Haynes International, Inc. (NASDAQ:HAYN) Q3 2020 Earnings Conference Call - Final Transcript
Jul 31, 2020 • 09:00 am ET
Good day, ladies and gentlemen, and welcome to your Haynes International, Inc. Third Quarter Fiscal 2020 Financial Results Call. [Operator Instructions]. It is at this time, it is my pleasure to turn the floor over to your host, David Van Bibber, Controller and Chief Accounting Officer. Sir, the floor is yours.
David Sean 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, and in Form 10-Q for the quarter ended June 30, 2020. 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
Thanks, Dave. Good morning, everyone. The current economic environment resulting from the COVID-19 pandemic, along with a significant drop in aerospace demand, are certainly not what any of us expected at the beginning of our fiscal year. However, I'm pleased that our team was able to immediately pivot to focus on cash generation as the economic issues with the pandemic became apparent. Our bottom line focused efforts over the past two years led to 18% gross margins right before the pandemic, positive cash flow over the past year and at least a 20% reduction in our breakeven point compared to the prior fiscal year. Our goal of worst to first in gross margin percent in our slice of the industry was within reach.
These successful actions, along with the fact that we have strong liquidity stemming from a carefully managed balance sheet, should assist us in writing out this terrible storm and position us for profitable growth once an aerospace recovery begins. The drop in our business has been significant. We're looking forward to seeing the first signs that the aerospace industry has bottomed and a recovery is ahead of us. As you can see by our results for the quarter, we saw a drop in revenue of $31 million or 28% sequentially and $45 million or 36% compared to the third quarter of last year.
These reductions in revenue match with the recent aerospace news that we have all seen and