Metal Fabrication Archives

Haynes International (HAYN) – Acerinox Completes the Acquisition of Haynes International

Posted on November 22, 2024November 22, 2024 by cpereira@noblefcm.com

Friday, November 22, 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.

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

Acquisition by North American Stainless. In February, Haynes International entered into an agreement to be acquired by North American Stainless, a wholly owned subsidiary of Acerinox. The transaction closed on November 21, 2024. We think the transaction is a positive outcome for Haynes’ various stakeholders.

Strategic benefits. Together, Haynes and VDM Metals will form Acerinox’s High-Performance Alloys Division. The integration of Haynes will support Acerinox’s strategic priorities, including the company’s focus on enhancing its operations in the U.S. market, high-performance alloys, and the aerospace sector. North American Stainless acquired all of the outstanding shares of Haynes for $61 per share in an all-cash transaction.

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Haynes International (HAYN) – Acquisition by North American Stainless Expected to Close Shortly

Posted on November 18, 2024November 18, 2024 by cpereira@noblefcm.com

Monday, November 18, 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.

Acquisition by North American Stainless. In February, Haynes International entered into an agreement to be acquired by North American Stainless, a wholly owned subsidiary of Acerinox. North American Stainless will acquire all the outstanding shares of Haynes for $61.00 per share. The merger is conditioned on, among other things, the receipt of the approvals, clearances, or expirations of waiting periods under certain regulatory laws.

Receipt of all regulatory approvals and clearances. With the Austria waiting period expiration on November 15, all regulatory approvals and clearances where the applicable authorities have asserted jurisdiction have been obtained, including in the United States and in the United Kingdom.

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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

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.

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.

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

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.

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

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.

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

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.

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

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.

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

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) – 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.

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

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.

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

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 (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.

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

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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