Industry Cyclicality and Demand - The cyclical nature of the industries served by the company leads to fluctuating demand for products, impacting future profitability [70] - A significant portion of sales is derived from the commercial aerospace industry, which is subject to cyclical trends influenced by economic conditions and consumer demand for air travel [71] - The company has experienced depressed demand from general industrial markets, particularly in the AA&S segment, which could adversely affect pricing and financial results [73] Cost and Supply Chain Challenges - Recent inflationary trends have resulted in increased costs for critical raw materials, including nickel and titanium, which may impact revenues and operating results [77] - The ongoing conflict between Russia and Ukraine has caused significant market disruptions, including volatility in commodity prices and supply chain interruptions [82] - The company relies on third parties for critical raw materials and supplies, which are subject to price and availability fluctuations, potentially affecting production capabilities [79] Labor and Workforce Management - Approximately 7,700 employees are active, with 35% covered by collective bargaining agreements, which are subject to renegotiation and could lead to labor disputes [87] - The company is focused on recruiting and retaining skilled personnel, as labor market pressures could impact operational efficiency and strategic execution [85] Environmental and Regulatory Risks - Climate change and regulatory efforts to transition to a lower-carbon economy present both opportunities and risks for the company's business [92] - The company is subject to various environmental laws that may require substantial cleanup costs and could increase operating costs due to compliance with new regulations [97] - Environmental liabilities recorded in the financial statements totaled approximately $15 million as of December 29, 2024, with no reasonable possibility of losses exceeding this amount for currently associated sites [98] - The company has publicly disclosed efforts to reduce greenhouse gas (GHG) emissions, but new regulations could increase operating costs and require capital investments for compliance [95] Operational Disruptions and Risks - Disruptions to manufacturing processes due to various factors could significantly impact the company's ability to fulfill orders and maintain product quality, potentially leading to material adverse effects on financial performance [100] - Future developments related to public health crises, such as the COVID-19 pandemic, could impact operations and financial performance, although the extent of such impacts is difficult to predict [109] Financial Position and Liabilities - As of December 29, 2024, the company's total consolidated indebtedness was approximately $1.9 billion, with an additional borrowing capacity of about $525 million under its Asset Based Lending (ABL) credit facility [111] - The company is identified as a potentially responsible party (PRP) at 41 sites under federal Superfund laws, with potential loss exposure on 8 sites considered material [97] - The company is involved in ongoing litigation related to its pension plan obligations, with two lawsuits filed in federal court following a purchase of group annuity contracts [105] Strategic and Capital Project Risks - The company faces risks associated with strategic capital projects, where unanticipated costs or delays could materially affect financial results [103] - Export sales are expected to continue accounting for a significant percentage of future revenues, with risks including political instability and trade sanctions that could adversely affect results [101] Financial Instruments and Hedging - The company utilized derivative financial instruments to hedge exposure to energy and raw material price volatility, with a focus on minimizing counterparty risk [235] - A hypothetical $1.00 per MMBtu increase in natural gas prices would result in increased annual energy costs of approximately $6 to $8 million [237] - The company used approximately 70 million pounds of nickel in fiscal year 2024, where a $1.00 per pound change in nickel prices would lead to increased costs of approximately $70 million [240] - As of December 29, 2024, the company hedged approximately 75% of its annual forecasted domestic requirements for natural gas for fiscal year 2025 [239] - The net mark-to-market valuation of outstanding natural gas hedges resulted in an unrealized pre-tax loss of $0.1 million as of December 29, 2024 [239] - The company recognized $2.2 million of expense for settled foreign currency forward contracts not designated as hedges during the fiscal year ended December 29, 2024 [243] - The company had no significant outstanding foreign currency forward contracts as of December 29, 2024 [242] - The company’s financial derivatives related to nickel hedging amounted to approximately 4 million pounds, covering about 5% of a single year's estimated nickel raw material purchase requirements [241] Goodwill and Financial Reporting - For fiscal year 2024, both reporting units with goodwill had fair values exceeding carrying values, indicating no impairment charges anticipated [114] - The company purchased group annuity contracts covering approximately 85% of its U.S. qualified defined benefit plan obligations, expecting no significant minimum cash funding requirements for at least ten years [113]

Core Insights - ATI Inc. has launched a state-of-the-art Additive Manufacturing Products facility in Margate, FL, which integrates various manufacturing processes under one roof [1][2] - The facility is capable of producing large parts, up to 1.5 meters, and combines materials science with additive manufacturing expertise to ensure high-quality production [2] - The facility has already secured its first contract with Bechtel Plant Machinery Inc. for the U.S. Naval Nuclear Propulsion Program [2] Group 1 - The new facility spans 132,000 square feet and features advanced manufacturing operations, including laser powder bed fusion printing [3] - Additive manufacturing allows ATI to produce complex components more quickly and with reduced waste [3] Group 2 - ATI currently holds a Zacks Rank of 3 (Hold), while competitors like Ingevity Corporation, Carpenter Technology Corporation, and Methanex Corp. have higher rankings [4] - Ingevity's earnings estimate for the current year is $2.75 per share, with a significant earnings surprise history [5] - Carpenter Technology's earnings estimate is $6.83 per share, with a remarkable 176.6% share price increase over the past year [6] - Methanex's earnings estimate stands at $4.2 per share, consistently surpassing earnings expectations [6]

Core Insights - ATI Inc. has launched a state-of-the-art Additive Manufacturing Products facility in Margate, Florida, featuring the industry's largest and most advanced large-format metal additive manufacturing capabilities [1][3][5] - The facility integrates design, printing, heat treating, machining, and inspection processes, enhancing operational efficiency and product quality [1][4] - The new operations can produce high-performance, complex components up to 1.5 meters tall, addressing demanding market needs in aerospace, defense, and space [3][4] Company Overview - ATI is recognized as a metallurgical leader, focusing on developing new alloy powder materials specifically for additive manufacturing [4] - The company emphasizes its commitment to innovation and materials science, providing high-performance materials and solutions for various critical applications, including aerospace and defense [6] Facility Details - The new facility spans 132,000 square feet and includes advanced manufacturing operations such as laser powder bed fusion printing [5] - A comprehensive quality system has been implemented, meeting ISO 9001 and AS9100D standards, ensuring high-quality production [5] Strategic Partnerships - ATI has secured its first contract from Bechtel Plant Machinery Inc. (BPMI) for highly engineered part solutions supporting the U.S. Naval Nuclear Propulsion Program [4]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores are designed to help investors identify stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score emphasizes identifying undervalued stocks using financial ratios [3] - Growth Score assesses a company's financial health and future growth potential [4] - Momentum Score capitalizes on existing price trends to identify favorable investment opportunities [5] - VGM Score combines all three styles to highlight stocks with the best overall characteristics [6] Zacks Rank and Performance - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to guide investment decisions [7] - Stocks rated 1 (Strong Buy) have historically delivered an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] - There are over 800 stocks rated 1 or 2, making it essential for investors to use Style Scores to narrow down choices [9] Stock Highlight: Allegheny Technologies (ATI) - Allegheny Technologies (ATI) is currently rated 3 (Hold) with a VGM Score of A and a Momentum Style Score of B [11] - ATI's shares have increased by 6.4% in the past four weeks, indicating positive momentum [11] - The Zacks Consensus Estimate for ATI's fiscal 2025 earnings has risen by $0.01 to $2.89 per share, with an average earnings surprise of 10.8% [12]

Group 1 - ATI experienced strong demand for its specialty materials across both segments as it exited the year [1] - The demand remains robust in the core Aerospace & Defense (A&D) end market, with an elevated backlog [1] - The company's topline is expected to continue growing due to these favorable market conditions [1]

Core Insights - ATI Inc. reported a fourth-quarter profit of $137.1 million or 94 cents per share, a decrease from $145.7 million or 99 cents in the same quarter last year, but adjusted earnings increased by 23% to 79 cents, surpassing the Zacks Consensus Estimate of 60 cents [1][2] Financial Performance - Fourth-quarter net sales reached $1,172.7 million, exceeding the Zacks Consensus Estimate of $1,083.5 million, and reflecting a year-over-year increase of approximately 10% [2] - The High-Performance Materials & Components segment generated sales of $634.2 million, an 8.9% increase year-over-year, beating the consensus estimate of $598 million, driven by demand for next-generation commercial jet engines [3] - Advanced Alloys & Solutions reported sales of $538.5 million, up 11.8% from the previous year's $481.5 million, also surpassing the consensus estimate of $472 million, attributed to higher sales in defense applications [4] - For the full year 2024, ATI's sales totaled $4,362.1 million, an increase from $4,173.7 million in 2023, while earnings per share dropped 9% to $2.55 from $2.81 [5] Financial Position - At the end of the fourth quarter, ATI had a cash balance of $721 million and additional liquidity of approximately $525 million from an asset-based lending credit facility, with cash flows from operating activities amounting to $381 million [6] - Capital expenditures for the quarter were $47 million, and the company utilized $70 million for share repurchases [6] Future Outlook - ATI anticipates adjusted earnings per share for 2025 to be between $2.80 and $3, with the first quarter forecasted at 55-61 cents, and adjusted EBITDA projected to be between $170 million and $180 million for the first quarter and $800 million to $840 million for the full year [7] - The company aims to remain agile in response to the normalization of the aerospace and defense supply chain and changes in global trade policies, expressing confidence in its growth and margin expansion prospects for 2025 and beyond [8]

Proven to perform anywhere. Fourth Quarter and Full Year 2024 Earnings February 4, 2025 ATI Proprietary and Confidential ©2025 ATI. All rights reserved. 1 Forward Looking Statements This presentation contains forward-looking statements. Actual results may differ materially from results anticipated in the forward-looking statements due to various known and unknown risks, many of which we are unable to predict or control. These and additional risk factors are described from time to time in the Company's filin ...

Core Viewpoint - Allegheny Technologies (ATI) reported quarterly earnings of $0.79 per share, exceeding the Zacks Consensus Estimate of $0.60 per share, and showing an increase from $0.64 per share a year ago, representing an earnings surprise of 31.67% [1][2] Financial Performance - The company posted revenues of $1.17 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 8.23%, compared to $1.06 billion in the same quarter last year [2] - Over the last four quarters, Allegheny Technologies has exceeded consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Allegheny Technologies shares have increased approximately 5.3% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] Future Outlook - The company's earnings outlook is crucial for investors, including current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $0.61 on revenues of $1.09 billion, and for the current fiscal year, it is $2.87 on revenues of $4.61 billion [7] Industry Context - The Steel - Specialty industry, to which Allegheny Technologies belongs, is currently ranked in the top 10% of over 250 Zacks industries, indicating a favorable outlook [8] - The performance of Allegheny Technologies' stock may also be influenced by the overall industry outlook [8]

Financial Performance - Full year 2024 sales reached $4.4 billion, the highest since 2012, representing a 5% increase over 2023[6] - Q4 2024 sales were $1.17 billion, up 10% year-over-year from Q4 2023, with net income attributable to ATI of $137.1 million, or $0.94 per share[3] - Full year 2024 operating cash flow was $407 million, significantly up from $86 million in 2023[3] - Adjusted EBITDA for Q4 2024 was $209.8 million, or 17.9% of sales, reflecting a 31% increase compared to Q4 2023[3] - Free cash flow for full year 2024 was $248 million, a 50% increase compared to the prior year[6] - Net income for the fiscal year ended December 29, 2024, was $382.7 million, a decrease of 9.6% compared to $423.4 million in the previous year[27] - Total revenue for the fiscal year ended December 29, 2024, reached $4,362.1 million, a 4.5% increase from $4,173.7 million in 2023[28] - Basic net income attributable to ATI per common share for the fiscal year 2024 was $2.82, down from $3.21 in 2023[32] Segment Performance - Aerospace and defense accounted for 65% of Q4 2024 sales, up from 62% in Q3 2024 and 63% in Q4 2023[5] - The High Performance Materials & Components segment reported sales of $634.2 million for the quarter ended December 29, 2024, compared to $582.5 million in the same quarter of 2023, marking an increase of approximately 8.9%[23] - The Advanced Alloys & Solutions segment achieved sales of $538.5 million for the quarter ended December 29, 2024, up from $481.5 million in the same quarter of 2023, reflecting an increase of about 11.8%[23] - Aerospace & Defense revenue accounted for 65% of total revenue in Q4 2024, with a total of $767.5 million, up from 62% in Q3 2024[28] Cash Flow and Capital Management - The company repurchased $260 million of its stock in 2024, ending the year with $721 million in cash[7] - Cash provided by operating activities significantly increased to $407.2 million in 2024, compared to $85.9 million in 2023[27] - Free cash flow for 2025 is expected to be between $240 million and $360 million, with capital expenditures projected between $260 million and $280 million[16] - Managed Working Capital for December 29, 2024, is $1,451.3 million, a decrease from $1,681.8 million on September 29, 2024[45] Guidance and Future Outlook - The company provided guidance for Q1 2025 adjusted EBITDA between $170 million and $180 million, and full year 2025 adjusted EBITDA between $800 million and $840 million[16] - Adjusted earnings per share guidance for 2025 is projected to be between $2.80 and $3.00[16] - The company anticipates growth and margin expansion in 2025 and beyond, driven by strong demand in end markets and a focus on agility amid evolving geopolitical uncertainties[16] Balance Sheet and Assets - Total assets increased to $5,230.6 million in December 2024, up from $4,985.1 million in December 2023, representing a growth of 4.9%[25] - Long-term debt decreased to $1,714.9 million in December 2024, down from $2,147.7 million in December 2023, a reduction of 20.1%[25] - The company reported a cash and cash equivalents balance of $721.2 million at the end of December 2024, down from $743.9 million at the end of December 2023[27] Inventory and Working Capital Management - Inventory levels increased to $1,353.0 million in December 2024, compared to $1,247.5 million in December 2023, reflecting a rise of 8.5%[25] - Accounts receivable decreased to $709.2 million on December 29, 2024, from $730.2 million on September 29, 2024[45] - Inventory decreased to $1,353.0 million on December 29, 2024, compared to $1,414.5 million on September 29, 2024[45] - Year-to-date change in managed working capital for 2024 is $129.4 million[45] Special Items and Adjustments - Total pre-tax adjustments for special items in the fiscal year 2024 amounted to $88.3 million, compared to $104.3 million in the previous year[34] - The company reported a $52.9 million gain on the sale of its precision rolled strip operations in the fiscal year 2024[40] - The company incurred a pension remeasurement loss of $14.1 million in the fiscal quarter ended December 29, 2024[38]

Full year 2024 sales of $4.4 billion represents ATI's highest total since 2012 Q4 2024 sales of $1.2 billion, up 10% over Q4 2023; full year 2024 sales of $4.4 billion, up 5% over full year 2023 Q4 2024 net income attributable to ATI of $137 million, or $0.94 per share; full year 2024 net income attributable to ATI of $368 million, or $2.55 per share Aerospace and defense represent 65% of Q4 2024 sales, up from 62% of Q3 2024 sales and 63% of Q4 2023 sales Full year 2024 operating cash flow of $407 million, ...