Haynes International, Inc. (NASDAQ:HAYN) Q1 2023 Earnings Call Transcript

And, that we’ve got about $5.5 million in the budget. We’re just waiting for the equipment to come in. So beyond that, cranes, tow motors, some equipment for our cold finish, flat area, a little of everything really just to keep us moving forward.

Michael Leshock: Got it. That’s really helpful. And then I wanted to ask on other markets, I know that’s a smaller market for you, but given the ASP at nearly double the rest of your market, it can have a meaningful swing to earnings. So I wanted to ask what the driver has been there over the last couple of quarters and are there any trends that are sustainable that could maybe maintain pricing around these current levels?

Michael L. Shor: So one of the things I talked about in the script was some of our new alloys and code cases and getting material in with some of our new alloys. But in other markets, number one, what helped us is flu gas sulfurization going down so much. But the other thing that helped us is we continue to drive our metal, our new alloys into the oil and gas market. And oil and gas year-on-year was up almost 62%. So yeah, we’re going to continue to look, we review on a monthly basis with our application engineering team what we’re driving in and where we’re driving it to. But as you know, our business, our key is getting to the end users and creating a pull from the end users through these products. And that’s what we saw this past quarter in oil and gas.

Daniel W. Maudlin: Yeah, and we certainly, you’ll look at the average selling price in other markets, $50.77 this quarter, which was fantastic. Last quarter was 47, so still quite high. Compare that to a year ago, it was more like 30, you know, between 35 to 40. So you see a lot of volatility in here cause there’s a lot of different applications, a lot of different alloys. So as Mike mentioned, a little mixed management to get out of the flu gas to sulfurization side of it really makes a big difference. As far as being a big earnings mover, I mean, yes we certainly love higher ends alloys into these applications, but keep in mind it was 290,000 pounds for the quarter, out of the 4.5. So it’s still a smaller part of the pie than say, aerospace, industrial gas turbines, and CPI.

Michael Leshock: And then lastly on the labor environment, is it the hiring side of things or is it training that’s the biggest constraint right now? And maybe if you could give an update on where you’re at on the hiring front and how much more headcount is there left to go? Thanks.

Michael L. Shor: Sure. It depends on the location. In Kokomo, we’re nearly fully staffed. We’ve brought in over a 100 people. In fact, next Monday we have another 12 that are being hired and being brought in. So we feel great in our largest operation in Kokomo where we are. It’s just from a safety perspective and from a quality perspective, making sure that people are fully trained on their operation before we let them loosen. That’s what we’re going through right now. And quite frankly making very good progress with that. So feel good about on the production side being fully staffed. I think also in Kokomo, everyone in the world is having some issues related to the trait and we are aggressively pursuing, making sure that we have long-term stability in our key trades in Kokomo.

Now in our other facilities, that being that the major ones being our wire facility, our tube facility, and our LaPorte Indiana distribution facility. Little tougher to have access to talent. They’ve done a great job of making sure they hit their forecast on a monthly basis, but it’s a little more difficult there than it’s been in Kokomo.