UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended December 31, 1998.
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from to .
Commission File Number: 333-5411
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HAYNES INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 06-1185400
- -------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1020 West Park Avenue, Kokomo, Indiana 46904-9013
- -------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(765) 456-6000
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(Registrant's telephone number, including area code)
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
As of February 12, 1999 the registrant had 100 shares of Common Stock, $.01 par
value, outstanding.
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HAYNES INTERNATIONAL, INC.
TABLE OF CONTENTS
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PART I FINANCIAL INFORMATION
Page
Item 1. Financial Statements:
Consolidated Condensed Balance Sheet as of September 30, 1998 and December 31, 1998 3
Consolidated Condensed Statement of Operations for the Three Months ended December 31,
1997 and 1998 4
Consolidated Condensed Statement of Comprehensive Income for the Three Months Ended 5
December 31, 1997 and 1998
Consolidated Condensed Statement of Cash Flows for the Three Months ended December 31,
1997 and 1998 6
Notes to Consolidated Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
PART II OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
Index to Exhibits 14
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
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HAYNES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited)
(dollars in thousands, except share amounts)
<S> <C> <C>
September 30, December 31,
1998 1998
-------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 3,720 $ 5,338
Accounts and notes receivable, less allowance for doubtful accounts of 45,974 37,868
$662 and $727, respectively
Inventories 81,861 88,711
-------------- -------------
Total current assets 131,555 131,917
Property, plant and equipment (at cost) 99,744 101,659
Accumulated depreciation (70,117) (71,700)
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Net property, plant and equipment 29,627 29,959
Deferred income taxes 36,549 36,171
Prepayments and deferred charges, net 9,532 10,202
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Total assets $207,263 $208,250
============== =============
LIABILITIES AND CAPITAL DEFICIENCY
Current liabilities:
Accounts payable and accrued expenses $ 20,823 $ 25,730
Accrued postretirement benefits 4,500 4,500
Revolving credit 35,273 31,646
Note payable 1,055 777
Income taxes payable 1,731 2,035
Deferred income taxes 1,199 1,036
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Total current liabilities 64,581 65,724
Long-term debt, net of unamortized discount 139,549 139,541
Accrued postretirement benefits 91,983 92,058
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Total liabilities 296,113 297,323
Redeemable common stock of parent company 2,088 2,088
Capital deficiency:
Common stock, $.01 par value (100 shares authorized, issued and outstanding)
Additional paid-in capital 49,087 49,087
Accumulated deficit (143,000) (142,819)
Accumulated other comprehensive income 2,975 2,571
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Total capital deficiency (90,938) (91,161)
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Total liabilities and capital deficiency $207,263 $208,250
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<FN>
The accompanying notes are an integral part of these financial statements.
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HAYNES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
(dollars in thousands)
<S> <C> <C>
Three Months Ended Three Months Ended
December 31, 1997 December 31, 1998
------------------- ------------------
Net revenues $ 64,240 $ 49,211
Cost of sales 49,852 37,296
Selling and administrative 4,419 4,941
Research and technical 956 912
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Operating income 9,013 6,062
Other cost (income), net (26) 230
Interest expense 5,413 5,054
Interest income (40) (21)
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Income before provision for income taxes and cumulative effect
of a change in accounting principle 3,666 799
Provision for income taxes 2,120 619
------------------- ------------------
Income before cumulative effect of a change in accounting principle 1,546 180
Cumulative effect of a change in accounting principle,
net of tax benefit (450) ---
------------------- ------------------
Net income $ 1,096 $ 180
=================== ==================
<FN>
The accompanying notes are an integral part of these financial statements.
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HAYNES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
(dollars in thousands)
<S> <C> <C>
Three Months Ended Three Months Ended
December 31, 1997 December 31, 1998
------------------ -------------------
Net Income $1,096 $ 180
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment 73 (404)
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Other comprehensive income (loss) 73 (404)
------------------ -------------------
Comprehensive income (loss) $1,169 ($ 224)
================== ===================
<FN>
The accompanying notes are an integral part of these financial statements.
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HAYNES INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
(dollars in thousands)
<S> <C> <C>
Three Months Ended Three Months Ended
December 31, 1997 December 31, 1998
------------------- ------------------
Cash flows from operating activities:
Net income $ 1,096 $ 180
Depreciation 1,938 1,747
Amortization 309 317
Deferred income taxes 235 217
Change in:
Inventories 5,201 (6,966)
Accounts receivable (8,620) 7,968
Accounts payable and accruals 2,869 4,625
Other, net (2,302) (636)
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Net cash provided by operating activities 726 7,452
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Cash flows from investing activities:
Additions to property, plant and equipment (2,783) (2,100)
Other investing activities 213 21
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Net cash used in investing activities (2,570) (2,079)
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Cash flows from financing activities:
Net increase (decrease) in revolving credit and 1,997 (3,702)
long-term debt ------------------- ------------------
Net cash provided by (used in) financing activities 1,997 (3,702)
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Effect of exchange rates on cash 15 (53)
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Increase in cash and cash equivalents 168 1,618
Cash and cash equivalents, beginning of period 3,281 3,720
------------------- ------------------
Cash and cash equivalents, end of period $ 3,449 $ 5,338
=================== ==================
Supplemental disclosures of cash flow information:
Cash paid during period for: Interest $ 1,035 $ 664
=================== ==================
Income taxes $ 370 $ 97
=================== ==================
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
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HAYNES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
For the Three Months Ended December 31, 1998
Note 1. Basis of Presentation
The interim financial statements are unaudited and reflect all adjustments
(consisting solely of normal recurring adjustments) that, in the opinion of
management, are necessary for a fair statement of results for the interim
periods presented. This report includes information in a condensed form and
should be read in conjunction with the audited consolidated financial statements
included in Form 10-K for the fiscal year ended September 30, 1998, filed by the
Company with the Securities and Exchange Commission ("SEC") on December 22,
1998. The results of operations for the three months ended December 31, 1998,
are not necessarily indicative of the results to be expected for the full year
or any other interim period.
Note 2. Inventories
The following is a summary of the major classes of inventories:
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September 30, 1998 December 31, 1998
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(Unaudited)
Raw Materials $ 3,535 $ 3,878
Work-in-process 35,215 41,610
Finished Goods 31,752 33,116
Other, net 11,359 10,107
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Net inventories $81,861 $88,711
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Note 3. Income Taxes
The provision for income taxes for the three months ended December 31, 1997
and 1998, differed from the U.S. federal statutory rate of 34% primarily due to
taxes on foreign earnings against which the Company was unable to utilize its
U.S. federal net operating loss carryforwards.
Note 4. Business Process Reengineering Costs
On November 20, 1997, the Financial Accounting Standards Board's Emerging
Issues Task Force ("EITF") issued a consensus ruling which requires that certain
business process reengineering and information technology transformation costs
be expensed as incurred. The EITF also consented that if such costs were
previously capitalized, then any remaining unamortized portion of those
identifiable costs should be written off and reported as a cumulative effect of
a change in accounting principle. Accordingly, in the first quarter of fiscal
1998 the Company recorded the cumulative effect of this accounting change, net
of tax, of $450,000, resulting from a pre-tax write-off of $750,000 related to
reengineering charges involved in the implementation of an information
technology project.
Note 5. Comprehensive Income
The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 130, "Reporting Comprehensive Income", effective October 1, 1998. SFAS No.
130 required that changes in the Company's foreign currency translation
adjustment be shown in the financial statements. SFAS No. 130 does not require a
specific format for the financial statement in which comprehensive income is
reported, but does require that an amount representing total comprehensive
income be reported in that statement. All prior year financial statements have
been reclassified for comparative purposes.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
References to years or portions of years in Management's Discussion and Analysis
of Financial Condition and Results of Operations refer to the Company's fiscal
years ended September 30, unless otherwise indicated. This discussion contains
statements that constitute forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements may include
statements regarding the intent, belief or current expectations of the Company
or its officers with respect to (i) the Company's strategic plans, (ii) the
policies of the Company regarding capital expenditures, financing or other
matters, and (iii) industry trends affecting the Company's financial condition
or results of operations. Readers of this discussion are cautioned that any such
forward looking statements are not guarantees of future performance and involve
risks and uncertainties and that actual results may differ materially from those
in the forward looking statements as a result of various factors. This report
should be read in conjunction with Management's Discussion and Analysis of
Financial Condition and Results of Operations included in Form 10-K for the
fiscal year ended September 30, 1998, filed by the Company with the Securities
and Exchange Commission on December 22, 1998.
Results of Operations
- ---------------------
Three Months Ended December 31, 1998 Compared to Three Months Ended December 31,
1997
Net Revenues. Net revenues decreased approximately $15.0 million to
approximately $49.2 million in the first quarter of 1999 from approximately
$64.2 million in the first quarter of 1998, primarily as a result of a 22.9%
decrease in volume, to approximately 3.7 million pounds in the first quarter of
1999 from approximately 4.8 million pounds in the first quarter of 1998.
Sales to the aerospace industry in the first three months of fiscal year
1999 declined by 19.4% to $23.2 million from $28.8 million for the same period a
year earlier due primarily to volume decline partially offset by an increase in
average selling prices. The volume decrease was caused by lower domestic sales
of nickel-base alloys to resellers and forge shop reprocessors as the aerospace
industry continues to make inventory adjustments for the announced changes in
the commercial aircraft build schedules.
Sales to the chemical processing industry declined by 23.9% from
approximately $22.2 million to approximately $16.9 million due to both volume
and average selling price declines. The difference in volume can largely be
attributed to a decline in project related business and somewhat lower
maintenance activity. The decline in the average selling price stems from
adjustments to pricing for falling raw material prices and heightened
competition.
Sales to the land-based gas turbine industry decreased by 25.0% in the
first three months of fiscal year 1999 to $3.3 million from $4.4 million for the
comparable period in fiscal year 1998 due to declines in both volume and average
selling prices. The decrease in volume was mainly due to reduced domestic
shipments of proprietary and specialty alloys that were not completely offset by
increased export sales. Average selling prices declined primarily as a result of
a change in product mix from higher to lower priced alloys and forms.
Sales to the flue gas desulfurization industry declined from approximately
$2.1 million to approximately $0.4 million due to the absence of any significant
project business in the quarter just ended. This market is generally
characterized by large project requirements and very modest continuing
maintenance needs.
<PAGE>
Sales to the oil and gas industry were insignificant in either of the
comparable quarters. This market is entirely dependent upon large drilling
projects, the timing of which are impossible to predict.
Sales to other industries declined by 35.8% to approximately $3.4 million
from approximately $5.3 million due to both volume and average selling price
declines. The drop in volume is the result of a nonrecurring project in the
waste market during last year's first quarter and substantially reduced sales of
a specialty alloy for wear applications. The lower average selling price can be
attributed to proportionately lower sales of higher cost, higher priced
cobalt-base alloys relative to lower cost, lower priced nickel-base alloys.
Cost of Sales. Cost of sales as a percentage of net revenues decreased to
75.8% for the first quarter of 1999 compared to 77.6% in the same period last
year. Lower raw material prices and a greater proportion of higher priced, high
value added product forms such as sheet and coil contributed to the decrease.
Selling and Administrative Expenses. Selling and administrative expenses
increased approximately $500,000 to approximately $4.9 million in the first
quarter of 1999 from approximately $4.4 million in the same period a year ago,
primarily as a result of higher domestic and export selling costs.
Research and Technical Expenses. Research and technical expenses were
relatively flat in the first quarter of 1999 compared to the first quarter of
1998.
Operating Income. As a result of the above factors, the Company recognized
operating income for the first quarter of 1999 of approximately $6.1 million,
approximately $1.3 million of which was contributed by the Company's foreign
subsidiaries. For the first quarter of 1998, operating income was approximately
$9.0 million, of which approximately $1.7 million was contributed by the
Company's foreign subsidiaries.
Other Cost (Income). Other cost increased by approximately $250,000, due
primarily to first quarter 1998 gains on the sale of land that did not occur in
the first quarter of 1999.
Interest Expense. Interest expense decreased approximately $300,000 to
approximately $5.1 million for the first quarter of 1999 from approximately $5.4
million for the same period in 1998. Lower revolving credit balances during the
first quarter of fiscal 1999, combined with lower interest rates, accounted for
the decrease.
Income Taxes. An income tax provision of approximately $619,000 was
recorded for the first quarter of 1999 compared to approximately $2.1 million in
fiscal 1998 due to lower pretax earnings.
Change in Accounting Principle. The cumulative effect of a change in
accounting principle recorded in the first quarter of 1998 represents the
write-off of the cumulative effect of certain business process reengineering and
information technology transformation costs that were previously capitalized.
The cumulative effect includes $750,000 in costs, reduced by a $300,000 tax
benefit, related to business process reengineering charges incurred in the
implementation of an information technology project.
Net Income. As a result of the above factors, the Company recognized net
income for the first quarter of 1999 of approximately $180,000, compared to net
income of approximately $1.1 million for the first quarter of 1998.
Liquidity and Capital Resources
The Company's near-term future cash needs will be driven by working capital
requirements, and planned capital expenditures. Capital expenditures were
approximately $2.1 million in the first three months of fiscal 1999, compared to
capital expenditures of approximately $2.8 million for the first three months of
fiscal 1998. First quarter 1999 capital spending included the initial costs of
outfitting the Company's new leased service center located in Lebanon, Indiana
and improvements to the Company's flat product production areas. The remainder
of planned 1999 expenditures will be for improvements in cost, quality, capacity
and reliability of manufacturing operations. The Company does not expect such
capital expenditures to have a material adverse effect on its long-term
liquidity. The Company expects to fund its working capital needs and capital
expenditures with cash provided from operations, supplemented by borrowings
under its Revolving Credit Facility with CoreStates Bank, N.A. and Congress
Financial Corporation (the "Facility"). The Company believes these sources of
capital will be sufficient to fund these capital expenditures and working
capital requirements over the next 12 months, although there can be no assurance
of this.
<PAGE>
Net cash provided by operating activities in the first three months of 1999
was approximately $7.5 million, as compared to net cash provided by operating
activities of approximately $700,000 in the first three months of 1998. The
positive cash flow from operations for 1999 was primarily the result of a
decrease in accounts receivable of approximately $8.0 million. The cash flow was
also affected by an increase in accounts payable and accrued expenses of
approximately $4.6 million, non-cash depreciation and amortization expense of
approximately $2.1 million, an increase in inventories of approximately $7.0
million, and other net adjustments of approximately $200,000.
Net cash used in investing activities decreased to approximately $2.1
million in the first three months of 1999 from approximately $2.6 million in the
same period for 1998, primarily as a result of decreased capital spending. Net
cash used in financing activities for the first three months of 1999 was
approximately $3.7 million, compared to net cash provided by financing
activities of approximately $2.0 million for the first three months of 1998,
primarily as a result of decreased net borrowings by the Company.
Cash for the first three months of 1999 increased approximately $1.6
million resulting in a cash balance of approximately $5.3 million at December
31, 1998. Cash in the first three months of 1998 increased approximately
$200,000, resulting in a cash balance of approximately $3.4 million at December
31, 1997.
Total debt at December 31, 1998, was approximately $172.0 million compared
to approximately $186.3 million at December 31, 1997, reflecting decreased
borrowing under the Facility.
At December 31, 1998, approximately $31.6 million had been borrowed
pursuant to the Facility compared to approximately $45.5 million at December 31,
1997. In addition, as of December 31, 1998, approximately $3.4 million in letter
of credit reimbursement obligations had been incurred by the Company. The
Company had available additional borrowing capacity of approximately $10.6
million on the Facility at December 31, 1998.
Accounting Pronouncements
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information" and SFAS No. 132, "Employers' Disclosures about Pension and Other
Postretirement Benefits", are effective for the year ending September 30, 1999.
In the opinion of management, SFAS No. 131 and SFAS No. 132 will not have a
material impact on the Company's financial position, results of operations or
cash flows, as these statements are principally disclosure oriented.
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities", is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. This statement establishes accounting and reporting
standards for derivative instruments and for hedging activities. It requires
that an entity recognize all derivatives as either assets or liabilities in the
statement of financial condition and measure those instruments at fair value.
The accounting for changes in the fair value of a derivative depends on the
intended use of the derivative and the resulting designation. Management has not
yet quantified the effect of the new standard on the financial statements.
Year 2000 Costs
The Company has recognized that the Year 2000 will affect certain business
systems currently being used and has taken steps to (1) protect the ability of
the Company to do business, (2) minimize the risk to the Company from Year 2000
exposure and (3) enhance or expand capabilities as exposures are eliminated. The
areas of exposure include the Company's computer systems and certain
non-Information Technology ("IT") equipment. The Company's products are not date
sensitive.
<PAGE>
Areas considered "critical" to fix are the current mainframe computer in
Kokomo, Indiana, the Argon-Oxygen Decarburization ("AOD") software and the least
cost melt software in the melt area, the four-high Steckel mill computer and
automatic gauge controls in the hot rolling production area, the power
consumption system, the computer in the Electro-slag remelt area, the gauge
controls for one cold rolling mill, the engineering test lab computer, the
telephone system, and the payroll system.
Areas which present a "slight to negligible" exposure if not fixed include
various non-IT program logic controllers, lab collection computers, various
gauges, various test equipment, electronic scales, desktop software, voice mail,
faxes, copiers, and printers.
The Company has already devoted significant amounts of time to ensure all
exposures are eliminated by December 1999, or sooner. In fiscal 1995, the
Company began its upgrade of the current IBM mainframe and an IBM System/36 used
for the Company's primary business system and received approval from the Board
of Directors in early fiscal 1996 for a $4.4 million new integrated information
system to replace the mainframe (of which approximately $2.2 million had been
spent through December 31, 1998, including $750,000 of business process
reengineering costs). This project includes new IBM AS/400 equipment and an
enterprise level software package called BPCS(TM), by System Software and
Associates, which is Year 2000 compliant and is slated for completion in June
1999. The costs for upgrading the stand-alone manufacturing and lab equipment
controls have been budgeted for fiscal 1999 as part of the spending or capital
expenditure budgets. The payroll system became Year 2000 compliant in October,
1998.
Surveys have been completed for the Company's customers and the Company has
sent surveys to its critical suppliers (generally $100,000 in purchases and
above) to assess their Year 2000 readiness. Currently there is no indication
that our suppliers will not be Year 2000 ready.
The total estimated costs as of December 31, 1998 for Year 2000 compliance
(other than the $4.4 million integrated information system mentioned above) are
currently estimated at approximately $600,000 for some critical and all
non-critical exposures and $1.2 million for capital expenditures related to
critical exposures. The Company intends to use its cash availability under its
revolving credit facility to finance these expenditures.
The Company's contingency plan if the Company is not ready by Year 2000 is
to have an immediate upgrade of the current IBM mainframe for its primary
business system and to have an immediate hardware upgrade for stand-alone
computer systems, data collection systems, test equipment, and process control
devices used throughout the Company, the cost of which is not known.
[Rest of page intentionally left blank.]
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
At December 31, 1998, the Company's primary market risk exposure was
foreign currency exchange rate risk with respect to forward contracts entered
into by the Company's foreign subsidiaries located in England and France. The
Company did not have any outstanding commodity contracts at December 31, 1998.
The foreign currency exchange risk exists primarily because the two foreign
subsidiaries need U.S. dollars in order to pay for their intercompany purchases
of high performance alloys from the Company's U.S. locations. The foreign
subsidiaries manage their own foreign currency exchange risk. Any U.S. dollar
exposure aggregating more than $500,000 requires approval from the Company's
Vice President of Finance. Most of the currency contracts to buy U.S. dollars
are with maturity dates of less than six months.
At December 31, 1998, the unrealized loss on these foreign currency
exchange contracts was $55,000.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities and Use of Proceeds
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
On January 13, 1999, Michael D. Austin resigned from the Company and Haynes
Holdings, Inc., the parent of the Company ("Holdings"), pursuant to an agreement
between the Company and Mr. Austin which provided for (1) certain severance
payments and other benefits, (2) certain consulting services to be performed by
Mr. Austin on behalf of the Company, (3) certain payments to be made to Mr.
Austin in the event of the occurrence of certain change in control transactions
affecting the Company or Holdings, (4) the termination of Mr. Austin's
employment agreement and severance agreement with the Company, and the release
by Mr. Austin of all obligations of the Company and Holdings pursuant to those
agreements, and (5) resignations by Mr. Austin from all positions with the
Company, including as a member of the Board of Directors of those entities. Mr.
Austin was replaced as President and Chief Executive Officer by Francis J.
Petro. The Company intends to enter into a written employment agreement with Mr.
Petro during the second quarter of fiscal 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. See Index to Exhibits
(b) Reports on Form 8-K. No report on Form 8-K was filed during the
quarter for which this report is filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HAYNES INTERNATIONAL, INC.
/s/ Francis J. Petro
-----------------------
Francis J. Petro
President and Chief Executive Officer
/s/ Joseph F. Barker
-----------------------
J. F. Barker
Vice President, Finance
Chief Financial Officer
Date: February 15, 1999
<PAGE>
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<CAPTION>
INDEX TO EXHIBITS
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Sequential
Numbering
Number Assigned In System Page
Regulation S-K Number of
Item 601 Description of Exhibit Exhibit
(2) 2.01 Stock Purchase Agreement, dated as of January 24,
1997, among Blackstone Capital Partners II
Merchant Banking Fund L.P., Blackstone Offshore
Capital Partners II Merchant Banking Fund L.P.,
Blackstone Family Investment Partnership L.P.,
Haynes Holdings, Inc. and Haynes International,
Inc. (Incorporated by reference to Exhibit 2.01
to Registrant's Form 8-K Report, filed February
13, 1997, File No. 333-5411.)
2.02 Stock Redemption Agreement, dated as of January
24, 1997, among MLGA Fund II, L.P., MLGAL
Partners, L.P. and Haynes Holdings, Inc.
(Incorporated by reference to Exhibit 2.02 to
Registrant's Form 8-K Report, filed February 13,
1997, File No.
333-5411.)
2.03 Exercise and Repurchase Agreement, dated as of
January 24, 1997, among Haynes Holdings, Inc. and
the holders as listed therein. (Incorporated by
reference to Exhibit 2.03 to Registrant's Form
8-K Report, filed February 13, 1997, File No.
333-5411.)
2.04 Consent Solicitation and Offer to Redeem, dated
January 30, 1997. (Incorporated by reference to
Exhibit 2.04 to Registrant's Form 8-K Report,
filed February 13, 1997, File No. 333-5411.)
2.05 Letter of Transmittal, dated January 30, 1997.
(Incorporated by reference to Exhibit 2.05 to
Registrant's Form 8-K Report, filed February 13,
1997, File No. 333-5411.)
(3) 3.01 Restated Certificate of Incorporation of
Registrant. (Incorporated by reference to Exhibit
3.01 to Registration Statement on Form S-1,
Registration No. 33-32617.)
3.02 By-laws of Registrant. (Incorporated by reference
to Exhibit 3.02 to Registration Statement on Form
S-1, Registration No. 33-32617).
(4) 4.01 Indenture, dated as of August 23, 1996, between
Haynes International, Inc. and National City
Bank, as Trustee, relating to the 11 5/8% Senior
Notes Due 2004, table of contents and cross-
reference sheet. (Incorporated by reference to
Exhibit 4.01 to the Registrant's Form 10-K Report
for the year ended September 30, 1996, File No.
333-5411.)
4.02 Form of 11 5/8% Senior Note Due 2004.
(Incorporated by reference to Exhibit 4.02 to the
Registrant's Form 10-K Report for the year ended
September 30, 1996, File No. 333-5411.)
(10) 10.01 Form of Severance Agreements, dated as of March
10, 1989, between Haynes International, Inc. and
the employees of Haynes International, Inc. named
in the schedule to the Exhibit. (Incorporated by
reference to Exhibit 10.03 to Registration
Statement on Form S-1, Registration No.
33-32617.)
10.02 Amended Stockholders' Agreement, dated as of
January 29, 1997, among Haynes Holdings, Inc. and
the investors listed therein. (Incorporated by
reference to Exhibit 4.01 to Registrant's Form
8-K Report, filed February 13, 1997, File No.
333-5411.)
10.03 First Amendment to the Amended Stockholders'
Agreement, dated March 31, 1997. (Incorporated by
reference to Exhibit 10.10 to Registrant's Form
10-Q Report, filed May 15, 1997, File No.
333-5411.)
<PAGE>
10.04 Executive Employment Agreement, dated as of
September 1, 1993, by and among Haynes
International, Inc., Haynes Holdings, Inc. and
Michael D. Austin. (Incorporated by reference to
Exhibit 10.26 to the Registration Statement on
Form S-4, Registration No. 33-66346.)
10.05 Amendment to Employment Agreement, dated as of
July 15, 1996 by and among Haynes International,
Inc., Haynes Holdings, Inc. and Michael D. Austin
(Incorporated by reference to Exhibit 10.15 to
Registration Statement on S-1, Registration No.
333-05411).
10.06 Haynes Holdings, Inc. Employee Stock Option Plan.
(Incorporated by reference to Exhibit 10.08 to
Registration Statement on Form S-1, Registration
No. 33-32617.)
10.07 First Amendment to the Haynes Holdings, Inc.
Employee Stock Option Plan, dated March 31, 1997.
(Incorporated by reference to Exhibit 10.18 to
Registrant's Form 10-Q Report, filed May 15,
1997, File No. 333-5411.)
10.08 Form of "New Option" Agreements between Haynes
Holdings, Inc. and the executive officers of
Haynes International, Inc. named in the schedule
to the Exhibit. (Incorporated by reference to
Exhibit 10.09 to Registration Statement on Form
S-1, Registration No. 33-32617.)
10.09 Form of "September Option" Agreements between
Haynes Holdings, Inc. and the executive officers
of Haynes International, Inc. named in the
schedule to the Exhibit. (Incorporated by
reference to Exhibit 10.10 to Registration
Statement on Form S-1, Registration No.
33-32617.)
10.10 Form of "January 1992 Option" Agreements between
Haynes Holdings, Inc. and the executive officers
of Haynes International, Inc. named in the
schedule to the Exhibit. (Incorporated by
reference to Exhibit 10.08 to Registration
Statement on Form S-4, Registration No.
33-66346.)
10.11 Form of "Amendment to Holdings Option Agreements"
between Haynes Holdings, Inc. and the executive
officers of Haynes International, Inc. named in
the schedule to the Exhibit. (Incorporated by
reference to Exhibit 10.09 to Registration
Statement on Form S-4, Registration No.
33-66346.)
10.12 Form of March 1997 Amendment to Holdings Option
Agreements. (Incorporated by reference to Exhibit
10.23 to Registrant's Form 10-Q Report, filed May
15, 1997, File No. 333-5411.)
10.13 March 1997 Amendment to Amended and Restated
Holdings Option Agreement, dated March 31, 1997.
(Incorporated by reference to Exhibit 10.24 to
Registrant's Form 10-Q Report, filed May 15,
1997, File No. 333-5411.)
10.14 Amended and Restated Loan and Security Agreement
by and among CoreStates Bank, N.A. and Congress
Financial Corporation (Central), as Lenders,
Congress Financial Corporation (Central), as
Agent for Lenders, and Haynes International,
Inc., as Borrower. (Incorporated by reference to
Exhibit 10.19 to the Registrant's Form 10-K
Report for the year ended September 30, 1996,
File No. 333-5411).
<PAGE>
10.15 Amendment No. 1 to Amended and Restated Loan and
Security Agreement by and among CoreStates Bank,
N.A. and Congress Financial Corporation
(Central), as Lenders, Congress Financial
Corporation (Central) as Agent for Lenders, and
Haynes International, Inc., as Borrower.
(Incorporated by reference to Exhibit 10.01 to
Registrant's Form 8-K Report, filed January 22,
1997, File No. 333-5411.)
10.16 Amendment No. 2 to Amended and Restated Loan and
Security Agreement, dated January 29, 1997, among
CoreStates Bank, N.A. and Congress Financial
Corporation (Central), as Lenders, Congress
Financial Corporation (Central), as agent for
Lenders, and Haynes International, Inc.
(Incorporated by reference to Exhibit 10.01 to
Registrant's Form 8-K Report, filed February 13,
1997, File No.
333-5411.)
10.17 Agreement by and between Galen Hodge and Haynes
International, Inc. dated January 13, 1998
(Incorporated by reference to Exhibit 10.17 to
Registrant's Form 10-Q Report filed February 13,
1998, File No. 333-5411).
(11) No Exhibit.
(15) No Exhibit.
(18) No Exhibit.
(19) No Exhibit.
(22) No Exhibit.
(23) No Exhibit.
(24) No Exhibit.
(27) 27.01 Financial Data Schedule.
(99) No Exhibit.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
HAYNES INTERNATIONAL, INC.
FINANCIAL DATA SCHEDULE
(dollars in thousands, except per share data)
The schedule contains summary financial information extracted from the
consolidated condensed financial statements of Haynes International, Inc. and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<CAPTION>
<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> SEP-30-1998 SEP-30-1999
<PERIOD-END> SEP-30-1998 DEC-31-1998
<CASH> 3,720 5,338
<SECURITIES> 0 0
<RECEIVABLES> 46,636 38,595
<ALLOWANCES> (662) (727)
<INVENTORY> 81,861 88,711
<CURRENT-ASSETS> 131,555 131,917
<PP&E> 99,744 101,659
<DEPRECIATION> (70,117) (71,700)
<TOTAL-ASSETS> 207,263 208,250
<CURRENT-LIABILITIES> 64,581 65,724
<BONDS> 139,549 139,541
0 0
0 0
<COMMON> 0 0
<OTHER-SE> (90,938) (91,161)
<TOTAL-LIABILITY-AND-EQUITY> 207,263 208,250
<SALES> 246,944 49,211
<TOTAL-REVENUES> 246,944 49,211
<CGS> 191,849 37,296
<TOTAL-COSTS> 242,171 48,412
<OTHER-EXPENSES> 952 230
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 21,171 5,054
<INCOME-PRETAX> 4,773 799
<INCOME-TAX> 2,317 619
<INCOME-CONTINUING> 2,456 180
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> (450) 0
<NET-INCOME> 2,006 180
<EPS-PRIMARY> 20,060 1,800
<EPS-DILUTED> 20,060 1,800
</TABLE>
