Haynes International, Inc. (HAYN), a leading technologically advanced high-performance alloy developer, manufacturer, and marketer, announced financial results for the fourth quarter ended 30 September 2020.
In the fourth quarter of fiscal 2020, net sales were $79.9 million, a drop of 38.3 percent from $129.6 million in the same period of fiscal 2019. In the fourth quarter of fiscal 2020, production was 2.9 million pounds, a reduction of 45.7 percent from 5.4 million pounds in the same fiscal 2019 period.
In addition to the effects caused by the grounding of the Boeing 737 MAX, the decline in volume is largely attributed to a large slowdown in demand caused by the COVID-19 pandemic.
Furthermore, cash protection practices for several clients have resulted in rather cautious patterns in order entry. In the fourth quarter of fiscal 2020, the average product sale price was $25.03 per pound, an improvement of 10.5 percent from $22.66 per pound in the same timeframe of fiscal 2019.
A higher demand commodity mix and previous price changes, as well as other pricing considerations, primarily reflect the growth in the global retail price per pound, which raised the average selling price per pound by around $2.99. These rises were largely offset by lower raw materials supply rates, which reduced the retail sale price per pound by about $0.62 on average.
In the fourth quarter of fiscal 2020, sales expenses were $76.0 million, or 95.1 percent of net revenues, compared to $108.3 million, or 83.6 percent of net revenues, in the same fiscal 2019 period. The drop in the dollar was largely due to reduced volumes, combined with the company’s steps taken in reaction to COVID-19 to lower prices, which included voluntary and forced layoffs and increases in salaried and hourly labor.
Despite these cost control steps, however, fixed costs did not reduce in line with the existing output rates, which involved the additional spending of a portion of those fixed costs of approximately $4.0 million.
As a consequence of the aforementioned causes, for the fourth quarter of fiscal 2020, gross profit was $4.0 million, a decline of $17.4 million from the same duration of fiscal 2019. In the fourth quarter of fiscal 2020, gross profit as a percentage of net sales declined to 4.9 percent as opposed to 16.4 percent in the same period of fiscal 2019.