tm2129725-1_def14a - none

DEF 14A 1 tm2129725-1_def14a.htm DEF 14A tm2129725-1_def14a - none - 13.3438337s

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

Haynes International, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

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January 21, 2022

To My Fellow Stockholders,

Fiscal 2021 was an unprecedented year for Haynes. We began the year experiencing the full impact of the COVID-19 pandemic on our business, but concluded fiscal 2021 with significantly improved performance and a team focused on building on our successes and unlocking the potential of our company. I’m very proud of how our employees worked together to overcome the obstacles faced over this past year and to achieve our fiscal 2021 goals related to cash generation, improving our gross margins, reducing our breakeven volume and improving our safety processes and performance.

As we look back on fiscal year 2021, we not only effectively handled the ongoing impact of the pandemic, but we also fundamentally and significantly improved our business in many areas. Our team improved our safety processes, increased base pricing, reduced variable costs of manufacturing, implemented numerous ESG initiatives, became profitable well below previous breakeven points and continued to enhance our product and service differentiators. This transformation of the business operations, combined with the significant positive effect of our newly developed capital allocation strategy on our balance sheet, has resulted in a truly different company. We are now a company with impressive earnings potential and a strong transformed balance sheet, both of which provide a foundation for growth and continued value creation for our shareholders.

Haynes’ core strengths and key competitive advantages include inventing new alloys, providing outstanding technical and commercial service to our customers and developing new applications for our alloys. We believe our culture of innovation is our greatest strength and our competitive advantage. While we are not one of the large companies in our industry, I believe we are the industry leader in innovation. We continue to work closely with our end-users to help them find innovative solutions to their demanding needs.

In the aerospace market, two of our proprietary alloys are already specified into engines for the more fuel efficient Airbus and Boeing aircraft, and a third, our brand new HAYNES® 233™ alloy, is in the advanced stages of testing. We also have our proprietary alloys specified into the most advanced and efficient industrial gas turbines used for power generation. In addition, Haynes alloys are used in a wide array of diverse applications in chemical processing that require advanced materials, including the processing of fertilizers used in food production to feed the world’s growing population or acetic acid plants that produce the building block component for adhesives, paints and other industrial applications. In addition, our highly specialized alloys are used or are being considered for producing “green/clean energy” to protect the environment for our children and generations beyond.

As fiscal year 2021 progressed, we were successful in achieving many of our goals, including a return to quarterly profitability. Quantifying our fiscal year 2021 improvements:

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We have continued our focus on our most important goal, which is protecting our employees. Our calendar year 2021 OSHA recordable rate dropped approximately 25% from our calendar year 2020 level;

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We generated $40.2 million in operating cash flow during the first nine months of the fiscal year and used that cash for a capital allocation strategy to increase the value of the business. The strategy included: continued commitment to funding our regular quarterly dividend; funding growth in our work-in-process inventory as order entry improved; repurchasing our stock in an open-market repurchase program; and investing in our U.S. pension assets as we worked to reduce what was the largest liability on our balance sheet;

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We reduced our U.S. pension net liability by $79.1 million from approximately $105.2 million to approximately $26.1 million over fiscal 2021 due to favorable market conditions combined with total

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company plan contributions of $21.0 million. In addition, our retiree medical liability was reduced by $10.4 million, and our U.K. pension liability improved by $3.0 million. All of the pension activities combined resulted in a net liability improvement of $92.5 million, an impactful value-creating balance sheet transformation;

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We finished the year with strong liquidity, an untapped credit facility and $47.7 million in cash on our balance sheet, which leaves sufficient capacity to fund the currently expected growth in the aerospace market;

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We improved our fourth quarter gross margin percentage by 1,260 basis points year-on-year, with a gross margin of 17.5% in the fourth quarter of fiscal 2021, compared to 4.9% in the fourth quarter of fiscal 2020. This was driven by volume increases as well as by our team’s relentless focus on both increased pricing to capture the value of the alloys, products and service we provide, and reduced variable costs of manufacturing;

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Based on the profits generated in both the third and fourth quarters of fiscal year 2021, we lowered our breakeven point, given the current mix of products, by an estimated 25%;

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Our backlog increased by 14.4% in fiscal 2021, driven by a 16.2% increase in the fourth quarter. We believe that, in fiscal 2022, our three core markets of aerospace, chemical processing and industrial gas turbines will be experiencing positive growth rates at the same time, which could accelerate our overall growth rate;

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Our ESG focus continues, with our latest milestone being the approval of a $1.8 million solar field installation in our Mountain Home, North Carolina wire facility. This new 1MW array is expected to generate half of that facility’s energy needs; and

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Finally, in the fourth quarter, as the fiscal year came to an end, we began to see the initial signs of a recovery in our aerospace market. Fourth quarter revenue from the aerospace market was up almost 15% sequentially and 16% year-on-year. We believe these numbers represent the beginning of the return of our largest market, however much more is expected. Aerospace volumes in fiscal 2021 were 31% below volumes of fiscal year 2020 and nearly 52% below volumes of fiscal 2019. Published build rates of single aisle aircraft show significant growth expected in fiscal year 2022 and generally a return to 2019 levels in fiscal year 2023.

We are a company prepared to continue to improve and strive to be best-in-class with our products, services and financial performance. The efforts of the Haynes team have changed the future of our company.

Finally, our sincere thank you to our shareholders. We look forward to showing our shareholders what Haynes is capable of achieving through our actions and increasingly favorable results in fiscal 2022.

Sincerely,

Michael L. Shor
President and Chief Executive Officer

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January 21, 2022

Dear Stockholders of Haynes International, Inc.:

You are cordially invited to attend the Annual Meeting of Stockholders of Haynes International, Inc. (“Haynes”) to be held Tuesday, February 22, 2022 at 10:00 a.m. (EST). As a result of continuing uncertainty around the COVID-19 pandemic and its variants, this year’s annual meeting will be a virtual meeting of stockholders. You may attend the meeting online, including submitting questions at www.virtualshareholdermeeting.com/HAYN2022 when you enter your 16 digit control number included with the proxy card. Instructions on how to attend and participate in the Annual Meeting via the webcast are posted at www.virtualshareholdermeeting.com/HAYN2022. You will be able to vote your shares while attending the Annual Meeting by following the instructions on the website.

Prior to the date of the virtual annual meeting, you will be able to vote at www.proxyvote.com or by telephone as described in the accompanying Notice of Annual Meeting. The proposals to be voted upon are described in the accompanying Notice of Annual Meeting and Proxy Statement. You may also submit questions before the annual meeting. Questions will be subject to standard screening criteria such as relevancy, tone and elimination of redundancy.

We hope you are able to attend the annual meeting virtually. Whether or not you attend, it is important that your stock be represented and voted at the meeting. I urge you to please complete, date and return the proxy card in the enclosed envelope, visit www.proxyvote.com to vote your shares electronically or vote by telephone as described in the attached Notice of Annual Meeting. The vote of each stockholder is very important. You may revoke your proxy at any time before it is voted at the annual meeting by giving written notice to the Corporate Secretary of Haynes, by submitting a properly executed paper proxy bearing a later date or by attending the annual meeting virtually and voting online during the meeting. Stockholders may also revoke their proxies by entering a new vote over the Internet or by telephone.

On behalf of the Board of Directors and management of Haynes, I thank you for your continued support.

Sincerely,
Haynes International, Inc.

Michael L. Shor
President and Chief Executive Officer

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HAYNES INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 22, 2022

Stockholders of Haynes International, Inc.:

The Annual Meeting of Stockholders of Haynes International, Inc. (“Haynes”) will be held virtually on Tuesday, February 22, 2022 at 10:00 a.m. (EST) for the following purposes:

To elect Donald C. Campion as a director of Haynes to serve for a one-year term;

To elect Robert H. Getz as a director of Haynes to serve for a one-year term;

To elect Dawne S. Hickton as a director of Haynes to serve for a one-year term;

To elect Michael L. Shor as a director of Haynes to serve for a one-year term;

To elect Larry O. Spencer as a director of Haynes to serve for a one-year term;

To ratify the appointment of Deloitte & Touche LLP as Haynes’ independent registered public accounting firm for the fiscal year ending September 30, 2022;

To approve Amendment No. 1 to the Haynes International, Inc. 2020 Incentive Compensation Plan;

To hold an advisory vote on executive compensation; and

To transact such other business as may properly come before the meeting.

Only stockholders of record at the close of business on January 7, 2022 are entitled to notice of, and to vote at, the annual meeting.

YOUR VOTE IS IMPORTANT. EVEN IF YOU EXPECT TO ATTEND THE ANNUAL MEETING VIRTUALLY, PLEASE DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY CARD. A RETURN ENVELOPE IS PROVIDED FOR THIS PURPOSE. YOU MAY ALSO VOTE YOUR PROXY BY VISITING WWW.PROXYVOTE.COM OR BY TELEPHONE AS DESCRIBED BELOW.

You can attend the meeting online and vote shares electronically during the annual meeting by visiting www.virtualshareholdermeeting.com/HAYN2022 at the time of the meeting. Online check-in will begin at 9:45 a.m. EST, and you should allow approximately 15 minutes for the online check-in procedure. Please have the control number on your proxy card available for check-in. Prior to the date of the annual meeting, you will be able to vote at www.proxyvote.com, and the proxy materials will be available at that site. You may also vote prior to the date of the meeting by telephone by calling 1-800-690-6903. Please consult your proxy card for additional information regarding these alternative methods. You may also submit questions before the annual meeting. Questions will be subject to standard screening criteria such as relevancy, tone and elimination of redundancy.

We hope you are able to attend the virtual annual meeting. Whether or not you attend, it is important that your stock be represented and voted at the meeting. I urge you to please complete, date and return the proxy card in the enclosed envelope, visit www.proxyvote.com to vote your shares electronically or vote by telephone using the information provided above. The vote of each stockholder is very important. You may revoke your written proxy at any time before it is voted at the annual meeting by giving written notice to the Corporate Secretary of Haynes, by submitting a properly executed paper proxy bearing a later date or by attending the annual meeting virtually and voting online during the meeting. Stockholders may also revoke their proxies by entering a new vote over the Internet or by telephone.

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By Order of the Board of Directors,

Janice W. Gunst
Corporate Secretary

January 21, 2022
Kokomo, Indiana

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on February 22, 2022: This Notice of Annual Meeting and Proxy Statement and the Company’s Fiscal 2021 Annual Report are available in the “Investor Relations” section of the Company’s website at www.haynesintl.com

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HAYNES INTERNATIONAL, INC. PROXY STATEMENT

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	Page
GENERAL INFORMATION		1
PROPOSALS FOR 2023 ANNUAL MEETING		2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS		3
SECURITY OWNERSHIP OF MANAGEMENT		4
PROPOSALS TO BE VOTED UPON		5
ELECTION OF DIRECTORS		5
Nominees		5
Business Experience of Nominated Directors		6
CORPORATE GOVERNANCE

SEC Form DEF 14A filed by Haynes International Inc.