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ATI - Allegheny Technologies Inc
$38.10
0.15(0.40%)4:54:04 PM 3/23/2023
Allegheny Technologies Incorporated is a specialty metals company headquartered at Six PPG Place in Pittsburgh, Pennsylvania. ATI produces titanium and titanium alloys, nickel-based alloys and superalloys, grain-oriented electrical steel, stainless and specialty steels, zirconium, hafnium, and niobium, tungsten materials, forgings and castings.

Financials

Quarterly financials
(USD)Dec 2022Q/Q
Revenue1B-2%
Gross Profit185.7MM+1%
Cost Of Revenue824.7MM-3%
Operating Income108.7MM-4%
Operating Expenses77MM-
Net Income76.9MM+26%
G&A76.8MM+5%

Revenue Breakdowns

The above Revenue Breakdowns and below Management Discussion contents are extracted from this specific SEC Edgar 10-K/10-Q filling. The process is fully automated and without human validation. Although we make every effort getting the relevant information, please be advised that We make no representation or warranties of any kind about completeness, accuracy, reliability, suitability or availability of the information exacted from Edgar 10-K/10-Q filings.

Highlights of Management DIscussion and Risk Factors in 10-K/10-Q filling

Positive
1.
We intend to continue to strategically position our businesses in order to improve our ability to compete.
2.
We voluntarily contributed $50 million to these plans in both 2022 and early 2023 to improve the plans’ funded position.
3.
Our intellectual property protects our investments in technological innovation, research and development, and plays an important role in maintaining our competitive position in the markets we serve.
4.
We continually work to strengthen our threat countermeasures, safeguard our systems and mitigate potential risks.
5.
Although our facilities vary in terms of age and condition, we believe that they have been well maintained and are in sufficient condition for us to carry on our activities.
Negative
1.
The significant macroeconomic impact of the COVID-19 pandemic and the measures designed to contain its spread negatively impacted several of the Company’s most significant end markets, and our sales to customers in those markets.
2.
Demand for our products is likewise subject to these trends, and in recent years, our business has at times been negatively impacted by depressed demand from the oil & gas industry.
3.
Risks Associated with the Commercial Aerospace Industry.
4.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
5.
We expect that this end market will remain a highly cyclical industry, and future downturns could have an adverse effect on the prices at which we are able to sell our products, and our results of operations, business and financial condition could be materially adversely affected.
6.
Additionally, a significant downturn or deterioration in the business or financial condition or loss of a key customer could negatively impact our business.
7.
For example, in 2021, the USW engaged in a 3 ½ month strike primarily affecting our AA&S segment operations, and we incurred approximately $63 million in strike-related costs and had lower revenues during this period while we continued to operate affected facilities with replacement workers.
8.
Any such events could cause us to lose customers or revenue and could require us to incur significant expense to remediate.
9.
This could cause us to lose sales, incur additional costs, delay new product introductions, or suffer harm to our reputation.
10.
This could cause us to lose sales, incur additional costs, delay new product introductions, or suffer harm to our reputation.
11.
This could cause us to lose sales, incur additional costs, delay new product introductions, or suffer harm to our reputation.
12.
From time-to-time, reduced demand, intense competition and excess manufacturing capacity have resulted in reduced prices, excluding raw material surcharges, for many of our products.
13.
The cyclical nature of the industries in which our customers operate causes demand for our products to be cyclical, creating potential uncertainty regarding future profitability.
14.
If we fail to appropriately adapt to the expectations of our customers or other stakeholders, fail to achieve or properly report progress toward our environmental sustainability goals and targets or otherwise are perceived as failing to adequately address climate change concerns, the resulting negative perceptions could adversely affect our business, reputation and access to capital.
15.
Lower than expected returns on our pension assets could result in great than anticipated pension contribution obligations in the future.
16.
Any determination requiring the impairment of a significant portion of goodwill or other long-lived assets has had, and may in the future have, a negative impact on our financial condition and results of operations.
17.
OTHER OPERATIONAL AND STRATEGIC RISKSRisks Associated with Disruptions to our Manufacturing Processes.
18.
Market and Reputational Risks.
19.
Our failure to successfully renew, renegotiate or favorably re-price such agreements, or a material deterioration in or termination of these or other key customer relationships, could result in a reduction or loss in customer purchase revenue.
20.
Risk of Operational Disruption.
21.
Additionally, even to the extent that significant weather events or changes in climate conditions do not directly impact our own facilities and/or operations, our business could be negatively impacted by events or more chronic climate conditions that disrupt or force longer-term changes in operations for our significant customers or suppliers, which could negatively impact the timing or overall volume of demand for our products or the cost and availability of critical raw materials, among other factors.
22.
In addition, the loss of key members of management and other personnel could negatively impact our business, and any unplanned turnover, or failure to develop adequate succession plans for key positions, could result in loss of technical or other expertise or institutional knowledge, delay or impede the execution of our strategic plans and priorities and, ultimately, negatively impact our business and results.
23.
These factors have had and may have an adverse impact on our revenues, operating results and financial condition.
24.
Such risks include, but are not limited to, adverse effects on global macroeconomic conditions; increased volatility in the price and demand of oil, natural gas and other commodities, increased exposure to cyberattacks; disruptions in global supply chains; and exposure to foreign currency fluctuations and potential constraints or disruption in the capital markets and our sources of liquidity.
25.
These direct and indirect costs may adversely impact our results.
26.
The war on terrorism as well as political and social turmoil could put pressure on economic conditions in the United States and worldwide.
27.
Further, increases in energy costs, or changes in costs relative to energy costs paid by competitors, has and may continue to adversely affect our profitability.
28.
Significant repair delays or unanticipated costs associated with these activities could have a negative impact on our results of operations and financial condition.
29.
12Regulatory and Other Transition Risks.
30.
RISK RELATED TO CLIMATE CHANGE AND OTHER ENVIRONMENTAL MATTERSRisks Associated with Climate Change.
31.
This could lead to disclosure, modification or destruction of proprietary and other key information, production downtimes, operational disruptions, and remediation costs, which in turn could adversely affect our reputation, competitiveness and results of operations.
32.
A “trade war” of this nature or other governmental action related to tariffs or international trade agreements or policies has the potential to adversely impact demand for our products, our costs, customers, suppliers and/or the U.S. economy or certain sectors thereof and, thus, to adversely impact our businesses.
33.
Risks Associated with Retirement Benefits.
34.
Political and Social Turmoil.
35.
Financial market volatility as a result of any ongoing impact of the COVID-19 pandemic or any future similar event could pose heightened risks to our liquidity, access to capital markets and cost of funds, which could adversely affect our business, financial position, results of operations and/or cash flows.
36.
Disruptions in the supply of energy resources could temporarily impair our ability to manufacture products for customers.
37.
Risks Associated with Other Environmental Compliance Matters.
38.
Risks Associated with Our Guidance and Other Targets and Expectations.
39.
Increased global information technology threats, vulnerabilities, and a rise in sophisticated and targeted international computer crime pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data.
40.
International acquisitions and other transactions could be affected by export controls, exchange rate fluctuations, domestic and foreign political conditions, changes in tax laws and a deterioration in domestic and foreign economic conditions.
41.
These political, social and economic conditions could make it difficult for us, our suppliers, and our customers to forecast accurately and plan future business activities, and could adversely affect the financial condition of our suppliers and customers and affect customer decisions as to the amount and timing of purchases from us.
42.
Cyber Security Threats.
43.
Cyclical and event-driven downturns in the commercial aerospace industry have had, and may in the future have, an adverse effect on the prices at which we are able to sell our products, and our results of operations, business and financial condition could be materially adversely affected.9Risks Associated with the Oil & Gas Industry.
44.
If we fail to attract, develop, retain and motivate a sustainable workforce with the skills and in the locations we need to operate and grow our business, our operations could be adversely impacted.
45.
It has and could continue 10to cause significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, trade disputes or trade barriers, changes in consumer or purchaser preferences, and increases in cyberattacks and espionage.
46.
It is possible that, over time, due to both regulatory action and/or changing customer and societal norms and expectations regarding the causes and importance of climate change issues, demand for products in one or more of our significant end markets could decline or, if we fail to keep pace with changing demand and technological advancement, shift in favor of products that we do not produce.
47.
Fulfilling contractual arrangements to provide various products to customers in this industry often involves meeting highly exacting performance requirements and product specifications, and our failure to meet those requirements and specifications on a timely and cost efficient basis could have a material adverse effect on our results of operations, business and financial condition.
48.
These changes could include decreases in the rate of consumption or use of our customers’ products due to economic downturns.
49.
Risks Associated with Information Technology.
50.
Future developments, administrative actions or liabilities relating to environmental matters, however, could have a material adverse effect on our financial condition or results of operations.13RISKS RELATED TO THE COVID-19 PANDEMICImpacts on the End-Markets that We Serve and Demand for Our Products.
51.
Risks Associated with Key Customers.
52.
If our operations, particularly one of our manufacturing facilities, were to be materially disrupted for any reason, we may be unable to effectively meet our obligations to or demand from our customers, which could adversely affect our financial performance.
53.
Impacts on Financial and Credit Markets.
54.
USM subsequently filed a claim challenging ATI Titanium’s right to suspend performance under the Supply Agreement.
55.
Risks Associated with Insurance Coverage.
56.
Under government regulations, a company, or one or more of its operating divisions or units, can also be suspended or debarred from government contracts based on the results of investigations.15RISKS ASSOCIATED WITH OUR INDEBTEDNESS; OTHER FINANCIAL AND FINANCIAL ACCOUNTING RISKSRisks Associated with Indebtedness.
57.
To the extent that these uncertainties cause suppliers and customers to be more cost sensitive, increased energy prices may have an adverse effect on our results of operations and financial condition.
58.
Any of these factors could materially adversely affect our results for the period in which they occur.
59.
Our customers may change their business strategies or modify their business relationships with us, including to reduce the amount of our products they purchase or to switch to alternative suppliers, as a result of which our financial condition and results of operations may be adversely affected.
60.
Risks Associated with Government Contracts.
61.
Events such as these could cause damage to critical facilities and equipment, result in significant operational disruption and have meaningfully adverse effects on our employees and the communities in which we operate.
62.
Impacts to Our Supply Chain.
63.
Risks Associated with Current or Future Litigation and Claims.
64.
The COVID-19 pandemic, including governmental and other actions taken or restrictions imposed to contain its spread and impact, subjected our operations, financial performance and financial condition to a number of risks including, but not limited to, those discussed below.
65.
If unable to obtain adequate and timely deliveries of required raw materials, we may be unable to timely manufacture sufficient quantities of products.
66.
If unable to obtain adequate and timely deliveries of required raw materials, we may be unable to timely manufacture sufficient quantities of products.
67.
A labor dispute, which could lead to a strike, lockout, or other work stoppage by the employees covered by one or more of the collective bargaining agreements, could have a material adverse effect on production at one or more of our facilities and, depending upon the length of such dispute or work stoppage, 11on our operating results.
68.
RISKS RELATED TO OUR WORKFORCERisks Associated with the Recruitment and Retention of Key Talent and the Sustainability of our Workforce.
69.
Further, the broader consequences of the current conflict between Russia and Ukraine may also have the effect of heightening many other risks disclosed in our public filings, any of which could materially and adversely affect our business and results of operations.
70.
If unable to obtain adequate and timely deliveries of required supplies, we may be unable to timely manufacture sufficient quantities of products.
71.
A failure to sufficiently secure or successfully enforce our intellectual property rights could adversely affect our business and competitive position.
72.
However, we have experienced and may again in the future experience the temporary shut down of facilities in response to employees being impacted by COVID-19, a similar future outbreak or any related changes in government policy.
73.
The ongoing conflict between Russia and Ukraine may adversely affect our business and results of operations.
74.
As we integrate, implement and deploy new information technology processes and information infrastructure across our operations, we could experience disruptions in our business that could have an adverse effect on our business, financial condition, results of operations and cash flow.
75.
Failure to achieve our targets or goals may have a material adverse effect on our business, financial condition, results of operations or the market price of our securities.
76.
In addition, the cost to implement any given strategic capital project ultimately may prove to be greater than originally anticipated.
77.
Shortages in skilled labor and other labor market pressures currently are resulting in greater competition for skilled labor and increased labor costs in some instances.
78.
As a result, our business, financial condition and results of operations could be materially adversely affected.14Risks Associated with Strategic Capital Projects and Maintenance Activities.
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