- Earnings call transcript Q4 2022

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Operator

Good morning, ladies and gentlemen, and welcome to the Haynes International, Inc. Fourth Quarter 2022 and Fiscal Year-End Financial Results. At this time, all participants have been placed on a listen-only mode. And the floor will be open for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mr. and Officer. Controller Bibber, Van Chief Accounting David David, is yours. the floor

David Van Bibber

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

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

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

Mike Shor

ago news to the from week morning, working like of by everyone. begin Good Haynes heartbreaking you Dave. Indiana our I'd a Kokomo, while sustained, employee death the of comments you, devastating plant. at my aware Thank injury making of and one today

during together, through Logansport, support each Badger, keeps extremely coworker, and difficult strength prayers To will to of find loss grief. thoughts other Haynes old XX the our in our and time. work that everyone Seth's in more lean ask We we and years our and who the your team, Seth this Indiana. was sadness family we As from on

XXXX fourth I'll year the a from which million. on and pressures. to XX.X% revenue a to dropped in fiscal us, by XXXX With not despite Revenues our year. and quick to for my and XXXX. quarter in million was research take now approximately shipping and for million, loss like Net $XXX XX%. million behind fiscal in XXXX back $X.X or performance technology, XX.X% best fiscal a was decade XX.X% margin $XX.X inflationary Gross and to net look Although full fiscal company comments compare to would the went just income fiscal XXXX including of doubled SG&A, to QX. from easy, income improved despite transition we from £XX.X X.X% of our in profit of a almost financial our fiscal XX.X%

company at last $XXX.X finished of level million, million. more record backlog which year's Our $XXX.X is a than double

have differentiated improvement. and highlight unique and We is have employees will this safely volume profitability the both so specifically, six that like our we regularly you reduction the happened driven I'd improvements that cost this to and at are Our our services, to business answer of on performance performance driving how to More point variable The improvement. products on were that drive excellent the thank the focus quick Haynes. now actions focus sincere drive able this business significant the because improve us in to their for that relentless people, will processes asked anticipate we relentless get – that were efforts future. rapidly. we additional items My and

our alloys aerospace Haynes still statistics market. industry. our part and XX% alloys our under is look others groups, is including XX% this, with invented statement our to is continues and development to from of revenue up. development in are second marketing applications new to unable best none bright of our significant or Approximately in our back First, margin patent The under of to application future alloy product and alloys within from alloys and about Two produce. our this research

Second, our services, high-value and mill the and centers service combination of products our truly company-owned differentiates us. including value-added

four significant reduction technical have a Third, yield resulted improvements, of financial fiscal margin advantage. is in we our and and that The a service, the of XXXX performance, quality – improvements provide cold moved of the this variable CapEx process gains, value and of our to increases customer Fourth, and to with end XX% users customers XXXX including hot and strong small capabilities prior all and all sales to result relentless low loyalty. year niche-oriented high-value the industry. finally, single and truly of via levels margins we our gross XXXX, to with rolling We've focus efficiency impact the industry flat our gross our and our immediately high a which a have mill continuing on And the manufacturing cost double-digit gross slice to continue our retention pandemic. throughout lead have along quantity sustainable leads tube to for from we competitive work the niche evident of in operations percentage highest wire made margins combination orders believe improvement. changes, in finishing outstanding in and Fifth, the manufacturing we us capabilities create capabilities. and which have unique products,

of tailwinds. We the with favorable material XX% have about from at emerged since margins pandemic impact now the without raw

our been that of In just current from past pounds significant deeper impact to addition, pounds the per shipped reduction in quarter. the Diving with confirm similar by million in to level year reduced now this about of per year's volumes. the the X quarter breakeven million X.X to breakeven, we've compared XX% approximately -- ended the prior quarterly XX% quarters results has our

best QX million. yet XXXX, finally, improved year by income story and XXXX approximately so $XX changes one of We've fiscal XXXX are volumes QX quarter of fiscal we million. QX of of fiscal volumes net QX $X similar to is of and our fiscal And and had possible. is income of fiscal XXXX, QX leading much volumes The improved of approximately that XXXX similar XXXX million. ship approximately the $XX that financial yet net XXXX we similar to more the by income believe net performance. volumes improved made In fundamental QX of income fiscal ship part similar to excellent by improved details. between $XX quarters by the are to XXXX had QX million. net had had about Here fiscal of to

comments markets, Now completed recently year. some and on our our fiscal QX and

XX.X% by year revenue increase fiscal XXXX, Our improved increase in XXXX XX% CPI, XX.X% IGT. led a and by versus a in fiscal over

double Our core QX each by of markets in increased IGT, revenue up CPI of almost $XXX.X with revenues and almost were decade. a up the million our XX% up XX%, Sequentially, Aerospace quarterly highest revenues digits, XX%. in over

at at aerospace our sales. $XX.X book-to-bill strong with management expected and IGT reduction X.X%. more million, X.X%, and mix QX commoditized revenue initiatives X.X% CPI addition, of remained at Even our on our on total X.X%, at current fourth CPI CPI with other was In directly the business. portion was our at of related XX% based representing overall revenue quarter high Aerospace shipment X.X% these levels, to revenue The

of our with in accelerate momentum. Aerospace, late view largest growth and very into to double with continuing is to build single-aisle XXXX commercial our rates market bullish remains Our recovery Aerospace in The XXXX. this show market, expected further expected

both in strong is Aerospace builds Commercial business. MRO aftermarket to exposure in new Our the and

specified next-gen XXXX proprietary far as As fuel-efficient the series into we've & the about are the talked build, new Pratt GEXX, before. like engines alloys Haynes as and Whitney

and along for of with our increased the the volume financial strong revenue, efforts. ongoing reflected Our performance impact quarter improvement

margin were full both QX XX%, income was year and our gross net year QX year any of achieved the net going XXXX. each back Our income fiscal QX greater over and to our in than

on we EBITDA. Finally, rate continue approximately $XXX of run in million a adjusted

price In couple million. component fluctuations. shipments on related each each we as of and material raw that, mechanism to that noting our our worth of you against are our out was reported our earnings is percent additional quarter, the we to points In noted with Now, $X.X margin quarter, without previously nickel mix the based cobalt, $X calculated raw the of gross on pricing know, third quarter, call combined of of XX.X%. reduced material million type tailwind of changes was tailwind QX, QX for a

of gross fiscal unfavorable remained detail margin the assuming current roughly cover In flat material neutralizing in for headwind XX%. $X.X fact, We September I a raw this talk year, view our we at actually despite in of balance the that, material December incurred quarter, approximately material now September, our I'll And prices. raw about more expect headwind. the of shortly when an then million in XXXX. fiscal raw

now our for will results. the have this in We with to more our to array a generating at source. in budget manufacturing The in electricity preparing now and Louisiana. facility North solar manufacturing momentum about comments tangible talk Next, I'd solar his from Haynes is for gain rate one-megawatt We're at fully project our like Continuing, tax our more wire Home, provide now Carolina. Dan was renewable project second and facility a operational quarter and ESG. detail on favorable, Mountain continues for next our Arcadia, finished comments. on

process ESG public developing disclosures the continue we increase a and of making additional in goals to continue The metrics as investments carbon for also reducing of as We priority while metrics. high amount will footprint our Haynes. develop

work. focus on market, alloy. on on with Haynes do proprietary I every to a development provide now the application insight additional HYBRID-BCX I'll want HASTELLOY alloy call, I Today, CPI you our and specifically alloy As

C-XXX, invented alloys for number several process the processing Over in all alloys the Haynes very C-XX, industry. are well chemical and corrosion-resistant a C-XXXX, has developed known other industry. BX, of and the HASTELLOY years, chemical GXX

chemicals. replaced that projections. alloy Institute, a our had cost collaboration go for corrosion-resistant provided has a has and to basis. alloy alloys, One accelerated alloy Technology accomplishments replacement. Corteva development. to of on and HYBRID-BCX with our through past step work advantage for HASTELLOY accepted to by We Corteva XXXX. with It's another and heat year cover exchanger production believe alloy the project. which our Agriscience exchanger and Based minimizing is MTI, on exchanger on with Wrapping up XXXX a proprietary and value work, application exchanger, life construction is a say I'm in -- of Alloy was Materials award an be to heat of protection our is has repairs these higher latest I'd heat annual and teams. alloy cycle just by comments, significantly MTI downtime fabricated A HYBRID-BCX our experiencing very was and of for the of proud this our the the corrosion that this crop heat C-XXX done my type in for sorry, attack bright Agriscience line fiscal recognized example HYBRID-BCX development application Haynes view our application outstanding us I'm like important for our This current been future

levels, anticipated our growth XX% our book-to-bill top year-on-year. XX% Specifically, support of to bookings line current and rate

second Our of margin in average of impact the raw half the when gross averaged material XXXX removing tailwinds XX%. fiscal approximately

improve and services that to on products in providing ongoing spite slightly volumes end fiscal and and costs along benefit of the in We of expected of our headwind, XXXX differentiated with users. QX in the our customers increased high-value because to expect work

aisle are issues shipments revenue projecting of entry balance operating begin flow set our and chain more Aerospace a as year at to with to record our this builds market, within into mid time. expect order entry. turn twin We're XXXX and raw positive supply and the in purchases despite lack order cash levels fiscal our of material We higher industry

to fiscal initiatives, to the when With earnings growth revenue year XX% XX% to ongoing the anticipated our XX% be along fiscal XXXX. with we anticipate in approximately growth XXXX improvement compared

our typically quarter holidays, calendar balance lower was sheets. maintenance their due customers revenue planned first Finally, year-end projects managing and to

for the turn In of for million previously, year the materials balance raw unfavorable to neutralized balance fiscal and flat of addition, relatively raw XXXX, headwind prices in our first material into of as $X.X of are noted an projected approximately the year. I the quarter assuming then

is With and the the that, Given to Haynes, sincere favorably would Dan financial in all sustainable actions The in is first factors, team. in have per the thanks in a fiscal our to the over $X.XX highlights. decade review business. The is future of to resulted line My projected first employees. changes I'll our employees the which earnings share to on everyone our quarter because bright first achieved of year of XXXX, quarter of fiscal roughly our $X.XX these call and be fundamental efforts of the year quarter turn best for represent compares to bottom of XXXX. $X.XX the to the to that

Dan Maudlin

the with strength, revenue year's $XX.X EBITDA that XX.X% finished to as which of fourth which double-digit at revenue We our adjusted Mike. million, with than last fourth XX.X% impressive sequential level million, you, million, income strength year percent and a is This was million drove and to pounds at revenue which revenue XX.X% volume QX. of was growth Thank revenue was quarter. is of This higher a results quarter $XXX.X revenue. margin Gross accomplished financial over shipped. combined in included margin of X.X net XX% $XX.X

an million, increasing as sales melt shipments optimistic $X results, and in to with this than The by this quarter tailwinds estimate driven and only favorable outlook. $X.X to material expected. QX margin volumes. quarter's cobalt year's combined strong impact raw increase XXX in gross million continued the from by and driven This Gross the nickel we and impacted out have the by as QX. was neutralizing raw improved faster compared If efforts production remove impact margin rates forward basis profitability in last points. by our results quarter well Our and we $X.X material cost of this was driven investment QX successful raw year's higher and last improvements, material price our was million inventory

an material tailwind go. unfavorable depending headwind. Looking year started seeing impact prices to going to tailwind. from down hit stabilize. forward, year to $XX raw this balance at estimated on back XXXX to impact down. to flip FY the QX to $XX material XXXX a causing million, a tough are it's to fiscal for raw similar the driving headwind then come $X.X $XX, we to neutralized that Trends a at a of $XX the expected expect where prices pound pound, Nickel go is in this This about about from cobalt $XX, headwind. $X mid-year assuming roughly then back Then around neutralize with It's

a delays industrial encounter business labor every supply market continue tight We to inflationary and like has. chain pressures,

way our team Our issues. these continues to navigate successfully around

LDI market relatively US a to mainly $X.X year's $X.X of pension million was expected. customized million, X.X% Non-operating continues was process than such due favorable strategy. expense P&L, raw XX% goal faster offsetting enhancements and Our $X.X improvements. Operating the year. tailwind this Continuing material income fourth we be quarter, benefit in our million reductions, with down $X.X $XX.X and million income the improving million for pressure declined $XX price retirement The million to of income remained is increases last at was sales. expense including improvement was percentage higher during the and/or million productivity funding stable, even SG&A, to and $XX.X as inflationary fourth last or technical research which cost net quarter, and neutralizing recent full quarterly due holding than to year's operating quarter. volatility the yields Sequentially,

reduction. pension valuation a a year September XXth, Our resulted $XX.X US retiree and decrease, health representing liability million, an million X/XX/XXXX, liability $X.X both net XXXX, $XX.X is which year-end in dropping which care million decrease liability the the combined, dropping over $XX.X million to at $XX to is million at our

$X.XX for in a tax discrete related for the credits lower stock utilization benefits rate XX.X%. effective rate XX.X% To Gross tax $XXX.X net the revenue well full quarter fiscal million, and tax fourth compared quarter. year last to in a rate effective $XXX.X year's at $X.XX over was year. our $X.XX margin this XX.X%. year's had third million the deductions moderately or was income XX.X%, was summarize last rates. earnings rate Our fiscal fourth Operating next net million million. in higher year to quarter was $XX.X we XXXX results, increase compensation. fourth year, of million, per The $XX.X of last income quarter higher, as of over was COVID-driven loss tax includes share last quarter year, year's The state diluted year tax effective for an federal a with million. and of million our statutory $XX.X income, estimates this with improvement Net which of line year negative $X.X $XX.X as All-in, $XX.X was an was and million improvement are and current fiscal full for

high million, trends levels. XXXX, forward $XXX.X quarter order entry FY year-over-year. month signals. month, A primary and The breakeven and inventory strength our backlog FY and of cash per strong few drove with this year second strong rising. $XXX.X per our by the million Other as October quarter to inventory over half we the represented $XX and of fourth Backlog XXth utilization over The into demand lower components of cost entry our the comments rose this inventory deployment of on ended cost year quarter profitability fiscal is of represented entry be Order revenues. one was backlog of to showing the slowing. and working roughly of with net higher the current clearly of cash was million pace revolver. receivable The the with which that increasing item, XX% controllable Inventory per quarter our $XX.X driven pound our the capital the accounts look this XXX.X% average and quarter extremely point. at pound increase such look rising. fiscal normalized increased flow order more income, ended over XX% And to new at XX.X% XXXX at backlog are million. over continued our the year up straight the October of over volumes

melt the levels, that utilization revolver with flow turn expected to in free and profitability, combined positive midyear 'XX, of cash our improved our will line the FY rates into in more we ease our estimate with with Looking is 'XX. shipping

is positive We the change company's begin XXXX. $XX.X $XXX we pay to $XX million, for our facility increasing and provide strong next down the base million expectations September 'XX, Current XX% using balance decreasing the revolver. flow with $XX.X and growth by cash October, to which fiscal $XXX in million was facility. be early and from of XXXX. quarter Controllable 'XX, than spending payable on $XX.X The to by increased fiscal moving to borrowed year $XX.X AR expect credit and revenue million, accruals growth We our of fiscal in a $XX year which and inventory to and earnings to million to net our sheet back $XX.X provide increasing million. million half $X.X foundation million, fiscal the working $XX.X the in for represents Outlook Capital of at slightly company's better accounts of at 'XX depreciation debt spend year million $XX size performance over rates. include full aligned In record is XX% approximately these XX% forward. for fiscal borrowing to we're million and the fourth million quarter the quarter cash XX, 'XX, on million. of backlog forecasting compared expanded estimates. the and with liquidity the credit This higher had capital

balance and fiscal first revenue to year-end typically calendar customers quarter their planned quarter our the maintenance sheets. and projects holidays, The earnings is lowest managing due

expected quarter turn our raw to then an of 'XX, estimated for year, the first materials. at materials raw the assuming into the fiscal of unfavorable fiscal of $X.X In addition, million, headwind is flat neutralized relatively in balance impact

fiscal In per and earnings the is quarter the quarter factors, strong to enthusiasm which is conclusion, strategy for high-growth financial 'XX, $X.XX quarter our in represent of us the first expectations evidence great share $X.XX results in share of compare and first fiscal a working. favorably a in per quarter projected 'XX continuing our in that decade provides performance 'XX. and our fourth $X.XX the fiscal be diluted to the roughly best to first these Given would

generate is fiscal our utilizing of for will this up the midpoint you. to at 'XX rate, second over this enable turn 'XX or growing now set cash working of flow, us to over strengthening that, projected And While which FY around expectations required capital, $XXX positive we view growth, fiscal in value. an optimistic starting to revolver of it were and investments and to the nicely 'XX. Combine was growing our of the EBITDA, million back provide half 'XX shareholder discussion Mike, annual I run with with these

Mike Shor

of truly open they up proud we is I'm possible and best up, the for point, in questions. further Wrapping do. The the is part doing our that are Dan. company. of that all everything you, for our story please improvement call team Haynes Thank At this Jenny, that

Operator

is and you. questions. the now Instructions] gentlemen, floor Ladies [Operator for open Thank

of question live. from Sidoti first Company. your Your & Steve, is line coming Ferazani is Steve

Steve Ferazani

on Good for call, detail the morning. Thanks everyone. all the

Mike Shor

Hi, Steve.

Steve Ferazani

wanted on market. ask aerospace your to take I the

the aisle. of think You your about next in some noted consistency take recovery? you that given the of double you delay your some get in year, on recovery the When the of in and what's your there, expected how backlog delay market shipments

Mike Shor

delay the it, double as of XX% -- see -- market, single-aisle We the is we aisle. versus is

engine going reasons on we've you. So forecast, chain just planes for push And that aisle. the builds obviously, for being this have dominant related, LEAP but all come push forecast that supply a the all that some is a to no yes, of and supply facts view to And the things continue impact The chain. market single is but our down grow engine are see LEAP is it we variety the significantly. to figures known that's is in to out, and a pushed there engine true double-aisle bit, through along,

finish they're X,XXX over projected at part be is most But that, for the important X,XXX here would to engines. next years, the most and So about LEAP-XA this year, likely XB X,XXX. to four

And significant year the this of are of On Boeing recently, Whitney to take Pratt build to surpass by statement. top the heard And lack heck the and not both holding customer XXXX. that, you finally, I factor expected main give build to I'll rates year Airbus when a you is pre-pandemic that's a from of & and for step lack appetite, engine the this back very back, and show that So next projected planes. XXXX series the line now, a beyond. engines, the LEAP rates are engines of

whatsoever no aerospace supply possible. the seeing and we're us So are as in chain customers as out to pushing holdback get still much

Dan Maudlin

One was is thing book-to-bill. over aerospace, we quarter that to revenue track at And per year was if XXXX. back the in at us X. FY volume. still XXXX aerospace. X.X, you we it very for And if over average $XX.X you was on quarter the look in record aerospace, a That strong thing always so book-to-bill in compare our But the – look in about one for million

double-aisle doing And with this come. aisles yet in revenue, driving was really Now that. well. and with the $XX.X to that just single-aisle double-aisle was was single is quarter million The still

Steve Ferazani

on up terms Excellent. beneficial to commentary new about orders you and follow was handling I clearly, to? are that wanted book-to-bill your color you're in -- versus, CPI bit provide Can the on how Excellent. helpful. significant given backlog, how orders little you. also Thank the more your higher-margin planned. a commoditized That's of more that of

Mike Shor

Sure.

of that a XXX definitely about with frankly, rate. You've efficiently, at turbines X.X. full alloys, are we Power supposed the alloy. with number huge to And land-based the I've optimistic these gas market our and it's is quite that’s -- is engines help There be this engines also There's got Haynes hotter aerospace build to this a book-to-bill there's market which power this, markets. ahead run steam at positive really heard proprietary And more over decade. positive look substitution of at is built. one in a as the look generation, the three most

are those So good.

On said, of the in months as us, now had entry. happened consecutive Dan $XX -- over XX we've order but to million what's is, Steve,

the average six months We record $XX have million. over is a backlog. last of in entry order The

Our industries starting in lead times to like the extend. are everyone

very really value two There's project market, to high say there's high CPI special margins. which at equals piece we pieces we the high it. look value, So, that, to and is the differentiated

for So good product it's a very us.

means try going very try larger portion, we and further instead in orders to. On And our the need business, and walking relatively – time, get to that it. are we but don't after we're get in which higher we to So that commoditized with we're we a lead amount it at very given it right of that getting happy bookings importantly, we extending treat not wherever of prices of now. keep all low quoting more that margins we from away we're

Dan Maudlin

other where is long-term reside. to as aerospace most that, our well one And agreements as element of

agreement. So, we're certainly commoditized long-term long-term that more side part that's not of business -- spot servicing those of agreements the on kind on CPI, of is the type

it's that So, the mix easier little a to on manage commodity side of market.

Steve Ferazani

room new you're think into the terms and you and get sales sense now to one half expanded deliveries gives I'm you backlog feel shipments Great. expanded year to match That's makes to up very quick conversion inventory the orders. the in, of now? you enough helpful. last half? have of How think, about If the the trying I thinking second can one Do revolver. do just that squeeze with in cushion you a second

Dan Maudlin

mean that XX% lines I certainly. was It revolver. Yeah, in better asset-based an agreement. a increase lending up the with much we're

driven lines such. better base, borrowing it imagine, is inventory as by which, you and with much receivable accounts up can our So and

certainly thinking of give as midpoint of yes, growth. to we'll lower, paying the think that's we revolver capacity and hit we over of once couple go And year, from going next be there moving kind So year's the about the us plenty the I forward. cash of generate

Steve Ferazani

Thanks, Mike. Thanks, Dan. Fantastic.

Dan Maudlin

Thanks, Steve.

Operator

you Thank much. very

your Michael Leshock KeyBanc Markets. Capital next Your of from question coming is Michael is line live.

Mike Shor

Hi, Mike.

Dan Maudlin

Mike. Hey,

Michael Leshock

guys. morning, good Hey,

you Do secondly, to all solid you're strong £X see further across I sense would demand At you the do ramp a do? markets. that And First, wanted something And million-plus quarter volume per leverage capacity? your mark? backlog nearing you level of that a what to volume looks see make end and you is continues to add have need here as absorption. that very ask and on

Dan Maudlin

getting certainly volumes. Sure. Yeah, makes we with I'll higher really leverage we seen The incremental I take call margin tremendous higher fantastic. believe a keep that the on first it we'll the profitability get certainly, that with We've there. question difference. what breakeven, volumes is lower

one So of quarter expectation yeah, over pounds the that, which exceeding over and continue million And improve. X start next as year. the to year, will course back of gross the get an main we margin to expect then drivers the that's incremental the we improved of margins a of

Mike Shor

a for what talk feel just comfortable shape. second we've Aerospace very especially in we're that capacity given are. me We let Mike, And in already about very in good we the invested where side, and

a If significant core you going between our which spent cold titanium into remember, capability of money finish And amount product capability, for significantly tube our and also is we expanded aerospace XXXX. and aerospace. our flat XXXX we

we feel good very items. about So those

between lines the a couple got our to of We improve couple million constrained. budget on have a piece of phases, that that year $X rolling we've over equipment multitude processing of One capability equipment -- in line. and is through products of the hot is our a are next that pieces for of strip and a finishing the

led done to our full have an the some significantly last the the the And that higher people are right one on the outstanding yields, is have the is improving less that. which focused feels And core now. products, we vacuum manufacturing job melt. with of or Strobel, is yields we that Dave So by very things induction And on melting, one of good.

down use makes at availability whether we're put outside on conversion, for sense evaluating addition it there to and In VIM, in is we're few additional the VIM. to us years road a whether also looking

So that. of we're going through all

Michael Leshock

as on to well. And guidance Thanks. the I touch Great. wanted

Given the the year, remaining balance level first that clearly in line look that the of something of the that -- markets, linear of seasonally your shipments? support backlog you expecting you're the you fairly we have end a or three into subdued as quarter-to-quarter, quarter is that your quarters the consistent given ramp do be of could expect with ramps there to

Dan Maudlin

inventory a to raise done I be work few of we've mean, that able the over that's the processing and a process revenue finish increased to rate. past rates with the queuing melt up certainly, months, in those lot quite Yes.

always, subdued, from to yes, we to will that over to mentioned, up which pick increase XX% XX% past XXXX. get get is once So as definitely seasonally it you QX, there

at it Once QX, anything There's end that. get will linear. will the we big linear. be hockey So or past pretty like no it be pretty stick

Michael Leshock

train labor, I labor, more an the update from when or these side to do the to then And the it the Is now? six- additions. a think hires? on in XX-month hires bottleneck on wanted still Is well will in you're to as improvements the for process hiring do training recent headcount lag, on of get as new your time or finding show? of terms productivity new or process see begin what it And you at where training the length there is you in

Mike Shor

feel We full Kokomo specialized some significant I'll then hiring of our a And hiring. at point trades. done exception we the at of In balance take this we've pretty and of amount with the we're the are facilities. now. much Kokomo,

we speed. begun to fact, finished see the have in volumes are to through And and training our people getting the area. many They have We cold quite we've increases, lot in a been coming in particular, for while up need. we're

good very So we are. where feel about we

we It's course, Kokomo. for it's what the headquarters the on to salaried and look continue within within our not we just need production on also side Of there side.

Those just at whether in our the close, say So I'd not side wire this people, basis and with that's side. daily but salaried or things job on tougher access a a or full almost A we're facility tube on other story different but that. staff be little like distribution basis, there production at regular on we're able to operations, about fairs we a centers to little and the the it's are our on facility.

we work continue secure So what to we need. to

Michael Leshock

I And then lastly ask pension. to wanted for on me,

XXXX there, versus XXXX? of about impact planned fiscal interest pension the the the and how you've in think and balance given Thanks. also of returns should rates changes Just we and expense that seen the liability

Dan Maudlin

LDI We're happy once hit slightly Actually, equities. we year get on And and funded Yes. have strategy than Great in And customized at if question. the trigger I we that. XX%. those, certain quoted at we've the little each we levels percentage very into more a the bit, this progress that. higher that points with shift into you made it's less

a a the well. decision also we're year, a helping So, we'll towards $XXX,XXX allocation to making million there. some talked funding that's see progress capital if as $X about bit maybe progress additional into XXX%. contribution we and month. make a plan, point, garner Currently, some We at lump a sum

we're consideration, future, allocation against we we'll make see capital all decisions going make that certainly So, that when decision. the that's up the into to a but other still

rates to, as moved far where the but expense yes, your year expense slightly on next be expense. the have may of discount interest right As piece XXXX, you're higher reliability, helps with for

year. it up interest the So, bit does non-cash a last where tick from was expense

we've still into with income the and we increases projections baked very these that believe these doable into in still even strength XX% have those that that is provided So, you net pension. forecasts at

Michael Leshock

level the guys. of Appreciate detail. Thanks Great.

Dan Maudlin

you. Thank Yes.

Operator

Sam River is [Operator Instructions] Capital. Mara Douglas Your next question from is live. line coming of Sam, your

Mike Shor

Sam. Hi

Sam Douglas

Hi. questions, I two can. I have if

color basis that driving up? to mix. is I about there's and what should the that think you lower, some you pandemic aerospace it's about off XX -- backlog of a little a mentioned ramp QX margin bit on significant off? that some significant think And bit know the expect mentioned QX ramp pre customer backlog guys at I know I to compared you just ex-commodity on look given maintenance like? and points compared production, seasonality drop more But QX, drop volumes. give little QX second, if could lower I to given a we And years. and scheduling, and mix how if higher gross First, you Should but that guess how didn't but could it's then about from we tailwinds

Mike Shor

very Sure. I'll headwinds our tailwinds. you When to QX, look you about at at every of start the with tailwind why with what gross million. look that's the When second material to raw talked part. question, the far Dan and we XX.X%, as margin, our for hard but talk we're or then $X.X it we I'll about hand first dealing quarter, as try reported gross was over margin

chemical down a go look math, we're same XX%. through through as go over at about what at in QX, little of as amount and is in material it delta and talked But the is products mix And at aerospace about you example that's the was that the the obviously about the the is have raw we what mentioned, and the versus tailwind an example. we're these you An as as So, then XX.X%. talking numbers really second. mix key and we of processing is when certain it item. we've And

was chemical And were about with on to down as are we now we are are need help us which our obviously remember, going processing, help much so orders, absorption, if book-to-bill or we what talked you cleaning through what with. don't which taken because I

So and shipping those books We're they're orders falling going are off forward. them in. then the

Dan Maudlin

it's we've back the it try drop our if Even that And interesting. is we a I in that question year, It's was pandemic. of to years, look and can a first this there. related bit than you for be seen to year, seasonality. QX to I the at Probably of won't COVID And coming out In volatile. QX seasonality what pattern pattern, kind compared but mentioned backlog QX. was of to in would handle years XX% We course, stronger. data other higher look last see many have

a X%, probably expect the in but territory, would something don't that that. reduction, I X%, be So like much that maybe of

Sam Douglas

that Okay. to an sorry, the the this in Thank expense it, expense. know expected and line retirement be that the just actual one you And then -- the on I is follow-up but expense expense going I that's mentioned you. pension missed higher I guess if year? interest non-operating through P&L? Is

Dan Maudlin

be benefit. less It's of expected to a

it. not expense year. When as this up, was is be going quite past up and to an will component be that So the this of goes expense, benefit, high shows go won't non-operating discount the a yes, as it where not benefit rates with that it's just interest retirement But it it no, it year. up hurt, just

is see service we're buried So where down cost that's a that elevation. kind seeing sold, the do in really going cost goods bit. actually of We of

a So we of cost portion slight increase on the expense. got a reduction on interest side, the service but the

both to when look in net-net, will couple So from hundred But that a thousand at increase little of more combined, benefit that this to year. year a see you last non-operating only those of you retirement line. of

Sam Douglas

you Thank Great. Okay. very much.

Dan Maudlin

Thank you. Appreciate questions. the

Operator

I for the Shor now to no Mike have over in back any comments. to appear closing questions We further much. very you Thank queue. will hand

Mike Shor

today, ongoing company to thank forward Jenny. you and you, our to journey. of for shareholders again To the on audience We part being call your in Thank our and next you. quarter. look for improvement interest you Thank our talking

Operator

Thank and call. you, conclude gentlemen. ladies This conference does today's

for phone lines and participation. a You may this disconnect time, have you day. your at wonderful Thank your

Haynes International (HAYN) 18 Nov 222022 Q4 Earnings call transcript