Haynes International Archives

Haynes International (HAYN) – Lowering Estimates to Reflect Anticipated Negative Revenue Impact of Boeing Strike

Posted on November 1, 2024November 1, 2024 by cpereira@noblefcm.com

Friday, November 01, 2024

Haynes International, Inc. is a leading developer, manufacturer and marketer of technologically advanced, nickel and cobalt-based high-performance alloys, primarily for use in the aerospace, industrial gas turbine and chemical processing industries.

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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Boeing strike. In fiscal year 2023 and for the first nine months of fiscal 2024, aerospace represented 49% and 51% of Haynes’ net revenue. A significant portion of the company’s aerospace sales are dependent on the number of aircraft built by The Boeing Company and Airbus. On September 13, Boeing union members went on strike after rejecting a contract proposal from the company. Boeing has extended a pause on component shipments for several of its programs. While we are hopeful that the strike will be resolved soon, we expect it to have a negative impact on Haynes’ fourth quarter of fiscal year 2024 which ended September 30 and the first quarter of fiscal year 2025 which ends on December 31, 2024. Seasonally, the first quarter of the fiscal year is generally the company’s weakest.

Updating estimates. We have lowered our 2024 EBITDA and EPS estimates to $67.4 million and $2.46, respectively, from $68.5 million and $2.52. The revisions reflect weaker demand in the aerospace segment and lower sales expectations for the fourth quarter. Our expectations for weaker demand extend into fiscal year 2025, and we have lowered our EBITDA and EPS estimates to $82.5 million and $3.35, respectively, from $99.5 million and $4.15. Our revisions reflect lower shipment, revenue, and margin expectations, particularly during the first half of the year.

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Haynes International (HAYN) – Tempering Expectations for the Remainder of FY 2024 and FY 2025

Posted on August 5, 2024August 5, 2024 by cpereira@noblefcm.com

Monday, August 05, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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Third quarter financial results. Haynes reported third-quarter fiscal 2024 net income of $8.1 million or $0.63 per share compared to $8.8 million or $0.68 per share during the prior year period. Adjusted EBITDA was $17.1 million compared to $18.7 million during the prior year period and declined as a percentage of net revenues. Third-quarter results were negatively impacted by raw material headwinds and lower mill production volumes due to fewer orders and company initiatives to reduce inventory.

Updating estimates. We have lowered our 2024 EBITDA and EPS estimates to $68.5 million and $2.52, respectively, from $77.3 million and $3.00. The revisions reflect third quarter financial results and management expectations that fourth quarter revenue and earnings will be like the third quarter due to the unfavorable impact of lower production volumes. Our 2025 EBITDA and EPS estimates were lowered to $90.5 million and $3.82, respectively, from $99.5 million and $4.15 to reflect lower revenue and margin expectations in 2025, particularly during the first half of the year.

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Haynes International (HAYN) – Third Quarter Negatively Impacted by Lower Production and Raw Material Headwinds

Posted on August 2, 2024August 2, 2024 by cpereira@noblefcm.com

Friday, August 02, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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Merger Update. With respect to Haynes’ proposed merger with North American Stainless, Inc., a wholly owned subsidiary of Acerinox S.A., required approvals in the United States have been obtained. Following favorable decisions by European countries reviewing the transaction from a foreign direct investment (FDI) perspective, the company expects to obtain remaining required clearances from the U.K. and Austria in time for a fourth calendar quarter 2024 transaction close.

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Haynes International (HAYN) – Key U.S. Regulatory Approval; Updating Estimates

Posted on July 1, 2024July 1, 2024 by cpereira@noblefcm.com

Monday, July 01, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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Key U.S. regulatory approval. Haynes International announced that clearance has been obtained from the Committee on Foreign Investment in the United States (CFIUS) related to the planned merger with North American Stainless, Inc. The merger remains subject to approvals from regulatory authorities in the United Kingdom and Austria. All other regulatory approvals and clearances have been obtained where the applicable authorities have asserted jurisdiction. The company continues to expect that the merger will close in the fourth calendar quarter of 2024.

Chief Operating Officer appointment. Mr. Marlin (Marty) Losch has been named Chief Operating Officer, a newly created role, and will have responsibility for all commercial and operational activities. Mr. Losch joined the company in 1988 and previously served as Vice President of Sales and Distribution. Mr. Losch has held various positions of increasing responsibility in marketing, quality engineering, and production. Mr. Losch’s expanded role should be helpful to Mr. Michael Shor, President and CEO, as Mr. Shor focuses more attention on closing the company’s merger with North American Stainless Inc, a division of Acerinox S.A. Additionally, we expect the appointment to enhance post transaction integration.

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Haynes International (HAYN) – Acquisition Expected to Close in the Fourth Calendar Quarter of 2024

Posted on June 3, 2024June 3, 2024 by cpereira@noblefcm.com

Monday, June 03, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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Merger receives regulatory scrutiny in the United Kingdom and in Austria. The Competition and Markets Authority in the United Kingdom (CMA) intends to conduct a formal investigation into Haynes’ proposed merger with North American Stainless, Inc., a wholly owned subsidiary of Acerinox S.A. This follows the Austrian Federal Competition Authority’s referral to the Austrian Cartel Court for a Phase II investigation of the transaction (See our research note dated May 3).

Closing expected in the fourth calendar quarter of 2024. Haynes’ management remains optimistic that the regulatory reviews will be positively resolved, and the required clearances will be obtained. Based on the expected timeline of the U.K. formal investigation and the Austrian Phase II investigation, Haynes now expects the merger will close in the fourth calendar quarter of 2024. While the timeline has been extended one calendar quarter, we remain confident that the new timeline will allow enough time for both examinations to run their course with outcomes that support a fourth calendar quarter closing.

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Haynes International (HAYN) – Raw Material Headwinds Persist

Posted on May 10, 2024May 10, 2024 by cpereira@noblefcm.com

Friday, May 10, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Second quarter financial results. Haynes reported second-quarter fiscal 2024 net income of $8.6 million or $0.66 per share compared to $12.3 million or $0.96 per share during the prior year period. Adjusted EBITDA was $18.0 million compared to $22.4 million during the prior year period and declined as a percentage of net revenues. While the company experienced revenue growth in its core aerospace and industrial gas turbine markets, the quarter was negatively impacted by decreasing nickel prices which reduced gross margins, along with lingering impacts from the unplanned hot mill outage in the first quarter. The estimated negative impact from raw material volatility in the second quarter was $5.3 million.

Updating estimates. We have lowered our 2024 EBITDA and EPS estimates to $79.3 million and $3.13 from $84.8 million and $3.50, respectively. The revisions reflect recent earnings results and lower margins in the second half of the year. Our 2025 EBITDA and EPS estimates were reduced to $103.9 million and $4.40 from $104.5 million and $4.45.

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Haynes International (HAYN) – Proposed Merger with North American Stainless Receives Scrutiny in Austria

Posted on May 3, 2024May 3, 2024 by cpereira@noblefcm.com

Friday, May 03, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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Merger proposal receives scrutiny in Austria. The Austrian Federal Competition Authority (AFCA) is of the opinion that the proposed merger between Haynes International and North American Stainless, Inc., a wholly owned subsidiary of Acerinox S.A., should not receive clearance in its current form but should be subjected to a detailed examination by the Austrian Cartel Court. The AFCA filed an application with the Austrian Cartel Court for a Phase II in-depth examination. Like Haynes, Acerinox is active in the field of specialty alloys through its VDM Metals subsidiary.

What is the problem? Based on the release, the AFCA is concerned that the merger would further strengthen Acerinox’s market position in the nickel alloy products sector which could have a negative impact on competition and lead to higher prices.

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Haynes International (HAYN) – Shareholders Vote to Approve Haynes’ Pending Acquisition by North American Stainless

Posted on April 17, 2024April 17, 2024 by slightbourne@noblecapitalmarkets.com

Wednesday, April 17, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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Transaction approved by Haynes stockholders. At a special meeting on April 16, Haynes shareholders voted to approve the company’s pending acquisition by North American Stainless, Inc., a wholly owned subsidiary of Acerinox S.A. Acerinox, a leader in the manufacturing and distribution of stainless steel and high-performance alloys, will acquire all the outstanding shares of Haynes for $61.00 per share in an all-cash transaction.

Closing is expected in the third calendar quarter. The transaction is expected to close in the third calendar quarter of 2024. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on March 18. Remaining closing conditions include approval by the Committee on Foreign Investment in the United States (CFIUS), an interagency committee authorized to review transactions involving foreign investment in the U.S.. Other conditions are receipt of approvals, clearances, or expiration of waiting periods under certain foreign regulatory laws.

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Haynes International (HAYN) – Special Shareholder Meeting is Scheduled for April 16

Posted on March 25, 2024March 25, 2024 by cpereira@noblefcm.com

Monday, March 25, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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Special meeting of stockholders. Haynes International recently filed definitive proxy materials in anticipation of a special meeting of stockholders to vote on the company’s proposed merger with North American Stainless, Inc., a wholly owned subsidiary of Acerinox S.A. Acerinox is a leader in the manufacturing and distribution of stainless steel and high-performance alloys and will acquire all the outstanding shares of Haynes for $61.00 per share in an all-cash transaction. The special meeting of stockholders of Haynes International will be held virtually on Tuesday, April 16, 2024, at 9:30 am ET. Haynes stockholders of record as of the close on March 11 are entitled to vote the shares of Haynes International common stock held on the record date.

Closing is expected in the third calendar quarter. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired on March 18. Remaining closing conditions include approval of the merger under other applicable foreign investment laws and the adoption of the merger agreement by Haynes’ stockholders. The transaction is expected to close in the third calendar quarter of 2024.

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Haynes International (HAYN) – Revising Near-Term Estimates; Merger Update

Posted on March 12, 2024March 12, 2024 by cpereira@noblefcm.com

Tuesday, March 12, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Merger update. Haynes International recently filed preliminary proxy materials in anticipation of a special meeting of stockholders to vote on the company’s proposed merger with North American Stainless, Inc., a wholly owned subsidiary of Acerinox S.A. Acerinox is a leader in the manufacturing and distribution of stainless steel and high-performance alloys and will acquire all the outstanding shares of Haynes for $61.00 per share in an all-cash transaction. While the date of the shareholder meeting has not been announced, we believe it is tentatively planned for April 2024.

Closing is expected in the third calendar quarter.The transaction has been unanimously approved by the board of directors of both companies and is expected to close in the third calendar quarter of 2024, subject to the satisfaction of closing conditions, including receipt of regulatory approvals and approval by Haynes stockholders. Acerinox will invest an additional $200 million into its U.S. operations, including $170 million into Haynes’ operations to help modernize and expand capacity to support continued growth in both flat and round products.

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Haynes International (HAYN) – Haynes International Shares Rise on Acquisition Announcement; Rating Lowered to Market Perform

Posted on February 6, 2024February 6, 2024 by cpereira@noblefcm.com

Tuesday, February 06, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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Haynes to be acquired by Acerinox, S.A. Haynes International entered into a definitive agreement to be acquired in an all-cash transaction by Acerinox’s wholly owned U.S. subsidiary, North American Stainless, Inc. Acerinox is a leader in the manufacturing and distribution of stainless steel and high-performance alloys and will acquire all the outstanding shares of Haynes for $61.00 per share valuing Haynes at an enterprise value of approximately $970 million and a fully diluted equity value of $798 million. The shares are trading close to the proposed transaction price per share.

Closing is expected in the third calendar quarter. The transaction has been unanimously approved by the board of directors of both companies and is expected to close in the third calendar quarter of 2024, subject to the satisfaction of closing conditions, including receipt of regulatory approvals and approval by Haynes stockholders. Because the Haynes shareholder meeting is tentatively planned for April 2024, we think the transaction could close sooner than later.

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Haynes International to be Acquired by Acerinox Subsidiary

Posted on February 5, 2024February 5, 2024 by cpatches

In a significant development within the metallurgical industry, Acerinox’s wholly owned U.S. subsidiary, North American Stainless, is set to acquire Haynes International (HAYN), a leading developer, manufacturer, and marketer of technologically advanced high-performance alloys. The all-cash transaction, valued at $798 million, positions Acerinox to fortify its global leadership in the high-performance alloy segment.

Under the definitive agreement, Acerinox will acquire all outstanding shares of Haynes for $61.00 per share in cash, reflecting a premium of approximately 22% to Haynes’s six-month volume-weighted average share price ending February 2, 2024. The enterprise value of the deal stands at approximately $970 million. The transaction has received unanimous approval from the Boards of Directors of both Haynes and Acerinox.

Strategic Benefits for Acerinox:

Global Leadership: Strengthens Acerinox’s global leadership in the high-performance alloy segment.
U.S. Market Expansion: Expands Acerinox’s presence in the U.S. market, creating new opportunities in the aerospace sector.
Strategic Investment: Haynes to reinvest around $200 million over the next four years, particularly in Haynes’s Kokomo operations, to establish an integrated HPA and stainless steel platform.
Synergies and Growth: Anticipates annual synergies of $71 million, primarily unlocked through the $200 million investment, fostering growth and margin enhancements.
Complementary Businesses: Creates additional value through the combination of complementary businesses, expanding U.S. operating capabilities and establishing a worldwide sales and distribution network.
Accelerated Growth: Provides a strong platform to accelerate growth in high-performance alloys and specialty stainless in North America.
R&D Capabilities: Adds extensive R&D capabilities and a significant patent portfolio, reinforcing Acerinox’s innovation potential.

Haynes’s Perspective:

Significant Premium: Delivers substantial value to Haynes stockholders, offering a premium of approximately 22% to the six-month volume-weighted average share price.
Long-Term Success: Ensures the long-term success of Haynes by validating the strength of the business and providing access to Acerinox’s financial strength and expertise.
Strategic Investment: The $170 million investment in Haynes’ operations supports continued growth in both flat and round products for the global market.
Enhanced Capacity: Positions Haynes to meet dynamic customer demands by increasing manufacturing capacity and offering more differentiated products, applications, and services with faster lead times.
Rich Heritage: Merges Haynes’ 112-year-strong foundation and leadership in high-performance alloys with the largest fully integrated stainless-steel company in the U.S.

Regarding the transaction, Noble Capital Markets Senior Research Analyst Mark Reichman stated, “In our opinion, the transaction provides a fair return for Haynes’ shareholders. Additionally, Acerinox has committed to investing $170 million into Haynes’ operations which will support the modernization and growth of the company’s global business in both flat and round products.” Mark initiated research coverage on Haynes International on February 16, 2023.

The information contained in this article, other than Mark’s quote, was derived from the individual press releases issued by the companies involved in this transaction. This press releases can be found here:

https://www.acerinox.com/en/comunicacion/noticias/Acerinox-to-Acquire-Haynes-International/

https://www.haynesintl.com/wp-content/uploads/2024/02/02.05.2024-Transaction-Press-Release.pdf

Haynes International (HAYN) is currently covered by Noble Capital Markets Senior Analyst Mark Reichman. Noble Capital Markets, Inc. is a subsidiary of Noble Financial Group, Inc., the parent company of Channelchek. All equity research on Channelchek is provided by Noble Capital Markets. No part of this article was prepared by Noble’s analysts. Please view Mark’s most recent research report on Haynes International for any applicable disclosures.

Haynes International (HAYN) – Lowering Fiscal Year 2024 Estimates; Rating Remains Outperform

Posted on January 10, 2024January 10, 2024 by cpereira@noblefcm.com

Wednesday, January 10, 2024

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

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Updating estimates. We have lowered our first quarter, second quarter and full year fiscal 2024 earnings per share estimates to $0.70, $1.04, and $4.25 from $0.83, $1.16, and $4.50, respectively. Our full year EBITDA estimate has been reduced to $96.1 million from $100.3 million. The revisions are due mostly to a negative first quarter impact from fluctuations in raw materials prices which we think could extend beyond the first quarter. While the first quarter is typically the company’s weakest, the company made some operational upgrades which may also have impacted efficiency and the mix of products sold during the quarter. Our third and fourth quarter fiscal year 2024 estimates are unchanged.

Impact of falling commodity prices. Raw material price fluctuations can impact Haynes’ results due to its product portfolio being solely high-end nickel and cobalt-based alloys. Production of these alloys generate a significant amount of scrap which is recycled but puts the commodity price risk associated with the scrap on the company and has an impact when market prices change. During the first quarter of fiscal 2024, nickel and cobalt futures prices fell 11.2% and 13.0%, respectively. Following the company’s fourth quarter 2023 earnings release on November 16 through the end of the quarter, nickel and cobalt future prices declined 3.6% and 13.1%, respectively, and have continued to weaken into January. As a reference point, Haynes’ fiscal year ends on September 30.

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