HAYN - Earnings call transcript Q2 2018 | Haynes International Inc

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Operator

Greetings and welcome to the Haynes International Second Quarter Fiscal 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I will now like to turn the conference over to your host, David Van Bibber, Controller and Chief Accounting Officer.

David Van Bibber

for today. much very you joining us Thank With of Vice Haynes are Mark President and CEO Comerford, President International; Chief Officer. me Financial today and and Dan Maudlin,

words brief would statements. Before and started, statements Section anticipate, of Securities intended Private that believe, the the This like Securities cautionary within contains note and forward-looking XXE of of identify to conference we to of similar call regarding I XXXX. and Exchange XXXX read expressions meaning get are Litigation statements. forward-looking Act The a plan Act the Reform are forward-looking

Although provide intentions reasonable, are suggested such and believe the assurance turn September with The intentions Exchange plans, no uncertainties, number will as ended With expectations are statements, let by subject in company's are regarding and a year to Commission, Securities Form a that whether achieved. risks no such result we or over the revise these fiscal our particular, Mark. expectations in Many plans, of statements of discussed or statements can such be detail we forward-looking obligation to in any update risks and to XX, new me or future forward-looking filings otherwise. call events or the that, publicly information, XX-K, the XXXX. of undertakes company for and

Mark Comerford

to to top saw move talked The momentum greater about orders end chance then and million in agenda a increase. on for business I'll will thanks standard our February markets, for call Hopefully, our the Thank in over under $XX Sequentially, from of call. with had we seen $XXX the million review shipments follow and that, shipments quarter. press you Good and backlog Dan the joining in about this us open in today. unfulfilled you, release in everyone, and on quarter results. strengthen last the just we today's financial give morning, Dave. you've all it. and detail in the continue we comments our to We'll

almost As month backlog margin We our two order invoicing of margin not release, same about best best three through, we lower have the the products profitability. uplifting being quarter two press last another still timeframe. took so quarters we have is quarter but along the for we ago, we time, business, we're I lower ending corresponding I'm March or each still mistaken, mentioned yet about in to mentioned transactional of a highest inclusive some during pound, with quality there it month last month as work X.X the that our seen not better, IGT orders in looking And selling think the per quarter, being revenue years two year's last with got our million. entry has our if per in about high the quarter pounds. was years net about year's $XXX.X Average the last pound. and revenue, year's down Volume might XX% from now. right X% so other up the even very three in were of probably quarter being years was million we're up X.X $XX.XX over -- been soft, in prices $XXX.X pounds, in million $XX.XX it's be X.X% from to that backlog Returning business with second million, the

both market. second gas processing by in the turbine poor sequentially chemical and year-on other increased quarter, in were Our industrial our shipments into significantly shipping the year-end those upset games but smaller markets levels the aerospace,

primary was were almost area, X.X% to pounds, we'll the million, phases operations. how distribution so. next continue and into up cover selling were have moved pleased shipments the key time, and-a-half We businesses I'm the up $XX.XX last As shipped we to $XX.X ramp XX.X% mentioned we aerospace that last with from from in over pound markets. quickly in their the market CPI XX.X% Volume make the to think made was revenue remain the years the last quarter and per IGT from with me shipping we ramp market in up approximately X.X OEMs soft quarter $XX push and the X.X to total this With IGT as the large in we'll Net to Average the products revenue, able years. in revenue. the restructure our second startup expect revenue year's to direction pound. price expanding still is was of $XX make market. $XX quarter's be finally representing this to quarter finishing we to I and the commissioning year's and four past Again, year's pounds. aerospace volume tubular area in backlog highest for million that, or aerospace is our move to million over in that expected per ramp in shortfall Sales of $XXX and for market a let through in finish and and million IGT beyond lack last sheet up and our XX.X% million our strip million the our $XX.XX up our transition. million cold to over about able in

the I smoother spite saw to aerospace expect increased the up the platforms levels, think new we the beginning market. also see ramp to and of increased engine a meet flow to material aerospace and better we're By shipping way, as rates. market that in see their production now seeing we in we're demands of capability the

by to to very solid need QX quarter. this in Our and aerospace sequentially market. we QX X% Overall, performance from driving in about during backlog forward increased keep the

flat-roll XX.X% Haynes. per quarter aware, of revenue. capabilities chemical subsequently Volume roughly I'm million, area and As the driving X-X I that In with for drop years very for to Average books $XX.XX our $XX.X XX% believe that as opportunities enter continuing XX% demand. and $XX.X products that operations operations tubular from to was shipments Airbus but XXX,XXX they're XXX,XXX shipments. net last service confident pounds. area and investments to I up ramp distribution this backlog and price after pleased this to earlier products pound, we and are The down XX.X% up demand was more you sequentially increased accounted value-added very well of ramp slightly, our roughly we're mentioned quarter cycle. the take that was pleased last slight ready of from as year's very in in anticipated million 'XX's engine in pound. X fell Again, was about revenue their responded areas, million. ramp than $XX.XX over year's XX% remember, last was processing have with in X.X%, selling and of in our the aerospace, market position are long-awaited quarter area in in this first backlogs up our the about how the as or for the per I'm we order Boeing look R&D pounds. backlog for year's market, step production from manufacturers from CPI pounds I on

areas better business. As last starting our we CPI of to both in see we're activity discussed time,

better On repair pipeline notably applications, some large the priced reported projects. lower higher large activity peers in most some applications, volume, of our have

with work investment of also Following larger and that fav work with [ph] more we're project repair seeing along chemical our some customers the shops.

move repair significant are column. a the avenues applications the mentioned some in last into out are one gaining have brisk alloys market coming and profitability column that sporadic, think moving Pacific. particular but and the We activity were in to best our -- past our that huge, Likewise into in for And CPI Specialty better into million work the few of us so, relatively application moving we about them in I applications these to in remains are to dormant but out back of $X applications starting seeing Pacific great they always the better very area, region Activity area. are fruit customers I been by projects Asia also week Asia when we're see had and concepts for special quarter is actual cold this Pacific as discussed time us. good projects come or starting which over of new in came region. dormant specialty Not quarters activity starting Also -- a had very of very that some two last activity outcome. new the bear our piece potential in are the a back. Asia way, both applications. this been to order our the to

economies four the benefited a moving appears appear holding that there's busier are reports this in some indicate customers past activity. the market, times I quarter from out the years. over bit up activity think This all remain under as quite industry. and world area but to to bias seeing be will the and in prices most the higher up be of our sporadic We're transactional from getting lead during the investment

market see activity people bias very it difficult trending be meet like distribution centers in this quarter sporadic, will responded XXXX. smoothly move to our finally and insight increase definitely it's upwards, that I as of mentioned, quarter. the if think but It feels A this I'm we one XX% better holds pleased up. is to I I this up, to in aerospace, Similar the I to transactional back is upward. expect schedule. we'll bias plants demand overall as in deeper move is think don't difficult but and with

in per quarter, area pounds. shift the X.X turbine per the market the low $XX.XX sales last a $XX.X industrial accounted XXX,XXX XX% year's XX.X% price million, in about XX.X% last gas our pound, that million very up Moving from volume year's during year's in pound over total was roughly last the to XX% pound. but down the imagine, up as level. down this of in is Backlog pounds IGT quarter, $XX.XX for selling Average XX.X% to increased from this $XX.X market, quarter was sales million. into can from you quarter per

call, restructuring As the the announcements much OEMs we frozen discussed pretty medium demand in the from large have turbine and trend markets. last large

than least a lot months give it say slower of MRO to idea, work on moving or put seems work was a out six you ago. be Just a for I'll at the to lot hold or it's year an

as will out. something and continue goes I think that year see to we be see the

higher the in large market expect see to is, Smaller a medium opinions to the to will frame increase, came opinions in when one bounce could orders continue means up the investment emerges. increased transactional on means and Interestingly, the our applications. this industry We new types and in it their The pain frame as development work will of market that to on severe orders gain in next for well over thing that in and that more of pick from environment widely, as the in were applications saying applications make and be means decision-makers past the start and it XXXX.' to to and 'don't duration this areas we're in as renew themselves, as where products. applications higher industry quarters. means some emerge any Haynes, of unified it typically present customer of Our applications in consolidations temperatures, back dampen differ for gas in but stay two Again, and front [ph] backlog likely people better the and relatively we few pains over the oil efficiencies where IGT -- these you for like as of demand for opportunities new seeing more are I that for quarter operating as know, think operating need sure the prepared customers.

jumping weigh a and last led to big to those This Finally, year's led revenue player our and quarter, $XX.X quarter, last We're was of markets XX% our XX.X% oil sequentially applications, smaller up in the about quarter. our over but the million this X.X% million. revenue. Sales roughly year. not weigh of this for gas accounted and area other XX% applications during from into markets products other $XX.X

think shipping work. now, the toll as previously made We have some up threshold for shipping a our to getting $XXX own million Having million more first that's The quarter the demand more price versus We're bit and high-price which revenue get to move products that push mentioned quality I more pretty a seeing with in internal highest means below that think is which as the less complex and side, stock complex quarter ingot, and levels. and IGT products on finish On that type is those customers on it per this also adjustments the continue now a types corrections billet an transition processing in more back that's X with products. more critical to do bleed the to the this mentioned level. requirements, saw of business right thing. high we mix quarter job I've lower the mix, as still backlog I that their quality, solid we we The are us product while your very of encouraging shipping surprising requirements, thicknesses, Translating a our own shipments stepping to that we'll mix, Operationally earlier, fell a to as into forms you side business. shipping making profitability. mentioned that We're more market levels and has process on replenishments, aerospace, but back and I start business, earlier, slab we're I we're applications fastest-turning demand that profitability. lighter slight volume specialty material precise means of we that to we'll of quarter, in next are fall the its into but items, me. and IGT backlog better out pound plus more to gauge

Finally, respond and the our demand I'm work people seeing. very to increased changes have of proud work done we're with the of

and moves markets with to and primary shipments up aerospace, pleased that we're center our service consolidation focus we've on-budget process, oil equipment that our with the manpower were people smaller get like and and Porte our La I'm With of along the on-time, ramping operations showed while in done some work and subsequent CPI safely, gas. of our in concurrent place that put very with the new

Dan than As to this and we to design all ever processing for -- a and from a way the mentioned that components. with over more their to place better-prepared is result our me that. be parts, to We're I've it feel With that, to specification resource testament for our confident turn ramp customers meeting alloy previously, that business the customers more let on and and backlog financials. want in we're our demand, manufacturing details

Dan Maudlin

but XX.X%, the strengths quarter driven by yet chemical have Gross favorable to was in and expansion more quarters. continued margin improving and orders by need which than be, Margins were the is right improved This prior product of four mix, partly offset quarters. they that the they Mark. backlog you, in better in this the recover, not to where shipments are taken pricing Thank margins past market direction. moving are value from processing, aerospace continued conditions lower to

recovery, the margin quarters it typically lower mentioned, of two to period to in Mark a these cycle three of market orders As margin from takes through P&L thus recovery. lag in backlog a resulting

to level quarter $X.X special in quarter of million of million, fiscal higher the higher first drives improved XXXX. project compared application margin. sales a this This Our $X.X only projects specialty to

to with the the tied over fiscal strength beginning shipments and ingot chemical higher XXXX, forge production are of mix of plate and more the market. products, addition industrial to product levels has processing aerospace improve, lower levels bit six In turbine of our which sheet, months a and our products gas and coil shifted first of with

favorable value-added to form of While is to volumes margins. margins, to expansion value are service Also strengthening is the is our product La our the lower center margins. to Indiana, favorable which higher products headwind ship overall capabilities a Porte shift at in ability our in

to which an to the expected quarter transition, by was this forward. expense we move partially of as is diminish $XXX,XXX, related However, offset

increase approximately our bankruptcy. cost Italy fiscal margins, market material were cost expected second to the and gross raw technical improvement product the fiscal equivalent prices, $XXX,XXX filing overall in strengthening in is of mix reserve $XX.X better in half Regarding over customer for continued of to with prices. the million charge This of rising a a research including XXXX includes quarter second volumes SG&A bad a of debt and XXXX.

unfavorable includes addition, $XXX,XXX foreign impacts. In approximately SG&A currency of

in forward, should had that place foreign currency a impacts Going mitigate beginning in program to currency hedging April help foreign SG&A. we new future in

Our from forfeiture driven X.X%, a of option for negative unfavorable full-grant was tax effective and creating XX quarter partly years by income second start an in rate stock a tax the March over $XXX,XXX. ago, income

we're pre-tax pre-tax effective during expecting continue a losses, bit tax will be a Our from unusual rate as to going income year. the forward shift to

Our effective the but as subject change currently is progresses. tax rate only estimated X%, year to is that at

the effective XX%. we reduction and to level. first solid the expected assuming deferred XXXX, quarter, quarter mid-XX% Tax Act our Federal law charge the environment, Jobs the In the rate from conditions income The from to market a XX% on fiscal Cuts value. signed Beyond statutory and is our in first tax be in a reduces significant had the U.S. asset rate in tax normalized

repaid other reform aspects us year-end. operations determine study tax such impact could foreign to should foreign full as is are which creation a the completed be accumulated analysis the as such forward, needed, way Further E&P any earnings. if under of before of adjustments Going

the impacted currency $XXX,XXX the going of items We $XXX,XXX, previously of do quarter majority by charge $XXX,XXX of to the items Our that cost-related tax mentioned to of loss reserves loss. the options bad million pre-tax, unfavorable stock driving for debt $XXX,XXX. quarter recur for and and cost forward. I a for the these a foreign tough expansion charge forfeited hope X.XXX net of the to not to was start reiterate increase are Four

of million underlines strength XX, at million at or XXXX. profitability from we fiscal half significantly through an increase XXXX backlog; XX% $XXX.X Turning $XXX.X This backlog for XXXX. to nearly March XX, and our increased $XX September optimism first the increasing revenue million at progress as with the of backlog over backlog

$XX.X $XXX.X partially XX, increased. increase Beyond backlog increased accounts $X.X Inventory of the continue of Liquidity; working $X.X conjunction million increased production first first $X.X are in cash decrease at fiscal increased also with the XXXX. quarter accounts million increase $XX.X working levels, increase in for accrued the this backlog half collections second with by as over fiscal month. receivable month capital XXXX at April in XXXX. million, an of over and of balances capital to and the expected the improve quarter-end, to cash million fiscal increase This a corresponding Cash backlog million, during a contributed investment of to million of of increase cash second payable expenses the six six XXXX from higher months offset in resulting sales. use of

In addition, process decrease complete current is and levels shipped. to as expected are inventory inventory the work and

balance Outlook the size at XXXX. accordion than second with untapped and credit $XXX we're the the to revolver earnings at million. revenue million for to seeing order and in quarter; those quarter fiscal an remains Our of pricing, quarter the be of feature third zero next expect $XXX rates, we entry trends positive better given of with facility backlog

science are with product of second our including allows. by improves This, and fiscal in encouraged and in price overall industry the activity, extending strengthening are backlog combined a We patented higher is utilizing processing for XXXX. capability improvement the times value project environment improving application levels chemical the lead favorable and market improved mix trends half across aerospace our specialty

years leverage past return below which The over operating focus levels Our we now capital believe you. our forecasted obtaining the is With levels turn an on of equipment will on is investment. over place upside well realized depreciation in million. is year on We back to that, have this volume I made the the $XX $XX million, expenditures to Mark, and be a going is key improving target call forward. CapEx investments few for higher provide for

Mark Comerford

recall. a Thanks, that difficult I increase. we where and the was lowest business. also the almost falling can Also in very, price had business very IGT a Dan. to Book-to-bill XX% quarter, quarter pushed over revenue level that million $X we increased through That in we

lot the to about, about you are nickel of things holding and lower that you we some think we we talk tough, are a as a customers price. nickel things when One think to out tell for

to likely out reverse-phenomenon disingenuous be point that would occurring it it's not is now. that think right I the

supply their extremely aerospace think in make place even mentioned made I in, some a we're upset though of there have order the also small a orders to in I of the are get to that bit them Dan well, quarters. been they're an queue think and strong think place said reserving orders being as are I forging a as held getting I last very, two Very, there bit nervous chain, our sure supply chain little very the appears trying has in that entry customers queue. well. customers make mentioned, and our their little aerospace people the we've and forging very some that get into saying, supplier in 'let's over April number the our That got booked.' up sure the

lower market I those think are indicative price going number and placed for of will that's specialty Again, have we I numbers aerospace that typically fight to April I have look some activity, It be this very transactional back to transaction little didn't April transaction and type through that a projects, mentioned tell the April orders mentioned yet, Those pulled future the deliver. Dan also about from as you are of final the was are queue but good. product orders. mentioned mix. bookings not But you don't to into March. great. We the I

So it still continuing very very, strengthen. to looks and good

the we're and seeing questions. and XXXX. that With to let's ahead quarter looked mentioned go backlog, have the the lower and we continuing and but in in mentioned, as book fight last think a quarter beginning your still I the Dan of and product I to to momentum here I transition good order, another call up the kicked layers price mix, that, this clearly open in is I As the think

Operator

& comes question-and-answer Please [Operator we'll from from a Instructions] question Marshall with At Company. first Our session. Sidoti line of proceed this question. the time, your conducting Edward be

Edward Marshall

Good morning, guys. are How you?

Mark Comerford

Ed. morning, Good

Dan Maudlin

morning. Good

Edward Marshall

April curious. of stronger curious, end was I'm about respect the of you at talked April remarks. the Mark, [indiscernible] March? March? coming I'm year to than the You cadence mentioned that's your your prepared

Mark Comerford

final yet Especially the final the no. qualitative quarter? on Was a We Don't yet, of at in side. was. not quantitative But Usually, that this order the January-February, have preliminary numbers it the the it's I the but don't the at, entry April of better invoicing And like but Ed, month than information, not not have the lot again, numbers look like point. it, first information transactional activity looked side. more March.

Edward Marshall

-- Got the it. way to in orders? that And you strength of can quantify traction have is there the seeing it early way idea can can identify we so transactional you an that? any Is mid-cycle, the you're any

Mark Comerford

peers typically we heavy that it's but and cycles. to supply in and by nine see look of the again when more and coming lot area. to chain, We're we're good I into the chemical early area ship a into oil of our like and gas the is gas Still best. some seeing activity gas why that -- The peripheral at will levels That's pretty thing volume and back news you're I starting deeper oil oil at to lag months.

through. of started that business. late replacements. the summer -- last will chain business. the a into with and big saw want last specialty that quarter we confuse a us projects, to don't We'll it. I pleased. outage side Really That's month. particular, think quarter, also see put real specialty of come but completed to more do still project We and that Asia probably chemical shipped at A the I'm for lot we're like In starting is for metal the pop see side and the area a project I we chemical it the of work. being it Asia this or plant supply to that an outage be spring have into chemical for

data two side like little really reinvestment I'm I prices and paranoid. and four got lack good more years. I I or You that know but one a I'm from the I've up. how points bit last about oil saying am, of oil than now, right gas is person heard holding like the over one what that

I see think to business. a to chemical start better going we're

lumpy. I I know to quarter going is think it's of be going this don't to the like. what rest look

definitely to upwards. going be it's I think is think but lumpy, bias I the

Edward Marshall

it. volume the the on given quarter spread the and the all over backlog. lower versus you? wasn't understand event QX, And shipments orders some coming I strong spread about I rows the between -- you seen spot more you've as in as of surprised out Is that was difference Got related talked to the move nickel. this that's those what market maybe with of QX can for

Mark Comerford

Yes.

work really wasn't we're of strong we about into had because specialty lagging a good you the talk real the a let If about Every and it a because whereas upside where time it couple I think this project lot. this time specialty last time we quarters we in go an ago everybody we cycle, think project. up

about more quarters do we bigger three it, where to out. part of business have of what's that are levels going like we levels the or I flush time these about price talk lag we every we'll things, Think a is essentially lower how So at up this on. lag That's industries. other got that lower of out mix we some we of think coming traditional cycle

of those are, annually other as or when to you're to and quarterly situation into going add, have either you new we'll either those The on that remember that's business. a bit side lag get the nickel contracts a we the on thing little reprice reset month, but always quarter, monthly, Ed, have is pieces too, quarterly, Dan? as or annually. or Again, a more uplift Anything semi-annually to move

Dan Maudlin

adjust going reflected of Yes. to time reiterate before. Nickel ended a only $X.XX, to get in at quarter of values. and adjusters the about the shipping the lot $X.XX was I'm which $X.XX do just quarter the that from for these actually take up

about a say [ph] you the contained think you lag really for forward or $X.XX, so that before we into be of quarter. product $X.XX, bit should so XX% stronger driver start a our that It's half nickel a of So seeing going in a some can ASPs of bit about it, $X.XX take next it.

Edward Marshall

it. going -- finally, understand side. insight that in into replacement is surprised, isn't on demand Got mean, can and why market think Any volume the slowing. at the And maybe what's then OE going MRO there? on I'm the I what's IGT, I I

Mark Comerford

and I last sitting phrase the hands are the in people think that their I I used on think call that. that's

market largest the side that the players cash seeing through going going You large if frame business, the even effort especially frame, in have and really they of way have heavy tremendous supply all jobs on chain. There's next. we're the on they're know conservation it the a people to don't the

Now, fabricators us that their of customers, from there. aerospace point our into business and really able are we're for to of doing migrate a view. well It's great number been

Some with are OEM types products. as into the really more more on us. able these I MRO see people it's things don't another of are and But good of place or we've order. those any aluminum, kind their when year. that not on the a seen defense-related an they hand. happening do sitting to bounce back, for Typically People bounce back for applications, to what side migrate buying but They're or colloquialism, carbon is are afraid vengeance.

Operator

proceed Capital comes Markets. line the Phil next from of Gibbs question. Please your from question with Our KeyBanc

Phil Gibbs

of terms of surprised curious happened just in what I'm may terms have you. Mark, what in

gap back maybe us sounded you think the expectations? breakeven Can potentially talking getting hopeful for months. you would or what bridge the really quarter to are your other the March that two and strong help between happened you relative the relative I about

Mark Comerford

stuff really the call that coming hit last time of. that pretty we where We We've gets pretty little like it I order situations the been the and XXXX out activities. we the I three advantage pretty we We quarter I the hate it, this to foreign hard time had tough and that the concerned January the I take mentioned to where in will into on we quarter book. one going out so discussions a to see what third better It's see book. and and are going. the and I low I of think think back order in margin were that I of stuff by about quarters transactional a in order exchange through but going we're right to XXXX. are, that feel take that think that I we bleed in I book of but lower and moving out had like start typically order these book, now great layers those be

got We've over this pound Phil, me, going X some the other we've and to to to I volume. is The lot get thing, per of of a got number. through forced products higher we've have and place number, got that Otherwise, type volume struggle say get a these quarter structure. are margin that to get and We've that pound more got bear million to types to we'll X really lot mark. cost over million

Dan Maudlin

and that for bit surprises. things the to a numbers bad was quite The that impacting, we I it ended call, think it that being as this that course, the seeing surprise. things clearly, didn't $XXX,XXX debt And The mentioned at was there as or script the expect, going Italy $XXX,XXX. look reserve you than some a weak Phil, high was with the foreign were was there a bit so surprise my we in lower It -- was if the QX, of in almost script of And bankruptcy some couple some that was of currency from one some revenue on up that was other revenue of mentioned, That I to his of higher we be next, low about mentioned a that Mark last that quarter conversion was were a than think we in corrections customers I bit a a expected, quarter. inventory was was. surprise. going IGT things

Phil Gibbs

north does. in through terms wire That's get of I give you obviously, a a little and quarter this be? lever Can gross helpful. Yes, regulated in the think you system because what any us of that's flavor XX% [ph]. big things your the mix it recovery on are terms of could margin timing

you the of couple you a can the like sense where next of quarters? that go play can think revenues us out So, give if

Dan Maudlin

If that we'll in million guidance well that margins, Well, our X quarter seeing can on then strength get the XX% orders, over as start we don't mentioning. do those flushing level pound but as clearly, back to we we give lower need some was Mark out beyond per margin going that we certainly margins have. that

were in normal, get back very market, But as a us still we not to mentioned. the we're What back CapEx I to that we unclear. should might yet, very we've quite And time that moving at right a strong but we're headed margin consider level. I the since if XX% what last at as we gross as then, direction. had that's invested capabilities that. such to that going you in market look we clearly, cadence some maybe think direction We're So exceed XXXX, that that forward give is

Phil Gibbs

and the in were trying their can Mark, to trying little bit in terms trying queue making that. understand you just with the of were to you was associated disruptions qualify. volatility And it qualify a forging of to the people what Thanks. of on plus I reserve some you commentary better the and

Mark Comerford

we've industry a applications going they're them forging the products. forging bigger forging from they're placing heard aerospace I got used place supplying kind periphery to lag just some industry they're into few the with the us a some touch them volumes the now industry, we're compared month and Obviously industry into the in all and orders customers. of forgers when think we the with cane. know, things some away. they're the and for of quarter, or on sudden, a We've We're steps to you supply huge Phil, who are during But with metals that our placing two, in specialty much, looking we for a far to at And are them thank us?' so sudden other and out look, anecdotal so or moving some disruptions the place I is, will I you're about get of four it's general, supply all seeing feel kind months, the been, we which of it's out of you reasons be logical next the question why placing you the that the 'hey, qualitative but placing for for some very the we're think forging times in One, these, has five out in to two thing but one good of things; chain. bullish industry pricing things.

cleared the forging not think the some made chain skittish. a the side that people last were the I of two disruptions I'm some of most I the little business is sure, in of up. have think over aerospace in supply quarters, but there that bit

think I point of from placing the helped book a order that has us us. of stronger view with

Phil Gibbs

much. very Thanks

Mark Comerford

You got it.

Operator

from Hillary the next Christopher comes Capital. your from of [Operator Please question question. proceed with line Instructions] Roubaix Our

Christopher Hillary

wanted to ask. I just

you continue in capacity your how had over value then and You much XX-XX demand? look and that to as product you a the do months, continue move that have upward that you higher do AFPs next how strong to meet and out expect of to

Mark Comerford

Capacity is not an issue.

the the and that of If corrosion our into aerospace manufacture go products go product, the typically over instance, IGT you in we same to run products think even for the of that way equipment. the and piece here

of ship or able plate the processing. volume IGT of being into we'll been be so. to our in more aerospace maybe ship aerospace, that over in six product shifting last in the able billet more from aerospace or really point helps us the view It been We ship CPI to instance can months into into downfall that has or the more sheets the the of more occurring chemical and So and market. has of more instance of what's

the average followed process look as the is have the you applications, we aerospace average market, market, the historically selling price chemical at are see data, price by typically If market. company the our you'll followed by that the in highest specialty IGT selling that by followed

specialty the load now seeing now now. uplift and also market; in pricing the where those average an selling selling right weighted the of you're seeing and seeing price when how the work it stronger of depressed answered highest gives idea pricing So things: system is I the or into areas probably stronger seeing market of we what seeing as an pricing IGT, those most through a pricing starting you're are in price hope environment; the which aerospace is, bit your in one, price you're out applications lowest average did of you we're also idea selling. in on passed that you're as increase mixed average right we're to of we're and shift, little pricing levels commodity price, the you marketplace the the a question. is That strongest raw are priced very a material and gives combination that two are where markets February I

Dan Maudlin

on project And selling skewed all of have, spend, our cold aerospace. bit we not one XX% that finishing Mark XX stepping a the operations, versus it's rates did markets the this mentioned around aerospace, higher price just production which that of we aerospace, towards up are up that and a see on ramp average but CapEx that finish for is the year. first It's the Once six continue million We're used of year. now we're driving about CapEx products. half that a up, months equipment capacity as months that it's the The We're on should is on increase that. last we in higher which outline pounds. average to nice ramping a and our it well ramped selling and the we be this synergauge utilizations million price [ph] and six sheet starting to capability first our capacities with coil fully over pounds. to of up XX.X and And second

Christopher Hillary

major like ramp rates and other in one aerospace extent customers. coming is maybe scheduled what production your in your from is order that some of with sort To predictable business business extent to there? To more markets? it your question be, you Okay. what allude end just just And

Mark Comerford

a the shipped never engines of shipped commercial the the and quarter or number have out change when feel market directly is can in talking busy how to to they and front the sure these supply spot or macro guy who chain is how a you many whipsaw best quarter, the starting might to it's people queue. the Quantitatively, or to what to the at plus engines plugs, more able our their more are the correlate supply manufacturing to number so on as in aircraft built the nozzles, are terms, rates much they'll like be the of being qualitative of in day orders patterns the talk Again, of fabricators about the of far it's work make in as chain. start in the between effect seals, opposed seems move trying or commercial there it, of be who every line put the buying their ship. in to in book depending because you to have When that getting said, draw combusters it I they're In of number of they different situation. aircraft and customers. you that number things, is Typically, versus manufacturing as to It's way fabricator. guy to

Christopher Hillary

nice weekend. a Thanks so Have much.

Mark Comerford

you. Thank bet. You

Operator

the would remarks. of to call question-and-answer Ladies the back the to we gentlemen, turn like and have Comerford I reached for closing end Mark session.

Mark Comerford

of thank We'll Thank updating quarter. forward today your for you, look to Thank Dana. next again you in and you you Haynes. interest your you, support for time Thank everyone.

Operator

today's this participation. time. conference, you your may Thank at disconnect you your lines concludes for This

Haynes International (HAYN) 6 May 182018 Q2 Earnings call transcript