Haynes International, Inc. (NASDAQ:HAYN) Q4 2019 Earnings Conference Call - Final Transcript

Nov 15, 2019 • 09:00 am ET


Haynes International, Inc. (NASDAQ:HAYN) Q4 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, good day, and thank you all for joining the Haynes International, Inc. Fourth Quarter Fiscal 2019 Earnings Conference Call. [Operator Instructions]

And now for opening remarks and introductions, I am pleased to turn the floor over to Controller and Chief Accounting Officer, Mr. David Van Bibber. Please go ahead, sir.

David Van Bibber

Thank you very much for joining us today. With me today are Mike Shor, President and CEO of Haynes International and Dan Maudlin, Vice President and Chief financial Officer.

Before we get started, I would like to read a brief cautionary note regarding forward-looking statements. This conference call contains statements that are forward-looking within the meaning of the Private Securities Litigation and Reform Act of 1995 and Section 21E of the Securities and Exchange Act of 1934. The words believe, anticipate, plan and similar expressions are intended to identify forward-looking statements. Although, we believe our plans, intentions and expectations regarding or suggested by such forward-looking statements are reasonable, such statements are subject to a number of risks and uncertainties, and we can provide no assurances such plans, intentions or expectations will be achieved. Many of these risks are discussed in detail in the Company's filings with the Securities and Exchange Commission, in particular Form 10-K for the fiscal year ended September 30, 2019. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

With that, let me turn the call over to Mike.

Michael L. Shor

Good morning, everyone. With the close of fiscal '19, I'm pleased to say that we've moved from words to actions and from plans to results. While we have so much more that we believe we can do with volumes, costs, pricing, cash generation and margins, I'm very proud of our team and all that they've accomplished in fiscal '19. We've gained significant momentum over the past year. Our employees focus on our monthly metrics and the actions required to change this business have been excellent.

A few highlights related to both Q4 and fiscal 2019. The depths of thinking and the actions underway to implement proactive safety initiatives throughout the entire Company have been excellent. We must continue to improve our safety performance and our employees' actions are a significant step in the right direction. Our cash flow has been positive for eight of the last 12 months. We increased cash over $21 million in fiscal '19, of which $9 million was from Q4. Inventory was reduced by $10.3 million in Q4.

Our fourth quarter gross margin finished at 16.4%. This much improved result is despite the well-documented cobalt price collapse and the cost and yield issues associated with the planned furnace rebuild, both of which are now behind us. These numbers are also beyond anything we've seen in recent years.

As I stated last quarter, our goal is to move from worst to first in gross margin percent in our slice of the industry. We continue to make progress towards