HAYN - Earnings call transcript Q2 2020 | Haynes International Inc

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Operator

Good day, ladies and gentlemen and welcome to your Haynes International, Inc.

Second Quarter Fiscal 2020 Financial Results Conference. [Operator Instructions] At this time it is my pleasure to turn the floor over to David Van Bibber, Controller and Chief Accounting Officer. Sir, the floor is yours.

David Van Bibber

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

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

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

With that, let to the call me turn Mike. over

Mike Shor

Good morning.

unique I all experienced have healthy. most that in I time safe the and you of that through your sincerely lifetime. living hope are families We and my are

these the our and to both Haynes at workforce times. best to continues in decisions company team to possible make Our work the protect unprecedented

the work safety with health our skeleton proactive we home, our to if These but the for press weeks manufacturing not of crews protect uncomfortable was to of our and to voluntary our possible most process decisions read feels are possible. so. in we as you to an to week layoffs. we required Many release, of to to employees and decisions, employees coronavirus of employees allowing of XX. continue in from have work coming who do offices, established they able all to April many close easy possible, lives. of three felt employee if our or the returned from coming also Where not our facility were work, most Where during made only a home in work are operate As of

social our also equipment We to guidelines distancing, follow protective continue related cleaning, shifts employees. all for and CDC to staggered

our and I few on business Now move will both a front us. of to thoughts on provide to what’s performance of in the reviewing

As far as line our performance, second actions along with bottom we our are of and focus our quarter business proud employees’ results.

margin QX gross the our power of Our show and collective results on profitability improvement. focus

our our significant percentage critical other gross forward our impact the to pandemic significant differentiated products. impact actions our on reduce As year-on-year you markets. point. aerospace significant our has the on for past cost and decrease as our in focus our overall breakeven its significant overall company well yields margin a are aware, been our XX These increase for have increase of prices significantly manufacturing, and improve in months over our high-value as volume its moving are and These a and given the industry economy in the resulted actions

to words results. team plans Our actions from moved has from truly and to

X.X have points our million XXX than highlight everyone’s now gross memory, basis step key To shipping year, review to a margin performance. few change was pounds. in will progress. revenues I our had margin prior year and higher our despite we our Compared a last QX refresh QX gross similar results to just

improvement driving trend reduction sold. second in a basis operating points prior XXX continued year-on-year despite quarter’s our higher pounds in see quarter, where can results, QX, XX.X% XX.X% you quarterly a reduction than were and in this revenue this income we in year our in $X.X a As million

QX percentage even Our margin was gross with at QX XX.X%.

proactive this quarter achieved shutdowns QX our the we in plant were despite gross However, coronavirus margin incurred significant costs March. with associated that within

percentage months we of X March. over margin due averaged issues quarter with pandemic in XX% global the coronavirus-related well dealing gross as began as Our the first before to demand the reductions shutdown the in

has per In addition, and impact pricing breakeven our by significantly an yield cost, point. focus value also our reducing had

at X of the pounds have past per X million difficulties quarter. shipped many being you over below know, we profitable As had years, volumes

Based results in talked have of million X have shown by million gross on quarters past two the lowered the the quarter. this pounds the prior many significantly comparing our now approximately years. improvement, X margin we with to to per first This X year from times the of about success we pounds now our below breakeven is

it’s think cost work near complete. I that is important nowhere that note our to on reduction

built and have momentum much opportunity. much We have we more still

be However, string to worldwide of that to return, all aim will further health margin that we issues to facing. structure, halted price it’s have by to that changes momentum economic improvement. news cost the and fundamental once we now The our and begins will made good today, volume our obvious and improved continue path gross quarters are on is our we our

has our the and generation. and our to changes to into view cash must our business as far the to appropriately. react team’s We focus future, shifted as acknowledge world the Now short-term

for first, X million representing a a X.X In thoughts, average XXXX, QX averaged baseline fiscal shipped pounds reduction quarter and per of XX% million facts volume perspective, year’s from fiscal pounds, we Some our XXXX shipped company. last from volume. year

volumes quarter impact to the issues. us coronavirus throughout other the due While were worldwide the to in March, to reaction impacted also began

ongoing market. CPI and weakening impact we aerospace to the commercial QX. processing issues across what with chemical and on the MAX, encountered many general which were This capital and XXX similar chain reductions and of ongoing that prices includes spending within in inventory due demand oil Some supply to the lower impact the platforms the

of estimate industry roughly what over look to customers and the specific with the year. might demand working are we forward, customer Looking balance like

but below to due the gather that reductions estimate also been to second the facts, at by lower what economic year growing demand. in to robust we up worldwide of levels significant now quarter demand fiscal the assume We’ve our XX% at looked QX versus volumes least issues, had very from scenarios QX continue including could be that We era XX% our levels.

very you in imagine, to this As forecast economic can forward it’s difficult environment. unprecedented

by facilities been this effects the Boeing The particularly supply has aerospace have The targets and of industry moved Airbus. the chain. throughout resulting shutdowns aircraft of temporary impacted, from lower announced production the manufacturing

to absorption is and, in and As we experienced in decreases industry leading in some issues, therefore, with typical significant drops inefficiency will encounter our volume-related reductions. mill This volume. sudden cost volume, very we margin

the However, volume of to actions reductions. continue to manufacturing plan take address continue we to short-term to our match the required cost anticipated and

part As of temporary the XX% release executive reduction our this, team of a noted in our our as April X, team management the in implemented Directors. have Board of salaries and of and Board press our

that a that months. is comfortable being the major these in here of currently times cash. source generation with potential point The reductions feel in is for to the capability With said, a to very basic our as cash we important X next inventory use principle Haynes of over make company

we and on finished given of positive we now in raw responsible fiscal year. inventory focused know continue materials reduction facilities. what today We distribution cash products will company our currently in inventory to monthly to Our our reduction be team throughout the believe over have that place is our from targets balance

sequentially or which pounds move details than pounds, higher last X.X was second quarter. than Now, up which the the pounds. last me quarter last second million of fiscal Volume of XXX,XXX million other second million Average Net the lower quarter. second on let revenues the XX.X% of was XXXX of in inclusive pounds $XX.XX second was lower first XX.X% year’s XXXX selling per in of price year’s quarter were than quarter about X.X X.X% over quarter. our XXX,XXX to of revenue, quarter of fiscal second year’s shipped fiscal and fiscal XXXX $XXX.X pound, was quarter XXXX, the in

decrease XX% decrease same to $XX.X our market me to of these dollars XX.X% key production million fiscal to of the let which in that, a of of XXXX. the primarily to quarter an the issues. slightly at Sales continuing revenue the increase aerospace revenue in on announced represents decrease the X.X% to industry pound. halt With average was has markets. QX by industry-wide due volume by X.X% aerospace to XXX volume had in selling per MAX pandemic to increased decreased period accounted second seasonality. XX.X% attributable move levels. impacted production the The from going the to and and by XX.X%. This The chain forward Volumes COVID-XX. Backlog in significantly aerospace aerospace XXXX is in from for our in from the beginning impacts fiscal sequentially Sequentially, aerospace the year last partially quarter, in significant offset by first price supply a compared reduced QX across decline due effects the are second aerospace quarter with shutdowns in market of expected on

the decrease sales to resulting by global of was by XXXX. a quarter reaction represents slightly offset fiscal industry’s processing same chemical offset per million projects of XXXX in volume, from average of decrease uncertainty, second to prices. significant chemical pound. market in X.X% Moving increase and Volume our in special from continued fiscal the to for a of drop a XX% the to selling on to This the revenue increased slightly tariffs COVID-XX, XX% was price period $XX.X in This accounted at lower oil XX.X% shipments. trade due the due the economic

XX% frame driven in last an by initiatives de-stocking price from volume X.X%. our The million chemical XX% of represented increase quarter for the spot inventory volume period to Sequentially, the IGT revenue due industry, share for XXXX from X.X% gain QX attributable in sequentially and of form. large Sales in in revenue $XX.X the the of in for in offset to quarter accounted slight of of decreased the of by in the turbines. pound, to easing change first impact our IGT is selling compared CPI increased fiscal X.X% fiscal dollars increase in turbine decrease gas to average an improvement of to product declined Backlog initial by year in at XXXX. the market QX the quarter fiscal second partially bright quarter. processing demand XXXX. a XX.X% the in second market same industrial per primarily

industrial in Sequentially, XXXX by turbines gas industrial X.X%. XX.X% in QX increased second in turbine fiscal of the the dollars first quarter QX decreased gas to revenue to market Backlog quarter. the from sequentially compared

a represents continued to meaningful at XX% second for of in to due accounted potential continue a of flue was to markets offset Other XX.X% fiscal to us. XXXX. growth market lower XXXX. fiscal decrease see in sales This the of to for due average the opportunities The in period for in gas increase a million price IGT decrease share by We revenue in XX.X% same in partially selling $XX.X volume compared XX.X% quarter volume the market. desulfurization decrease primarily

period revenue markets in million The fiscal second the to Sequentially, compared XX.X% second X.X% from the Backlog increased same dollars $X.X XXXX to other other compared increase the conversion. in Other at in increase first represents the increased QX Sequentially, other QX of of of in decreased primarily revenue toll the X.X% was This X% quarter. from due fiscal to of fiscal of QX. quarter sequentially X.X%. XXXX. revenue accounted first an markets quarter. for decreased revenue XXXX the quarter to by in

of detail financials. it that markets, over now more Dan let me on on details turn the all for With our Okay. to

Dan Maudlin

start gross February had and January We margin showing momentum a good Mike. our XX%, in you, continued of average initiatives. to with from the the Thank focus over quarter

voluntary of March However, for at basis. the slowing COVID-XX production coming levels of decision operations concerns resumed to of to shutdown on employees, weeks, We demand with the spilling the crews for into feel in of safety which and impact April. led the X majority our began month a situation with total a the reduced a the to the of

although XX% with production our staffing insurance laid paid enhanced continuing remaining the now are by unemployment running the Employees are while company at currently levels the be being is We location off. not off, main Kokomo available government. laid roughly in from to

compressed shutdown, well estimated which impacted month of due reduced unfavorable operating million. cost March to as levels was the by absorption, the revenue the fixed as margins in an $X.X Given

specialty million $X on note million. XXXX compared projects year’s a side, favorable Special $X.X the quarter. of On quarter projects last second million and sequentially this to of to of application compared QX were FY $X.X

with breakeven by yields to challenging quarter $XX.X spite as this and representing margin many QX we points quarter last margin projects, important both better on quarter basis these navigate and which believe a achieved forward last if achieved through percentage quarter, our improved percentage fiscal XXXX, dollars you of is margin of have and special have current ahead. the of was lower focus fiscal million. lowered our All We expected in gross we special projects. quarters any this for point XXX than the the year. any an exceeded a highest achieved be revenue same improved increase QX second momentum volume XX.X%, in in achieved to in pricing, quarter percentage in fiscal was recall, going a And was Gross year We margin back million $X.X XXXX. of by gross costs, point which reduced in than first year’s this time was of XX of an our as

Moving expense, management lower accruals research on second layoffs. for $X.X foreign this lower and of plans XXXX. and was than first $XX.X incentive currency, in SG&A, quarter which including year primarily to This salaried some million to technical due the quarter the fiscal million is

second in discretionary salaries and the to as of executive travel costs, of as the year XXXX We temporary in costs other to well trend reduction compensation consulting in Board due cash expect Directors’ fiscal half SG&A reductions spending. other and lower XX%

discount due the we Non-operating discussed quarter to occurred slightly due retirement expense the QX lower quarter. nearly the mid-March. on this million doubled $X.X was year’s million, $X.X on P&L which Interest to was rates to was expense last compared of benefit draw the higher last in which revolver,

with million was XXXX. March at million of million. at of net or decrease Our year’s $XX.X a net quarter XX.X% compared XX, from effective million tax or rate at diluted for income December the Backlog per $X.X share XX, to income $XXX.X XX% $X.XX quarter at second remained million $XXX.X last XXXX, $X.X the

The company unprecedented economy, with inventory pandemic supply entry authorities. COVID-XX remainder in uncertainty Boeing to are the significant measures has reductions, attributable tariffs continued levels limited the of a oil experienced to pursued by visibility the from trade of grounding lower global significant the respect Outlook is XXXX the COVID-XX prices. with due the drop uncertainty the XXX to impact fiscal MAX, of order that on and and the chain its ultimate beyond surrounding mitigation and governmental the impact

challenges pandemic the lower XXXX many due in quarter third fiscal are increased production elevated reduced with and We anticipating and announcing of uncertainty demand and to levels. global shutdowns COVID-XX customers

unprecedented fiscal through to flow, third second and inventory of be in through quarter be those manage we The As levels. fiscal below our focus expects XXXX these will the decreasing the issues, earnings quarter revenue generating especially cash of XXXX. on company well cash of

assume As with is economic up second to It to scenarios XX% at that QX very estimate could the in Mike this of the at and lower volume now mentioned, we’ve quarterly be also our volumes difficult fiscal year we levels. the least forecast any in below accuracy QX environment. unprecedented levels, half XX% looked of by

we liquidity, important, becomes Moving to that liquidity has like proud in on very are obviously, strong times these, liquidity. Haynes and

the cash revolver on increase total account XXXX, giving measure $XXX Our we a total accordion to readily $XX only this roughly solid facility, available in $XXX recently of handle puts our $XX.X million our XX, credit drew over available. credit $XXX cash million. crisis. sheet cash had on million million have protective balance $XX million with bank liquidity option the At at to and us and March us footing the on million We to on an as to

our of plus bear keep million Borrowings period inventory accounts lending collateral rate asset-based of we level, if have agreement LIBOR interest either the primarily available. and facility Our and $XX euro-dollar for exceeds credit receivable prime facility X.X%. an certain current declared to rate at or base the up per made at annum adjusted currently maximum. a our borrowing Therefore, time the is currently plenty

covenant-light borrowing coverage are X.X, X.XX% ABL I wanted covenant the Our over mention at XX-month is charge ratio rolling requirement. also fixed current until primary our is million rate $XX of of currently we with requirement to X.X, above well of being that the mid-June. the a financial and

covenant this we of does only until our apply or within not borrowing capacity our even a addition, level $XXX XX% of of In million versus are borrowing borrowing $XX million. roughly current

In fiscal increase inventory reducing as generate cash year strategy to levels to cash expectation significant of half Mike our XXXX. the cash fiscal second in Also, and our an balance able of of mentioned, we have our inventory. and QX it our been volume decreases, in from flow our of operations previous increasing resulting QX is reduce times in from

after expected per was cash as to Act of cash sheet. The $X.X the great $XX period. forecast example, our recession be the XXXX XXXX our to X-month an level Also million to XXXX fiscal FICA $XXX XXXX, for the million defer balance spending roughly compared of Capital tax had fiscal to CARES in utilization of depreciation is provision and payments calendar million. of is $X.X half between $XXX,XXX over million on in the XXXX, the year and contributing we balance employer $XX the million of spending As for quarter. portion expected our capital first in for increase

expected demand looking significant conclusion, ahead half to which our In impact XXXX levels. see fiscal are second challenges forward, we volume

from employees taken believe period financial to the unprecedented carefully through well-being the demand our is actions have We that this in protect company. managing of manage these Our arising and proactive challenges. team lower we

on both stemming importantly, from focus historical inventory clean We and liquidity sheet. position spend diligent are most point, currently a volume on our our balance positioned breakeven solid, lower focus management with reduction, diligent is a and a

carefully see to the are are positioned opportunities the on ahead, challenging we storm weather positive While quarters side. growth other and

Mike, with back turn to the that, discussion I over now will you.

Mike Shor

final easy me took find and we you, financial made offs situation, current answers. and There’s to decision we’ve together The here, our how perfect one I’ll team of strong. thoughts was they Thank you, entire our have tell there that the or lightly. is proud no customers’ position and lay requirements we been on A employees, no temporary decision an meet working forward. our a worked Dan. certainly few keep path I of I’m have from protect our our to or not playbook

up Melinda, questions. let’s open call the With to that,

Operator

And like is go ahead. & first looks Sidoti it Marshall Instructions] question [Operator Edward Company. our Please from with

Edward Marshall

Good morning. guys. Good morning, Mike, Hope you Dan, David.

Dan Maudlin

Good Mike. morning,

Edward Marshall

from you can guys I I your have that pretty look And for you Hope tailwind well then that to QX. families about could projects of quarter special at balance the provide, might and what’s there maybe and kind doing benefit I the you. you tend isolate I margins. in well know this a might of wanted gotten as year? hope step wanted to special further, projects. are. anything maybe chunky at talk maybe and backlog specific have And they taking at looking if Thanks. that I see in a the to Thank

Mike Shor

Okay.

As last far we prior I quarters, memory, year quarter as the or projects, but special to exceeded three well this QX, year a same as quarter. doing QX in as had, special same believe did good in from we’ve projects, revenues related we from

special with well done we’ve So projects.

mix pleased that year-on-year. has the much there been We been in of very have products also higher

big cost It’s about pricing been doubt our the able it. So and helped pull that also to contributor. certainly us, But throughout that, it it’s has plants. reduction beyond a in no we’ve the

big three the contributors. they’re So

Dan Maudlin

highlight categorize margins at the one well that bump over we year, margins we nice margin projects quarters, we that’s in special percentage nice margins on Both the a low remarks XX% wanted last those in seen as to quarter. quarters and so four product product is I isolate projects, where in we’ve look And compared XX% point are we getting. these had that of that a my step-up for the items special very all that prepared And our based projects. in do to this these

helpful. it So is

Mike Shor

far sorry. go Ed, ahead, As I’m as

Edward Marshall

that’s No, ahead. okay. Go

to going I think address you backlog. the are

Mike Shor

Yes.

As on a in backlog a what’s aerospace on a drop X/XX. book-to-bill down that we’ve $XX came overall, and little actually. and far seen you, in I book-to-bill, backlog, we’ve million than when revenue, as on will less or backlog, in obviously, obviously, based on our at $XXX our $XXX.X dropped million look XX/XX side, When that our the XX.X% QX, tell about, million, you

aerospace we’re seeing So and of aerospace the the certainly effects market. what’s in happening

We’re right line what everybody. we’re with with in reading

be which can value continue are to to before. talked to continue sure to and make continues orders, supply to to to the have be ability in What do faster we’ve to our job the we Our to what we get provide about smaller quantities customers wheelhouse. going are

Edward Marshall

Got it.

of the about takeouts prices the you as you now. toward for and several are talk cost into or of kind and some might later that some volume lead you macro had of the kind are kind there had those the But The are have maybe originally able that working controls accelerate didn’t you working to have kind next unfortunate You of right you times, things control price, opposed going on? over in maybe the initiatives, talk deliveries, you and those reduced goals how be even against about to of been more volume maybe of progressing cost? it’s Have on-time the might that of that you sort controllable year? year planned be these

Mike Shor

right. on the cost think are you side, I

are provide. pricing own in best we the side, On our to the We we hold our that. doing believe on value

will that from of and COVID-XX. a about employees that we got our we moving we with success, variety our what breakeven were out on I will On our are this and all all were here There had we have to But on coming how they team costs projects on hate going but work. keeping Obviously, industry, actions figuring our especially continue. I taken budging, Absorption there the a safe differentiated costs, not talked is our the and are but not we high-value plants we amazing speed to Kokomo, of we to fundamental cost, call, So in with is the because obviously just sure make of to across offsets. are that with in we’ve are shows that where in word reduce working is real. down related continue the products. it’s

have you going when VP less don’t on of And I do offsets, product to as order lose is far our Strobel, time, cost. to there Dave through, time. VP focus be it’s as Marty what our to Losch, because Sales, continue going the Lead an heard take we going but Operations, say of lead to of

getting are we’re very there aggressive. volume aggressive we our are Obviously, facility. in tubing as very our less We we and have in plants, getting

are So lead we down times. pulling our

far And find reasons as is, I’d our But been didn’t will we inventory. delivery. focus the decisions. delivery, as and we the improve ways to for focus it’s customers, was we to safety come made so, a significant plant it weeks. tell you we’re as now we down to as on-time I it bottom to our team good our the But or which tough some say, we heard over reasons, help us that shut did X-months line back, will finished a on-time we can on as And I And As that reduce a down delivery bring because improve that. me we last, now into delivery, continue plant of focus. for couple great on-time bring a by that back continue for back, right we for you to with tell can’t is thing. our decision for the on-time on-time shut continued doing about workforce

all areas the focus us. all it’s for are of those So above

Edward Marshall

We this that’s to ship channel the we anticipate on it. on Because and where getting about in their XXXX, MAX lot maybe good booked some of as upwards color is zero step growth you the Got some we doing the is and into XX% inventory might Boeing shipsets, of what the in I a be? shipset. on kind what year. wanted

aircraft So occur later? now. term to that to what ship I the be and into able right of near the as restocking the side kind going know as might is funny difficult so there a is It’s visibility move – of potential start is forth, get looking mean, digest help. of a I the Are And is? But kind we we at this. that that asking, kind I’m trying really how that inventory again, to you other we just of think do in to that

Mike Shor

that Sure. me what thing aerospace, we metal. it in now. forecast on the is is inventory and much ability engine side this very was chain the to to of with came just everyone tell is first XXX Obviously, across whether right our years, so demand inventory the COVID-XX, I can has excessive for difficult. going get It supply you pretty suddenly with drop the the side board, be the What it’s and obviously now airframe extent the or hear the on

on And chain. across that we’ve military the think Obviously, that people board. heard are in across but there applications, in aggressive were a we’ve building supply of those board applications, the pulling commercial But the so which are is lot some nicely. I heard inventory, is there inventory

this Boeing not XXXX to be to So about is CEO quick. to travel going return for the levels. to Obviously, talked three two years

to how this we’re going this So the bounce but is positioned. comfortable run. realize not very back long We with quickly, we’re for in feel

Edward Marshall

Okay, thus We challenging guys. a Thanks environment far. much. navigate very

Mike Shor

it. Appreciate Thanks.

Operator

with Michael ahead. go KeyBanc. [Operator Leshock to Instructions] we Next, Please go

Michael Leshock

morning. Good Hey, guys.

Mike Shor

you? are Hi, Michael. How

Michael Leshock

well. Doing

you turbines. to the So first, in strength about talk gas I wanted saw

a you shift the there’s prepared And the out How there. of of you view or destocking a in because in a uncertainty expect remarks, You’re some inventory in momentum do And driving over encouraging of do longer-term recovery to with gradual easing But in seeing customer your I COVID. an what’s really reopening assuming when just economy wanted levels you to here? on would that IGT. restocking, quarter market, you a that? view called hone the obviously, lot next two?

Mike Shor

so is many much builds issue I large because with and of And nature because with there many absolute over frames frame, builds number think the significant the weight is and conservative the one. of IGT past the years large the two, fundamental weren’t us restocking. there reduction number everyone for not

So been the been frame. inventory and the keep just which is to a chain. large drain or where reduction to bit is a the doing their volume of best there quite has again, the There’s quite supply bit,

about are peak. and expect were that, is talked to point, for at half We this at, about back not are that two things to don’t with but probably, we are renewable, volume we And we going at on its quarters, this we this through there in probably drive we generation, forward power get are now have prior us. there, the that

across it sales a the pull gone application that our as the now I just frame taking is there hearing hearing need, are opposed is force, when large to We and engineers our a inventory out. inventory am from there board. is

us. So that’s thing a for really good

of it focus. take and quarters renewables, very what The are smaller our had it’s worked second And very hard to being we figure hard pie out successful. we we’ve be to a that because we’ve And increase is going part of share. I’ve for share worked two talked targeted about market we going to now have it’s and to market

us for significant have gained volume We forward. going

see in We our should to and frankly, continue to that second quite that see grow. and it have begun began quarter results, We of volume. beginning the

share chain, pull a we that’s And gain. more So when good and thing. our the there for inventory demand see large will in number two, products a that’s is frame, supply no

Michael Leshock

at reopen what Got could And about facilities could of you’ve voluntary That’s little into ramping you’re coming it. as some a just a far, just facilities more on talk you in, mid-April workers as up and maybe back you to reopening it those your on on of rates reopening what detail utilization if how basis in go helpful. the your means facilities thus then seen terms well? back are depending customers’

Mike Shor

on, early to the Sure. okay, decisions employees we were six There were just too will the start. our At tougher one with down say, shutting just keep having unknowns weeks many crew. I I’ve skeleton ago, a safe. beginning, in my involved can facilities, of the mind been

weeks. we So break, to we strongly take very go felt don’t mill steel a a cold. that doesn’t did two you and we that Obviously, in had

to was And of this got here. crew been third everyone us, height, you’ve Louisiana, of was at the pretty infections. ready bring would were then much the So for we getting back, a as which Indiana have week as skeleton

So that for issue us, the was a big week. extended so third to

people for As keep whatever by and or wanted caring people, with we child just we the didn’t be. may right. parents on elderly to eye have And some Oh, To comfortable. way, before. or feel be have everyone is And their it volume we name brought of we the the me, care game, we situations back, the people it it’s whether the had don’t obviously, need very unique ball. I safety

advantage. our work So this could to

XX% range of So when people in of We XX% On came not the a back we probably this. we to employees voluntary that to voluntary started had the brought back. but were prior range our on this the basis. we two in week, for that weeks basis, a

we We So shifts do. needed else. a did was in place, game. we in the And heads comfortable. what had perspective, their to safety I We staggered everything social from the and had distancing

we So very, we range, plus And we will I what to to am started number. we we to very we what This with then thing XX% with are material have facility. are doing. meet next week, week very do after as XX% the well And be nicely minus but our a organized since a on are weeks, guess, for beginning and or in daily ourselves this it’s and week it’s that. very will out and going related next flow that. X go first XX% to figure going through and range to had back that lower pleased staff My

So flow as weeks. material back we bring through. now back the enough people remove we for but for to issues and going won’t to first have we those few we excuses the excuses we will flow But XXX%, to have be are

Michael Leshock

could And some your internal was if nickel fiscal of it. XQ? lag forward Got prices in and assumptions in for a prices what nickel on talk impact the you of quarter going the to

Dan Maudlin

pretty neutral found actually quarter. this was for in nickel We that us

bit. end a maybe last nickel prices, were fiscal at at and But they year the If high you came been look of quite down relatively back then of the kind low-XXs. in mid-XXs, the it’s stable

am able $X, being I to pretty gross been to that margin. neutral we able we been So sorry, And $X. our have see to have

a see don’t big as it we So impact all. at

Going Indonesia, other heard forward, assume some going also could have easing maybe of Obviously, restrictions happens. impact, have have demand an we’ll lower won’t have we impact see what for the we which steel, in also but stainless – would I way. and an

what pretty see but will we neutral. nickel now, right So does, it’s

Michael Leshock

you margins mix focus to allow could markets could to that? color how then any you fiscal in certain And there is around the volume out Are levels about XQ? you that shake Does on in you’re any more talk or that great. anticipating? lower you provide Okay, expect

Dan Maudlin

I don’t think on mix. we would really focus

there out. get whatever can we issue orders is get the think we out, I will

hungry you’re when take we’ll of So volume, certainly, orders. for kind whatever

time As Mike mentioned, lead issue. be don’t an let

get product the order the will the We and door. out we’ll get

the sometimes drop, found it’s have side the commodity when business. volumes in We of typically that

So our shipping, normal. of be left little can a sometimes what than richer we margin percentage, what’s are

So a know. squeeze that percentage, and operating gross on that’s lines definitely we income compress I lower, gross percentage. much see And one don’t that forward. that’s look at you’ll our volumes mean, exactly we in to to certainly, thing. we’re How being margin But margin gross continue we’re and see be? going to that the forward going margins looking going will as and

certainly it are volumes We get compressed. to are what but expect not going do, to sure we

Michael Leshock

shift Okay. relates make would as to to cash you And you capital lastly it and specifically then changes for any dividend, just your there terms liquidity? allocation, your in me generation of as focus

Mike Shor

you. Thank question. Good

committed as is to at but currently see all our importance We We COVID-XX current don’t the to continuing going. economy we level. have dividend where the our shareholders. We policy, obviously, in answers dividend the our the at are dividend realize the as point and of with no far this change

environment. committed right changing evaluate but us if are open, we warrant leave continue So continuing it. will now, And some to economic that point, conditions to we the will we to door at reconsider this

Michael Leshock

the Great. Thanks for color.

Mike Shor

you. Thank

Dan Maudlin

Thanks.

Operator

Michael further Shor. to time. are signals The return There this floor will no at

Mike Shor

you, and today, support thoughts of everybody. your your interest our this your for talking and company. quarter. to and forward Melinda. time very our you your safe, and unusual for families you Thank to look you Thank are Please We time. thank with in Thanks, be you next

Operator

your does conclude We This thank for you. today’s Thank participation. you teleconference.

You may your now Have day. time. this great line a disconnect at

Haynes International (HAYN) 3 May 202020 Q2 Earnings call transcript