Aerospace recovery continues to gain momentum
PITTSBURGH, Aug. 3, 2021 — (PRNewswire) — Allegheny Technologies Incorporated (NYSE: ATI) reported second quarter 2021 results, with sales of $616 million and a net loss attributable to ATI of $49.2 million, or $(0.39) per share. Excluding $40.3 million of strike-related costs and $6.2 million of income from reduced restructuring charge reserves, adjusted net loss attributable to ATI was $15.1 million, or $(0.12) per share. Adjusted EBITDA was $53.7 million, or 8.7% of sales. Sales in the first quarter 2021 were $693 million, and the net loss attributable to ATI was $7.9 million, or $(0.06) per share. Adjusted EBITDA was $62.6 million, or 9.0% of sales. Prior year second quarter results were sales of $770 million, and the net loss attributable to ATI was $422.6 million, or $(3.34) per share. Excluding goodwill impairment, debt extinguishment costs and income tax valuation allowances, ATI's adjusted net loss for the second quarter 2020 was $2.3 million, or $(0.02) per share, and adjusted EBITDA was $57.6 million, or 7.5% of sales.
"Our second quarter results reflect the ongoing improvements in many of our key end markets, most notably jet engine materials and components, as well as the continued benefits from our aggressive 2020 cost cutting actions and recent share gains," said Robert S. Wetherbee, Board Chair, President and CEO. "Worldwide economic recovery is increasing the demand for travel, efficient energy, and many types of consumer products. These benefit ATI, and we are well positioned to capture this growth."
ATI's second quarter results include a significant negative impact on our Specialty Rolled Products (SRP) business from the strike by employees represented by the United Steelworkers, which concluded on July 13, 2021. "We welcome our employees back," said Wetherbee. "While their decision to strike created short-term headwinds, the settlement reached allows this business to have a more predictable and manageable cost structure moving forward. We thank the salaried and temporary workers who kept us operating safely so we could meet the needs of the customers who count on us. We look forward to this business ramping back up to its full capability in the second half of 2021. The transformation of our SRP business remains on track, including the elimination of standard stainless sheet products by the end of 2021."
Operating Results by Segment | |||||||||||
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| Three months ended | ||||||||||
High Performance Materials & Components (HPMC) | June 30 |
| March 31 |
| June 30 | ||||||
($ millions) | 2021 |
| 2021 |
| 2020 | ||||||
Sales | $ | 300.6 |
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| $ | 240.9 |
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| $ | 300.7 |
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Segment EBITDA | $ | 37.2 |
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| $ | 24.6 |
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| $ | 28.7 |
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% of Sales | 12.4 | % |
| 10.2 | % |
| 9.5 | % | |||
- HPMC's second quarter 2021 sales increased 25% versus the first quarter 2021 as demand from the commercial aerospace market was 28% higher, and sales to energy markets increased 58%, led by growth in our specialty energy markets. Sales were flat with the second quarter 2020, reflecting lower commercial aerospace sales largely brought on by the global Covid-19 pandemic, offset by higher government defense and energy markets sales.
- HPMC segment EBITDA was $37.2 million , or 12.4% of sales. Strike-related costs of $2.1 million were excluded from HPMC segment second quarter 2021 results. Compared to the first quarter 2021, results increased more than 50%, reflecting improved operating margins from higher production volumes, aided by share gains and the ongoing benefits of 2020 cost cutting actions. These same factors and benefits from raw material price changes drove a 30% segment EBITDA improvement over the second quarter 2020 despite a 22% decline in sales of highly profitable next-generation jet engine products versus the prior year.
