analyst. bit the an worth a opening to think Look, instructions clear your you you offer question first, know you I And Scott, for here. Now strike your a expand nonaerospace us tell some could firm maybe on

us want know a But the tell then take decided here could not numbers you a because I what stand. have and take if You're must company long-term the giving look gains here impact. and to to out you crunched numbers and

is thinking just little could a help your with the your you more what behind maybe bit So us actions? thinking,

Robert Wetherbee

to Yes, your Rich, I'll wasn't strike to really clear, question. just It do the this choice. Bob. union the And take leadership's our choice is was be that.

actually long value-added labor an as for having close on most long-term managing largely X% think going significant of annual have XX%, comes And It I in issue, one the relationships. of we're is fundamental to products are customers, which can term. shift our XX%, very be the we it's to our inflation that content down agreement. OEMs, to XX% to cost mix, healthcare inflation. space

we're for sure And contract that our this and sure control help controlling asking employees that costs. and and is make our we're spend. manage to really to have We our the fair. the what proposal our reason to our table in think we And healthcare fair overall that's close And members make they're sharing USW part we that employees it's those there competitors, employed other already think by on the and and USW-represented contribute costs. is is their of

we're already for not hasn't given. that really So asking union industry the and the something

think will XX% the with future workers earners. this the fair, The I not it transform worker And stress top of So will wage actually for a to And to in average global. contract, we're this in into the the to contract get under carry need it's many we way we're this making business. lost be investments long moment, I long-term it want just is issues the to is the success. go competitiveness though, U.S. transform the one still addressing of the to

-- the good long for great responding we're it but pretty great pretty action, to we And didn't long in with this a jobs, the the view. of jobs, it's choose so right in term certainly contract, term. it's good But benefits. actually we course it Again, approach. think we're So

Richard Safran

second, And you hypersonics because programs. Thanks think could little a you that. but slides in you growth And didn't meaningful this time, Okay. important that were be the last noted on mention a here. I driver is this quarter, for this

opening defense you to your There's about which an of can, here -- tell best on, here about me there's what defense, what about question you're obvious could does an obvious you -- outlook question So remarks your growth? to supplying? you're long-term because for this remarks the programs about

Robert Wetherbee

We're what too. future mean one, excited about Rich. of the question, Yes. hypersonics that Great to I'll ATI. take

and good the see And about day. actually material of think technologies and us, the advanced every science, to the people get stretching we temperatures. the that think a is bringing being innovative strength are stretch what alloy advanced that with powder us You incredible at company extreme have involved you'll going the Hypersonics process to into that's us party I technologies. thing, applications core metal

are the a position with specific see for what processes I invested And what to bring. defining in we've You'll specking thermal And we programs. think to about asked with agencies. those us performance. core three of in But we we're and you wide do. us our manufacturing great think a I of the and the array engaged engaged, things that is long are part how mechanical be view technology, we term. want and We're OEM puts customers government And that materials design

platform that the to is if hypersonics a leverages program in And positions the for been and us a a we strengths. well it space we've great feel and future. legacy And there's that So long show in it time, for ATI's probably we're with programs somewhere. hypersonics, involved

So I everywhere, we advanced be successful. we're think is I to think But to is we're line, material think going require well bottom And core. positioned. material so science our speak. Hypersonics science to

Richard Safran

Appreciate Thanks it Thanks. for that. Bob.


from question Please next Capital question. go KeyBanc with comes Markets. Our from your Philip Gibbs

Philip Gibbs

morning. Good Hey

Robert Wetherbee

morning. Good

Philip Gibbs

And us can also number? about then much strong. timing? secondly, segment the look what AA&S, When at was we inflation contributed raw material $XX that benefit to how you transitory very million idea the STAL from tell obviously in an Can you us that EBITDA, did give

Don Newman

parts. Two Sure.

benefit benefit First, benefit in a to ways at highlighted our $X.XX relative his and in segment it. couple million. SRP to of about the as actually look of rather, was the And then transitory Bob -- from largely there's business. terms the that was script, to that the the metal, it guidance, in to translate about $X for amounted overall SRP, EBITDA you SPR for

majority business. SRP And of related movements. metal that in the price majority the of So was to the the benefit nickel

strong end we're strong China very as serves double-digit it to in very strong in -- well terms even SBUs. in as by electronic the share In the demand very, EBITDA going largely extremely from high performance. will specifically terms would STAL. because have very, with continue share Also, margins continue we margins, of we are say contribution, I see to the all-time performance, its mentioned revenue. though the be EBITDA an you, don't that of expect hit markets They've been I range. we that to automotive. And that STAL that regard in generated to an standpoint, the consumer EBITDA in it good and electronics

Philip Gibbs

forgings, that's script from I in positions there comments the Thank you. were just any it And moving we expected to any But give curious you there Thanks -- minority on majority certain that color contract to on a presumably here your business. Anything could that engine think GE on would some so much. that? if related as effectively all helpful. kicking be would? new in about lag Is

Don Newman

of was. yes, Yes. of It's waiting to would relationships recover. key sign isothermal-related end what customers that aggressively terms our in is, continuing with that what would the after say, We're going we far of and terms them. shares forgings not another you're I It off is it the with increase the in markets -- just not growth source on good say to our primarily, is, building I have and for

another guy It's toward share and levels. excited. pretty we're So trend good our

Philip Gibbs

Thank you.


next Cowen. Khanna your comes Gautam Our question. question from from go Please with

Gautam Khanna

to agreement. specifically there? can bit I Boeing Any talk you titanium you duration? little minimum the volumes? added about could was What renewed comment contractual if Was Anything Yes. change wondering changed? there a

Robert Wetherbee


you're a to I think, point Bob. that we're -- on situation, Boeing see this the extension, for And multiyear pleased first think it asking is is the I about.

aligns kind of it's contract think kind the titanium norms of of I for and with industry the spun backup the following supply. some

It their demand feel we business. as about through to for of we is good emergent share So a positioned think time. grow pretty that. well we're I capture And

on we as good for So the is the necessarily the that as our Is chain wouldn't go what us last for while there. growth we But they details -- desires. and say the it we to destocks, disclose can on right? positions that, a based widebody finite from customer's think beyond -- supply side expect I probably burn off

that So -- helps. hopefully,

Gautam Khanna

Okay. more Boeing think? better have you maybe was you wondering specifically, 'XX? -- do volume? Or Could I if in titanium grow I guess I guys you could XXXX -- what was visibility it what do on

Robert Wetherbee

Yes. in in when want flatten Yes, it's we're to in fair getting into think say. a some be demand back the we widebody see customers right? listen be starting game to the on narrowbody going I really the whether back, we think not, guys trends, judge. versus 'XX, question. narrowbody, I XX-XX that's And that's 'XX, And upticks destocking not or what anything's the is we our out to probably it where come see fair to to can But you of So terms side, XXXX. XXXX, what widebody about

So it's going to extended. be

our we've cost think, that. I to adjusted do structure

we the two position production to And the going been And guys in some year airframes. major share we that Now last late had build other think lower States. United in that's with probably on here expect other to degree, a guy. widebody the is thing we there's who mitigate I the the gained that announced

think I to we'll XXXX And titanium start I while XXXX, a to would it's hopefully, be destock. probably to XXXX, the going supply chain for say helps. levels. that take XXXX, back by to So

Gautam Khanna

It does. guess 'XX get the back will above mean, but levels. that I gradually be do -- it I expect you to in that. they'll 'XX,

Robert Wetherbee

right. That's

the not then just see be come we'll back going expect XXXX. destocking improvement levels. to XXXX, XXXX in the to to and It's We

Gautam Khanna

sense. makes That much. you Thank very Great.


next ahead our Markets. Capital question Please comes from Paretosh go And from Misra with your question. Berenberg

Paretosh Misra

high-performance metal think how Don as such cobalt Scott. on nickel? of question and tailwind there Bob, A morning, business. the higher Good much any prices, Is way you. Thank your and to about was from

Don Newman

I Don. in saw they you what you the the the as were Yes, HPMC side related same this business. SRP not is to say Generally, of a the business, of give would tailwinds I'll sense. on side the metal -- nearly what is

have low of would of been millions it single-digit So kind tailwind.

we but So on HPMC to side the reason, There's us, specifically structures for nearly the HPMC business that a from side right? have that a AA&S part guy the certainly that a the good volatility the of or are on contract the side. stands standpoint. very performance on highlight metal on because And exposure not not different SRP

Paretosh Misra

it. Got

it how So this does it? you I in do generally, segment, customers or through hedge it work? your to guess, more Or pass

Don Newman

It's a variety of contract structures.

a value detail. that to creation is really of we've deal we've in want I the constructed way for able because bring our is is to a of say which agreements bottom the metal the we great what have, table, and capabilities, I So line we risk that the and highlight melt been minimize But into that the that get and wouldn't to example. in forging other would

So we're happy with that construct.

will out, two-third. project in our part on point in that the by important, because volatility thing you we're reduce transformation that the is of of portion other that in rests The got we've is putting transformation I as really place metal about would which think program that business, our going the volatility a business, exposure significant SRP metal

to going fundamentals. this We business profile. our dramatically on affect risk that's so And run

uncontrollable that a is And so us. eliminating volatility to priority

Paretosh Misra

from also just likely the I destocking. for it. And declined, is sure products, down sequentially the make But your it's alloy up details. looks that the all is, revenue but it want titanium-based quarter, it then like went on looked frame that's all like stream this Thanks because and Got which titanium in if previous it to sequentially it time. widebody

make So things driven just or largely the if to want are still it's by other if on? going sure widebody there

Robert Wetherbee

the in question, Yes. destocking Good say, airframe. and general and aerospace Paretosh. issue I'd widebody -- There's obviously,

is plate going armor about thing briefly transition. that's the The on, and we other talked it

bit to only going programs. is armor a of in little major down because transition So be a

of half, signs of second it engine into to expect back in stronger very that -- We to clearly, second we coming jet the as we the And look the back recovery positive. see be the half. start are

think, just it's But in will a know year. exactly supply progress can't of But coming. back great And when. should We chain make the half the we destocking mentioned it's in armor earlier, then the we predict as combo. on the titanium XXXX. we come that back So

Paretosh Misra

guys. Thanks, helpful. very That's


answer for question that like with remarks. we've to Minder the to back gentlemen and ladies closing of any end reached I'd session. conference And today's over call the turn and Scott

Scott Minder

conference today. all interest us concludes call. This Thank your our in quarter you appreciate We first joined ATI. to XXXX continued


that and concluded. We gentlemen do with presentation. our conference you has attending for Ladies today's thank

You lines. now disconnect your may