Haynes International Inc (HAYN) Reports Q4 and Fiscal Year 2023 Results

• Haynes International Inc (NASDAQ:HAYN) announces an 11.7% increase in Q4 net revenues year-over-year.

• Full-year revenue up over 20%, with significant growth in aerospace and industrial gas turbine markets.

• Backlog increased by 23.2% for the fiscal year, despite raw material price challenges.

• Declared quarterly cash dividend of $0.22 per share, payable on December 15, 2023.

On November 16, 2023, Haynes International Inc (NASDAQ:HAYN) released its 8-K filing, detailing the financial outcomes for the fourth quarter and fiscal year ended September 30, 2023. The company, a prominent developer and marketer of high-performance alloys, reported a robust increase in net revenues for both the quarter and the full year, driven by record sales in key markets. However, the company faced challenges due to raw material price fluctuations, which impacted gross profit margins.

Financial Performance Overview

For the fourth quarter, Haynes International Inc (NASDAQ:HAYN) reported net revenues of $160.6 million, an 11.7% increase from the same period in the previous fiscal year. This growth was attributed to an 11.4% rise in product average selling price per pound, reflecting price increases and a favorable product mix. Despite an unplanned equipment outage, the company managed to ship approximately the same volume of 4.9 million pounds as in the prior year's quarter.

Cost of sales increased to $130.8 million, or 81.4% of net revenues, compared to $111.9 million, or 77.8% of net revenues, in the same period of fiscal 2022. This rise was primarily due to higher raw material prices included in the cost of sales. Consequently, gross profit for the quarter decreased by $2.1 million year-over-year to $29.8 million.

Operating income for the quarter was reported at $16.1 million, a decrease from $18.8 million in the same period of fiscal 2022. Net income also declined to $13.1 million compared to $16.3 million in the prior year's quarter. The company attributed these decreases to the higher raw material prices impacting cost of sales.

Year-End Highlights and Financial Position

For the fiscal year, Haynes International Inc (NASDAQ:HAYN) saw a revenue increase of over 20%, with the aerospace and industrial gas turbine markets contributing significantly to this growth. The company's backlog increased by 23.2%, indicating strong demand for its products. Controllable working capital rose by 18.8% to $449.4 million, primarily due to increases in inventory and accounts receivable.

The company's liquidity position included cash and cash equivalents of $10.7 million and a revolving line of credit with remaining capacity of $85.2 million, totaling $95.9 million in liquidity. Net cash used in operating activities for fiscal 2023 was $16.7 million, a notable improvement from $79.5 million used in fiscal 2022.

Capital expenditures for fiscal 2023 amounted to $16.4 million, with plans for fiscal 2024 projected to be between $25.0 million and $35.0 million. The company also maintained its quarterly cash dividend of $0.22 per share.

Outlook and Guidance

Looking ahead to fiscal 2024, Haynes International Inc (NASDAQ:HAYN) anticipates continued growth in volume and revenue, with incremental improvements in gross margin and positive cash flow from operations. The company expects the balance on its revolving credit facility to decline, with revenue and earnings in the first quarter of fiscal 2024 projected to be higher than the same quarter of the previous year but lower than the fourth quarter of fiscal 2023.

Haynes International Inc (NASDAQ:HAYN) will host a conference call to discuss these results and provide further insights into its performance and strategy. The company remains focused on managing the challenges posed by raw material price fluctuations and is committed to delivering value to its shareholders.

In summary, Haynes International Inc (NASDAQ:HAYN) has demonstrated resilience in the face of market challenges, delivering increased revenue and maintaining a strong backlog. The company's strategic focus on high-value alloys and applications, along with its efforts to improve gross margins, positions it well for the future.

Explore the complete 8-K earnings release (here) from Haynes International Inc for further details.

This article first appeared on GuruFocus.