ATI Inc. (NYSE:ATI) Q2 2024 Results Conference Call August 6, 2024 8:30 AM ET

Company Participants

David Weston - VP, IR
Kim Fields - President and CEO
Don Newman - EVP and CFO

Conference Call Participants

Seth Seifman - JP Morgan
Gautam Khanna - TD Cowen
Scott Deuschle - Deutsche Bank
Richard Safran - Seaport Research Partners
David Strauss - Barclays
Andre Madrid - BTIG
Phil Gibbs - KeyBanc Capital Markets

Operator

Hello, everyone. And welcome to the ATI Second Quarter 2024 Results Conference Call. My name is Seb, and I'll be the operator for your call today [Operator Instructions]. I will now hand the floor over to David Weston, Vice President of Investor Relations to begin the call. Please go ahead.

David Weston

Thank you. Good morning. And welcome to ATI's second quarter 2024 earnings call. Today's discussion is being webcast online at atimaterials.com. Participating in today's call to share key points from our second quarter results are Kim Fields, President and CEO; and Don Newman, Executive Vice President and CFO. Before starting our prepared remarks, I would like to draw your attention to the supplemental presentation that accompanies this call. Those slides provide additional color and details on our results and outlook and can also be found on our Web site at atimaterials.com. After our prepared remarks, we'll open the line for questions. As a reminder, all forward-looking statements are subject to various assumptions and caveats. These are noted in the earnings release and in the accompanying presentation. Now I'll turn the call over to Kim.

Kim Fields

Thanks, Dave. Good morning, everyone. Let's dive in. ATI's second quarter results represent another strong quarter of execution and performance. What excites me the most, here are three key highlights. First, revenue growth. Quarterly sales reached their highest level in nearly a decade, nearly $1.1 billion, reflecting 10% sequential increase in our strategic A&D and aero-like revenue categories. Second, strategic mix expansion. A&D sales made up 62% of our revenues this quarter, putting us on track toward our A&D mix target of 65%-plus. In total, 79% of our revenues comes from A&D and aero-like markets, markets where our differentiation is most valued. And third, strong financial results. Adjusted EPS hit $0.60 at the high end of our guidance and adjusted EBITDA came in at $183 million, exceeding the upper end of our guidance range. So what is driving these results? Let me break it down to three main points. First, it's about surging demand. At the Farnborough Air Show, the high demand for our products was clear. Interest has broadened beyond titanium to nickel, looking for commitments for the rest of this decade and into the 2030s. Customers are offering premiums for any available near term slot that opens up. We're currently in discussions with multiple customers about investing their capital for added capacity. And why are they investing? To guarantee supplies available when they need it and secure their preferred position in line. They're increasingly facing the wide body ramp while still supporting historic levels of shop visits and spare parts demand.