10-KPeriod: FY2024

ATI INC Annual Report, Year Ended Dec 29, 2024

Filed February 21, 2025For Securities:ATI

Summary

ATI Inc. reported a strong fiscal year 2024, with sales increasing 5% to $4.4 billion, marking the highest total since 2012. This growth was primarily driven by the aerospace & defense sector, which now represents 62% of total sales, up from 59% in the prior year, with particular strength in commercial jet engines and airframes. The company also saw significant growth in its other core markets, including medical and electronics, which grew by 15% collectively. ATI's strategic focus on high-growth end markets is yielding positive financial results, evidenced by a 15% increase in Adjusted EBITDA to $729.1 million, and a 150 basis point improvement in the Adjusted EBITDA margin to 16.7%. The company also generated robust operating cash flow of $407.2 million and continued to strengthen its balance sheet by redeeming convertible notes and repurchasing shares. ATI is well-positioned for continued growth, with a strong backlog and investments in advanced materials for next-generation aerospace applications.

Financial Highlights

51 data points
Beta

Revenue

$4.36B

20.6% Gross Margin

Net Income

$367.80M

8.4% Net Margin

EPS (Diluted)

$2.55

Total Assets

$5.23B

Cash & Equivalents

$721.20M

Free Cash Flow

$407.20M

Financial Statements
Beta
Revenue$4.36B
Cost of Revenue$3.46B
Gross Profit$898.20M
R&D Expenses$19.60M
SG&A Expenses$342.30M
Operating Income$608.90M
Interest Expense$124.20M
Net Income$367.80M
EPS (Basic)$2.82
EPS (Diluted)$2.55
Shares Outstanding (Basic)130.40M
Shares Outstanding (Diluted)146.60M

Key Highlights

  • 1Sales increased 5% to $4.4 billion in fiscal year 2024, the highest since 2012, driven by aerospace & defense (62% of sales) and other core markets (medical, electronics).
  • 2Adjusted EBITDA grew 15% to $729.1 million, with margins improving to 16.7%, indicating strong operational performance.
  • 3The High Performance Materials & Components (HPMC) segment saw sales increase 8%, largely due to a 10% rise in aerospace & defense revenue.
  • 4The Advanced Alloys & Solutions (AA&S) segment experienced a 2% sales increase, driven by growth in aerospace & defense, medical, and electronics markets, despite softness in some industrial sectors.
  • 5The company generated $407.2 million in cash flow from operations, demonstrating effective working capital management.
  • 6ATI returned $260 million to shareholders through share repurchases in fiscal year 2024 and redeemed $291 million in convertible notes, improving its balance sheet.
  • 7Significant investments in titanium melt capacity are underway, with an expected 80% increase compared to fiscal year 2022 levels by late fiscal year 2025.

Frequently Asked Questions

ATI's sales growth in fiscal year 2024 was primarily driven by strong demand in the aerospace & defense markets, which now constitute 62% of total sales. This was complemented by growth in the medical and electronics markets, which collectively increased by 15%.

ATI demonstrated strong financial performance with a 15% increase in Adjusted EBITDA and robust operating cash flow of $407.2 million. The company also focused on balance sheet improvement by redeeming convertible notes and repurchasing shares, enhancing its financial flexibility.

ATI's outlook for its key end markets, especially aerospace & defense, is positive. The company is well-positioned to benefit from the continued demand for next-generation jet engines and airframes, supported by long-term agreements with major OEMs and a significant backlog of orders. Investments in titanium capacity further support this growth.

Key risks include the cyclical nature of its end markets, dependence on critical raw materials subject to price and availability fluctuations, potential disruptions in manufacturing processes, and the ongoing need to recruit and retain skilled talent. The company also faces risks related to international trade policies and cybersecurity threats.