Haynes International, Inc. HAYN(OTUS) Profile Profile
Morningstar Equity Research
Haynes International, Inc. HAYN (OTUS) Last Close
Industry
Sector
23.94
Steel & Iron
Industrial Materials
USD
Profile Pricing data through 18 Aug 2009
In addition to this comprehensive company profile, Morningstar offers in-depth analyst research and ratings on selected companies. For information about our full analyst coverage, please contact: Morningstar Equity Research +1 (312) 696-6869 [email protected]
Contents Company Profile
1
Company Data
2
Management & Ownership
3
Industry Focus
4
Haynes International, Inc. is a producer of high-performance nickel- and cobalt-based alloys in sheet, coil and plate forms. It is focused on developing, manufacturing, marketing and distributing alloys, which are used mainly in the aerospace, chemical processing and land-based gas turbine industries. Haynes' main end markets have experienced expansion and management would continue to demonstrate attractive fundamentals with demand increasing for aerospace, chemical plants and land-based gas turbines. The global alloy market consists of three main sectors: stainless steel, general purpose nickel alloys and high-performance nickel-and cobalt-based alloys. Haynes currently maintains a wide portfolio of patents in the US and abroad targeted at countries or potential markets for the patented products and continues to develop, manufacture and test high-performance nickel- and cobaltbased alloys. The company sells its products mainly through its direct sales organization, which operates in the U.S., Europe, Asia and India. All of the company's service and sales centers are operated either directly by the company or through its wholly-owned subsidiaries.
©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 1 of 5
Morningstar StockResearch Data Sheet Morningstar®Equity
Pricing data thru Aug. 18, 2009
Haynes International, Inc. HAYN
Sales USD Mil Mkt Cap USD Mil Industry
Sector
582
290
Industrial Materials
Fair Value
Uncertainty
.
.
Haynes International develops and manufactures highHaynes International develops and manufactures performance nickel- and cobalt-based alloys for applications high-performance nickel- and cobalt-based alloys for in aerospace and chemical processing. Its high-temperature applications in aerospace and chemical processing. Its alloys (HTA) and corrosion-resistant alloys (CRA) are used in high-temperature alloys (HTA) and corrosion-resistant alloys aerospace, power generation, waste incineration, and (CRA) are used in aerospace, power generation, waste industrial heating. incineration, and industrial heating.
Morningstar Rating —
Last Price
-
-
23.94
15.30 9.90
Rating updated as of Aug. 18, 2009
Steel & Iron Economic Moat
-
28.00 15.00
Fiscal year-end: September
TM
Stewardship Grade
-.
54.00 100.10 24.00 41.00
-
. per share prices in USD 69.50 12.49
28.25 10.92
Annual Price High Low Recent Splits
Price Volatility 79.0 39.0 19.0
Monthly High/Low Rel Strength to S&P 500 52 week High/Low 61.02 - 10.92 10 Year High/Low 100.10 - 9.90
1020 West Park AvenueP.O. Box 9013 Employees: 1138 1020 West Avenue P.O. Box 9013 Kokomo, INPark 46904 Kokomo,1 317 IN 46904 Phone: 456-6005 Phone: 1 317 456-6005Website: http://www.haynesintl.com Website: http://www.haynesintl.com
Growth Rates Compound Annual Grade: B
Revenue % Operating Income % Earnings/Share % Dividends % Book Value/Share % Stock Total Return % +/- Industry +/- Market
3 Yr
5 Yr
10 Yr
13.8 -8.8 -11.4 . 16.9 -60.4 -23.0 -37.8
25.1 871.2 . . . -13.3 -19.9 -4.6
29.0 75.5 . . . . . .
9.9 11.6 . . . . . .
Current
5 Yr Avg
Return on Equity % -1.3 Return on Assets % -0.8 Fixed Asset Turns 5.5 Inventory Turns 1.8 Revenue/Employee USD K 511.3 Gross Margin % Operating Margin % Net Margin % Free Cash Flow/Rev % R&D/Rev %
17.2 2.1 -0.8 9.8 0.6
Trading Volume Ten 699.0 39.0
2006
2007
2008
YTD
Stock Performance
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
60.0 57.0 31.5 . 240
124.6 111.0 74.7 . 539
28.9 25.4 -51.6 . 821
-64.6 -26.1 -0.8 . 295
-2.8 -12.4 -56.4 0.0 290
Total Return % +/- Market +/- Industry Dividend Yield % Market Cap USD Mil
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
TTM
Financials
209 21.4 16 7.4
230 18.7 16 7.0
252 21.8 25 9.9
226 22.3 22 9.8
178 18.6 6 3.3
. . . .
325 11.2 0 0.0
434 25.1 66 15.2
560 27.0 109 19.4
637 22.7 99 15.5
582 17.2 12 2.1
Revenue USD Mil Gross Margin % Oper Income USD Mil Operating Margin %
2000
2001
2002
2003
2004
2005
Ind
Mkt
1
-4
0
1
-63
36
66
63
-4
17.7 6.8 6.9 12.6 964.3
.
-4
9.3 3.9 2.0 6.0 .
. 0.00 . .
. 0.00 . .
. 0.00 . .
. 0.00 . .
. 0.00 . .
. . . .
. 0.00 10 -0.57
3.46 0.00 10 16.68
5.89 0.00 11 28.42
5.22 0.00 12 31.72
-0.37 0.00 12 27.91
. . . . .
21.2 13.3 4.1 6.5 .
37.5 16.1 7.7 0.0 11.2
-1 -8 -9
-12 -9 -22
6 -4 2
26 -6 20
-8 -4 -12
. . .
-24 -5 -29
0 -11 -10
5 -16 -12
41 -19 23
72 -15 57
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
TTM
Profitability
0.3 . 0.3 0.98 .
-1.8 . -1.8 0.99 .
0.1 . 0.1 1.04 .
0.4 . 0.4 0.95 .
-29.4 . -35.4 0.83 .
. . . . .
-1.1 . -1.3 0.84 .
8.5 49.9 8.2 1.04 2.9
12.8 28.3 11.8 1.08 1.9
10.4 18.0 9.9 1.06 1.6
-0.8 -1.3 -0.8 1.02 1.6
Return on Assets % Return on Equity % Net Margin % Asset Turnover Financial Leverage
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
03-09
57 140 -90 .
41 143 -98 .
48 143 -97 .
59 142 -97 .
-86 2 -159 .
. . . .
59 0 112 .
102 3 152 0.02
299 3 316 0.01
330 2 380 0.00
320 1 336 0.00
Working Capital USD Mil Long-Term Debt USD Mil Total Equity USD Mil Debt/Equity
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
TTM
Valuation
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
. . 0.7 . .
12.3 0.7 1.2 3.2 9.2
12.1 0.7 1.4 2.5 .
5.5 0.5 0.5 0.8 6.8
. . 0.6 0.9 2.7
09-08 USD Mil
03-09 USD Mil
Cash Inventories Receivables Current Assets
7 305 99 423
30 243 88 372
Fixed Assets Intangibles Total Assets
107 52 618
108 8 523
Payables Short-Term Debt Current Liabilities Long-Term Debt Total Liabilities
49 2 93 2 238
23 0 52 1 187
Total Equity
380
336
. . . . .
Revenue USD Mil
Jun 08
Sep 08
Dec 08
Mar 09
Most Recent Period Prior Year Period
166.3 141.1
160.8 160.9
134.3 146.1
120.4 163.8
Rev Growth %
Jun 08
Sep 08
Dec 08
Mar 09
17.9 22.8
-0.1 41.1
-8.1 21.3
-26.5 19.2
Jun 08
Sep 08
Dec 08
Mar 09
1.46 1.49
1.35 1.49
0.38 1.16
-3.58 1.25
Valuation Analysis Price/Earnings Forward P/E Price/Cash Flow Price/Free Cash Flow Dividend Yield % Price/Book Price/Sales PEG Ratio
Quarterly Results Current
5 Yr Avg
Ind
Mkt
. 33.7 2.7 3.0 . 0.9 0.6 1.9
. . . . . . . .
5.1 . 3.8 7.4 2.6 1.6 0.5 .
17.4 14.7 6.5 16.7 2.5 2.1 1.1 2.0
*3Yr Avg data is displayed in place of 5Yr Avg
Bear-Market Rank 0 (10=worst)
. . . . 493.8 *
Financial Position Grade: C
1.0
1999
1 Yr
Profitability Analysis Grade: B
4.0
Most Recent Period Prior Year Period Earnings Per Share USD
Most Recent Period Prior Year Period
Net Income USD Mil Earnings Per Share USD Dividends USD Shares Mil Book Value Per Share USD Oper Cash Flow USD Mil Cap Spending USD Mil Free Cash Flow USD Mil
Financial Health
Price/Earnings P/E vs. Market Price/Sales Price/Book Price/Cash Flow
Industry Peers by Market Cap Mkt Cap USD Mil Rev USD Mil
Haynes International Baoshan Iron And Ste Angang Steel Company
290 . .
582 . .
P/E
ROE%
. . .
-1.3 . .
Major Fund Holders % of shares
Keeley Small Cap Value A T. Rowe Price Small-Cap Stock Columbia Acorn Z
6.29 5.00 3.25
TTM data based on rolling quarterly data if available; otherwise most recent annual data shown.
© 2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
®
ß
Morningstar Equity Research
Haynes International, Inc. HAYN (OTUS) Last Close
Industry
Sector
23.94
Steel & Iron
Industrial Materials
USD
Management & Ownership Management
Name
Position
COMERFORD MARK
President,Chief Executive Officer, Director Director Vice President Vice President Vice President,Chief Financial Officer Vice President Director Director
BOHAN PAUL J NEEL JEAN C LOSCH MARLIN C III MARTIN MARCEL LAIRD JAMES A MCCARTHY TIMOTHY J WALL WILLIAM P
Shares Held
Report Date*
InsiderActivity
13,241
31 Mar 2009
-
8,500 5,850 5,750 4,250
31 Mar 2009 31 Mar 2009 31 Mar 2009 31 Mar 2009
-
3,750 3,500 3,500
31 Mar 2009 31 Mar 2009 31 Mar 2009
-
*Report date represents the date on which the owner’s the common shares held was audited.
Fund Ownership Top Owners
Morningstar Star Rating
% of Shares Held
% of Fund Assets
Change (k)
Keeley Small Cap Value A T. Rowe Price Small-Cap Stock Columbia Acorn Z Royce Opportunity Invmt T. Rowe Price New Horizons
QQ QQQ QQQQ QQQ QQQQ
6.29 5.00 3.25 3.11 2.92
0.42 0.34 0.08 0.69 0.18
5 25 0 -13 0
30 Apr 2009 30 Jun 2009 30 Jun 2009 30 Jun 2009 30 Jun 2009
QQ QQ
0.10 0.80
2.42 1.02
0 37
31 Mar 2009 31 Mar 2009
% of Shares Held
% of Fund Assets
Shares Bought/ Sold (k)
Portfolio Date
Concentrated Holders
CornerCap Small Cap Value Legg Mason Partners Small Cap Value A
Institutional Transactions Top 5 Buyers
Morningstar Star Rating
Legg Mason Partners Small Cap Value A Northern Small Cap Value T. Rowe Price Small-Cap Stock DFA US Small Cap Value I Putnam Small Cap Growth A
QQ QQQ QQQ QQQ QQ
0.80 0.29 5.00 0.64 0.17
1.02 0.07 0.34 0.04 0.37
37 32 25 21 21
31 Mar 2009 30 Jun 2009 30 Jun 2009 31 May 2009 30 Jun 2009
QQQQ QQQ QQQQQ QQQ
2.12 0.53 0.13 3.11
0.17 0.87 0.70 0.69
-24 -22 -15 -13
30 Jun 2009 31 Dec 2008 31 Dec 2008 30 Jun 2009
Portfolio Date
Top 5 Sellers
Royce Pennsylvania Mutual Invmt Wasatch Small Cap Value Wasatch Micro Cap Value Royce Opportunity Invmt
©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 3 of 5
Morningstar Equity Research
Haynes International, Inc. HAYN (OTUS) Last Close
Industry
Sector
23.94
Steel & Iron
Industrial Materials
USD
Industry Focus: Steel & Iron China's Massive Stimulus and U.S. Steel Companies 29 July 2009
Min Ye
Stock Analyst
China's stimulus program is stabilizing the world steel market.
China's CNY 4 trillion ($586 billion) stimulus program made its economy the envy of the world. Chinese steel prices bottomed in March and imports of base metals soared in the second quarter. How will Chinese stimulus spending affect the United States steel market? Are U.S. steel companies likely to benefit from Chinese demand? Here we break down China's stimulus spending and highlight how Chinese demand is affecting U.S. producers. The numbers seem to suggest that Chinese stimulus demand is helping to stabilize the world steel market, which in turn benefits U.S. steel producers. An Analysis of Chinese Stimulus Spending According to the details provided by the central government, over 60% of the $586 billion stimulus package will go into infrastructure construction, including railways, roads, airports, power grid investments, rural infrastructure, and earthquake zone reconstruction. Another 9% goes into rural infrastructure spending such as paving roads and building bridges. The rest of the stimulus spending will be directed to the provision of welfare and environmental
programs. Of all infrastructure projects, railroads should experience the biggest investment boost. The country's railway system is struggling to keep pace with the growth of the economy. China's per capita railroad length is one of the lowest in the world, at 58 kilometers per million people, a far cry from the United States' 765 kilometers per million people and the European Union's 482 kilometers.
With the announcement of the $586 stimulus program, the government allocated CNY 800 billion ($117 billion) for railroads, in addition to the CNY 1.25 trillion ($182 billion) set aside in the nation's 11th Five-Year Plan. With this incremental $117 billion, the Ministry of Railways is planning to expand the nation's railroad network to 100,000 kilometers by 2010, up from 78,000 kilometers as of 2007 and an incremental 10,000 kilometers compared with the previous plan. This would create demand for another 5 million-10 million tons of steel, depending on the amount of infrastructure construction needed along the railroads. For example, the high-profile Beijing-Shanghai high-speed railway alone would consume 5 million tons of steel due to the need for many bridges along the rail line. Another destination of public spending is highway construction. Although the Chinese government spent significant resources in building the nation's highway network over the past two decades, the country's 1.9 million kilometers of highway network is far from sufficient for an area of over 9 million square kilometers. Along with the $586 billion stimulus program, the Ministry of Transportation announced CNY 5 trillion ($730 billion) of investments in highway, waterway, and port construction over the next three to five years. This would imply an additional CNY 1.7 trillion ($248 billion) investment on top of what was stipulated under the current 11th Five-Year Plan. Most of that additional investment would go into highway construction, considering that China has a decent
©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 4 of 5
Morningstar Equity Research
Haynes International, Inc. HAYN (OTUS) Last Close
Industry
Sector
23.94
Steel & Iron
Industrial Materials
USD
Industry Focus: Steel & Iron port system. This would imply roughly another 20 million tons of steel to be used in highway construction. Impact on U.S. Steel Producers Considering that China consumed 500 million tons of steel in 2008, the incremental steel consumption directly caused by the stimulus infrastructure spending doesn't appear impressive at all. The spillover effect to the economy is probably the more important objective--as people get employed, they spend more, and a lot of this additional consumption would be necessities such as refrigerators and washing machines, and even apartment homes. Those would drive additional steel demand.
June to July. As a result, Midwest steel producer Steel Dynamics STLD anticipated its scrap recycling operation to become profitable in the second half; we think this is a reasonable expectation. Excluding low-grade steel, where demand is firmer, other steel products have only recently seen an uptick in demand as the U.S. domestic restocking process is underway. However, we have not yet seen the impact of the U.S. stimulus, and companies do not expect material spending to occur until early 2010. While Chinese demand has helped stabilize the supply and demand balance in the world steel market, U.S. steel mills still need to count on domestic demand to really recover their profitability.
Nonetheless, the speed of China's stimulus spending definitely helped stabilize the steel market. In fact, stabilization of the Chinese steel market is a nontrivial effect since China consumes and produces over 30% of the world's steel. For example, import competition has remained in check in the U.S. From January to May, steel imports excluding oil country tubular goods (OCTG) were down 47% year over year. This brought a bit of relief to domestic producers who were experiencing a 50%-60% drop-off in production rates. In the first half of 2009, Chinese infrastructure demand has moved parts of the steel market. In particular, low-grade steel products and ferrous scrap recovered faster than other steel grades due to Asia's construction steel demand. Lowgrade steel products, such as rebar, are used mostly in highway construction. Steel billet and ferrous scrap are widely used in steelmaking. As international demand picks up, more U.S. companies are taking advantage of the export market. Nucor NUE , for instance, exported 9% of its production to overseas markets in Africa and South and Central America during the first half. This is close to last year's 10% level, despite a significant strengthening of the dollar. West-coast ferrous scrap recycler Schnitzer Steel SCHN saw a 40% surge in ferrous scrap sales volume in the first half of 2009 from late 2008 levels. Higher export scrap prices pushed domestic scrap prices much higher in ©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 5 of 5
Haynes International, Inc. HAYN (OTUS) Last Close
Industry
Sector
23.94
Steel & Iron
Industrial Materials
USD
Profile Pricing data through 18 Aug 2009
In addition to this comprehensive company profile, Morningstar offers in-depth analyst research and ratings on selected companies. For information about our full analyst coverage, please contact: Morningstar Equity Research +1 (312) 696-6869 [email protected]
Contents Company Profile
1
Company Data
2
Management & Ownership
3
Industry Focus
4
Haynes International, Inc. is a producer of high-performance nickel- and cobalt-based alloys in sheet, coil and plate forms. It is focused on developing, manufacturing, marketing and distributing alloys, which are used mainly in the aerospace, chemical processing and land-based gas turbine industries. Haynes' main end markets have experienced expansion and management would continue to demonstrate attractive fundamentals with demand increasing for aerospace, chemical plants and land-based gas turbines. The global alloy market consists of three main sectors: stainless steel, general purpose nickel alloys and high-performance nickel-and cobalt-based alloys. Haynes currently maintains a wide portfolio of patents in the US and abroad targeted at countries or potential markets for the patented products and continues to develop, manufacture and test high-performance nickel- and cobaltbased alloys. The company sells its products mainly through its direct sales organization, which operates in the U.S., Europe, Asia and India. All of the company's service and sales centers are operated either directly by the company or through its wholly-owned subsidiaries.
©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 1 of 5
Morningstar StockResearch Data Sheet Morningstar®Equity
Pricing data thru Aug. 18, 2009
Haynes International, Inc. HAYN
Sales USD Mil Mkt Cap USD Mil Industry
Sector
582
290
Industrial Materials
Fair Value
Uncertainty
.
.
Haynes International develops and manufactures highHaynes International develops and manufactures performance nickel- and cobalt-based alloys for applications high-performance nickel- and cobalt-based alloys for in aerospace and chemical processing. Its high-temperature applications in aerospace and chemical processing. Its alloys (HTA) and corrosion-resistant alloys (CRA) are used in high-temperature alloys (HTA) and corrosion-resistant alloys aerospace, power generation, waste incineration, and (CRA) are used in aerospace, power generation, waste industrial heating. incineration, and industrial heating.
Morningstar Rating —
Last Price
-
-
23.94
15.30 9.90
Rating updated as of Aug. 18, 2009
Steel & Iron Economic Moat
-
28.00 15.00
Fiscal year-end: September
TM
Stewardship Grade
-.
54.00 100.10 24.00 41.00
-
. per share prices in USD 69.50 12.49
28.25 10.92
Annual Price High Low Recent Splits
Price Volatility 79.0 39.0 19.0
Monthly High/Low Rel Strength to S&P 500 52 week High/Low 61.02 - 10.92 10 Year High/Low 100.10 - 9.90
1020 West Park AvenueP.O. Box 9013 Employees: 1138 1020 West Avenue P.O. Box 9013 Kokomo, INPark 46904 Kokomo,1 317 IN 46904 Phone: 456-6005 Phone: 1 317 456-6005Website: http://www.haynesintl.com Website: http://www.haynesintl.com
Growth Rates Compound Annual Grade: B
Revenue % Operating Income % Earnings/Share % Dividends % Book Value/Share % Stock Total Return % +/- Industry +/- Market
3 Yr
5 Yr
10 Yr
13.8 -8.8 -11.4 . 16.9 -60.4 -23.0 -37.8
25.1 871.2 . . . -13.3 -19.9 -4.6
29.0 75.5 . . . . . .
9.9 11.6 . . . . . .
Current
5 Yr Avg
Return on Equity % -1.3 Return on Assets % -0.8 Fixed Asset Turns 5.5 Inventory Turns 1.8 Revenue/Employee USD K 511.3 Gross Margin % Operating Margin % Net Margin % Free Cash Flow/Rev % R&D/Rev %
17.2 2.1 -0.8 9.8 0.6
Trading Volume Ten 699.0 39.0
2006
2007
2008
YTD
Stock Performance
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
60.0 57.0 31.5 . 240
124.6 111.0 74.7 . 539
28.9 25.4 -51.6 . 821
-64.6 -26.1 -0.8 . 295
-2.8 -12.4 -56.4 0.0 290
Total Return % +/- Market +/- Industry Dividend Yield % Market Cap USD Mil
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
TTM
Financials
209 21.4 16 7.4
230 18.7 16 7.0
252 21.8 25 9.9
226 22.3 22 9.8
178 18.6 6 3.3
. . . .
325 11.2 0 0.0
434 25.1 66 15.2
560 27.0 109 19.4
637 22.7 99 15.5
582 17.2 12 2.1
Revenue USD Mil Gross Margin % Oper Income USD Mil Operating Margin %
2000
2001
2002
2003
2004
2005
Ind
Mkt
1
-4
0
1
-63
36
66
63
-4
17.7 6.8 6.9 12.6 964.3
.
-4
9.3 3.9 2.0 6.0 .
. 0.00 . .
. 0.00 . .
. 0.00 . .
. 0.00 . .
. 0.00 . .
. . . .
. 0.00 10 -0.57
3.46 0.00 10 16.68
5.89 0.00 11 28.42
5.22 0.00 12 31.72
-0.37 0.00 12 27.91
. . . . .
21.2 13.3 4.1 6.5 .
37.5 16.1 7.7 0.0 11.2
-1 -8 -9
-12 -9 -22
6 -4 2
26 -6 20
-8 -4 -12
. . .
-24 -5 -29
0 -11 -10
5 -16 -12
41 -19 23
72 -15 57
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
TTM
Profitability
0.3 . 0.3 0.98 .
-1.8 . -1.8 0.99 .
0.1 . 0.1 1.04 .
0.4 . 0.4 0.95 .
-29.4 . -35.4 0.83 .
. . . . .
-1.1 . -1.3 0.84 .
8.5 49.9 8.2 1.04 2.9
12.8 28.3 11.8 1.08 1.9
10.4 18.0 9.9 1.06 1.6
-0.8 -1.3 -0.8 1.02 1.6
Return on Assets % Return on Equity % Net Margin % Asset Turnover Financial Leverage
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
03-09
57 140 -90 .
41 143 -98 .
48 143 -97 .
59 142 -97 .
-86 2 -159 .
. . . .
59 0 112 .
102 3 152 0.02
299 3 316 0.01
330 2 380 0.00
320 1 336 0.00
Working Capital USD Mil Long-Term Debt USD Mil Total Equity USD Mil Debt/Equity
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
TTM
Valuation
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
. . 0.7 . .
12.3 0.7 1.2 3.2 9.2
12.1 0.7 1.4 2.5 .
5.5 0.5 0.5 0.8 6.8
. . 0.6 0.9 2.7
09-08 USD Mil
03-09 USD Mil
Cash Inventories Receivables Current Assets
7 305 99 423
30 243 88 372
Fixed Assets Intangibles Total Assets
107 52 618
108 8 523
Payables Short-Term Debt Current Liabilities Long-Term Debt Total Liabilities
49 2 93 2 238
23 0 52 1 187
Total Equity
380
336
. . . . .
Revenue USD Mil
Jun 08
Sep 08
Dec 08
Mar 09
Most Recent Period Prior Year Period
166.3 141.1
160.8 160.9
134.3 146.1
120.4 163.8
Rev Growth %
Jun 08
Sep 08
Dec 08
Mar 09
17.9 22.8
-0.1 41.1
-8.1 21.3
-26.5 19.2
Jun 08
Sep 08
Dec 08
Mar 09
1.46 1.49
1.35 1.49
0.38 1.16
-3.58 1.25
Valuation Analysis Price/Earnings Forward P/E Price/Cash Flow Price/Free Cash Flow Dividend Yield % Price/Book Price/Sales PEG Ratio
Quarterly Results Current
5 Yr Avg
Ind
Mkt
. 33.7 2.7 3.0 . 0.9 0.6 1.9
. . . . . . . .
5.1 . 3.8 7.4 2.6 1.6 0.5 .
17.4 14.7 6.5 16.7 2.5 2.1 1.1 2.0
*3Yr Avg data is displayed in place of 5Yr Avg
Bear-Market Rank 0 (10=worst)
. . . . 493.8 *
Financial Position Grade: C
1.0
1999
1 Yr
Profitability Analysis Grade: B
4.0
Most Recent Period Prior Year Period Earnings Per Share USD
Most Recent Period Prior Year Period
Net Income USD Mil Earnings Per Share USD Dividends USD Shares Mil Book Value Per Share USD Oper Cash Flow USD Mil Cap Spending USD Mil Free Cash Flow USD Mil
Financial Health
Price/Earnings P/E vs. Market Price/Sales Price/Book Price/Cash Flow
Industry Peers by Market Cap Mkt Cap USD Mil Rev USD Mil
Haynes International Baoshan Iron And Ste Angang Steel Company
290 . .
582 . .
P/E
ROE%
. . .
-1.3 . .
Major Fund Holders % of shares
Keeley Small Cap Value A T. Rowe Price Small-Cap Stock Columbia Acorn Z
6.29 5.00 3.25
TTM data based on rolling quarterly data if available; otherwise most recent annual data shown.
© 2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported.
The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
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ß
Morningstar Equity Research
Haynes International, Inc. HAYN (OTUS) Last Close
Industry
Sector
23.94
Steel & Iron
Industrial Materials
USD
Management & Ownership Management
Name
Position
COMERFORD MARK
President,Chief Executive Officer, Director Director Vice President Vice President Vice President,Chief Financial Officer Vice President Director Director
BOHAN PAUL J NEEL JEAN C LOSCH MARLIN C III MARTIN MARCEL LAIRD JAMES A MCCARTHY TIMOTHY J WALL WILLIAM P
Shares Held
Report Date*
InsiderActivity
13,241
31 Mar 2009
-
8,500 5,850 5,750 4,250
31 Mar 2009 31 Mar 2009 31 Mar 2009 31 Mar 2009
-
3,750 3,500 3,500
31 Mar 2009 31 Mar 2009 31 Mar 2009
-
*Report date represents the date on which the owner’s the common shares held was audited.
Fund Ownership Top Owners
Morningstar Star Rating
% of Shares Held
% of Fund Assets
Change (k)
Keeley Small Cap Value A T. Rowe Price Small-Cap Stock Columbia Acorn Z Royce Opportunity Invmt T. Rowe Price New Horizons
QQ QQQ QQQQ QQQ QQQQ
6.29 5.00 3.25 3.11 2.92
0.42 0.34 0.08 0.69 0.18
5 25 0 -13 0
30 Apr 2009 30 Jun 2009 30 Jun 2009 30 Jun 2009 30 Jun 2009
QQ QQ
0.10 0.80
2.42 1.02
0 37
31 Mar 2009 31 Mar 2009
% of Shares Held
% of Fund Assets
Shares Bought/ Sold (k)
Portfolio Date
Concentrated Holders
CornerCap Small Cap Value Legg Mason Partners Small Cap Value A
Institutional Transactions Top 5 Buyers
Morningstar Star Rating
Legg Mason Partners Small Cap Value A Northern Small Cap Value T. Rowe Price Small-Cap Stock DFA US Small Cap Value I Putnam Small Cap Growth A
QQ QQQ QQQ QQQ QQ
0.80 0.29 5.00 0.64 0.17
1.02 0.07 0.34 0.04 0.37
37 32 25 21 21
31 Mar 2009 30 Jun 2009 30 Jun 2009 31 May 2009 30 Jun 2009
QQQQ QQQ QQQQQ QQQ
2.12 0.53 0.13 3.11
0.17 0.87 0.70 0.69
-24 -22 -15 -13
30 Jun 2009 31 Dec 2008 31 Dec 2008 30 Jun 2009
Portfolio Date
Top 5 Sellers
Royce Pennsylvania Mutual Invmt Wasatch Small Cap Value Wasatch Micro Cap Value Royce Opportunity Invmt
©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 3 of 5
Morningstar Equity Research
Haynes International, Inc. HAYN (OTUS) Last Close
Industry
Sector
23.94
Steel & Iron
Industrial Materials
USD
Industry Focus: Steel & Iron China's Massive Stimulus and U.S. Steel Companies 29 July 2009
Min Ye
Stock Analyst
China's stimulus program is stabilizing the world steel market.
China's CNY 4 trillion ($586 billion) stimulus program made its economy the envy of the world. Chinese steel prices bottomed in March and imports of base metals soared in the second quarter. How will Chinese stimulus spending affect the United States steel market? Are U.S. steel companies likely to benefit from Chinese demand? Here we break down China's stimulus spending and highlight how Chinese demand is affecting U.S. producers. The numbers seem to suggest that Chinese stimulus demand is helping to stabilize the world steel market, which in turn benefits U.S. steel producers. An Analysis of Chinese Stimulus Spending According to the details provided by the central government, over 60% of the $586 billion stimulus package will go into infrastructure construction, including railways, roads, airports, power grid investments, rural infrastructure, and earthquake zone reconstruction. Another 9% goes into rural infrastructure spending such as paving roads and building bridges. The rest of the stimulus spending will be directed to the provision of welfare and environmental
programs. Of all infrastructure projects, railroads should experience the biggest investment boost. The country's railway system is struggling to keep pace with the growth of the economy. China's per capita railroad length is one of the lowest in the world, at 58 kilometers per million people, a far cry from the United States' 765 kilometers per million people and the European Union's 482 kilometers.
With the announcement of the $586 stimulus program, the government allocated CNY 800 billion ($117 billion) for railroads, in addition to the CNY 1.25 trillion ($182 billion) set aside in the nation's 11th Five-Year Plan. With this incremental $117 billion, the Ministry of Railways is planning to expand the nation's railroad network to 100,000 kilometers by 2010, up from 78,000 kilometers as of 2007 and an incremental 10,000 kilometers compared with the previous plan. This would create demand for another 5 million-10 million tons of steel, depending on the amount of infrastructure construction needed along the railroads. For example, the high-profile Beijing-Shanghai high-speed railway alone would consume 5 million tons of steel due to the need for many bridges along the rail line. Another destination of public spending is highway construction. Although the Chinese government spent significant resources in building the nation's highway network over the past two decades, the country's 1.9 million kilometers of highway network is far from sufficient for an area of over 9 million square kilometers. Along with the $586 billion stimulus program, the Ministry of Transportation announced CNY 5 trillion ($730 billion) of investments in highway, waterway, and port construction over the next three to five years. This would imply an additional CNY 1.7 trillion ($248 billion) investment on top of what was stipulated under the current 11th Five-Year Plan. Most of that additional investment would go into highway construction, considering that China has a decent
©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 4 of 5
Morningstar Equity Research
Haynes International, Inc. HAYN (OTUS) Last Close
Industry
Sector
23.94
Steel & Iron
Industrial Materials
USD
Industry Focus: Steel & Iron port system. This would imply roughly another 20 million tons of steel to be used in highway construction. Impact on U.S. Steel Producers Considering that China consumed 500 million tons of steel in 2008, the incremental steel consumption directly caused by the stimulus infrastructure spending doesn't appear impressive at all. The spillover effect to the economy is probably the more important objective--as people get employed, they spend more, and a lot of this additional consumption would be necessities such as refrigerators and washing machines, and even apartment homes. Those would drive additional steel demand.
June to July. As a result, Midwest steel producer Steel Dynamics STLD anticipated its scrap recycling operation to become profitable in the second half; we think this is a reasonable expectation. Excluding low-grade steel, where demand is firmer, other steel products have only recently seen an uptick in demand as the U.S. domestic restocking process is underway. However, we have not yet seen the impact of the U.S. stimulus, and companies do not expect material spending to occur until early 2010. While Chinese demand has helped stabilize the supply and demand balance in the world steel market, U.S. steel mills still need to count on domestic demand to really recover their profitability.
Nonetheless, the speed of China's stimulus spending definitely helped stabilize the steel market. In fact, stabilization of the Chinese steel market is a nontrivial effect since China consumes and produces over 30% of the world's steel. For example, import competition has remained in check in the U.S. From January to May, steel imports excluding oil country tubular goods (OCTG) were down 47% year over year. This brought a bit of relief to domestic producers who were experiencing a 50%-60% drop-off in production rates. In the first half of 2009, Chinese infrastructure demand has moved parts of the steel market. In particular, low-grade steel products and ferrous scrap recovered faster than other steel grades due to Asia's construction steel demand. Lowgrade steel products, such as rebar, are used mostly in highway construction. Steel billet and ferrous scrap are widely used in steelmaking. As international demand picks up, more U.S. companies are taking advantage of the export market. Nucor NUE , for instance, exported 9% of its production to overseas markets in Africa and South and Central America during the first half. This is close to last year's 10% level, despite a significant strengthening of the dollar. West-coast ferrous scrap recycler Schnitzer Steel SCHN saw a 40% surge in ferrous scrap sales volume in the first half of 2009 from late 2008 levels. Higher export scrap prices pushed domestic scrap prices much higher in ©2009 Morningstar. All Rights Reserved. Unless otherwise provided in a separate agreement, you may use this report only in the country in which its original distributor is based. Data as originally reported. The information contained herein is not represented or warranted to be accurate, correct, complete, or timely. This report is for information purposes only, and should not be considered a solicitation to buy or sell any security. Redistribution is prohibited without written permission. To order reprints, call +1 312-696-6100. To license the research, call +1 312-696-6869.
Page 5 of 5
