ATI (ATI) 2 Aug 232023 Q2 Earnings call transcript

Thank you. Good morning and welcome to ATI's Second Quarter 2023 Earnings Call. Today's discussion is being broadcast on our website. Participating in today's call to share key points from our second quarter are; Bob Wetherbee, Board Chair, and CEO and Don Newman, Executive Vice President and CFO.

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

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

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

Thanks, Dave.

Let really seeing you have and we're happy the already. by of with you presence the to welcoming begin to me ATI We're your impact team. us

another reported a strong with So use thanks three We for the that margin focus accomplished being line highlights top We've my to quarter and the I lot, quarter growth attention morning here. sequential I'll on think your about important. time are expansion. this and most

aerospace defense and strong. are core markets First, our

in X% Why so is quarter the our and A&D, to a as continue increased of this and income. over in of grow sales total over We and A&D XXXX. absolute dollars revenue QX prior XX% QX both important? percentage

markets, There's is year-over-year. up and Specifically in the vehicles, This second materials military XX% from and brown sales the in defense applications. for quarter rotorcraft prior demand X% quarter. in sustained naval million $XXX surpassed

key an the Demand opportunity role playing of hypersonic accelerate. advancement technologies, to continues we're longer-term, our highly Looking area a growth significant materials. with in for differentiated

the strong a of it with the together, $X.X backlog, we're year, order healthy the backlog all part Our increasing very best is top end us. you still up productivity, robust of from in the billion sales, at reaching put very June. more of the line XX% in ahead cycle beginning a than of growth When sequential

XX%. attributed ATI and to of defense is overall now aerospace Our revenue percentage

We're number our Just was progress of goal making year toward a XX%. that rapid ago sales A&D XX%.

to and continues greater Highlight benefits. transformation deliver greater our strategic number two,

defense margins this ramping Materials overall This demand. our XX.X% Components sequentially basis XX% aerospace the production is XX% in three segment of by by driven robust driven operations. Our and improved hitting mix commercial increased in HPMC pricing, EBITDA volume. of by points its All Sales High sales. XXX Performance efficiencies year-over-year, realization enabled to and segment grew continued Equally and increase was important, stride. are & quarter-over-quarter

will variety teams be system. want continuing and a our reasons have still that to critical work to team capital second this the are on Don on in to where not the of We tangible doing The operating improving. shortly. We're flow do But confident, recognizes improvement Our paths. great of efficiencies I'm of that working not velocity we through debottleneck provide as metric, improve improve for our in year. half percentage production also of and managed see color inventory a to sales we'll the done we're work

three, by earnings $X.XX, our starts doing in number, Highlight top our commitments and say at shareholders. including the on segment. did challenges, guidance ATI to delivering served industrial our what headwinds, the end continued and this landing was face per of the Advanced we and customers And It our our we all with share recessionary do, markets in of adjusted and will we Alloys range. Solutions

of productive QX deliveries not strip quarter second I'm supplied rolled more of recovery but we're precision Asian stabilizing continuing a experiencing about, to into results of quarter's by was yet this strong to parties. chapter, third ATI. XXXX in is by this come. and we strong excited how half story Our leading a It's business, beyond. and for and one billet there's more late us forging talk see directed very

on after Don take that guidance for ATI's I'll our will perspective moment. take the half. in future, that on I'll these and provide back into But my questions. second on and a first, results, be his share to us share more

Thanks, Bob.

those results our and headlines, trajectory. financial color I'll on more Following same some add

in high, strategy up driven is A&D. projected we QX This A&D and strengthening A&D of line, with X,XXX content. revenue points Reaching year-over-year our sequentially. a some up margins growth. near-term XX% First is to by increasing and ATI's With of basis This expand are was sustained and XXX highest offers up, directly points defense our leadership. demand, basis aerospace our

by it than rose content and to year-end. Within will of we Our higher or total ATI, XX% trends, jet sales drive Strong A&D increased sales sales we sequential continue goal be XX% for to business. expect XX% A&D, should defense is and growth total greater of X%. for our by A&D project engine continue.

margin Turning to points an margin adjusted overall HPMC basis increased our by from increase EBITDA XX% sequentially, and by driven of to ATI's headline That's XXX quarter X% Overall, performance. last adjusted two, increased year-over-year. segment. number XX.X%. EBITDA

A&D sales Let's QX XXXX take at HPMC content total QX XX% a up of closer $XX a driver XX% in quarter the first key QX look revenues. sales. increased year-over-year Remember, HPMC in XX% results. compared HPMC's makes It's XXXX. or the of to million increase

a lingering HPMC XXXX. Another cost positive from XXXX our in was reduction performance, of QX inefficiencies our and

which roughly As incurred sequentially quarter. to declined improved in XXX The expected, million QX this clearly efficiencies in adjusted and improved headwind HPMC's that EBITDA XX.X%. basis visible are mix $X margins, points

Rolled in Asian in sequential AA&S EBITDA low line targeted a those This due puts us That to primarily margins impacts, with saw softness to lingering flatness are where offset industrial business. in sales markets end segment for Strength targets. decline. XXXX the in was we XXXX mid-XX% HPMC with general economic in Strip HPMC and Our Precision range. our our associated

shows there's critical We're leadership know working an It's it improvement for our capital. doing we opportunity that focus well area area is and results. a and ATI of managed One our of in for lot things team.

$X.X quarter QX. $XX the ABL was That points of of adjusted billion end material when working was funded revolver. raw This purchase or with made on in we XXX million draw the At by drops purchase for our XX% sales. capital second balance managed basis a strategic a

inventory that the and to be We of to ABL largely by strategic repaid end consumed the be expect the year. draw

three things. is would else working What to higher driving point I capital?

A&D into for position ramp. the continuing inventory put we've First,

As Bob noted, XX% in than QX. X% growth grown more backlog our year-to-date has including

Second, associated inventory have to our spikes are which expanding constraints. ahead we work and with inventory create as And sales. we third, downstream solve rates titanium production can improving, ramping bottlenecks melt of capacity

is The our these all near-term and new focus best drivers earnings on ahead of generation. of good purpose. for I inventory to inventory news is could We higher sales think revenue lead of purpose for cash the Ramping increases.

by working are We our target capital year-end will confident we're on focused managed we XX% and deliver. hitting

capital on efficient deployment. strategic We have equally sharp focus and

the was accrued million to $XXX $XX at includes XXXX million half of of carryover CapEx first end which of related the for XXXX. Our capital expenditures

plan. guidance capital associated disciplined guidance our Overall we in recently track emphasize includes annual expansion of on with Washington. announced to $XXX million to in CapEx We're with previous our XXXX titanium Richland expenditures important holding melt remain this million. $XXX our investment It's

prudent managing We're in million of Therefore the challenges of free annual million. capital are to $XXX and capital cash our focused holding range with working we flow concert expenditures. at $XXX

which in our in cash available a to management, $XXX cash We This balanced the approximately from remain operations liquidity facility. ABL quarter QX. total capital on million ended returning includes $XXX million shareholders. under We million. cash our $XX of capital committed million of reflects with we deployment Expanding $XXX strategy to and generated

announced with call, $XX share we quarter's In buyback million a next program. the tranche repurchases of last

QX, not we the to While program did by year. repurchase end we million the expect shares $XX in the complete of

adjusted above per performance earnings and raw slower demand performance And share, material of provided. share. quarter The was builds $X.XX strong the to EPS metal reflects moderately lower our from and was first of highlight favorable end A&D midpoint range mix high the this for tied it our quarter. prices. higher This growth, At range per offset our partially on and third results area price by $X.XX the was we industrial at the a to guidance positive

our fourth quarter was which $X This in billion. revenue exceeded consecutive

revenue a the represents strength demand. reinforces Our year-over-year $X.XX of and in X% sustained increase billion

and confident premier our position as are a supplier. in We aerospace defense

QXX guidance. Now, forward full year let's to look and

driven adjusted also expectation expect the The Rolled in of be continue Strip Asian sales conditions. be the EPS will Precision third business to of $X.XX our to China's in QX, quarter. For in that economic range, planned outages to quarter, the the below our by range It third midpoint pressured to is reflects $X.XX we $X.XX. facility due

the also assuming will We in industrial slowdown continue QX. are in demand

raising are full our to to range of $X.XX We year a share. EPS $X.XX guidance per

we're QX about thinking the can how You QX get EPS a sense full performance. guidance use of year to and

QX full year EPS in ranges respective per the Assuming the $X.XX of then EPS would QX are their midpoint of range and be share. at

in we provide from of improvements. QX, move finish to a strong demand, year Avenue a A&D Albany, an momentum EPS robust drive and XXth increase Oregon be What will the nice facility XXXX. operational would continued as into and That in continued restart the contributions will great

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

Thanks, Don. can lot one We've it this covered morning and a up sum statement. simple in I

markets are picture, time very we great in backlog where had It's I a a trajectory confident. long ever. positive demand forward. we've focused of than going accelerating, at stronger disciplined Look We and a execution, are a recovering, if think and

roughly on targeted announced a these near-term $XXX announced margin new commitments. new In of an per our of and to XXXX June, year that this, from per secured That's the agreements. an announced additional sales above over result year demand to our to Of incremental EBITDA estimated sales, we XXXX of long-term converting in to targets. $X.X in incremental $XX into billion is XX% We're XX% assume is EBITDA million $XX million average we've XXXX. million XX% targets, previously

rising starts To The new future and getting applications critical to aero and collective capacity we vehicle and represent share we commitments meet with this existing demand, more growth. can the materials from continue armor. engine and assets. ensure sustained ground meet support titanium needs our positions It customers. increase encompass nickel of airframe to for They

as location. to more A get from capacity quarterly titanium few That's in shipped is calls Albany, Oregon titanium We'll see starting melt producing ingots QX. levels capacity. restarted end this announced the third at as XXXX We're baseline. the the shop impact melt quarter. already expansion positive at our in incremental target even capacity a ago in ingots XX% the producing that component financial key products we increase the of delivering deliver on Our

build. that the of operation in The Last month underway. we expansion our well named as is Washington Richland site existing

XXXX. previously an is additional shared will the end projected of we online by baseline. XXXX As be additional by ATI's to titanium our increase XX% it over This increase production

in Additional from XX% and the more product plus together qualifications expansion commitments. capacity the including rate will reach to restart expect XX% XX% Albany assets we in confirmed full Added to run a existing in billion XXXX. support increase Richland profits from their occur XXXX in revenue and $X.X

important We gained It's to serve future. To least, say strong we're capabilities has positioned quality and mix Richland standard of for input both flexibility and we highlight expansion drive the and in the materials. chemistry have of speed both that our our capacity advance addition aero produce We airframe value well and and continuously engine the the customers the the demand. to we'll in and a to to for in to flexibility shareholders. the both refine prime recycled and ability form for to premium control extraordinary deliver most capability products

strategic consistency Our value volatility and in related stabilizes creation. material the fuel performance and quarterly has our results reduced quarter-on-quarter of pricing. strategic transformation to our It raw growth

what our A&D in we way market. opportunity today all operational confident strong And ever-growing adding every it We're to of long is wrapping in go on we're stronger delivering our to the The disciplined what demand. We're up execution. That value this clear our across will a confident gives laser-focused confident customers and achieve efficiencies path with in beyond. in We're performance ATI. Well, shareholder say about? capability. we're provide what getting meet we're are our and we doing me So in the our in unlocking we'll we confident capacity confident strategy day team confidence a term. to growth and we

leverages levels constantly in strive pushing working accelerates not And enterprise brings collaboration to and but across higher and for We're least that us record of more I'm production ourselves reset performance. team. improvements. together Each created a new confident drives more. last our We've ideas the system to

team honored lead to I'm this forward.

Officer. of the Our is Kim a our President business. we were part to why optimizing delighted success Operating to add Chief performing as responsibilities role large is team and Fields The of

recognize the is Now, it's great to to take minute leadership a having. her impact

Our customers feel it.

Our and earned responding seeing our given is given team shareholders often it are earned. well are it. and to certainly they're first before not they're and Titles

the of in we're question. that to things great We're It's perform. grow. ready Kim. to the So you thank position a makes one for us Operator, first proven

line ahead. Richard [Operator open. Safran first question Our go Richard, your from comes Please is from Seaport. you. Instructions] Thank

at accretive Thanks. should what okay this you. follow-up. Air How think could a if morning. expand show, we your and in like, $X.X kind Bob, comments contracts. for Bob, margin then incremental Don, I you've merchant those of were you Paris XX% one making I to Don, are on And I'm to about made. quick billion wondering, got like to Don, maybe I'd Dave, good first is think you? XX% this that I'd ask, work also if new does how Thanks. it's the that comments you if

Okay.

that. be run And Let short let at accretive. you me me a take The the they yes, is, on should walk through that. math answer

sales billion a commitments $X.X six-year period. is shared we've So, over of

expect as $XXX you a our XX% targets, of revenue annual about in million about million think XXXX that out, of you So we and $XXX is incremental. that that, year about spread

as And on you terms that new XX% XX% that, margins we're up. Rich, think then, the think for about business in of picking to I that

the from that million $XX and Of million indicates, of then business. to on between generated have to math that's EBITDA new probably we're going that be $XX going incremental course,

our about overall targeted answer be to existing this then how you XX% margins the As there, business. yes, short and affect think for The well, margins XX% that does those EBITDA should incremental XXXX incremental. for

that but probably to XX way you're math to do going going XX and EBITDA it's the the XX% the on math I prove is our incrementals, out, range effect about of basis at that similar targeted it, And we've to and to of points typically know to margin have to effect enhancement incremental think a expect XXXX. would XX% we the XX% it to which XX% would for you to kind the

done ask that. Okay. Thanks trends. again before. about to you something you've Bob, like I'd titanium for

a the and that's work. because about dilutive share made talk you lead of on And are? gains not where bit could about Specifically, some times orders, taking you've previously think I possible pricing, if comments

titanium would So, trends on Thanks. be any color you helpful. provide could

All right. we and these our and Well, lives capacity increase thanks Rich. our as up Certainly, debottleneck. days dominating ramp

of improvements I'll access we've improvements actually in because forward what's business making, we've And of of been call able to, bar we've We going it, have so actually, to more terms because the made. accretive, that been the accretive actually the right? lower more

up actually away So some moved of the historical access. bigger paradigms have opening from us, a

billion the nickel But billion. lion's right? adjustments point, that's roughly, split of share that that I clearly we is a of let's as world's to Ukrainian based and your share post titanium announced baseline it. kind on share by a $X.X the about $X.X the the use gains. for taking So, the Russia one-third the And titanium result invasion would two-thirds say, of of is

other but actually The to was customers, picked titanium we due side. third nickel our in versus up of you're share more about the performance asking quality

gain's pretty So, share aggressive.

by titanium but we're gains. in to benefits pretty share that a the not XXXX, XXXX, there quantifying big see start are with seeing we'll We it. But

heavy it's In we've contract said kind what backlog anybody if the terms they in to seen the get that's the seen titanium couple quarters rise our their who of in order trying long-term reflective say we've times contracts of of I you was and of a that backlog. a ago lead we in knew should would XX% load.

products. depending titanium out on bar commitments some XXXX we So, Titanium XXXX even like up orders the titanium maybe these into picked QX that plates, are XXXX. QX and probably customer for in

we kind up sparse. market of just extended. Albany that's starting maybe a If late facility, the where XXXX, QX pretty few have kind XXth is. they're slots got business left kind of we we've It's start you wanted in with of Avenue And but -- but to some of opportunities as transactional to XXXX, some in be

So market. on a perspective I time And seller's I think then on from think pricing that titanium. lead been a the helps definitely it's side,

for we get think we're the their to are the But value getting for secure I market. terms quality. pricing in people reliable. in appropriate of are say think and I increases and the and I where stage trying seeing reliability we're would supply do

like I hopefully Rich There's your always think in them was questions all. six that list. got there I

to for just did. Thanks, You like Bob. I'd efficiency. go

All you. Thank too. right. That’s We good. do

Thank you.

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

very and thanks good much Hey, morning.

how For a saw I first role and question like sales saw about look I wanted in And in HPMC to if fact up again margin it played in engine particular to to the factor any in ask and impact? in may have the the we quarter strong you going that contributed sequentially. the quarter mix have degree Are they that which picked there. started there the did QX? does sell that to products profitability forward the

That's a Good question morning. good Seth.

perspective, the issue. think isothermal our those we've think market. a say the per of forgings bar, heading of slightly mix the up that towards we're say comment about recovery some I which end It the products would ingot, also probably widebody picking from had se great the our is the I I stride I of of are kind hitting of wouldn't are seeing some and up start of our but wide-body kind biggest seen billet products a the larger mix probably

revenue I and positive. been upgrades I price would say efficiencies would with with that. a certainly mix modest of lot have is contract So that say it volume these the And come

want So, have add Don, did yeah, big are that? you any you think color to ones. those I on probably the

Yeah.

and in Seth, sequential the $XX context, increase margin. EBITDA nice on as the for think our expansion I about million you that think

want it of and those was drove as probably all look about you get price/mix price/mix. is driven and really Bob But absolutely volume one-third of volume. it, kind two was related two-thirds at As which to sense is you if a It to right. really to about

So to overall really demand from that nice really. growth contribution

just where things bit or non-A&D it that is? Great. that kind that headwinds I something some a you. the as account segment EBITDA A&S that down? of maybe year, the the little of a guess, you we thinking A&S for way And stable? Thank in faces think from still the you And expect you -- demand Is of terms kind where how end on for where at that at the the looking about then about demand looking of markets. the follow-up, we were quarter did of how and -- more signals rest do in are did that's the end

Yeah, good question, time. the are all we something at looking

we So recovering -- go talking the or say give in take, back about, I markets we'll a into that QX industrial to One things QX XX% businesses bit more of before automotive really remnant would about is see transitory two into issue a appliances little by it's industrial three in obviously stabilizing think you're I decline stuff food we QX. the the It's mostly segment of have. the things, we perhaps. of then some and beverage markets, type supply and some the driven

really industrial those kinds markets it's So things, down. being of the

year. back tends some two lot we the breaths or then through with in moving the to stabilizing the to distribution take make to in OEM's distribution a do if channel a that a see next these in the these right sure economy or place QX half products solid and the But of is of breath, and And kind tend going the up also some of exacerbate of distribution see of just familiar We products channel. take decline. you're through going when channel

energy a also on And we're seeing -- the it's side. little

back to as go followed take oil OEMs say breath happens, recovered. prices well when EPCs see. and or just When now the prices let's wait they've quickly, May, that nickel well dropped and If you a

or of are in those -- of project later program back orders. XXXX kind They'll shipments. HX year We for the expect chunky those come probably

solid So that with is the it's of heavy general there. there and business industrial of But have and line energy kind volatility the we the bottom defense. markets, increasing aerospace little the chunkiness a

of we're it And seeing. XXXX guys spots then EBITDA high-teens different But Even there. and them. come back is we our through economics by runway put of this actually giving be floating Certainly, like in pause. out, definitely QX and kind is I people the you we read where what mid- is everybody the just think is to around the in different But and going reports QX. looks kind it stabilizing else see are and channels target to

much. Excellent. That's Cool. Thanks very helpful.

you. Thank

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

on Korn pension Joshua thinking XXXX longer-term to wanted nickel for the actually how is target? I about David. Thanks. relative and pass-through you're to This ask

as shape we say What think you metal those targets Sure. is, would XXXX those about Sure. assuming I flat targets, prices.

talking the kind pass-through you're that of So about. assumption answers that

well, those pass-through are Right surcharges. now, which it have be prices But in this that metal assuming we've when pass-through elevated that we're as saw XXXX higher and revenue XXXX some those and we comes targets, going metal to higher us. seen and elevated not prices, with continue to to

that's going the of out a moment with be headwind is don't headwind So to we that expect a that it's XXXX. to us margins, to continue bit at to -- but our

In the I in with us that way increase It is be pension terms past, expense pension additional simplest expense increase saw that expense. million in $XX is pension, non-cash, in shared This that I've not assumed million XXXX, is in a guys in to it the the overall $XX targets. with about those not XXXX expect do to you but in be is long-term. and going think we to a about of

don't would out with So that us indicate XXXX. it to be to I expect and

help as So bridging with you performance as from well answer margins. that that Does profitability expanding your thinking current about will question? increased as the to XXXX you're

over the at prices AA&S results months couple quarter? then impacted Yes. in recent Okay. last you. in Thank in all negatively the drop the And the did of nickel

Yes. The short answer is, yes.

it's headwind us. when prices the generally for is metal metal modest was up the and business So other prices generally prices way go contracted. on go metal pullback constructed our and a a for a guy us, direction, there that's When good

million headwinds, probably you million But of in million $X.X we precise would million about would it's QX. like actually seen was that $X business AA&S $X to around. already in to expect start to QX get those We've terms turn on think something to recovering $X million EBITDA as that super of $X metal So it early that. prices the probably headwind in

we guide And good to the us year. rest out as of for so that the should look be a

Okay. Thank you.

Thank you.

Our Khanna comes next open. your question ahead. line go Please now from is TD from Gautam Cowen. Gautam,

Hi. Good guys. morning

Good morning.

Bob titanium. of based on new annually your $XXX-ish is the on the which business comments million two-thirds

you about the titanium of So pretty I'm business. much still away on? new just $XXX all of got do the going additional million think share. from concluded I are VSMPO. was lot a your curious left Or or discussions exhaust still how folks curious you does switching of that to there's headroom largely opportunity get

Well, sure. number I on get to got your to never-ending for Yes. a you new But process pad. it's a put

just You sure million to got right? to incremental same of make So about what the think got of numbers. said $XXX to new we we which million business before, is $XXX

say, your think our Yes, question, of so orders I commitments those what is seeing the out. think those what's other would are I against we're that times I driving lead is which part --

-- time. say of big They couple no. the There's, commitments I expire there. think would I the the that still contract a same don't done. are all at out all ones from

probably points renewal orders the So probably next and beyond. XXXX

wide-body back, or long assessing reassessing So the as where the to they people be term. are comes need for

those. of couple a there's, So

so -- opportunities. doesn't it the exhaust of terms In

participants. would industry lack we it other when by pickup or call of performance opportunities see think I to I

the will engine think a on real of OEMs be definitely that the side and concern airframe on side. the I

opportunity. So I it don't exhausts think the

a we're stretch, opportunities we any wide-body still not probably come, by going of emerging best to the think continues as upside the to I that market recover. have titanium but the situation quite overcapacitized see capacity for bit

new we're there's, of some optimization. market think, well. using I the And kind then there XX-XX always probably as lastly, product opportunities And

have clearly we continue prioritize. to we where So opportunities

all? terms get us that how I think the I another And do see Gautam, question, adjusted. that's be So upside answer of in still mix can them your for did

Yeah.

did. think you I

clear, be I it better. to so Just understand

contract of of that as will make emergent in like -- supplier XXXX doing sure is to But share, those understood terms I ones, terms are just -- to that want the In share kind or opportunities the is be for I competitors ones opportunities of -- against aren't that big well. that. next big reset

Yeah.

So we'll you benefit were And it's start it see not XXXX, next exhausted. was the And asking exhausted. $X.X billion no, the we I in to get would right? the if next ones then, say that But the real But of I opportunity. in that's for process. matter in a opportunity timing they renewal their up-scaling XXXX. think the shipments the would where of of be and some just schedules of customer sit And there's do

That's very is EBIT helpful. that? HPMC about Could talked to And then, sequential what seasonality, articulate QX maintenance. from seasonal you you guys the impact

It quarter. issues opportunity and was therefore as had QX. very of on all QX, reflect it have strong could like, in back-end could those a kind QX, or is was you clean HPMC relative wasn't throughput we if just performance been. of that on QX's the And still the to because Did table looked it in loaded the as resolve there in QX

is This Sure. Don.

a run. me Let Yeah. take

at run take me that. let a So

of first. first answer me of So the -- the in terms second question let all,

really In was QX for of the terms right? about HPMC, and performance volume to it QX price/mix,

got the So Yeah, some quite bottlenecks constraint QX. actually. we had that through the some strongly of we were in more resolved there we when HPMC released Are what that? for so, seeing opportunities in business that believe QX in were been

sales being flows, effect of cetera. and that the part on inventory and et throughput capital management in improving that's to done profitability around has our really work business, a the the flows with which do positive that And will have

job those identifying just doing addition HPMC, units. phenomenal are operating A&S Kim the to In also a are for that, for efficiencies not but opportunities and teams the business existing and operational

in time business. performance so over would And our see those the additive can to we that be

to answer To about terms to not really the about think is of in HPMC. the we that how talked seasonal related QX outages that question of for much

expect in of terms QX. in see to any HPMC significant pullback wouldn't in performance I So

And math drop kind A&S. direction The that in of -- to you'll performance. dimensionalizing, you way QX million those EPS the to the in the see in to that from think the general terms of do that QX So outages if probably of performance. QX effect million $X on $XX the to outage think QX, being spend reflected about are in of scheduled increased

there's Now, offset. some

performance see you perform the run You'll expecting of A&D especially the we're numbers. when that HPMC the continue business -- Obviously in to it math side to well. in the to

And expecting our offset indications strength helps continued those we're some outages getting And quarter et cetera, et a to so upon cost. QX based of then saw that of course, out QX A&D nice in in you cetera. outage that breakout of as

Excellent. you much. so Thank

bet. You

Instructions] Timna [Operator from Wolfe comes from open. now your question line Tanners Timna, next is Our Research.

morning, stabilizing you and just notes my you, everyone. disappointment Thank two had I be improving a looking was at story you in China or remaining. second the I said to past China expected that had and questions with good first half that hit in half.

can now? conditions So kind of what's a in to there assuming China, continue soft anything your guidance would embedded in just clarify it is that? this or you change great? And Is be

Yeah.

time. know lacks -- please me is clarity this this if So, if let then

that saw that slowness right. that, And precision to second related recover the you're strip our in rolled business. we entered So into XXXX, would were absolutely carried When expectations we over were slowness in half.

this have seen We precision `rolled recovery in business. strip not

continue the guidance year. through recovery a to an business the so PRS is our second the upside the off QX will that, of If half what that we've And obviously that's there is guidance. in assumed of performance in

player be been steel you. just if a And Thank question wonder, used those margins would strong. really Okay. I grain-oriented. be producing know years and a you to steel electrical is perhaps then big market or expected even last nongrain electrical in exploded it be is that's return to to I to the My but random whether the much really, would and Helpful. possible understanding it couple have strong. over demand be of

it. wondering again. if just possible if it's Thanks think you So would and about

XXXX that answers our do based you allocation We say into we're Yes. doing. devote a the aerospace would we're I is Fair question. capital strategy do opportunities. see concise in alloys. to always magnetic assets the on We decision and still clear we no getting not and which towards back had like at defense the I that's back in like time business. Timna, made XXXX, what

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Okay. Thank you.

you. Thank hand on for back now line. David are questions to any closing There Weston no further remarks. I'll the

day. Earnings joining us Thanks will our today's A available today. again Call. you. Second good on Have be Quarter ATI concludes Thank for website. a XXXX replay This

call This joining. you concludes very Thank everybody. much for today's conference

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