Haynes Swings to Q1 Loss Amid Pandemic
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowKokomo-based Haynes International Inc. (Nasdaq: HAYN) is reporting a fiscal first-quarter loss of $8 million, compared to net income of $3.2 million during the same period a year ago as it struggles with the impact of the global pandemic. The company, which manufactures high-performance alloys, says it continues to experience low orders and shipments of its products.
“Our first-quarter gross margin was significantly compressed due to the low volumes caused by the COVID-19 pandemic, especially in the aerospace market,” said Michael Shor, president and chief executive officer. “As we continue to navigate through the business impacts caused by the pandemic, our liquidity remains strong with cash generation this quarter of $14 million, resulting in over $61 million of cash on our balance sheet with zero borrowed against our credit facility.”
Shor says many of the company’s customers are in a cash preservation mode which has also resulted in “conservative order entry trends.”
Haynes says it was also impacted by the nearly two-year-long grounding of the Boeing 737 Max. The Kokomo company is a supplier to Boeing. The jet was banned from flight following two crashes which caused 346 deaths.
In November, the U.S. Federal Aviation Administration cleared the Max to fly again. Regulators in other nations have since followed suit. Just this week, the European Union Aviation Safety Agency gave Boeing’s troubled aircraft the green light.
“Looking forward, we welcome the favorable news of the start of the vaccination rollout and the recertification of the Boeing 737 MAX. While visibility is still unclear, our conversations with customers as well as recent order entry trends lead us to believe that Q1 volume is at or near the bottom of this unprecedented downturn,” said Shor.
Click here to view the company’s earnings report.