ATI (ATI) 4 May 232023 Q1 Earnings call transcript

Hello, everyone, and welcome to the ATI First Quarter 2023 Earnings Call. My name is Bruno, and I'll be the operator of today. [Operator Instructions] I will now hand over to your host, Tom Wright. Please go ahead.

Thank you. to quarter welcome earnings and morning ATI's XXXX first call. Good our is being discussion website. broadcast Today's on Participating in and are Kim Newman, today's call Vice Fields, and Chair, Executive Executive CEO, President, Vice and President President COO, Don Bob and CFO. Wetherbee, Board Don and our on messages. focus and first will highlights key Kim, Bob, quarter

can color would and Before that Those call. questions. accompanies I draw found and on attention results like be additional our details starting that website we'll our After prepared to our your outlook this prepared slides to our for remarks, open at the presentation on provide supplemental line the atimaterials.com. remarks,

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

the over call Bob. turn to Now, I'll

marked and strong and good consistent performance for QX top-line Tom, of morning. sequential quarter growth ATI. another Thanks,

driving this build in quarter forward. continues did What Number momentum, summarize team points. first three our Our our thoughts performance my solid include? business quarter delivering. on we're to I'll one,

results earnings share the quarterly Sales We XX% the consistency. XX% year prior X% That's adjusted prior Today's the of a our on importance up the know a delivering higher than and that than $X.XX, again quarter, ago. X% quarter guidance we on the over was over reaffirm on And ago. exceeded Our per commitments. our range. high-performance the segments for place that higher were and materials quarter. components side up $X year higher importance of and billion, revenue

remarks, Chief doing on her new capabilities. driving will Fields reflect team. done Operating operational capitalizing results Officer opportunities, that. every perspective on ATI the my Kim also day They're being our we're work growing After and how our Our efficiencies, incredible share by

flawless we from around in that of are A ramp, forgings Even historic continues. trajectory a we're number expectation. ATI's any delays, signs positive bumps haven't in I sources don't with. signals demand a Message and indicate couple supply think probably number Despite is non-ATI chain supply that the delivery continuing the year. aerospace been and materials. the us The dealing for issue and aero all so, clear. chain some momentum driving and materials defense is expected in disappointed two, ramp incoming this one

OEMs core are future bullish excited continue. year build We're XX% versus sales reaffirming prior to by market In about to it growth QX, across progress rates. aircraft expect portfolio. period. content first-hand. wide-body deliveries, ATI's our this We're and grew seeing see in aerospace strong commercial significant tailwinds the provides airframe this

by by jet Obviously, period specialty continued expect jet and quarter gains quarter year. led engine materials XX% military XX% after in same after and forgings. last by sales period last we year, were Quarterly over grew in quarter. armor, allied These serving sales engine, to titanium continue materials Quarterly as same the defense well, growth grew over this growth growth the systems. naval driven

XX and really the defense tremendous year. expect That's defense. There in toward from It's continue last target. It into aerospace XX% that making revenue. In future. and ATI percent our first fly, it the float, to strong, quarter of up markets is in and business you highlights have progress we QX, the and A&E represented of sales we're roll, XX%

demand prior and QX gas applications. period. conventional driven for power XX% serving and year This the oil over energy nuclear was were growing civilian sales materials up by

continue As markets. last we we smaller shared softness quarter, with see our in you industrial to

see and China. served business strip precision these to also We cyclical also levels. markets emerging to sales dramatically automotive for growth about of sales. information remembering to rolled the critical More five lag Asian primarily China, This on moderate to continues the about continued signs by changes our year-over-year corresponding specialty the presentation this markets products in found and there significantly website. and reduced in our applications our XXXX through exposure economy rolled electronics that sequential our seeing transformation of markets be percent we're can in business. in business, More ATI but we've Remember, of specifically, total accounts softness our adjacent pertains

Now, my third message.

We are executing.

every enterprise, we're flow want laser-focused every inventory alloy asking every the batch. flow Across specialty maximum more. the value and every We right these titanium greatest ounce capabilities. of Our on and produce, possible. extracting for accelerating velocity, deliver melt output customers we cases, the can all operation, we many team have on path, optimizing times, To the and from even asset, are in every opportunities,

so I'll Now, unlocking on Kim our ATI's full recent actions share can to potential. turn she it over to path

join great provide three performance. key and highlights. details lead It's we're tremendous delivering of to I'll sharing follow and the how to Bob. your continue Thanks you going I'm Don, trend and this by

give I'll First, new that an update we're the capabilities bringing online. on

getting to And in insights existing capacity give for success meet assets. steps more to Second, taking historic the we the share the from third, are having are demand we titanium.

stages Vandergrift, First the new we operation. are of Pennsylvania up, final share that Bright the Anneal excited I'm line commissioning in to in our

reduce finishing and step provide the customer Rolled quality surface of a thin-gauge equipment capabilities. for the These costs wide more of for world, delivers sensitive specialty transformation control by Completing our it with to times state-of-the-art in on project's coil lower production dimensional products, by has of times Products and control their formability competition. QX. that over Specialty many flow improved to creating metal has line sizes our systems new deliver finish wider include materials, flexibility for cycle material of advantages their and The last business, the the end range the cases. best-in-the-world in reduced higher shortest track risk potential that XX% for the in qualify This the customers, than fabricating processes, and forming meaningfully

line capabilities. specialty products' rolled our Bright threat new Anneal The rounds triple out of

combined the melt And with capabilities the Vandergrift. Brackenridge, our during world's in Pennsylvania tremendous lastly, capabilities Latrobe, mill world-class upgrades, finishing Pennsylvania. rolling pandemic, hot completed First, most which with powerful located in our were

this in no OEMs commodity is key connections business helping as strong the relying channels It's We're on our to establish product commercial primary approach. Why with stainless our specialty go-to-market markets. key major important? transformation, direct distribution rolled longer

to leader a is seeing results. and in are markets, be aerospace we the strategy defense and Our

advanced A&D first alloys solutions grew segment in revenue quarter compared year The our and period. prior by the XX% to

the on On key priority team focused point second excellence. my to my and Across this year. highest member is every of single operational system,

of increased capture out Our there, more existing incremental lot our in us demand allow work increasing after time to look every to output and improved increase improvements right product this these process. step it of with goal first hard yields. is efficiencies and improvements product A at through of What's will and margins. is improved The assets production day. and and quality operational We're day productivity like? throughput our higher

product XX% like In XX% relieving performance since and increasing some make operations, we're one process of game much as inches efficiency it's bottlenecks, to in a and resulting the seeing quarter, customers. delivery in as improvements Lombardi improved ultimately said, inches, flow, of It's our for champions.

the in disciplined segments, from win. We game Benefits laser to we to are that QX. Across position starting efforts will operating broke us both execution playing are records these multiple focus show. already and with

its Every of sales For example, it in key and are vertically product paths. unit segment, times, its majority XXXX QX velocity, defense level. highest and in sets business the now, benefits leading In but and decades. the our our volatility solutions inches in unit because specialty up improved up. aerospace flow of or for is alloys specialty are inventory incremental the work to record operating benefits metal we record role in is this advanced for significantly that major add pace The flow center business beyond This for the set know showing transformation our products. levels materials at integrated lower

As Bob most quarter, last adding mentioned year. new workforce place of our is X,XXX employees last in after

curve too. gaining Now we're training on the

repetition on adds newest changing members progress our our and to our multiple are and new This through team, Our they're gaining for our nimbleness grow meet made and member every experienced, us We've operations. operations, needs. both I team customers' to react cross-training experience and every and of allowing doing. flexibility The the brings first benefits quarter, thank day. great in team all

there. demand an to do industry a that increase lead competitors us In customer. times XX weeks great maximize we We out upside a norm, delight enable XX can't. these yields where allows efforts We our to uptime us to of are everything believe the capture team and have becoming to

My third unprecedented increase topic, the working titanium. titanium really capacity. We're to melt demand for

of has access We're lost With in third in a was titanium commercial to in Ukraine, XXXX. the the supply the commitments. market meeting that the our tragic world situation

for Our customers more. this are and asking performance appreciate

in capacity over XX% production Bob Oregon. existing baseline. shared This includes earlier we're assets has previously As increasing restarting idle from in the XXXX calls, titanium

While than creative our now, minimal melting way, to day. on faster estimated while but continues accelerating we're for their solutions coming output reach exceed online, to investment. every capital using team they're requiring milestones Still modest expectations

this the there be achieve comes the full run expect XXXX, bottom half initial line in capacity in to rate impact back As will on, and we of XXXX.

That increase operational full Bob. productions this capacity. aspect maximizing thanks capacity. titanium Every ATI I and our expanding should operating capability, for it the so business rising our from across are system, efficiency, and operation increased tide, to like me, We're our taking customers. titanium before. Customers this and advantage in benefits sit, our where is a assets improved of of never do do positioned From our well as

leadership. team, the it. stick Thanks, remarks. and appreciate shareholders. Thanks the your Kim. Keep our from our is our session matters, to around our doing, will team for Everyone our benefits prepared great work. business, customers, and Q&A and after what your you Kim we up It

details for it's of the of ahead Now share to rest what's performance Don's financial the QX and year. turn

the our I'll two areas, for Kim, update. results our Today, outlook. details thanks, on key QX and and Bob, Thanks, operational provide

year-over-year, earned defense, by quarter third a row billion, was billion. marked $X more energy. first $X.XX a in strength which in XX% as and in than well aerospace increase we The the continued driven in growth Revenue as quarter

revenue offset our Declines in also in QX sequential in growth. sequentially. XXXX. automotive to between mix basis year-over-year highlighted improvement. mix and as improved the growth speaks quarter-over-quarter of a velocity year-over-year mix XXX partially improvement A&D QX basis A&D increase top Bob XXXX. points sales X,XXX of building point on of a of percentage XXX from That's points QX our and electronics The that basis

be airframe last A&D to some value A&D our also As generation important? the our in of jet we commercial mix generate are typically mix the Why our year. we of shared end sales. recognition market, margins our XX% by customers' Within of latest this margins highest reflecting differentiated defense We quarter, accretive, of and is so above expect products. engine

AA&S? The strong and components, X% continuing, and HPMC, We or sales increasing from X% Overall improving grew largely growing see solutions, growth primarily increase drove materials flat sequential XX% by saw in in or capacity strength commercial automotive offset efficiencies. growth XXXX. tied gains HPMC X% Asia. High-performance AA&S, and and sequentially. our and revenue and were this in sales, sales. revenues What grew energy. AA&S alloys quarter-over-quarter, A&D were is electronics declines flat for QX These sales the by in actually market aerospace the to advanced enhanced

a retention XXXX talk to margins ago, in incentives, included XXX XXXX. of compared million let's this adjusted quarter Consolidated versus Now, QX COVID-related points. XX% XXXX in by margins. employee enhanced basis in Remember, XX.X% EBITDA QX were down which margins year $XX

contributions. not comparative impact benefit costs XXXX. QX incremental post-retirement Another our factor is $X do pension incremental margins Those million in current impacting costs of

they XX.X% Year-over-year, to EBITDA and exclude XXX non-repeating improvements? XX.X% incremental higher create basis in headwind. COVID a drove Well, What benefit post-retirement the XXXX. point these incentives would costs? we from What XX of points adjusted do impact margins be XXXX the year-over-year, increasing basis margin underlying in if underlying

actions year continued sales improve diligent and will offset production first Price management. offset to XXXX, growth, quarter inflation the improvement, described. inflation successfully more through Kim and and actions EBITDA impacts. Shifting and of more success to anticipate due value-added management impacts the continued mix, improvements margins cost in cost a cost We in levels, this mixed than year. increasing We that

EPS our $XX million. volume the We $X.XX. $XXX about. with QX the liquidity share but $X.XX was This million our for existing buybacks. ended restart melt to $X.XX, $XX spoke in was and at of First than XXXX just includes paid also the $XX contribution plan million It's XX% approximately reflects to close range. Adjusted the QX related Kim higher assets quarter part are costs QX voluntary tied of the of of quarter of facility. to incremental total in CapEx guidance pension XXXX. million items Adjusted titanium from existing accrued unadjusted the It of EPS midpoint the

accounts late $XX ramping capital QX million. at receivable quarter working million support in due included Those in in capital a being sales. inventory QX. investing $XXX in to are Managed XXXX surge million to ended working collected increased receivables XX% to Inventory in approximately That sales. with $XXX We quarter increased sales. this managed of due

return to QX those lower or of the million. the to expect We end even year. $XX CapEx was by levels

roughly CapEx the payment to chain end of our investment on to half earlier, capital with was remain were accrued equipment deliveries disciplined related the mentioned I due As That's at that of track of we supply was XXXX. when delayed challenges. Overall, spend plan.

million of under buyback. quarter, last $XX In stock authorized $XXX we completed the million previously first the purchases our

announcing new We buyback today a million $XX are program.

is and balanced to authorization with that strategy, returning delevering a capital we goal. growth I also As maintaining to said, while This deployment capital funding consistent shareholders. are committed

QX's and $XXX This with we to capital million. guidance of of delevering is Add million pension deploying consistent free the are in XXXX cash to and plan, of $XXX to $XXX contribution cash to $XX flow range return our million shareholders.

let's year Now guidance. QX about and talk full

to adjusted we energy. Precision continued due conditions. that from of For to reflects Rolled EPS markets delivered in our It range pressured $X.XX, to our A&D China's and range, continue represents midpoint be business $X.XX Asian of strength expect will reflects expectation to guidance our The Strip a sales XX% QX. core economic in the also in in be The EPS increase adjusted $X.XX. the second sequential quarter, $X.XX the the

full we are increasing the our EPS adjusted guidance. For year,

new of range $X.XX $X.XX XXXX previous we increases by share. early $X $X.XX. the new The guidance though $X.XX our Our range This by per to $X.XX Even of confidence EPS year, range in raise the to midpoint the point was end to share. per end is share. it's adjusted per $X.XX have the bottom a range to the of

evaluate As appropriate. when updating the guidance, year progresses, we will continue to

other several I guided want earnings to prior on call. reaffirm key we our items

range to First, to continue flow of $XXX we will anticipate full cash the in free year XXXX million million. be $XXX

Second, XXXX in commitments. are confident our that range planned to third, XXXX QX, the we will plans on deliver our track million organic noted. expected contributions including year. in of on $XXX short, be growth And for to Kim $XXX completing CapEx the million, we'll the made pension investments million and we the $XX In contribution our

to With that, I'll Bob. turn the call back over

Thanks, That XXXX year ATI take really away today? aero of full the growth should And in call Don. from we What mode. is the recovery. is remember, full the first commercial

in years growth line core markets top continue expect to We come. our to for

to built We've commitments every value and our saying materials. effectively We're living flow a up it's chain steady easy. ensure to of reliably customers, We're delivering resilient to our add day. we're a not to supply

fighting heard each position, for You step. talk great how choosing in Kim we're put every We about inch. deliberately ourselves actively a consciously,

year us. big a is This for

the more of our with that, us we gives bottom hitting We performing. and production one mix. have right P to stride price. confidence, all line that There's commanding the are We're people. right the product We're our all

the their productivity We have right and people right is in climbing. the roles

makes As It's higher, achieve bar to the proven our to goes more. us strives team perform. what

we're first for Operator, the question. ready

you.[Operator Instructions] Richard, line Thank Seaport go now Richard question our have from Safran Research first open. ahead. We is Partners. Please from your

Good everybody. morning

from your of competitors one gains was share this titanium week talking VSMPO. about So

bit just utilization titanium out and made in you about close being you to to just remarks gains about are what bunch a sold capacity remarks, you say more? on I'm you if a titanium since update And your wanted could on wondering also capacity. so of opening us how share I comments discuss could know your the

market Bob. question that of I'll this is the talk that much Rich, and Kim Fields part off hand morning the issues then first take the it Good discussed to are to Great. about capacity today. around

So right, well, melt, to you pretty forgings. sponge mill know products VSMPO to to

that and are actually the to that. the well. So engines I plate support in growth bar of think seeing aero products is structures, of some and us no space medical key the as for a We're and subset products

share our to key more to issues have is think the melt share, performance and than the our enablers I been with VSMPO easiest way summarize operating the and fair So that.

growth at focusing along could sustained gain that programs on and with we're we time. So that come with new focusing positions the potential, were share on same

has So get nutshell, our the I say, than next for where ended the the growth more a But here in we order is the would will demand now, The share who fair the she on horizon. of years. is couple up. melt is

so And positioned for well we that. really feel

hopefully, answers on say that I'd So share question. your gains, the

capacity talk little over I'll the about to bit turn a it Kim situation. to

right. All Yes.

I'd So don't in stop across are Rich, pretty But say we my and businesses. our remarks, And we full. the operations the as full. heard to new you set and are all processes records of there, are continuing we

titanium the to For XX%. mentioned in first example, I is up, just quarter, XX%

continuing assets are and at melt Our levels, operating to higher nameplate capacity. challenge we're

So to we focused we challenging those get maximizing our are are and continuing more. and limits, assets on really

line, bottom order, commitment. The we're think that we at, where as I take on about we an deliver when

Our opportunities been get sharing today. and customers by we acknowledge with it orders this from marketplace us. business even apparent them. And They've It's it. more in become and more getting recognized more

job. see we're well. order team in some working additional as think there's we're to capacity to I as is very do and full, always, everyone as assets coming continue with that. a upside So and there's and else, coming some The fantastic online doing

Okay. asked you. Don, And maybe -- before. this you Thanks for because that. one I've for next this

gave out I'm something answer, of go a a your to flowing to lot, said has XXXX Airbus changes outlook. you want don't again, you glad if else. in But So lot since to

we've to numbers you've out been to an update given that the wanted give if I like you'd the there changes on seen. So just know

the information to targets. attempt some to XXXX more I'll add Sure.

you quarter, as it, our expected revenue high think upped about the targeted XXXX to end $XXX high end growth of million That revenue. rate. Rich, rate our at growth by of through takes So we the billion, potential last of about the $X.X

confident I of one, -- achieve think that we're rates say very number I is, that range. ability those our to end would our what in toward growth high

I was through the inch, create some within Kim opportunity that value say seeing productivity by meaningful kinds inch while what today of opportunities see is And would the of she certainly think I the shared modest we those about business. we're to also activities.

the share So we're potential updated to end I lot XXXX we with At very phone, ability a to past range, stop our some the we the beyond we'll at opportunity think that. on the do would I hit, confident that. you see targets punchline our time, is, of even and high of the XXXX. say, do expect to or XXXX. upside and right surprise anybody also We not growth talk No see probably growth after beyond

business creates investors the interesting EBITDA. it's end XXXX, and more point math a good. targets or that simple very, you this based terms And a see our XX% It's that on of XXXX other as But what think margin math confidence a of the level when to the should XXXX, -- we of or We're that be to then XXXX. that million XX%, take strong in for to would about delivered our value that at to And it of EBITDA $XXX EBITDA. very very generating gave, $XXX guidance to I shared goals and you is that's proposition that again, confident. range, generate you comes business ability high say million in the mid you do of the for which looking we take when really

speaks think well So to opportunities. that the I

cash generation. And the by that cascades, to way,

on are on XX% to And very conversion confident we're achieve cash targets. or those of our We and track focused still better.

hopefully, your bit helpful to So you a question. answered and that's

Thank you.

Phil, Our is comes KeyBanc. from open. next ahead. question Phil your Please now from Gibbs line go

Hey morning. good

Morning, Phil.

on quarter? the mix? that help type a you there. in both pickup the on provide segments? $X.XX-ish us that earnings talked about Anything Maybe expectations second you versus could Is quarter sequentially. include you texture volume? Any could Does the Is first in it increase

Yes.

this run Don. take at I'll So a answering is that.

we've all, we growth we're to yes, expecting to improvement in go. that continued growth mix sequential QX. mix it seen direction in a into There's of continue One, So and of are we drivers. want as first top line expecting the the couple move business

were think QX end to what think I is, carried expect that for XXXX see SM, X,XXX ended they That as their were from course, And inventory. just worked did the if as those over think largely roles, we broader some we're example, in the new Those was were new we the efficient QX. carry that with SM, added That earnings, in form inventory elevated through getting about today. you the employees should business costs. about carried you costs also learning the they, they over not not process of increased are through of you costs about of When in employees. as through inventory. up

million And lower so I QX. costs to QX -- benefit see $X million know, you tune as would the to I from to from to maybe a that move from of expect $X don't probably,

that So be tailwind a well. as will

a that to are mind. those come things So of couple

going Now both terms is improvement in in to of this them? both of touch segments

A&S north that you'll XX% business in back we full is the then of what But year, the and QX. range of expect year. And take we of course, not for makes year hey, for that the would well. the full a see of would you'll means to the kind improvement And wasn't give to But for seeing context, something year you look EBITDA That a just in in the with certainly margins, think for consolidated focused side expect, growth a full to in they full think it it both on as margins should I businesses. on sense overall you're like. step the so maybe probably be XX% increases no, I would see terms it -- be some growing HPMC think period. much of Yes,

Oregon sort -- for that the costs the a how mentioned restarting take could year thing? Can operations. Thank you. they us really contributing? Albany, you in through follow-up, the the assume much When be it as upstream didn't titanium cadence are restart kind of through some just ramping? of you moves of in then start-up And see of that terms them you How I meaningful QX.

of why the costs So I'll standpoint, thinking the contributions, to open cost if and bring be about we're from to the how to from be is Also can on an reasons and it at this don't standpoint. relative costs cost why also have a like projects a example, earnings of of the one kind operational you for modest new putting because that the cash wants you And I cost restart, much produce to a faster. up which love into this anything to position doing Kim of she restart, and share the can from But a touch very see can those been relatively speed in assets the assets. modest.

in just of I that expect costs, start-up you're we $X between $X think to instead of that production restart X modestly in And maybe expecting maybe really XXXX. production about but that we've the is be would placeholder of bit then your as run benefits range, talking ramping about and a million rate possibly higher up, QX. that, than to talked as million X, X far I new to it saw costs see a as as to So X, model. in in

half. through expecting run the going stealing it's to -- into earnings at full finished but that be And likely to see our as start Kim's converted production rate it script then of business, of beginning kind of working in to here, is production resulting and we'll revenues goods. some the And we're second

of maybe QX. scenario, then would we and say which million what the get incremental from bit not this XX% from increase that $X frame of looper effect on run by to is time off I it's rate XXXX just would percent terms expect incremental expect a And earnings just production, $XXX in all revenues a to would full run probably off that let's then financial to $XXX full QX in million plant, would okay, is, then when we'd and that. way, assume off be? of an but the $X.XX what capacity of XX-ish I you kind standpoint, what to more XXth probably think so this in top the a But the margin of expect, earnings restart, and And draw a at rate, is say, line say we of in

what are And investments and is or those making assets these tell you advantage assets can returns that idle that modest taking these and underutilized, assets those on sitting very the the restarting of just are we're investments a shared expecting less that. for We've find to incredible. mean hard before it's we're returning better going I you're XXth, that million to example. kind to of restart spend than to -- $XX not investment than

anything but... contribute for So I you left know if I to don't

later yet. turn an we'll Don, ops you Sorry, into

just of Don covered most it. I think to add, So

are in the give point, of through and running. flow the to color, your up the in quarter. assets Just we little that a didn't are crews a see place, first lot To

to given QX times start our QX. see late flow processes, our will into through You come that through

majority. the see You'll

would I that this this add add a seller's market. is one is, The to

maybe they're And marketplace to up seeing we're and business. transactional in bringing missing the able the others pick get capacity And and -- as prices. efforts are productivity incremental delivery selling yield we both able more around online, online, customers, that being new so as our coming we're forth, are we the as well improvements in dates through are idled assets so Oregon assets as to transactional that more or

it going and see through start be to And a us pounds you them giving come so in is as to our lift as well those statements.

you. Thank

Phil. Thanks

Please your Seth, from from JPMorgan. Seifman ahead. go now Our next Seth question comes line is open.

the good and the Thanks little to there's engine very jet And so revenues of the production us much increases results. here, a bit a grow. we've Obviously, of in out Wanted plateau engine nd jet revenues, airframe good to seen a of lot continue ask, morning. on aftermarket. given front growth in

when that that at we that round plateau -- starting we've sense how okay, kind for point? airframe of Is the do of think XXX-driven? this more one about on seen, increases we point a it that, revenue have of then forward? a have said, the primarily that in do trajectory and widebody-driven? And is be side, terms that have customers that soon? we'll the is issue need side we more what next that the is And you kind In And at then of this likewise, supply moves of

part a to to bit. bit We'll All a and first little about talk little hand off take the I'll Kim right. unpack try to that then it it.

in think a about on in Don is we back-end which shipments, side. talked of QX, had the receivables what very I loaded QX terms So

said, You booked, confidence remember and take started have when early that can to we were And could the deliver. that were lead orders orders of to COVID that were XXXX willing really happen? not coming grow. how well, those we we they out Well, times right, didn't

So a got loaded lot late. of it

the up it over But I'll I that asked timing color in questions. feel extra join work to was, in us be that's couple So that's doing why QX call, engine. market why some today. you now don't in you'd the his I in holy March smokes, the place to let we in add think took is confident. a say, of And because wide-bodies, March all were If -- Kim question. lot issue on of jet of catch had earnings we Kim indicator will a invited Bob we able growth is that QX, to a you to going turn stuff It's and and what just think said greatest airframes, disclose they're forward. today that where specific her the other and quarter-over-quarter-over-quarter us in

sure. Sure,

So it was and mention that we're some it's piece, and more second chain, which I'd we're gases, larger year. solutions on than I'd not supply just our were just and creative like say stable in to say to to industrial were hydrogen on backups, cases, in immune tanks last sources. put able there, focused We problematic. And third challenges been but generator

managing we're chain. think I supply So the

in around nickel-alloy QX explosion. the bottlenecks some and billets, continues widely billet powder I though, be a melt What am specialty there's mainly billets shop forging time seeing, steel and that in reported tight to and creating is

vertically where are seeing to billet of lot delays billet. a provide don't And we on our these due directed So aren't supply, are we and some integrated buys.

opportunities looking it are to we other ourselves customers for applicable, our where or sources. with providing So identify working

as this assured on to OEMs. lost working the issue rest But are They recognize our isn't well get that and material.

far little that. not about bit the can a airframe, necessarily As driven widebody. as was talk by we This

about this of in if to starting But the single everybody seeing you're come more demand those trying the against growth are on is to I remember I I'm the are side, talked that believe on us contracts to aisle gotten those would to we're your in there. -- see the we've substantial in. and And all We AA&S seeing. past, we've some say orders the in I moving contracts, especially answered particular, as starts That full and get airframe. questions answers orders

an Yes, overloaded it Yes. question. was

it. of I got So all

just a rest because sort I'll QX think year, into here, that overloaded, know really slipped since trajectory I year last for quick some of it trajectory here, of we for the -- through how year? the about of easy about one. was do investment so the a just follow-up, yes, of we think that the maybe CapEx so kind When And QX

big $XXX have in pattern $XXX don't throughout be sort to quarter-to-quarter. straight. my quarter $XX do it do, shift it's looking What happen. to would But relatively of assume X our with million. anomalies from to expect model. year, tell to doesn't to projections just for for from you, the I a saw But But another. I you any you're those I'll It I I million would modeling million if purposes, much probably things would obviously just invoice guidance build take at sometimes a

great. Okay, much. very Thanks

Our Please is next ahead. open. line your question from comes from Strauss go Barclays. David, David now

the I could there implied we you. XX high. of margin compute seem they Don, mean, you this have guidance. mean us I really can you help EBITDA incrementals, Thank guidance for kind out -- revenue

business kind us incremental by and business? If But as going you last year's what of incremental margins of we EBITDA help about margins by could target that right have should EBITDA stuff pension you was normalized numbers. the forward? Obviously, level maybe some this think in of onetime

growth, that's getting mix where be a because revenue about our what some parts there First, the change of before metrics, latest-generation think we're and you largely in be happening. as example, get is of margin for When revenue richer growth we're I strong our seeing appears getting engine jet incrementals in business. you'd on sales, of color why part that's the strong into build incrementals, the because a to some to on building

so to that's beneficial And us.

the improved more to doing the you're also is and affecting absorption. as structures means fact it, that continue time, finding as and the attacking also squeeze absorption we're same of means our we're that, getting base, At margins. we incremental, think cost That efficiencies I out we're within incrementals, more that business. production what's what's asset better the better seeing

seeing sensible that's at talked period, at that I hey, probably higher XX% together you to expect right XX.X% is saying very right? those not XX.XX%, that period it you that I I'm when but in or all numbers some to of north we've I -- growth, is business they be incrementals what of are to could XX% be for comes and that are in with from in the all you elements. that the probably to incrementals require consider reality get the look margins your does which about the to And say, change doubt you're EBITDA know us in that model but But look when not and numbers XX%. those So the line the really, past, underlying, underlying

to that is helpful you? So

I implied billion up higher fine. a we if XX% number about take the later. XX%, EBITDA the your mean run well and can and I'm today but way to $X.X coming Yes, coming it implied with I talk I'm a than up with on yes. revenue XX rate in margin, That's that's -- above versus your number based

find about as that. thinking thing you you're might would add I But helpful one that

at looking -- to the you're sales material line. margin, to right, what value on as apparent selling happening when But lower a higher will So we're and your every you're bottom incremental. adding right, incremental opportunities, it change dollar the profitability doing of the you're math, because redeploying that there's that's and the we're increase calculation absolute is also mix shedding right

cause to happening. what of appears your but So be in it incrementals, a mix will change distortion kind it's is because that

we better these We We we folks do from get we the period don't deeper And as some evolve that's pricing. to XXXX, that that part profiles. into we're call on bringing getting also, we highlight richer period. some do, out may what expect, then also do where into don't pricing maybe of mix too is see as like but latest-generation element

that it -- closer coming CapEx back it to mean Okay. wouldn't that? And it. you've out closer I lot asked XX% that than free contribution I before, How years, Are be I a been come to assuming about numbers? to mean be but down I've conversion flow this cash are in a pension thought That's XXX%? why the I you those in why talking you're D&A. you -- helpful. think better then I'll the targeting, just assuming wouldn't

are have out, I conversion. we the can targets to when like conservative cash -- that tell it on you targeting I than comes the that assume you better we can And side. just they're other internally, XXXX XX%

is it's cash strong Another conversion. consistent strong it's thing to important that's about cash conversion not about us for year, a

not from not in put we XXXX. But the the we standpoint. out a number consider so one-timer our it's target our ceiling, assured, And XX% that rest and that's

very All right. much. Thanks

Thank you.

comes next Gautam open. Khanna Instructions] Please question go your ahead. [Operator line Cowen. Gautam, from Our is from now

Hey good morning guys.

wanted I pricing. ask your on on You covered of a lot ground. to comment

VSMPO, has of bit to I customers in just and quarter you curious, them? a price was sign to last over what sensitivity their the at move as terms more that of I who little too want urgency for thought up their fill point, reasonable urgency I'm at for be titanium Just what thought the one returns high. of potential some should happened willingness the away guys their you void from

color question, for add a Gautam. of that, end. and back bit Kim the I'll little Thanks that at take some can

last the right? around ranges. I were point kind for was chains. the They supply big inflection or of think volume. OEMs the not of contracts months So fixed we're worries the And XX an quarter the that realignment priority lot a their were shares global actually second at they of first were have, here in really the share

early the was lot a range. of within that So work

XX% my to starting effect fast to was to really I So that supply was, the of chain displace priority And guiding I got of upwards as as XXXX. in can. XX% take

here inventory to and over the they've about people But us once I'll talk address they realigned and of think XXXX, ramp. I benefit then can to they're looking flow of right? because it how of she Kim, where you'll chains, now, go see start like at really in supply kind for turn kind from full they as growth the the

Yes.

Bob the time were from in our reset as just customers to the this think early supply just I on going -- chain, in case. in mentioned, in just

our I And now. seen, aerospace And there industry. it's the not as this grown. think rush. backlogs And in a was you've so billion have $X.X We're just record at

seeing defense, businesses about. are of all medical, in the all Bob our X markets, demand across that talked We of electronics

inventories, a between supply thinking to we're the they're as happened, strategic So now rates that's starts looking how placing at now we've strategic we and need momentum, much we especially as I and about XXXX, look got and ensure gain the positions reset think they're we longer there anticipating. and at the is with that XXXX, widebody do that build companies that

them And supply work really be to been would are Yes, the I part numerous the forward. going going Kim reliability say chain customer conversations. a I quality for for and enablers and have of having

everything appropriate extension reflecting every just been and a almost, a market It's from the And case so have it, to to So your earlier, our said it's I every right? pricing for the got sure, seller's And renewal to renew I shift would or to for point, in but helpful. Kim from I that's is think really or right? time contracts, some great say, perspective. long-term, Gautam,

those a the capacity some deliveries to sales the better the you engine first X%, kind Like level possible were jet you X%, improvement constraint -- quarter. where sequentially. as to in you engine this that the a later than the a sequential in release, that's they're were doing in And about up is of in load look of I engine back-end positioned potential year And have? why the mentioned mentioned as guys capacity you talk bit output? Could later the you is little jet what melted think a what -- X% Yes. and had follow-up, approximately cycle, you in of X% jet at

Yes.

not So orders. rates, thing about the really talk increase right? a it's always the So way, those I'll I Kim the to orders first produced the we like same on And how question take we critical the build answer is let capacity. we to that's would say bit on work going little

Yes.

could to versus we of I XX% see of QX. a and mentioned, XX% ramp our And are I as production example, think mentioned we rate XX% And that titanium, seeing couple quarter our up I XX% in of going. the was anticipate and them, another you for assets.

A are different specific curve. about increasing. We're and learning bottlenecks, the one, up going couple of our employees experience you things asked

training. We are doing some cross

running move ability we up help and possible. to streamlining and pit it the like where on things crew. in. a equipment getting to They're need as the We're to fast We're coming We're turnarounds. produce. having labor back working as we're machine So

reducing unplanned downtime. You're

We the upgrades we harsh as some changing electrical most our melting in equipment that out longevity. so as equipment. well conditions at doing talked the of about get that are the We've looking we're in

assets so doing equipment through. coming and schedule of place we've crews continuing idled right running, our flow that talked that's in and on bringing Oregon things so we're as And the ahead is And those in to now. The about, we on assets. are are are obviously, all current in

activities us would for you'll see businesses got, substantial fourth that and and we've one through we're step seeing melt is then and processing on capacity, coming third quarter. start focused will That fall the there. I anticipate, that downstream into out, So to quarter gains

I does help? -- think that that

for helpful. that's one No, Don. And maybe Absolutely.

you Don, little could $X benefit calibrate expense sequential -- properly. guys just segment or sequential pressure we you that any curious of if talk the mentioned metals. so at could million, headwinds retirement high-performance Just was just you kind million it $X talk be other whether you at items, that the a I incurred, about all

Yes, a of couple so Sure. things.

inventory, And but of HPMC and lot not into carryover We some the just segment, AA&S. also about inefficiencies so modest a saw metal that we headwinds. to of I talked some the did release, related see

highlight don't consider we because headline it. a need course, isn't for digging metal it while to so you're And us you in, of as

did see modest So for headwinds segments, both we that the of in regard.

And of And at I think them. We of in in being when you a robust XXXX. one a while at nickel guess saw I'm inputs, not robust some our prices primary surprised increases nickel they're they're some level, about still really robust lower level.

in so about been and Other our And credits pension. COVID changes that, a open pretty modestly impact that. we saw year-over-year like pretty around things like open -- has been headwind things modest a pull standpoint. we've which from back a the about QX, than to business in We've them

Okay. at much was RBE how though, Thank you. HPMC? up that sequentially,

sorry, that I'm say again, please?

Yes. impact Pension HPMC? of Pension. sequential at

year-over-year you the the for quarter. impact impact HPMC, million give let about So impact, in so you and was think $X AA&S, million me me so the was -- it $X And $X year-over-year, million. give let pension between the

Thank you guys.

no have currently further questions. We

to to please hand call remarks. would ahead. Tom, the So like I for back final Tom Wright go

replay Earnings available will XXXX Quarter First ATI's concludes our at on be This today. atimaterials.com. us joining for you Thank Call. website A

concludes this you joining. Thank Ladies and today's for gentlemen, call.

lines. Thank may your you. now disconnect You