Haynes International, Inc. (NASDAQ:HAYN) Q4 2020 Earnings Conference Call - Final Transcript

Nov 20, 2020 • 09:00 am ET

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Haynes International, Inc. (NASDAQ:HAYN) Q4 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Hello, everyone, and thank you for joining us today for the Haynes International Inc. Fourth Quarter Fiscal 2020 Financial Results Conference Call. [Operator Instructions]

To get us started today with opening remarks and introductions, I am pleased to yield the floor to Controller and Chief Accounting Officer, Mr. David Van Bibber. Good morning, sir.

Executive
David Van Bibber

[Technical Issues] 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, 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.

Executive
Michael L. Shor

Thanks, Dave. Good morning, everyone.

As our team leads our Company through the impact of the pandemic, I thought I would start this call by highlighting some of the positives from this past quarter. While this has been a difficult period, we have executed well, and I'm proud of our team's accomplishments.

First, starting in late March, we prioritized cash generation. After generating $13.1 million in cash in our third quarter, we generated an additional $11.7 million in Q4 for a total of $24.8 million in the second half of our fiscal year. We've also developed plans for positive cash generation to continue throughout fiscal 21. Next, we have strong liquidity, no debt and $47.2 million in cash in our balance sheet. Due to our high level of confidence in operating cash in fiscal '21, we paid off the $30 million precautionary draw on our revolver in September 2020. Many years of tightly managing our balance sheet has set us up well to manage our way through the pandemic.

In addition, our team is strategically positioning our Company to exit this downturn with a competitive advantage by leveraging our mill direct and service center routes to market. We are building flexible intermediate inventory in the mill to allow for consistently shorter lead times in the future for our high-volume alloys while our service centers are targeting stock for even shorter lead time requirements and small order quantities. We also plan to continue to invest in value-added cutting capacity to provide a high-value differentiated product and therefore build additional competitive advantage. Throughout this pandemic, we have stayed in close contact with our customers, continuing to provide what they need when they need it and to gain their insight into current business conditions and future