Delivering cost savings ahead of schedule

• Sales of $598 million reflecting challenged market conditions in commercial aerospace
• Net loss attributable to ATI of $50.1 million, or $(0.40) per share
  • Adjusted net loss of $47.8 million, or $(0.38) per share, excluding restructuring
  • Adjusted EBITDA of $16.6 million, or 2.8% of sales
• $572 million of cash at September 30, approximately $950 million of total liquidity
• Reduced managed working capital by $115 million

PITTSBURGH — (BUSINESS WIRE) — October 29, 2020 — Allegheny Technologies Incorporated (NYSE: ATI) reported third quarter 2020 results, with sales of $598 million and a net loss attributable to ATI of $50.1 million, or $(0.40) per share. Third quarter 2020 results include $2.3 million of restructuring charges for additional employee severance actions. On an adjusted basis, third quarter 2020 net loss attributable to ATI was $47.8 million, or ($0.38) per share. Adjusted EBITDA was $16.6 million, or 2.8% of sales for the third quarter 2020.

For the third quarter 2019, sales were $1.0 billion and net income attributable to ATI was $111.0 million, or $0.78 per share. Results in 2019 included $68.2 million of pretax gains on sales of non-core assets. On an adjusted basis, third quarter 2019 net income attributable to ATI was $44.9 million, or $0.33 per share. Adjusted EBITDA for the prior year quarter was $180.2 million, or 17.7% of sales.

“By proactively focusing on reducing costs, we accelerated savings, limited decremental margins and drove third quarter results that significantly exceeded our previous guidance,” said Robert S. Wetherbee, ATI President and Chief Executive Officer. “We've continued to prioritize the safety of our people as they focus on delivering quality and value for our customers. We've improved the efficiency of our operations and working capital investment and maintained our strong financial position. Our substantial cash and liquidity provides increasing stability in challenging economic conditions and the capability to accelerate shareholder value creation over time.”

Operating Results by Segment

• HPMC sales in the third quarter 2020 decreased 51% year-over-year and 26% versus the second quarter 2020. Sales to the aerospace and defense markets represented 78% of total segment sales, with sales to the commercial aerospace market down 64%, while sales to the defense markets were 32% higher, compared to the prior year period. In the third quarter 2020, sales of next-generation jet engine products were 19% of total HPMC jet engine product sales.
• HPMC segment operating loss was $2.7 million, or (1.2)% of sales. Lower overall demand, including profitable next generation jet engine products, and reduced asset utilization rates negatively impacted operating margins.

• AA&S third quarter 2020 sales were 34% lower compared to the prior year's quarter, and 20% lower than the second quarter 2020. Sales to the aerospace and defense markets were down 41% compared to the prior year period, and down 34% sequentially. Sales to electrical energy generation markets were 7% higher compared to the prior year period, while total sales to all energy markets, which include oil & gas, hydrocarbon and chemical processing were 42% lower.
• AA&S segment operating loss was $4.1 million, or (1.1)% of sales. Compared to the prior year period, AA&S 2020 segment results reflect lower retirement benefit expense of approximately $5 million each quarter.
• Third quarter AA&S segment results include $1.6 million of losses from the A&T Stainless joint venture, which suspended production in the quarter.